EXHIBIT 2.1
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement is entered into this 18th day of October, 2005, by and
between the following parties:
o Back Yard Burgers, Inc., a Delaware corporation ("BUYER"); and
o Xxxxxxx X. Xxxxxxx ("Xxxxxxx"), an individual residing in Memphis,
Shelby County, Tennessee, Southern Restaurant Development, LLC ("SRD"),
a Florida limited liability company, and CLR Management, LLC ("CLR"), a
Tennessee limited liability company (Xxxxxxx, SRD and CLR are
collectively, the "SELLERS").
RECITALS
A. Sellers are the owners and franchisee operators of four (4)
restaurants doing business under the "Back Yard Burgers" trade name in the
Florida cities of Panama City, Destin, Fort Xxxxxx Beach, and Crestview
(collectively, the "BUSINESS").
B. Buyer desires to buy and Sellers desire to sell substantially all of
Sellers' assets used or useful in the operation of the Business as a going
concern on the terms and conditions set forth in this Agreement.
AGREEMENT
In consideration of the mutual agreements, promises and covenants set
forth above and contained herein, the parties hereto agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS
1.01 PURCHASED ASSETS. Subject to the terms and conditions set forth in
this Agreement, Sellers hereby agree to sell, transfer and convey to Buyer, free
and clear of all mortgages, liens, security interests and encumbrances of any
kind, and Buyer hereby agrees to purchase from Sellers, all of the real and
personal property, tangible and intangible, owned or leased, that is located at
and used by Sellers in the operation of the Business (collectively, the
"ASSETS"), being more particularly described as follows:
(a) All equipment, machinery, tools, furniture, computers,
cash registers and all other tangible personal property used by Sellers
in the operation of the Business, set forth on SCHEDULE 1.01(a) and all
rights associated therewith ("EQUIPMENT");
(b) All of Xxxxxxx' right, title and interest under that
certain Lease Agreement dated as of January 21, 2004, by and between
Xxxxxxx X. Xxxxxx, as Lessor, and Xxxxxxx X. Xxxxxxx, as Lessee, and
all amendments, renewals, modifications and assignments thereof (the
"LEASE");
(c) All of Sellers' right, title and interest in the building,
and all fixtures thereto, and all related improvements existing at
00000 Xxxxx Xxxxx Xxxx in Panama City, Florida (the "PANAMA CITY
BUILDING");
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(d) The real estate described on SCHEDULE 1.01(d) and all
buildings, fixtures and improvements located thereon (the "REAL
ESTATE");
(e) All of Sellers' rights, to the extent legally
transferable, in all Permits which relate to the operation of the
Business;
(f) All records, computer software, operations manuals, repair
and maintenance logs, "Back Yard Burgers" franchise materials, employee
manuals and warranties located at the Business, and all other documents
used by Sellers in the operation of the Business;
(g) All of Sellers' right, title and interest in and to any
franchise agreements relating to the Business, including but not
limited to those certain franchise agreements entered into between
Buyer and CLR, dated November 8, 2002, October 4, 2004, and February 7,
2005, and that certain franchise agreement entered into between Buyer
and CLR, dated December 15, 2004, and any amendments, addenda or
alterations thereto; and
(h) All of Sellers' right, title and interest in and to that
certain Area Development Agreement entered into between Buyer and CLR,
dated November 8, 2002.
1.02 EXCLUDED ASSETS. The Assets purchased by Buyer shall not include
any assets of Sellers or Assets associated with the Business not specifically
listed in the Agreement.
1.03 ASSUMED LIABILITIES AND OBLIGATIONS. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, Buyer shall assume
and thereafter shall perform and discharge all of Sellers' obligations under the
Lease and the Service Contracts described on Exhibit 1.03 annexed hereto and
incorporated herein by this reference (the "ASSUMED LIABILITIES"). Buyer shall
forever defend, indemnify and hold harmless Sellers from and against all
liability of Sellers under the Assumed Liabilities, including costs, expenses,
reasonable attorney's fees and expert witness fees related to, or arising,
therefrom. Buyer shall NOT assume any of Sellers' liabilities, including its
accounts payable, except the Assumed Liabilities.
ARTICLE 2. PURCHASE PRICE
2.01 PURCHASE PRICE; PAYMENT. Buyer shall purchase the Assets for the
amount of Four Million Six Hundred Fifty Thousand and no/100 Dollars
($4,650,000.00) (the "PURCHASE PRICE"). Buyer shall pay the sum of Fifty
Thousand and no/100 Dollars ($50,000.00) to Sellers upon execution of this
Agreement as xxxxxxx money. At the Closing, Buyer shall pay Sellers the balance
of the Purchase Price by bank cashier's check or a Federal Reserve System wire
transfer of immediately available funds.
2.02 INVENTORY. At the Closing, Buyer shall purchase from Sellers all
usable inventory of the Business at the Sellers' invoice cost ("AT COST"). The
purchase of the inventory under this Section is separate from and in addition to
the Purchase Price stated in Section 2.01. The purchase price of the inventory
shall be paid to Sellers at Closing. The Buyer shall have the right to
physically inspect, count and value (at cost) the inventory on-hand the night
prior to the Closing. The Buyer has the right to reject (and not purchase) any
inventory items that Buyer, or
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its agents, deems to be unuseable or unsalable in the ordinary course of the
Business, within Buyer's sole discretion.
