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EXHIBIT 2.4
PURCHASE AGREEMENT
This Purchase Agreement dated as of September 10, 1999 is among
Claremont Restaurant Group, LLC, a North Carolina limited liability company
("Claremont"), Fresh Foods Sales, LLC, another North Carolina limited liability
company ("Sales"), Fresh Foods, Inc., a North Carolina corporation and the sole
member-manager of both Claremont and Sales ("Seller"), and CRG Holdings Corp., a
North Carolina corporation ("Buyer").
WHEREAS, the parties consider it advisable and in their mutual best
interest that Seller sell Claremont and Sales to Buyer, and that Buyer buy
Claremont and Sales from Seller, on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, the parties do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the terms identified in this Article shall
have the meanings indicated.
1.1 ACCOUNTANTS: PricewaterhouseCoopers, LLP.
1.2 ACTUAL NET WORKING CAPITAL AMOUNT: has the meaning ascribed to such
term in Section 2.2(a) of this Agreement.
1.3 AFFILIATE: a Person that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
another Person, within the meaning of Rule 144(a)(1) under the Securities Act.
1.4 AGREEMENT: this Purchase Agreement, including the Schedules and
Exhibits hereto and Seller's Disclosure Document.
1.5 BENEFIT PLANS: has the meaning ascribed to such term in Section
3.11(c) of this Agreement.
1.6 BUSINESS: has the meaning ascribed to such term in Section
5.11(a)(1) of this Agreement.
1.7 BUYER: has the meaning ascribed to such term in the recitals to
this Agreement.
1.8 BUYER'S COUNSEL: Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., Bank
of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000-0000.
1.9 CLAREMONT: has the meaning ascribed to such term in the recitals to
this Agreement.
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1.10 CLAREMONT SUBSIDIARY: any of Sagebrush of South Carolina, LLC,
Sagebrush of North Carolina, LLC, Fresh Foods Restaurant Group, LLC, Spicewood,
Inc. and Sagebrush of Tennessee, LP (collectively, the "Claremont
Subsidiaries").
1.11 CLOSING: the consummation of the purchase of all issued and
outstanding Interests in Claremont and Sales by Buyer from Seller, and the sale
of all issued and outstanding Interests in Claremont and Sales by Seller to
Buyer, as contemplated by this Agreement.
1.12 CLOSING DATE: October 1, 1999, or such other date for the Closing
upon which the parties may agree upon satisfaction of all of the conditions to
Closing contained herein.
1.13 CLOSING DATE BALANCE SHEET: has the meaning ascribed to such term
in Section 2.2(a) of this Agreement.
1.14 CLOSING PRICE: has the meaning ascribed to such term in Section
2.1(b) of this Agreement.
1.15 ENVIRONMENTAL LAW: any statute, law, code, regulation, order,
notice, rule or ordinance, or any requirement, restriction, limitation,
condition or obligation contained therein, including any and all plans, orders,
decrees, judgments and notices issued, entered, promulgated or approved
thereunder, purporting to regulate the use, misuse, pollution or preservation of
land, air or water resources, including (without limitation) those purporting to
regulate building or planning, industrial buildings, plants or equipment or
health or safety, as such are related to environmental matters.
1.16 ERISA: the Employee Retirement Income Security Act of 1974, as
amended and in effect at the date of this Agreement.
1.17 ESTIMATED NET WORKING CAPITAL AMOUNT: has the meaning ascribed to
such term in Section 2.1(c) of this Agreement.
1.18 ESTIMATED PURCHASE PRICE: has the meaning ascribed to such term in
Section 2.1(c) of this Agreement.
1.19 EXCHANGE ACT: the Securities Exchange Act of 1934, as amended to
the date as of which any reference thereto is relevant under this Agreement.
1.20 FIDUCIARY DETERMINATION: a good faith determination by Seller's
board of directors or a duly constituted committee thereof, after consultation
with legal counsel, that termination of this Agreement and acceptance of a
proposal made by a Person other than Buyer to acquire (including pursuant to a
merger or share exchange) some or all of the Sell-Side Companies, or assets
thereof, is necessary in execution of such directors' duties under the NCBCA.
1.21 GAAP: generally accepted accounting principles, as in effect on
the date of any statement, report or determination that purports to be, or is
required to be, prepared or made in accordance therewith; and references herein
to financial statements prepared "in accordance
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with GAAP" shall mean in accordance with GAAP consistently applied throughout
the periods to which reference is made.
1.22 HSR ACT: the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended to the date as of which any reference thereto is relevant under this
Agreement.
1.23 INTEREST: a membership interest in Claremont or Sales, as the
context requires, as defined in such limited liability company's operating
agreement as amended to the date hereof.
1.24 LAST OFFER: has the meaning ascribed to such term in Section
2.2(c) of this Agreement.
1.25 LIEN: any lien, mortgage, security interest, pledge, charge,
claim, equity, reservation, adverse claim or other encumbrance of any kind.
1.26 MATERIAL ADVERSE CHANGE: with respect to a Person, a material
adverse change in the business, condition (financial or otherwise), operations
or prospects of such Person.
1.27 MATERIAL ADVERSE EFFECT: with respect to a Person, a material
adverse effect on the business, condition (financial or otherwise), operations
or prospects of such Person.
1.28 NASDAQ: the National Association of Securities Dealers, Inc.
Automated Quotation system.
1.29 NCBCA: the North Carolina Business Corporation Act, as amended to
the date as of which any reference thereto is relevant under this Agreement.
1.30 NET WORKING CAPITAL AMOUNT: has the meaning ascribed to such term
in Section 2.1(b) of this Agreement.
1.31 NON-PREVAILING PARTY: has the meaning ascribed to such term in
Section 2.2(c) of this Agreement.
1.32 PERSON: an individual, a corporation, a partnership, a limited
liability company, an association, a joint-stock company, a trust, an
unincorporated organization, a government or a political subdivision thereof.
1.33 PREVAILING PARTY: has the meaning ascribed to such term in Section
2.2(c) of this Agreement.
1.34 PURCHASE PRICE: has the meaning ascribed to such term in Section
2.1(b) of this Agreement.
1.35 RESTAURANT SEGMENT: Claremont and its Subsidiaries, Sales and
Sunshine WSMP, Inc., a Subsidiary of the Seller.
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1.36 RESTAURANT SEGMENT'S AUDITED FINANCIAL STATEMENTS: the combined
balance sheet of the Restaurant Segment as of March 7, 1999 and the related
combined statements of earnings and cash flows for the year then ended, audited
and reported on as of August 30, 1999 by Deloitte & Touche LLP.
1.37 RESTRICTED PERIOD: has the meaning ascribed to such term in
Section 5.11(a) of this Agreement.
1.38 RETAINED ASSETS: the assets to be transferred by Sales, Claremont
and the Claremont Subsidiaries to other Persons prior to the sale of the
Interests to Buyer hereunder, consisting of a Xxxxxxx'x restaurant and rights
related exclusively thereto and certain vacant and undeveloped real property
(all as specifically identified in Seller's Disclosure Document).
1.39 RETAINED LIABILITIES: any and all liabilities and obligations
associated with the Retained Assets, including those liabilities and obligations
identified in Seller's Disclosure Document.
1.40 SALES: has the meaning ascribed to such term in the recitals to
this Agreement.
1.41 SEC: the Securities and Exchange Commission.
1.42 SEC REPORT: a document filed with the SEC pursuant to the Exchange
Act.
1.43 SECURITIES ACT: the Securities Act of 1933, as amended to the date
as of which any reference thereto is relevant under this Agreement.
1.44 SELLER: has the meaning ascribed to such term in the recitals to
this Agreement.
1.45 SELLER'S AUDITED FINANCIAL STATEMENTS: the audited consolidated
balance sheets, income statements, statements of shareholders' equity and
statements of cash flows of Seller filed by Seller as part of its Annual Report
on Form 10-K for its fiscal year ended March 6, 1999.
1.46 SELLER'S BALANCE SHEET: the most recent balance sheet included in
Seller's Audited Financial Statements.
1.47 SELLER'S COUNSEL: McGuire, Woods, Battle & Xxxxxx LLP, Bank of
America Corporate Center, l00 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000.
1.48 SELLER'S DISCLOSURE DOCUMENT: the document delivered by Seller to
Buyer at or prior to the date of this Agreement, the receipt of which is hereby
acknowledged, containing certain disclosures regarding the Sell-Side Companies
and Claremont Subsidiaries pursuant to this Agreement.
1.49 SELLER'S FACILITIES AND EQUIPMENT: all restaurants, stores,
fixtures, improvements, equipment, automobiles and other tangible property owned
or leased by Sales, Claremont or a
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Claremont Subsidiary or otherwise used by one of them in connection with the
operation of its business or leased or subleased to other Persons, excluding,
however, the Retained Assets.
1.50 SELL-SIDE COMPANIES: Seller, Claremont and Sales.
1.51 SUBSEQUENT AGREEMENT: has the meaning ascribed to such term in
Section 8.2(b) of this Agreement.
