_______________________________________________________________________________
ASSET PURCHASE AGREEMENT
by and among
HOMESTEAD WEST INC. and AMAGRIL, INC. (collectively "SELLER")
and
MAVERICK RESTAURANT CORPORATION ("BUYER")
and
ALAN BUNDY
("STOCKHOLDER")
Dated June 14, 1996
_______________________________________________________________________________
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into this
14th day of June, 1996 by and among Homestead West, Inc., a Kansas corporation
and Amagril, Inc., a Kansas corporation (hereinafter referred to as "Seller"),
Alan Bundy, the majority stockholder of Seller (hereinafter referred to as
"Stockholder") and Maverick Restaurant Corporation, a Kansas corporation
(hereinafter referred to as "Buyer").
WITNESSETH
WHEREAS, Seller is in the business of operating four (4) "Amarillo Grill"
restaurants in the cities of Wichita, Hutchinson and Overland Park, Kansas (the
"Business"); and
WHEREAS, Seller desires to transfer to Buyer the Business and all of its
properties and assets related to such Business, and Buyer desires to acquire
such Business, properties and assets, all upon the terms and conditions set
forth herein; and
WHEREAS, in conjunction with the acquisition by Buyer of the Business, the
parties desire that various of the parties and their affiliates enter into
certain agreements, including but not limited to a Non-Competition Agreement,
all as set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and conditions contained
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE ONE
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 ASSETS. Subject to the terms and conditions hereof and subject to the
representations and warranties made herein, on the Closing Date, as hereafter
defined, Seller shall sell, assign, transfer, grant, bargain, deliver and convey
to Buyer the entire right, title and interest in and to the Business, as a going
concern, and all assets used by Seller or Stockholder in or arising out of the
Business, including, without limiting the generality of the foregoing, all of
the following assets, free and clear of any lien, security interest,
encumbrance, claim, charge or restriction:
(a) All of Seller's inventory and supplies;
(b) All of Seller's furniture, fixtures, smallwares, equipment and signs
listed on Schedule 1.1(b) hereto;
-1-
(c) All of Seller's office furniture, office supplies and office
equipment, including without limitation the office furniture, office
supplies and office equipment listed on Schedule 1.1(c) hereto;
(d) All of Seller's right, title and interest in and to the real estate
listed on Schedule 1.1(d) hereto;
(e) All of Seller's prepaid expenses and deposits;
(f) Seller's telephone numbers, trademark "Amarillo Grill" (including the
goodwill represented thereby), trade secrets, business records and files,
specifications, drawings, recipes, advertising and promotional tapes, and
prototypes and tangible items, including the goodwill of the Business as a
going concern;
(g) All of Seller's rights under all contracts, leases, licenses and other
agreements relating to the Business including those set forth on Schedule
1.1(g) hereto; and
(h) All other property and assets of Seller of every kind and description
whether personal, real or mixed or tangible or intangible;
wherever located and whether or not reflected on its balance sheet (hereinafter
collectively called the "Assets").
1.2 LIABILITIES NOT ASSUMED. Except with respect to those liabilities and
obligations assumed for the contracts, leases, licenses and real property leases
listed on Schedule 1.1 (g) and those liabilities accruing after the Closing,
Buyer will not assume, and Seller will retain and be responsible for, all
liabilities or obligations of Seller. Seller shall indemnify Buyer against any
and all such liabilities as provided in ARTICLE NINE.
ARTICLE TWO
CLOSING
The closing of this transaction (the "Closing") shall take place at 10:00 A.M.
on June 17, 1996 (the "Closing Date"), at Buyer's office or at such other time
and place as the parties shall mutually agree upon.
ARTICLE THREE
PURCHASE PRICE
3.1 PURCHASE PRICE AND PAYMENT. At the Closing, Buyer shall pay to Seller for
the Business and the Assets (i) the amount of One Million Five Hundred Thousand
Dollars ($1,500,000), and (ii) one million (1,000,000) shares of Buyer's common
stock, $0.01 par value (the "Stock"). Seller acknowledges that the Stock will
not have
-2-
been registered under the Securities Act of 1933 and therefore cannot be resold,
pledged, assigned or otherwise disposed of for a period of at least two (2)
years, and then only in accordance with Rule 144 promulgated pursuant to such
Act. Rule 144 requires, among other things, that the amount of restricted stock
sold during any three (3) month period cannot exceed an amount equal to one
percent (1%) of the number of shares of common stock outstanding on the date of
such sale. A restrictive legend preventing transfer of the Stock shall be
placed on the stock certificates. In the event Buyer otherwise registers a
portion of its common stock with the Securities and Exchange Commission for sale
to the public, and in the event the managing underwriter of the proposed stock
offering allows shares to be sold by current restricted stockholders ("Selling
Stockholders"), Buyer shall include in such registration statement a portion of
the Stock received by Seller pursuant to this Agreement to be determined as
follows. If the managing underwriter of the proposed stock offering limits the
amount of common stock which can be sold by Selling Stockholders, Seller or its
stockholders shall be allowed to sell an amount of Stock which is equal to its
"ownership percentage" multiplied by the total number of shares which the
managing underwriter determines can be sold by Selling Stockholders. For
purposes of this paragraph, "ownership percentage" shall be determined by
dividing the number of shares of Stock owned by Seller or its stockholders by
the total number of shares owned by Selling Stockholders who participate in the
proposed offering.
3.2 PRORATION OF TAXES. Seller warrants that neither the Assets nor the
Business are nor will prior to the Closing Date be subject to or liable for any
special assessments or similar type of impositions. Seller shall be responsible
for and agrees to pay when due all sales and use taxes arising out of the
transactions contemplated hereunder. All other taxes against or in respect of
the Assets or the Business for the taxable period which includes the Closing
Date shall be prorated between Buyer and Seller as of the Closing Date. In the
event the amount of such taxes or assessments cannot be ascertained as of the
Closing Date, proration shall be made on the basis of the preceding year and to
the extent that such proration may be inaccurate Seller and Buyer agree to make
such payment to the other after the tax statements have been received which are
necessary to allocate such taxes properly between Seller and Buyer as of the
Closing Date. Buyer agrees to pay such taxes and assessments when due and
Seller's prorated portion thereof shall be paid by Seller to Buyer upon Buyer's
request therefor.
3.3 ALLOCATION OF PURCHASE PRICE. Buyer and Seller agree to report and
allocate the purchase price for income tax purposes in the manner provided on
Schedule 3.3 hereto.
-3-
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDER
Seller and Stockholder hereby jointly and severally make the following
representations and warranties to Buyer, each of which is true and correct on
the date hereof and will be true and correct on the Closing Date, each of which
shall be unaffected by any investigation heretofore or hereafter made by Buyer
and each of which shall survive the Closing and the transactions contemplated
hereby:
4.1 AUTHORIZATION FOR AGREEMENT. The execution, delivery and performance of
this Agreement by Seller and Stockholder and the consummation of the
transactions contemplated hereby will have been duly authorized by all necessary
actions and proceedings prior to the Closing, and this Agreement is, and any
documents or instruments to be executed and delivered by Seller or Stockholder
pursuant hereto will be, legal, valid and binding obligations of Seller and
Stockholder enforceable in accordance with their terms.
4.2 ORGANIZATION AND STANDING. Seller consists of two (2) corporations which
are duly organized, validly existing and in good standing under the laws of the
State of Kansas and has all requisite corporate power and authority to own its
property and operate its business as and where it is now being conducted.
