Draft #4
2/4/94
PURCHASE AND SALE AGREEMENT
Among
CARROLS CORPORATION
(as Purchaser)
And
KIN RESTAURANTS, INC.
(as Seller)
And
MICHAEL OLANDER
(as the Seller's Agent)
Dated as of February 10, [ ], 1994
TABLE OF EXHIBITS
Exhibit A Form of Assignment and Assumption of Lease
Exhibit B Form of Lease Consent and Estoppel Certificate
Exhibit C Form of Assumption Agreement
Exhibit D Form of Opinion of Purchaser's Counsel
Exhibit E Form of Bill of Sale and Assignment
Exhibit F Form of Opinion of Seller's Counsel
TABLE OF SCHEDULES
A Restaurants operated by Seller
1.1(a) Restaurant Equipment
1.1(e) Leased Assets
1.2(c) Allocation of Purchase Price Among Separate Classes of Assets
1.3(a)(ii)Real Property Lease Terms
1.3(c) Parking and Easements Agreements
2.5 Required Consents
2.6(b) Events or items not reflected in Financial Statements
2.7 (a) Exceptions to Assets to be Conveyed
2.9(a) Liens on Leased Real Properties
2.11(b) Compliance with Employment Laws, etc.
2.11(c) Seller's Employees and Wages
2.12 Other Contracts
2.13 (a) Employee Pension Benefit plans
2.13 (b) Employee Welfare Benefit plans
2.14(a) Litigation
2.14(c) Required Licenses
2.15 Environmental Matters
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") made as of February 10,[
,] 1994 by and between CARROLS CORPORATION, a Delaware corporation, with its
principal office at 968 James Street, Syracuse, New York 13217-6969
("Purchaser"); KIN RESTAURANTS, INC. a North Carolina corporation having its
principal office at 170 Wind Chime Court, Raleigh, North Carolina 27615
("Seller"), and Michael Olander, with an address at 170 Wind Chime Court,
Raleigh, North Carolina 27615,an individual residing at [
], as agent for the Seller (the "Seller's Agent"):
W I T N E S S E T H:
WHEREAS, Seller operates the Burger King restaurants identified by address
and Burger King Franchise number on Schedule A annexed hereto (each restaurant
is hereinafter sometimes referred to individually as a "Restaurant" and
collectively as the "Restaurants");
WHEREAS, Seller is the owner or lessee of certain personal property used
or held for use in or in connection with the conduct of business at the
Restaurants and Seller is the lessee of certain buildings, other real property
and land upon and in which the Restaurants are located (individually, the "Real
Property" and collectively, the "Real Properties");
WHEREAS, Seller proposes to sell, and Purchaser proposes to purchase, the
Assets (as hereinafter defined) of Seller;
WHEREAS, Seller occupies Real Property pursuant to a lease agreement (each,
a "Real Property Lease" and, collectively, the "Real Property Leases") with an
unaffiliated landlord and proposes to assign to Purchaser, and Purchaser
proposes to accept such assignment of Seller's leasehold interest with respect
to the Real Property on which the Restaurants are located (each a "Leased Real
Property" and, collectively, the "Leased Real Properties");
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
PURCHASE AND SALE; CLOSING
SECTION 1.1 Assets To Be Conveyed. Subject to the terms, provisions and
conditions contained in this Agreement, and on the basis of the representations
and warranties hereinafter set forth, Seller agrees to sell, assign, transfer,
convey and deliver to Purchaser at Closing (as hereinafter defined), and
Purchaser agrees to purchase and accept the assignment, transfer, conveyance and
delivery from Seller at Closing of, all of the following assets used or located
in or held for use in connection with the Restaurants operated by Seller
(collectively, the "Assets") free and clear of all mortgages, liens, security
interests, encumbrances, equities, claims, pledges, charges, liabilities and
other obligations of whatever kind and character (collectively referred to
herein as "Liens"):
(a) Restaurant Equipment. All of the machinery, equipment,
furnishings, supplies, uniforms, spare equipment parts and all other personal
property (other than Inventory, as hereinafter defined) owned by Seller and used
or held for use in, or in connection with, the operation of the Restaurants,
including but not limited to the assets set forth in Schedule 1.1 (a) annexed
hereto (collectively, "Restaurant Equipment");
(b) Leasehold Improvements. All fixtures and other leasehold
improvements owned by Seller in the Restaurants ("Leasehold Improvements");
(c) Franchise Agreements. The Burger King Franchise Agreement for the
Restaurants (the "Franchise Agreements");
(d) Inventories. All of the food, related paper products and
promotional items owned by Seller or otherwise used or held for use in or in
connection with the business being conducted at the Restaurants (collectively,
"Inventory");
(e) Leased Assets. All of the right, title and interest of Seller in
any item of personal property which is not owned by it but is leased by it or
otherwise is used or held for use, in or in connection with the business being
conducted at the Restaurants, including but not limited to, the assets set forth
on Schedule 1.1(e) annexed hereto (collectively the "Leased Assets"); and
(f) Miscellaneous Assets. All of the right, title and interest of
Seller in any other asset or property owned, leased, subleased, used or held for
use in, or in connection with the business being operated at the Restaurants
including, but not limited to, contract rights and other general intangibles.
SECTION 1.2 Purchase Price for Assets. (a) The Purchase Price (as
hereinafter defined,) for the Assets shall be payable at the Closing to Seller's
Agent (on behalf of Seller) either (i) by Federal funds bank wire transfer to
an account designated by Seller's Agent or (ii) by delivery of one or more
certified checks; except, however, the Purchase Price to be paid for the
Inventory shall be paid in the manner set forth in Section 1.2(b)(ii) below.
(b) As used herein, "Purchase Price" shall mean:
(i) For the Assets of Seller, exclusive of the Inventory, the
aggregate sum of One Million Five Hundred Ten Thousand Dollars ($1,510,000);
(ii) For the Inventory, the amount equal to the cost therefore
as charged to Seller by its unaffiliated supplier or vendor. The cost of the
Inventory of Seller shall be determined by physical inventories to be taken on
the Closing Date in the Restaurants and in any other location where Inventory
may be located. Seller and Purchaser shall each have the right to have at least
one of its representatives present at the taking of such inventories. The
representatives shall submit a written report of the results of such inventories
promptly after Closing to both Seller's Agent and Purchaser. Promptly after
receiving such report Seller's Agent shall then price the inventories shown on
such report by multiplying the physical items by their cost, determined as
aforesaid, and Seller's Agent shall submit such priced inventory (the "Priced
Inventory Report") to Purchaser. If Purchaser and Seller's Agent are unable to
agree upon the purchase price of the Inventory within 10 days after Seller's
Agent and Purchaser have received the Priced Inventory Report, such purchase
price shall be determined by an independent accounting firm selected by Seller
and Purchaser, whose determination shall be final and binding upon Seller and
Purchaser. Within 30 days after the final determination of the purchase price
for the Inventory, Purchaser shall pay said amount by check to Seller's Agent.
(c) With respect to the Assets being sold by Seller, the Purchase
Price therefor shall be allocated among the separate classes of assets
comprising the Assets of Seller in the manner set forth on Schedule 1.2(c)
annexed hereto and Seller and Purchaser shall prepare and file their respective
tax allocation forms consistent with such allocations.
SECTION 1.3 Real Properties: Assignments of Leases; Easements and Parking
Agreements. Subject to the terms, provisions and conditions contained in this
Agreement and on the basis of the representations and warranties hereinafter set
forth, at the Closing, Seller shall assign to Purchaser all of its leasehold
interest in the Leased Real Properties and shall assign, sublease or otherwise
transfer to Purchaser all of its right, title and interest in and to all parking
and other access agreements or arrangements relating to the Real Properties, as
follows:
(a) Assignment of Real Property Leases. (i) At Closing, Seller shall
assign to Purchaser all of Seller's right, title and interest as tenant under
the applicable Real Property Lease pursuant to the form of Assignment and
Assumption of Lease (the "Lease Assignment") annexed hereto as Exhibit A. The
Lease Assignment shall be executed and delivered at Closing by Seller and
Purchaser.
(ii) The expiration dates, monetary terms and renewal terms for
each of the Real Property Leases are as set forth in Schedule 1.3 (a)(ii).
(b) Lease Assignment Consent. At Closing, Seller shall deliver to
Purchaser a Consent to Assignment and Estoppel Certificate in the form annexed
hereto as Exhibit B (the "Lease Assignment Consent") pursuant to which the
respective landlords shall: (i) acknowledge and consent to the applicable Lease
Assignment, and (ii) confirm all of the information set forth in the first and
last sentences of Section 2.9(b).
(c) Parking, Easements and Related Agreements. Schedule 1.3(c)
annexed hereto with respect to Seller sets forth all written or oral parking
leases, easements, agreements, grants, licenses, options and any other agreement
(collectively referred to herein as "Easements") pursuant to which Seller is
granted, for use in connection with the Restaurants, parking privileges or
rights, current or prospective, and/or rights of access of any kind or nature
in and to the applicable Real Property. At Closing Seller shall deliver to
Purchaser such documentation in form and substance satisfactory to Purchaser and
its counsel which effectively assigns or transfers Seller's rights under both
recorded and unrecorded Easements to Purchaser (hereinafter individually
referred to as an "Easement Assignment", and, collectively, as the "Easement
Assignments").
SECTION 1.4 Assumption of Liabilities
(a) No Assumption by Purchaser. The parties hereto hereby agree and
acknowledge that Seller is not selling, transferring, assigning, delivering or
otherwise conveying, and Purchaser is not purchasing, receiving, acquiring or
otherwise assuming, any liabilities of Seller, or any of its Affiliates except
as specifically set forth in Section 1.4(b) hereof. Purchaser shall neither be
liable for any liability or obligation of Seller, or any of its Affiliates nor
shall it be required to indemnify Seller, or any of its Affiliates against any
liability or obligation other than those so specifically assumed or indemnified,
as the case may be.
Without limiting the generality of the foregoing, Purchaser is not assuming
and shall not indemnify Seller, or any of its Affiliates against any liability,
obligation, duty or responsibility of Seller, or any of its Affiliates:
(i) arising from, or out of, the ownership or operations or use
of, or incurred in connection with, or incurred as a result of any claim made
against Seller, or any of its Affiliates in connection with, any Restaurant,
Asset, Real Property, Real Property Lease or Assumed Contract (as hereinafter
defined) on or prior to, or relating to any time period prior to 6:00 A.M. on
the Closing Date;
(ii) any Federal, state or local income taxes, transfer taxes,
sales taxes or any other kind of tax of whatever kind including, without
limitation, any such tax that may arise from or by reason of the transactions
contemplated by this Agreement;
(iii) with respect to any wages, vacation, severance or sick pay
or any rights under any stock option, bonus or other incentive arrangement that
have accrued as of the Closing Date;
(iv) with respect to any employment, consulting or similar
arrangement to which Seller is a party or for which Seller is responsible;
(v) with respect to any Plan (as hereinafter defined) whether
arising before, on or after the Closing Date; or
(vi) under any Laws (as hereinafter defined) relating to public
health and safety and pollution or protection of the environment, including,
without limitation, those relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous or toxic materials
or wastes into ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants or hazardous or
toxic materials or wastes or any materials defined or categorized by any of the
above as "Hazardous Materials", "Hazardous Substances", or similar or related
designations (collectively referred to herein as "Environmental Laws").
(b) Assumption of Assumed Contracts. Seller shall assign to, and
Purchaser shall accept assignment of and assume from and after the Closing Date,
all of the rights, obligations and liabilities of Seller attributable to the
period after the Closing Date, under the Franchise Agreements, Real Property
Leases, Easements and the Other Contracts (as hereinafter defined)
(collectively, the "Assumed Contracts").
SECTION 1.5 Closing; Deliveries
(a) Date. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of the Seller[
], (or such other location as shall be agreed upon by the parties) on a date
which shall be mutually agreed upon by the parties, but in no event more than
30 days after Burger King Corporation ("Burger King") shall have granted its
consent to this transaction (the "BKC Consent Date"), provided, however, that
if, through no fault of the parties hereto, all of the conditions to the
parties' obligations to close hereunder are not satisfied or waived on the date
so designated, the Closing shall be adjourned to a subsequent mutually agreeable
date not later than 60 days after the BKC Consent Date (the "Outside Date"),
unless further extended by mutual agreement by the parties. The "Closing Date"
is the date Closing actually takes place.
(b) Delivery of Documents. At the Closing, Seller's Agent and
Purchaser shall deliver to each other the respective documents and other items
set forth in Article V.
SECTION 1.6 Adjustments. (a) All customary prorations with respect to (i)
obligations under the Assumed Contracts; (ii) utility charges and (iii) personal
property taxes, shall be adjusted between the parties as of 6:00 A.M. on the
Closing Date. Payment, if any, owed by Purchaser to Seller or by Seller to
Purchaser by reason of such adjustments shall be made at the Closing (by
adjustment of the Purchase Price, if practicable) or as soon as reasonably
practicable thereafter.
(b) Seller shall pay all sales taxes, and transfer taxes, if any,
applicable to its transaction at the Closing. Seller shall be responsible for
all franchise assignment fees owed to Burger King in connection with the
assignment of the Franchise Agreements to Purchaser.
(c) All "minimum" or "fixed rentals" percentage rentals and any other
monetary obligations accruing under the Real Property Leases shall be adjusted
for the month in which the Closing occurs.
SECTION 1.7 Appointment of Seller's Agent. Seller irrevocably appoints and
authorizes Seller's Agent to do all such acts and things as agent (and not as
principal) on its behalf and to exercise all such rights, powers and privileges
in relation to this Agreement as fully and completely as Seller could on its own
behalf, together with all such powers as are reasonably incidental thereto.