1.52 SUBSIDIARY: with respect to any Person, a second Person of which
fifty percent or more of the effective voting power, or the effective power to
elect a majority of the Board of Directors or similar governing body, or fifty
percent or more of the equity interest, is owned by the first Person, directly
or indirectly.
1.53 TAKEOVER LAWS: any and all "moratorium," "control share," "fair
price," "business combination" and other anti-takeover laws of the State of
North Carolina, including, without limitation, Articles 9 and 9A of the NCBCA.
1.54 TAX AGREEMENT: that certain Tax Agreement of even date herewith
among the parties hereto.
1.55 TRANSACTION DOCUMENTS: this Agreement and the Tax Agreement.
ARTICLE II
THE CLOSING
2.1. CLOSING PURCHASE PRICE. (a) The Closing will occur at the office
of Seller's Counsel, commencing at 10:00 A.M., Eastern time, on the Closing
Date. At the Closing, Seller will sell the Interests to Buyer and Buyer will buy
the Interests from Seller, in each case subject to satisfaction or waiver of the
applicable Closing conditions specified in Article VII of this Agreement. Upon
the Closing, (i) Buyer will deliver to Seller the Estimated Purchase Price
(determined and delivered in accordance with paragraphs (b), (c) and (d) below)
against a written receipt (in form reasonably acceptable to Buyer) evidencing
Seller's transfer of the Interests to Buyer and (ii) Buyer will acquire good,
valid and exclusive title to the Interests free and clear of all Liens.
(b) At the Closing, Buyer will pay to Seller $50,000,000 (the "Closing
Price"), subject to adjustment as provided in Sections 2.1(c) and 2.2 with
respect to the Net Working Capital Amount (as finally determined and adjusted,
the "Purchase Price"). "Net Working Capital Amount" means an amount (determined
in accordance with GAAP and on a basis consistent with, and using the same
accounting principles, policies, practices and procedures used in preparing, the
Restaurant Segment's Audited Financial Statements) equal to (x) the sum of cash
and cash equivalents, accounts receivable (less allowance for doubtful
accounts), current portion of notes and other receivables (other than Retained
Assets), inventories, prepaid expenses and other current assets less (y) the sum
of trade accounts payable, accrued payroll and all related accrued payroll taxes
and benefits, accrued insurance (both premiums and estimated losses and incurred
but not reported claims pushed-down from Seller's balance sheet), gift
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certificates outstanding and all other current liabilities (including, but not
limited to, rent payable and amounts payable to the health plan covering
employees of Claremont and Sales). In calculating the Net Working Capital
Amount, there shall be excluded all assets, liabilities and accruals related to
Taxes (as defined in the Tax Agreement), Retained Assets and Retained
Liabilities.
(c) Not less than two business days prior to the Closing Date, Seller
will deliver to Buyer an unaudited combined balance sheet that will (i) set
forth Seller's estimate of the Net Working Capital Amount of Sales and Claremont
as of the close of business on the Closing Date (the "Estimated Net Working
Capital Amount"), determined in accordance with the second sentence of Section
2.2(a) as if it were the Actual Net Working Capital Amount, but based upon
Seller's review of the most current financial information then available to
Seller and its inquiries of personnel responsible for the preparation of
financial information relating to Sales and Claremont, and (ii) otherwise be
satisfactory to Buyer in its reasonable good faith discretion. The Closing Price
will be reduced or increased dollar-for-dollar, as the case may be (as so
adjusted, the "Estimated Purchase Price"), by the amount by which the Estimated
Net Working Capital Amount is less or more, as the case may be, than negative
$4,650,000.
(d) On the Closing Date, Buyer will pay by wire transfer of immediately
available funds to such account as Seller has theretofore designated an amount
equal to the Estimated Purchase Price.
2.2. PURCHASE PRICE ADJUSTMENT. (a) To determine the Purchase Price,
the Estimated Purchase Price will be reduced or increased dollar-for-dollar, as
the case may be, to the extent that the Actual Net Working Capital Amount is
less or greater, as the case may be, than the Estimated Net Working Capital
Amount. "Actual Net Working Capital Amount" means the Net Working Capital Amount
as set forth on a combined balance sheet of Claremont and Sales, prepared in
accordance with this Section 2.2 as of the close of business on the Closing Date
(the "Closing Date Balance Sheet") determined in accordance with GAAP and on a
basis consistent with, and using the same accounting principles, policies,
practices and procedures used in preparing, the Restaurant Segment's Audited
Financial Statements.
(b) Within 45 calendar days after the Closing Date, Buyer will prepare
and deliver, or cause to be prepared and delivered, to Seller an unaudited
Closing Date Balance Sheet setting forth the Actual Net Working Capital Amount.
(c) If, within ten calendar days after the date of Buyer's delivery of
its computation of the Actual Net Working Capital Amount, Seller determines in
good faith that such computation is inaccurate, Seller will give written notice
to Buyer within such ten-calendar day period (i) setting forth Seller's
computation of the Actual Net Working Capital Amount as of the Closing Date and
(ii) specifying in reasonable detail Seller's basis for its disagreement with
Buyer's computation. The failure by Seller so to express its disagreement or
provide such specification within such ten-calendar day period will constitute
Seller's acceptance of Buyer's computation of the Actual Net Working Capital
Amount. If Seller and Buyer are unable to resolve any disagreement between them
within ten calendar days after the giving of notice of such disagreement, then
the items in dispute will be referred for determination to the Charlotte
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office of the Accountants as promptly as practicable. The Accountants will make
a determination as to each of the items in dispute, which determination will be
(A) in writing, (B) furnished to each of the parties hereto as promptly as
practicable after the items in dispute have been referred to the Accountants,
(C) made in accordance with this Agreement and (D) conclusive and binding upon
each of the parties hereto. In connection with their determination of the
disputed items, the Accountants will be entitled to have access to the
workpapers, trial balances and similar materials prepared by Deloitte & Touche
LLP in connection with such firm's examination of the Restaurant Segment's
Audited Financial Statements, and the fees and expenses of the Accountants will
be shared equally by Buyer and Seller (except as provided below). Buyer and
Seller will use reasonable efforts to cause the Accountants to render their
decision as soon as practicable, including by promptly complying with all
reasonable requests by the Accountants for information, books, records and
similar items. If the determination of the Accountants represents an outcome
more favorable to either Buyer or Seller than the midpoint of such parties' last
written settlement offers related to all items in dispute, in the aggregate,
submitted to the Accountants upon the referral of the matter to the Accountants
(each, a "Last Offer"), then the party obtaining such favorable result will be
deemed the "Prevailing Party" and the other party will be deemed the
"Non-Prevailing Party." For purposes hereof, all of the fees and expenses of the
Accountants, and the reasonable out-of-pocket expenses of the Prevailing Party,
will be borne by the Non-Prevailing Party. No party will disclose to the
Accountants, and the Accountants will not consider for any purpose, any
settlement offer (other than the Last Offer) made by any party.
(d) To the extent that the Actual Net Working Capital Amount determined
as provided in this Section 2.2 is greater or less than the Estimated Net
Working Capital Amount, Buyer or Seller, as applicable, will, within ten
calendar days after the final determination of the Actual Net Working Capital
Amount pursuant to this Section 2.2, make payment by wire transfer of
immediately available funds of the amount of such difference, together with
interest thereon from the Closing Date to the date of payment (at a rate equal
to Bank of America's prime rate, as publicly announced and in effect from time
to time during such period, plus 2.0%, calculated on the basis of the actual
number of days elapsed over 365), to such account as has been designated by
Buyer or Seller, as applicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELL-SIDE COMPANIES
The Sell-Side Companies jointly and severally represent and warrant to
Buyer as follows:
3.1 ORGANIZATION AND QUALIFICATION. Each of the Sell-Side Companies is
duly organized, validly existing and in good standing under the laws of the
State of North Carolina and has the requisite power and authority to carry on
its business as it is now being conducted. Each of the Sell-Side Companies is
duly qualified to do business, and is in good standing, in each jurisdiction
where the character of the properties owned or leased by it, or the nature of
its activities, is such that qualification to do business in that jurisdiction
is required by law, except for jurisdictions in which the failure to be so
qualified is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on any of them. Seller has delivered to Buyer true and
complete copies of
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the articles of organization and operating agreements of Claremont and Sales and
all amendments, supplements and modifications thereto and the charter and bylaws
of Seller.
3.2 CAPITALIZATION OF CLAREMONT AND SALES. Claremont and Sales have
authorized capital consisting solely of the Interests, all of which are owned
(of record and beneficially) by Seller, free and clear of any Liens. All of the
outstanding Interests have been duly authorized and validly issued. No
membership interests in either Claremont or Sales are reserved for issuance, nor
are there issued or outstanding any options, warrants, convertible securities or
other rights, agreements or commitments to issue or acquire any such membership
interests. On the Closing Date, Buyer will acquire good, valid and exclusive
title to the Interests, free and clear of all Liens.
