UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLORADO
In re:
Case No. 96-23391 DEC
ROUND THE CORNER RESTAURANTS,
INC., a Colorado corporation,
EIN: 00-0000000,
Chapter 11
Debtor-In-Possession.
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement"), is entered into
this 29th day of August, 1997, between Round The Xxxxx
Restaurants, Inc. ("RTC"), and Good Times Restaurants, Inc.
("Good Times"), for and in consideration of the mutual covenants
contained herein and for the payment by RTC to Good Times of the
sum of three-hundred-thousand dollars ($300,000.00), and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
RECITALS
A. RTC operates a chain of specialty restaurants along the
Front Range of Colorado,with most locations being in the greater
Denver metropolitan area.
B. On or about February October 25, 1996 RTC filed its
voluntary petition under Chapter 11 of the United States
Bankruptcy Code, Case No. 96-23391 DEC ("Case").
C. Good Times asserts it is both a secured and unsecured
creditor in the Case. Good Times status as a creditor arises
from its sale of RTC to Hot Concepts, LLC ("Hot Concepts") in
October of 1995, and various promissory notes and security
agreements executed in its favor by RTC at the time of that sale
("Sale"). Further, even after the Sale of RTC to Hot Concepts,
Good Times continued to pay monthly rent at various RTC retail
restaurant locations as it remains liable as a guarantor for the
rents due thereon.
D. Good Times may also possess a right to assert claims in
the RTC Case as a result of its status as both an unsecured and
secured creditor, for any claims w@ich may have arisen as a
result of its payments of post-petition monthly rents on RTC
retail locations, and for damages arising from RTC's rejection of
various leases during the Case.
E. The undersigned, (hereinafter collectively referred to
as the "Parties") have reached an agreement to settle all
differences which exist between them related to the Good Times
status as a creditor in the Case.
AGREEMENT
1. In conjunction with the execution of this Agreement, RTC agrees to
pay Good Times the sum of three-hundred-thousand dollars ($300,000.00),
("Funds") solely from the proceeds of a separate settlement agreement reached
with the Einstein/Noah Bagel Corporation ("Einsteins") as follows: one payment
of $80,000.00, due upon the entry of a final court order approving both this
Agreement, and the agreement to be entered into with Einsteins and the closing
on the sale of RTC's Table Mesa location to Einsteins; $110,000.00 due within
two (2) business days of RTC's receipt of the second installment payment from
Einsteins in the amount of $110,000.00, pursuant to that agreement, and
$110,000.00 due within two (2) business days of RTC's receipt of the third
$110,000.00 installment payment due from Einsteins. The Second $110,000 is
due from Xxxxxxxx by no later than December 1, 1997, and the third installment
payment is due from Einsteins by no later than March 1, 1998.
2. RTC has further agreed to assume and assign to Good Times its
retail restaurant locations, including all rights, title to and interest in
the restaurant equipment used therein and Good Times shall have the right to
operate without charge under the "RTC" name and a separate motion has been
filed and noticed to creditors setting forth the terms and conditions for said
assumption and assignment, said restaurants being at the following locations:
a. Colorado Boulevard Restaurant Lease:
0000 X. Xxxxxxxx Xxxx.
Denver, CO 80210
b. Crossroads Mall Lease:
0000 - 00xx Xxxxxx
Xxxxxxx, XX 00000
The Motion regarding these restaurant locations was filed on August 4,
1997 with an objection date of August 28, 1997.
3. Upon a final Court Order approving this Agreement RTC shall transfer,
sell and assign to Good Times all of its rights, title to and interest in the
following personal property:
a. All rights, title to and interest in the restaurant equipment
used at its Aurora Mall and Westland locations, which restaurant locations are
no longer in operation;
b. All rights, title to and interest in the restaurant equipment used at
its Table Mesa location, upon the closing of the sale of said location to
Einsteins; and
c. All rights, title to and interest in one 7000 Panasonic point-of-sale
system.