Seller has complete and unrestricted power and authority to sell, assign,
transfer, convey and deliver all the Assets and the Business to be sold to Buyer
under this Agreement, and at Closing, the Assets will be free and clear of any
liens, claims or encumbrances. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby requires
the consent or approval or the giving of notice to, registration, filing or
recording with or the taking of any other action by Seller or Stockholder in
respect of any federal, state or local governmental authority or any third party
except for the granting of new liquor licenses which Buyer shall obtain.
4.3 FINANCIAL STATEMENTS. The unaudited balance sheets of Seller as of
December 31, 1995, the statements of profit and loss and source and application
of funds for the fiscal year then ended and the related notes, if any, all of
which have previously been delivered to Buyer, present fairly the financial
condition of Seller as of their respective dates and the results of its
operations for the respective period then ended and have been prepared
consistently applied throughout the respective periods. Seller has no material
liabilities, absolute or contingent, which are not shown or provided for on the
unaudited balance sheet of Seller as of December 31, 1995.
4.4 ABSENCE OF CERTAIN EVENTS. Since December 31, 1995, the Business has been
operated only in the ordinary and normal course of business and there has not
been:
-4-
(a) Any sale of any of Seller's assets or properties or any cancellation
of any debts to or claims of Seller, other than in the ordinary course of
business;
(b) Any damage or destruction, whether covered by insurance or not,
materially and adversely affecting the Assets or properties of Seller;
(c) Any labor trouble, strike, work stoppage or comparable event;
(d) Any increase in the fixed compensation payable to or to become payable
by Seller to any of its officers, employees or agents, or in any insurance,
pension or other beneficial plan, payment or arrangement made to, for or
with any of such officers, employees or agents or any bonus or commission
paid or commitment made to pay any bonus or commission to any officer, key
employee or agent of Seller;
(e) Any transaction by Seller not in the ordinary course of business;
(f) Any material adverse change in Seller's financial condition, assets,
liabilities, prospects or business;
(g) Any payment of stockholder liabilities; or
(h) To the best of Seller's and Stockholder's knowledge, any other event
or occurrence pertaining specifically to Seller, the Assets or the Business
which will or could materially and adversely affect Seller's financial
condition, assets, liabilities, prospects or business.
4.5 TITLE TO AND CONDITION OF PROPERTIES.
(a) Except as set forth in Schedule 4.5, Seller has, and at the Closing
will transfer to Buyer, good and marketable title to the Business and all
of the Assets free and clear of all mortgages, liens, pledges, charges, tax
liens, claims, leases, restrictions or encumbrances of any nature
whatsoever, and subject to no restrictions with respect to transferability.
(b) All of the Assets are in good operating condition and repair free from
any defects (except such minor defects as do not materially interfere with
the continued use thereof in the conduct of normal operations).
(c) All inventory of Seller to be purchased pursuant to Section 1.1(a)
above consists of a quality and quantity usable in the ordinary course of
the Business.
-5-
4.6 CONTRACTS AND COMMITMENTS.
(a) Except as identified in Schedule 4.6(a), Seller has no existing
contracts with directors, officers, employees, shareholders, agents,
consultants, distributors, sales representatives or dealers that are not
cancelable by Seller on notice of not longer than thirty (30) days and
without liability, penalty or premium.
(b) Seller has not given a power of attorney, which is currently in
effect, to any person, firm or corporation for any purpose whatsoever.
(c) Seller has no collective bargaining or employment agreements, nor any
agreements that contain any severance or termination pay liabilities or
obligations, nor any bonus, vacation, deferred compensation, stock
purchase, stock option, profit-sharing, pension, retirement or other
employee benefit plans. Schedule 4.6(c) sets forth the names, titles,
present annual salary rates and bonus compensation of all management that
as of the date of this Agreement are employed by Seller.
(d) Neither Seller nor Stockholder has made any other contract or
agreement or granted any option to sell or otherwise transfer the Assets or
the Business.
(e) Schedule 1.1(g) attached hereto is a list of all contracts, leases,
licenses, commitments and other agreements relating to the Assets and the
operation of the Business (collectively the "Contracts"). A correct and
complete copy of each of such Contracts which is written has been or will
be provided to Buyer upon Buyer's request. Each of such Contracts, is in
full force and effect and constitutes the legal, valid and binding
obligations of all of the parties thereto. Seller is not in default and
has not received or given any notice of default and to Seller's and
Stockholder's knowledge no other party thereto is in default under any of
the Contracts or other agreement or under any other obligation relating to
the Assets or the Business. Each of the leases of real property identified
on Schedule 1.1(g) is fully assignable to Buyer as contemplated in this
Agreement without additional cost or penalty.
4.7 NO LITIGATION OR ADVERSE EVENTS. Except as set forth in Schedule 4.7, no
suit, action or legal, administrative, arbitration or other proceeding, or, to
the best of Seller's and Stockholder's knowledge, no investigation by any
governmental agency, pertaining to the Assets or the Business or any change in
the zoning or building ordinances affecting the properties or leasehold
interests of Seller, is pending or, to the best of Seller's and Stockholder's
knowledge, has been threatened against Seller or Stockholder which
-6-
could adversely affect the financial condition or prospects of the Business or
any of the Assets.
4.8 INSURANCE. Schedule 4.8 lists all policies of insurance relating to the
Assets in effect as of the date hereof. All the policies of insurance so
described are in full force and effect and the premiums therefor have been paid
currently.
4.9 INTANGIBLE PROPERTIES.
(a) None of the Assets are subject to any patent or patent application,
copyright or copyright application, trademark or trademark application, or
similar evidence of ownership or the right to the use thereof by any third
party.
(b) Seller, to its knowledge, has not infringed any patent or patent
application, copyright or copyright application, trademark or trademark
application or trade name or other proprietary or intellectual property
right of any other person or received any notice of a claim of such
infringement.
(c) Attached hereto as Schedule 4.9 is a true and accurate list of all
patents, copyrights, trademarks, trade names and service marks, both
foreign and domestic, owned, possessed or used by Seller. Seller owns the
entire right, title and interest therein and each thereof is in full force
and effect.
(d) Seller has, and is transferring to Buyer hereunder, the rights to use
all data and information (including without limitation confidential
information, trade secrets and know how) necessary to permit the conduct of
Buyer from and after the Closing Date of the Business as it is and has been
normally conducted.
Assets nor the Business are nor will at the Closing Date be subject to or liable
for any special assessments or similar type of impositions.
4.10 NO VIOLATION. The execution, delivery and performance of this
Agreement will not result in any violation of, be in conflict with, or
constitute a default or give rise to a right of termination, cancellation or
acceleration under any provision of (a) Seller's Articles of Incorporation
and Bylaws; (b) any judgment, decree or order or any material agreement,
contract, understanding, indenture or other instrument to which Seller or
Stockholder is a party; or (c) any statute, rule or governmental regulation
applicable to Seller or Stockholder; in each case where such violation,
conflict, default, right of termination, cancellation or acceleration would
have a material adverse affect on Buyer's ability to consummate the
transactions contemplated by this Agreement.
-7-
4.11 TAX MATTERS.
(a) Seller has filed with the appropriate government agencies all tax or
information returns and tax reports required to be filed.
(b) All federal, state, local, and foreign taxes whether or not yet due
have been fully paid or adequately provided for.
(c) Seller has withheld and paid all taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
(d) Except as set forth on Schedule 4.11(e), neither the Assets nor the
Business are nor will at the Closing Date be subject to or liable for any
special assessments or similar type of impositions.