3.3 SUBSIDIARIES AND INVESTMENTS. Sales has no Subsidiaries. Claremont
has disclosed in Section 3.3 of Seller's Disclosure Document the identity,
jurisdiction of organization, foreign qualifications and outstanding equity
capitalization of each of its Subsidiaries. Except for Claremont's equity
interests in its Subsidiaries, neither Claremont nor Sales owns (of record or
beneficially) any capital stock, membership interest or other equity interest in
any Person. Claremont or a Claremont Subsidiary owns (of record and
beneficially) the entire equity interest in each Claremont Subsidiary, free and
clear of all Liens. No equity interest in any such Subsidiary is or may become
required to be issued by reason of any option, warrant or other right relating
to the equity of such Subsidiary. There is no contract, arrangement or
understanding by which any Claremont Subsidiary is bound to issue any of its
equity or any option, warrant or other right relating thereto or by which
Claremont is or may be bound to transfer any part of the equity interest in any
Claremont Subsidiary. There is no contract, arrangement or understanding
relating to the right of Claremont to vote, transfer or otherwise dispose of any
of the equity interest in any Claremont Subsidiary. The equity interest in each
Claremont Subsidiary that has been issued has been duly authorized and validly
issued, was not issued in violation of any preemptive rights and is fully paid
and nonassessable under the law of the jurisdiction in which such Subsidiary was
organized and is owned by Claremont, free and clear of all Liens. Each Claremont
Subsidiary is duly qualified to do business, and is in good standing, in each
jurisdiction where the character of the properties owned or leased by it, or the
nature of its activities, is such that qualification to do business in that
jurisdiction is required by law, except for jurisdictions in which the failure
to be so qualified is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Claremont, Sales and the Claremont
Subsidiaries (considered as one enterprise). Seller has delivered to Buyer true
and complete copies of the articles of organization, operating agreements,
certificates of limited partnership, partnership agreements, articles of
incorporation, bylaws and other organizational documents, if any, for or
relating to all of the Claremont Subsidiaries.
3.4 AUTHORITY RELATIVE TO TRANSACTION DOCUMENTS. The Transaction
Documents have been duly and validly executed and delivered by each of the
Sell-Side Companies. Each Transaction Document constitutes a legal, valid and
binding agreement of each of the Sell-Side Companies enforceable against each of
them in accordance with its terms. Each of the Sell-Side Companies has all
requisite power and authority to enter into the Transaction Documents and to
consummate the transactions contemplated thereby. Seller (the sole
member-manager of each of Claremont and Sales) has, subject to the terms and
conditions set forth herein: (a) determined that the Transaction Documents and
the transactions contemplated thereby are fair to, and in the best
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interests of, the Sell-Side Companies and Seller's shareholders; and (b)
approved the Transaction Documents and the transactions contemplated thereby. No
other action is required on the part of any Sell-Side Company, and no action is
required on the part of Seller's shareholders, to authorize any of the Sell-Side
Companies to execute and deliver the Transaction Documents and consummate the
transactions contemplated thereby.
3.5 ABSENCE OF BREACH; NO CONSENTS. The execution and delivery of this
Agreement by the Sell-Side Companies do not, and the performance by them of
their obligations hereunder will not, (a) result in a breach of any provision of
the articles of organization or operating agreement of Claremont or Sales, the
articles of incorporation or bylaws of Seller or the articles of organization or
operating agreement or the articles of incorporation or bylaws of any Claremont
Subsidiary; (b) violate any law, rule or regulation of any state or the United
States (except for compliance with alcoholic beverage retail sales licensing
laws applicable to Claremont), or of any foreign jurisdiction, or any order,
writ, judgment, injunction, decree, determination or award of any court or other
authority having jurisdiction over any of the Sell-Side Companies or any
Claremont Subsidiary or any of their material properties, or cause the
suspension or revocation of any authorization, consent, approval or license
presently in effect that affects or binds any of the Sell-Side Companies or any
Claremont Subsidiary or any of their material properties, except, with respect
to all matters described in this subsection (b), to the extent that such
violation would not reasonably be expected to have a Material Adverse Effect on
Claremont and Sales (considered as one enterprise); (c) result in a breach of or
default under any material indenture or loan or credit agreement or other
material agreement or instrument to which Seller or any of its Subsidiaries is a
party or by which it or they or any of its or their material properties are
affected or bound; (d) require the authorization, consent, approval, permit or
license of any Person, any notice to be given to, filing to be made with or
other action to be taken with or by any Person (other than filings and actions
to be made and taken under the HSR Act), of such a nature that the failure to
obtain or make the same would be reasonably expected to have a Material Adverse
Effect on Claremont and Sales (considered as one enterprise); or (e) constitute
grounds for the loss or suspension of any material permit, license or other
authorization used by Sales, Claremont or a Claremont Subsidiary (other than
alcoholic beverage retail sales licenses used by Claremont).
3.6 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
or the transactions contemplated hereby, or any related transaction, based upon
any agreement, written or oral, made by or on behalf of any of the Sell-Side
Companies or any of their Affiliates, except that Xxxxxx Xxxxxxxxx Xxxxxx, a
division of First Union Capital Markets Corp., is entitled to certain payments
under its agreement with Seller dated as of April 7, 1999. Seller is solely
responsible for all payments under such agreement.
3.7 DELIVERED DOCUMENTS. Seller has delivered to Buyer each of the
following:
(a) Annual Report of Seller to its shareholders for its fiscal year
ended March 6, 1999;
(b) Annual Report of Seller on Form 10-K as filed with the SEC for
Seller's fiscal year ended March 6, 1999;
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(c) proxy statement of Seller relating to its meeting of shareholders
held on July 22, 1999; and
(d) all other SEC Reports of Seller, to the extent that such reports
have been filed with the SEC after the filing of the SEC Report
referred to in clause (b) above.
Each such document did not, at the time it was filed with the SEC, and all such
documents taken together do not, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made or are
made, respectively, not misleading. All of the financial statements contained in
the foregoing documents were prepared from the books and records of Seller and
its Subsidiaries. Seller's Audited Financial Statements were prepared in
accordance with GAAP and fairly and accurately reflect the financial condition
and results of operations of Seller and its consolidated Subsidiaries as at the
dates and for the periods indicated.
3.8 STATE TAKEOVER LAWS. The transactions contemplated by this
Agreement are exempt from any applicable Takeover Laws.
3.9 FINANCIAL STATEMENTS; BOOKS AND RECORDS.
(a) The Restaurant Segment's Audited Financial Statements were prepared
from the books and records of the Restaurant Segment. The Restaurant Segment's
Audited Financial Statements are accurate and correct in all material respects
and fairly present the combined financial position of the Restaurant Segment as
of March 7, 1999 and the results of its combined earnings and its combined cash
flows for the year then ended in conformity with GAAP.
(b) The books and records of Claremont, Sales and the Claremont
Subsidiaries made available to Buyer and its agents are accurate, current and
complete in all material respects.
3.10 FRANCHISES.
(a) Seller's Disclosure Document contains a list of the Restaurant
Segment franchises currently in operation, including the name of the franchisor,
the name of the franchisee, the address of such franchisee's franchised location
or locations and the date the franchise agreement with such franchisee
terminates.
(b) There are no material disputes or claims by any Restaurant Segment
franchisee with, or against, Seller, Sales, Claremont or any Claremont
Subsidiary, except as disclosed in Seller's Disclosure Document. The franchise
agreements with the Restaurant Segment franchisees do not require the consent of
such franchisees with respect to the transactions contemplated by this
Agreement.
(c) The revenues reasonably expected by Seller from the Restaurant
Group franchisees are as specified in Seller's Disclosure Document, except for
such differences as, in the aggregate, are not material.
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3.11 ABSENCE OF MATERIAL DIFFERENCES FROM SELLER'S DISCLOSURE DOCUMENT.
Except as disclosed in Seller's Disclosure Document:
(a) NO MATERIAL ADVERSE CHANGE OR OTHER EVENT. Since the date of
Seller's Balance Sheet, there has not been:
(1) a Material Adverse Change in Claremont, Sales and the Claremont
Subsidiaries (considered as one enterprise);
(2) any purchase or disposition of any material items of real or
personal property (other than Retained Assets) by Claremont, Sales or
any Claremont Subsidiary;
(3) any change in the accounting methods or practices of Claremont,
Sales or any Claremont Subsidiary;
(4) any material liability incurred by Claremont, Sales or any
Claremont Subsidiary;
(5) any bonus paid to any officer of Claremont, Sales or any Claremont
Subsidiary, any increase in the compensation paid or to be paid,
directly or indirectly, to any officer of Claremont, Sales or any
Claremont Subsidiary or any severance payments or arrangements made to,
for or with any officer of Claremont, Sales or any Claremont
Subsidiary; or
(6) any agreement entered into between, on the one hand, Claremont,
Sales or any Claremont Subsidiary and, on the other hand, Seller, any
of its Subsidiaries or any of the directors, officers, employees or
greater-than-5% shareholders of Seller, any of its Subsidiaries or any
of their respective Affiliates.
(b) EMPLOYEES. Claremont, Sales and the Claremont Subsidiaries are not
bound by any express or implied contract or agreement to employ, directly or as
a consultant or otherwise, any Person for any specific period of time or until
any specific age.
(c) EMPLOYEE BENEFIT PLANS.