2.03 CASH ON HAND. At the Closing, Buyer shall compensate Sellers for
any cash on hand as of said date. This payment shall likewise be separate from
and in addition to the Purchase Price stated in Section 2.01.
ARTICLE 3. THE CLOSING
3.01 CLOSING DATE. Provided this Agreement has not been previously
terminated as provided herein, the closing (the "CLOSING") of the transactions
contemplated herein (the "TRANSACTION") shall occur at the offices of Xxxxx,
Tarrant & Xxxxx, LLP, 0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxx
00000, at 10:00 a.m. on November 15, 2005 (the "CLOSING DATE"), or sooner upon
mutual agreement.
3.02. TRANSFER OF CONTROL. Buyer shall be in control and possession of
the Assets as of the close of the Business on the Closing Date.
3.03 PRORATION OF SALES AND EXPENSES ON THE CLOSING DATE. All sales
proceeds on the Closing Date shall belong to Buyer. All operating expenses,
including staffing, attributable to the Closing Date shall be paid by the Buyer.
3.04 ACCOUNTS RECEIVABLE. All outstanding royalties, ad fees and any
other payments due to Buyer from Seller under the aforesaid franchise agreements
will be made at or prior to closing.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.01 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
4.02 AUTHORITY. Buyer has full power and legal capacity to execute and
deliver this Agreement and to perform its obligations under the terms hereof,
including consummation of the Transaction. Buyer's execution and delivery of
this Agreement and performance of its obligations hereunder, including
consummation of the Transaction, have been duly authorized by all necessary
corporate action.
4.03 ENFORCEABLE AGREEMENT. This Agreement constitutes a legally valid
and binding obligation of Buyer that is enforceable according to its terms
subject only to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting the enforceability of contractual
obligations and creditor's rights generally and by the application of equitable
principles by courts of competent jurisdiction, sitting at law or in equity.
4.04 NO CONFLICTS, VIOLATIONS OR BREACHES. Execution and delivery of
this Agreement by Buyer and its performance of the obligations hereunder,
including consummation of the Transaction, do not conflict with or contravene
(i) any provision of Buyer's Articles of
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Incorporation or Bylaws; (ii) any judgment, order or decree binding on or
affecting Buyer; or (iii) any law, ordinance, regulation or rule, or any order
or restriction of any court, governmental body or agency, to which Buyer is
subject or bound.
4.05 BROKER'S FEES. No agent, broker, finder, investment banker or
other person is entitled to any fee in connection with the Transaction or the
closing of the Transaction.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant the following to Buyer:
5.01 ORGANIZATION AND QUALIFICATION. Southern Restaurant Development,
LLC, is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Florida. CLR Management, LLC, is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Tennessee.
5.02 AUTHORITY. Sellers have full power and legal capacity to execute
and deliver this Agreement and to perform their obligations hereunder, including
consummation of the Transaction. Sellers' execution and delivery of this
Agreement and performance of their obligations hereunder, including consummation
of the Transaction, have been duly authorized by all necessary corporate action.
5.03 ENFORCEABLE AGREEMENT. This Agreement constitutes a legally valid
and binding obligation of Sellers that is enforceable according to its terms
subject only to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting the enforceability of contractual
obligations and creditor's rights generally and by the application of equitable
principles by courts of competent jurisdiction, sitting at law or in equity.
5.04 NO CONFLICTS, VIOLATIONS OR BREACHES. Sellers' execution and
delivery of this Agreement and performance of the obligations hereunder,
including consummation of the Transaction, do not conflict with, contravene or
constitute a material default, violation or breach under any of the following:
(i) any judgment, order or decree of any court, governmental body or agency that
binds or affects any Seller; (ii) any law, ordinance, regulation or rule of any
governmental body or agency, to which any Seller, any Asset or the Business is
subject; or (iii) any agreement, or other instrument, to which any Seller is a
party.
5.05 BROKER'S FEES. No agent, broker, finder, investment banker or
other person is entitled to any fee or commission based upon bringing the Buyer
and Sellers together.
5.06 TAXES.
(a) Sellers have:
(i) filed all returns for federal, state, county,
local and foreign income, use, excise, property, sales,
employment, business activity and other taxes that were
required to be filed on or before the date of this Agreement;
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(ii) paid all taxes, assessments, governmental
charges, withholding deposits and all interest and penalties
which were due and payable on or before the date hereof; and
(iii) withheld and paid all taxes required to have
been withheld and paid in connection with amounts paid or
owing to their employees, creditors, independent contractors
or other third parties
(b) Each of the Sellers has no knowledge that it or any other
Seller is a party to any pending or threatened action or proceeding for
assessment or collection of taxes, and no claim for assessment or
collection of taxes has been asserted against any Seller.
5.07 JUDGMENTS; LITIGATION. The Assets and/or the Business are not
subject to any judgment, order or decree of any court or agency. There is not
now pending any suit, action or proceeding before any court, arbitrator or
tribunal, against or involving the Business or the Assets, and Sellers have no
knowledge of any threat of any such proceeding.