Seller agrees that the foregoing appointment and powers are coupled with an
interest and every party acting hereunder shall be entitled to rely on any
action taken or omitted by Seller's Agent on behalf of Seller.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, jointly and severally, represent, warrant, covenant and agree to
and with Purchaser as follows:
SECTION 2.1 Organization and Corporate Power. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State
of North Carolina and is duly qualified and licensed to do business in the State
of North Carolina which is the only jurisdiction wherein the character of the
Real Properties and other Assets owned or leased or the nature of the business
of Seller makes such licensing or qualification to do business necessary.
Seller has full power and authority (corporate or otherwise) to own its assets,
or hold under lease the real property it presently holds under lease including,
without limitation, the Real Properties, and to carry on the business in which
it is engaged at all locations at which it is presently located including,
without limitation, operation of the Restaurants at the Real Properties and to
execute and deliver this Agreement and the other documents and instruments to
be executed and delivered by Seller, as the case may be, pursuant hereto or in
connection herewith (this Agreement and all other agreements, documents and
instruments to be entered into pursuant to this Agreement or in connection
herewith including all exhibits and schedules annexed hereto and thereto are
collectively referred to herein as the "Transaction Documents") and to
consummate the transactions contemplated hereby and thereby.
SECTION 2.2 Governing Instruments. The copies of the Governing Instruments
(as defined in Section 10.6) of Seller, and all amendments thereto to date, as
certified by the secretary of Seller have heretofore been delivered to
Purchaser, and are complete and correct. Seller is not in default in the
performance, observance or fulfillment of any of the provisions, terms or
conditions of its Governing Instruments.
SECTION 2.3 Due Authorization. All requisite authorizations for the
execution, delivery and performance of this Agreement and the other Transaction
Documents by Seller have been duly obtained. The execution and delivery of this
Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by the
Board of Directors and shareholders of Seller, and no other corporate acts or
proceedings on the part of Seller or its shareholders are necessary to authorize
the execution and delivery of this Agreement or any of the other Transaction
Documents or the consummation of the transactions contemplated
hereby or thereby. This Agreement and each of the other Transaction Documents,
upon execution and delivery by Seller, will be the legal, valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency and other
laws affecting creditors rights (collectively "Bankruptcy Laws") and subject to
general principles of equity affecting the right to specific performance and
injunctive relief.
SECTION 2.4 No Violation. The execution, delivery and performance of this
Agreement and the other Transaction Documents by Seller and the consummation by
Seller of the transactions contemplated hereby and thereby, do not and at
Closing will not: (a) violate its Governing Instruments; (b) violate or
conflict with or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under any agreement, indenture,
instrument or understanding to which Seller is a party or by which it is bound;
(c) violate any judgment, decree, law, rule or regulation to which Seller is a
party or by which it is bound; (d) result in the creation of, or give any party
the right to create any encumbrance upon the property and assets of Seller; (e)
terminate or modify, or give any third party the right to terminate or modify,
the provisions or terms of any agreement or commitment to which Seller is a
party or by which Seller is subject or bound; or (f) result in any suspension,
revocation, impairment, forfeiture or non-renewal of any permit, license,
qualification, authorization or approval applicable to Seller.
SECTION 2.5 Consents. Schedule 2.5 sets forth a list of all consents,
approvals or other authorizations which Seller is required to obtain from, and
any filing which Seller is required to make with, any governmental authority or
agency or any other Person including, but not limited to, consents required from
Burger King (the "Burger King Consents") in connection with the execution,
delivery and consummation of this Agreement and the other Transaction Documents
and the consummation of the transactions contemplated hereby or thereby
(collectively, the "Required Consents").
SECTION 2.6 Financial Statements. (a) Seller has delivered to Purchaser
its Statement of Profit and Loss for each of the Restaurants for the 12 months
ended December 31, 1993 and 1992, which financial statements present fairly the
financial position of Seller and its subsidiaries (if any) as of the dates
thereof and present fairly the results of operations of the Restaurants for the
periods covered thereby, in each case in conformity with generally accepted
accounting principles consistently applied.
(b) The financial statements of Seller referred to in Section 2.6(a)
(collectively, the "Financial Statements") are true, correct and complete, have
been prepared in accordance with generally accepted accounting principles
consistently applied and accurately present the results of operations of The
Restaurants for the periods covered thereby. The Financial Statements reflect
or provide for all material claims against, and all debts and liabilities (of
any kind or nature) of, Seller, fixed or contingent, as at the dates thereof and
for the periods covered thereby, and Seller knows of no basis for the assertion
against it of any liability or obligation of any nature whatsoever, not fully
reflected or reserved against in such Financial Statements. There has not been
any change between the date of the Financial Statements and the date of this
Agreement which has materially affected the financial condition, assets,
liabilities, results of operations or business of the Restaurants and, except
as set forth in Schedule 2.6(b), no fact or condition exists or is contemplated
or threatened which might cause any such change at any time in the future.
Without limiting the foregoing since January 1, 1994 with, respect to
the Restaurants:
(i) Seller has not incurred any obligation or liability
(absolute or contingent) except current liabilities incurred in the ordinary
course of conduct of business and obligations under Contracts entered in the
ordinary course of business; and
(ii) Seller has not paid, loaned or advanced any amounts to, or
sold, transferred, leased, subleased or licensed any Real Properties or
Assets
to, or entered into any agreement or arrangements with, any Affiliate or
associate (and any of such transactions shall have been terminated on or before
the Closing Date).
SECTION 2.7 Assets. (a) Seller owns, and will transfer to Purchaser at
Closing, good and marketable title to all of its Assets and Assumed Contracts
free and clear of all Liens. The Assets of Seller include all of the operating
assets used or held for use in or in connection with the business being
conducted by Seller at the Restaurants. To the best knowledge of Seller, all
the Assets: (i) are, and on the Closing Date will be, in good operating
condition and repair, capable of performing the functions for which such items
are currently and normally used, normal wear and tear excepted; and (ii) except
as set forth in Schedule 2.7(a) annexed hereto, conform, and on the Closing Date
will conform, to the standards of Burger King under the terms and conditions set
forth in the applicable Franchise Agreements. On the Closing Date, each
Restaurant, together with its related Assets and Real Property, taken as a
whole, will constitute a fully operable "turn-key" Burger King restaurant
sufficient to permit Purchaser to immediately operate the business at such
Restaurant as presently being conducted therein.
(b) Seller will transfer and/or assign to Purchaser at Closing all
warranties, if any, with respect to its Assets.
SECTION 2.8 Inventory. The Inventory of Seller consists, and at Closing
will consist, of items of quality and quantity usable or salable in the ordinary
course of business. The present quality and quantities of all Inventory of
Seller are, and the qualities and quantities of all Inventory outstanding at the
Closing will be, reasonable in accordance with the current specifications of
Burger King. At Closing, the Inventory at each Restaurant shall be sufficient
for the operation of such Restaurant for at least 48 hours after the Closing
Date, and in no event will there be excess inventory in relation to normal
usage.
SECTION 2.9 Real Property Leases. (a) Seller has delivered to Purchaser a
true and complete copy of the Real Property Lease applicable to it, together
with all amendments thereto. To the best of Seller's knowledge, each applicable
owner of Leased Real Property has good record and marketable title in fee simple
to such real property free and clear of all Liens except as set forth in
Schedule 2.9(a). Seller has no knowledge or information of any facts,
circumstances or conditions which do or would in any way adversely affect the
Leased Real Property or the operation thereof or the business thereon as
presently conducted or as intended to be conducted. At or prior to Closing,
Seller shall cause to be discharged of record all Liens against Seller or
Seller's interest affecting its Leased Real Property. Each Real Property Lease
is valid and binding in full force and effect and enforceable in accordance with
its terms. There are no existing defaults or offsets which any of the
applicable landlords has against the enforcement of its Real Property Lease by
the Seller and neither Seller nor such landlord is in default under the
applicable Real Property Lease, nor have any events under any such Real Property
Lease occurred which, with the giving of notice or passage of time or both,
would constitute a default thereunder by either party thereto.
(b) To the best of Seller's knowledge, the Real Properties and all
improvements located thereon and the present use thereof comply with, constitute
a valid non-conforming use, or are operating pursuant to the provisions of a
valid variance under all zoning laws, ordinances and regulations of governmental
authorities having jurisdiction thereof and, to the best of Seller's knowledge,
the construction, use and operation of the Real Properties by Seller are in
substantial compliance with all Laws. On or prior to Closing, Seller shall
deliver to Purchaser true and complete copies of each certificate of occupancy
for each Restaurant and all amendments thereto to date. In the event Seller is
unable to provide copies of said certificates, Seller shall deliver
documentation from the appropriate municipalities indicating that such
certificates are not required or no longer exist in their records. Seller also
agrees to indemnify and hold Purchaser harmless for all costs, expenses and
damages incurred by Purchaser as a result of Seller's inability to provide
Purchaser with said certificates of occupancy. To the best of Seller's
knowledge, the Real Properties and the Restaurants located thereon are in a
state of good maintenance and repair and are in good operating condition, normal
wear and tear excepted, and (i) Seller is not aware of any material physical or
mechanical defects in any of the Real Properties or Restaurants, including,
without limitation, the structural portions of the Real Properties and
Restaurants and the plumbing, heating, air conditioning, electrical, mechanical,
life safety and other systems therein and to the best knowledge of Seller and
all such systems are in good operating condition and repair (normal wear and
tear excepted); and (ii) there are no ongoing repairs to the Real Properties or
Restaurants located thereon being made by or on behalf of Seller or being made
by or on behalf of any landlord. All necessary occupancy and other certificates
and permits, municipal and otherwise, for the lawful use and occupancy of the
Real Properties for the purposes for which they are intended and to which they
are presently devoted including, without limitation, for the operation of a
Burger King restaurant thereon, have been issued and remain valid. There are
no pending or threatened actions or proceedings that might prohibit, restrict
or impair such use and occupancy or result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such certificates or permits. All
notes or notices of violation of any Laws, against or affecting any such Real
Properties have been complied with. There are no outstanding correcting work
orders from any Federal, state, county, municipal or local government, or the
owner of the Real Properties or any insurance company with respect to any such
Real Properties.
(c) There are no condemnation or eminent domain proceedings of any
kind whatsoever or proceedings of any other kind whatsoever for the taking of
the whole or any part of the Real Properties for public or quasi-public use
pending or, to the knowledge of Seller, threatened against the Real Properties.
(d) The Real Properties and all improvements thereon represent all of
the locations at which the Seller conducts business relating to the Restaurants
and are, now, and at Closing will be, the only locations where any of the Assets
are or will be located.
(e) All water, sewer, gas, electric, telephone and drainage
facilities, and all other utilities required by any Law or by the normal use and
operation of the Real Properties and the Restaurants located thereon are
installed to the property lines of the respective Real Properties, are connected
pursuant to valid permits, are fully operable and are adequate to service the
Real Properties and the Restaurants located thereon and to permit full
compliance with all Laws and normal utilization of the Real Properties and the
Restaurants located thereon.
(f) All licenses, permits, certificates, including, without
limitation, proof of dedication, required from all governmental agencies having
jurisdiction over the Real Properties, and from any other Persons, for the
normal use and operation of the Real Properties and the Restaurants located
thereon and to ensure adequate vehicular and pedestrian ingress to and egress
from the Real Properties and the Restaurants located thereon have been obtained.
The Easements are valid and binding, in full force and effect and enforceable
in accordance with their respective terms.
SECTION 2.10 Franchise Agreements. Seller has delivered to Purchaser a
true, complete and correct copy of the Franchise Agreements , including any and
all amendments thereto. Seller owns, and at Closing will transfer to Purchaser,
its right, title and interest in the Franchise Agreements, free and clear of all
Liens. Subject to the written consent of Burger King, which Seller shall obtain
and deliver to Purchaser at or prior to the Closing, Seller has the absolute
right and authority to sell, assign, transfer and convey the Franchise
Agreements. Seller has received no notice of violation with respect to the
Franchise Agreements, and Seller does not know or has no reason to know of any
event which would give rise to a violation or default under the Franchise
Agreements.
SECTION 2.11 Employment Arrangements. (a) Except as required by Law,
Seller has no obligation, contingent or otherwise, under any employment
agreement, collective bargaining or other labor agreement, any agreement
containing severance or termination pay arrangements, retainer or consulting
arrangements, or purchase plan or other employee contract or non-terminable
(whether with or without penalty) arrangement.
(b) Except as set forth on Schedule 2.11(b), within the last five
years Seller has not experienced any labor disputes, union organization attempts
or any work stoppage due to labor disagreements. Except as set forth on
Schedule 2.11(b), (i) to the best knowledge of Seller, Seller is in substantial
compliance with all applicable Laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice; (ii) there is no unfair labor practice,
charge or complaint against Seller pending or threatened before the National
Labor Relations Board; (iii) there is no labor strike, dispute, request for
representation, slowdown or stoppage actually pending or threatened against or
affecting Seller; (iv) no question concerning representation has been raised or
is threatened respecting the employees of Seller; and (v) no grievance which
might have an adverse affect on Seller or the conduct of its business nor any
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claims therefor exist.
(c) Schedule 2.11(c) sets forth a true and complete list of (i) the
names of all managers and assistant managers employed by Seller at the
Restaurants as of the date hereof, the date such individuals were first employed
by Seller, how long such individuals have been at the particular Restaurants and
the salary payable to such persons and (ii) the names of all other persons
employed by Seller at the Restaurants as of the date hereof, and the salary or
hourly wage payable to each such person, and (iii) the total number of vacation
days accrued by all persons employed by Seller and the total monetary value of
such accrued vacation for all such persons. From and after the date hereof,
Seller or Olander or any of their respective Affiliates will not remove any
management personnel (managers and assistant managers) from the Restaurants or
relocate such management personnel to any other restaurants owned or operated
by Seller, Olander or their respective Affiliates and at Closing the Restaurants
shall have sufficient management and non-management personnel required to run
and operate the Restaurants in accordance with Burger King Standards.
