November 13, 1995
Xx. Xxxx Xxxxxxx
President
Steakout, King of Steaks, Inc.
c/o Xxxxx Xxxxx, Esq.
0000 XxXxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Dear Xxxx:
This letter will set forth our agreement for the
purchase by Steakout, King of Steaks, Inc., a Nevada corporation
("Steakout"), from Good Times Drive Thru Inc., a Colorado
corporation ("Good Times"), of the assets of the four restaurants
("Restaurants") located at the following addresses:
0000 Xxxx Xxxx Xxxx Xxxxxxxxx
Xxxxx Xxx Xxxxx, Xxxxxx
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxx
0000 Xxxx Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxx
000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxx
1. Purchased Assets. Steakout shall purchase all of
the assets of the Restaurants consisting of Good Times' leasehold
interests in the real property at the above-described locations
together with the furniture, fixtures and equipment set forth in
Exhibit A attached hereto. All of the foregoing purchased assets
are hereinafter referred to as the "Assets." The Assets are being
purchased by Steakout in "as is" condition and Good Times makes no
warranties express or implied with respect to the Assets other
than those set forth in this Agreement. Steakout shall not assume
any liabilities associated with the Restaurants other than the
assumption of the real property leases therefor for the period
from and after the closing hereunder. Such real property leases,
which are hereinafter referred to as the "Leases," consist of the
following:
Lease dated November 30, 1990,
as heretofore amended, with
College Park Realty Co. as lessor
for the location at 0000 Xxxx Xxxx
Xxxx Xxxxxxxxx, Xxxxx Xxx Xxxxx,
Xxxxxx;
Lease dated July 11, 1990, as
heretofore amended, with Hasco NV
as lessor for the location at 0000
Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxx
Xxxxx, Xxxxxx;
Lease dated July 1, 1995, with
MTK Corporation of America as
lessor for the location at 0000
Xxxx Xxxxxxxxx Xxxxxxxxx, Xxx
Xxxxx, Xxxxxx; and
Lease dated July 1, 1995, with
Cormore Partners, Ltd. as lessor
for the location at 000 Xxxxx
Xxxxxx Xxxxxxxxx, Xxx Xxxxx,
Xxxxxx.
2. Consideration.
a. The assumption by Steakout of the
Leases shall constitute the consideration for
the assignment of Good Times' interests in
the Leases. The obligations of Steakout
under the Leases in which Good Times is not
released from liability shall be secured by
deeds of trusts covering the leasehold
interests with respect thereto and the
personal guarantees, for a period of two
years, of Xxxx and Xxxxxx Xxxxxxx.
b. In consideration for the furniture,
fixtures and equipment described in Exhibit
A, Steakout shall pay Good Times the purchase
price of $30,000 per Restaurant. Such amount
shall be paid upon execution of this
Agreement into an interest bearing escrow
account established at Escrow Line, Inc.
located at 0000 Xxxxxxxx Xxxx, Xxx Xxxxx
Xxxxxx. Upon the escrow company's receipt
of written notification from Good Times of
the satisfaction of the Contingency set forth
in Section 3.b. hereof, $15,000 for each of
the East Tropicana and Xxxxxx Boulevard
Restaurants shall be promptly distributed by
the escrow company to Good Times. Upon the
escrow company's receipt of written
notification from Good Times of the
satisfaction of the Contingencies set forth
in Sections 3.a. and 3.b. hereof, the escrow
company shall promptly distribute $15,000 for
each of the East Charleston and Lake Xxxx
Restaurants to Good Times. The foregoing
$15,000 payments to Good Times shall be non-refundable to Steakout
unless Good Times breaches its obligations under this
Agreement. The remaining $15,000 per
Restaurant in escrow shall be distributed to
Good Times promptly upon the escrow company's
receipt of written notification from Steakout
of the satisfaction of the Contingency set
forth in Section 3.c. hereof, provided that
the Contingencies in Section 3.a. and 3.b.
have also been satisfied at such time,
otherwise such amount shall be distributed to
Good Times upon the last of the Contingencies
to be satisfied.
3. Contingencies. The closing of the purchase of the
Assets and the assumption of the Leases by Steakout is contingent
upon the following ("Contingencies"):
a. The obtaining on or before November
24, 1995 of consents to assignments from the
lessors under the East Charleston and Lake
Xxxx Leases in forms reasonably acceptable to
Good Times.
b. Good Times' approval on or before
November 20, 1995 of the financial condition
of Steakout.
c. Approval by Steakout on or before
November 30, 1995 of the condition of the
Assets.