5.08 ABSENCE OF CERTAIN DEVELOPMENTS. None of the following events has
occurred since January 1, 2005:
(a) any material transaction affecting the Business of the
Assets not in the ordinary course of the Business;
(b) any material adverse change in the condition, financial or
otherwise, of the Business;
(c) any purchase, sale, lease, assignment or other transfer of
any of the Assets or any interest therein, or reaching an agreement or
understanding to do any of the foregoing, excepts sales in the ordinary
course of the Business;
(d) any mortgage or pledge of any of the Assets or subjecting
any of the Assets to any mortgage, lien, charge, security interest or
other encumbrance; or
(e) Any of the Sellers becoming obligated for any indebtedness
or liability except any incurred in the ordinary course of business.
5.09 ASSETS. Except for the Permitted Exceptions, Sellers are the legal
and beneficial owners of all the Assets. The Assets constitute all of the
property that Sellers use in the operation of the Business.
5.10 CONDITION OF EQUIPMENT. All heating, air-conditioning, electrical,
sewer and plumbing systems, equipment and appliances to be acquired by Buyer are
suitable for the uses intended therefor.
5.11 EMPLOYEE RELATIONS. Sellers have no written agreement with any
employee whereunder (a) any Seller has any obligation to such employee, or his
or her beneficiaries, other than the obligation to pay current compensation and
accrued vacation, (b) any Seller must give
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more than thirty (30) days prior notice in order to terminate such agreement, or
(c) any employee owes money to any Seller.
5.12 MATTERS REGARDING REAL ESTATE.
(a) Xxxxxxx X. Xxxxxxx ("Xxxxxxx") is the record owner of the
Real Estate, free and clear of all mortgages, liens or encumbrances
whatsoever (other than mortgages which will be paid at Closing out of
the sale proceeds) or claims of any other person or entity, except for
any special exceptions shown on SCHEDULE 5.12 attached hereto.
(b) Xxxxxxx has not received any notice of any existing or
threatened condemnation or any legal action of any kind involving the
Real Estate.
(c) Except for Buyer's rights, Xxxxxxx is not subject to any
agreement including, but not limited to, any right of first refusal or
option to purchase granted to a third party which would or could
prevent him from completing the sale of the Real Estate under this
Agreement.
(d) Xxxxxxx has no knowledge with respect to any part of the
Real Estate:
(i) that asbestos or polychlorinated byphenyls
("PCBS") is located on or in any of the Real Estate;
(ii) that any underground storage tanks are located
on the Real Estate or were located on any part of the Real
Estate and subsequently removed or filled;
(iii) that any portion of the Real Estate (including
improvements thereon) contains asbestos or any substance or
materials which are deemed to be hazardous or toxic under any
Federal or State law, regulation or order.
(e) That from the date hereof and up to the Closing Date,
Xxxxxxx will refrain from transferring any of the Real Estate or
creating on the Real Estate any easements, liens, mortgages,
encumbrances or other interests in favor of third parties.
(f) No work has been performed or is in progress and no
materials have been furnished which might give rise to a mechanic's,
materialman's or other similar lien against the Real Estate.
(g) Until the Closing Date, Xxxxxxx shall not, without the
prior written consent of Buyer, permit any structural or mechanical
modifications or additions to the Real Estate.
ARTICLE 6. CONDUCT AND OBLIGATIONS PENDING THE CLOSING
6.01 Unless Buyer otherwise agrees in writing or as otherwise
contemplated by this Agreement, Sellers will, prior to the Closing Date, conduct
the Business in the ordinary and usual course and consistent with past custom
and practice.
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ARTICLE 7. OTHER AGREEMENTS
7.01 PRE-CLOSING ACCESS BY BUYER.
(a) Immediately after this Agreement is signed and through and
including the Closing Date, the Buyer, subject to Sellers' reasonable
approval, shall have access to the Real Estate and the Business during
the regular business hours of the Business for the purposes of: (i)
evaluating and hiring for itself existing employees of Sellers; (ii)
hiring and training new employees to work in the Business and (iii)
inspecting facilities and equipment.
(b) The hiring process referred to in Section 7.01(a) shall
include but not be limited to advertising for open positions in the
local newspapers, on-site interviews and making offers of employment.
(c) The Buyer shall not to interfere with the operation of the
Sellers' Business.
(d) It is understood and agreed that Buyer's above-described
pre-closing activities will not relieve Sellers of the responsibility
of fully staffing and operating the Business in its ordinary course at
all times prior to Closing.
7.02 ACCESS TO BOOKS, RECORDS AND PERSONNEL. Sellers shall provide
Buyer and its counsel, accountants or other agents, access to Sellers' books and
records, personnel and properties, including the Assets, during reasonable
hours.
7.03 FILINGS AND CONSENTS. Buyer and Sellers shall take all reasonable
action necessary to (a) prepare all applications, filings and other
requirements, if any, under applicable federal, state and local laws, ordinances
and regulations governing completion of the Transaction and conduct of the
Business and (b) obtain all consents, amendments or waivers under any contract
that is necessary in order to avoid a breach of or default under such contract
as the result of the execution of this Agreement or the consummation of the
Transaction.
7.04 EXPENSES. Except as otherwise provided herein, all costs and
expenses, including attorney's fees, incurred in connection with the negotiation
of this Agreement and the sale of the Assets under the terms hereof and with all
other events upon which closing of the Transaction shall be paid by the party
incurring such expenses.
