Exhibit 10.9
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into on or as of the 23rd
day of August 1999 by and among INTERFOODS OF AMERICA, INC., a Nevada
corporation, and its wholly owned subsidiary, Sailormen, Inc., a Florida
corporation (collectively "Purchaser", and XXXXX ENTERPRISES, INC., a
Mississippi corporation ("Seller").
WHEREAS, Seller operates 37 Popeyes Chicken franchise stores in the States of
Mississippi and Louisiana (the "Stores");
and
WHEREAS, Purchaser desires to acquire the assets of the Stores, including (i)
the real estate upon which 33, and the leases as tenant upon which four, of the
Stores are operated, (ii) the Franchise Agreements ("FAS" or "Franchise
Agreements") between the Seller and AFC Enterprises, Inc. or its predecessors or
assignors. (collectively "Franchisor") with respect to the Stores, (iii) to the
extent assignable, prepaid development fees and other rights of Seller to
develop Stores in portions of Mississippi and Louisiana ("Future Development
Rights"), and (iv) cars used by Store supervisors and owned by the Seller and
certain trucks or other vehicles owned by Seller and used by maintenance
employees of the Stores (collectively "Vehicles"); and
WHEREAS, pursuant to the provisions of this Agreement, Seller desires to sell
the Assets to Purchaser, and the Purchaser desires to acquire the Assets from
the Seller;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Assets Purchased.
1.1 Pursuant to the provisions of this Agreement, Seller agrees to sell to
the Purchaser, and the Purchaser agrees to purchase from the Seller, all of the
Seller's right, title and interest in the assets (the "Assets"), which consist
of the furnishings, fixtures, tools, utensils, equipment, signage and other
tangible personal property located on the premises of any of the Stores, vendor
relations, supplier lists, telephone numbers and directory listings, goodwill,
Vehicles and certain other intangible assets used in the Stores. The Purchaser
and the Seller agree that all Assets shall be sold by the Seller to the
Purchaser in their respective "as is," "where is," and "with al faults and
defects condition." The Assets are listed by general category on Exhibit 1.1
attached hereto. At Purchaser's request, Seller agrees to transfer, assign and
convey all Assets to Purchaser's wbolly owned subsidiary, Sailormen, Inc, which
is one of the Purchasers.
1.2 All personal property shall be sold by Seller to Purchaser with no
warranty except for standard warranties of title. Pending Closing, all equipment
and personal property shall be maintained in substantially its present
condition, reasonable wear and tear excepted, and the disposition of worn out or
obsolete equipment.
1.3 Subject to the approval of the Franchisor, the Seller shall assign or
transfer to the Purchaser all Franchise Agreements with respect to the Stores,
said Stores having the Franchisor numbers listed in Exhibit 1.3, and, to the
extent assignable, all Future Development Rights.
1.4 The real estate upon which 33 of the Stores are operated is more
particularly described in Exhibit 1.4 annexed hereto. The Purchaser acknowledges
that the Batesville, Mississippi, Store is subject to an option to purchase
("Purchase Option") granted by the Seller to an unrelated third party, as
described in Exhibit 1.4A ("Option Property"), and, if such Purchase Option to
purchase has not expired prior to the Closing, the Purchaser shall acquire the
Option Property subject to such Purchase Option. In addition, Purchaser shall
assume the leases for the land and, if applicable, the improvements for three
Stores described in Exhibit 2.1. The Purchaser acknowledges that the West Point,
Mississippi, Store, which is leased by the Seller, as tenant, includes an
obligation or covenant by the Seller to operate a convenience store and fuel
depot, and the Purchaser shall assume Seller's operation obligation or covenant
upon the Seller's transfer and assignment of the West Point, Mississippi, Store
lease to the Purchaser. In addition, Purchaser shall lease the Columbia,
Mississippi, Store pursuant to a fully net lease, the term of which will be 20
years, with two five year options. The base lease payments shall be as follow:
1.4.1 Years 1-5: $24,000 per annum;
1.4.2 Years 6-10 $30,000 per annum;
1.4.3 Years 11-15 $36,000 per annum;
1.4.4 Years 16-20 $42,000 per annum;
1.4.5 Years 21-25 $48,000 per annum; and
1.4.6 Years 26-30 $54,000 per annum.
The form of the lease for the Columbia, Mississippi, Store, which shall grant
Purchaser the first option to purchase the Columbia, Mississippi, Store
("Columbia Store Lease"), is attached to this Agreement as Exhibit 1.4B.
1.5 Purchaser shall assume only those contracts of Seller's listed on
Exhibit 1.4; however, Purchaser is not assuming any equipment leases or any
other long term contracts or leases, except the Purchaser shall assume the
Seller's supply contracts and contracts with Pepsi, Xx. Xxxxxx and Seven-Up
(collectively "Contracts") and the Leases.
1.6 To the extent required by any lender or other secured party to release
its liens or security interests against the Assets, the Seller shall pay all
debts and obligations of the business from the proceeds of the sale. These
debts, to the extent matured, shall be paid not later than 14 days from the date
of Closing. The Seller shall retain all accounts and other receivables, bank and
investment accounts and, except as provided by Section 3.2, inventory and cash
in Stores.
1.7 The Seller shall retain, and the Assets do not include, (i) any
non-Store assets and property owned by the Seller, (ii) all books and records of
the Seller, including, but not limited to, tax returns, financial statements,
corporate records and documents and documents related to non-store assets and
property owned by the Seller, (iii) the Columbia, Mississippi, Store, including
all real property improvements which will be leased to the Purchaser by the
Seller as provided by the Columbia Store Lease, (iv) any offices and warehouse
facilities of the Seller, (v) except as otherwise determined by the Seller, in
the Seller's sole and absolute discretion, any real property owned by the Seller
which abuts or adjoins the real property of a Store but which is not used by the
Seller in the operation of such Store (collectively "Excess Real Property") and
all such Excess Real Property shall be retained by the Seller, (vi) all accounts
and other receivables of the Seller relating to the Stores and the business
conducted at the Stores, (vii) rights to receive rebates paid in arrears or
based on purchases with respect to Contracts ("Contract Rebates") to the extent
of purchases under such Contracts or othcrwise accrued to the Closing date, and
(viii) all assets and property of the Seller which are not listed on Exhibit
1.1.