SECTION 2.12 Contracts and Arrangements. (a) Except for the Franchise
Agreements, Real Property Leases, Easements, and the Contracts set forth on
Schedule 2.12 hereto (the Contracts set forth on Schedule 2.12 being referred
to herein, collectively, as the "Other Contracts"), Seller has no Contract
relating to the Restaurants, Assets or Real Properties, including, without
limiting the generality of the foregoing, any (i) Contract for the purchase or
sale of Inventory; (ii) Contract for the purchase or sale of supplies, services
or other items; (iii) Contract for the purchase, sale or lease of any Restaurant
Equipment; (iv) Franchise Agreement or license agreement; and (v) employment or
consulting agreement or pension, disability, profit sharing, bonus, incentive,
insurance, retirement or other employee benefit agreement.
(b) Seller has delivered to Purchaser a true, complete and correct
copy of each Other Contract applicable to it together with all amendments (if
oral, a written description of the terms thereof) thereto.
(c) Seller has performed all obligations required to be performed
under each Other Contract relating to its business and is not in breach or
default or in arrears in any respect under the terms thereof. Seller has
received no notice of the termination of any such Other Contract prior to the
expiration of the scheduled term thereof or has knowledge of the intent of a
party to any such Other Contract to do the same, nor has any event occurred
which, with notice or the passage of time or both, would constitute a default
under any such Other Contract. Seller has the right, under the terms of each
Other Contract, to assign such Other Contract to Purchaser.
(d) Seller has given no power of attorney (revocable or irrevocable)
to any Person for any purpose whatsoever.
SECTION 2.13 ERISA. (a) Schedule 2.13(a) Contains a true and complete list
of all "employee pension benefit plans" (as defined in section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
including all "multi-employer plans" (as defined in ERISA section 3(37)), and
any other stock bonus, pension, or profit sharing plans described in section
401a of the Internal Revenue Code of 1986, as amended (the "Code"), that Seller
or any other entity which would be considered in a controlled group or under
common control or as a single employer with Seller under ERISA sections
4001(a)(14) or (b) or Code sections 414(b), (c), (m), or (o) presently maintains
or is obligated to contribute or had maintained or had an obligation to
contribute at any time within the past five years.
(b) Schedule 2.13(b) contains a true and complete list of all
"employee welfare benefit plans" as defined in ERISA section 3(1) and all
deferred compensation, stock purchase, stock option, incentive, bonus, vacation,
severance (including, without limitation, benefits in the event of a change of
ownership in whole or in part, of Seller), disability, hospitalization, medical
insurance, child care, educational assistance, or other employee benefit plan,
program or arrangement currently maintained by Seller or to which Seller has an
obligation to contribute.
(c) Seller has delivered or made available to Purchaser true and
complete copies of all documents, as they may have been amended to the date
hereof, embodying or relating to the plans, programs or arrangements described
in Section 2.13(a) and (b) (collectively the "Plans").
(d) There are no actions, audits, suits, or claims pending (other than
routine claims for benefits) or, to the knowledge of Seller, threatened, against
any Plan or any fiduciary of any Plan or against the assets of any Plan.
(e) Seller has no obligation to any retired or former employee with
respect to, nor made any oral or written representation or communication to any
retired or former employee regarding, the provisions of any disability (long or
short term), hospitalization, medical, dental or life insurance plans (whether
insured or self-insured) or any other "employee welfare benefit" plan as defined
in ERISA section 3(1).
SECTION 2.14 Litigation, Compliance with Laws and Consents. (a) Except as
set forth on Schedule 2.14(a), there are no suits, grievances, complaints,
charges, inquiries, proceedings, hearings, demands, notices, demand letters,
claims, actions, causes of action or investigations before any court, tribunal,
governmental or regulatory authority or any other Person (each an "Action" and,
collectively, "Actions") now pending, or, to the knowledge of Seller, in
prospect or threatened against, Seller or any of its respective officers,
directors or partners, at law or in equity, whether or not fully covered by
insurance, in connection with the Assets, Real Property Leases, Assumed
Contracts, Real Properties, Restaurants, business, affairs, properties or assets
of Seller.
(b) To the best knowledge of Seller, Seller at all times during the
past has been, and at Closing, will be, in substantial compliance in all
respects with all laws (whether statutory or otherwise) rules, regulations,
orders, ordinances, judgments, injunctions, demands, or decrees of any
governmental authority (Federal, state, local or otherwise) (collectively
"Laws") applicable to its business, affairs, properties or assets. Neither
Seller, nor any officer, director or authorized agent of Seller is in default
with respect to, and has not been charged or to its knowledge threatened with,
nor is under investigation with respect to any violation of any Laws relating
to any aspect of its business, affairs, properties or assets including, but not
limited to, the Restaurants, Assets, Real Property Leases, Assumed Contracts,
and the Real Properties.
(c) Set forth on Schedule 2.14(c) hereto is a list of all licenses,
permits, approvals, permissions, qualifications, consents and other
authorizations (collectively "Licenses") which are required to be obtained in
connection with the ownership, use or operation of the Restaurants, the Assets,
Real Property Leases or the Real Properties ("Required Licenses"). Except as
set forth in Schedule 2.14(c), Seller has obtained each of the Required Licenses
and each such Required License is and on the Closing Date will be, validly
issued and in full force and effect and there are not now, and at Closing shall
not be any Actions pending, and to Seller's knowledge, any Actions in prospect
or threatened, challenging the Required Licenses.
SECTION 2.15 Environmental Matters. Except as set forth in Schedule 2.15
annexed hereto: (i) Seller has obtained all Licenses which are required under
any Environmental Laws; (ii) to the best of Seller's knowledge, Seller is in
substantial compliance with all terms and conditions of the Required Licenses
and is also in substantial compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any Environmental Laws or code, plan, order, decree or
judgment relating to public health and safety and pollution or protection of the
environment or any notice or demand letter issued, entered, promulgated or
approved thereunder; (iii) there are no civil, criminal or administrative
Actions pending, or to Seller's knowledge threatened, against Seller relating
in any way to any Environmental Law or any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder; and (iv) Seller does not know or has any
reason to know of, nor has Seller received any notice of any facts, events or
conditions which would interfere with or prevent continued compliance with, or
give rise to any common law or legal liability under any Environmental Law.
SECTION 2.16 Insurance Policies. Seller has maintained with financially
sound and reputable insurers insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
reputable companies in the same or similar business, of such types and in such
amounts (with such deductible amounts) as is customary for such companies under
similar circumstances. All of the applicable insurance policies are valid and
enforceable and in full force and effect and will be continued in full force and
effect up to and including the Closing Date.
SECTION 2.17 Tax Returns. Seller has filed all Federal income tax returns
and all state and local income, franchise and sales tax returns and all real
property tax returns and any other tax return which was required to be filed as
of the date of this Agreement, and will timely file or obtain extensions of time
to file all returns which were not required to be filed prior to the date
hereof. The provision for taxes shown on the Financial Statements of Seller was
sufficient to satisfy all taxes due and all assessments received by Seller (and
all other entities included within the Financial Statements) for all periods
ended on or prior to the date of such Financial Statements. As of the date
hereof, no taxes are past due, and no tax liabilities have been assessed or
proposed which remain unpaid and all current payroll taxes have been paid.
Seller is not aware of any basis upon which any assessment of additional
Federal, state or local income or other taxes could be made, and Seller has not
signed any extension agreement with the Internal Revenue Service or any other
governmental agency or given waiver of a statute of limitations with respect to
the payment of taxes for periods for which the statute of limitations has not
expired. Seller shall be liable for all tax liabilities in connection with the
operation of the Restaurants, the Assets, the Real Properties, the Real Property
Leases, the Easements and Assumed Contracts, which cover periods prior to the
Closing Date. Seller shall be liable for all transfer, sales and similar tax
liabilities, if any, in connection with the leasing of the Real Properties under
the Real Property Leases, the assignment of the Real Property Leases and the
Assumed Contracts, and the transfer of any rights under the Easements. All
taxes which Seller is required by law to withhold or collect have been duly
withheld or collected and to the extent required have been paid over to the
proper governmental authorities on a timely basis or reflected as an obligation
on the current Financial Statements of the applicable Seller.
SECTION 2.18 Adverse Restrictions. Seller is not subject to any charter,
by-law, Lien, lease, agreement, instrument, order, judgment or decree, or any
other restriction of any kind or character, or, any law (currently in existence
or adopted on or before the Closing Date), rule or regulation, which now is or
in the future could be burdensome or which could affect materially adversely the
Restaurants or the business conducted therein, Assets, Real Properties, Real
Property Leases, the Easements or Assumed Contracts. The execution and delivery
of this Agreement and the other Transaction Documents and the consummation of
the transactions contemplated hereunder and thereby will not result in the
violation or breach of, default or the creation of any Lien under any of the
aforesaid.
SECTION 2.19 Brokers. No broker, finder or selling agent has had a part
in bringing about any of the transactions contemplated by this Agreement or the
other Transaction Documents (including, but not limited to, the leasing of the
Real Properties and the assignment of the Real Property Leases) and no
commission or other fee is due to any party in connection with the transactions
contemplated by this Agreement or the other Transaction Documents.
SECTION 2.20 Material Information. The Financial Statements, this
Agreement, the other Transaction Documents and any exhibit, schedule,
certificate, or other information, representation, warranty or other document
furnished or to be furnished by Seller to Purchaser pursuant to or in connection
with any of the foregoing, do not (i) contain, nor will the same contain, any
untrue statement of a material fact; or (ii) omit, nor will the same omit, or
fail to state, a material fact required to be stated herein or therein or which
is necessary to make the statements herein or therein not misleading.
SECTION 2.21 Continuing Representations. The representations and
warranties of Seller herein contained shall be true and correct on and as of the
Closing Date with the same force and effect as if made on and as of that date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents, warrants, covenants and agrees to and with Seller
that:
SECTION 3.1 Organization and Corporate Power. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser has full power and authority (corporate and other)
to execute and deliver this Agreement and the other Transaction Documents to be
executed and delivered by Purchaser pursuant hereto or in connection herewith
and to consummate the transactions contemplated hereby and thereby.
SECTION 3.2 Certificate of Incorporation and By-Laws. Copies of the
Certificate of Incorporation and By-Laws of Purchaser and all amendments thereto
to date, as certified by the Secretary of Purchaser, have heretofore been
delivered to Seller's Agent by Purchaser, and are complete and correct as of the
date of this Agreement and will be complete and correct as of the Closing Date.
Purchaser is not in default in the performance, observance or fulfillment of any
of the terms or conditions of its Certificate of Incorporation or By-Laws.
SECTION 3.3 Due Authorization. All requisite authorizations for the
execution, delivery, performance and satisfaction of this Agreement and the
other Transaction Documents by Purchaser have been duly obtained. The execution
and delivery of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of Purchaser and no other corporate acts
or proceedings on the part of Purchaser or its shareholders are necessary to
authorize the execution and delivery of this Agreement or any of the other
Transaction Documents or the consummation of the transactions contemplated
hereby or thereby. This Agreement and each of the other Transaction Documents,
upon execution and delivery by Purchaser, will be the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its
terms, except as enforcement thereof may be limited by Bankruptcy Laws and
subject to the general principles of equity affecting the right to specific
performance and injunctive relief.
SECTION 3.4 No Violation. The execution, delivery and performance of this
Agreement and the other Transaction Documents by Purchaser and the consummation
by Purchaser of the transactions contemplated hereby and thereby will not (a)
violate its Certificate of Incorporation or By-Laws; (b) violate or conflict
with or constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under any agreement, indenture, instrument
or understanding to which Purchaser is a party or by which it is bound; (c)
violate any judgment, decree, law, rule or regulation to which Purchaser is a
party or by which it is bound; (d) terminate or modify, or give any third party
the right to terminate or modify, the provisions or terms of any agreement or
commitment to which Purchaser is a party or by which Purchaser is subject or
bound; or (e) result in any suspension, revocation, impairment, forfeiture or
non-renewal of any license, qualification, authorization or approval applicable
to Purchaser.
SECTION 3.5 Consents. Except for the Burger King Consents, the consent of
Heller Financial, Inc. (Purchaser's senior lender) and any filings that
Purchaser may be required to make with the Securities and Exchange Commission,
Purchaser is not required to obtain any consents, approvals or other
authorizations or to make any filing with any governmental authority or agency
or any other Person in connection with the execution, delivery and consummation
of this Agreement and other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby.
SECTION 3.6 Brokers. No broker, finder or selling agent has had a part in
bringing about any of the transactions contemplated by this Agreement or the
other Transaction Documents (including, but not limited to, the leasing of the
Real Properties and the assignment of the Real Property Leases) and no
commission or other fee is due to any party in connection with the transactions
contemplated by this Agreement or the other Transaction Documents.
SECTION 3.7 Material Information. This Agreement, the other Transaction
Documents and any exhibit, schedule, certificate or other information
representation, warranty or other document furnished or to be furnished by
Purchaser to Seller do not (a) contain, nor will the same contain, any untrue
statement of a material fact; or (b) omit, nor will the same omit or fail to
state, a material fact required to be stated herein or therein or which is
necessary to make the statements herein or therein not misleading.
SECTION 3.8 Continuing Representations. The representations and warranties
of Purchaser herein contained shall be true and correct on and as of the Closing
Date with the same force and effect as if made on and as of that date.
ARTICLE IV
COVENANTS OF THE PARTIES
SECTION 4.1 Access to Records and Properties Prior to the Closing Date.
Between the date of this Agreement and the Closing Date, Seller shall give
Purchaser, its directors, officers, employees, accountants, counsel and other
representatives and agents ("Representatives") reasonable access to the
premises, properties, books, financial statements, Contracts, records of Seller
relating to the Restaurants, the Assets, Real Properties, Real Property Leases,
the Easements and Assumed Contracts, and shall furnish Purchaser with such
financial and operating data and other information with respect to the business
and properties of Seller as Purchaser shall from time to time reasonably request
for such purposes as Purchaser shall require. Any such investigation or
examination shall be conducted at reasonable times and upon reasonable notice
to Seller's Agent. Notwithstanding inspections, audits or other studies
undertaken by or on behalf of Purchaser hereunder or any other due diligence
investigation undertaken by or on behalf of Purchaser, Seller shall not be
relieved in any way of responsibility for their warranties, representations and
covenants set forth in this Agreement.