7.05 PROVISIONS REGARDING PURCHASE OF THE REAL ESTATE. The parties
hereto agree that the sale of the Real Estate shall close simultaneously with
the closing of the sale of the other Assets. Such Real Estate purchase shall be
consummated pursuant to the following:
(a) TITLE AND DEEDS. On the Closing Date, Xxxxxxx shall sell
and convey to Buyer the Real Estate by warranty deeds (the "DEEDS"),
subject only to the "Permitted
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Exceptions" (defined in Section 7[c]) and all matters which would be
disclosed by an accurate survey.
(b) TAXES AND ASSESSMENTS. General real property taxes and
installments of special assessments imposed upon the Real Estate
(herein called "TAXES") shall be remitted to the collecting authorities
by Xxxxxxx if due and payable on or before the Closing Date and by
Buyer if due and payable thereafter; PROVIDED, HOWEVER, the Taxes for
the period in which the Closing Date occurs (herein called the
"PRORATION PERIOD") shall be apportioned between Xxxxxxx and Buyer on
and as of the Closing Date, with Buyer bearing only the expense of that
proportion of such Taxes that the number of days in the Proration
Period following and including the Closing Date bears to the total
number of days in such period.
(c) XXXXXXX TO OBTAIN TITLE COMMITMENT.
(i) Xxxxxxx, at his expense, will obtain and furnish
to Buyer, within 15 days after the date of this Agreement,
title insurance commitments (the "COMMITMENTS") from a title
company or companies to be mutually agreed upon, together with
copies of all exceptions referenced therein, pursuant to which
said title company(ies) will agree to issue to Buyer, at
Buyer's expense, an owner's title insurance policy or policies
insuring that at the time of recordation of the Deeds there is
vested in Buyer fee simple title to the Real Estate, free and
clear of all liens, charges, leases, claims, actions,
encumbrances or title exceptions of any kind, except those
approved or waived by Buyer as set forth herein (the
"PERMITTED EXCEPTIONS").
(ii) If the Commitments disclose defects in title
which are unacceptable to Buyer (the "UNACCEPTABLE DEFECTS"),
Buyer shall advise Xxxxxxx in writing of the Unacceptable
Defects within 10 days after the receipt of the Commitments,
and Xxxxxxx may elect to remedy such of the Unacceptable
Defects as are susceptible of being remedied, but in no event
shall Xxxxxxx be required to remedy any Unacceptable Defect or
institute a lawsuit or similar proceeding or expend any money
in connection with such remedy. All matters which are not
objected to within such 10 day period shall be deemed
"PERMITTED EXCEPTIONS."
(iii) Within 10 days after Buyer advises Xxxxxxx of
the Unacceptable Defects, Xxxxxxx shall notify Buyer of which
Unacceptable Defects, if any, Xxxxxxx intends to cure prior to
the Closing Date (the "CURABLE DEFECTS"). If Buyer is not
satisfied with Xxxxxxx' selection of the Curable Defects, then
Buyer shall have the right, as Buyer's sole and exclusive
remedy on account thereof, to terminate this Agreement by
giving written notice thereof to Sellers within 5 days after
Buyer's receipt of the list of Curable Defects from Xxxxxxx.
If Buyer elects to terminate this Agreement, then this
Agreement shall terminate as of the date of Buyer's notice to
Sellers, the Deposit shall be returned to Buyer, and neither
party shall have any further liability under this Agreement
after the date of such notice.
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If Buyer does not so elect to terminate this Agreement within
such 5 day period, then Buyer shall be deemed to have approved
as Permitted Exceptions all of the Unacceptable Defects (other
than the Curable Defects).
(iv) If Xxxxxxx does not remedy the Curable Defects
prior to the Closing Date, Buyer may either (i) complete this
purchase and accept such title as Xxxxxxx is able to convey
without reduction of the Purchase Price or (ii) declare this
Agreement null and void, in which case the Deposit shall be
returned to Buyer. In no event shall any Permitted Exception
be deemed a defect in title.
(d) CLOSING, CLOSING COSTS AND ORDER OF RECORDING. Buyer shall
pay for (i) the recording costs of the Deeds, and (ii) one-half of the
closing/escrow fee. Xxxxxxx shall pay for (i) one-half of the
closing/escrow fee and (ii) the cost of the Commitment(s).
(e) CONDITION AND INVESTIGATIONS OF EQUIPMENT AND REAL ESTATE.
(i) Buyer represents to Sellers that (i) subject to
the "Investigations" (hereinafter defined), Buyer knows, has
examined and has investigated to the full satisfaction of
Buyer, the physical nature and condition of the Equipment and
Real Estate; (ii) except for Sellers' representations and
warranties provided herein, neither Sellers nor any partner,
agent, employee or representative of Sellers has made any
representations whatsoever regarding the Business, the
Equipment or the Real Estate, or any part thereof, including,
without limiting the generality of the foregoing,
representations as to the physical nature or condition thereof
and the restrictions thereon, regardless of howsoever,
whensoever and wheresoever the same may be or hereafter arise;
and (iii) except as otherwise specifically set forth in this
Agreement to the contrary, Buyer, in executing, delivering
and/or performing this Agreement, does not rely upon any
statement and/or information to whomsoever made or given,
directly or indirectly, verbally or in writing, by Sellers or
any broker, individual or corporation. Except as otherwise
specifically set forth in this Agreement to the contrary,
Buyer agrees to take the Equipment and Real Estate "as is,
where is," in such condition and state as the same may be at
the Closing. Buyer shall be responsible for payment of all
impact fees or other similar fees, if any, imposed by any
governmental authority against the Equipment or the Real
Estate.
