ASSET PURCHASE AGREEMENT
BETWEEN
SYBRA, INC.,
VALCOR, INC.
AND
U.S. RESTAURANT PROPERTIES MASTER L.P.
DECEMBER 23, 1996
TABLE OF CONTENTS
1. Definitions...........................................................1
2. Basic Transaction.....................................................4
(a) Purchase and Sale of Assets.....................................4
(b) Assumption of Liabilities. ....................................4
(c) Purchase Price..................................................4
(d) The Closing. ..................................................4
(e) Deliveries at the Closing.......................................4
(f) Allocation.....................................................5
3. Representations and Warranties of the Seller..........................5
(a) Organization of the Seller......................................5
(b) Authorization of Transaction....................................5
(c) Noncontravention................................................5
(d) Brokers' Fees...................................................6
(e) Legal Compliance................................................6
(f) Real Property..................................................6
(g) Litigation......................................................7
(h) Certain Notices.................................................7
(i) Financial Statements...........................................7
4. Representations and Warranties of the Buyer. ........................8
(a) Organization of the Buyer.......................................8
(b) Authorization of Transaction. .................................8
(c) Noncontravention................................................8
(d) Brokers' Fees. ................................................9
(e) Financing.......................................................9
(f) Due Diligence..................................................9
5. Pre-Closing Covenants.................................................9
(a) General. ......................................................9
(c) Notices and Consents...........................................11
(d) Access.........................................................11
(e) Notice of Developments.........................................11
(f) Exclusivity. ................................................12
6. Post-Closing Covenants..............................................12
(a) General........................................................12
(b) Litigation Support.............................................12
7. Conditions to Obligation to Close....................................13
(a) Conditions to Obligation of the Buyer..........................13
(b) Conditions to Obligation of the Seller.........................14
8. Remedies for Breaches of this Agreement..............................15
(a) Survival of Representations and Warranties.....................15
(b) Indemnification Provisions for Benefit of the Buyer............15
(c) Indemnification Provisions for Benefit of the Seller and Valcor16
(d) Matters Involving Third Parties................................16
(e) Determination of Adverse Consequences..........................17
(f) Other Indemnification Provisions..............................17
9. Termination..........................................................17
(a) Termination of Agreement. ....................................17
(b) Effect of Termination..........................................18
10. Miscellaneous.......................................................19
(a) Press Releases and Public Announcements........................19
(b) No Third Party Beneficiaries Other than Valcor.................19
(c) Entire Agreement...............................................19
(d) Succession and Assignment......................................19
(e) Counterparts. ................................................19
(f) Headings. ...................................................19
(g) Notices. .....................................................19
(h) Governing Law..................................................21
(i) Amendments and Waivers........................................21
(j) Severability..................................................22
(k) Expenses. ....................................................22
(l) Construction. ...............................................22
(m) Incorporation of Exhibits. .....................................22
(o) Bulk Transfer Laws. ..........................................23
EXHIBITS
EXHIBIT A Form of Assumption
EXHIBIT B Allocation Schedule
EXHIBIT C Disclosure Schedule
SCHEDULES
SCHEDULE 1 Acquired Assets
SCHEDULE 2 Assumed Liabilities
SCHEDULE 3 Agreed Value
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into as of
December 23, 1996, by and between U.S. RESTAURANT PROPERTIES MASTER L.P., a
Delaware limited partnership (the "Buyer"), SYBRA, INC., a Michigan corporation
(the "Seller") and VALCOR, INC., a Delaware corporation and the sole stockholder
of Seller ("Valcor"). The Buyer and the Seller are referred to individually as a
"Party" and collectively as the "Parties."
This Agreement contemplates a transaction in which the Buyer will purchase,
for cash consideration, certain restaurant properties owned or ground-leased by
Seller.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
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"Acquired Assets" means all of the right, title, and interest that the
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Seller possesses and has the right to transfer in and to all of the assets
described on Schedule 1 attached to this Agreement and incorporated herein by
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this reference.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
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investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
`Agreed Value'' means the value of a parcel of Real Property as specified
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in Schedule 3.
"Applicable Rate" means the "Prime Rate" as identified in the Wall Street
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Journal Money Rates section from time to time as the base rate of interest for
corporate loans.
"Assumed Liabilities" means all liabilities and obligations of the Seller
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described on Schedule 2 attached to this Agreement and incorporated herein by
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this reference.
"Buyer" has the meaning set forth in the preface above.
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"Closing" has the meaning set forth in Section2(d) below.
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"Closing Date" has the meaning set forth in Section2(d) below.
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"Confidential Information" means any information concerning the businesses
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and affairs of the Seller that is not already generally available to the public.
"Disclosure Schedule" has the meaning set forth in Section3 below.