(1) Seller's Disclosure Document contains a complete list of all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus and other incentive
plans, all other written employee programs, arrangements and agreements, all
medical, vision, dental and other health plans, all life insurance plans and all
other employee benefit plans and fringe benefit plans, including, without
limitation, "employee benefit plans" as that term is defined in Section 3(3) of
ERISA, currently or previously adopted, maintained by, sponsored in whole or in
part by or contributed to by Seller or an Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors and
other beneficiaries of Claremont and Sales and under which employees, retirees,
dependents, spouses, directors, independent contractors and other beneficiaries
of Claremont and Sales are eligible to participate (collectively, "Benefit
Plans").
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(2) Seller has delivered or made available to Buyer true and complete
copies of all Benefit Plans, including, but not limited to, any trust
instruments or insurance contracts, if any, forming a part thereof.
(3) To the knowledge of Seller, each Benefit Plan has been administered
in all material respects in accordance with the terms thereof and is in material
compliance with, to the extent applicable, ERISA, the Code, the Age
Discrimination in Employment Act and other applicable laws. Each Benefit Plan
that is intended to be qualified under Section 401(a) of the Code has received a
determination from the Internal Revenue Service that such plan is so qualified,
and Seller is not aware of any circumstances reasonably likely to result in the
revocation or denial of any such determination. There is no pending or, to
Seller's knowledge, threatened litigation or governmental audit, examination or
investigation relating to any Benefit Plan other than benefit claims made in the
ordinary course.
(4) All contributions, premiums and payments required to be made under
the terms of any Benefit Plan have been made or accrued.
(5) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due to any director or employee of
Claremont or Sales from Claremont or Sales, (ii) increase any benefits otherwise
payable under any Benefit Plan or (iii) result in any acceleration in the time
of payment or vesting of any such benefit.
(d) ADEQUACY OF ASSETS AND FACILITIES. The properties and assets of
Claremont, Sales and the Claremont Subsidiaries include (i) all tangible and
intangible real and personal property and other assets necessary for the
continuation of their business as currently conducted after the Closing, (ii)
all properties and assets reflected in the detailed fixed asset listing
underlying the Restaurant Segment's Audited Financial Statements (except for
properties and assets, not material in the aggregate, disposed of in the
ordinary course of business) and (iii) all properties and assets (other than the
Retained Assets) that generated the revenues reflected in the Restaurant
Segment's Audited Financial Statements. Seller's Facilities and Equipment are
structurally sound. Seller's Facilities and Equipment are in good operating
condition and repair and are adequate for the uses to which they are being put,
in each case with such exceptions as are not in the aggregate reasonably likely
to have a Material Adverse Effect on Claremont and Sales (considered as one
enterprise). None of Seller's Facilities and Equipment is in need of maintenance
or repairs, except for routine maintenance and other repairs not reasonably
likely to have a Material Adverse Effect on Claremont and Sales (considered as
one enterprise). Neither Claremont nor Sales is in breach, violation or default
of any lease with respect to or as a result of which the other party thereto
(whether lessor, lessee, sublessor or sublessee) has the right to terminate the
same, except for terminations not reasonably likely in the aggregate to have a
Material Adverse Effect on Claremont and Sales (considered as one enterprise).
Neither Claremont nor Sales has received notice of any claim or assertion that
it is in any such breach, violation or default, except for breaches, violations
and defaults not reasonably likely in the aggregate to have a Material Adverse
Effect on Claremont and Sales (considered as one enterprise). Claremont, Sales
and the Claremont Subsidiaries hold all of the material governmental licenses,
permits and other governmental franchises required
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for the conduct of their business and are not in default under any such license,
permit or franchise, except for such defaults as in the aggregate are not
reasonably likely to have a Material Adverse Effect on Claremont and Sales
(considered as one enterprise). Since January 1, 1997, neither Seller nor any of
its Affiliates has received any warning or notice alleging (i) any violation of
any material governmental license, permit or franchise relating to the business
conducted by Claremont, Sales and the Claremont Subsidiaries or (ii) that
Claremont, Sales or any of the Claremont Subsidiaries (or any of their
predecessors) do not have any material governmental license, permit or franchise
required for their conduct of the business.
(e) LITIGATION. There is no action, suit, claim, proceeding or
investigation pending or threatened against Sales, Claremont or a Claremont
Subsidiary. No action, suit, claim, proceeding or investigation by Sales,
Claremont or any Claremont Subsidiary is pending or threatened against any
Person.
(f) COMPLIANCE WITH LAWS. Claremont and Sales are in compliance with
all laws applicable to their business, including all applicable Environmental
Laws, except for instances of noncompliance that in the aggregate have not
resulted in, and are not reasonably likely to result in, a Material Adverse
Effect on Claremont and Sales (considered as one enterprise). To Seller's
knowledge and except in such circumstances as in the aggregate are not
reasonably likely to have a Material Adverse Effect on Claremont and Sales
(considered as one enterprise), no substances, materials or wastes have been
used, spilled, discharged, released or allowed to escape or migrate on or to any
real property (including the soil and subsurface thereof) owned or leased by
Claremont, Sales or any Claremont Subsidiary in a manner to violate any
Environmental Law, to give rise to any liability under any Environmental Law or
to affect the value of any such real property. To Seller's knowledge, all
operations of the business of Claremont, Sales and the Claremont Subsidiaries
(and their respective predecessors) comply, and have complied, in all material
respects with all Environmental Laws. No investigation or proceeding is pending
or, to Seller's knowledge, threatened with respect to (i) the presence or
alleged presence of any substance, material or waste or (ii) any violation or
alleged violation of, or any liability or alleged liability under, any
Environmental Laws, in either case relating to (a) any real property currently
or formerly owned or leased by Claremont, Sales or any Claremont Subsidiary or
(b) any of their operations thereon.
(g) DISCLOSURE OF RELATED PARTY TRANSACTIONS. Seller is party to no
transactions with its officers, directors or shareholders required by the
Exchange Act to be disclosed to the public at the date hereof.
(h) INTELLECTUAL PROPERTY. Sales, Claremont and Claremont's
Subsidiaries own or have the right to use (without violating or conflicting
with, in any material respect, the rights of others) all of the federal, state
and foreign registrations of trademarks and of other marks, trade names and
other trade rights, all pending applications for such registrations, all patents
and copyrights and all pending applications therefor, all other trademarks and
other marks, trade names and other trade rights in which Sales, Claremont and
Claremont's Subsidiaries have any interest whatsoever and all other trade
secrets, designs, plans, specifications, technical information and other
proprietary rights, whether or not registered, that are necessary or useful for
the conduct of the business of Sales,
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Claremont and the Claremont Subsidiaries consistent with past practice, with
such exceptions as in the aggregate would have no Material Adverse Effect on
Claremont and Sales (considered as one enterprise).
(i) TITLE TO REAL AND PERSONAL PROPERTY; LEASEHOLD INTERESTS. Sales,
Claremont and Claremont's Subsidiaries have good and marketable title, or valid,
effective and continuing leasehold rights in the case of leased property, to all
real property and all personal property owned or leased by them, including all
properties and assets reflected in the detailed fixed asset listing underlying
the Restaurant Segment's Audited Financial Statements (other than properties and
assets disposed of in the ordinary course of business), or used by them in the
conduct of their business, free and clear of all Liens, except Liens for taxes
not yet due and minor imperfections of title and encumbrances, if any, which,
singly and in the aggregate, are not substantial in amount and do not detract
materially from the value of the property subject thereto or impair materially
the use thereof. Seller's Disclosure Document contains the following information
regarding all real property owned or leased by Seller, Claremont and the
Claremont Subsidiaries, which information is true and accurate in all respects:
(i) a listing of the respective owners of record title to each of 20 owned
restaurant sites; (ii) a listing of the respective current holders of leasehold
interests relative to each of 46 leased restaurant sites; and (iii) a listing of
the current "landlord" or "lessor" relative to each of the 46 leased restaurant
sites. Each lease covering a leased restaurant site is in full force and effect,
and neither the relevant tenant nor, to the best knowledge of the Sell-Side
Companies, any other party thereto is in default with respect to any material
provision of any such lease. Seller has delivered true and correct copies of all
such leases, together with any and all consents, assignments, subleases,
amendments, modifications and other documents pertaining thereto, to Buyer.
There are no pending, threatened or contemplated condemnation, eminent domain or
similar proceedings involving all or any portion of the owned restaurant sites
or, to the best knowledge of the Sell-Side Companies, the leased restaurant
sites. No property damage to any owned or leased restaurant site resulting from
a casualty event has occurred during the twelve-month period immediately
preceding the date hereof (or, if any such damage has occurred during such
period, the property so damaged has been fully restored).
(j) MATERIAL CONTRACTS. Sales, Claremont and Claremont's Subsidiaries
(1) have no contracts, agreements or commitments that are material to their
business, (2) are not in default in any material respect under any material
contract, agreement or commitment to which any of them is a party or by which
any of them is bound or by which any property owned or leased by any of them is
involved and (3) have performed in all material respects all of their respective
obligations required to be performed to date under all of their material
contracts, agreements and commitments.