4.12 ENVIRONMENTAL MATTERS.
(a) To the best of Seller's knowledge, the operations of the Business
comply with all applicable environmental and health and safety laws,
regulations, ordinances and requirements.
(b) Except as set forth in Schedule 4.12 and to the best of Seller's
knowledge, Seller has obtained all environmental, health and safety
permits, licenses, authorizations or other entitlement necessary for its
operations, the lack of which could materially, adversely affect the
business, operations, properties, assets, liabilities, working capital,
prospects or condition (financial or otherwise) of the Business, and all
such permits, licenses, authorizations or other entitlement are in good
standing and the Business is in compliance with all material terms and
conditions of such permits.
(c) Except as set forth in Schedule 4.12 and to the best of Seller's
knowledge, neither Seller nor Stockholder is aware of, nor has made or
filed, any report or notice reporting a release, spill, emission, leaking,
disposal, discharge, leaching or migration into the indoor or outdoor
environment of a waste, pollutant, hazardous substance, toxic substance,
hazardous waste, extremely hazardous waste, restricted waste, special
waste, asbestos or any substance or waste the presence of which will
require remedial action.
4.13 COMPLIANCE WITH LAWS. The Seller has complied with all applicable laws,
rules, regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings and charges (including those relating to public health and safety and
the environment) of federal, state, and local governments and all agencies
thereof. To its knowledge, no environmental conditions exist with respect to
any real property leased to Seller or any of the improvements
-8-
thereon which now, or with the passage of time will, impose liability upon
Buyer, or Seller to remediate, remove, abate or otherwise clean-up under
applicable environmental laws or the terms of the leases pursuant to which
Seller occupies such property.
4.14 LICENSES AND PERMITS. Seller has all permits, licenses, registrations and
other authorizations necessary or required for conduct of the Business as and
where it is now conducted. As of the Closing, Buyer will have obtained either
transfer of the current liquor licenses for each of the restaurant facilities or
new liquor licenses.
4.15 NECESSARY AND REQUIRED ASSETS. The Assets constitute all of the assets and
properties necessary or required for the conduct of the Business after Closing
in the manner and to the extent it is now being conducted. No asset or property
used in the conduct of the Business is owned by Stockholder or any person
related by blood, adoption or marriage to him.
4.16 REAL PROPERTY. Seller owns no real property.
4.17 DISCLOSURE. No representation or warranty of Seller or Stockholder
in this Agreement or any other document delivered pursuant hereto or any
statement, document, certificate or exhibit furnished or to be furnished by
Seller and/or Stockholder pursuant to this Agreement or in connection with
the transactions contemplated hereby contains or will contain any untrue
statement of a material fact or omits or will omit a material fact necessary
to make the statements contained herein not misleading.
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer does hereby make the following representations and warranties to Seller,
each of which is true and correct on the date hereof and will be true and
correct on the Closing Date, each of which shall be unaffected by any
investigation heretofore or hereafter made by Seller and each of which shall
survive the Closing and the transactions contemplated hereby:
5.1 AUTHORIZATION FOR AGREEMENT. The execution, delivery and performance of
this Agreement by Buyer and the consummation of the transactions contemplated
hereby will have been duly authorized by all necessary actions and proceedings
prior to the Closing, and this Agreement is, and any documents or instruments to
be executed and delivered by Buyer pursuant hereto will be, legal, valid and
binding obligations of Buyer enforceable in accordance with their terms.
5.2 ORGANIZATION AND STANDING. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Kansas and has all
requisite corporate power and
-9-
authority to own its property and operate its business as and where it is now
being conducted. Buyer has complete and unrestricted power and authority to
purchase the Assets and the Business to be sold to Buyer under this Agreement.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby requires the consent or approval or the giving
of notice to, registration, filing or recording with or the taking of any other
action by Buyer in respect of any federal, state or local governmental authority
or any third party.
5.3 NO VIOLATION. The execution, delivery and performance of this Agreement
will not result in any violation of, be in conflict with, or constitute a
default or give rise to a right of termination, cancellation or acceleration
under any provision of (a) Buyer's Articles of Incorporation and Bylaws; (b) any
judgment, decree or order or any material agreement, contract, understanding,
indenture or other instrument to which Buyer is a party; or (c) any statute,
rule or governmental regulation applicable to Buyer; in each case where such
violation, conflict, default, right of termination, cancellation or acceleration
would have a material adverse affect on Buyer's ability to consummate the
transactions contemplated by this Agreement.
ARTICLE SIX
CONDUCT OF SELLER'S BUSINESS PENDING CLOSING
From and after the date hereof and until the Closing Date:
6.1 FULL ACCESS. Buyer and its authorized representatives shall have full
access during normal business hours to all properties, books, records, contracts
and documents of Seller, and Seller shall furnish or cause to be furnished to
Buyer or its authorized representatives all information with respect to the
affairs and business of Seller as Buyer may reasonably request.
6.2 CONDUCT OF BUSINESS. Except as otherwise expressly contemplated by this
Agreement or as Buyer may otherwise consent in writing from time to time, Seller
will carry on the Business only in the ordinary course, in substantial
compliance with all applicable laws, and in a manner consistent with past
practices, and will not enter into any extraordinary transactions affecting any
Asset or the operations, business, or financial condition of the Business.
Without limiting the foregoing, Seller will not, without the prior, written
consent of Buyer, with respect to the Business or Assets:
(a) mortgage, pledge, or subject to any lien, charge, or encumbrance any
Asset;
(b) sell, transfer, or otherwise dispose of any material Asset, other than
inventory or supplies in the ordinary course of business;
-10-
(c) incur any obligation or liability (fixed or contingent) except
unsecured current obligations or liabilities incurred in the ordinary
course of business, amend the terms of or extend the time for payment of
any existing indebtedness, or guarantee or agree to guarantee the
obligations of any person;
(d) fail to pay or discharge any current liability when it becomes due and
payable;
(e) enter into or increase the compensation payable or to become payable
under any employment, pension, deferred compensation, bonus, retirement,
vacation, disability, death benefit, hospitalization, insurance, severance,
or other employee contract, incentive or welfare plan, arrangement, or
understanding (whether or not legally binding), with or to any employee,
other than routine pay increases in the ordinary course of business or as
required by minimum wage laws;
(f) enter into or terminate any lease of real or personal property;
(g) enter into any new contract involving payment or receipt of an amount
exceeding $5,000, or not terminable at will or on not more than 31 days'
notice without penalty; and
(h) enter into any other transaction or take any other action which would
be inconsistent with the representations and warranties set forth in
ARTICLE FOUR of this Agreement.
6.3 PRESERVATION OF ORGANIZATION. Seller shall use its best efforts to
preserve Seller's Business, to keep available to Buyer the present employees of
Seller and to preserve for Buyer the present relationships of Seller with its
suppliers, distributors and customers and others having business relations with
it.
6.4 USE OF PROPERTY. All tangible property of Seller will be used, operated,
maintained and repaired in a careful and efficient manner.
6.5 NO DEFAULT. Seller shall not act or omit to do any act, or permit any act
or omission to act, which will cause a breach of any contract, commitment or
obligation.
6.6 INSURANCE. Seller shall maintain in full force and effect all of its
insurance presently in effect including flood insurance, if applicable.