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"Environmental Law" means any national or local statute, law, ordinance,
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rule, regulation, order, consent, decree, judicial or administrative decision or
directive of applicable law now existing relating to (A) pollution or protection
of the environment, including natural resources, (B) exposure of persons,
including employees, to hazardous substances or other products, materials or
chemicals, or (C) protection of the public health or welfare from the effects of
products, by-products, waste, emissions, discharges or releases of chemical or
other substances from industrial or commercial activities.
"GAAP" means United States generally accepted accounting principles as in
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effect from time to time.
"Indemnified Party" has the meaning set forth in Section8(d) below.
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"Indemnifying Party" has the meaning set forth in Section8(d) below.
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"Knowledge" means actual knowledge without independent investigation of the
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referenced person or, if an entity, the executive officers of the referenced
entity.
"Newco" means an entity to be identified that will enter into the Stock
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Purchase Agreement and, pursuant to the Stock Purchase Agreement, will acquire
all of the outstanding equity interests in Seller.
"Ordinary Course of Business" means the ordinary course of business
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consistent with past custom and practice (including, without limitation, with
respect to quantity and frequency).
"Party" has the meaning set forth in the preface above.
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"Person" means an individual, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section2(c) below.
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"Real Property" has the meaning set forth in Section5(b)(i) below.
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"Required Consents of Seller" has the meaning set forth in Section3(c)
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below.
"Required Consents of Buyer" has the meaning set forth in Section4(c)
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below.
"Securities Act" means the Securities Act of 1933, as amended.
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"Securities Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
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or other security interest, other than (a) mechanic's, materialmen's, and
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similar liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
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"Stock Purchase Agreement" means a Stock Purchase Agreement by and between
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Valcor and Newco pursuant to which Newco will acquire all of the outstanding
equity interests in Seller.
"Subsidiary" means any corporation or other entity with respect to which a
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specified Person (or a Subsidiary thereof) owns a majority of the common stock
or other equity interests, or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors or other persons
performing similar functions with respect to such entity.
"Survey" has the meaning set forth in Section5(b)(ii) below
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"Third Party Claim" has the meaning set forth in Section8(d) below.
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"Title Commitment" has the meaning set forth in Section5(b)(i) below.
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"Title Company" has the meaning set forth in Section5(b)(i) below.
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"Units" means certain units of limited partnership interest of Buyer as
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more particularly described in the Units Purchase Agreement.
"Units Purchase Agreement" means the Units Purchase Agreement dated
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December 23, 1996 by and between Valhi and Buyer.
"Valcor" has the meaning set forth in the preface above.
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"Valhi" means Valhi, Inc., a Delaware corporation.
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2. Basic Transaction.
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(a) Purchase and Sale of Assets. On and subject to the terms and
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conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in this
Section2.
(b) Assumption of Liabilities. On and subject to the terms and conditions
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of this Agreement, the Buyer agrees to assume and become responsible for all of
the Assumed Liabilities at the Closing. The Buyer will not assume or have any
responsibility, however, with respect to any other obligation or liability of
the Seller not included within the definition of Assumed Liabilities.
(c) Purchase Price. The Buyer agrees to pay to the Seller at the Closing
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$45,000,000 (the "Purchase Price") by delivery of cash in the amount of the
Purchase Price payable by wire transfer or delivery of other immediately
available funds. The Purchase Price is subject to any prorations and
adjustments required by this Agreement, including without limitation, as
provided in Schedule 2.
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(d) The Closing. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of Valcor in Dallas,
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Texas, commencing at 9:00 a.m. local time on the second business day following
the satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated by this Agreement (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date as the Buyer and the Seller may mutually
determine (the "Closing Date"); provided, however that the Closing Date shall be
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no later than January 31, 1997 except that, by written notice to Buyer, Seller
may extend such date for up to fifteen (15) days in order to obtain Required
Consents.
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
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deliver to the Buyer the various certificates, instruments, and documents to be
delivered by Seller as referred to in Section7(a) below; (ii) the Buyer will
deliver to the Seller the various certificates, instruments, and documents to be
delivered by Buyer as referred to in Section7(b) below; (iii) the Seller will
execute, acknowledge (if appropriate), and deliver to the Buyer (A) a special
limited warranty deed (subject to Permitted Exceptions) with respect to each
parcel of Real Property owned by Seller that is part of the Acquired Assets, (B)
an assignment or other appropriate conveyance of Sybra's interest with respect
to each parcel of Real Property leased by the Seller that is part of the
Acquired Assets, and (C) such other instruments of sale, transfer, conveyance,
and assignment as the Buyer and its counsel reasonably may request; (iv) the
Buyer will execute, acknowledge (if appropriate), and deliver to the Seller (A)
an assumption in the form attached hereto as Exhibit A and (B) such other
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instruments of assumption as the Seller and its counsel reasonably may request;
and (v) the Buyer will deliver to the Seller the Purchase Price specified in
Section2(c) above.