Section 2. Leases
2.1 The Seller shall assign, and the Purchaser shall assume, the leases on
three Stores on the same terms and conditions as the current leases ("Leases")
which are annexed hereto as Exhibit 2.1, Purchaser shall lease the Columbia,
Mississippi, Store from the Seller pursuant to the Columbia Store Lease. If the
Seller is not released from all monetary and non-monetary obligations and
covenants under each of the Leases prior to or at the Closing, then the
Purchaser shall defend and indemnify the Seller with respect to each such
non-released obligation which accrues or
occurs on or after the date of the Closing. In the event that Seller cannot
obtain any consent, then to the extent only that Seller has the contractual
right to sublet the Store without the consent of the landlord, Purchaser shall
have a right to sub-lease this Store from Seller on the exact same terms and
conditions as contained in the Lease, including, but not limited to, the amount
of rental payment and the right to any options to renew the Lease or purchase
any premises. If the Purchaser does not obtain the consent of a landlord (i) to
assign and transfer a Lease to the Seller, or (ii) to sublease such Store to the
Purchaser as contemplated by this Section 2.1, then Seller and Purchaser shall
execute an operating agreement for such Store ("Store Operating Agreement")
which shall provide that the Purchaser (i) shall purchase from the Seller all
Assets related to such Store, except Seller's interest in such Lease, (ii) shall
operate, manage and maintain such Store during the entire lease term of such
Lease, (iii) shall not require the Seller to extend or renew the lease term of
such Lease, but Seller consents to Purchaser negotiating its own lease for such
Store at any time during such lease term, provided Seller is released from all
monetary and non-monetary obligations and covenants under the Lease, and (iv) at
least -five business days prior to any payment due date of Seller, shall
promptly pay to Seller all amounts payable by Seller to the landlord under or
pursuant to the Lease.
Section 3. Purchase Price for Asset and Payment of Purchase Price. The
purchase price (the "PP") for the Assets shall be $34,000,000. Except as
otherwise provided in Section 3.4, all amounts payable by the Purchaser to the
Seller under or pursuant to this Agreement, including, but not limited to, the
PP, shall be paid by the Purchaser to the Seller at the Closing or other
applicable payment date by wire transfer of immediately available funds to a
bank account designated by the Seller at or prior to the Closing or, if
applicable, at or prior to such other payment date. The PP shall be adjusted as
provided by this Section 3 or otherwise by this Agreement. The PP shall be paid
as follows:
3.1 At the Closing, $34,000,000, less (i) deductions for prorations of all
applicable ad valorem real estate and personal property taxes, and (ii) $150,000
allowance for repairs and maintenance of or to the Assets. If the Option
Property is sold by the Seller prior to Closing pursuant to the Purchase Option,
then the PP shall be reduced by $625,000 and, in such event, the Option Property
shall not be considered to be an Asset. Seller shall pay its own attorney's
fees. Purchaser shall pay the Franchise Agreements transfer fees, all of its own
expenses and all other costs and expenses to negotiate and Close the transaction
contemplated by this Agreement, including, but not limited to (i) all costs of
re-imaging or upgrading the Stores as required by the Franchisor for approval to
transfer the Franchise Agreements or for any other reason, including currently
scheduled Store re-imaging or upgrades (Seller shall provide Purchaser with a
list of the Stores which Seller believes require re-imaging), (ii) all costs
associated with obtaining the approval of the Franchisor in connection with the
proposed transaction, including transfer fees, (iii) all costs of title
searches, certificates or abstracts, surveys and environmental or other testing,
inspections, audits or reviews, (iv) all documentary stamps or transfer fees or
taxes, and (v) all broker's commissions or similar compensation,
3.2 In addition to the PP and at the Closing, the Purchaser shall pay to the
Seller by Purchaser's check payable to Seller at the Closing in an amount equal
to the Seller's cost of usable inventory in the Stores and the aggregate amount
of cash in the Stores, as determined as of the close of business on the, day
prior to Closing.
3.2A The PP shall be increased by all of the Seller's acquisition and
related costs and expenses of land or leases for new proposed Stores which have
been approved by Purchaser who will not unreasonably withhold or delay such
approval (collectively "New Stores"), including, but not limited to, (i)
deposits, xxxxxxx money or similar payments, (ii) purchase prices as adjusted by
purchase or acquisition agreements, (iii) rents and other payments under leases,
(iv) attorneys', surveyor, engineering, broker and other professional fees and
expenses related to any New Stores, (v) ad valorem or similar taxes and interest
or other loan or financing costs and expenses related to New Stores, and (vi)
all other costs and expenses incurred by the Seller in connection with any New
Store. At the Closing, the Purchaser shall pay all New Stores costs and expenses
described in this Section 3.2A to the Seller by wire transfer of immediately
available funds to a bank account designated by the Seller at or prior to the
Closing.
3.3 Allocation of Purchase Price. Subject to adjustment required by this
Agreement or otherwise agreed by the Purchaser and the Seller at, prior to or
after the Closing, the PP shall be allocated between and among the Assets as
follows:
3.3.1 Equipment and Vehicles per Schedule 3.3.1 $ 2,000,000
3.3.2 Real Estate per Schedule 3.3.2 $30,000,000
3.3.3 Leasehold Improvements per Schedule 3.3.3 $ 1,000,000
3.3.4 Goodwill $ 630,000
3.3.5 Franchise Agreements and Future Development $ 370,000
Rights per Schedule 3.3.5
3.4 ss. 1031 Exchange. At the option and designation by the Seller prior to
the Closing with respect to each Store where the real property is owned by the
Seller, the Seller intends that the transaction contemplated by this Agreement
("Sale") shall qualify for a "like-kind exchange" of the real property ("ss.
1031 Property") within the meaning of ss. 1031 of the Internal Revenue Code of
1986, as amended ("Code"), and corresponding provisions of Mississippi and/or
Louisiana law, and that any such exchange shall be conducted with the use of a
qualified intermediary ("Qualified Intermediary"), as defined in applicable
Treasury Regulations under ss. 1031 of the Code. In connection therewith, the
Purchaser agrees to take such actions and to execute such documents as may be
reasonably necessary to facilitate the Seller's exchange of each ss. 1031
Property for other real property of a like-kind, provided that:
(a) The Purchaser shall not be required to take or convey title to the
exchange or replacement property selected by the Seller.