6.7 CONSENTS. Seller will use its best efforts to obtain, to the extent
necessary, all appropriate approvals and consents in writing to the transactions
contemplated by this Agreement and such amendments, assignments, or
modifications of such documents as may be required in order that the Closing
will not result in any
-11-
violations of or defaults with respect to any applicable laws or any permits,
licenses, agreements, leases, contracts, commitments, claims, instruments, or
other rights or arrangements to which Seller is a party or its properties or
assets are bound.
6.8 NOTICE OF DEVELOPMENTS. Seller will promptly notify Buyer of any material
problems or developments with respect to the Business or the Assets, and of any
order or decree or any filed complaint against Seller praying for any order or
decree restraining or enjoining the consummation of this Agreement or the
contemplated transactions, or any notice from any court or governmental agency,
board, or commission of its intention to institute an investigation into, or
institute a suit or proceeding to restrain or enjoin, the consummation of this
Agreement.
ARTICLE SEVEN
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date shall be
subject to the satisfaction prior to or on the Closing Date of the following
conditions, unless waived in writing by Buyer:
7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties
made by Seller and Stockholder in this Agreement shall be true and correct on
and as of the Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date, and Buyer
shall receive a certificate from an executive officer of Seller to that effect.
7.2 COMPLIANCE WITH AGREEMENT. Seller and Stockholder shall have performed and
complied with all of their obligations under this Agreement which are to be
performed or complied with by them prior to or on the Closing Date, and Buyer
shall receive a certificate from an executive officer of Seller to that effect.
7.3 CORPORATE DOCUMENTS AND RESOLUTIONS. Seller shall have delivered or caused
to be delivered to Buyer (i) resolutions of Seller's stockholders approving the
sale of the Assets and the Business contemplated hereby and resolutions of the
Seller's Board of Directors authorizing the execution, delivery and performance
of this Agreement and authorizing the acts of its officers and employees in
carrying out the terms and provisions hereof, and (ii) certificates from the
proper state officials evidencing the good standing of Seller in its state of
incorporation and all other states wherein Seller is qualified to do business.
7.4 CONFIDENTIALITY AND NONCOMPETE AGREEMENT. Stockholder shall have executed
and delivered to Buyer a Confidentiality and Noncompete Agreement in the form
attached hereto as Exhibit A.
-12-
7.5 INSTRUMENTS OF TRANSFER. Seller shall have delivered or cause to be
delivered to Buyer a bill of sale substantially in the form of the bill of sale
attached hereto as Exhibit B and such other assignments and other instruments of
transfer and conveyance, as Buyer shall deem to be necessary or desirable to
vest in Buyer all right, title and interest in and to the Assets and the
Business.
7.6 NO MATERIAL CHANGE. The Assets and the Business shall not be adversely
affected or threatened to be affected in any way as a result of fire, explosion,
earthquake, disaster, accident, any action or threatened action by the United
States or any other governmental authority, flood, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or public enemy,
and Buyer shall receive a certificate from an executive officer of Seller to
that effect.
7.7 REVIEW OF ASSETS AND RECORDS. Buyer shall have the option to review or
cause its representatives to review Seller's records and Assets, and in the
event Buyer exercises such option, Buyer shall be satisfied that such review
indicates that the financial statements of Seller which have been delivered to
Buyer accurately reflect the past results and the current financial condition of
Seller's business to be acquired hereby.
7.8 OPINION OF COUNSEL FOR SELLER. Buyer shall have received an opinion of
counsel in substantially the form attached as Exhibit C.
7.9 ASSIGNMENT OF CONTRACTS. Seller shall have delivered to Buyer (i) a valid
assignment, of all of Seller's right, title and interest in and to the contracts
and leases listed on Schedule 1.1(g) hereto, (ii) consents to such assignment by
all other parties to such contracts and leases if such consents are required by
the terms thereof, and (iii) the written statement of said other parties to said
contracts that as of the Closing Date, to said persons knowledge, no defaults or
events of default have occurred and are continuing under any of said contracts.
7.10 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings,
corporate or otherwise, to be taken in connection with the transactions
contemplated by this Agreement and all appropriate documents incident thereto
shall be satisfactory in form and substance to Buyer's counsel; and Seller
shall have made available to Buyer for examination the originals or true and
correct copies of all records and documents which Buyer may reasonably
request in connection with the transactions contemplated hereby.
7.11 NO LITIGATION. No action or proceeding shall be pending or
threatened at any time prior to or at Closing before or by any court or
governmental body asking to restrain or enjoin the performance of the
transaction contemplated herein.
-13-
ARTICLE EIGHT
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Each and every obligation of Seller to be performed on the Closing Date shall be
subject to the satisfaction prior to or on the Closing Date of the following
conditions, unless waived in writing by Seller:
8.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties
made by Buyer in this Agreement shall be true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date.
8.2 CORPORATE DOCUMENTS AND RESOLUTIONS. Buyer shall have delivered or caused
to be delivered to Seller (i) resolutions of the Buyer's Board of Directors
authorizing the execution, delivery and performance of this Agreement and
authorizing the acts of its officers and employees in carrying out the terms and
provisions hereof, and (ii) certificates from the proper state officials
evidencing the good standing of Buyer in its state of incorporation and all
other states wherein Buyer is qualified to do business.
8.3 COMPLIANCE WITH AGREEMENT. Buyer shall have performed and complied with
all its obligations under this Agreement which are to be performed or complied
with by it prior to or on the Closing Date.
8.4 GRANT OF STOCK OPTIONS. Buyer shall have prepared stock option agreements
granting to certain employees of Seller the aggregate amount of three hundred
fifty thousand (350,000) shares of Buyer's common stock. Seller shall designate
the amount and name of such employees to receive options, and deliver this
information to Buyer prior to the Closing Date. The terms and conditions of the
stock options granted shall be governed by the provisions of Buyer's 1994
Incentive Stock Option Plan.
8.5 OPINION OF COUNSEL. Seller shall have received an opinion dated the
Closing Date from Buyer's counsel substantially in the form of Exhibit D.
8.6 EMPLOYMENT OF STOCKHOLDER. Commencing on the Closing Date, Stockholder
shall be employed by Buyer as Executive Vice President and shall be elected to
the Board of Directors of Buyer. Stockholder shall receive such salary and
benefits as the parties hereto mutually agree.
8.7 OPTION TO PURCHASE. Buyer shall have executed and delivered to Seller the
Option Purchase Agreement in the form attached hereto as Exhibit E.
-14-
8.8 NO LITIGATION. No action or proceeding shall be pending or threatened at
any time prior to or at Closing before or by any court or governmental body
asking to restrain or enjoin the performance of the transaction contemplated
herein.
ARTICLE NINE
INDEMNIFICATION
9.1 INDEMNIFICATION. Seller agrees to defend, indemnify and hold harmless
Buyer and its officers, directors, employees, agents, representatives,
successors and assigns from, against and in respect of any and all loss,
liability and expense resulting from:
(a) All liabilities of Seller of every kind and nature, without
limitation, known or unknown, contingent or otherwise;
(b) Any and all loss, damage or deficiency resulting from any material
misrepresentation or breach of warranty or nonfulfillment of any obligation
by Seller under this Agreement or from any misrepresentation in or omission
from any certificate or other instrument furnished or to be furnished to
Buyer pursuant to this Agreement; and
(c) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and expenses (including legal expenses) incident to any of
the foregoing provisions.