(f) Allocation. The Parties agree to allocate the Purchase Price (and all
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other capitalizable costs) among the Acquired Assets for all purposes (including
financial accounting and tax purposes) in accordance with the allocation
schedule attached hereto as Exhibit B. The Buyer and the Seller will cooperate
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in the preparation and filing of Internal Revenue Service Form 8594 in a manner
consistent with this Section 2(f).
3. Representations and Warranties of the Seller. The Seller represents
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and warrants to the Buyer that the statements contained in this Section3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section3),
except as set forth in the disclosure schedule attached hereto as Exhibit C and
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incorporated in this Agreement by this reference (the "Disclosure Schedule").
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(a) Organization of the Seller. The Seller is a corporation validly
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existing, and in good standing under the laws of Michigan.
(b) Authorization of Transaction. The Seller has the corporate power and
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authority to execute and deliver this Agreement and to perform its obligations
under this Agreement. This Agreement constitutes the valid and legally binding
obligation of the Seller, enforceable in accordance with its terms and
conditions.
(c) Noncontravention. Neither the execution and the delivery of this
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Agreement, nor the consummation of the transactions contemplated by this
Agreement, will (i) violate any valid constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller is subject or any
provision of the charter or bylaws of the Seller or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which the Seller is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice, or Security Interest would not have a material adverse effect on the
financial condition of the Seller or on the ability of the Parties to consummate
the transactions contemplated by this Agreement. To the Knowledge of the
Seller, and other than in connection with those required notices, consents and
approvals relating to the Seller as described in the Disclosure Schedule (the
"Required Consents of Seller"), Seller does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, except where the failure to give
notice, to file, or to obtain any authorization, consent, or approval would not
have a material adverse effect on the financial condition of the Seller or on
the ability of the Parties to consummate the transactions contemplated by this
Agreement.
(d) Brokers' Fees. The Seller has no liability or obligation to pay any
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fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(e) Legal Compliance. To the Knowledge of the Seller, the Acquired Assets
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are in compliance with all applicable and valid laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) applicable to assets of such type and the restaurant
operations as presently conducted with respect to the Acquired Assets, except
where the failure to comply would not have a material adverse effect upon the
restaurant operations as presently conducted on any parcel of Real Property and
except that Seller makes no representation regarding Environmental Laws.
(f) Real Property.
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(i) With respect to each parcel of Real Property owned by Seller, to
the Knowledge of Seller and except for matters set forth in the Title Commitment
and Surveys:
(A) the identified owner has good title to the parcel of Real
Property, free and clear of any Security Interest, easement or covenant, except
for installments of special assessments not yet delinquent, recorded easements,
covenants, and other restrictions, and utility easements, building restrictions,
zoning restrictions, and other easements and restrictions existing generally
with respect to properties of a similar character;
(B) there are no leases, subleases, licenses, concessions, or
other agreements granting to any party or parties the right of use or occupancy
of any portion of the parcel of Real Property; and
(C) there are no outstanding options or rights of first refusal
to purchase the parcel of Real Property, or any portion thereof or interest
therein.
(ii) The Seller has delivered to the Buyer correct and complete
copies (as amended to date) of the ground leases for each parcel of leased Real
Property, which ground leases are listed in Section3(f)(ii) of the Disclosure
Schedule. To the Knowledge of the Seller, each ground lease listed in
Section3(e)(ii) of the Disclosure Schedule is legal, valid, binding, enforceable
in accordance with its terms, and in full force and effect, except where the
illegality, invalidity, nonbinding nature, unenforceability, or ineffectiveness
would not have a material adverse effect on the Acquired Assets.
(g) Litigation. To the Knowledge of Seller, Section3(g) of the
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Disclosure Schedule sets forth each instance in which any of the Acquired Assets
(i) is subject to any outstanding injunction, judgment, order, decree, ruling,
or charge; or (ii) is the subject of any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction, except where the
injunction, judgment, order, decree, ruling, action, suit, proceeding, hearing,
or investigation would not reasonably be expected to involve consideration in
excess of $10,000.
(h) Certain Notices. To the Knowledge of Seller, Section3(g) of the
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Disclosure Schedule sets forth each instance in which any of the Real Property
(i) is the subject of a written notice received by Seller from any insurance
company, board of fire underwriters or similar organization regarding any
material defects in such Real Property; (ii) is the subject of a written notice
from a governmental authority that such Real Property is in violation in any
material respect of a material applicable law; or (iii) is the subject of a
written notice from a government authority of intent to initiate, or the
initiation, of a taking or condemnation proceeding.
(i) Financial Statements. Check dates
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(i) The Seller's balance sheets dated as of December 31, 1993,
December 31, 1994 and December 31, 1995, as well as income statements for the
years then ended, delivered to the Buyer (cumulatively the "Annual Financial
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Statements") present fairly the financial position of the Seller as of the date
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of each respective Annual Financial Statement and the results of operations of
the Seller for the respective periods covered by the Annual Financial Statements
in accordance with GAAP.