(ii) Buyer, at Buyer's expense, shall have the right,
within thirty (30) days after the date of this Agreement (the
"INSPECTION PERIOD"), to enter on to the Real Estate to
inspect the Real Estate, subject to the prior approval of
Seller to conduct soil and boring tests, to perform an
environmental audit, to determine utility availability and to
conduct any other tests, inspections or investigations as
Buyer deems appropriate or necessary to confirm that the Real
Estate is suitable for Buyer's intended use (collectively, the
"INVESTIGATIONS"), provided Buyer shall repair, restore and
replace any part of the Real Estate damaged or altered by such
Investigations to the condition that existed immediately prior
to such Investigations. If Buyer reasonably determines that
such Investigations disclose
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information which will interfere with Buyer's ability to use
the Real Estate as a restaurant, then Buyer shall have the
right to terminate this Agreement by written notice thereof to
Sellers on or before the expiration of the Inspection Period,
in which case the Deposit shall be returned to Buyer. If Buyer
so elects to terminate this Agreement, neither party shall
have any further liability under this Agreement after the date
of such notice. Buyer hereby agrees to indemnify, defend and
hold harmless Sellers against all damages, claims, suits,
liability, costs and expenses (including reasonable attorney's
fees and court costs) which Sellers incur as a result of
Buyer's Investigations, such indemnity and hold harmless to
survive any termination, expiration or closing of this
Agreement.
(iii) Possession of the Real Estate shall be
delivered together with all keys to the Buyer at the Closing.
7.06 WAIVER OF BULK SALES LAW. The parties have agreed to waive
compliance with any bulk transfer law, if applicable, in connection with this
sale of Assets. Nothing in this section shall estop or prevent either Buyer or
Sellers from asserting as a bar or defense to any action or proceeding brought
under that law that such law is not applicable to the sale contemplated under
this agreement. Sellers agree to indemnify and hold the Buyer harmless from any
loss or damage, including attorney fees, arising out of or resulting from the
failure of the parties to comply with the bulk transfer law.
ARTICLE 8. CONDITIONS TO CLOSING
8.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE. The obligation of
Buyer and Sellers to consummate the Transaction is subject to satisfaction of
the following conditions:
(a) No order of any court or governmental agency of competent
jurisdiction shall have been issued and be in force as of the Closing
Date and no legal action or proceeding by any governmental entity or
private party shall be pending on the Closing Date or threatened
against the Business, the Assets, Sellers, or Buyer which seeks to
restrain, enjoin or otherwise prevent the Transaction or to recover
damages or obtain any other relief from any party to this Agreement, or
their agents, as the result of the consummation of the Transaction; and
(b) There shall have been no law, statute, rule or regulation
enacted or promulgated which would make illegal consummation of the
Transaction or conduct of any part of the Business as conducted on the
date of this Agreement.
8.02 CONDITIONS TO BUYER'S OBLIGATION TO CLOSE. The obligation of Buyer
to consummate the Transaction is subject to satisfaction of the following
conditions:
(a) All representations and warranties made herein by Sellers
shall have been true and correct in all material respects when made and
are true and correct in all material respects as of the Closing Date;
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(b) On or before the Closing Date, Sellers shall have
materially complied with and satisfied all covenants and agreements
contained herein and materially performed all acts required of them by
this Agreement;
(c) Neither the Business nor the Assets shall have been
materially and adversely affected by fire, explosion, earthquake, flood
or other act of God, by acts of the United States, other governmental
authority or public enemy or by embargo, riot, civil disturbance or
declared or undeclared war;
(d) All required consents by third parties, if any, and by all
other persons shall have been obtained;
(e) At the Closing, Sellers (or those Sellers with an
ownership interest in such) deliver a xxxx of sale conveying the
Equipment and the Panama City Building to Buyer;
(f) At the Closing, Xxxxxxx delivers an assignment of the
Lease to Buyer;
(g) At the Closing, Sellers deliver the certificates and
documents set forth on Schedule 8.02(g);
(h) At the Closing, Sellers deliver termination documents, in
a form or forms acceptable to the Buyer, with respect to the franchise
agreements referenced in Section 1.01(g) hereof and the Area
Development Agreement referenced in Section 1.01(h) hereof;
(i) At the Closing, Xxxxxxx delivers the Deeds conveying the
Real Estate to Buyer;
(j) All actions to be taken by Sellers in connection with
consummating the Transaction and all documents required herein to be
delivered by Sellers or any other person in connection with
consummating the Transaction will be reasonably satisfactory in form to
Buyer; and
(k) Buyer shall have completed the physical inventory
inspection and valuation described in Section 2.02 hereof.
