CONTRACT FOR THE PURCHASE AND SALE OF REAL ESTATE
Exhibit 10.2
CONTRACT
FOR THE PURCHASE AND SALE OF REAL ESTATE
Subject
to the terms and provisions contained herein, Steak n Shake Operations, Inc.,
an
Indiana corporation ("Seller"), hereby agrees to sell and convey Xxxxxx
Operations, Inc., a North Carolina corporation, having its principal office
at
0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, and/or its permitted
assigns ("Purchaser"), and Purchaser hereby agrees to buy and pay for that
certain real property situated in the City of Greenville, Greenville County,
South Carolina, containing approximately 1.07 acres of land, more or less,
more
particularly described on Exhibit "A"attached hereto and made a
part hereof, along with all improvements located thereon (collectively the
"Real
Estate").
This
Contract is executed upon the following terms and conditions:
1. Purchase
Price.
The
Purchase Price for the Real Estate shall be One Million One Hundred Twenty
Seven
Thousand Eight Hundred Dollars ($1,127,800). The Purchase Price shall be payable
at Closing (as hereinafter defined), in cash, by cashier’s or certified check,
or by wire transfer of immediately available funds, subject to prorations and
adjustments as hereinafter set forth.
2. Independent
Contract Consideration.
Upon
complete execution of this Contract, Purchaser shall pay to the order of Seller
Independent Contract Consideration (so called herein) in the amount of $100.00
as consideration for Seller’s entering into this Contract. The Independent
Contract Consideration is not refundable and shall be retained by Seller
notwithstanding any other provisions of this Contract.
3. Survey.
Within
five (5) days following the Effective Date, Seller, at Purchaser’s sole cost and
expense, shall order an update of that ALTA survey prepared by AOS, Inc. dated
June 26, 2000 and having a last revision date of August 15, 2000 as Project
No.
048, to show all improvements located on the Real Estate (the "Survey").
The
Survey shall contain a certification from the surveyor or engineer to Purchaser,
the Title Company and any lender designated by Purchaser. Purchaser shall
reimburse Seller for the cost of the Survey at Closing.
4. Title
Commitment.
As of
the date hereof, Purchaser, at Seller’s sole cost and expense, has ordered an
update of Chicago Title Insurance Company Title Policy currently in effect
(No.
NBU-00192011067164) (the "Title Commitment") issued through Chicago Title
Insurance Company, 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, X.X. 00000 (the
"Title Company"), setting forth the status of title of the Real Estate and
all
exceptions, including rights-of-way, easements, restrictions, covenants,
reservations and other conditions, if any, affecting the Real Estate with true,
legible copies of all instruments referred to in the Title Commitment affecting
title to the Real Estate, not already in Seller’s possession and delivered
pursuant to Section 5 hereof.
5. Additional
Information.
Within
fifteen (15) days following the Effective Date, Seller, at Seller’s sole cost
and expense, shall furnish to Purchaser, to the extent available, all
engineering studies, surveys, soil tests, environmental reports or studies
and
any contracts which affect the operation of this restaurant.. Purchaser
acknowledges and agrees that foregoing documents will be delivered to Seller
without any warranties as to their accuracy or completeness.
6. Review
of Title and Survey.
Purchaser
shall have a period (the "Inspection Periodæ) ending ninety (90) days after the
Effective Date in which to notify Seller of any objections Purchaser has to
any
matters shown or referred to in the Title Commitment or the Survey hereto
failing which Purchaser waives its right to raise such objections and title
shall be deemed satisfactory. In the event Purchaser notifies Seller of any
unacceptable exceptions or conditions ("Unacceptable Condition(s)"), Seller
shall have five (5) days thereafter in which to notify Purchaser whether Seller
will eliminate or modify such Unacceptable Condition(s) or conditions. In the
event Seller does not respond within such 5-day period, Seller will be deemed
to
have declined to eliminate or modify such Unacceptable Condition(s). If Seller
does not opt to eliminate or modify such condition, Purchaser may (i) waive
such
Unacceptable Condition(s) and proceed to Closing; (ii) terminate this Agreement
(subject to Section
17);
or
(iii) attempt to resolve the Unacceptable Condition(s) at Purchaser’s sole cost
and expense, with Seller’s cooperation provided Seller shall not be required to
incur any costs.