(ii) The unaudited income statements of the Seller as of June 30,
1996 for the six-month period then ended delivered to the Buyer present fairly
the financial position of the Seller as of the date thereof and the results of
operation of the Seller for the period covered thereby in accordance with GAAP,
subject to normal recurring year-end adjustments in accordance with the Seller's
historical accounting practices.
(iii) The unaudited income statements of the Seller as of September
28, 1996, for the period then ended delivered to the Buyer present fairly the
financial position of the Seller as of the date thereof and the results of
operation of the Seller for the period covered thereby in accordance with GAAP,
subject to normal recurring year-end adjustments in accordance with the Seller's
historical accounting practices.
4. Representations and Warranties of the Buyer. The Buyer represents and
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warrants to the Seller and to and for the benefit of Valcor that the statements
contained in this Section4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section4), except as set forth in the Disclosure
Schedule.
(a) Organization of the Buyer. The Buyer is a limited partnership duly
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formed, validly existing, and in good standing under the laws of the
jurisdiction of its formation.
(b) Authorization of Transaction. The Buyer has the partnership power and
----------------------------
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the Buyer, enforceable in accordance with its terms and conditions.
(c) Noncontravention. Neither the execution and the delivery of this
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Agreement, nor the consummation of the transactions contemplated by this
Agreement (including, without limitation, the assignments and assumptions
referred to in Section2 above), will (i) violate any valid constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
the Buyer is subject or any provision of its limited partnership agreement or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets) except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have a
material adverse effect on the financial condition of the Buyer and its
Subsidiaries taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. To the Knowledge of the Buyer, and
other than in connection with those required notices, consents and approvals
relating to the Buyer or any of its Subsidiaries as described in the Disclosure
Schedule (the "Required Consents of Buyer"), the Buyer does not need to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section2 above), except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on the ability of the Parties
to consummate the transactions contemplated by this Agreement.
(d) Brokers' Fees. The Buyer has no liability or obligation to pay any
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fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
(e) Financing. Buyer will have, on the Closing Date, all funds necessary
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to pay the Purchase Price and related fees and expenses, and has, or will have
on the Closing Date, the financial capacity to perform all of its other
obligations under this Agreement.
(f) Due Diligence. Buyer acknowledges and agrees (A) that Buyer has had
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access to and the opportunity to perform unrestricted due diligence with respect
to Sybra, the Acquired Assets and the Assumed Liabilities; (B) Buyer is
acquiring the Acquired Assets and assuming the Assumed Liabilities without
reliance on any representations or warranties of Seller except as expressly set
forth in Section3 of this Agreement and subject to all of the limitations
provided in this Agreement.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
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the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable efforts to take
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all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section7
below).
(b) Title Insurance; Surveys.
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(i) Buyer and Seller shall cooperate to obtain a commitment (the
"Title Commitment") issued by a title insurance company reasonably acceptable to
Buyer and Seller (the "Title Company") for the issuance of a standard owner's
(ALTA) policy or policies of title insurance insuring fee simple title to the
real property owned by the Seller and part of the Acquired Assets and fee simple
leasehold title to the real property leased pursuant to ground leases by the
Seller and part of the Acquired Assets, all as more particularly described in
Schedule 1 hereto (the "Real Property"). The Buyer shall have twenty (20) days
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following receipt of the Title Commitment and the Survey with respect to each
parcel of Real Property and copies of all exceptions listed in such Title
Commitment to object by written notice to the Seller to any title exception
revealed by the Title Commitment, exceptions or the Survey. All title
exceptions revealed by any Title Commitment, exceptions or any Survey to which
Buyer does not object within the twenty-day period provided above shall be
considered approved (such exceptions, together with the matters referenced in
Section3(f)(i)(A) hereof, the "Permitted Exceptions"). In the event the Buyer
timely objects to a title exception, the Seller may, within fifteen (15) days
following receipt of the Buyer's written objections, and in any event no later
than the Closing Date, eliminate or modify or arrange for the removal or
modification of such disapproved exception to the Buyer's reasonable
satisfaction; provided however, Seller shall provide for the release on or
before Closing of all liens on the Real Property securing indebtedness for
borrowed money, judgment liens or similar obligations. In the event that the
Seller is unable or does not elect to eliminate or modify, or arrange for the
elimination or modification of any disapproved exceptions within such fifteen
(15) day period, the Buyer shall be entitled to (i) amend this Agreement so as
to exclude any parcel of Real Property the title to which is so impaired as to
make the title unmarketable, and (ii) receive a reduction of the purchase price
with respect to the Agreed Value of each such parcel of Real Property; provided,
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however, that Buyer's rights under this sentence shall not extend to more than
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two (2) parcels of Real Property in addition to the Buyer's termination rights
under Section9(a)(vi). In addition, in the event that (i) the Seller is unable
or does not elect to eliminate or modify, or arrange for the elimination or
modification of any disapproved exceptions within such fifteen (15) day period,
(ii) Buyer has exercised all of its exclusion rights under the foregoing
sentence and/or Section9(a)(vi) with respect to the parcel or parcels of Real
Property affected by some of such disapproved exceptions, and (iii) the
disapproved exceptions affecting the remaining parcels of Real Property,
individually or in the aggregate would have a material adverse effect on the
aggregate value of all such remaining Real Property, the Buyer shall have ten
(10) days after the expiration of such fifteen (15) day period within which to
notify the Seller in writing whether the Buyer shall elect to terminate this
Agreement. If Buyer fails to provide such notice within such fifteen (15) day
period, Buyer shall be deemed to have waived its objection to the disapproved
exceptions (in which case the exceptions shall be a Permitted Exceptions). In
the event of such termination, all obligations of the parties under this
Agreement (except such obligations that survive termination as set forth in
Section9(b)) shall thereafter cease and be of no further force or effect.