SECTION 4.2 Operation of the Business of Seller. (a) Between the date of
this Agreement and the Closing Date, Seller shall conduct the operation of the
Restaurants in the ordinary and usual course of business, consistent with past
practices and will use its best efforts to preserve intact the present business
organization with respect to the Restaurants, to keep available the services of
its officers and employees, and to maintain satisfactory relationships with
landlords, franchisors, dealers, licensors, licensees, suppliers, contractors,
distributors, customers and others having business relations with it and the
Restaurants and will maintain the Restaurants, Real Properties, and Assets in
a condition conducive to the operation of the business currently carried on
therein.
(b) Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement or with the prior written consent
of Purchaser, Seller will not:
(i) Keep and maintain its books of account and records other
than in accordance with generally accepted accounting principles consistent with
past practices;
(ii) Amend or restate any Governing Instrument, the Real
Property Leases, the Franchise Agreements or any other material Contract;
(iii) (A) Increase in any manner the compensation of any of the
employees at any of the Restaurants other than in the ordinary course of
business, consistent with past practices;
(B) pay or agree to pay any pension, retirement allowance or other employee
benefit not required or permitted by any Plan, whether past or present; or (C)
commit itself in relation to the Restaurants, the employees at the Restaurants
or the Real Properties, to any new or renewed Plan with or for the benefit of
any Person, or to amend any of such Plans or any of such agreements in existence
on the date hereof;
(iv) Permit any of its insurance policies to be canceled or
terminated or any of the coverage thereunder to lapse, unless simultaneously
with such termination, cancellation or lapse, replacement policies are in full
force and effect providing coverage, in form, substance and amount equal to or
greater than the coverage under those canceled, terminated or lapsed for
substantially similar premiums;
(v) Enter into any other Contracts whether written or oral
which, individually or in the aggregate, would be material to the Restaurants,
Assets, Real Properties, Real Property Leases, the Easements or the Assumed
Contracts, except Contracts for the purchase, sale or lease of goods or services
in the ordinary course of business consistent with past practice and not in
excess of current requirements, or otherwise make any material change in the
conduct of the businesses or operations of Seller;
(vi) Take any action which would result in any of the
representations or warranties contained in this Agreement or the other
Transaction Documents not being true at and as of the time immediately after
such action at and as of the Closing Date, or in any of the covenants contained
in this Agreement or other Transaction Documents becoming unperformable or which
would have a materially adverse impact on the transactions contemplated hereby
or thereby;
(vii) Operate the Restaurants or otherwise engage in any
practices which would materially affect sales at the Restaurants; or
(viii) Agree (in writing or otherwise) to do any of the
foregoing.
SECTION 4.3 Supplements to Disclosures. Prior to the Closing Date, Seller
will promptly supplement or amend the information set forth herein and in the
Schedules and Exhibits referred to herein with respect to any matter hereafter
arising which, if existing or occurring at or prior to the date of this
Agreement, would have been required to be set forth or described herein or in
a Schedule or Exhibit or which is necessary to correct any information herein
or in a Schedule or Exhibit or in any representation and warranty, which has
been rendered inaccurate thereby.
SECTION 4.4 No Other Asset Sales. From the date hereof until the Closing
Date, Seller shall not, directly or indirectly and whether by means of a sale
of assets, sale of stock, merger or otherwise:
(a) sell, transfer, assign or dispose of, or offer to, or enter into
any Contract to sell, transfer, assign or dispose of, the Assets or any interest
therein, except for normal operations in the ordinary course of business; or
(b) encourage, initiate or solicit any inquiries or proposals by, or
engage in any discussions or negotiations with, or furnish any non-public
information to any Person concerning any such transaction and Seller's Agent
shall promptly communicate to Purchaser the substance of any inquiry or proposal
concerning any such transaction which may be received.
SECTION 4.5 Regulatory Filings and Consents. From the date hereof until
the Closing Date, each of the parties hereto shall furnish to the other party
hereto such necessary information and reasonable assistance as such other party
may reasonably request in connection with its preparation of necessary filings
or submissions to any governmental agency and Seller shall use its best efforts
to obtain all Licenses and Required Consents from third parties necessary to
consummate the transactions contemplated by this Agreement and the other
Transaction Documents. Each party shall furnish to the other copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between Purchaser, Seller, or any of their respective
Representatives and agents, on the one hand, and any government agency or
authority or third party, or members of the staff of such agency or authority
or third party, on the other hand, with respect to this Agreement and the other
Transaction Documents and transactions contemplated hereby and thereby.
SECTION 4.6 Announcements; Confidentiality. (a) From the date of this
Agreement until Closing, except as required by Law and except as is necessary
to consummate the transactions contemplated herein and in the Transaction
Documents, no announcement of the existence or terms of this Agreement or the
other Transaction Documents or the transactions contemplated hereby and thereby
shall be made publicly or to the employees or customers of Seller, by any party
to this Agreement or any of its respective Representatives without the advance
written approval of the other parties.
(b) Purchaser, on the one hand, and Seller and Seller's Agent, on the
other hand, each shall hold in strict confidence, and shall use their best
efforts to cause all their Representatives to hold in strict confidence, unless
compelled to disclose by judicial or administrative process, or by other
requirements of law, all confidential and proprietary information (collectively,
"Confidential Information") concerning Seller and Seller's Agent (in the case
of Purchaser) and Purchaser (in the case of Seller and Seller's Agent) which is
created or obtained prior to, on or after the date hereof in connection with the
transactions contemplated hereby, and Purchaser, Seller and Seller's Agent each
shall not use or disclose to others, or permit the use or disclosure of, any
such information created or obtained except to the extent that such information
can be shown to have been (i) previously known by Purchaser, and Seller or
Seller's Agent, as the case may be; and (ii) in the public domain through no
fault of a party or any of its Representatives, and will not release or disclose
such information to any other Person, except its officers, directors, employees,
Representatives and lending institutions who need to know such information in
connection with this Agreement.
(c) If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except (i) as required by law
or (ii) to the extent such information comes into the public domain through no
fault of a party or any of its Representatives.
SECTION 4.7 Limitation of Seller, Actions After Closing. From and after
the Closing and thereafter so long as the provisions of Article VII are still
applicable, neither Seller nor Seller's Agent shall, without the prior written
consent of Purchaser: (i) engage in any business which would adversely affect
the value of Purchaser's business; or (ii) take any other action or fail to take
any action, or allow the occurrence of any event, with respect to Seller's
assets, including without limitation, the Real Properties, which could be
reasonably expected to materially and adversely affect Seller's ability to
indemnify, defend and hold harmless Purchaser and its officers, directors and
shareholders from and against Damages (as hereunder defined) pursuant to Article
VII.
SECTION 4.8 Bulk Sales. Purchaser hereby waives compliance by Seller with
the provisions of the North Carolina Uniform Commercial Code Bulk Sales laws.
Seller hereby agrees to pay and discharge, promptly when due, all claims of
creditors which may be asserted against Purchaser by reason of such
noncompliance. Purchaser also hereby waives compliance by Seller with the
provisions of any applicable bulk sales state or local tax laws in effect in the
state of North Carolina. The bulk sales laws referred to in Sections 4.8(a) and
(c) hereof are referred to herein, collectively, as the "Bulk Sales Laws".
SECTION 4.9 Financial Statements and Reports. Between the date hereof and
the Closing Date, Seller's Agent shall deliver to Purchaser:
(a) within five business days after the end of each calendar month,
a written statement, certified by Seller's Agent, of the Gross Sales of each
Restaurant for that month; and
(b) within five business days of their availability, such financial
statements relating to each Restaurant as may be prepared by Seller, which shall
be prepared on a basis consistent with past practices.
SECTION 4.10 Environmental Matters. (a) Seller shall, at its sole cost and
expense, obtain current "Level-One" or "Phase I" environmental site assessments
(hereinafter "Phase I's") for each of the Real Properties, which shall be
conducted by a reputable, licensed environmental services company (the
"Environmental Company"). The Environmental Company shall be selected by
Purchaser subject to the reasonable approval of Seller. The Phase I's shall be
prepared by the Environmental Company so that they may be relied upon by both
Seller and Purchaser.
(b) In the event any of the Phase I's shall recommend that a
"Level-Two" or "Phase II" environmental site assessment (hereinafter "Phase
II's") be performed, or shall disclose any environmental conditions which
Purchaser, in its reasonable discretion, believes should be investigated
further, Seller, at its sole cost and expense, shall cause Phase II's for each
Real Property so affected to be performed by the Environmental Company.
(c) In the event that a Phase II shall identify a Real Property which
is affected by an environmental condition which requires abatement or
remediation (an "Environmentally Damaged Restaurant"), Purchaser shall have the
option, to be exercised within ten days of receipt of such Phase II, to: (i)
require Seller to promptly perform the remediation at Seller's sole cost and
expense; or (ii) elect to have the Environmentally Damaged Restaurant and the
Real Property upon which such Restaurant is located, and all other Assets
relating to such Restaurant, withdrawn from this transaction, whereupon the
purchase price for the Assets shall be reduced by an amount (referred to herein
as the "Damage Credit") which shall be determined by Purchaser and Seller's
Agent by taking into account the sales, profitability and location of such
Restaurant, as well as any other relevant material facts or factors related to
the value of such Restaurant, the Assets related thereto or the Real Property
upon which it is located. In the event Purchaser and Seller's Agent are unable
to agree upon the Damage Credit, such dispute shall be submitted to arbitration
under the rules of the American Arbitration Association in New York, New York.
In the event Purchaser elects to require Seller to perform the necessary
remediation at such Restaurant, the Closing shall occur pursuant to this
Agreement except a portion of the purchase price equal to the Damage Credit
shall be held in escrow by the attorneys for Purchaser pending completion of
such remediation. In the event such remediation is not completed within 90 days
after the date Purchaser has elected to have Seller proceed with such
remediation, Purchaser shall have an additional option to withdraw the
Environmentally Damaged Restaurant from this transaction, exercisable within 30
days from date Purchaser's additional option shall arise, whereupon the Damage
Credit shall immediately be paid to Purchaser.
(d) In the event that the Phase II's shall identify two or more Real
Properties affected by environmental conditions requiring remediation or
abatement, Purchaser shall have the option to terminate this Agreement, which
option shall be exercisable within 20 days from the date Purchaser shall have
received the Phase II's disclosing such conditions. In the event Purchaser
shall not elect to terminate this Agreement, the provisions of Section 4.10(c)
above shall apply to each Restaurant so affected.
SECTION 4.11 Employee Benefit Matters. (a) No later than seven days after
the Closing Date, Seller shall discharge and satisfy in full (and provide
evidence thereof to Purchaser) any liabilities it may have with respect to any
wages, vacation, severance or sick pay, or any rights under any stock option,
bonus or other incentive arrangements of its employees which shall have accrued
as of the Closing Date. For the purposes hereof, such accrued liabilities shall
be determined as if Seller does not terminate the employment of its employees
on the Closing Date.
(b) Seller shall assume full responsibility and liability for offering
and providing "continuation coverage" to any employee of Seller, and to
"qualified beneficiaries" of any employee of Seller or to any qualified
beneficiary who incurs a multiple qualifying event after the Closing Date
provided that the employee or "qualified beneficiary" incurs a "qualifying
event" prior to the Closing Date. The continuation coverage shall be provided
under a group health plan of Seller or an affiliate of Seller. The type of
coverage shall be that described in Section 4980B(f)(2)(A) of the Code. The
continuation coverage shall be provided for the period described in Section
4980B(f)(2)(A) of the Code. "Continuation coverage", "qualified beneficiaries",
and "qualifying event" have the meanings given such terms under Section 4980B
of the Code. Seller hereby agrees to indemnify, defend and hold Purchaser
harmless from and against any "Damages" (as defined in Section 7.2(a) below)
arising out of Seller's failure to offer the continuation coverage described
herein.
SECTION 4.12 Access to Restaurants Prior to Closing. Within 48 hours prior
to the Closing Date, Seller shall give Purchaser and its Representatives access
to the Restaurants for the purposes of facilitating Purchaser's conversion of
the cash register systems. Such access by Purchaser shall be upon reasonable
prior notice and Purchaser agrees to use best efforts to conduct said activities
in such manner so as not to unreasonably interfere with the operation of
Seller's business. To the extent there is storage space available at the
Restaurants and the same shall not cause undue burden on Seller, Purchaser may
also, at its sole risk, store its register equipment at the Restaurants.
SECTION 4.13 Covenants of Michael Olander. By his signature at the end of
this Agreement, Michael Olander agrees to observe and be bound by the provisions
of Sections 4.4, 4.6, 4.7, 10.1, 10.8, 10.11 and Article VIII hereof.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF PARTIES
SECTION 5.1 Conditions to the Obligations of Seller and Purchaser. The
obligations of Purchaser and Seller to consummate the transactions contemplated
by the Transaction Documents are subject to the satisfaction at or prior to the
Closing of the following conditions, except to the extent that any such
condition may have been waived in writing by both Seller's Agent and Purchaser
at or prior to the Closing:
(a) Impediments to Closing. No Actions shall have been instituted or
shall be pending or threatened which questions the validity or legality of this
Agreement and the other Transaction Documents and the transactions contemplated
hereby and thereby and which could reasonably be expected to damage materially
the business or assets of Seller if the transactions contemplated hereby or
thereby are consummated. No injunction, decree or order shall be in effect
prohibiting consummation of the transactions contemplated by this Agreement or
the other Transaction Documents or which would make the consummation of such
transactions unlawful and no Actions shall have been instituted and remain
pending to restrain or prohibit the transactions contemplated by this Agreement
and the other Transaction Documents.