7. Inspection.
At all times during the Inspection Period, Purchaser, its agents,
representatives and designees (including prospective tenants, occupants and
users of the Real Estate and their agents and representatives) shall have the
right to enter on the Real Estate to conduct any investigations (including
without limitation review of any POS equipment), soil tests, environmental
assessments and engineering and feasibility studies as may be deemed necessary
or advisable in connection with the purchase or use of the Real Estate; provided
that Purchaser gives Seller’s representative, Xxxx Xxxxx (000) 000-0000, not
less than twenty four (24) hours advanced notice (by telephone) of each such
entry provided that Purchaser’s entry upon the Real Estate shall not, in
Seller’s judgement, interfere with the use and operation of Seller’s restaurant.
Any entry upon the Real Estate by or on behalf of Purchaser shall be subject
to
such reasonable rules, regulations, standards and conditions as Seller may
impose and (without limitation) may be conditioned upon Purchaser’s delivery to
Seller of proof of any insurance coverage that Seller may be reasonably require.
Purchaser shall deliver to Seller, promptly
upon receipt by Purchaser and in any event within five (5) days after the
termination of this Contract, pursuant to this
Section,
a true
and complete copy of each inspection report or summary, survey, engineering
study, soil test report, environmental report, or written result of such
inspection, investigation, study or test conducted by or on behalf of Purchaser
in connection with a study or investigation made during the Inspection Period,
without any representation or warranty from Purchaser as to the accuracy or
completeness of such reports. Promptly after each entry onto the Real Estate,
Purchaser shall restore the Real Estate to substantially the same condition
as
it was in prior to such entry. Purchaser’s obligation to deliver copies of
report, summaries, surveys, and test results as provided in this Section and
Purchaser’s obligation to restore the Real Estate as aforesaid shall survive the
termination of this Agreement or the Closing hereunder (whichever is to
occur).
Purchaser
shall indemnify and hold Seller harmless, and, at Seller’s option, defend Seller
from and against any and all losses, costs, liens, damages, claims, suits,
actions, liabilities, and expenses (including reasonable attorneys’ fees and
court costs) incurred by Seller in connection with or arising in any way out
of
Purchaser’s entry upon the Real Estate pursuant to this Section. Purchaser’s
obligations pursuant to this Section shall survive a period of one (1) year
after the termination of this Contract or Closing hereunder (whichever is to
occur).
If
it
should be determined by Purchaser, on or before the end of the Inspection
Period, in Purchaser’s sole discretion and judgment, that the Real Estate is not
suitable for the purposes for which Purchaser intends to utilize the Real
Estate, Purchaser shall submit a list of those issues limiting the suitability
of the Real Estate, including issues regarding machinery, equipment, furniture
and fixtures located at the Real Estate, to Seller in the same manner that
Purchaser shall submit notice of Unacceptable Conditions pursuant to Article
6
and, similarly, Seller shall have the opportunity to respond in the same manner
within the same time period set forth in Article 6 for Unacceptable Conditions.
If Seller does not opt to eliminate or modify such the issues raised in this
notice, Purchaser may (i) waive such issue(s) and proceed to Closing; or (ii)
terminate this Agreement (subject to Section 17).
8. [Intentionally
Deleted].
9. Closing
Date and Place.
The
Closing (so called herein) hereunder shall take place at 10:00 a.m. at the
offices of the Title Company ten (10) days after the expiration of the
Inspection Period.
10. Seller’s
Representations and Warranties. Seller represents
and warrants to Purchaser to the best of Seller’s knowledge, which for purposes
of this section shall refer to the actual knowledge of Xxxxxxx X. Xxxxxxx,
Associate Counsel - Director Real Estate Law and/or Xxxxxxx Xxxxx - Vice
President Franchising, without the benefit of nor obligation to make an
independent investigation, as follows:
| a. |
Seller
has and, at the time of Closing, will have good and indefeasible
fee
simple title to the Real Estate, free and clear of any and all
encumbrances and title exceptions other than the Permitted
Exceptions.
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| b. |
There
are no adverse parties in possession of the Real Estate or any part
thereof and no parties in possession of any portion of the Real Estate
as
lessees, tenants at sufferance or trespassers; and no party has been
granted any license, lease or other right relating to the use or
possession of the Real Estate.
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| c. |
There
is no pending or threatened condemnation or similar proceeding affecting
the Real Estate or any part thereof, nor is any such proceeding
contemplated by any governmental
authority.
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| d. |
There
is no pending or threatened litigation, actions or proceedings against
Seller arising out of Seller’s ownership of the Real Estate which could
adversely affect the ability of Seller to perform any of its obligations
hereunder or the use of the Real Estate by
Purchaser.
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| e. |
Seller
has not received notice from any governmental, quasi-governmental
agency
or owner association requiring the correction of any condition with
respect to the owner association requiring the correction of any
condition
with respect to the Real Estate, or any part thereof, by reason of
a
violation of any federal, state, county or city statute, ordinance,
code,
rule or regulation or stating that any investigation has been commenced
or
is contemplated regarding any of the
foregoing.