(b) All costs incident to such exchange are paid solely by the Seller.
(c) The Purchaser shall have no additional duties, obligations or
liabilities solely as a result of such exchange other than to cooperate
at or prior to the Closing with the form of the Sale as described in
this Section 3.4 and to accept notices required in connection with a
ss. 1031 exchange. The Purchaser shall have no duties, obligations or
liabilities to the Seller or to the Qualified Intermediary with respect
to the exchange after the Closing, except to accept notices required in
connection with the ss. 1031 exchange and to comply with the provisions
of this Agreement.
(d) The Purchaser does not represent or warrant the tax consequences of
any such exchange contemplated by this Section 3.4.
(e) The Seller shall convey eachss.1031 Property directly to the
Purchaser at the Closing.
(f) Assignment of the portion of this Agreement relating to each ss.
1031 Property or, if applicable, a separate ss. 1031 agreement ("ss.
1031 Agreement') to the Qualified Intermediary by the Seller shall in
no way relieve or discharge the Seller or the Purchaser of their
respective duties, obligations and liabilities under this Agreement.
(g) Notwithstanding any provision of this Agreement to the contrary,
the net purchase price of each ss. 1031 Property ("'Exchange Price")
payable to the Seller, as specified in this Section 3, shall be paid by
the Purchaser at Closing directly to the Qualified Intermediary
designated by the Seller at or prior to the Closing. If the Seller has
not designated the Qualified Intermediary prior to or at the Closing,
then the Purchaser shall pay the Exchange Price at Closing to the
Seller as otherwise provided by this Agreement.
(h) The Seller shall have the right and option to require each ss. 1031
Property to be sold to the purchaser pursuant to a ss. 1031 Agreement,
which form is attached as Exhibit 3.4, and, in such event, the PP shall
be reduced by the amount allocated to the ss. 1031 Property in Schedule
3.3.2 and such amount shall be the net purchase price for the ss. 1031
Property in the ss. 1031 Agreement.
Section 4. Seller's Representations and Warranties. Seller represents and
warrants to Purchaser as follows:
4.1 Financial Statements. Attached hereto as Exhibit 4.1 are Seller's
internally prepared and unaudited financial statements of the Stores for the
1997 and 1998 years (Seller operates on a 52/53 week year) and the 1999 year
through July 11, 1999 ("Financial Statements"). The Financial Statements were
prepared on, a basis consistent with prior accounting periods. Since the date of
the latest Financial Statement, there have been no material adverse changes in
the financial condition of the Stores in the aggregate. Prior to Closing, Seller
shall allow Purchaser's auditors to complete a two year audit
as it relates to the Stores' operations at Purchaser's expense, provided such
audit (i) Is completed within 60 days after the Effective Date, (ii) is
conducted at a location approved by the Seller, and (iii) does not interfere
with Seller's business operations.
4.2 Title to Assets. Seller holds good and marketable title to the Assets
and, with respect to the real property, free and clear of title exceptions
except title exceptions listed in Schedule 4.2 or described below and liens and
encumbrances to be released at Closing. Title to each Store's real property
which is owned by the Seller and conveyed by the Seller to the Purchaser at the
Closing (individually "Property" and collectively "Properties") shall be
marketable as will enable Purchaser's closing agent, an ALTA member title
insurance underwriter selected by Purchaser, and authorized to do business in
Mississippi and Louisiana, to issue to Purchaser, at regular rates, its full
purchase price coverage, insuring marketable title, revised ALTA Owner's Title
Insurance Policy for each Property in the amount of the PP allocated to such
Property under Schedule 3.3.2, without exception as to (i) survey, provided
Purchaser obtains a survey of such Property, at Purchaser's expense, which is
satisfactory to Purchaser's closing agent, or (ii) mechanic's or similar liens,
and free and clear of all other liens and encumbrances and subject only to:
(a) General and special real property ad valorem taxes;
(b) Utility casements to service the Property;
(c) Prior reservations and conveyances of oil, gas and other
minerals, including leases, and other exceptions listed in
Schedule 4.2 acceptable to Purchaser's lender; and
(d) Other matters as may be approved in writing by Purchaser or
title objections waived by Purchaser pursuant to this
paragraph.
At the Closing, the Seller shall execute appropriate mechanic's and
materialmen's lien affidavits for each Property to permit Purchaser's closing
agent to delete the mechanic's and materialmen's lien exception from the Title
Insurance Policy for the Property.
4.3 Brokers and Finders. To the Seller's knowledge, National Restaurant
Brokers is the only procuring broker for this transaction.
4.4 Transfer Not Subject to Encumbrances or Third-Party Approval. The
execution and delivery of this Agreement by Seller, and the consummunation of
the contemplated transactions, will not result in the creation or imposition of
any valid lien, charge, or encumbrance an any of the Assets, and will not
require the authorization, consent, or approval of any third parry, including
any governmental subdivision or regulatory agency, except for the consents of
the Franchisor and the landlords of the Leases disclosed in Exhibit 2.1 and
other persons or entities disclosed in Schedule 4.4.
4.5 Labor Agreements and Disputes. Seller is neither a party to, nor
otherwise subject to, any collective bargaining or other agreement governing the
wages, hours and terms of employment of Seller's employees. Except for normal
employee grievances, Seller is not aware of any labor dispute or labor trouble
involving employees of Seller, nor has there been any such dispute or trouble
during the two years preceding the date of this Agreement.
4.6 Compliance with Codes and Regulations. Seller has no knowledge that
leasehold improvements violate any provisions of any applicable building codes,
fire regulations, building restrictions, or similar ordinances, orders, or
regulations,
4.7 Litigation. Seller has no knowledge of any claim, litigation,
proceeding, or investigation pending or threatened against Seller that might
result in any material adverse change in the business or condition of Assets
being conveyed under this Agreement.
4.8 Accuracy of Representations and Warranties. None of the representations
or warranties of Seller contain or will contain any untrue statement of a
material fact or omit or will omit or misstate a material fact necessary in
order to make statements in this Agreement not misleading. Seller knows of no
fact relating to Seller's ownership and operation of the Assets that has
resulted, or will result, in a material change in the business, operations, or
assets of Seller.