(k) INSURANCE. All of the material assets and operations of Claremont,
Sales and the Claremont Subsidiaries of an insurable nature and customarily
insured by companies of similar size and in similar businesses are insured by
Seller in such amounts and against such losses, casualties or risks as is
customary for such companies and such assets and operations.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sell-Side Companies as follows:
4.1 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
North Carolina and has the requisite power and authority to carry on its
business as it is now being conducted. Buyer has delivered to Seller a true and
complete copy of the articles of incorporation and bylaws of Buyer.
4.2 OWNERSHIP. Buyer has authorized capital consisting solely of
1,000,000 shares of common stock and 100,000 shares of preferred stock, all of
the outstanding shares of which are owned (of record and beneficially) by
Carousel Capital Partners, L.P., free and clear of any Liens. All such
outstanding shares have been duly authorized and validly issued.
4.3 AUTHORITY RELATIVE TO TRANSACTION DOCUMENTS. The Transaction
Documents have been duly and validly executed and delivered by Buyer. Each
Transaction Document constitutes a legal, valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms. Buyer has all requisite
power and authority to enter into the Transaction Documents and to consummate
the transactions contemplated thereby. The board of directors and shareholders
of Buyer have, subject to the terms and conditions set forth herein, approved
the Transaction Documents and the transactions contemplated thereby. No other
action is required on the part of Buyer or the shareholders of Buyer to
authorize Buyer to execute and deliver the Transaction Documents and to
consummate the transactions contemplated thereby.
4.4 ABSENCE OF BREACH; NO CONSENTS. The execution and delivery of this
Agreement by Buyer do not, and the performance by Buyer of its obligations
hereunder will not, (a) result in a breach of any provision of the articles of
incorporation or bylaws of Buyer; (b) violate any law, rule or regulation of any
state or the United States (except for compliance with alcoholic beverage retail
sales licensing laws applicable by reason of Buyer's purchase of Claremont), or
of any foreign jurisdiction, or any order, writ, judgment, injunction, decree,
determination or award of any court or other authority having jurisdiction over
Buyer or any of its material properties, or cause the suspension or revocation
of any authorization, consent, approval or license presently in effect that
affects or binds Buyer or any of its material properties, except, with respect
to all matters described in this subsection (b), to the extent that such
violation would not reasonably be expected to have a Material Adverse Effect on
Buyer; (c) result in a material breach of or default under any material
indenture or loan or credit agreement or other material agreement or instrument
to which Buyer is a party or by which it or any of its material properties are
affected or bound; or (d) require the authorization, consent, approval, permit
or license of any Person, any notice to be given to, filing to be made with or
other action to be taken with or by any Person (other than filings and actions
required to be made and taken under the HSR Act), of such a nature that the
failure to obtain or make the same would be reasonably expected to have a
Material Adverse Effect on Buyer.
4.5 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's, or other fee or commission for which Seller would have any
liability in connection with this
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Agreement or the transactions contemplated hereby, or any related transaction,
based upon any agreement, written or oral, made by or on behalf of Buyer or any
of Buyer's Affiliates.
4.6 FINANCING. Buyer has delivered to Seller a commitment letter of
even date herewith, issued by one or more lenders, to lend to the Buyer, subject
to all of the terms of and satisfaction or waiver of the conditions stated
therein, an amount not less than the Purchase Price (less Buyer's anticipated
equity capitalization), to be applied by Buyer in payment thereof at the
Closing.
ARTICLE V
COVENANTS OF THE SELL-SIDE COMPANIES
5.1 BEST EFFORTS; GOOD FAITH. Subject to the terms and conditions
herein provided and to applicable fiduciary duties, each of Seller, Claremont
and Sales agrees to use its best efforts to take or cause to be taken all such
actions necessary, proper or advisable under applicable laws and regulations to
satisfy the conditions set forth in Article VII and to consummate the
transactions contemplated by this Agreement (whether before or after the
Closing), including the prompt execution and delivery of such other
certificates, agreements, consents, governmental licenses and permits and other
documents and the taking of such other actions as may be necessary or desirable
in order to consummate or implement expeditiously the transactions contemplated
by this Agreement (including any necessary to ensure the accuracy of Section
3.11(d)) and including the filing or recording, as soon as possible following
the Closing, of certificates, financing statements, agreements and other
documents with the appropriate governmental authorities and other Persons
necessary to effect the transactions contemplated by this Agreement. Seller
shall use reasonable efforts to assist Buyer in the preparation of the
applications for all licenses and permits necessary for the post-Closing
operation of Sales, Claremont and the Claremont Subsidiaries, and in the
securing of such licenses and permits. Seller agrees to use its best efforts to
obtain fair-market-value renewal options to lease through December 31, 2014 any
and all real properties leased by Sales, Claremont or any of the Claremont
Subsidiaries for use as restaurants at the date hereof. Seller agrees to notify
Buyer immediately of any event or circumstance that occurs that reasonably could
be expected to result in a Material Adverse Effect on Claremont and Sales
(considered as one enterprise) or that might result in Seller's failure to
effect the Closing or a delay in respect thereof. Seller also agrees to notify
Buyer immediately of the receipt by Seller or by any of Seller's representatives
of an offer or proposal made by any Person other than Buyer relating to any
merger, reorganization, consolidation, share exchange, recapitalization,
business combination, liquidation, dissolution or other similar transaction of
or with Claremont, Sales or any Claremont Subsidiary, or any sale, lease,
exchange, transfer or other disposition of all or any significant portion of the
assets of Claremont, Sales or any Claremont Subsidiary or any of the membership
interests of Claremont, Sales or any Claremont Subsidiary, in a single
transaction or series of related transactions, except for offers and proposals
relating only to Retained Assets.
5.2 CONTINUING INVESTIGATION; CONFIDENTIALITY.
(a) Each of the Sell-Side Companies covenants and agrees with Buyer
that Buyer may, prior to the Closing Date and through its own employees and
agents, make a reasonable investigation of the business and assets of Sales,
Claremont and the Claremont Subsidiaries, it being
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understood and agreed (i) that such investigation shall have no effect on any
representations or warranties hereunder and (ii) that Buyer's satisfaction with
the results of such investigation is not a condition precedent to Buyer's
obligation to effect the Closing (all such conditions being stated in Article
VII). In furtherance of this covenant and agreement, each of the Sell-Side
Companies covenants and agrees to permit Buyer and its agents to have reasonable
access, upon notice and during regular business hours, to the premises and books
and records of Sales, Claremont and the Claremont Subsidiaries. Seller will
furnish to Buyer and its agents such financial and operating data and other
information with respect to the business and assets of Sales, Claremont and the
Claremont Subsidiaries as Buyer may reasonably request. In the event of
termination of this Agreement, Buyer will deliver to Seller all documents, work
papers and other material so obtained before or after the execution hereof and
will not itself use, directly or indirectly, any information so obtained or
otherwise obtained hereunder, or in connection herewith, from Seller or any of
Seller's Affiliates or agents. In such event, Buyer also will use its best
efforts to have all such information kept confidential and not used in any way
detrimental to Seller or any of Seller's Affiliates, except for information
that, otherwise than pursuant to a breach by any Person of a duty of
confidentiality, (a) is or becomes available to the public, (b) was known by
Buyer before its disclosure by Seller or its representatives or (c) becomes
available to Buyer from a Person other than Seller or its representatives.
(b) Each of the Sell-Side Companies agrees to use its best efforts to
arrange and permit Buyer to interview and have discussions with those Persons
identified by Buyer who are franchisees of the Restaurant Segment as soon as
practicable after the date hereof. Buyer and the Sell-Side Companies shall
cooperate in good faith in the identification of appropriate Persons with whom
Buyer might conduct such interviews and discussions and to arrange the time,
place and manner thereof.
5.3 EXPENSES. Whether or not the Closing occurs, all costs and expenses
incurred by Seller in connection with this Agreement and the transactions
contemplated hereby shall be paid by Seller except as otherwise provided in
Section 8.2.
5.4 PUBLICITY. Prior to the first to occur of the termination of this
Agreement and the second business day following the Closing Date, any news
releases by Seller pertaining to this Agreement or the Closing shall be
submitted to Buyer for review and approval prior to release and shall be
released only in a form approved by Buyer; PROVIDED, HOWEVER, that (1) such
approval shall not be unreasonably delayed or withheld, and (2) notwithstanding
Seller's best efforts to give Buyer the opportunity to review and approve any
news release, such review and approval shall not be required of a release by
Seller if in Seller's reasonable judgment (exercised in consultation with
Seller's Counsel) it would prevent the dissemination of information in such time
as may be necessary or appropriate to comply with applicable law or NASDAQ rules
(in which case, however, the text of the announcement, if written, or a written
summary thereof, if oral, shall be provided prior to such release to Buyer).
5.5 DISCLOSURE AMENDMENTS. Seller shall notify Buyer of any changes,
additions or events that should, consistently with this Agreement, result in the
filing by Seller of any SEC Reports or in any amendment to any of Seller's SEC
Reports or to Seller's Disclosure Document promptly after the occurrence of the
same and again at the Closing by delivery of appropriate
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amendments thereto. No notification made pursuant to this Section shall be
deemed to cure any misrepresentation or any breach of warranty made in or in
connection with this Agreement unless Buyer specifically agrees thereto in
writing.