4. Closing.
a. The closing of the purchase of the Assets and
the assumption of the Leases by Steakout shall take
place as soon as reasonably possible after the
satisfaction of the Contingencies, but in no event later
than November 30, 1995.
b. Good Times and Steakout, as applicable, shall
execute the following documents in conjunction with or
as soon as reasonably possible after the execution of
this Agreement:
(i) Consent to and Agreement Regarding
Assignment with respect to the East Charleston and
Lake Xxxx Leases, substantially in the forms
attached hereto as Exhibit B (such documents shall
also be executed by the applicable lessors on or
before the closing);
(ii) Assignment of Lease and Assumption of
Lease regarding the Tropicana and Nellis Leases,
substantially in the forms attached hereto as
Exhibit C;
(iii) Bills of Sale for the Assets
described in Exhibit A with respect to each
Restaurant, substantially in the form attached
hereto as Exhibit D;
(iv) Guaranty Agreement of Xxxx and Xxxxxx
Xxxxxxx substantially in the form attached hereto
as Exhibit E;
(v) Deeds of Trust with respect to the
leasehold interests of Steakout in each of the
Restaurants, substantially in the forms attached
hereto as Exhibit F; and
(vi) Such other documents and instruments as
are reasonably necessary in order to effectuate
the intentions of the parties with respect to the
sale of the Assets to Steakout.
Upon execution of any of the foregoing documents
prior to closing, such executed documents shall be placed in
trust with a mutually agreeable third party. The holder of
the executed documents shall deliver them at such time and in
such manner as directed in writing by both Good Times and
Steakout.
c. Utilities, taxes, insurance and other
obligations, other than rent under the Leases, shall be
prorated as of the date of closing. Good Times shall
cancel all utilities for the Restaurants as of the date
of closing and shall be entitled to all utility deposits
therefrom. Notwithstanding the assignment of the Leases
to Steakout at the closing, Good Times covenants and
agrees to pay the base rent accruing under each of the
Leases until the earlier of (i) the applicable
Restaurant for each Lease opens for business to the
public, or (ii) February 1, 1996.
5. Deposit Escrow. Steakout shall establish an
interest bearing escrow account with Escrow Line, Inc. within
thirty days prior to the expiration of the term of the Guaranty
described in Section 4(b)(iv). Such escrow account shall be
established for the entire term of the Leases and funded by
Steakout with a minimum amount at all times equal to one month of
rent due under each of the Leases as of February 1, 1998. Escrow
Line, Inc. shall distribute funds in such amounts from such escrow
account to Good Times promptly upon receipt from Good Times of
proof of its payment of any rental or other amounts due under the
Leases.
6. Representations and Warranties.
a. Good Times represents and warrants to Steakout
that:
(i) At the closing the Assets will be in
substantially the same physical condition in all
material respects as on the date of this
Agreement;
(ii) The Assets, including Good Times'
interests in the Leases, are free and clear of
all liens, encumbrances and restrictions other
than the rights of the lessors under the Leases
and current property taxes none of which are past
due;
(iii) The Leases are in full force and
effect and no monetary defaults exist thereunder;
(iv) The execution and carrying out of this
Agreement has been duly authorized by the Board of
Directors of Good Times.
b. Steakout represents and warrants to Good Times
that the execution and carrying out of this Agreement
has been duly authorized by the Board of Directors of
Steakout and that no other authorizations are required
therefor.
7. Indemnification.
a. Good Times shall indemnify and hold harmless
Steakout with respect to any liability, loss, cost or
expense resulting from (i) any breach by Good Times of
a representation, warranty or any other provision of
this Agreement and (ii) any liability or claim
associated with the Restaurants relating to the period
prior to the closing hereunder.
b. Steakout shall indemnify and hold harmless
Good Times with respect to any liability, loss, cost or
expense resulting from (i) any breach by Steakout of a
representation, warranty or any other provision of this
Agreement, and (ii) any liability or claim associated
with the Restaurants relating to the period after the
closing hereunder.
8. Benefit. The terms and conditions of this
Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
If this letter correctly sets forth our agreement, kindly
sign and return the attached copy hereof. This letter may be
signed in counterparts by facsimile.
Very truly yours,
GOOD TIMES DRIVE THRU INC.,
a Colorado corporation
By: /s/ Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Agreed to this _____ day of November, 1995.
STEAKOUT, KING OF STEAKS, INC.,
a Nevada corporation
By: /s/ Xxxx Xxxxxxx
Title: President