4.9 Lease. Exhibit 2.1 contains a true and correct copy of the Leases which
does not include the Columbia Store Lease. To the best of Seller's knowledge,
Seller is in compliance with
the terms of the Leases (collectively "Leases") and is not in default
under any of the Leases. Seller shall use commercially reasonable
efforts to obtain the consent of the landlords for the assignment to
Purchaser of the Leases.
4.10 Franchise Agreements. True and correct copies of the FAS are contained
in Schedule 4.10. To the best of Seller's knowledge, Seller is in compliance
with the terms of each FAS and is not in default of any of the terms of any FAS.
Seller shall use commercially reasonable efforts to obtain the consent of the
Franchisor to the assignment of all the FAS to Purchaser and to the release of
Seller's and its shareholder's guaranties to Franchisor, but the Seller shall
not be required to pay any amount to the Franchisor in order to obtain
Franchisor's consent for the transfer and assignment of the FAS to the
Purchaser.
Section 5. Representations of Purchaser. The Purchaser represents and
warrants to the Seller as follows:
5.1 Corporate Existence. Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Florida. Purchaser
has all requisite corporate power and authority to enter into this Agreement and
perform its obligations hereunder. Prior to the Closing, Purchaser shall qualify
to do business in the States of Mississippi and Louisiana.
5.2 Authorization. The execution, delivery, and performance of this
Agreement has been duly authorized and approved by the Board of Directors of
Purchaser, and this Agreement constitutes a valid and binding Agreement of
Purchaser in accordance with its terms.
5.3 Brokers and Finders. To the Purchaser's knowledge, National Restaurant
Brokers is the only procuring broker for the transaction contemplated by this
Agreement, and the broker's commission or similar compensation is not less than
$300,000.
5.4 Accuracy of Representations and Warranties. None of the representations
or warranties of Purchaser contain or will contain any untrue statement of a
material fact or omit or will omit or misstate a material fact necessary in
order to make the statements contained herein not misleading.
5.5 Financial Statements. Attached hereto as Exhibit 5.5 are Purchaser's SEC
filings (Form 1O-K or other "small business" equivalent) for the period ending
December 31, 1997 and December 31, 1998 and Purchaser's SEC filings during 1999
(Form 1O-Q and Form 8-K or other "small business" equivalent) ("Purchasers's
Financial Statements"). Since the date of the latest Purchaser's Financial
Statements, there has been no material adverse change in the financial condition
of Purchaser.
5.6. Purchaser Efforts. Purchaser shall use commercially reasonable efforts
to satisfy all conditions specified in Section 8 which are under the control or
partial control of the Purchaser, including, but not limited to, (i) all action
necessary to obtain financing to enable the Purchaser to pay all amounts payable
to the Seller at the Closing, and (ii) all action necessary to obtain title
commitments for the Properties within the time specified in this Agreement.
Section 5A. Re-imagiogy of Stores. Except for five Stores designated by
Franchise number and by Seller's Store number in Schedule 5A (collectively
"Stores To Be Reimaged"), Seller represents that, as of the Effective Date, the
Seller has "re-imaged" the Stores requested by the Franchisor has requested in
conformance with the Franchisor's current re-image standards and will use
commercially reasonable efforts to obtain a report from the Franchisor
certifying this fact. If the Seller is unable to obtain such report and the
Franchisor claims there are deficiencies related to the status of the re-imaging
of Stores requested to be re-imaged by the Franchisor prior to August 1, 1999,
but excluding the Stores To Be Reimaged then the Seller at it sole cost, shall
cure all such deficiencies identified by the Franchisor, Purchaser shall be
responsible for the re-imaging costs of (i) the Stores To Be Re-imaged, and (ii)
any Stores which the Franchisor requests to be re-imaged after July 31, 1999,
Section 6. Covenants of Seller. Seller agrees that between the date of this
Agreement and the Closing date, Seller will:
6.1 Operation of Business. Continue to operate the Stores in the usual and
ordinary course and in substantial conformity with all applicable laws,
ordinances, regulations, rules, or orders, and will
use commercially reasonable efforts to preserve the continued operation of its
business with its customers, suppliers, and others having business relations
with Seller.
6.2. Transfer of Assets. Not assign, sell, lease, or otherwise transfer or
dispose of the Assets, whether now owned or thereafter acquired, except in the
normal and ordinary course of business and in connection with its normal
operation, including the disposition of worn out or obsolete equipment.
6.3. Maintenance of Assets. Maintain all of the Assets other than
inventories in their present condition, reasonable wear and tear and ordinary
usage and the disposition of worn out or obsolete equipment excepted, and Seller
shall maintain the inventories at levels normally maintained.
6.4 Access Premises and Information. At reasonable times prior to the
Closing date, Seller will, upon reasonable notice, provide Purchaser and its
representatives with reasonable access during and after business hours to the
assets, titles, contracts, and records of the Stores, provided such access does
not interfere with Seller's business operations, and furnish such additional
information relating to the Stores as Purchaser from time to time may reasonably
request, provided Seller is in possession of such information.
6.5 Employee Matters. Prior to Closing, Seller will deliver to Purchaser a
list of the names of all persons on the payroll of the Stores, together with a
statement of amounts paid to each during Seller's most recent fiscal year and
amounts paid for services from the beginning of the current fiscal year through
the date such information is furnished to Purchaser and, promptly after Closing,
Seller will update such information for the current fiscal year through the day
prior to the Closing date. Seller will also provide Purchaser with a schedule of
all employee bonus arrangements and a schedule of other material compensation or
personnel benefits or policies in effect. After the Effective Date, Seller will
not, without Purchaser's prior written consent, which will not be unreasonably
withheld, enter into any material agreement with its employees, increase the
rate of compensation or bonus payable to or to become payable to any employee,
or effect any changes in the management, personnel policies, or employee
benefits, except in accordance with existing employment practices or as may be
required by law.
6.6 Conditions and Efforts. Seller will use commercially reasonable efforts
to satisfy the conditions precedent to Closing of the transactions contemplated
by this Agreement which are under the control, in whole or in part, of the
Seller and to fulfill all the conditions of the obligations of Seller under this
Agreement, and will do all acts and things as may be reasonably required to
carry out its respective obligations under this Agreement and to consummate and
complete the transaction contemplated by this Agreement.