SECTION 5.2 Conditions to the Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated hereby and by the other
Transaction Documents are subject to the satisfaction at or prior to the Closing
of the following conditions, except to the extent that any such condition may
have been waived in writing by Seller's Agent at or prior to the Closing:
(a) Representations, Warranties and Performance. The representations,
warranties, covenants and agreements of Purchaser contained in this Agreement
and the other Transaction Documents or otherwise made in writing by it or on its
behalf pursuant hereto or otherwise made in connection with the transactions
contemplated hereby or thereby shall be true and correct at and as of the
Closing Date, with the same force and effect as if made at and as of the Closing
Date; the Purchaser shall have performed or complied with all agreements and
conditions required by this Agreement and the other Transaction Documents to be
performed or complied with by it on or prior to the Closing Date; and Seller's
Agent shall have received a certificate to the foregoing effect dated the
Closing Date in form satisfactory to him signed by an officer of Purchaser.
(b) Governing Instruments, etc. Seller's Agent shall have received
a certificate, dated the Closing Date, of the Secretary or Assistant Secretary
of Purchaser certifying, among other things, that attached or appended to such
certificate (i) is a true and correct copy of its Certificate of Incorporation
and all amendments, if any, thereto as of the date thereof; (ii) is a true and
correct copy of its By-laws; (iii) is a true copy of all corporate actions taken
by it, including resolutions of its board of directors authorizing the execution
and delivery of this Agreement and each other Transaction Document to be
delivered by it pursuant hereto and the consummation of the transactions
contemplated hereby and thereby; and (iv) are the names, the signatures of its
duly elected or appointed officers who are authorized to execute and deliver
this Agreement, and any certificate, document or other instrument in connection
herewith.
(c) Payment of Purchase Price. Purchaser shall have tendered to
Seller's Agent the Purchase Price payable at Closing in accordance with Section
12(a).
(d) Assumption of Assumed Contracts. Seller shall have received from
Purchaser an Assumption Agreement substantially in the form annexed as Exhibit
C hereto.
(e) Opinion of Counsel. Seller's Agent shall have received an opinion
of counsel for Purchaser, as of the Closing Date, substantially in the form
annexed as Exhibit D hereto.
SECTION 5.3 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated hereby and by the other
Transaction Documents are subject to the satisfaction at or prior to the Closing
of the following additional conditions, except to the extent that any such
condition may have been waived in writing by Purchaser at or prior to the
Closing:
(a) Representations, Warranties and Covenants. The representations,
warranties, covenants and agreements of Seller contained in this Agreement and
the other Transaction Documents, or otherwise made in writing by it or on its
behalf pursuant hereto or otherwise made in connection with the transactions
contemplated hereby or thereby shall be true and correct at and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date; Seller shall have performed or complied with all agreements and
conditions required by this Agreement and the other Transaction Documents to be
performed or complied with by it on or prior to the Closing Date; and Purchaser
shall have received certificates to the foregoing effect dated the Closing Date
in form satisfactory to Purchaser signed by the Chief Executive Officer of
Seller.
(b) Governing Instruments, etc. Purchaser shall have received a
certificate, dated the Closing Date, of the Secretary or Assistant Secretary of
Seller certifying, among other things, that attached or appended to such
certificate (i) is a true and correct copy of each Governing Instrument and all
amendments if any thereto as of the date thereof; (ii) is a true copy of all
corporate actions taken by it, including resolutions of its board of directors
and shareholders authorizing the execution and delivery of this Agreement and
each other Transaction Document to be delivered by it pursuant hereto and the
consummation of the transactions contemplated hereby and thereby; and (iii) are
the names and signatures of its duly elected or appointed officers who are
authorized to execute and deliver this Agreement and any certificate, document
or other instrument in connection herewith.
(c) Instruments of Transfer. Seller shall have delivered to Purchaser
a bill of sale and assignment ("Bill of Sale") substantially in the form annexed
as Exhibit E hereto, a Lease Assignment (if applicable) and any other documents
of transfer which Purchaser reasonably shall request in order to evidence and
effectuate the sale and assignment to Purchaser of the Assets, the Real Property
Leases, the Assumed Contracts and the consummation of all other transactions
contemplated by this Agreement and the other Transaction Documents.
(d) Consents. Seller shall have obtained, and delivered to Purchaser,
copies of the Required Consents applicable to it in form and substance
satisfactory to Purchaser.
(e) Opinion of Counsel. Purchaser shall have received an opinion or
opinions of counsel for Seller, as of the Closing Date, substantially in the
form attached hereto as Exhibit F.
(f) No Material Adverse Change. There shall have been no material
adverse change, nor any events which could have a material adverse change, in
the business, operations, prospects or financial or other condition of any
Restaurant or in the respective Assets or Real Properties from the date hereof
to the Closing Date (the "Interim Period") nor shall have there been, for all
Restaurants in the aggregate, a decrease of five percent or more in Gross Sales
or Gross Profit during the Interim Period, as compared with the same period
during the prior calendar year. For purposes hereof, "Gross Profit" shall mean
total Gross Sales reduced by the sum of food, and other goods. At Closing,
Purchaser shall have received a certificate dated the Closing Date in form
satisfactory to Purchaser signed by the Chief Executive Officer of Seller, and
attested to by the Secretary of Seller, to the foregoing effect.
(g) Environmental Due Diligence. Purchaser shall have completed its
environmental due diligence of the Restaurants, Real Property and Assets and
have received results which are satisfactory to Purchaser in its sole
discretion.
(h) Other Documents. Seller shall have delivered to Purchaser:
(i) the Assignments of its Real Property Leases, each Assumed
Contract and the Lease Assignment Consents;
(ii) the Easement Assignments;
(iii) a fully executed original counterpart of the Real Property
Leases;
(iv) receipts for funds paid to Seller's Agent by Purchaser;
(v) certificates dated no earlier than 30 days prior to the
Closing Date, from appropriate authorities in the State of its jurisdiction of
incorporation, as to the good standing of Seller;
and
(vi) all other documents, instruments and agreements required
to be delivered by Seller to Purchaser pursuant to this Agreement and the other
Transaction Documents.
(i) Senior Lender's Consent. Purchaser shall have received, if
necessary, the written consent of its senior lender, Heller Financial, Inc., to
the transactions contemplated hereby.
ARTICLE VI
DAMAGE OR DESTRUCTION
SECTION 6.1 Damage to or Destruction of One Restaurant. If prior to the
Closing Date, one of the Restaurants (hereafter referred to as a "Damaged
Restaurant") incurs substantial damage or is destroyed by fire or other casualty
(whether or not such destruction is covered by insurance) Purchaser shall have
the option, to be exercised within 30 days of the date of such fire or casualty,
to: (i) require Seller to promptly repair, rebuild and/or replace such Damaged
Restaurant at Seller's sole cost and expense; or (ii) elect to have the Damaged
Restaurant and the Real Property upon which such Restaurant is located, and all
other Assets relating to such Restaurant, withdrawn from this transaction,
whereupon the purchase price for the Assets shall be reduced by an amount equal
to the Damage Credit. In the event Purchaser and Seller's Agent are unable to
agree upon the Damage Credit, such dispute shall be submitted to arbitration
under the rules of the American Arbitration Association in New York, New York.
In the event Purchaser elects to require Seller to rebuild and/or replace such
Restaurant, the Closing shall occur pursuant to this Agreement except a portion
of the purchase price equal to the Damage Credit shall be held in escrow by the
attorneys for Purchaser pending completion of the repair and/or restoration of
the Damaged Restaurant. In the event such restoration or repair is not
completed within 90 days after the date Purchaser has elected to have Seller
proceed with the repair and/or restoration, Purchaser shall have an additional
option to withdraw the Damaged Restaurant from this transaction, exercisable
within 30 days from date Purchaser's additional option shall arise, whereupon
the Damage Credit shall immediately be paid to Purchaser.
SECTION 6.2 Damage to or Destruction of Two or More Restaurants. In the
event two or more Restaurants are destroyed or incur substantial damage prior
to the Closing, Purchaser shall have the option to terminate this Agreement,
which option shall be exercisable within 30 days from the date the option to
terminate shall arise. In the event Purchaser shall not elect to terminate this
Agreement, the provisions of Section 6.1 above shall apply to each Restaurant
so affected.
SECTION 6.3 Notification of Damage or Destruction. Seller's Agent shall
immediately notify Purchaser of any destruction or damage to any of the Real
Properties or Assets.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival of Representations. All representations, warranties,
covenants and other agreements made by each party hereto in this Agreement shall
survive the Closing.
SECTION 7.2 Agreement to Indemnify. Subject to the conditions of this
Article VII:
(a) Purchaser hereby agrees to indemnify, defend and hold harmless
Seller and Seller's Agent from and against all demands, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties and reasonable attorney's
fees, costs and disbursements and expenses (collectively, "Damages"), asserted
against, resulting to, imposed upon or incurred by Seller directly or
indirectly, arising out of or resulting from (i) a breach of any representation,
warranty, covenant or agreement of Purchaser contained in or made pursuant to
this Agreement (including but not limited to enforcement of this Article VII),
the other Transaction Documents or the transactions contemplated hereby or
thereby or any facts or circumstances constituting such a breach; and (ii) any
indebtedness, obligation or liability assumed by Purchaser pursuant to Section
1.4(b) hereof and (iii) the operation, use or ownership of the Restaurants,
Assets, Real Property Leases, Real Properties, the Easements and Assumed
Contracts, during, or which have otherwise accrued from or otherwise relate to,
the period of time after the Closing Date; and
(b) Seller hereby agrees to indemnify, defend and hold harmless
Purchaser and its officers, directors and shareholders from and against all
Damages asserted against or incurred by Purchaser or such officers, directors
and shareholders, directly or indirectly, arising out of or resulting from: (i)
a breach of any representation, warranty, covenant or agreement of Seller
contained in or made pursuant to this Agreement (including but not limited to
enforcement of this Article VII, the other Transaction Documents or any facts
or circumstances constituting such a breach; (ii) any indebtedness, obligations
or liabilities of Seller including, but not limited to, any liability or
obligation set forth in Section 1.4(a), and the tax liabilities set forth in
Section 2.17 other than those expressly assumed by Purchaser hereunder, (iii)
a breach of or otherwise arising under any Environmental Law (whether now
or
hereafter in effect), to the extent the same arises out of any condition or
state of facts or otherwise relates to the period of time commencing on the date
of possession by the applicable Seller of the Real Property in question and
ending on the Closing Date; (iv) the operation, use or ownership of the
Restaurants, Assets, Real Properties, Real Property Leases, the Easements and
Assumed Contracts during, or which have otherwise accrued from or otherwise
relate to the period of time prior to the Closing Date; (v) Seller's failure to
pay and discharge all claims of creditors which may be asserted against
Purchaser by reason of Purchaser's waiver of compliance by Seller of the Bulk
Sales Laws; and (vi) any claims made with respect to any Plan.
SECTION 7.3 Conditions of Indemnification. The obligations and liabilities
of an indemnifying party under Section 7.2 with respect to Damages for which it
must indemnify another party hereunder (collectively, the "Indemnifiable
Claims") shall be subject to the following terms and conditions:
(a) The indemnified party shall give the indemnifying party notice of
any such Indemnifiable Claim which notice shall set forth in reasonable detail
the basis for and amount of the Indemnifiable Claim, and the circumstances
giving rise thereto. If the Indemnifiable Claim is a third-party claim, the
notice must contain a copy of any papers served on the indemnified party.
(b) If the Indemnifiable Claim is not a third-party claim, unless
within 30 days of receipt by the indemnifying party of notice of the
Indemnifiable Claim the indemnifying party sends written notice to the
indemnified party disputing the facts giving rise to the Indemnifiable Claim or
the amount of Damages stated in the notice, the Damages stated in the notice
shall become due and payable upon the expiration of such 30 day period. If,
however, the indemnifying party disputes the facts, giving rise to the
Indemnifiable Claim or the amount of Damages stated in the notice within such
30 day period and the dispute cannot be resolved within the following 90 days,
the dispute shall be submitted to arbitration under the rules of the American
Arbitration Association in New York, New York.
(c) If the Indemnifiable Claim is a third-party claim, the
indemnifying party may undertake the defense thereof at its own expense by
representatives of its own choosing reasonably satisfactory to the indemnified
party and will consult with the indemnified party concerning such defense during
the course thereof. If the indemnifying party, within 30 days after receipt of
notice of any Indemnifiable Claim (or such shorter period as is necessary to
prevent prejudice to the indemnified party, if such 30 day period would
prejudice the rights of the indemnified party), fails to defend, the indemnified
party will (upon further notice to the indemnifying party) have the right to
undertake the defense, compromise or settlement of such Indemnifiable Claim on
behalf of and for the account and risk of and at the expense of the indemnifying
party. In addition, if there is a reasonable probability that a third-party
Indemnifiable Claim may materially and adversely affect an indemnified party,
the indemnified party shall have the right, at its own cost and expense, to
defend, compromise or settle such Indemnifiable Claim.
(d) Anything in this Section 7.3 to the contrary notwithstanding,
neither the indemnifying party nor the indemnified party, as the case may be,
may settle or compromise any Indemnifiable Claim or consent to entry of any
judgment in respect thereof, without the written consent of the other, which
consent may not be unreasonably withheld or delayed.
SECTION 7.4 Remedies Cumulative. The remedies provided in this Article VII
shall be cumulative and shall not preclude the assertion by any party hereto of
any other rights or the seeking of any other remedies against the other parties
hereto. Either party may, among its other remedies, offset the amount of any
Indemnifiable Claim which becomes due and payable to it or to its shareholders,
officers or directors, against any payments to be made or consideration to be
paid to the other pursuant to this Agreement or any of the other Transaction
Documents including, but not limited to, the Leases.