Buyer's rights to terminate this Agreement, partially or in its entirety,
pursuant to this Section5(b) and/or Section9(a)(vi) are Buyer's sole rights
and remedies with respect to the title exceptions affecting the Real Property.
Seller shall bear the costs of the Title Commitments and premiums for title
insurance policies, excluding special endorsements requested by Buyer which
shall be at Buyers sole cost and expense, issued pursuant to the Title
Commitment at the Closing.
(ii) Buyer and Seller shall cooperate to obtain a current "as built"
survey ("Survey") for each parcel of Real Property, which Survey shall meet the
minimum standard detail requirements for ALTA/ACSM land title surveys, shall be
certified or recertified to Buyer and the Title Company, shall list all
easements and encroachments affecting the Real Property, shall identify parking
spaces (including handicapped designations) and ingress and egress, and shall
contain a flood plain certification. Seller shall bear the costs of obtaining
such Surveys.
(c) Notices and Consents. Each Party will give any notices (and will
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cause each of its Subsidiaries, if any, to give any notices) to third parties,
and each Party will use its reasonable efforts to obtain (and will cause each of
its Subsidiaries, if any, to use its reasonable efforts to obtain) any third
party consents, including the Required Consents of Seller and the Required
Consents of Buyer, that the other Party reasonably may request in connection
with the matters referred to in Section3(c) and Section4(c) above. Each of
the Parties will (and will cause each of its Subsidiaries, if any, to) give any
notices to, make any filings with, and use its reasonable efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section3(c) and Section4(c)
above.
(d) Access. The Seller will permit representatives of the Buyer to have
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access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of the Seller, to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to the Seller as Buyer may reasonably request from time to time
solely (i) for the purpose of confirming Seller's compliance with Section5(c)
above, and (ii) to conduct environmental assessments. The Buyer will treat and
hold in confidence any Confidential Information it receives or has received from
the Seller or Valcor in the course of its due diligence review or the reviews
contemplated by this Section5(d), will not use any of the Confidential
Information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, will return to the Seller and Valcor or
destroy, at Seller's or Valcor's request, all tangible embodiments (and all
copies) including, without limitation, all electronic media, of the Confidential
Information which are in its possession.
(e) Notice of Developments.
----------------------
(i) The Seller may elect at any time to notify the Buyer of any
development causing a breach of any of its representations and warranties in
Section3(e)-(g) above. Unless the Buyer has the right to terminate this
Agreement pursuant to Section9(a)(ii) below by reason of the development and
exercises that right within the period of ten (10) business days referred to in
Section9(a)(ii) below, the written notice pursuant to this Section5(e)(i) will
be deemed to have amended the Disclosure Schedule, to have qualified the
representations and warranties contained in Section3 above, and to have cured
any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.
(ii) Each Party will give prompt written notice to the other Party of
any material adverse development causing a breach of any of its own
representations and warranties in Section3(a)-(d) and, Section4 above. No
disclosure by any Party pursuant to this Section5(e)(ii), however, shall be
deemed to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.
(f) Exclusivity. The Seller will not solicit, initiate, or encourage the
-----------
submission of any proposal or offer from any Person relating to the acquisition
of the Acquired Assets.
(g) Security Interest. The Seller will not grant any Security Interest
-----------------
with respect to the Acquired Assets other than in the ordinary course of
business.
6. Post-Closing Covenants. The Parties agree as follows with respect to
----------------------
the period following the Closing:
(a) General. In case at any time after the Closing any further action is
-------
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as the other Party reasonably may request, all at the
sole cost and expense of the requesting Party (except to the extent that the
requesting Party is entitled to indemnification therefor under Section8 below).