5.6 STATE TAKEOVER LAWS. None of the Sell-Side Companies or Claremont
Subsidiaries shall take any steps to make the transactions contemplated by this
Agreement subject to any Takeover Law.
5.7 CONDUCT OF BUSINESS PENDING THE CLOSING. The Sell-Side Companies
covenant and agree with Buyer that, prior to the Closing, unless Buyer shall
otherwise consent in writing, except as otherwise contemplated by this Agreement
or by Section 5.7 of Seller's Disclosure Document:
(a) Sales, Claremont and Claremont's Subsidiaries will conduct business
in the ordinary and usual course, will use reasonable efforts to keep intact
their business organizations and goodwill, will use reasonable efforts to keep
available the services of their respective officers and employees, will pay
accounts payable in the ordinary course of business consistent with their terms,
otherwise will use its best efforts to maintain a level of working capital
consistent with past practice and will use reasonable efforts to maintain good
relationships with suppliers, lenders, creditors, distributors, employees,
customers and others having business or financial relationships with them;
(b) Seller will continue properly and promptly (1) to file or cause to
be filed when due (meaning, to the extent that extensions of time are permitted
and utilized, by the expiration of the extension period) all periodic reports
and other documents required to be filed by it with the SEC and all federal,
state, local, foreign and other tax returns, reports and declarations required
to be filed by any of the Sell-Side Companies and (2) to pay, or make full and
adequate provision for the payment of, all taxes and governmental charges due
from or payable by any of the Sell-Side Companies with respect to Claremont and
Sales;
(c) none of Sales, Claremont or Claremont's Subsidiaries will (1) amend
or restate its articles of organization or operating agreement, its certificate
of limited partnership or partnership agreement or its articles of incorporation
or bylaws or (2) split, combine or reclassify any of its equity interests or
other securities or make or agree or commit to make any exchange for or
redemption of any of its equity interests or other securities payable in cash,
stock or property;
(d) none of Sales, Claremont or Claremont's Subsidiaries will issue or
agree to issue any equity interests in itself, or options, warrants or other
rights of any kind to acquire any such equity interests, whether by purchase or
conversion or exchange of other equity interests or other securities;
(e) none of Sales, Claremont or Claremont's Subsidiaries will create,
incur, assume or guarantee any indebtedness for borrowed money, except for
incurrences of indebtedness to Seller in the ordinary course of business and
consistent with past practice;
(f) none of Sales, Claremont or Claremont's Subsidiaries will (1)
adopt, enter into or amend any bonus, profit sharing, compensation, stock
option, warrant, pension, retirement, deferred compensation, employment,
severance, termination, change in control or other employee benefit
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plan, agreement, trust fund or arrangement for the benefit or welfare of any
officer, director, employee or consultant or (2) agree to any increase in the
compensation payable or to become payable to, or any increase in the contractual
term of employment of, any officer, director, salaried employee or consultant
or, except in the ordinary course of business and consistent with past practice,
any hourly employee;
(g) none of Sales, Claremont or Claremont's Subsidiaries will sell,
lease, mortgage, encumber or otherwise dispose of or grant any interest in any
of its assets or properties, except for (1) sales, leases, encumbrances and
other dispositions or grants in the ordinary course of business and consistent
with past practice, (2) sales, leases, encumbrances, dispositions or grants
involving Retained Assets and (3) Liens for taxes not yet due or Liens not
material in amount or effect that do not impair the use of the property;
(h) none of Sales, Claremont or Claremont's Subsidiaries will (1)
acquire (by merger, consolidation or acquisition of equity interests or assets)
any corporation, partnership or other organization or division thereof engaged
in any business (including, in particular, restaurant operations) or any equity
interest therein; (2) enter into any contract or agreement that would be
material to it or extend, renew, amend or renegotiate any contract with any
supplier to Sales, Claremont or any Claremont Subsidiary; or (3) authorize or
make any repairs or capital expenditure (or series of related repairs or capital
expenditures) in excess of $25,000 in the aggregate or outside the ordinary
course of business or inconsistent with past practice; and
(i) none of Sales, Claremont or Claremont's Subsidiaries will enter
into any agreement, commitment or understanding, whether in writing or
otherwise, with respect to any of the matters referred to in subsections (c)
through (h) of this Section.
5.8 FINANCIAL CONDITION OF BUSINESS AT THE CLOSING. The Sell-Side
Companies covenant and agree with Buyer that, immediately prior to the Closing,
unless Buyer shall otherwise consent in writing:
(a) the current liabilities of Claremont and Sales at the Closing will
have been incurred in the ordinary course of their restaurant business; and
(b) none of Sales, Claremont or Claremont's Subsidiaries will have any
indebtedness for borrowed money (including any guarantee of any indebtedness for
borrowed money).
5.9 NO SOLICITATION. Each of Seller, Claremont and Sales shall not, and
each of them shall cause its Subsidiaries and its and its Subsidiaries'
officers, directors, agents, advisors, representatives and Affiliates not to,
consider, solicit, discuss or encourage inquiries or proposals from any Person
with respect to, or engage in any negotiations concerning or provide any
confidential information regarding, the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, or any merger or
consolidation with, Claremont, Sales or any of the Claremont Subsidiaries.
5.10 RETAINED LIABILITIES. From and after the Closing Date, Seller
shall indemnify, defend and hold harmless Buyer, Sales, Claremont and the
Claremont Subsidiaries from and
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against any loss, damage, liability, cost or expense incurred in connection with
any claim, action, suit, proceeding or investigation arising from the any of the
Retained Liabilities.
5.11 NON-COMPETITION.
(a) Seller agrees that, for a period of three years from the Closing
Date (the "Restricted Period"), it shall not:
(1) engage, either directly or indirectly, as a principal or for its
own account or solely or jointly with others, or as a stockholder in
any corporation, member of any limited liability company or equity
holder of any other Person, in the ownership or operation of a
restaurant (the "Business") in any city in which the Restaurant Segment
currently operates a restaurant or of any steakhouse restaurant in any
state in which the Restaurant Segment currently operates a restaurant;
PROVIDED, HOWEVER, that nothing herein shall prohibit: (A) Seller from
holding or acquiring, solely for investment purposes, any interest in a
business engaged in the Business if (i) Seller has no participation in
the management of such business and (ii) such interest constitutes less
than a five percent ownership interest in such business; or (B) Seller
from engaging in the Business so long as such engagement is limited to
the continued operation of the Retained Assets in a manner and on a
scale consistent with past practices;
(2) use or disclose any confidential information related to the
Business; or
(3) solicit the performance of services by any employee of Sales,
Claremont or any Claremont Subsidiary or otherwise induce any such
employee to leave his or her employment with Sales, Claremont or any
Claremont Subsidiary.
(b) If any provision contained in this Section shall for any reason be
held invalid, illegal or unenforceable in any respect, then such invalidity,
illegality or unenforceability shall not affect any other provision of this
Section, but this Section shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. It is the intention of
the parties that, if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time that is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, then such provision shall not be construed to be null, void and
of no effect, but, to the extent such provision would be valid or enforceable
under applicable law, a court of competent jurisdiction shall construe and
interpret or reform this Section to provide for a covenant having the maximum
enforceable geographic area, time period and other provisions (not greater than
those contained herein) as would be valid and enforceable under such applicable
law. Seller acknowledges that Buyer would be irreparably harmed by any breach of
this Section and that there would be no adequate remedy at law or in damages to
compensate Buyer for any such breach. Seller agrees that Buyer shall be entitled
to injunctive relief requiring specific performance by Seller of this Section
upon appropriate judicial determination thereof.
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ARTICLE VI
COVENANTS OF BUYER
6.1 BEST EFFORTS; GOOD FAITH. Subject to the terms and conditions
herein provided, Buyer agrees to use its best efforts to take or cause to be
taken all such actions necessary, proper or advisable under applicable laws and
regulations to satisfy the conditions set forth in Article VII and to consummate
the transactions contemplated by this Agreement (whether before or after the
Closing), including the prompt execution and delivery of such other
certificates, agreements, consents, governmental licenses and permits and other
documents and the taking of such other actions as may be necessary or desirable
in order to consummate or implement expeditiously the transactions contemplated
by this Agreement and including the filing or recording, as soon as possible
following the Closing, of certificates, financing statements, agreements and
other documents with the appropriate governmental authorities and other Persons
necessary to effect the transactions contemplated by this Agreement. Buyer
agrees to notify Seller immediately of any event or circumstance that occurs or
comes to Buyer's attention in the course of Buyer's continuing investigation of
Claremont, Sales and the Claremont Subsidiaries or in the course of Buyer's
financing of the transactions contemplated hereby, or otherwise, if and to the
extent that a result of the event or circumstance, or of Buyer's knowledge of
the same, might be Buyer's failure to effect the Closing or a delay in respect
thereof.
6.2 EXPENSES. Whether or not the Closing occurs, all costs and expenses
incurred by Buyer in connection with this Agreement and the transactions
contemplated hereby shall be paid by Buyer except as otherwise provided in
Section 8.2.