ARTICLE VIII
COVENANT NOT TO COMPETE
SECTION 8.1 Covenant Not to Compete. (a) Seller and Seller's Agent hereby
jointly and severally covenant and agree that it or he will not, directly or
indirectly, for its or his own account or as an employee, officer, director,
partner, joint venturer, shareholder, investor, consultant or otherwise:
(i) for a period of three years from the Closing Date own,
operate, manage, develop, or otherwise engage in any "fast service" restaurant
business or operation, in Durham County, or Wake County, North Carolina (the
"Restricted Area");
(ii) for a period of three years from the Closing Date, with
respect to Restaurants 755 and 2983 (the"Subject Restaurants"), do any thing or
allow parties within his or its control to do anything which materially
diminishes the value of the Subject Restaurants; or
(iii) for a period of one year following the Closing Date,
employ or solicit the employment or engagement by others of any executive or
management level employees of the Restaurants who are employed by or in any of
the Restaurants on the Closing Date.
(b) The provisions of Section 8.1(a) shall not preclude Seller,
Seller's Agent or any Affiliate of Seller or from owning and operating any
Burger King restaurant which is owned or operated by Seller, Seller's Agent or
any Affiliate of Seller as of the date of this Agreement.
SECTION 8.2 Geographic Area Reasonable; Reduction of Geographical Area and
Time Restriction. Seller and Seller's Agent acknowledge that the restricted
period of time and geographical area specified in Section 8.1 hereof are
reasonable. Notwithstanding anything herein to the contrary, if the period of
time or the geographical area specified under Section 8.1 hereof should be
determined to be unreasonable in any judicial proceeding, then the period of
time and territory of the restriction shall be reduced so that this Agreement
may be enforced in such area and during such period of time as shall be
determined to be reasonable.
SECTION 8.3 Effect of Breach. The parties acknowledge that any breach of
this Section 8 will cause Purchaser irreparable harm for which there is no
adequate remedy at law, and as a result, Purchaser shall be entitled to the
issuance by an arbitrator or court of competent jurisdiction of an injunction,
restraining order or other equitable relief in favor of itself restraining
Seller or Seller's Agent, as the case may be, from committing or continuing any
such violation. Any right to obtain an injunction, restraining order or other
equitable relief hereunder shall not be deemed a waiver of any right to assert
any other remedy Purchaser may have at law or in equity.
ARTICLE IX
TERMINATION
SECTION 9.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) By mutual written consent of Seller's Agent and Purchaser;
(b) By Seller's Agent on behalf of Seller, if (i) there has been a
material misrepresentation or breach of warranty on the part of Purchaser in the
representations and warranties contained herein and such material
misrepresentation or breach of warranty, if curable, is not cured within 15 days
of written notice thereof from Seller's Agent; (ii) Purchaser has committed a
material breach of any covenant imposed upon it hereunder and fails to cure such
breach within 15 days of written notice thereof from Seller's Agent; or (iii)
any condition to Seller's obligations hereunder becomes incapable of fulfillment
through no fault of such parties and is not waived by such parties;
(c) By Purchaser, if (i) there has been a material misrepresentation
or breach of warranty on the part of Seller in the representations and
warranties contained herein and such material misrepresentation or breach of
warranty, if curable, is not cured within 15 days of written notice thereof from
Purchaser; (ii) Seller has committed a material breach of any covenant imposed
upon it hereunder and fails to cure such breach within 15 days of written notice
thereof, from Purchaser; or (iii) any condition to Purchaser's obligations
hereunder becomes incapable of fulfillment through no fault of Purchaser and is
not waived by Purchaser;
(d) By Purchaser in the circumstances provided in Section 4.10(d) or
6.2;
(e) By Seller's Agent on behalf of Seller, if the Closing shall not
have occurred on or before the Outside Date; provided that Seller's Agent shall
not be entitled to terminate this Agreement pursuant to this clause if the
failure of Seller or Seller's Agent to fulfill any of its obligations under this
Agreement shall have been the reason that the Closing shall not have occurred
on or before said date;
(f) By Purchaser, if the Closing shall not have occurred on or before
the Outside Date; provided that Purchaser shall not be entitled to terminate
this Agreement pursuant to this clause if the failure of Purchaser to fulfill
any of its obligations under this Agreement shall have been the reason that
the Closing shall not have occurred on or before said date; and
(g) By Seller's Agent on behalf of Seller, or by Purchaser, if there
shall be any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if any judgment,
injunction, order or decree enjoining Purchaser, or Seller, from consummating
the transactions contemplated hereby is entered and such judgment, injunction,
order or decree shall become final and nonappealable.
SECTION 9.2 Effect of Termination; Right to Proceed. In the event
that
a party wishes to terminate this Agreement pursuant to Section 9.1, it shall
give written notice thereof whereupon all further obligations of the parties
under the Agreement shall terminate without further liability of any party
hereunder except (i) to the extent that a party has made a material
misrepresentation hereunder or committed a breach of the material covenants and
agreements imposed upon it, hereunder; (ii) to the extent that any condition to
a party's obligations hereunder became incapable of fulfillment because of the
breach by a party of its obligations hereunder and (iii) that the agreements
contained in Sections 4.6, 10.3 and 10.4 and Article VII shall survive the
termination hereof. In the event that a condition precedent to its obligation
is not met, nothing contained herein shall be deemed to require any party to
terminate this Agreement, rather than to waive such condition precedent and
proceed with the transactions contemplated hereby. Notwithstanding anything to
the contrary contained herein, no party shall have any obligation to the other
hereunder arising out of the occurrence of an event or circumstance not within
the control of such party which event or circumstance resulted in a
representation or warranty of such party ceasing to be true.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Further Assurances. Each of the parties hereto shall without
further consideration execute and deliver to any other party hereto such other
instruments of transfer and take such other action as any party may reasonably
request to carry out the transactions contemplated by this Agreement and the
other Transaction Documents.
SECTION 10.2 Waiver and Amendment. No provisions of this Agreement may be
amended, supplemented or waived at any time except by a written instrument
executed by the parties hereto, or in the case of a waiver, by the waiving
party. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly provided.
SECTION 10.3 Remedies. In the event of a default under this Agreement or
the Transaction Documents, the aggrieved party may proceed to protect and
enforce its rights by a suit for damages, suit in equity action at law or other
appropriate proceeding, whether for specific performance, or for an injunction
against a violation of any terms hereof or thereof or in aid of the exercise of
any right, power or remedy granted thereby or by law, equity, statute or
otherwise. The foregoing shall include, but shall not be limited to, allowance
for recovery by the aggrieved party of all of its fees and expenses and
disbursements incurred by it in connection with the transactions contemplated
hereby and in the Transaction Documents, including, without limitation, the
reasonable fees and expenses of its counsel, accountants, agents and
representatives employed by it. No course of dealing and no delay on the part
of any party in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such party's rights, powers or remedies. No
right, power or remedy conferred hereby shall be exclusive of any other right,
power or remedy referred to herein or now or hereafter available at law,
in equity, by statute, or otherwise.
SECTION 10.4 Expenses. Except as expressly otherwise provided for in this
Agreement, all expenses incurred by or on behalf of the parties hereto in
connection with the authorization, preparation and consummation of this
Agreement and the other Transaction Documents, including without limitation all
fees and expenses of agents, representatives, counsel and accountants employed
by the parties hereto in connection with the authorization, preparation,
execution and consummation of this Agreement, shall be borne solely by the party
who shall have incurred the same.
SECTION 10.5 Entire Agreement. This Agreement and the other Transaction
Documents and the Exhibits and Schedules referred to herein and therein contain
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior arrangements or understandings with respect thereto.
SECTION 10.6 Definitions. (a) For the purposes of this Agreement:
(i) "Affiliate" shall mean, with respect to any Person, any
other Person that has a relationship with the designated Person whereby either
of such Persons directly or indirectly controls or is controlled by or is under
common control with the other of such Persons.
(ii) "Contract" shall mean any contract, agreement, purchase
order, sales order, guaranty, option, mortgage, promissory note, assignment,
lease, franchise, commitment, understanding or other binding arrangement,
whether written, oral, express or implied.
(iii) The term "Control", with respect to any Person, shall mean
the power to direct the management and policies of such Person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with a Contract with one or more other Persons by or through
stock ownership, agency or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
(iv) The term "Governing Instruments" shall mean, with respect
to any Person, the certificate of incorporation, articles of incorporation,
bylaws, code of regulations or other organizational or governing documents
howsoever denominated of such Person.
(v) "Person" shall mean an individual, partnership, corporation,
joint venture, unincorporated organization, cooperative, or a governmental
entity or agency thereof.
(b) The following terms have been defined in the following sections
of this Agreement:
Defined Term Section No.
Actions 2.14(a)
Agreement Preamble
Assets 1.1
Assumed Contracts 1.5(b)
Bankruptcy Laws 2.3
Bill of Sale 5.3(c)
Bulk Sales Laws 4.8
Burger King 1.5(a)
Burger King Consents 2.5
Closing 15(a)
Closing Date 1.5(a)
Code 2.13(a)
Damage Credit 4.10(c)
Damaged Restaurant 6.1
Damages 7.2(a)
Easement Assignments 13(d)
Easements 1.3(d)
Environmental Company 4.10(a)
Environmentally Damaged
Restaurant 4.10(c)
Defined Term
Section No.
Environmental Laws 1.5(a)(vi)
ERISA 2.13(a)
Financial Statements 2.6
Franchise Agreements 11(c)
Gross Profit 5.3(f)
Gross Sales 3(c)(iii) of the Lease
Indemnifiable Claim 7.3
Interim Period 5.3(f)
Inventory 1.1(d)
Laws 2.14(b)
Lease Assignment 1.3(b)
Lease Assignment Consent 1.3(c)
Leased Assets 11(f)
Leased Real Properties Preamble
Leasehold Improvements 1.1(b)
Licenses 2.14(c)
Liens 1.1
Other Contracts 2.12(a)
Outside Date 1.5(a)
Phase I's 4.10(a)
Phase II's 4.10(b)
Plan 2.13(b)
Priced Inventory Report 1.2(a)(ii)
Purchase Price 1.2
Purchaser Preamble
Real Properties Preamble
Real Property Leases Preamble
Representatives 4.1(a)
Required Consents 2.5
Required Licenses 2.14(c)
Restricted Area 8.1(a)(i)
Restaurants Preamble
Restaurant Equipment 1.1(a)
Seller Preamble
Seller's Agent Preamble
Transaction Documents 2.1
SECTION 10.7 Interpretation. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
Agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 10.8 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be validly given,
made or served in writing and delivered personally, sent by telecopier, Federal
Express or other reputable overnight courier or sent by certified or registered
mail, postage prepaid, return receipt requested, at the addresses set forth
below:
(a) if to Purchaser, to:
Carrols Corporation
968 James Street
Syracuse, New York 13203-6969
Telecopier Number: (315) 475-9616
Attention:Daniel T. Accordino,
President; and
Joseph A. Zirkman, Esq.
(b) if to Seller or Seller's Agent, to :
Michael Olander
KIN Restaurants, Inc.
P.O. Box 20249
Raleigh, NC 27619
or such other address as any party hereto may, from time to time, designate in
a written notice given in a like manner (which change of address shall only be
effective upon actual receipt of same by the other party). Notices shall be
deemed delivered: (i) three days after the date the same is postmarked if sent
by registered or certified mail; (ii) on the date the same is delivered
personally; (iii) the next business day after delivery to the courier service,
if sent by Federal Express or other reputable overnight courier and (iv) upon
receipt by the sender of telecopier confirmation, if sent by telecopier.
SECTION 10.9 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the heirs, executor,
personal representatives, legal representatives, successors and assigns of the
parties hereto, and shall not be assignable by either party without the prior
written consent of the other party.
SECTION 10.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of North
Carolina without giving effect to North Carolina's conflict of laws rules.
SECTION 10.11 Consent to Jurisdiction; Service of Process. (a) Except with
respect to disputes wherein the parties have expressly agreed herein to submit
such dispute to arbitration, the parties hereto irrevocably submit to the
jurisdiction of the United States District Court for the Southern District of
New York over any dispute arising out of or relating to this Agreement or any
agreement or instrument contemplated hereby or entered into in connection
herewith or any of the transactions contemplated hereby or thereby, and each
party hereby irrevocably agrees that all claims in respect of such dispute or
proceeding shall be heard and determined in such court.
(b) Each of the parties hereto consents to process being served by any
party to this Agreement in any suit action or proceeding of the nature specified
in subsection 10.8 (a) above by mailing a copy thereof in accordance with the
provisions of Section 10.8 of this Agreement or in any other manner provided by
law.
SECTION 10.12 Severability. Whenever possible, each provision in this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. If any provision of this Agreement shall be prohibited
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
SECTION 10.13 Purchaser's Designated Affiliate. Purchaser may designate
one or more of its wholly-owned subsidiaries or Affiliates to carry out all or
part of the transactions contemplated hereby to be carried out by Purchaser.
SECTION 10.14 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase and
Sale Agreement to be executed as of the date first written above.
CARROLS CORPORATION
By: _____________________
Name: Joseph Zirkman
Title: Vice President
KIN RESTAURANTS, INC.
By: _____________________
Name:Michael Olander
Title:
The undersigned is signing this Agreement in his individual capacity solely
to agree to the provisions of Section 4.13 hereof.
___________________
Michael Olander
aqolandr.001
EXHIBIT A TO PURCHASE AND SALE AGREEMENT
BK No.
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT made this day of , 1994 between KIN
RESTAURANTS, INC., a North Carolina Corporation having an office at 170 Wind
Chime Court, Raleigh, North Carolina ("Assignor"), and CARROLS CORPORATION, a
Delaware Corporation having an office at 968 James Street, Syracuse, New York
("Assignee").