(b) Litigation Support. In the event and for so long as any Party
------------------
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving Seller, the other Party shall cooperate with it
and its counsel in the defense or contest, make available its personnel, and
provide such testimony and access to its books and records as shall be necessary
in connection with the defense or contest, all at the sole cost and expense of
the contesting or defending Party (except to the extent that the contesting or
defending Party is entitled to indemnification therefor under Section8 below).
7. Conditions to Obligation to Close.
---------------------------------
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
-------------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section3 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(iv) no material adverse change shall have occurred with respect to
the Acquired Assets taken as a whole since September 30, 1996;
(v) the Seller shall have delivered to the Buyer a certificate to the
effect that each of the conditions specified above in Section7(a)(i)-(iv) is
satisfied in all respects;
(vi) the Buyer shall have received the Required Consents of Buyer,
all other authorizations, consents, and approvals of governments and
governmental agencies referred to in Section3(c) and Section4(c) above and
evidence reasonably satisfactory to Buyer of receipt of all required consents
from Seller's lessors with respect to leases affecting the Real Property ;
(vii) the Title Insurance Company shall be prepared to issue title
insurance policies for each parcel of Real Property, subject only to Permitted
Exceptions;
(viii) the results of Buyer's environmental assessments and other due
diligence relating to the condition of the Acquired Assets with respect to
environmental liabilities shall be satisfactory to Buyer in all material
respects;
(ix) the financial condition and the identity of the owners of the
purchaser under the Stock Purchase Agreement shall be satisfactory to Buyer in
all material respects;
(x) Valcor and Newco shall have entered into a Stock Purchase
Agreement in form and substance reasonably satisfactory to Buyer and Valcor;
(xi) Simultaneously with the Closing, Newco and Buyer shall enter
into a lease by Buyer to Newco and/or Seller with respect to the Real Property,
which lease shall be in form and substance reasonably satisfactory to Buyer and
Seller;
(xii) all conditions have been satisfied to the obligations of the
parties to the Stock Purchase Agreement and the Units Purchase Agreement and the
closings of the transactions contemplated in the Stock Purchase Agreement and
the Units Purchase Agreement shall occur simultaneously with the Closing; and
(xiii) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer.
The Buyer may waive any condition specified in this Section7(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the Seller
--------------------------------------
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in Section7(b)(i)-(iii)
is satisfied in all respects;
(v) the Seller shall have received the Required Consents of Seller
and all other authorizations, consents, and approvals of governments and
governmental agencies referred to in Section3(c) and Section4(c) above;
(vi) all conditions have been satisfied to the obligations of the
parties to the Stock Purchase Agreement and the Units Purchase Agreement and the
closings of the transactions contemplated in the Stock Purchase Agreement and
the Units Purchase Agreement shall occur simultaneously with the Closing;
(vii) Valcor and Newco shall have entered into a Stock Purchase
Agreement in form and substance reasonably satisfactory to Buyer and Valcor;
(viii) Simultaneously with the Closing, Newco (or Seller) and Buyer
shall enter into a lease by Buyer to Newco (or to Seller) with respect to the
Real Property, which lease shall be in form and substance reasonably
satisfactory to Buyer and Seller; and
(ix) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Seller.
The Seller may waive any condition specified in this Section7(b) if it executes
a writing so stating at or prior to the Closing.
8. Remedies for Breaches of this Agreement.
----------------------------------------
(a) Survival of Representations and Warranties. None of the
-------------------------------------------
representations and warranties of the Seller contained in Section3(e)-(g) shall
survive the Closing. Subject to the limitations set forth in Section8(b)(i)
below, all of the other representations and warranties of the Buyer and the
Seller in this Agreement or any deed or other conveyance executed pursuant to
this Agreement shall survive the Closing (unless the damaged Party knew or had
reason to know of any misrepresentation or breach of warranty contained in
Section3 or Section4 above or any deed or other conveyance at the time of
Closing) and continue in full force and effect forever thereafter (subject to
any applicable statutes of limitations).
(b) Indemnification Provisions for Benefit of the Buyer. In the event the
----------------------------------------------------
Seller breaches any of its representations, warranties, or the covenants
contained in this Agreement or in any deed or other conveyance executed pursuant
to this Agreement, and, if there is an applicable survival period pursuant to
Section8(a) above, provided that the Buyer makes a written claim for
indemnification against Valcor pursuant to Section10(g) below within such
survival period, then Valcor agrees to indemnify the Buyer from and against any
Adverse Consequences the Buyer shall suffer through and after the date of the
claim for indemnification (but excluding any Adverse Consequences the Buyer
shall suffer after the end of any applicable survival period) caused proximately
by the breach; provided, however, that Valcor shall not have any obligation to
indemnify the Buyer from and against any Adverse Consequences caused by the
breach of any representation or warranty of the Seller contained in
Section3(e)-(g) of this Agreement. Valcor's indemnification obligations to the
Buyer pursuant to this Subsection together with Valcor's indemnification
obligations under the Stock Purchase Agreement shall not exceed $2,000,000
million in the aggregate, determined, as of any relevant date, based upon
aggregate claims actually paid as of such date by Valcor to Buyer or Newco.