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| f. |
Seller
has full power and authority to enter into this Contract and to perform
its obligations under this Contract. The execution, delivery and
performance of this Contract and the transactions contemplated hereby
have
been duly authorized and approved and no other actions or proceedings
on
its part are necessary to authorize the execution, delivery or performance
of this Contract. This Contract constitutes the legal, valid and
binding
obligations of Seller enforceable in accordance with its
terms.
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| g. |
Seller
is not a foreign person as defined in Section 1445 of the Internal
Revenue
Code of 1986, as the same may have been or may hereafter be amended,
or
the regulations promulgated
thereunder.
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| h. |
Seller
is in possession of all licenses, permits and other governmental
approvals
necessary to operate a "Steak N Shakeæ restaurant at this
location.
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Purchaser’s
obligation to close this Contract shall be contingent on the above
representations and warranties also being true and correct on the Closing
Date.
11. AS-IS;
No Implied Representations. Seller and Purchaser
acknowledge and agree that except as otherwise may be specifically and expressly
provided herein, or in the special warranty deed, neither party has made any
representations or warranties or agreements to, or on behalf of the other party
as to any other matter concerning this Contract, the Real Estate, the present
use thereof, or the suitability of the Real Estate for Purchaser’s intended use.
Purchaser hereby acknowledges that pursuant to Section 6 and 7 hereof, Purchaser
is entitled to and shall make its own independent inspection and investigation
of the Real Estate and, in entering into this Contract, Purchaser represents
and
warrants to Seller that it intends to rely solely on such inspection and
investigation of the Real Estate. ACCORDINGLY, BUYER IS NOT RELYING AND SHALL
NOT BE ENTITLED TO RELY UPON ANY REPRESENTATIONS OR WARRANTIES OF SELLER OR
ANY
PRINCIPAL, AGENT, PARTNER, OFFICER, DIRECTOR, ATTORNEY, EMPLOYEE, BROKER, OR
OTHER REPRESENTATIVE OF SELLER, AND, AT THE CLOSING UNDER THIS AGREEMENT, BUYER
SHALL ACCEPT CONVEYANCE OF THE REAL ESTATE IN ITS "AS-IS", "WHERE- ISæ CONDITION
AS OF THE CLOSING DATE WITH ALL FAULTS WITOUT ANY REPRESENTATION OR WARRANTY
WHATSOEVER FROM SELLER, EXCEPT AS EXPRESSLY CONTAINED HEREIN, OR IN THE SPECIAL
WARRANTY DEED. NO AGREEMENT, WARRANTY, COVENANT, OR REPRESENTATION, UNLESS
EXPRESSLY SET FORTH HEREIN OR IN THE DEED SHALL BIND SELLER.
12. Risk
of Loss.
Risk
of
all loss, destruction or damage to the Real Estate or any portion thereof,
from
any and all causes whatsoever until consummation of the Closing shall be borne
by Seller. In the event of damage by fire or other casualty or a taking by
condemnation or similar proceedings or actions of all of the Real Estate, or
any
portion of the Real Estate which, at Purchaser’s sole discretion, is material to
the use of the remainder, Purchaser shall have the option to terminate this
Contract upon written notice to Seller, and neither Purchaser nor Seller shall
have any further right or obligation hereunder. Should Purchaser elect not
to
exercise its option as provided hereunder, then the Contract shall remain in
full force and effect and Seller shall assign or pay to Purchaser at Closing
Seller's interest in and to all insurance proceeds, condemnation awards or
proceeds from any such proceedings or actions in lieu thereof.
13. Seller’s
Obligations at Closing.
At
the
Closing, Seller shall deliver or cause to be delivered to Purchaser, at Seller’s
sole cost and expense, each of the following items:
| a. |
A
special warranty deed duly executed and acknowledged by Seller, conveying
to Purchaser good, marketable fee simple title in the Real Estate,
subject
only to the Permitted Exceptions.
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| b. |
A
non-foreign person affidavit sworn to by Seller as required by Section
1445 of the Internal Revenue Code. In the event that (i) Seller fails
to
deliver the affidavit at Closing; or (ii) Seller delivers the affidavit
but Purchaser has actual knowledge that the affidavit is false; or
(iii)
Purchaser receives notice that the affidavit is false from any agent
of
Purchaser or Seller, then Purchaser shall be entitled to withhold
from the
Purchase Price a sum equal to ten percent (10%) of the total amount
which
otherwise would have been realized by Seller from such sale, which
sum
will be paid by Purchaser to the United States Treasury pursuant
to the
requirements of Section 1445 of the Internal Revenue Code and the
regulations promulgated thereunder.