Section 7. Covenants of Purchaser.
7.1 Conditions and Efforts. Purchaser will use commercially reasonable
efforts to satisfy the conditions precedent to Closing of the transactions
contemplated by this Agreement which are under the control, in whole or in part,
of the Purchaser, and to fulfill all the conditions of Purchaser's obligations
under this Agreement, and shall do all acts and things as may be reasonably
required to carry out Purchaser's obligations and to consummate and complete the
transaction contemplated by this Agreement.
7.2 Confidential Information. If for any reason the Purchaser does not
purchase the Assets, then Purchaser shall not disclose to third parties any
confidential information received from Seller in the course of investigating,
negotiating, and performing the transactions contemplated by this Agreement, and
Purchaser acknowledges that it is, and shall continue to be, bound by the
provisions of the Nondisclosure Agreement, dated February 12, 1999, between
Seller and Purchaser ("Nondisclosure Agreement"), a copy of which is attached to
this Agreement as Exhibit 7.2.
7.3 Employees. At Closing, Purchaser shall offer comparable employment to
Seller's current Store level employees, supervisors of Stores, employees
involved in marketing or maintaining the Stores, the directors of operations of
the Stores, and Seller's receptionist and accounting employees (collectively
"Transferred Employees"), but not Seller's head accountant, administrative
assistant or chief operating officer. However, Purchaser is under no obligation
to continue the employment of any Transferred Employees for any set period of
time.
7.4 Title to Properties. Purchaser shall obtain a survey and a title report,
certificate or abstract for each Property addressed to Purchaser and Seller; and
provide copies to Seller, within 30 days after the Effective Date,
Section 8. Conditions Precedent to Purchaser's Obligations. The obligation
of Purchaser to purchase the Assets is subject to the fulfillment, prior to or
at the Closing date, of each of the following conditions, any one or portion of
which may be waived in writing by Purchaser:
8.1 Representations, Warranties, and Covenants of Seller. All
representations and warranties made in this Agreement by Seller shall be true,
in all material respects, as of the Closing date as fully as though such
representations and warranties had been made on and as of the Closing date, and,
as of the Closing date, Seller shall not have violated or shall have failed to
perform in any material way, in accordance with any covenant contained in this
Agreement.
8.2 Licenses and Permits. Purchaser shall have obtained all licenses and
permits from public authorities necessary to authorize the ownership and
operation of the Stores.
8.3 Consents. Seller shall have obtained (i) the required consents under the
Leases and the Contracts for assignment of Lease and Contract to the Purchaser,
and (ii) the consent by Franchisor to the transfer of the FAS to Purchaser,
8.4 Conditions of the Business. There shall have been no material adverse
change in the manner of operation of the Stores in the aggregate prior to the
Closing date.
8.5 Opinion of Counsel for Seller. At the Closing, there will have been
delivered to Purchaser a signed opinion from counsel for the Seller, reasonably
satisfactory to Purchaser's counsel, to the effect that:
8.5.1 The Seller is a corporation validly existing and in good standing
under the laws of the State of Mississippi.
8.5.2 This Agreement when executed and delivered by the Seller will be
a valid and binding obligation of the Seller, enforceable against Seller in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
rights of creditors generally and the discretion of courts in granting equitable
remedies.
8.6 NoSuits or Actions. At the Closing date, no suit, action, or other
proceeding shall have been threatened, to the knowledge of Seller or Purchaser,
or instituted to restrain, enjoin, or otherwise prevent the consummation of the
transaction contemplated by this Agreement.
8.7 Due Diligence. Seller shall have 10 business days from the date of this
Agreement to deliver to Purchaser its Leases, Franchise Agreements, Financial
Statements, vending contracts and all other contracts which Purchaser shall be
assuming, and Purchaser shall have up to the date of Closing to conduct any and
all due diligence (the "Due Diligence Period") on the Seller as it deems
reasonable and necessary to Close the transaction contemplated by this
Agreement, including inspections of the Assets and environmental studies on the
Properties. If during the Due Diligence Period, Purchaser discovers material
items or matters which were unknown to it at the time of this Agreement, then
Purchaser shall have the absolute right, in its sole discretion, and upon notice
to Seller, to terminate and cancel this Agreement and, in such event, except as
otherwise specifically provided by this Agreement, neither the Purchaser nor the
Seller shall have any Liability or obligation under this Agreement. If Purchaser
fails to give such notice prior to the Closing, then such condition precedent
shall be deemed waived.
8.8. Financing Continigency . As an additional condition precedent to
Closing, within 20 days after the Effective Date, Purchaser shall have obtained
institutional or other financing satisfactory to Purchaser to Close the
transaction contemplated by this Agreement.
8.9. Title Insurance. A Title Commitment acceptable to Purchaser's lender
together with copies of all exceptions shall have been obtained by Purchaser for
each Property within thirty (30) days after the Effective Date of this
Agreement. If the title evidence reveals any defects in the title or any
physical encroachment on any Property, the Purchaser shall have ten (10)
business days from the
date the Purchaser receives the title evidence or survey to notify the Seller in
writing of the defects. If within thirty (30) days from the receipt of
Purchaser's written notice of defects, the Seller is unwilling or unable to cure
the defects to the reasonable satisfaction of Purchaser, the Purchaser may at
its option by written notice to Seller given within the ensuing ten (10)
business days, either (1) cancel and terminate this Agreement and, except as
otherwise expressly provided by this Agreement, neither party shall have any
further obligations under this Agreement, or (2) the Purchaser may elect to
Close the transaction contemplated by this Agreement and purchase the Property
without offset against the PP for any title defects,
8.10 FAS Transfer. In the event that Seller cannot obtain consent to
transfer the FAS to Purchaser within 45 days following the execution of this
Agreement or if the conditions imposed by Franchisor on Purchaser for such
consent are not acceptable to Purchaser, in its reasonable discretion, then
Purchaser shall have the right to terminate this Agreement without penalty to or
any further obligation of either party, except as otherwise expressly provided
by this Agreement.