Buyer agrees that it will not seek indemnification for any claim under this
Subsection unless the aggregate of all claims under this Subsection together
with all claims under the Stock Purchase Agreement, determined as of the date
any claim is made, will result in loss to Buyer and/or Newco in excess of
$100,000 in the aggregate, provided however, that once such threshold is
exceeded, Valcor shall indemnify Buyer and/or Newco, as applicable, for all such
claims from the first dollar of claims up to and subject to the $2,000,000
limitation specified above.
(c) Indemnification Provisions for Benefit of the Seller and Valcor. In
---------------------------------------------------------------
the event the Buyer breaches any of its representations, warranties or the
covenants contained in this Agreement, and, if there is an applicable survival
period pursuant to Section8(a) above, provided that Seller or Valcor makes a
written claim for indemnification against the Buyer within such survival period,
then the Buyer agrees to indemnify Seller and Valcor from and against the
entirety of any Adverse Consequences the Seller or Valcor, as applicable, shall
suffer through and after the date of the claim for indemnification (but
excluding any Adverse Consequences the Seller or Valcor shall suffer after the
- ---------
end of any applicable survival period) caused proximately by the breach.
(d) Matters Involving Third Parties.
-------------------------------
(i) If any third party shall notify any Party (the "Indemnified
-----------
Party") with respect to any matter (a "Third Party Claim") which may give rise
- ----- -----------------
to a claim for indemnification against another Party (the "Indemnifying Party")
------------------
under this Section8, then the Indemnified Party shall promptly (and in any
event within ten (10) business days after receiving notice of the Third Party
Claim) notify the Indemnifying Party thereof in writing.
(ii) The Indemnifying Party will have the right to assume and
thereafter conduct the defense of the Third Party Claim with counsel of its
choice; provided, however, that the Indemnifying Party will not consent to the
-----------------
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes the defense of
the Third Party Claim as provided in Section8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party except to the extent
that the Indemnified Party elects to waive its right to indemnification
hereunder with respect to such claim.
(e) Determination of Adverse Consequences. The Parties shall make
--------------------------------------
appropriate adjustments for tax benefits and insurance coverage and take into
account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this Section8. All
indemnification payments under this Section8 shall be deemed adjustments to the
Purchase Price.
(f) Other Indemnification Provisions. The indemnification provisions in
---------------------------------
this Section8 are the sole remedy any Party may have after the Closing for
breach of representation or warranty in this Agreement, any covenant in this
Agreement (excluding those set forth in Section6 of this Agreement) or any
representations and warranties contained in any other conveyance executed
pursuant to this Agreement; provided, however, that the Buyer acknowledges and
agrees that it shall not have any remedy after the Closing for any breach of the
representations and warranties in Section3(e)-(g) above; and provided further,
each Party shall be entitled to specific performance of all covenants.
(g) Specific Performance. A remedy of specific performance shall be the
--------------------
sole remedy available to either Buyer or Seller in the event that the other
fails to perform at the Closing as required by this Agreement if all conditions
of the party failing to perform have been satisfied as required by this
Agreement or waived.
9. Termination.
-----------
(a) Termination of Agreement. The Parties may terminate this
------------------------
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement pursuant to
Section5(b)(i);
(iii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing in the event (A) the
Seller has within the then previous ten (10) business days given the Buyer any
notice pursuant to Section5(e)(i) above and (B) the development that is the
subject of the notice has had a material adverse effect upon the Acquired Assets
and/or Assumed Liabilities, taken as a whole.
(iv) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event the
Seller has breached any material representation, warranty, or covenant contained
in this Agreement (other than the representations and warranties in
Section3(e)-(g) above) in any material respect, the Buyer has notified the
Seller of the breach, and the breach has continued without cure for a period of
the shorter of (x) thirty (30) days after the notice of breach or (y) the number
of days between the notice of breach and the Closing Date or (B) if the Closing
shall not have occurred on or before January 31, 1997 (or such later date to
which extended by Seller as provided in Section2(d)), by reason of the failure
of any condition precedent under Section7(a) hereof (unless the failure results
primarily from the Buyer itself breaching any representation, warranty, or
covenant contained in this Agreement);
(v) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the Buyer
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Seller has notified the Buyer of the
breach, and the breach has continued without cure for a period of thirty (30)
days after the notice of breach or (B) if the Closing shall not have occurred on
or before January 31, 1997 (or such later date to which extended by Seller as
provided in Section2(d)), by reason of the failure of any condition precedent
under Section7(b) hereof (unless the failure results primarily from the Seller
itself breaching any representation, warranty, or covenant contained in this
Agreement); and
(vi) the Buyer shall be entitled to (A) terminate this Agreement
as to any parcel of Real Property the title to which is so impaired as to be
unmarketable or the environmental condition of which is so impaired as to make
the parcel of Real Property unusable to Buyer without substantial remediation,
and (B) receive a reduction of the purchase price with respect to the Agreed
Value of each such parcel of Real Property; provided, however, that Buyer's
-----------------
entitlement under this clause (vi) shall not extend to more than three (3)
parcels of Real Property.