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| c. |
An
ALTA Owner’s Policy of Title Insurance based on the updated Title
Commitment (the "Owner’s Policy") in the amount of the Purchase Price for
the Real Estate issued by the Title Company, insuring good and marketable
fee simple title to the Real Estate in Purchaser, subject only to
the
Permitted Exceptions and the standard printed
exceptions.
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| d. |
Such
evidence or documents as may be reasonably required by the Title
Company
evidencing the status and capacity of Seller and the authority of
the
person or persons who are executing the various documents on behalf
of
Seller in connection with the sale of the Real
Estate.
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14. Purchaser’s
Obligations at Closing.
At
the
Closing, Purchaser shall deliver to Seller the following items:
| a. |
The
Purchase Price in full, subject to any prorations or other adjustments
contained in this Contract by means of a wire transfer or immediately
available funds at Closing or by a bank cashier’s check made payable to
the Title Company; and
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| b. |
Such
evidence or documents as may reasonably be required by the Title
Company
evidencing the status and capacity of Purchaser and the authority
of the
person or persons who are executing the various documents on behalf
of
Purchaser in connection with the purchase of the Real
Estate.
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15. Prorations
and Costs.
Ad
valorem taxes for the then current year shall be prorated at the Closing
effective as of the Closing Date. If the Closing shall occur before the tax
rate
is fixed for the then current year, the proration of taxes shall be based upon
taxes for the prior year and adjusted for the year of closing when they become
finally determined with such settlement to be made within ten (10) days after
the date taxes are finally determined. Seller shall be responsible for any
and
all taxes related to the Real Estate for years prior to Closing due to a change
in land usage or ownership. Seller shall also be responsible for any and all
transfer taxes and documentary stamps and/or recording fees payable on account
of transfer of title to the Real Estate to Purchaser. Charges made by the Title
company for its services shall be divided equally between. the
parties.
16. Brokerage
Commission.
Seller
represents and warrants to Purchaser that Seller has not engaged nor utilized
the services of any broker or other professional, who can make a claim for
a
fee, commission or other compensation as the result of the consummation of
the
transaction contemplated herein. Except as otherwise provided in this Section,
Seller agrees to indemnify and hold harmless Purchaser against any claims or
losses resulting from a breach of the preceding representation and warranty.
Purchaser represents and warrants to Seller that Purchaser has not engaged
or
utilized the services of any broker or other professional who can make a claim
for a fee, commission or other compensation as the result of the consummation
of
the transaction contemplated herein. Purchaser agrees to indemnify and hold
harmless Seller against any claims or losses resulting from a breach of the
preceding representation and warranty. The provision of this Section shall
survive Closing for a period of one (1) year.
17. Termination
by Purchaser.
If this
Contract is terminated by Purchaser pursuant to Section
6 or Section 7,
or by
mutual agreement of the parties, the Xxxxxxx Money shall be immediately returned
to Purchaser by the Title Company, and the parties shall have no further
obligations to one another except those provisions which survive closing or
the
termination of the Contract by their express terms.
18. Seller’s
Default.
In
the
event of Seller’s default hereunder, Purchaser may, at Purchaser’s option, and
as Purchaser’s sole and exclusive remedy, either: (i) terminate this Contract by
giving written notice from Purchaser to Seller; or (ii) enforce specific
performance hereunder.
19. Purchaser’s
Default.
In
the
event that Purchaser shall fail to consummate this Contract for any reason,
except Seller’s default or the termination of this Contract pursuant to any
right of termination given to Purchaser herein, Seller, shall have the right
to
terminate this Contract by notice to Purchaser; or pursue any legal remedies.
20. Notice.
All
notices, demands, or other communications of any type (herein collectively
referred to as "Noticesæ) given by Seller to Purchaser or by Purchaser to
Seller, whether required by this Contract or in any way related to the
transaction contracted for herein, shall be in writing and shall be deemed
delivered when actually received, or, if earlier and whether or not actually
received, (i) if delivered by courier or in person, when left with any person
at
the address reflected below, if addressed as set forth below, (ii) if by
overnight courier service (such as, by way of example but not limitation, U.S.
Express Mail or Federal Express) with instructions for delivery on the next
business day, one (1) business day after having been deposited with such
courier, addressed as reflected below, and (iii) if delivered by mail, three
(3)
days after being deposited in a Post Office or other depository under the care
or custody of the United States Postal Service, enclosed in a wrapper with
proper postage affixed (as a certified or registered item, return receipt
requested), addressed as follows:
To
Purchaser: Xxxxxx
Operations, Inc.,
0000
Xxxxxxxxx Xxxxx;
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Attn.:
Xxxxxxx Xxxxxx
To
Seller: Steak
n
Shake Operations, Inc.