If any condition specified in this Section 8 has not been satisfied prior to or
on the Closing Date, then the Purchaser may terminate this Agreement and, upon
such termination, neither party shall have any liability or obligation under
this Agreement, except as otherwise expressly provided by this Agreement.
Section 9. Conditions Precedent to Obligations of ScIler. The obligations of
Seller to Close the transaction contemplated by this Agreement are subject to
the fulfillment, prior to or at the Closing date, of each of the following
conditions, any one or a portion of which may be waived in writing by Seller:
9.1 Representations, Warranties, and Covenants of Purchaser. All
representations and warranties made in this Agreement by Purchaser shall be true
as of the Closing date as fully as though such representations and warranties
had been made on and as of the Closing date, and Purchaser shall not have
violated or shall not have failed to perform in accordance with any covenant
contained in this Agreement.
9.2 Legal Opinion. At the Closing, there will have been delivered to Seller
a signed opinion from counsel for the Purchaser, reasonably satisfactory to
Seller's counsel, to the effect, that:
9.2.1 Sailormen, Inc, is a corporation validly existing and in good
standing under the laws of the State of Florida. Interfoods of America,
Inc. is a corporation validly existing and in good standing under the
laws of the State of Nevada.
9.2.2 The Purchaser has full corporate, power and authority to execute,
deliver and perform this Agreement, and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the consummation by the Purchaser of
the transactions contemplated herein have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and
binding obligation of the Purchaser, enforceable in connection with its
terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of
courts in granting equitable remedies.
9.3 The Seller shall have obtained (i) the required consents under the
Leases and the Contracts for assignment of each Lease and Contract to Purchaser,
and (ii) the consent by Franchisor to the transfer of the FAS to Purchaser.
9.4 At the Closing date, no suit, action or other proceeding shall have been
threatened, to the knowledge of Seller or Purchaser, or instituted to restrain,
enjoin or otherwise prevent the consummation of the transaction contemplated by
this Agreement.
9.5 The Owner's Title Commitment referred to in Section 8.9 and title to
each Property shall be (1) acceptable to Seller, and (ii) enable Seller to
convey each Property to the Purchaser as required by this Agreement.
9.6 On terms reasonably acceptable to Seller and its stockholder, Xxxx X.
Xxxxxxx ("Stockholder"), Franchisor shall have (i) terminated or waived all
obligations of Seller or its Stockholder to guarantee performance of Purchaser's
obligations under any applicable Franchise
Agreement or related documents after the Closing, and (ii) terminated all other
guarantees and personal liability of Seller or Stockholder under any Franchise
Agreements and related documents. Franchisor must have waived any and all rights
of first refusal or similar rights to acquire, or direct the acquisition of, the
Stores and related Assets under each Franchise Agreement and related documents.
If any condition specified in this Section 9 has not been satisfied prior to or
on the Closing date, then the Seller may terminate this Agreement and, upon such
termination, neither party shall have any liability or obligation under this
Agreement, except as otherwise expressly provided by this Agreement.
Section 10. Purchaser's Acccptance. Purchaser represents and acknowledges
that it has entered into this Agreement on the basis of its own examination,
personal knowledge and opinion of the value of the business, Purchaser has not
relied on any representations, warranties or covenants made by Seller except as
expressly provided in this Agreement, and there are no implied or constructive
representations, warranties or covenants of the Seller, Purchaser further
acknowledges that Seller has not made any agreement or promise to repair or
improve any of the leasehold improvements, equipment, or other personal property
or any Property being sold to Purchaser under this Agreement. and that Purchaser
shall acquire, purchase and accept each of the Assets in its "as is," "where is"
and with "all faults and defects" condition.
Section 11. Risk of Loss. The risk of loss, damage, or destruction to any of
the equipment, inventory, or other personal property to be conveyed to Purchaser
under this Agreement shall be borne by Seller to the time of Closing. In the
event of such loss, damage, or destruction, Seller, to the extent commercially
reasonable, shall replace the lost property or repair or cause to be repaired
the damaged property to its condition prior to the damage. If replacement,
repairs, or restorations an not completed prior to Closing, then the PP shall be
adjusted by an amount agreed upon by Purchaser and Seller that will be required
to complete the replacement, repair, or restoration following Closing. If
Purchaser and Seller are unable to agree, then Purchaser, at its sole option and
notwithstanding any other provision of this Agreement, upon notice to Seller,
may terminate this Agreement and, in such event, except as otherwise
specifically provided by this Agreement, neither the Purchaser nor the Seller
shall have any liability or obligation under this Agreement, If, prior to
Closing, any of the real properties that are the subject of the Leases are
damaged or destroyed, then Purchaser may terminate this Agreement, unless
arrangements for repair satisfactory to all parties involved are made prior to
Closing, and, in such event, except as otherwise specifically provided by this
Agreement, neither the Purchaser nor the Seller shall have any liability or
obligation under this Agreement.
Section 12. Indemnification and Survival.
12.1 Survival of Representations and Warranties. Except as otherwise
expressly provided by this Agreement, all representations, warranties and
covenants made in this Agreement shall survive for 12 full calendar months after
the Closing of the transaction contemplated by this Agreement, except that any
party to whom a representation or warranty has been made in this Agreement shall
be deemed to have waived any misrepresentation or breach of representation or
warranty of which such party had knowledge prior to Closing. Any party teaming
of a misrepresentation or breach of representation or warranty under this
Agreement shall immediately give written notice thereof to all other parties to
this Agreement. The representations, warranties and covenants in this Agreement
shall terminate six full calendar months after the Closing, and such
representations, warranties or covenants shall thereafter be without force or
effect, except any claim with respect to which notice has been given to the
party to be charged prior to such expiration date.
12.2 Seller's Indemnification. Seller hereby agrees to indemnify and hold
Purchaser, it successors, and assigns harmless from and against:
12.2.1 Any and all claims, liabilities, and obligations of every kind
and description, contingent or otherwise, arising out of or related to the
operation of Seller's business prior to the close of business on the day before
the Closing date, except for claims, liabilities, and obligations of Seller
expressly assumed by Purchaser under this Agreement or paid by insurance
maintained by Seller or Purchaser.