8.03 CONDITIONS TO SELLERS' OBLIGATION TO CLOSE. The obligation of
Sellers to consummate the Transaction is subject to satisfaction of the
following conditions:
(a) All representations and warranties made herein by Buyer
shall have been true and correct in all material respects when made and
are true and correct in all material respects as of the Closing Date;
(b) On or before the Closing Date, Buyer shall have materially
complied with and satisfied all covenants and agreements contained
herein and materially performed all acts required of Buyer by this
Agreement;
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(c) All required consents by third parties or by governmental
bodies and agencies and by all other persons shall have been obtained;
(d) At the Closing, Buyer delivers the Purchase Price required
by Section 1.03 hereof;
(e) At the Closing, Buyer delivers an Assumption of the Lease
to Sellers;
(f) At the Closing, Buyer delivers the certificates and
documents set forth on Schedule 8.03(f);
(g) All actions to be taken by Buyer in connection with
consummating the Transaction and all documents required herein to be
delivered by Buyer or otherwise in connection with consummating the
Transaction will be reasonably satisfactory in form to Sellers.
ARTICLE 9. SURVIVAL AND INDEMNIFICATION
9.01 INDEMNIFICATION BY SELLERS. Sellers shall indemnify, defend and
hold harmless Buyer after the Closing ("BUYER INDEMNITEE") from and against all
losses, liabilities, indebtedness, damages, actions, causes of action, debts,
judgments, obligations, taxes, penalties, expenses and fees, including all
reasonable attorneys' fees (collectively, "LOSSES"), suffered by Buyer
Indemnitee or that become an encumbrance upon any property owned by Buyer
Indemnitee, including the Assets, which result from, arise out of, relate to or
are caused by:
(a) Sellers' breach of any representation or warranty set
forth herein, including in Article 5 hereof, in any closing
certificate, xxxx of sale, assignment instrument or other document or
instrument delivered by Sellers in connection with the Transaction;
(b) Sellers' breach or failure to perform or comply with any
obligation, agreement or covenant set forth herein;
(c) any liability or obligation of Sellers arising prior to
the Closing which is not set forth on any Schedule to this Agreement
including, without limitation, liability for unpaid taxes, fines,
interest and penalties;
(d) any liability arising from violation of any federal, state
or local law or ordinance, including, without limitation, the
Occupational Safety and Health Act and Florida workers' compensation or
wage and hour acts, prior to Closing even though the existence thereof
has been disclosed to Buyer or its officers, employees, attorneys,
accountants or other agents; and
(e) all liabilities and obligations for federal, state or
local income or other taxes, including fines, interest and penalties,
imposed upon Sellers which arise, directly or indirectly, out of the
Transaction.
9.02 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend and hold
harmless Sellers after the Closing ("SELLER INDEMNITEE") from and against all
losses, liabilities,
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indebtedness, damages, actions, causes of action, debts, judgments, obligations,
taxes, penalties, expenses and fees, including all reasonable attorneys' fees
(collectively, "LOSSES"), suffered by any Seller Indemnitee or that become an
encumbrance upon any property owned by any Seller Indemnitee, including the
Assets, which result from, arise out of or are caused by:
(a) Buyer's breach of any representation or warranty set forth
herein, including in Article 4 hereof, in any closing certificate, xxxx
of sale, assignment instrument or other document or instrument
delivered by Buyer in connection with the Transaction;
(b) Buyer's breach or failure to perform or comply with any
obligation, agreement or covenant set forth herein;
(c) any liability or obligation of Buyer arising after the
Closing including, without limitation, liability for unpaid taxes,
fines, interest and penalties and any claim of third parties;
(d) any liability arising from violation of any federal, state
or local law or ordinance, including, without limitation, the
Occupational Safety and Health Act and Florida workers' compensation or
wage and hour acts, after the Closing; and
(e) all liabilities and obligations for federal, state or
local income or other taxes, including fines, interest and penalties,
imposed upon Buyer which arise, directly or indirectly, out of the
Transaction.
9.03 CLAIM PROCEDURE; DEFENSE OF CLAIMS. Upon the later of (a) twenty
(20) days after a Buyer Indemnitee or Seller Indemnitee receives written notice
of a claim for which he or it may seek reimbursement hereunder and (b) ten (10)
days before a Buyer Indemnitee or a Seller Indemnitee makes a commitment to
incur costs or obligations for which it or he may seek reimbursement hereunder,
the party seeking indemnification shall give written notice of the claim for
indemnification to the other party; provided, however, if the party seeking
indemnification must incur such costs or obligations earlier than the prescribed
notice period to avoid material disruption to the business of the Buyer
Indemnitee or because of an emergency, notice shall be given as soon as
practicable and reasonable under the circumstances. The indemnifying party shall
notify the party seeking indemnification within ten (10) days after receipt of
the notice from the party seeking indemnification, as to whether the
indemnifying party will indemnify the party seeking indemnification with respect
thereto and will assume the defense of the claim and payment of the costs and
obligations associated with such defense. If the indemnifying party does not
timely give notice, then the party seeking indemnification may defend against
the matter in any manner it or he deems appropriate and may incur such costs and
obligations the party seeking indemnification deems reasonable, including any
amounts paid in settlement. In either event, the indemnifying party shall be
liable for all such amounts paid or suffered by the party seeking
indemnification to the extent provided in this Article 9.