Without limiting the generality of the foregoing, Seller agrees that it will
continue to defend at its expense actions brought against it which are based on
dealings prior to the Closing Date with distributors, suppliers and other
parties, and Buyer agrees to cooperate fully with Seller in such matters by
providing access to files and other information accessible to Buyer and helpful
to Seller in defense of such claims.
9.2 CLAIMS. Should any claim be made by a person not a party to this Agreement
with respect to any matter to which the foregoing indemnity relates, Buyer, on
not less than thirty (30) days' notice to Seller or Stockholder, may make
settlement of such claim and such settlement shall be binding on Buyer, Seller
and Stockholder for the purposes of this subsection; provided, however, that if
within said thirty (30) day period Seller or Stockholder shall have requested
Buyer to contest any such claim at the expense of Seller and Stockholder, Buyer
will promptly comply and Seller or Stockholder shall have the right to direct
the defense of such claim or any litigation based thereon at its or their own
expense through counsel of its or their own choosing, provided that to the
satisfaction of Buyer, Seller and Stockholder shall indemnify and secure Buyer
against such contested claims and for the expenses of contesting and defending
the claims.
-15-
9.3 COSTS. If any legal action or other proceeding is brought for the
enforcement or interpretation of any of the rights or provisions of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and all other costs and expenses incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
ARTICLE TEN
COVENANTS OF SELLER AND STOCKHOLDER
10.1 FURTHER ASSURANCES. Seller and Stockholder agree as follows:
(a) Seller and Stockholder will use their best efforts (i) to obtain any
consents by any third party or government authority or agency required or
deemed desirable by Buyer in connection with the consummation of the
transactions contemplated by this Agreement, (ii) to fulfill or cause to be
fulfilled each of the conditions precedent to Buyer's obligations set forth
in ARTICLE SEVEN hereof on or prior to the Closing and (iii) to perform
each of the acts and things required to be performed by it hereunder at or
prior to the Closing; and
(b) Seller shall execute and deliver or cause to be executed and delivered
such further instruments and take such other action as Buyer may require to
remedy any misrepresentation or any breach of warranty made by Seller
herein and to more effectively carry out the transfer of the Assets and the
Business and the consummation of the matters contemplated by this
Agreement.
10.2 CONFIDENTIAL INFORMATION. Seller and Stockholder each agree not to
communicate, divulge or use for the benefit of any person, firm, partnership or
corporation any of the trade secrets, recipes, business methods, business
records and files, customer lists, promotional materials, product
specifications, drawings and prototype, price lists, instruction manuals,
reports, or any other confidential or proprietary information of any type or
description being acquired by Buyer pursuant to this Agreement.
ARTICLE ELEVEN
TERMINATION AND ABANDONMENT
11.1 TERMINATION OF AGREEMENT. This Agreement may be terminated on or
prior to the Closing Date as provided below:
(a) by mutual consent of all parties hereto;
(b) by Buyer giving written notice to Seller and Stockholder on the sooner
of the Closing Date or on or before the fifteenth (15th) day following the
date of this Agreement if
-16-
Buyer is not reasonably satisfied with the results of its continuing
business, legal and accounting due diligence regarding the Business and
Assets;
(c) by Buyer in the event any of the conditions of closing set forth in
ARTICLE SEVEN have not been met on the Closing Date; or
(d) by Seller in the event any of the conditions of closing set forth in
ARTICLE EIGHT have not been met on the Closing Date.
11.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
Section 11.1 above, all rights and obligations of the parties hereunder shall
terminate without liability of any party to any other part (except for any
liability of any party then in breach).
ARTICLE TWELVE
ASSIGNMENT
This Agreement shall not be assigned by any party without the prior written
consent of each of the other parties and any attempted assignment without such
written consent shall be null and void and without legal effect.
ARTICLE THIRTEEN
WAIVER OF FURTHER WARRANTIES
Except as otherwise provided in Section 4.5, the Closing of the transactions
contemplated by the parties hereto and the acceptance by Buyer of Seller's
transfer documents as provided by this Agreement, shall constitute full
acceptance of the Assets in the same AS IS physical condition in which they are
found at the Closing and shall extinguish any further obligations of Seller to
Buyer in connection with the physical condition of the Assets or any part or
component thereof. With the exception of the provisions of Section 4.5, no
further warranties or representations, whether express or implied have been made
by Seller as to the condition of the Assets. All expressed and implied
warranties of quality, condition, merchantability and fitness are hereby waived
and disclaimed.
ARTICLE FOURTEEN
DESTRUCTION BY FIRE OR OTHER CASUALTY
Seller shall keep the Assets insured to the extent same are presently insured,
against damage due to fire or other casualties between the date of this
Agreement and the Closing. If, after the date of this Agreement but before the
Closing, any of the substantial items of equipment, inventory or buildings and
improvements is damaged by fire or other casualty, then Seller
-17-
agrees to give Buyer prompt notice of the event causing the damage or
destruction, together with a complete description of the item damaged.
Notwithstanding the provisions of Section 7.6 herein, if such damage or
destruction would reasonably be expected to have a cost of repair of more than
$50,000, then Buyer shall have the option of either electing to terminate this
Agreement or of going forward with the performance of the Agreement. Buyer
shall exercise buyer's option by written notice to Seller within ten days (10)
of receipt of Seller's notice of damage, or by Closing, whichever shall first
occur. If Buyer does not so elect to terminate this Agreement, then the Closing
shall take place as herein provided without an abatement of purchase price and
there shall be assigned to Buyer at the Closing all interests of Seller in and
to any insurance proceeds which shall be payable to Seller on account of the
damage or destruction.
ARTICLE FIFTEEN
GOVERNING LAW
This Agreement shall be governed by and construed and interpreted in accordance
with the law of the State of Kansas.
ARTICLE SIXTEEN
AMENDMENT AND MODIFICATION
Buyer, Seller and Stockholder may amend, modify and supplement this Agreement in
such manner as may be mutually agreed by them in writing.
ARTICLE SEVENTEEN
NOTICES
All notices, requests, demands and other communications hereunder shall be
deemed to be duly given if delivered by hand or if mailed by certified or
registered mail with postage prepaid as follows:
IF TO BUYER:
Mr. Chris F. Hotze
Maverick Restaurant Corporation
302 N. Rock Road, Suite 200
Wichita, KS 67206
with copy to:
Ms. Jacqueline K. Levings
Attorney at Law
250 N. Rock Road, Suite 250
Wichita, KS 67206
-18-
IF TO SELLER OR TO STOCKHOLDER:
Alan Bundy
8100 E. 22nd Street North
Building 1900
Wichita, KS 67226
or to such other address as any party may provide to the other in writing.
ARTICLE EIGHTEEN
ENTIRE AGREEMENT
This Agreement (including the exhibits, schedules and 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 are related in any way to the subject matter
hereof.
ARTICLE NINETEEN
SUCCESSORS AND COUNTERPARTS
This Agreement shall be binding upon and shall inure to the benefit of each of
the parties hereto and to their respective successors and assigns and may be
executed in two or more counterparts each of which shall be deemed an original
but all of which together shall constitute but one and the same instrument.
ARTICLE TWENTY
HEADINGS
The headings used in this Agreement are for convenience only and shall not
constitute a part of this Agreement.
ARTICLE TWENTY-ONE
SCHEDULES AND EXHIBITS
All of the schedules and exhibits attached hereto are incorporated herein and
made a part of this Agreement by reference thereto.
ARTICLE TWENTY-TWO
NEGOTIATED TRANSACTION
The provisions of this Agreement were negotiated by the parties hereto and said
Agreement shall be deemed to have been drafted by all the parties hereto.