12.2.2 Any and all damage or deficiency resulting from any material
misrepresentation, breach of warranty or covenant, or nonfulfillment of any
agreement on the part of Seller under this Agreement.
12.2.3 If any claim is asserted against Purchaser that would give rise
to a claim by Purchaser against Seller for indemnification under the provisions
of this Section, then Purchaser shall promptly give written notice to Seller
concerning such claim and Seller shall, at no expense to Purchaser, defend the
claim.
12.2.4 Any obligation on Seller's part to indemnify Purchaser under
this Agreement, including, but not limited to, this Section 12, shall become
applicable only when Purchaser has incurred at least an aggregate amount equal
to $100,000 in actual expenses which are otherwise subject to indemnity by
Seller and, thereafter, Seller's obligation to indemnify shall in no event
exceed an aggregate amount equal to $ 11,000,000. Notwithstanding any provision
of this Agreement to the contrary, environmental matters shall not be subject to
indemnification by the Seller. This Section 12 is the exclusive remedy of the
Purchaser under this Agreement, including, but not limited to, Exhibits and
Schedules to this Agreement, and under all documents executed under or pursuant
to this Agreement,
12.3. Purchaser's Indemnification. Purchaser agrees to defend, indemnify,
and hold harmless Seller against:
12.3.1 Any and all claims, liabilities, and obligations of every kind
and description arising out of or related to the operation of the business
following Closing or arising out of Purchaser's failure to perform obligations
of Seller assumed by Purchaser pursuant to this Agreement.
12.3.2 Any and all damage or deficiency resulting from any material
misrepresentation, breach of warranty or covenant, or nonfulfillment of any
agreement on the part of Purchaser under this Agreement.
12.3.3 All environmental matters relating to the Assets, which
indemnification obligation shall not expire.
12.3.4 If any claim is asserted against Seller that would give rise to
a claim by Seller against Purchaser for indemnification under the provisions of
this Section, then Seller shall promptly give written notice to Purchaser
concerning such claim and Purchaser, at no expense to Seller, defend the claim.
Section 13. C1osing,
13.1 Time and Place. This Agreement shall be Closed on or before October 31,
1999, or at such other time at such place that the parties may agree to in
writing. If the Closing does not occur by October 31, 1999, then Seller may
extend the Closing date to be a date between January 10, 2000 through January
31, 2000. Notwithstanding any contrary provision of this Agreement, the Closing
shall not occur between October 12, 1999, and October 26, 1999,
13.2 Obligations of Seller at the Closing. At the Closing and simultaneously
with the performance by Purchaser of its obligations described herein, Seller
shall deliver to Purchaser the following:
13-2.1 Xxxx of Sale for the Assets and Copies of Acts of Sales for the
real property being conveyed herein, including, to the extent assignable, Future
Development Rights.
13.2.2 Consent of Seller's landlords and other consents as provided for
herein,
13.2.3 Consent of the Franchisor to the transfer and assumption of the
Franchise Agreements to Purchaser.
13.2.4 Execute with the Purchaser a joint letter to the persons or
entities obligated to pay Contract Rebates allocating such Contract Rebates
between the Seller and the Purchaser (collectively "Joint Letters").
13.2.5 Execute such documents as may be required to transfer and assign
the Vehicles to the Purchaser.
13.2.6 All other documents called for in this Agreement and such other
documents that Purchaser and its counsel may reasonably require.
13.3 Obligations of Purchaser at the Closing. At the Closing and
simultaneously with the performance by Seller of its obligations described
herein, Purchaser shall deliver to Seller the following:
13.3.1 Wire transfer of immediately available funds to a bank account
designated by the Seller at or prior to the Closing for the PP, less all
applicable deductions provided by this Agreement, plus, except as otherwise
provided by Section 3.2, other amounts payable to the Seller by the Purchaser
under this Agreement.
13.3.2 Execute and deliver (i) an assumption of all obligations, and
defense and indemnification of Seller, under FAS, Leases and Contracts assigned
to Purchaser, and deeds conveying the Properties to Purchaser, (ii) an
indemnification agreement of Seller under any sublease or Store Operating
Agreement, and (iii) an indemnification agreement of Seller with respect Section
18 environmental matters,
13.3.3 Execute and deliver an agreement to pay to Seller each four week
period used by Franchisor ("Period") an amount equal to the royalty rebate
allowed to Purchaser for such Period with respect to Stores which have been
re-imaged or updated or remodeled by the Seller prior to Closing.
13.3.4 Execute and deliver to Seller the Joint Letters.
Section 14. Rights and Obligations Subsequent to Closing.
14.1 Books and Records. This sale does not include the books of account and
records of Seller's business, provided, however, for 12 full calendar months
after the Closing date, Seller shall grant Purchaser reasonable access to
Seller's books and records relating to the Assets and the conduct of Seller's
business at the Stores.
14.2 Seller's Right to Pay. In the event Purchaser fails to make any payment
of taxes, assessments, insurance premiums, or other charges that Purchaser is
required to pay to third parties under this Agreement, Seller shall have the
right, but not the obligation, to pay the same. Purchaser will reimburse Seller
for any such payment immediately upon Seller's demand, together with interest at
the prime rate as published in the Wall Street Journal from time to time plus 3%
from the date of Seller's payment until Purchaser reimburses Seller. Any such
payment by Seller shall not constitute a waiver by Seller of any remedy
available by reason of Purchaser's default for failure to make the payments.
Section 15. Confidentiality
The Purchaser and the Seller acknowledge that the Nondisclosure Agreement is
binding upon the Purchaser, the Seller and their respective successors and
assigns.
Section 16. Miscellaneous Provisions.
16.1 Amendment and Modification. This Agreement may be amended, modified, or
supplemented only by a written agreement signed by all of the parties hereto.
16.2 Notices. All notices, requests, demands, and other communications
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand, by overnight courier, or fax, or five
business days afteT being mailed by certified or registered mail, return receipt
requested, with postage prepaid:
If to Purchaser:
Xxxxxx X. Xxxx, President
0000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Copy to: Xxxx X. Xxxxxxx, Esquire
0000 X.X. 000xx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
If to Seller: Xxxx Xxxxxxx
Xxxxx Enterprises, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Copy to: Xxxxx X. Xxxxxx, Esquire
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
or to such other address as any Party furnishes the other in writing.