(b) Effect of Termination. If any Party terminates this Agreement
---------------------
pursuant to Section9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
-----------------
the confidentiality provisions contained in Section5(d) above shall survive any
such termination.
10. Miscellaneous.
-------------
(a) Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party or any affiliate of such Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its publicly-
traded securities (in which case the Party which intends, or which has an
affiliate that intends, to issue such press release or make such public
announcement will advise the other Party prior to making the disclosure and
provide the other Party opportunity to comment upon the release or
announcement).
(b) No Third Party Beneficiaries Other than Valcor. This Agreement shall
----------------------------------------------
not confer any rights or remedies upon any Person other than the Parties and
Valcor and their respective successors and permitted assigns. The Buyer
acknowledges and agrees that Valcor is intended to be and shall be a beneficiary
of Buyer's representations, warranties, covenants and indemnification
obligations in this Agreement.
(c) Entire Agreement. This Agreement (including the documents referred to
----------------
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
-------------------------
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Seller: Sybra, Inc.
----------------
8300 Dunwoody Place, Suite 300
Atlanta, Georgia 30350-1296
Attention: President
Tel: 770-587-0290
Fax: 770-594-7044
Prior to Closing, copy to:
-------------------------
Valcor, Inc.
Three Lincoln Centre, Suite 1700
5430 LBJ Freeway
Dallas, TX 75240-2697
Attention: Steven L. Watson
Tel: 214-233-1700
Fax: 214-239-0142
James L. Palenchar
Bartlit Beck Herman Palenchar & Scott
511 16th Street, Suite 500
Denver, Colorado 80202
Tel: 303-592-3100
Fax: 303-592-3140
Edward J. Hardin
Rogers & Hardin
2700 International Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Tel: 404-522-4700
Fax: 404-525-2224
If to the Buyer: U.S. Restaurant Properties Master L.P.
---------------
5310 Harvest Hill Road, Suite 270
L.B. 168
Dallas, Texas 75230
Tel: 972-387-1487
Fax: 972-490-9119
Copy to: Richard Wilensky, Esq.
-------
Middleberg Riddle & Gianna
2323 Bryan Street, Suite 1600
Dallas, Texas 75201
Tel: 214-220-6300
Fax: 214-220-0179
If to Valcor: Valcor, Inc.
------------
Three Lincoln Centre, Suite 1700
5430 LBJ Freeway
Dallas, TX 75240-2697
Attention: Steven L. Watson
Tel: 214-233-1700
Fax: 214-239-0142
James L. Palenchar
Bartlit Beck Herman Palenchar & Scott
511 16th Street, Suite 500
Denver, Colorado 80202
Tel: 303-592-3100
Fax: 303-592-3140
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware; provided however,
that all conveyances and similar documents relating to the transfer of the
Acquired Assets shall be governed by the laws of the states in which the
Acquired Assets, respectively, are located.
(i) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer, the Seller and Valcor. The Seller may consent to any such amendment at
any time prior to the Closing with the prior authorization of its board of
directors; provided, however, that any amendment effected after Valcor has
-----------------
approved this Agreement will be subject to the restrictions contained in the
Delaware General Corporation Law. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any such prior or subsequent
occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
------------
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. The Seller shall bear the costs and expenses identified in
--------
Section5(b)(i)(other than special endorsements), and the Buyer will bear the
costs and expenses of all special endorsements and all due diligence required by
it with respect to environmental assessments and other due diligence relating to
the condition of the Acquired Assets with respect to environmental liabilities.
Except as otherwise provided in this Agreement, each of the Buyer and the
Seller will bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. The Seller will also bear all of Valcor's costs and expenses (including
all of its legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby (other than any income tax on any
income or gain Valcor may realize if the Seller makes any dividend or
distribution to Valcor). The Seller and Buyer each shall bear one-half of the
costs of any customary and reasonable closing expenses.
(l) Construction. In the event an ambiguity or question of intent or
------------
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. The word "including" shall
mean including without limitation.
(m) Incorporation of Exhibits. The Exhibits and any annexes and schedules
-------------------------
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(o) Bulk Transfer Laws. The Buyer acknowledges that the Seller will not
------------------
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
*****
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on [as of]
the date first above written.
U.S. RESTAURANT PROPERTIES MASTER
L.P., a Delaware limited partnership
By:
----------------------
Title:
---------------------
SYBRA, INC., a Michigan corporation
By:
----------------------
Title:
---------------------
VALCOR, INC., a Delaware corporation
By:
----------------------
Title:
---------------------