4. In exchange for the above, upon a final Court Order approving this
Agreement, and upon completion of RTC's performance hereunder, including but
not limited to Good Times' receipt of the $300,000 described in paragraph 1
above, Good Times shall:
a. Waive any and all claims of any kind whatsoever it may possess
against RTC as a result of the Case or the Sale;
b. Execute any and all documents necessary to release any security
interests it may possess in any real property or personal property owned by
RTC;
X. Xxxxxx all indebtedness which may be owed to it by RTC and mark as
paid any and all promissory notes which have been executed by RTC and return
same to RTC;
d. Withdraw any proof of claim filed in the Case;
e. Waive any claim it may possess to further payment to it by RTC under
any Plan Of Reorganization which may be filed by RTC and submitted for Court
approval in the Case;
f. Vote in support of the support any Plan Of Reorganization which may
be filed by RTC and submitted for Court approval in the Case which
incorporates the terms of this Agreement;
x. Xxxx any indebtedness it claims to be owed by RTC discharged in the
RTC Case.
h. Release Hot Concepts from any and all claims it may possess against
Hot Concepts;
i. Agree to indemnify RTC for any and all claims which might be asserted
against RTC and its' principals at any time now or in the future as a result
of Good Times' agreement to operate the RTC restaurant locations and
restaurant equipment referenced in Paragraph two (2) above, and to maintain at
all times liability insurance in an amount of not less than $1,000,000 per
occurrence, in support of the indemnification agreement as set forth herein.
j. Assume responsibility for payment of any and all costs, expenses and
any and all other liabilities, known or unknown, associated with the Good
Times' agreement to operate the RTC restaurant locations referenced in
Paragraph two (2) above.
5. Except for the obligations and rights set forth in this Agreement,
Good Times and RTC shall, for themselves, their successors, their assigns, and
for anyone claiming by or through them, shall, upon Court approval of this
Settlement Agreement and full performance hereunder, be deemed to have hereby
released and forever discharged each other, their officers, directors,
partners, employees, agents, representatives, successors, assigns and the
like, and their administrators an assigns, from any claims they may possess.
6. As further consideration for this Agreement, the Parties hereto
warrant that no promise or agreement that is not expressed in this Agreement
has been made to any party hereby released; in executing this release, the
Parties are not relying upon any statement or representation made by the
parties, agents or attorneys concerning any matter or thing, but are relying
solely upon their own judgment and knowledge that the within referenced
consideration is received by each party in full settlement and satisfaction of
all the aforesaid claims and demands; that in determining said consideration
there has been taken into consideration not only any ascertained or estimated
damages and expenses involved with the Case, but also the possibility that any
damages allegedly sustained may be indefinite, or the consequences not now
anticipated may result from events which have occurred.
7. As further consideration for this Agreement, the Parties acknowledge
that this Agreement is not to be construed as an admission of any allegation
of law or fact on the part of either Party, but rather is a settlement of a
disputed claim made to forgo the expense and uncertainty of litigation which
might have arisen during the Case and in the absence of this Agreement.
8. The Parties represent that they have full authority to execute this
Agreement and that this Agreement constitutes the entire agreement between the
parties and supersedes any aid all prior agreements whether oral or written as
to the subject matters hereof.
9. Promptly after the execution of this Agreement, RTC shall submit the
Agreement for Court approval, which must be obtained on or before October 15,
1997. Accordingly, all obligations and rights of the Parties to this
Agreement are contingent upon the approval of this Agreement by the United
States Bankruptcy Court in Case No. 96-23391 DEC on or before October 15,
1997.
10. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the laws of the State of
Colorado. Jurisdiction over any dispute which may arise with respect to this
Agreement shall be proper only in the United States Bankruptcy Court for the
District of Colorado.
11. This Agreement may be executed in any number of counterparts which
when read together shall constitute one complete and binding original
Agreement. It shall be acceptable for the Parties to provide signatures
via telecopier.
DATED this 29th day of August, 1997.
ROUND THE CORNER RESTAURANTS, INC.
By: /S/ Xxx Xxxx
Xxx Xxxx, President
GOOD TIMES RESTAURANTS, INC.
By: /s/ Xxxx Xxxxxx
Xxxx X. Xxxxxx, President
APPROVED AS TO FORM:
BASS & XXXXXX, LLP
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, #13650
Xxxxx X. Xxxxxx, #17915
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
ATTORNEYS FOR ROUND THE CORNER RESTAURANTS, INC.
XXXXX, XXXXX & XXXXX, X.X,
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx #0000
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
ATTORNEYS FOR GOOD TIMES RESTAURANTS, INC.