17.3. Attorney Fees. In the event suit or action is brought by any party
under this Agreement to enforce any of its terms, or in any appeal therefrom, it
is agreed that the prevailing party shall be entitled to reasonable attorneys
fees to be fixed by the arbitrator, trial court and/or appellate court.
17.4 Law Governing. This Agreement shall be exclusively governed by and
construed in accordance with the internal laws of the state of Mississippi
without regard to principles of conflicts of laws, and the federal and state
courts of the State of Mississippi shall be the exclusive forum for the judicial
resolution of all disputes between the parties and the determination of the
rights and obligations under, and the interpretation of, this Agreement.
17.5 Coputation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday or a
legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday or legal holiday. Time is of the essence.
17.6 Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor affect the interpretation of this Agreement.
17.7 Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons may require.
17.8 Entire Agreement. This Agreement and the Schedules and Exhibits to this
Agreement and the Nondisclosure Agreement contain the entire understanding
between and among the parties and supersedes any prior understandings and
agreements, except the Nondisclosure Agreement, among them respecting the
subject matter of this Agreement. Any amendments to this Agreement must be in
writing and signed by the party against whom enforcement of that amendment is
sought,
17.9 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
17.10 Presumption. This Agreement or any Section thereof shall not be
construed against any party due to the fact that said Agreement or any Section
thereof was drafted by said party.
17.11 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purpose of the Agreement.
17.12 [Intentionally Omitted]
17.13 Parites in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
17.14 Savings Clause. Except for provisions of this Agreement relating to
the determination of the PP or other amounts payable to the Seller, if any
provision of this Agreement, or the application of such provision to any person
or circumstance, shall be held invalid, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as to
which it is held invalid, shall not be affected thereby.
Section 18 Environmental Matters. The Purchaser and Seller acknowledge that
prior to closing, the Purchaser, as part of its due diligence and as a condition
precedent to closing, will be conducting an environmental test of the property
being purchased hereunder. As such, at closing, Purchaser waives any and all of
its remedies which it may otherwise have had against the Seller with respect to
any environmental matters, including, but not limited to hazardous waste
disposal.
Section 19 Effective Date. For purposes of this Agreement, the term
Effective Date shall be the first date written on page 1 of this Agreement.
Section 20 Xxxxxxx Money. Upon Purchaser's execution of this Agreement, the
Purchaser shall pay $100,000 to the trust account of Seller's attorney, Nippes
Law Firm, PLLC ("Seller's Attorney") as xxxxxxx money ("Xxxxxxx Money"), which
shall be applied against the PP at Closing. The Xxxxxxx Money shall be
non-refundable unless the Purchaser gives written notification to the Seller and
Seller's Attorney within 30 days after the Effective Date that the Purchaser has
terminated this Agreement because (i) the financing contingency described in
Section 8.8 has not been satisfied by the Purchaser, or (6) the Purchaser has
not obtained a Title Commitment acceptable to Purchaser's leader for each
Property as described in Section 8.9. Except as expressly provided in this
Section 20, the Purchaser shall have no tight to a refund of the Xxxxxxx Money
regardless of any reason that the Closing does not occur as provided by this
Agreement, and the Seller shall retain the Xxxxxxx Money as liquidated damages,
as compensation for not negotiating for the sale of the Assets to other persons
and entities during the prior several months and as an estimate, and as payment
of, Seller's costs and expenses incurred in the negotiation of this Agreement
and in connection with the transaction contemplated by this Agreement. If the
Purchaser has not terminated this Agreement as provided by this Section 20,
then, upon the expiration of 30 days after the Effective Date, the Seller's
Attorney shall pay the Xxxxxxx Money, plus accrued interest, to the Seller. If
the Purchaser terminates this Agreement as provided by this Section 20, then the
Seller's Attorney shall pay the Xxxxxxx Money, plus accrued interest, to the
Purchaser. Upon any termination of this Agreement pursuant to this Section 20,
neither the Purchaser nor the Seller shall have any liability or obligation
under this Agreement or otherwise.
Section 21 Closing. For purposes of this Agreement, the term Closing shall
mean the date on which the transaction contemplated by this Agreement is
consummated.
Section 22 Schedules and Exhibits. All Schedules referred to in this
Agreement, including all permitted amendments or supplements to or modifications
of any Schedules are made a part of and incorporated into this Agreement by
reference. The Seller shall promptly amend, supplement and modify the Schedules
and Exhibits to ensure that all Schedules and Exhibits remain true, correct,
complete and accurate in all material respects between the date of this
Agreement and the Closing. Within ten business days after the Purchaser's
receipt of each Schedule, or any amendments, supplements or modifications to or
of a Schedule or Exhibit, the Purchaser shall accept or reject each Schedule or
Exhibit by written notice to the Seller. The Purchaser's failure to accept or
reject a Schedule or Exhibit as provided by this Section 22 shall constitute an
acceptance by the Purchase of such Schedule or Exhibit. If the Purchaser
reasonably rejects a Schedule or Exhibit, then the Purchaser may terminate this
Agreement by written notice to the Seller and, in such event, neither party
shall have any obligation Or liability under this Agreement or otherwise except
as expressly provided by this Agreement.
Section 23 FAS Transfer Consent Procedure. Notwithstanding any contrary
provision of this Agreement, the Purchaser and the Seller agree that (i) the
Purchaser shall contact the Franchisor regarding the transfer and assignment of
the FAS, including the Future Development Rights, and the matters described in
Section 9.6 (collectively "FAS Transfer Issues"), (ii) the Purchaser shall
conduct all discussions and negotiations with the Franchisor relating to the FAS
Transfer Issues, and (iii) only after agreement with the Purchaser or if the
conditions of Section 9.6 have not been satisfied within 45 days after the
Effective Date will the Seller discuss and negotiate FAS Transfer Issues with
the Franchisor.
In Witness Whereof, the Seller and the Purchaser have
executed this Agreement on or as of the date first writtcn above,
INTERFOODS OF AMERICA, INC. XXXXX ENTERPRISES, INC.
By: By:
Xxxxxx X. Xxxx, CEO Xxxx X. Xxxxxxx, President
SAILORMEN, INC.
By:
Xxxxxx X. Xxxx, CEO