500
Century Building
00
Xxxxx
Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000-0000
Attention:
Xxxxxxx X. Xxxxxxx,
Associate
Counsel - Director Real Estate Law
Phone:
(000) 000-0000
Fax:
(000) 000-0000
21. Unit
Franchise Agreement Contingency.
Seller
and Purchaser acknowledge that they have entered into this Contract to transfer
title to the Real Estate so that Purchaser can operate the Restaurant located
thereon as a franchisee of Seller pursuant to that Unit Franchise Agreement
("UFA") of even date herewith. The parties further acknowledge that if the
UFA
is terminated, for any reason, before the consummation of the transaction
contemplated herein, this Contract shall terminate immediately.
22. Governing
Law and Venue.
This
Contract shall be construed in accordance with the laws of the State of Indiana
and any court action arising out of this Contract shall be brought in Xxxxxx
County, Indiana.
23. Capacity.
Except
as
hereinafter provided, each person executing this Contract hereby represents
and
warrants that he has the authority to do so and that his signature shall bind
the entity for which he signed. Each party hereto shall provide the other party
and the Title Company with such documentation as the Title Company or
Purchaser’s or Seller’s attorney deems necessary to evidence the authority of
that party to perform the actions contemplated herein.
24. Timing.
Time
is
of the essence of this Contract. For purposes hereof, the "Effective Date"
of
this Contract shall be the date both parties are in receipt of a fully-executed
original of the Contract. If the date that the performance of any obligations
arising hereunder, or the date upon which any notice shall be given, is a
Saturday, Sunday or any legal holiday under the laws of the State of South
Carolina, then such date shall be extended to the next business day immediately
succeeding such Saturday, Sunday or legal holiday.
25. Attorney’s
Fees and Costs.
In
the
event either party hereto files a suit to enforce this Contract or any
provisions contained herein, the party prevailing in such action shall be
entitled to recover, in addition to all other remedies or damages, its costs,
including reasonable attorney’s fees, incurred in such suit.
26. Assignability.
This
Contract may be assigned by Purchaser without the consent of Seller, and upon
such assignment Purchaser shall be relieved of all duties and obligations
hereunder and Seller shall thereafter look solely to Purchaser’s assignee for
the performance of Purchaser’s obligations hereunder.
27. Gender.
Where
required for proper interpretation, words in the singular shall include the
plural and the masculine gender shall include the neuter and the feminine gender
and vice versa.
28. Headings.
The
descriptive headings of the several Sections contained in this Contract are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
29. Complete
Agreement.
This
Contract embodies the complete agreement between the parties hereto and cannot
be varied or terminated except by written agreement of the parties.
30. Withdrawal
of Offer.
Purchaser
must accept this Contract by signing and returning a fully executed copy of
the
same to Seller at the address provided in Section
20
within
ten (10) days from the date of its receipt hereof, or this offer may, at
Purchaser’s option, be deemed to be withdrawn.
31. [DELETED].
32. Removal
from Market.
Upon the
full execution of this Contract, Seller hereby agrees that it shall not solicit
offers for the purchase, lease or development of the Real Estate from any
parties other than Purchaser or its assigns, while the Contract is in
effect.
33. Counterparts.
This
Contract may be executed in any number of counterparts, each of which will
be
deemed to be an original and all of which will be identical and, when taken
together, shall constitute one and the same instrument and the agreement of
the
parties hereto.
34. Good
Faith and Fair Dealing.
The
parties agree to deal with each other fairly and in good faith including
executing any documents reasonably necessary to effectuate the intent of this
Contract.
EXECUTED
on this, the 16th day of December, 2005, by Purchaser.
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Xxxxxx
Operations, Inc., a North Carolina corporation
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By:
/s/ Xxxxx X. Xxxxxx
Title:__President__________________________________
EXECUTED
on this, the 16th day of December, 2005, by Seller.
STEAK
N SHAKE OPERATIONS, INC., an Indiana corporation
By:
___/s/ Xxxxx X. Milne___________________________________
Name:
_____/s/ Xxxxx X. Milne____________________________
Title:
_____General Counsel, Secretary________
RECEIPT
BY TITLE COMPANY
This
Contract has been received by the Title Company this, the 16th day of December,
2005; and the undersigned agrees to abide by all provisions contained herein
regarding the disposition of the Xxxxxxx Money.