After the indemnifying party has acknowledged, in writing, that he or
it will indemnify the party seeking indemnification for all Losses and will
defend him or it against all such claims, the indemnifying party will be
entitled to assume the defense of such claim or litigation with the counsel of
his or its choice, so long as such choice is reasonably satisfactory to the
party seeking
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indemnification; provided, however, (i) the party seeking indemnification may,
at his, her or its election and cost, participate in the defense with his or its
own counsel acting as co-counsel, if he or it determines, in their sole
discretion, that such litigation may materially affect the ongoing business of
any Buyer Indemnitee or of any Seller Indemnitee and (ii) the indemnifying party
will not consent to the entry of any judgment or enter into any settlement with
respect to the matter without the written consent of the party seeking
indemnification. If the party seeking indemnification rejects a settlement which
the indemnifying party is willing to accept and the claim is later settled or
judgment is subsequently entered against the party seeking indemnification for
an amount greater than the rejected settlement, the indemnifying party shall not
be liable for the amount of the ultimate judgment or settlement that is in
excess of the rejected settlement and the party seeking indemnification shall be
liable to the indemnifying party for all costs incurred after the rejected
settlement.
9.04 SUBROGATION. Upon full payment of all Losses, an indemnifying
party shall be fully subrogated to the rights of the party indemnified as
against all other parties to the extent of the amount paid.
ARTICLE 10. TERMINATION
10.01 TERMINATION. This Agreement shall terminate at any time prior to
Closing upon the occurrence of any of the following and notice of termination by
the party terminating this Agreement to the other:
(a) mutual consent of Buyer and Sellers;
(b) by either party if the Closing does not occur on or before
the Closing Date;
(c) by Buyer if any of the conditions set forth in Section
8.01 or 8.02 are not satisfied as of the Closing Date;
(d) by Sellers if any of the conditions set forth in Section
8.01 or 8.03 are not satisfied as of the Closing Date; or
(e) by one party to the other if the other party has
materially breached this Agreement in any way.
10.02 REMEDIES UPON BREACH. Each party to this Agreement shall be
entitled to seek and recover all damages and other remedies available to such
party at law, in equity or under the terms of this Agreement that result from a
breach of this Agreement by another party. However, no party shall recover
consequential, speculative and/or punitive damages arising from a breach of this
Agreement.
ARTICLE 11. GENERAL PROVISIONS
11.01 AMENDMENT. Only a written instrument signed by Buyer and Sellers
may amend this Agreement.
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11.02 WAIVER. At any time prior to the Closing, the parties hereto may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(c) waive compliance with any of the agreements or conditions contained herein.
A party's agreement to any extension or waiver shall be valid if set forth in
writing and signed by such party. Waiver of any provision of this Agreement, or
of any breach hereof, shall be a waiver of only said specific provision or
breach and shall not be deemed a waiver of any other provision or any future
breach hereof.
11.03 NOTICES. All notices and other communications hereunder shall be
in writing and delivered to the parties at the following addresses or fax
numbers:
Buyer:
Back Yard Burgers, Inc.
Attn: Xx. Xxxxxxxxx M. Michael
0000 X. Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
Email: xxxxxxxx@xxxxxxxxxxxxxxx.xxx
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxx-Xxxxxx, P.A.
X.X. Xxx 00
Xxxxxxxxxx, XX 00000
(Street Address: 000 Xxxxxx Xxxxxx, Xxxx, XX 38645)
Fax No.: (000) 000-0000
Email: xxx@xxxxx-xxxxxx.xxx
Sellers:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Email: xxx0000@xxxxxxxxx.xxx
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxx, Tarrant & Xxxxx, LLP
0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
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or such other addresses or numbers as a party shall furnish to the other in
writing. Notices and other documents shall be deemed (a) delivered and received
when delivery is tendered if personally delivered, (b) delivered when postmarked
if mailed certified mail, return receipt requested, and received three (3) days
after the postmark date, (c) delivered when delivered to a national overnight
delivery company or the United States Postal Service for overnight delivery and
received on the first business day after delivery to the carrier and (d)
delivered and received on the day receipt is confirmed by the recipient or any
person authorized to receive telecopies at the indicated telecopy number if sent
by electronic facsimile transmission. Notices sent by other method shall be
deemed delivered and received when actually received by the addressee or its or
his authorized agent.
11.04 APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Tennessee.
11.05 ARBITRATION. Any dispute arising under or out of this Agreement
or the Transaction shall be submitted to arbitration in accordance with the
Commercial Rules of the American Arbitration Association. The decision of the
arbitrator(s) shall be final and binding on the parties.
11.06 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any dispute
under this Agreement shall be entitled to recover from the other party all
reasonable attorney's fees and out-of-pocket costs and expenses incurred by the
prevailing party which are associated with resolution of the dispute. An
arbitrator or panel of arbitrators shall determine the just and reasonable
amount of such fees, costs and expenses to which prevailing party shall be
entitled, if any, under the circumstances.
11.07 ENTIRE AGREEMENT. This Agreement and the agreements specifically
referred to herein constitute the entire agreement and understanding of the
parties with respect to the Transaction and supersede all prior agreements and
understandings relating to the subject matter hereof.
11.08 HEADINGS. The parties have included the section and article
headings in this Agreement for convenience of reference only and they do not
intend for them to affect the meaning or interpretation of this Agreement.