Pursuant to a lease dated ("Lease")
("Landlord") demised to [Insert Seller Corporation] certain premises at
. Assignor desires to transfer, sell, assign, convey and
deliver to Assignee the Lease and Assignee desires to accept said transfer,
sale, assignment, conveyance and delivery.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein set forth and for $10.00 and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Assignor hereby transfers, sells, assigns, conveys and delivers to Assignee all
of Assignor's right, title and interest in and to the Lease and any and all
options to renew or extend the same. Assignee hereby accepts the foregoing
transfer, sale, assignment, conveyance and delivery and assumes and agrees to
pay and perform all liabilities and obligations under the Lease arising from and
after this date. The assignment shall inure to the benefit of and be binding
upon the heirs, successors and assigns of the Assignor and the successors and
assigns of Assignee.
This Agreement is made in connection with a Purchase and Sale Agreement
dated , 1994 between Assignor as Seller, and Assignee, as
Purchaser, the terms, conditions, representations and warranties of which are
incorporated herein by reference and made part hereof.
This Agreement is subject to receipt of Landlord's consent to the
assignment of the Lease.
Assignor represents, covenants and warrants that this assignment is not and
shall not constitute a breach or default under the terms of the Lease.
ATTEST: CARROLS CORPORATION
BY:______________________
ATTEST: KIN RESTAURANTS, INC.
BY:______________________
STATE OF NEW YORK )
COUNTY OF ONONDAGA ) SS:
On this day of , 1994 before me personally came Joseph
A. Zirkman, to me personally known, who, being by me duly sworn, did depose and
say that he resides at 8129 Solomon Seal Lane, Manlius, New York 13104; that
he is a Vice President of Carrols Corporation, the corporation described in and
which executed the Assignment; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
_______________________
Notary Public
STATE OF )
COUNTY OF ) SS:
On this day of , 1994 before me personally came
to me personally known, who, being by me duly sworn, did
depose and say that he resides at ; that he is the
of , the corporation described in
and which executed the Assignment; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
_______________________
Notary Public
EXHIBIT B TO PURCHASE AND SALE AGREEMENT
BK No.
CONSENT AND ESTOPPEL CERTIFICATE
, 1994
Carrols Corporation
968 James Street
Syracuse, New York 13203
Re: ("Premises") Lease dated
, amended ("Lease") now between [Insert Seller
corporation] ("Lessee") and ("Lessor")
Gentlemen:
It is our understanding that the Lessee has agreed to assign the referenced
lease (the "Lease") to Carrols Corporation ("Carrols") and as a condition
precedent thereto is required to provide you with this Certificate from the
undersigned.
In respect to the Lease, the undersigned certifies and acknowledges as
follows:
1. The undersigned now owns the Premises and is the Lessor under the
Lease. Lessee is now the Lessee under the Lease.
2. The Lease commenced on , and its term is due
to expire on , . [The Lease allows Lessee to renew
same for an additional term of years]. The present minimum rent
paid to Lessor under the Lease is $ . The Lease is the entire
agreement between the parties as to the Premises.
3. As of this date, the Lease is in full force and effect in accordance
with its terms and has not been modified, amended or supplemented in any way
except as set forth in this letter. To the best of Lessor's knowledge, Lessee
is not in default under the Lease, and no act has occurred which with the
passing of time, or the giving of notice, or both will constitute a default
under the Lease.
4. Lessee is given permission to assign the Lease to Carrols provided
Lessee remains liable for any breach of the Lease which occurs after the
assignment is made.
5. Carrols is given permission to grant a security interest in its
interest under the Lease by way of a leasehold mortgage and/or a collateral
assignment to a financial institution ("Secured Party") to whom Carrols' Burger
King Franchise Agreement will also be collectively assigned. In the event
Secured Party exercises its remedies against Carrols' interest under the Lease,
Secured Party may assign the Lease to Burger King Corporation or to an approved
Burger King franchisee.
6. Landlord will give Secured Party notice of any default by
Carrols
under the Lease simultaneously with the giving of such notice to Carrols
provided Landlord is provided written notice of the name and address of the
Secured Party. Secured Party, if it so elects, may cure any default of Carrols
within the time permitted in the Lease or, if no cure period is provided in the
Lease, 10 days after its receipt of such notice.
7. The undersigned will not accept any surrender, cancellation or
modification of the Lease without first giving 10 days' written notice thereof
to Secured Party.
8. Landlord agrees that the personal property and trade fixtures of
Carrols (including inventory and equipment) located at the Premises
(collectively "Collateral") will not be deemed "fixtures" and will remain the
personal property of Carrols subject to Secured Party's security interest.
Landlord will not assert any statutory or possessory liens or rights of
distraint against the Collateral or take any other action with respect thereto
and agrees that all of its rights thereto are subordinate to the rights, claims
and security interests therein in favor of the Secured Party to the full extent
that the same secures or hereafter may secure any and all obligations or
indebtedness of every kind, now existing or hereafter arising, of Carrols to
Secured Party.
9. Secured Party and its agents and representatives, upon reasonable
prior notice, but without the consent of Landlord, may enter the Premises and
remove and take possession of the Collateral at any time in accordance with the
security agreements.
10. The provisions hereof shall be irrevocable and remain in full force
and effect until Carrols has fully paid and performed all of its obligations to
Secured Party under all agreements, instruments and documents evidencing such
obligations, and under all security agreements, present and future, and any
extensions, modifications and renewals thereof at any time made, and until all
obligations, if any, of Secured Party to extend loans or financial
accommodations to Carrols shall have terminated.
11. This Consent and Estoppel Certificate shall be binding upon and inure
to the benefit of the parties herein named and their respective assigns and
successors in interest.
Very truly yours,
by:____________________________
Title:
EXHIBIT C TO THE PURCHASE AND SALE AGREEMENT
BK#
CARROLS CORPORATION
Assumption Agreement
THIS ASSUMPTION AGREEMENT, made this ____ day of ,
1994, by and among KIN RESTAURANTS, INC., a North Carolina corporation
("Seller"), and CARROLS CORPORATION, a Delaware corporation ("Purchaser"):
W I T N E S S E T H:
WHEREAS, this Assumption Agreement is being executed and delivered
pursuant to that certain Purchase and Sale Agreement, dated as of (the
"Purchase Agreement"), among Purchaser, Seller, and Michael Olander,as agent for
Seller (terms used herein without definition shall have the respective meanings
set forth in the Purchase Agreement);
WHEREAS, subject to the provisions of the Purchase Agreement, Seller
has agreed to sell, assign, transfer and convey to Purchaser all of Seller's
right, title and interest in and to the Assets, subject to Purchaser's
assumption of the Assumed Contracts (as hereinafter defined); and
NOW, THEREFORE, in consideration of the execution and delivery of the
Purchase Agreement and the Bill of Sale and Assignment dated the date hereof and
for other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties agree as follows:
1. From and after the date hereof, Purchaser hereby assumes and
agrees to pay, perform, or discharge, as the case may be, and hereby agrees to
indemnify and hold Seller harmless against, all of the rights, obligations and
liabilities of Seller arising on or after 6:00 A.M. on the date hereof (the
"Closing Date") under each of the Contracts set forth on Schedule A hereto (the
"Assumed Contracts").
2. Anything herein to the contrary notwithstanding, Seller shall
remain liable for, and hereby agrees to retain and discharge, and to indemnify
and hold harmless Purchaser from and against, any and all liabilities of Seller
or its Affiliates not being expressly assumed by Purchaser hereunder or under
Section 1.5 of the Purchase Agreement, including, without limitation, any
liability of Seller or any Affiliate of Seller (i) arising from, or out of, the
ownership or operations or use of, or incurred in connection with, any of its
respective Affiliates in connection with, the Restaurants, Assets, Real
Property, Real Property Lease or the Assumed Contracts on or prior to, or
relating to any time period prior to the Closing Date; (ii) arising from or by
reason of the transactions contemplated by the Purchase Agreement, including,
but not limited to Federal, state or local income taxes, transfer taxes,
and other taxes, if any, arising from or by reason of the receipt of the
consideration for the Assets; (iii) with respect to any wages, vacation,
severance or sick pay or any rights under any stock option, bonus or other
incentive arrangement that have accrued as of the Closing Date; (iv) with
respect to any employment, consulting or similar arrangement to which Seller is
a party or for which Seller is responsible; (v) with respect to any "employee
benefit plan" as defined in Section 3(3) of Employee Retirement Income Security
Act of 1974, as amended ("ERISA") including multi-employer plans as defined in
Section 3(37) of ERISA whether arising before, on or after the Closing Date; or
(vi) under any Laws relating to public health and safety and pollution or
protection of the environment, including, without limitation, those relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials or wastes into ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic materials or wastes
or any materials defined or categorized by any of the above as "Hazardous
Materials", "Hazardous Substances", or similar or related designations.
3. This Assumption Agreement is delivered pursuant to, and is
subject to, the Purchase Agreement.
4. This Assumption Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective successors and assigns.
IN WITNESS WHEREOF, the parties have duly executed this Assumption
Agreement this ____ day of , 1994.
PURCHASER:
CARROLS CORPORATION
By:____________________
Name:
Title:
ACKNOWLEDGED AND AGREED
TO BY:
SELLER:
KIN RESTAURANTS, INC.
____________________
By:
Name:
Title:
EXHIBIT D TO THE PURCHASE AND SALE AGREEMENT
[FORM OF OPINION OF COUNSEL TO
CARROLS CORPORATION]
, 1994
To Seller
Ladies and Gentlemen:
I am the general counsel for Carrols Corporation, a Delaware
corporation ("Purchaser"), in connection with the transactions contemplated by
that Purchase and Sale Agreement dated as of [ , 1994] (the
"Purchase Agreement") among Purchaser, Michael Olander (the "Seller's Agent")
and KIN Restaurants, Inc. ("Seller"). Terms used and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Purchase
Agreement. This opinion is being furnished to you, at the request of Purchaser,
pursuant to Section 5.2(e) of the Purchase Agreement.
In connection with rendering the opinions hereinafter set forth, I
have examined the originals, or copies certified or otherwise identified to my
satisfaction as being true copies, of the following:
(a) The Purchase Agreement;
(b) The various assumption instruments executed by Purchaser on the
date hereof; and
(c) such certificates of public officials, corporate documents and
records, and other certificates to the extent that the same were made available
to me for such examination, and have made such investigation of law, as I have
deemed necessary as a basis for the opinions expressed herein.
The foregoing agreements and instruments together with each other
agreement, document, certificate or instrument executed or delivered by
Purchaser in connection with the consummation of the transactions contemplated
by the Purchase Agreement (the "Contemplated Transactions") are referred to
herein, collectively, as the "Transaction Documents".
For purposes of the opinions expressed herein, with your permission,
I have assumed, without any independent investigation or verification of any
kind: (i) the genuineness of all signatures, the authenticity and
completeness of all documents submitted to me as originals and the conformity
to original
documents and completeness of all documents submitted to me as copies; (ii) that
all Transaction Documents have been duly authorized, executed and delivered by
the parties thereto other than Purchaser; and (iii) that the certificates of
public officials dated earlier than the date of this letter remain accurate from
such earlier date through and including the date of this letter.
As to various questions of fact material to my opinion, I have relied
upon the representations made in the Transaction Documents and upon inquiries
and certificates of officers or representatives of Purchaser. When a statement
herein is qualified by "to my knowledge" or similar language, it is intended to
indicate that, during the course of my representation of Purchaser, no
information that would give me actual knowledge of the inaccuracy of such
statement has come to my attention.
I am a member of the bar of the State of New York and do not purport
to be an expert in, or to express any opinion concerning, any law other than the
laws of the State of New York, the General Corporation Law of the State of
Delaware and the Federal law of the United States of America. No opinion is
expressed as to the laws of any other jurisdiction or the effect which the laws
of any other jurisdiction might have on the subject matter of the opinions
expressed herein under conflict of laws principles or otherwise.
Based upon and subject to the foregoing and the qualifications set
forth below, I am of the opinion that:
1. Purchaser is a corporation validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
2. Purchaser has full corporate power and authority to enter into the
Transaction Documents to which it is a party and to carry out the Contemplated
Transactions.
3. The execution, delivery and performance of the Transaction
Documents to which Purchaser is party have been duly authorized by all requisite
corporate action.
4. Each Transaction Document to which Purchaser is a party has been
duly and validly executed and delivered by it and constitutes the legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms except as may be limited by the Enforcement Exceptions (as
hereinafter defined).
5. Neither the execution, delivery or performance of any Transaction
Document by Purchaser, nor the consummation of the Contemplated Transactions
will, with or without the giving of notice or the passage of time or both,
conflict with, result in a default or loss of rights (or give rise to any right
of termination, cancellation or acceleration) under, or result in the creation
of any Lien, pursuant to: (a) any provision of the certificate of incorporation
or by-laws of Purchaser; (b) to my knowledge, any material note, contract,
agreement or other instrument or obligation to which Purchaser is a party
or by
which Purchaser or its properties may be bound or affected; (c) any law,
ordinance, rule or regulation to which Purchaser is subject or by which its
properties may be bound or affected; or (d) to my knowledge, any judgment, award
or order to which Purchaser is subject or by which its properties may be bound
or affected.
6. The execution, delivery and performance of the Transaction
Documents to which Purchaser is a party do not require the consent, approval or
authorization of or license from: (a) any governmental authority or other
regulatory body or (b) to my knowledge, any other Person, except for such
consents, approvals or authorizations that have been obtained and which are in
full force and effect.
The validity and enforceability of the rights and remedies set forth
in the Transaction Documents are subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditors' rights and remedies generally and the application of
principles of equity whether in an action at law or a proceeding in equity. In
addition, I express no opinion regarding the availability of the remedy of
specific performance, or of any other equitable remedy or relief to enforce any
right under any agreement or document. All of the above have hereinbefore been
referred to as the "Enforcement Exceptions".
This opinion is being furnished for the sole benefit of the named
addressee and its counsel, and may not be relied upon by any other Person or
published, quoted or otherwise used for any other purpose without my prior
written consent. This opinion is based on the law (and interpretations thereof)
and facts existing as of the date hereof. I disclaim any obligation to advise
you of any changes therein that may be brought to my attention after the date
hereof.