6.3 PUBLICITY. Prior to the first to occur of the termination of this
Agreement and the second business day following the Closing Date, any news
releases by Buyer pertaining to this Agreement or the Closing shall be submitted
to Seller for review and approval prior to release and shall be released only in
a form approved by Seller; PROVIDED, HOWEVER, that such approval shall not be
unreasonably withheld or delayed.
6.4 DISCLOSURE AMENDMENTS. Buyer shall notify Seller of any changes,
additions or events that should, consistently with this Agreement, result in any
amendment to Article IV of this Agreement promptly after the occurrence of the
same and again at the Closing by delivery of appropriate amendments thereto. No
notification made pursuant to this Section shall be deemed to cure any
misrepresentation of any breach of warranty made in or in connection with this
Agreement unless Seller specifically agrees thereto in writing.
6.5 MAINTENANCE OF RECORDS. Buyer agrees to cause Sales, Claremont and
the Claremont Subsidiaries to maintain for seven years after the Closing Date
the books, records and other documents of Sales, Claremont, the Claremont
Subsidiaries and their respective predecessors. Buyer agrees to afford to Seller
and its accountants, legal counsel and other agents full access to such
documents (to the extent that Seller can demonstrate a reasonable need for such
access), during normal business hours, for seven years from the Closing Date.
6.6 CONTINUATION OF EMPLOYEE BENEFITS. Buyer acknowledges and agrees
that it presently intends, after the Closing Date, to cause Sales, Claremont and
the Claremont Subsidiaries
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to provide their employees with benefit arrangements that are substantially
equivalent in total to the employee benefit arrangements currently maintained by
Seller for such employees.
ARTICLE VII
CLOSING CONDITIONS
7.1 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer to
effect the Closing shall be subject to satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) The representations and warranties of the Sell-Side Companies set
forth in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and, without consideration of any further disclosures
made pursuant to Section 5.5 of this Agreement, as of the Closing Date (as if
made at such time), PROVIDED that, with respect to any representation or
warranty that is qualified by a materiality standard, such representation and
warranty shall be true and correct in all respects.
(b) The Sell-Side Companies shall have performed the covenants and
agreements required by this Agreement to be performed by them at or prior to the
Closing.
(c) Buyer shall have received from Seller an officers' certificate,
executed by the president and the chief financial officer of Seller (in their
capacities as such) and dated the Closing Date, confirming satisfaction of the
conditions stated in subsections (a), (b), (i), (j), (k), (l), (n) and (o) of
this Section.
(d) Buyer shall have received an opinion letter of Seller's Counsel,
dated the Closing Date, conforming to the provisions of Sections 3.1, 3.2, 3.3,
3.4, 3.5, 3.8 and 3.11(e) of this Agreement insofar as such provisions relate to
matters of law as distinguished from matters of fact.
(e) Buyer shall have executed and delivered definitive credit
documentation with the parties that have provided the financing commitment
described in Section 4.6 (or with other lenders satisfactory to Seller), and all
of the conditions to funding contained therein shall have been satisfied.
(f) Buyer shall have received certificates from each of the Sell-Side
Companies, dated the Closing Date and signed by the secretary or an assistant
secretary of such Sell-Side Company, certifying (i) that the attached copies of
(A) such Sell-Side Company's articles of incorporation and bylaws or certificate
of formation and operating agreement, as the case may be, and (B) resolutions of
the board of directors of Seller and of Seller as sole member-manager of Sales
and Claremont adopted in connection with the transactions contemplated by this
Agreement are all true, correct and complete and remain in full force and effect
and (ii) as to the incumbency and specimen signature of each Person executing
any of the Transaction Documents on behalf of any of the Sell-Side Companies.
(g) Buyer shall have received certificates as of a recent date as to
the existence of Sales, Claremont and each Claremont Subsidiary under the laws
of its jurisdiction of organization.
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(h) Buyer shall have received the written resignations of the officers
and directors of Sales, Claremont and the Claremont Subsidiaries requested by
Buyer. Each such officer and director (whether or not resigning) shall have
released Buyer, Sales, Claremont and the Claremont Subsidiaries from any
liabilities (other than for salaries and employee benefits owed in the ordinary
course of business).
(i) All management bonus plans and programs that involve bonus payments
to executives of Claremont and Sales shall have been terminated prospectively,
with such termination to be effective on the Closing Date and with none of
Buyer, Sales, Claremont or the Claremont Subsidiaries having any liability under
any such plans or programs after the Closing Date.
(j) Buyer shall have received the original books and records, and
substantially all other documents related thereto, of Sales, Claremont and the
Claremont Subsidiaries.
(k) Sales, Claremont and the Claremont Subsidiaries shall have
transferred the Retained Assets and the Retained Liabilities to other Persons.
(l) Any and all applicable waiting periods under the HSR Act relating
to the transactions contemplated by this Agreement shall have expired or been
terminated. There shall not be in effect any preliminary or permanent injunction
or other order by any federal or state authority prohibiting the consummation of
the transactions contemplated hereby.
(m) Seller and Claremont shall have entered into a lease relating to
certain office facilities located in Claremont, North Carolina which shall (1)
provide for an initial term expiring December 31, 1999, (2) be renewable on a
month-to-month basis, (3) include monthly rental payments of $5,000 and (4)
otherwise be on terms and conditions satisfactory to Seller and Claremont.
(n) Seller shall have entered into agreements extending through
December 31, 2014 the initial terms or renewal terms of all leases of real
property leased at the date hereof from any of its Affiliates for use as
restaurants.
(o) None of Sales, Claremont or any Claremont Subsidiary shall have any
indebtedness for borrowed money.
7.2 CONDITIONS TO OBLIGATION OF SELLER. The obligation of Seller to
effect the Closing shall be subject to satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) The representations and warranties of Buyer set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and, without consideration of any further disclosures made
pursuant to Section 6.4 of this Agreement, as of the Closing Date (as if made at
such time), PROVIDED that, with respect to any representation or warranty that
is qualified by a materiality standard, such representation and warranty shall
be true and correct in all respects.
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(b) Buyer shall have performed the covenants and agreements required by
this Agreement to be performed by it at or prior to the Closing.
(c) Seller shall have received from Buyer an officers' certificate,
executed by the president and the secretary of Buyer (in their capacities as
such) and dated the Closing Date, confirming satisfaction of the conditions
stated in subsections (a), (b) and (g) of this Section.
(d) Seller shall have received an opinion letter of Buyer's Counsel,
dated the Closing Date, conforming to the provisions of Sections 4.1, 4.2, 4.3
and 4.4 of this Agreement insofar as such provisions relate to matters of law as
distinguished from matters of fact.
(e) Seller shall have received a certificate from Buyer, dated the
Closing Date and signed by the secretary or an assistant secretary of Buyer,
certifying (i) that the attached copies of (A) Buyer's articles of incorporation
and bylaws and (B) resolutions of the board of directors of Buyer adopted in
connection with the transactions contemplated by this Agreement are all true,
correct and complete and remain in full force and effect and (ii) as to the
incumbency and specimen signature of each Person executing any of the
Transaction Documents on behalf of Buyer.
(f) Buyer shall have received a certificate as of a recent date as to
the existence of Buyer under the laws of its jurisdiction of organization.
(g) Any and all applicable waiting periods under the HSR Act relating
to the transactions contemplated by this Agreement shall have expired or been
terminated. There shall not be in effect any preliminary or permanent injunction
or other order by any federal or state authority prohibiting the consummation of
the transactions contemplated hereby.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
8.1 TERMINATION. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Closing:
(a) by written consent of Buyer and Seller;
(b) by either Buyer or Seller in the event of a material
misrepresentation or material breach of warranty of the other party contained in
this Agreement (which breach has not been cured, in the case of a breach of
warranty, within fifteen days following receipt of written notice thereof by the
breaching party);
(c) by either Buyer or Seller in the event of a material breach of any
covenant or agreement by the other party contained in this Agreement (which
breach has not been cured within fifteen days following receipt of written
notice thereof by the breaching party);
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(d) by Seller in the event that the Closing shall not have occurred by
11:59 P.M., Eastern time, on the 45th day following the date of this Agreement,
PROVIDED that the nonoccurrence of the Closing by such time is not caused by a
material misrepresentation or a material breach of this Agreement by Seller or
solely because the condition set forth in Section 7.2(g) has not been satisfied;
(e) by Buyer in the event that the Closing shall not have occurred by
11:59 P.M., Eastern time, on the 45th day following the date of this Agreement,
PROVIDED that the nonoccurrence of the Closing by such time is not caused by a
material misrepresentation or a material breach of this Agreement by Buyer or
solely because the condition set forth in Section 7.1(l) has not been satisfied;
(f) by Buyer in the event of a misrepresentation of Seller contained in
Section 3.10(c) of this Agreement or in the event of a material breach of the
covenant contained in Section 5.2(b) of this Agreement (which breach has not
been cured within three days following receipt of written notice thereof by the
breaching party), PROVIDED that notice of such misrepresentation or of such
uncured covenant breach, as the case may be, is received by Buyer by 5:00 P.M.,
Eastern time, on the twentieth day following the date of this Agreement;
(g) by either Buyer or Seller in the event that the Closing shall not
have occurred by 11:59 P.M., Eastern time, on the 90th day following the date of
this Agreement if the condition set forth in Section 7.1(l) or 7.2(g) has not
been satisfied by that time;
(h) by either Buyer or Seller if the board of directors of Seller (or a
committee of such board) makes a Fiduciary Determination.