11.09 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties, their successors and assigns, to the extent allowed
hereby.
11.10 SURVIVAL OF COVENANTS. The covenants contained in this Agreement
shall survive the closing of the contract.
11.11 ASSIGNMENT. No party may assign his rights or delegate his
obligations under this Agreement to any other person without the prior written
consent of the other party.
11.12 COUNTERPARTS. The parties may execute this Agreement in any
number of separate counterparts, each of which shall be deemed an original, but
which together shall constitute one and the same instrument.
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11.13 PUBLIC ANNOUNCEMENTS. Neither party shall not make any press
release or media or other public announcement prior to the Closing Date that
relate to this Agreement or the Transaction without Sellers' and Buyer's prior
written consent and approval of all copy.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed on the date first above written.
BUYER: SELLERS:
Back Yard Burgers, Inc. /s/ Xxxxxxx X. Xxxxxxx
----------------------
XXXXXXX X. XXXXXXX
By: /s/ Xxxxxxxxx M. Xxxxxxx Xxxxxxxx Restaurant Development, LLC
-----------------------------
Xxxxxxxxx M. Michael,
Chairman and CEO
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx,
Chief Manager
CLR Management, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx,
Chief Manager
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SCHEDULE 1.01(a) - EQUIPMENT
Panama City
[ADD PROPERTY LIST] and all other personal property used in the Business and
located at 00000 Xxxxx Xxxxx Xxxx, Xxxxxx Xxxx, Xxxxxxx.
Destin
[ADD PROPERTY LIST] and all other personal property used in the Business and
located at 0000 Xxx-Xxxxx Xxxx, Xxxxxx, Xxxxxxx.
Fort Xxxxxx Beach
[ADD PROPERTY LIST] and all other personal property used in the Business and
located at 000 Xxxx Xxxxxx Xxxxxx XX, Xxxx Xxxxxx Xxxxx, Xxxxxxx.
Crestview
[ADD PROPERTY LIST] and all other personal property used in the Business and
located at 0000 X. Xxxxxx, Xxxxxxxxx, Xxxxxxx.
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SCHEDULE 1.01(d) - LEGAL DESCRIPTION OF REAL ESTATE
Destin
Xxxx 0, 0, 00 xxx 00, Xxxxx 14, Amended Map of Oakland, according to the plat
thereof recorded in Plat Book 2, Page 142, of the Public Records of Okaloosa
County, Florida.
Fort Xxxxxx Beach
Lot 8 less the East 20 feet thereof, Emerald Lakes Commercial Subdivision
according to the plat thereof as recorded in Plat Book 19, Page 40 and 41 of the
Public Records of Okaloosa County, Florida.
Crestview
COMMENCE AT THE NORTHWEST CORNER OF THE NORTHEAST ONE- QUARTER OF SECTION 00,
XXXXXXXX 0 XXXXX, XXXXX 00 XXXX, XXXXXXXX XXXXXX, XXXXXXX; THENCE SOUTH
00E06'27" EAST ALONG THE WEST LINE OF SAID SECTION 29 A DISTANCE OF 1070.00
FEET, THENCE SOUTH 89E53'51" EAST A DISTANCE OF 662.38 FEET TO THE WESTERLY
RIGHT XX XXX XX XXXXX XXXX #00 AND THE POINT OF BEGINNING; THENCE NORTH
13E56'46" EAST ALONG SAID R/W A DISTANCE OF 71.57 FEET, THENCE NORTH 89E53'51"
EAST A DISTANCE OF 210.00 FEET, THENCE SOUTH 13E56'46" WEST A DISTANCE OF 125.00
FEET, THENCE SOUTH 89E53'51" EAST A DISTANCE OF 210.00 FEET TO THE AFORESAID R/W
OF S.R. #85; THENCE NORTH 13E46'46" EAST ALONG SAID R/W A DISTANCE OF 53.43 FEET
TO THE POINT OF BEGINNING. ALL LYING IN SECTION 29, TOWNSHIP 3 NORTH, RANGE 23
WEST, OKALOOSA COUNTY, FLORIDA. LESS AND EXCEPT: ANY PART WITHIN STATE ROAD NO.
85.
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SCHEDULE 5.12 - SPECIAL EXCEPTIONS
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SCHEDULE 8.02(g) - DELIVERIES BY SELLERS AT CLOSING
1. A certificate from each of the Sellers stating that the conditions set
forth in Sections 8.02 (a) (b) (c) and (d) have been fully satisfied;
2. Good standing certificate for Southern Restaurant Development, LLC,
from the Florida Secretary of State dated not earlier than 20 days
before the Closing Date or other proof of good standing that is
acceptable to the Buyer;
3. Good standing certificate for CLR Management, LLC, from the Tennessee
Secretary of State dated not earlier than 20 days before the Closing
Date or other proof of good standing that is acceptable to the Buyer;
and
4. Copies of any third party and governmental consents that Sellers are
required to obtain in order to effect the Transaction.
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SCHEDULE 8.03(e) - DELIVERIES BY BUYER AT CLOSING
1. A certificate from Buyer stating that the conditions set forth in
Sections 8.03 (a) (b) and (c) have been fully satisfied; and
2. Copies of all third party and governmental consents that Buyer is
required to obtain in order to effect the Transaction.
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