-19-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
HOMESTEAD WEST, INC.
By: ________________________ By: ______________________
Alan Bundy Alan Bundy
President
AMAGRIL, INC. "Stockholder"
By: _______________________
Alan Bundy
President
"Seller"
MAVERICK RESTAURANT CORPORATION
By: _______________________
Chris F. Hotze
President
"Buyer"
-20-
EXHIBITS AND SCHEDULES
TO
ASSET PURCHASE AGREEMENT
EXHIBITS
EXHIBIT A Non-Competition Agreement
EXHIBIT B Bill of Sale
EXHIBIT C Opinion of Seller's Counsel
EXHIBIT D Opinion by Buyer's Counsel
EXHIBIT E Option to Purchase Agreement
SCHEDULES
Schedule 1.1(b) List of Furniture, Fixtures,
Smallwares, Equipment and Signs
Schedule 1.1(c) List of Office Furniture and
Supplies
Schedule 1.1(d) Legal Description of Real Estate
Schedule 1.1(g) List of Contracts, Leases and
Licenses
Schedule 4.5 List of Liens
Schedule 4.6(a) Noncancellable Contracts
Schedule 4.7 Litigation
Schedule 4.8 Insurance
Schedule 4.9 Proprietary Rights
Schedule 4.11(e) Special Assessments
-1-
EXHIBIT A
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made as of _______________,
1996, by and between MAVERICK RESTAURANT CORPORATION, a Kansas corporation
("Buyer") and ALAN BUNDY an individual ("Bundy").
WITNESSETH
WHEREAS, Buyer and Homestead West, Inc., a Kansas corporation, and Amagril,
Inc., a Kansas corporation (collectively the Seller") are parties to an Asset
Purchase Agreement dated June 14, 1996, ("Asset Purchase Agreement") in which
Buyer will purchase certain assets owned by Seller; and
WHEREAS, Bundy is presently the president and the majority stockholder of
Seller; and
WHEREAS, a condition precedent to the closing of the Asset Purchase Agreement is
the execution by Buyer and Bundy of an agreement restricting Bundy from engaging
in certain activities which would be detrimental to Buyer.
NOW THEREFORE, in consideration of the mutual covenants and conditions contained
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
1. CONFIDENTIALITY. Bundy acknowledges that during the course of his
employment by Seller, Buyer was given access to Confidential Information
and Trade Secrets of Seller. As used in this Section 1, "Confidential
Information and Trade Secrets" means all trade practices, plans, price
lists, supplier lists, recipes, customer lists, marketing plans, financial
information, and all other compilations of information which relate to the
business of Seller. At all times after the date of this Agreement, except
with the Buyer's express prior written consent, Bundy shall not directly or
indirectly, communicate, disclose or divulge to any Person (as defined in
Section 3 hereof), or use for his benefit or the benefit of any person, in
any manner any Confidential Information and Trade Secrets of Seller
acquired before or during his employment with Seller or Buyer, or
concerning the conduct of the business of Buyer.
2. NONCOMPETITION. During Bundy's employment with Buyer and for a period of
three (3) years commencing on the date of termination of such employment,
Seller shall not, except with Buyer's express prior written consent or in
the proper course
of his employment with Buyer, directly or indirectly, in any capacity, for
the benefit of any Person, in an area with a radius of fifty (50) miles
from any restaurant then operated or contemplated by Buyer, establish,
engage, own, manage, operate, join or control, or participate in the
establishment, ownership, management, operation or control of, or be a
director, officer, employee, salesman, agent or representative of, or be a
consultant to, any Person in connection with the operation of a restaurant
similar to those then operated by Buyer. Notwithstanding anything to the
contrary contained herein, ownership of less than five percent (5%) of any
class of securities of any publicly held Person shall not constitute a
violation of this Section 2.
3. DEFINITION OF "PERSON". For purposes of this Agreement, the term "Person"
means any individual, sole proprietorship, joint venture, partnership,
corporation, association, cooperative, trust, estate, government (or any
branch, subsidiary or agency thereof), governmental, administrative or
regulatory authority, or any other entity of any nature whatsoever.
4. RELIANCE. Bundy acknowledges that his compliance with the terms of this
Agreement is an essential part of the transaction contemplated by the Asset
Purchase Agreement. The parties agree that if any provision of this
Agreement or its application is construed to be invalid or unenforceable,
then the other portions hereof shall not be affected thereby and shall be
enforceable. If any provision hereof shall for any reason be held to be
excessively broad as to duration, geographical scope, property, subject or
similar factor, then the court making such determination shall have the
power to reduce or limit such scope, duration, area or other factor so as
to be enforceable to the maximum extent compatible with the applicable law,
and such provision shall then be enforceable in its reduced or limited
form.
5. EQUITABLE RELIEF AND OTHER REMEDIES. Bundy does hereby acknowledge and
agree that Buyer's remedy at law for any breach of the provisions of this
Agreement shall be inadequate, and that Buyer, its successors and assigns
shall be entitled to injunctive or other equitable relief in addition to
any other remedy it may have for a breach of such provisions. If a final
judicial determination is made that any provision of this Agreement
constitutes an unreasonable or otherwise unenforceable restriction against
Bundy, Bundy and Buyer agree that such provision shall be void only to the
extent that such judicial determination finds such provision to be
unreasonable or otherwise unenforceable.
6. CONDITION PRECEDENT. This Agreement shall be effective as of the closing
of the Asset Purchase Agreement and the closing of
A-2
the Asset Purchase Agreement shall be a condition precedent to the
obligations of the parties hereunder.
7. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior negotiations, understandings, agreements,
arrangements and understandings, both oral and written, between the
parties hereto with respect to such subject matter.
(b) AMENDMENT. This Agreement may not be amended or modified in any
respect, except by the mutual written agreement of the parties hereto.
(c) WAIVERS AND REMEDIES. The waiver by any of the parties hereto of any
other party's prompt and complete performance, or breach or violation,
of any provision of this Agreement shall not operate nor be construed
as a waiver of any subsequent breach or violation, and the failure by
any of the parties hereto to exercise any right or remedy which it may
possess hereunder shall not operate nor be construed as a bar to the
exercise of such right or remedy by such party upon the occurrence of
any subsequent breach or violation.
(d) DESCRIPTIVE HEADINGS. Descriptive headings contained herein are for
convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the separate parties hereto in separate
counterparts, each of which shall be deemed to be one and the same
instrument.
(f) NOTICES. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in
regard hereto shall be in writing and shall be deemed to have been
duly given, when delivered by hand or two (2) days after deposited in
the United States mail, by registered or certified mail, return
receipt requested, postage prepaid, as follows:
A-3
If to Bundy: Alan Bundy
8100 E. 22nd Street North
Building 1900
Wichita, KS 67226
If to Buyer: Maverick Restaurant Corporation
302 N. Rock Road
Suite 200
Wichita, KS 67206
With a copy to: Ms. Jacqueline K. Levings
Attorney at Law
250 N. Rock Road, Suite 250
Wichita, KS 67206
or to such other address as any party hereto may from time to time
designate in writing delivered in a like manner.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
personal representatives, heirs, successors and assigns.
(h) APPLICABLE LAW. This Agreement shall be governed by, and shall be
construed, interpreted and enforced in accordance with, the laws of
the State of Kansas without regard to its conflict of laws principles
to the extent that such principles would require the application of
laws other than the State of Kansas.