Very truly yours,
EXHIBIT E TO PURCHASE AND SALE AGREEMENT
[NAME OF SELLER]
Bill of Sale and Assignment
KIN Restaurants, Inc., a North Carolina corporation ("Seller"), for
and in consideration of sums duly paid by CARROLS CORPORATION, a Delaware
corporation ("Purchaser"), and for other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, pursuant to that
certain Purchase and Sale Agreement dated as of , 1994 (the
"Purchase Agreement") among Purchaser, Seller, and Michael Olander as agent for
the Seller, DOES HEREBY sell, assign, transfer, and convey and deliver to
Purchaser all of the following assets used or located in or held for use in
connection with the restaurant having a Burger King franchise number of [
] (the "Restaurant") operated by Seller (collectively, the "Assets") free
and clear of all mortgages, liens, security interests, encumbrances, equities,
claims, pledges, charges, liabilities and other obligations of whatever kind and
character:
(a) Restaurant Equipment. All of the machinery, equipment,
furnishings, supplies, uniforms, spare equipment parts and all other personal
property (other than Inventory, as hereinafter defined) owned by Seller and used
or held for use in, or in connection with, the operation of the Restaurants,
including but not limited to the assets set forth in Schedule 1.1 (a) annexed
hereto;
(b) Leasehold Improvements. All fixtures and other leasehold
improvements owned by Seller in the Restaurants;
(c) Franchise Agreements. The Burger King Franchise Agreement
for the Restaurant, as more fully set forth in Schedule 1.1 (c) annexed hereto;
(d) Inventories. All of the food, related paper products and
promotional items owned by Seller or otherwise used or held for use in or in
connection with the business being conducted at the Restaurants;
(e) Leased Assets. All of the right, title and interest of
Seller in any item of personal property which is not owned by it but is leased
by it or otherwise is used or held for use, in or in connection with the
business being conducted at the Restaurants, including but not limited to, the
assets set forth on Schedule 1.1 (e) annexed hereto; and
(f) Miscellaneous Assets. All of the right, title and interest
of Seller in any other asset or property owned, leased, subleased, used or held
for use in, or in connection with the business being operated at the
Restaurants, including, but not limited to, contract rights and other general
intangibles.
TO HAVE AND TO HOLD all of the Assets hereby sold, assigned,
transferred, conveyed and delivered to Purchaser, its successors and assigns,
for its and their own use and behalf forever.
This Bill of Sale and Assignment is delivered pursuant to, and is
subject to, the Purchase Agreement.
Seller shall cooperate with Purchaser and shall take such further
action and shall execute and deliver such further documents as may be requested
by Purchaser, its successors and assigns, to implement the provisions and
purposes of this Bill of Sale and Assignment.
IN WITNESS WHEREOF, Seller had duly caused this Bill of Sale and
Assignment to be executed this day of , 1994.
KIN Restaurants, Inc.
By:______________________
Name: Michael Olander
Title: President
EXHIBIT F TO PURCHASE AND SALE AGREEMENT
[OPINION OF COUNSEL TO SELLER]
, 1994
Carrols Corporation
968 James Street
Syracuse, NY 13203
Ladies and Gentlemen:
We have acted as counsel for Michael Olander (the "Seller's Agent")
and KIN Restaurants, Inc. (the "Seller"), in connection with the transactions
contemplated by that Asset Purchase Agreement dated as of [ ,
1994] (the "Purchase Agreement") among Seller, Seller's Agent and Carrols
Corporation, a Delaware corporation (the "Buyer"). Terms used and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Purchase Agreement. This opinion is being furnished to you, at the
request of Seller and Seller's Agent, pursuant to Section 5.3(e) of the Purchase
Agreement.
In connection with rendering the opinions hereinafter set forth, we
have examined the originals, or copies certified or otherwise identified to our
satisfaction as being true copies, of the following:
(a) The Purchase Agreement;
(b) The Bill of Sale ("Bill of Sale") and other instruments of
conveyance, transfer and assignment executed by Seller on the date hereof; and
(c) such certificate of public officials, corporate documents and
records, and other certificates to the extent that the same were made available
to us for such examination, and have made such investigation of law, as we have
deemed necessary as a basis for the opinions expressed herein.
The foregoing agreements and instruments together with each other
agreement, document, certificate or instrument executed or delivered by Seller's
Agent or Seller in connection with the consummation of the transactions
contemplated by the Purchase Agreement (the "Contemplated Transactions") are
referred to herein, collectively, as the "Transaction Documents".
For purposes of the opinions expressed herein, with your permission,
we have assumed, without independent investigation or verification of any kind:
(i) the genuineness of all signatures, the authenticity and completeness of all
documents submitted to us as originals and the conformity to original documents
and completeness of all documents submitted to us as copies; (ii) that all
Transaction Documents have been duly authorized, executed and delivered by
Buyer; and (iii) that the certificates of public officials dated earlier than
the date of this letter remain accurate from such earlier date through and
including the date of this letter.
As to various questions of fact material to our opinion, we have
relied upon the representations made in the Transaction Documents and upon
inquiries and certificates of Seller's Agent and of the officers or
representatives of Seller. When a statement herein is qualified by "to our
knowledge" or similar language, it is intended to indicate that, during the
course of our representation of Seller and Seller's Agent, no information that
would give us actual knowledge of the inaccuracy of such statement has come to
our attention.
We are members of the bar of the State of North Carolina and do not
purport to be experts in, or to express any opinion concerning, any law other
than the laws of the State of North Carolina and the Federal law of the United
States of America. No opinion is expressed as to the laws of any other
jurisdiction or the effect which the laws of any other jurisdiction might have
on the subject matter of the opinions expressed herein under conflict of laws
principles or otherwise. In this connection, we have assumed, with your
permission, that the Transaction Documents and the Assumed Contracts were
governed by the laws of the State of North Carolina.
Based upon and subject to the foregoing and the qualifications set
forth below, we are of the opinion that:
1. Seller is a corporation validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted. Seller is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not, individually
or in the aggregate, have a material adverse effect on the business, properties,
financial condition or the results of operations of Seller.
2. Seller and Seller's Agent each has full corporate power and
authority or capacity, as the case may be, to enter into the Transaction
Documents to which it or he is a party and to carry out the Contemplated
Transactions.
3. The execution, delivery and performance of the Transaction
Documents to which Seller is party have been duly authorized by all requisite
corporate action.
4. Each Transaction Document to which a Seller or Seller's Agent is
a party has been duly and validly executed and delivered by it or him and
constitutes the legal, valid and binding obligation of Seller and Seller's
Agent, respectively, enforceable against each of them in accordance with its
terms except as may be limited by the Enforcement Exceptions (as herein-after
defined).
5. Neither the execution, delivery or performance of any Transaction
Document by a Seller or Seller's Agent, nor the consummation of the Contemplated
Transactions will, with or without the giving of notice or the passage of
time
or both, conflict with, result in a default or loss of rights (or give rise to
any right of termination, cancellation or acceleration) under, or result in the
creation of any Lien, pursuant to: (a) any provision of the Governing
Instruments of Seller; (b) to our knowledge, any material note, contract,
agreement or other instrument or obligation to which Seller or Seller's Agent
is a party or by which Seller or Seller's Agent or their respective properties
may be bound or affected; (c) any law, ordinance, rule or regulation to which
Seller or Seller's Agent is a party or by which their respective properties may
be bound or affected; or (d) to our knowledge, any judgment, award or order to
which Seller or Seller's Agent is a party or by which their respective
properties may be bound or affected.
6. The execution, delivery and performance of the Transaction
Documents to which Seller or Seller's Agent is a party do not require the
consent, approval or authorization of or license from or registration or filing
with: (a) any governmental authority or other regulatory body or (b) to our
knowledge, any other Person, except for such consents or approvals that have
been obtained and which are in full force and effect.
7. The Bill of Sale and other instruments of conveyance, transfer and
assignment executed by Seller are in form sufficient to convey to Buyer all of
Seller's right, title and interest in and to the Assets. To our knowledge, the
Assets will be conveyed to Buyer free and clear of all Liens.
8. Except as disclosed in the Purchase Agreement, there is no claim,
legal action, counterclaim, suit, arbitration, governmental investigation or
other legal, administrative or tax proceeding, nor any order, decree or judgment
in progress, pending or threatened against or relating to Seller or their
respective Assets.
9. To our knowledge, Seller is in compliance in all material respects
with all applicable laws, regulations and administrative orders of the United
States and the State of North Carolina, the non-compliance with which would have
a materially adverse effect upon the Assets or the Contemplated Transactions.
10. Each Assumed Contract is valid, subsisting, in full force and
effect, binding upon and enforceable against the Seller and, to our knowledge,
on the other parties thereto, in accordance with their respective terms and, to
our knowledge, neither the Seller nor any other party to any such Assumed
Contract is in default thereunder in any material respect nor, to our knowledge,
does any condition exist that with notice or lapse of time or both would
constitute a material default thereunder.
11. Based solely upon a review of the stock transfer ledgers and
minute books of Seller, Michael Olander is the record and, to our knowledge,
beneficial owners of all of the issued and outstanding shares of capital stock
of Seller.
The validity and enforceability of the rights and remedies set forth
in the Transaction Documents and the Assumed Contracts are subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights and remedies
generally and the application of principles of equity whether in an action
at law or a proceeding in equity. In addition, we express no opinion regarding
the
availability of the remedy of specific performance, or of any other equitable
remedy or relief to enforce any right under any agreement or document. All of
the above have herein-before been referred to as the "Enforcement Exceptions".
This opinion is being furnished for the sole benefit of the named
addressee, its counsel and any Person providing financing to Buyer and may not
be relied upon by any other Person or published, quoted or otherwise used for
any other purpose without our prior written consent. This opinion is based on
the law (and interpretations thereof) and facts existing as of the date hereof.
We disclaim any obligation to advise you of any changes therein that may be
brought to our attention after the date hereof.
Very truly yours,
SCHEDULE A
BK Number Address
399 1200 W. Club Boulevard
Durham, NC
755 349 Tyron Road
Tryon Hills Shopping Ctr.
Raleigh, NC
2983 6500 Glenwood Road
Raleigh, NC
SCHEDULE 1.1(a)
[To be provided by Seller]
SCHEDULE 1.1(e)
NONE
SCHEDULE 1.2(c)
Franchises $1,210,000
Equipment $ 300,000
SCHEDULE 1.3(a)(ii)
Annual
Lease Expiration Option Minimum Percentage
BK Number Landlord Date Date Terms Rent Rent
_________ ________ _____ __________ ______ _______ __________
399 BKC 8/23/74 8/29/2014 n/a $54,185.00 8-1/2%
over
$637,500.
755 Eden 10/1/78 9/30/98 4-5 yr. $36,666. 6-1/2%
Services, *renewal over
Inc. CPI 118% $564,092.
inc.
2983 BKC 7/26/80 7/25/2000 n/a $61,550 8-1/2%
YR. 11-15 over
$724,118.
$65,853 8-1/2%
YR. 16-20 over
$774,741.
SCHEDULE 1.3(c)
Easement for BK #2983, 6500 Glenwood Road, Raleigh, NC as more particularly
set forth on the attached. [To be provided by Seller]
SCHEDULE 2.5
Consent from Burger King Corporation
Consent from B & W Partners, Ltd. for assignment of Lease for Store #755
SCHEDULE 2.6(b)
NONE
SCHEDULE 2.7 (a)
None, except as set forth in Successor Checklist for Restaurant No. 755 dated
10/19/93
(Copy Annexed Hereto)
SCHEDULE 2.9(a)
NONE
[To be attached based upon Title reports subject to approval of Purchaser]
SCHEDULE 2.9(b)
See copies of letters from City of Raleigh with respect to Burger King
Restaurant #755 and #2983 and the Durham City-County Inspections Department with
respect to Burger King Restaurant #399
SCHEDULE 2.11(b)
NONE
SCHEDULE 2.11(c)
[To be provided by Seller after contract is executed, but prior to closing]
[Names of Managers and Assistant Managers to be attached prior to execution]
SCHEDULE 2.12
See Schedule of Existing Contracts attached hereto and made part hereof.
1
SCHEDULE 2.13 (a)
NONE
SCHEDULE 2.13 (b)
See Group Benefit Plan of KIN Restaurants, Inc./MOR Restaurants revised August
1, 1993 and MedCost Carolina Preferred Care Directory of Hospitals and
Facilities of June 1993.
SCHEDULE 2.14(a)
KIN Restaurants, Inc. Before the Property Tax Commission, Case No. 92 PTC
507. From the Valuation and Taxation by Wake County for Tax Years 1987 - 1992
with respect to Burger King Restaurant #755 and 2983.
SCHEDULE 2.14(c)
#399 N.C. State Privilege License
City of Durham City Privilege
License
N.C. Dept. of Agriculture
N.C. Dept. of Environment,
Health & Natural Resources
#755 N.C. State Privilege License
City of Raleigh City Privilege
License
N.C. Dept. of Agriculture
N.C. Dept. of Environment,
Health & Natural Resources
#2983 N.C. State Privilege License
City of Raleigh City Privilege
License
N.C. Dept. of Agriculture
N.C. Dept. of Environment,
Health & Natural Resources
SCHEDULE 2.15
See January 1994 Environmental Site Assessment for Burger King Restaurant
located at 1200 West Club Boulevard, Durham, North Carolina prepared by Senior
Environmental Consultants, Inc.
See January 1994 Environmental Site Assessment for Burger King Restaurant
located at 6500 Glenwood Avenue, Raleigh, North Carolina prepared by Senior
Environmental Consultants, Inc.
See January 1994 Environmental Site Assessment for Burger King Restaurant
located at 349 Tyron Road, Raleigh, North Carolina prepared by Senior
Environmental Consultants, Inc.