8.2 CONSEQUENCES OF TERMINATION.
(a) In the event of the termination of this Agreement and the
abandonment of the transactions contemplated by this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become void and of no effect,
without any liability on the part of any party hereto, or its Affiliates,
directors, officers, members or shareholders, other than pursuant to the
provisions of this Article and of Sections 3.6, 4.5, 5.2(a) (last two
sentences), 5.3 and 6.2, which shall survive such termination and abandonment;
PROVIDED, HOWEVER, that termination of this Agreement pursuant to subsection
(b), (c) or (f) of Section 8.1 shall not relieve a party from liability for the
misrepresentation or for the breach of warranty, covenant or agreement giving
rise to termination. In the event of the termination of this Agreement by Seller
pursuant to subsection (b) or (c) of Section 8.1, Buyer will pay to Seller, not
later than ten days following delivery of notice of such termination to Buyer,
the aggregate amount of Seller's reasonable and documented legal, investment
banking, accounting and other out-of-pocket expenses incurred in pursuit of the
transactions contemplated by this Agreement (whether incurred before or after
the date hereof). In the event of the termination of this Agreement by Buyer
pursuant to subsection (b) or (c) of Section 8.1, Seller will pay to Buyer, not
later than ten days following delivery of notice of such termination to Seller,
the aggregate amount of Buyer's reasonable and documented legal, investment
banking, accounting and other out-of-pocket expenses incurred in pursuit of the
transactions contemplated by this Agreement (whether incurred before or after
the date hereof). In the event of a termination of
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this Agreement by Buyer or Seller pursuant to subsection (h) of this Agreement,
Seller will pay to Buyer, not later than ten days following delivery of notice
of such termination, as liquidated damages (and not as a penalty), $1,000,000
plus the aggregate amount of Buyer's reasonable and documented legal, accounting
and other out-of-pocket expenses incurred in pursuit of the transactions
contemplated by this Agreement (whether incurred before or after the date
hereof). Any such payment shall be made by wire transfer of immediately
available funds to an account designated for such purpose by the recipient in
its notice of termination.
(b) If in the event of a termination of this Agreement by Buyer
pursuant to subsections (b), (c) or (e) and within six months following such
termination Seller accepts a proposal made by a Person other than Buyer to
acquire some or all of Claremont, Sales and the Claremont Subsidiaries, or a
material portion of the assets thereof, or otherwise enters into an agreement to
sell some or all of Claremont, Sales and the Claremont Subsidiaries, or a
material portion of the assets thereof, to a Person other than Buyer (any of the
foregoing being a "Subsequent Agreement"), and if the purchase price stated in
the Subsequent Agreement assumes an enterprise value for Claremont, Sales and
the Claremont Subsidiaries that exceeds the Purchase Price, and if the Person
with whom the Subsequent Agreement is made is a Person with whom Seller or its
agents discussed a purchase of Claremont, Sales and the Claremont Subsidiaries,
or a material portion of the assets thereof, in person or by telephone prior to
the date hereof, then Seller will pay to Buyer, not later than ten days
following the date of the Subsequent Agreement, as liquidated damages (and not
as a penalty), $1,000,000 plus the aggregate amount of Buyer's reasonable and
documented legal, accounting and other out-of-pocket expenses incurred in
pursuit of the transactions contemplated by this Agreement (whether incurred
before or after the date hereof).
8.3 AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
8.4 WAIVERS. To the extent permitted by applicable law, the Sell-Side
Companies or Buyer at any time may (a) extend the time for the performance of
any of the obligations or other acts of the other, (b) waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto or (c) waive compliance with any of the agreements, covenants or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
9.1 SURVIVAL. Absent fraud, the representations, warranties, covenants,
indemnities and other agreements of the parties made in and pursuant to this
Agreement shall not survive the Closing, except for the covenants and agreements
made in Sections 5.1, 5.2, 5.3, 5.4, 5.10, 5.11, 6.1, 6.2, 6.3 and 6.5, which,
by their terms, are to be performed after the Closing Date.
9.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed sufficiently given if delivered personally or sent
by facsimile transmission or by
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registered or certified mail (postage prepaid), addressed as follows (or to such
other address for a party as shall be specified by like notice given at least
seven days prior thereto):
if to any or all of the Sell-Side Companies, then to:
Xx. Xxxxx X. Xxxxx
Fresh Foods, Inc.
000 0xx Xxxxxx, XX
Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxxxx, Esq.
McGuire, Woods, Battle & Xxxxxx LLP
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
if to Buyer, then to:
CRG Holdings Corp.
c/o Carousel Capital Partners, L.P.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx III
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
All such notices and communications shall be considered as having been duly
given at the time delivered by hand, if delivered personally; when receipt
confirmed, if sent by facsimile; and five business days after deposit in the
mail, if sent by registered or certified mail.
9.3 HSR ACT COMPLIANCE. Each of Buyer and Seller shall (a) make or
cause to be made the filings required of such party or any of its Subsidiaries
or Affiliates under the HSR Act with respect to the transactions contemplated
hereby as promptly as practicable, (b) comply at the earliest practicable date
with any request for further information or documents received by such party or
any
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of its Subsidiaries from the Federal Trade Commission, the Department of Justice
or any other governmental authority in respect of such filings or such
transactions, including, without limitation, any request for additional
information and documents under the HSR Act, and (c) cooperate with the other
party in connection with any such filing (including, with respect to the party
making a filing, providing copies of all such documents to the non-filing party
and its advisors prior to filing (other than documents containing confidential
business information, which need be shared only with legal counsel to the
non-filing party) and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith) and in connection with
resolving any investigation or other inquiry of any such agency or other
governmental authority with respect to any such filing or any such transaction.
Each party shall use its reasonable best efforts to furnish to each other all
information required for any application or other filing to be made pursuant to
any applicable law in connection with the transactions contemplated by this
Agreement. Each party shall promptly inform the other party of any communication
with, and any proposed understanding, undertaking or agreement with, any
governmental authority regarding any such filings or any such transaction.
Neither party shall independently participate in any meeting with any
governmental authority in respect of any such filings, investigation or other
inquiry without giving the other party prior notice of the meeting and, to the
extent permitted by such governmental authority, the opportunity to attend and
participate. The parties will consult and cooperate with one another in
connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to the HSR Act. Each of
Buyer and Seller shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted by any governmental authority with
respect to the transactions contemplated by this Agreement.
9.4 CERTAIN CLAIMS AND INSURANCE MATTERS. Seller covenants and agrees
with Buyer that, immediately prior to the Closing, Seller will assign to
Claremont, and Claremont will assume from Seller, any and all claims (whether or
not in litigation) then pending or asserted against Seller to the extent, and
only to the extent, that such claims arise from or relate to the acts or
omissions of Claremont, Sales and the Claremont Subsidiaries prior to the
Closing (and are not Retained Liabilities). Seller represents and warrants to
Buyer that Seller has secured its obligations to its general liability insurer
with respect to these and other claims by arranging a letter of credit in the
amount of approximately $1.9 million. Buyer covenants and agrees with Seller
that, prior to the Closing, Buyer will provide such insurer with collateral of
its own on terms and conditions sufficient to cause such insurer to release the
collateral arranged by Seller with respect to all claims to be assigned to and
assumed by Claremont hereunder. The assignment, assumption, collateralization
and release contemplated by this Section of the Agreement shall be documented on
terms and conditions reasonably acceptable to Seller and Buyer. To the extent
that any provision of this Section may be inconsistent with any other provision
of this Agreement, the provision of this Section shall be the one that governs
the rights and duties of the parties.
9.5 MISCELLANEOUS. This Agreement (a) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, between and among the parties, or any of them, with respect to the subject
matter hereof, except as specifically provided otherwise or referred to herein,
so that no such external or separate agreements relating to the subject matter
of this Agreement shall have any effect or be binding, unless the same is
referred to
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specifically in this Agreement or is executed by the parties after the date
hereof; (b) is not intended to confer upon any other person any rights or
remedies hereunder; (c) shall not be assigned by operation of law or otherwise;
and (d) shall be governed by and construed in accordance with the laws of the
State of North Carolina. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall constitute an original but all of which
together shall constitute one agreement. The Tax Agreement is integral to the
transactions contemplated by this Agreement and shall be construed IN PARI
MATERIA with this Agreement.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed
and delivered as of the date first written above.
CLAREMONT RESTAURANT GROUP, LLC
By FRESH FOODS, INC.,
its sole member-manager
By /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx
President
FRESH FOODS SALES, LLC
By FRESH FOODS, INC.,
its sole member-manager
By /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx
President
FRESH FOODS, INC.
By /s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx
President
CRG HOLDINGS CORP.
By /s/ Xxxxxx Xxxxxx III
-----------------------------
Xxxxxx Xxxxxx III
President
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