(i) CONSENT TO JURISDICTION. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction of the state and federal courts
located in Sedgwick County, Kansas in any and all actions between and
among any of the parties hereto, whether arising hereunder or
otherwise.
(j) ATTORNEYS' FEES. If any legal action is brought for the enforcement
of any of the provisions of this Agreement, the prevailing party shall
be entitled to recover upon final judgment on the merits reasonable
attorneys' fees (including attorneys' fees for any appeal) incurred in
bringing such action.
A-4
IN WITNESS WHEREOF, the parties hereto have placed their hands as of the day and
year first above written.
MAVERICK RESTAURANT CORPORATION
By: ______________________________
Chris F. Hotze
President
"Buyer"
___________________________________
ALAN BUNDY
"Bundy"
A-5
EXHIBIT B
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS:
That in consideration of the sum of One Million Five Hundred Thousand Dollars
($1,500,000) and the transfer of one million (1,000,000) shares of Maverick
Restaurant Corporation, $0.01 par value common stock, the receipt of which is
hereby acknowledged, Homestead West, Inc. and Amagril, Inc. do hereby grant,
sell, transfer and deliver to Maverick Restaurant Corporation, free and clear of
all liens and encumbrances, all equipment, fixtures, smallwares, signs and
inventory, used in the operation of the "Amarillo Grill" restaurants located at
the following addresses:
5730 E. Central 1410 E. 11th Street
Wichita, KS Hutchinson, KS
600 S. Holland 6800 W. 95th Street
Wichita, KS Overland Park, KS
IN WITNESS WHEREOF, Homestead West, Inc. and Amagril, Inc. have executed this
Bill of Sale on the ____ day of _____________, 1996.
HOMESTEAD WEST, INC.
By: ________________________________
Alan Bundy, President
AMAGRIL, INC.
By: ________________________________
Alan Bundy, President
B-1
EXHIBIT C
(DATE)
Maverick Restaurant Corporation
302 N. Rock Road, Suite 200
Wichita, KS 67206
Gentlemen:
This opinion is being submitted to you in connection with the execution and
delivery of an Asset Purchase Agreement (hereinafter, the "Agreement") dated
_______________, 1996 for reference purposes, between Maverick Restaurant
Corporation ("Buyer"), Homestead West, Inc. and Amagril, Inc. (collectively the
"Seller") and Alan Bundy ("Stockholder").
In the undersigned's function as counsel to Seller, I have examined records,
certificates, and other documents certified or otherwise authenticated to my
satisfaction, made inquiries of Seller, and conducted such other examinations as
I deemed appropriate for the opinions expressed in this letter. In connection
with the opinions set forth herein, I have assumed the genuineness of all
signatures on documents examined by me and the conformity to originals of all
copies supplied to me.
Based upon the foregoing, I am of the opinion that:
1. Seller consists of two corporations duly organized, validly existing, and
in good standing under the laws of the State of Kansas. Seller has all
requisite power and authority to own or lease its properties and to carry
on its businesses as they are presently being operated and in the places
where such properties are owned or leased and such businesses are
conducted. Seller is (i) authorized and qualified to do and transact
business and is in good standing, and (ii) entitled to use its name and
assumed names, in all jurisdictions where the nature of the properties
owned or leased by it or the nature of the businesses conducted by it makes
such authorization and entitlement necessary under applicable law.
2. There are no dissolution, liquidation, winding-up, bankruptcy, insolvency,
reorganization, receivership, or any similar proceedings under
consideration by or pending or threatened against Seller.
C-1
3. The execution, delivery, and performance of the Agreement by Seller and the
other agreements referred to in it or contemplated by it (the "Other
Agreements"), are in compliance with the terms and conditions of the
Agreement and the Other Agreements, and consummation of the transactions
contemplated by the Agreement and the Other Agreements do not and will not:
(i) conflict with or violate the articles of incorporation or bylaws of
Seller; (ii) conflict with, violate the provisions of, constitute a default
(or an event that with notice, lapse of time, or both, would become a
default), result in the creation of a lien or encumbrance on any of the
Assets, or create any rights of termination, cancellation, or acceleration
in any person under any contract, mortgage, indenture, agreement, note, or
other instrument or agreement to which Seller is a party or by which Seller
or any of its properties is bound or affected, (iii) result in the loss or
adverse modification of any material license, franchise, permit or other
authorization granted to or otherwise held by Seller, (iv) conflict with,
violate, or require a filing or waiting period under any law applicable to
Seller, or (v) require the consent or approval of any governmental
authority.
4. Seller has full right, capacity, power, and authority to execute and
deliver the Agreement, to execute and deliver all of the Other Agreements
to which it is a party, to perform its obligations under the Agreement and
the Other Agreements, and to consummate the transactions contemplated by
the Agreement and all of the Other Agreements to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, have
been duly authorized by all requisite corporate action by Seller and no
further action or approval is necessary in order to permit Seller to
consummate the transactions contemplated by the Agreement and the Other
Agreements. The Agreement has been duly executed and delivered by Seller
and, assuming due authorization, execution, and delivery by Buyer,
constitutes the legal, valid, and binding obligation of each of them
enforceable in accordance with its terms and conditions, except as such
enforcement may be limited by any applicable bankruptcy, insolvency,
reorganization, or other laws of general application affecting creditors'
rights generally ("Debtor Relief Laws") or by general principles of equity.
The Other Agreements, as appropriate, will have been duly executed and
delivered by Seller on or before the Closing and, when duly executed and
delivered, will constitute the legal, valid, and binding obligations of
Seller, enforceable in accordance with their respective terms and
conditions, except as such enforcement may be limited by Debtor Relief Laws
or general principles of equity.
5. Nothing has come to my attention which would indicate, and I have not been
advised, that the representations and warranties
C-2
of Seller set forth in the Agreement or the Other Agreements contain any
untrue statement of a material fact or omit any material fact necessary to
make the statements made not misleading.
Sincerely,
Counsel For Seller
JKL/jm
C-3
EXHIBIT D
June 17, 1996
Homestead West, Inc.
Amagrill, Inc.
8100 E. 22nd Street North
Building 1900
Wichita, KS 67226
Ladies and Gentlemen:
I have acted as counsel to Maverick Restaurant Corporation, a Kansas corporation
(hereinafter referred to as "Buyer"), in connection with the Asset Purchase
Agreement dated as of June 14, 1996 (the "Asset Purchase Agreement") between
Buyer, Homestead West, Inc. and Amagril, Inc. (hereinafter referred to
collectively as "Seller") and Alan Bundy (hereinafter "Bundy"). This opinion is
furnished to you pursuant to Section 8.5 of the Asset Purchase Agreement. All
capitalized terms used but not defined herein shall have the meaning set forth
in the Asset Purchase Agreement unless the context otherwise requires.
In connection with this opinion, I have reviewed the Asset Purchase Agreement,
the Bills of Sale, and the other documents and instruments executed and/or filed
pursuant to any of the foregoing (collectively the "Transaction Documents"). I
have also reviewed such corporate documents and records of the Buyer and
certificates of public officials as I have deemed necessary or appropriate for
purposes of this opinion. As to various issues of fact, I have relied upon the
factual portions of representations and warranties of the Buyer contained in the
Asset Purchase Agreement and upon statements and certificates of officers of the
Buyer. I have assumed regarding documents executed by parties other than the
Buyer that such documents are valid, binding and enforceable against such
parties. I have also assumed the authenticity of all documents submitted to me
as originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to authentic original documents of all documents
submitted to me as certified, conformed or photostatic copies. For purposes of
the opinions on the good standing of the Buyer, I have relied upon good standing
certificates of recent date.
I am qualified to practice law only in the State of Kansas and I am not an
expert in and express no opinion herein as to the laws or
D-1
jurisdictions other than those of the State of Kansas or the United States.
Subject to and based on the foregoing, and such other matters as I have deemed
relevant, I am of the opinion that:
1. The Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Kansas and has the corporate power
and authority to own its properties and carry on its business as presently
conducted.
2. Each of the Transaction Documents executed by the Buyer has been duly
executed and delivered by the Buyer.
3. The execution, delivery and performance of the Transaction Documents and
the transactions contemplated thereby (i) have been authorized by all
required or necessary corporate and other proceedings or actions, and (ii)
do not contravene any existing provisions of applicable law or the articles
of incorporation or bylaws of the Buyer.
4. To the best of my knowledge, the execution, delivery and performance of the
Transaction Documents and the Transactions contemplated thereby do not
constitute a default under, or an event which with the lapse of time or the
giving of notice, or both, would constitute a default under any agreement,
understanding, instrument, trust, restriction, judgment, order, decree,
permit, license or undertaking binding upon or applicable to any of the
Assets or the Buyer.
5. The execution, delivery and performance of the Transaction Documents by the
Buyer and the enforceability of the Transaction Documents against it does
not require any approval or consent of, or filing or registration with, any
court or governmental authority or any other person, other than approvals,
consents, filings and registrations that have already been obtained by the
Buyer.
6. The Transaction Documents, as executed and delivered, are the valid and
binding obligations of the Buyer, enforceable in accordance with their
terms. The opinions expressed herein are qualified to the extent that the
enforceability of any of such agreements is subject to (i) applicable
bankruptcy, reorganization, insolvency, moratorium and similar federal and
state laws affecting the rights and remedies of creditors generally and
(ii) general principles of equity limiting the availability of equitable
remedies (including but not limited to the remedy of specific performance),
whether considered in a proceeding at law or in equity.
D-2
The opinions expressed herein are for the sole benefit of the addressee hereof,
and this letter may not be delivered or quoted to or relied upon by any other
person or entity without or written consent.
Sincerely,
Jacqueline K. Levings
JKL/jm
D-3
EXHIBIT E
OPTION TO PURCHASE AGREEMENT
THIS OPTION TO PURCHASE AGREEMENT (the "Agreement") is made as of
_______________, 1996, by and between MAVERICK RESTAURANT CORPORATION, a Kansas
corporation ("Buyer") and ALAN BUNDY an individual ("Bundy").
WITNESSETH
WHEREAS, Buyer and Homestead West, Inc., a Kansas corporation, and Amagril,
Inc., a Kansas corporation (collectively the Seller") are parties to an Asset
Purchase Agreement dated June 14, 1996, ("Asset Purchase Agreement") in which
Buyer will purchase certain assets owned by Seller; and
WHEREAS, Bundy is presently the president and the majority stockholder of
Seller; and
WHEREAS, a condition precedent to the closing of the Asset Purchase Agreement is
the execution by Buyer and Bundy of an agreement granting an option to Bundy to
repurchase the assets transferred to Buyer (the "Option").
NOW THEREFORE, in consideration of the mutual covenants and conditions contained
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
1. OPTION TO PURCHASE. Buyer does hereby grant to Bundy the option to
purchase the assets transferred pursuant to the Assets Purchase Agreement
(the "Assets") on the terms and conditions contained herein.
2. EXERCISE PERIOD. The Option shall be exercisable for a ninety (90) day
period commencing with the fourth anniversary date of this Agreement and
ending ninety (90) days thereafter.
3. PRICE. The purchase price for the Assets shall be equal to the purchase
price paid by Seller for the Assets pursuant to the Asset Purchase
Agreement plus all amounts expended by Buyer for capital improvements to
the Assets during the previous four (4) year period. For purposes of this
calculation, the value of the stock transferred to Seller pursuant to the
Asset Purchase Agreement shall be equal to the amount recorded on the books
of Buyer for the purchase of the Assets.
4. EXERCISE OF OPTION. In the event Bundy exercises the Option, Bundy shall
notify Buyer of such prior to the expiration of
the period. Payment to Buyer of the purchase price and transfer of the
Assets from Buyer to Bundy shall occur by the closing of business on the
twentieth (20th) day following receipt of notice by Buyer of the exercise
of the Option. If transfer of the Assets does not occur within such twenty
(20) day period due to the actions of Bundy, the Option shall immediately
terminate.
5. CONDITION PRECEDENT. This Agreement shall be effective as of the closing
of the Asset Purchase Agreement and the closing of the Asset Purchase
Agreement shall be a condition precedent to the obligations of the parties
hereunder.
6. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof
and supersedes all prior negotiations, understandings, agreements,
arrangements and understandings, both oral and written, between the
parties hereto with respect to such subject matter.
(b) AMENDMENT. This Agreement may not be amended or modified in any
respect, except by the mutual written agreement of the parties hereto.
(c) WAIVERS AND REMEDIES. The waiver by any of the parties hereto of any
other party's prompt and complete performance, or breach or violation,
of any provision of this Agreement shall not operate nor be construed
as a waiver of any subsequent breach or violation, and the failure by
any of the parties hereto to exercise any right or remedy which it may
possess hereunder shall not operate nor be construed as a bar to the
exercise of such right or remedy by such party upon the occurrence of
any subsequent breach or violation.
(d) DESCRIPTIVE HEADINGS. Descriptive headings contained herein are for
convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the separate parties hereto in separate
counterparts, each of which shall be deemed to be one and the same
instrument.
(f) NOTICES. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in
regard hereto shall be in writing and shall be deemed to have been
duly given, when delivered by hand or two (2) days after deposited in
the
E-2
United States mail, by registered or certified mail, return receipt requested,
postage prepaid, as follows:
If to Bundy: Alan Bundy
8100 E. 22nd Street North
Building 1900
Wichita, KS 67226
If to Buyer: Maverick Restaurant Corporation
302 N. Rock Road
Suite 200
Wichita, KS 67206
With a copy to: Ms. Jacqueline K. Levings
Attorney at Law
250 N. Rock Road, Suite 250
Wichita, KS 67206
or to such other address as any party hereto may from time to time
designate in writing delivered in a like manner.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
personal representatives, heirs, successors and assigns.
(h) APPLICABLE LAW. This Agreement shall be governed by, and shall be
construed, interpreted and enforced in accordance with, the laws of
the State of Kansas without regard to its conflict of laws principles
to the extent that such principles would require the application of
laws other than the State of Kansas.
(i) CONSENT TO JURISDICTION. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction of the state and federal courts
located in Sedgwick County, Kansas in any and all actions between and
among any of the parties hereto, whether arising hereunder or
otherwise.
(j) ATTORNEYS' FEES. If any legal action is brought for the enforcement
of any of the provisions of this Agreement, the prevailing party shall
be entitled to recover upon final judgment on the merits reasonable
attorneys' fees (including attorneys' fees for any appeal) incurred in
bringing such action.
E-3
IN WITNESS WHEREOF, the parties hereto have placed their hands as of the day and
year first above written.
MAVERICK RESTAURANT CORPORATION
By: ______________________________
Chris F. Hotze
President
"Buyer"
___________________________________
ALAN BUNDY
"Bundy"
E-4