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EXHIBIT 10.99
SALE AND LEASE AGREEMENT
THIS SALE AND LEASE AGREEMENT (this "Agreement") is made as of July ___,
1996, by and among FFCA ACQUISITION CORPORATION, a Delaware corporation
("Buyer"), whose address is 17207 North Perimeter Drive, Scottsdale, Arizona
85255, and the partnerships, corporations, limited liability companies and
other entities described on Schedule 1 attached hereto (individually called
"Seller" and collectively called "Sellers"), whose collective address is 7373
North Scottsdale Road, Scottsdale, Arizona 85253.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms used in
this Agreement shall have the meanings set forth in Section 1. BEP Holdings owns
all of the issued and outstanding capital stock of Franchisor. BEP Holdings, as
seller, and DenAmerica, as buyer, entered into the Stock Purchase Agreement for
the sale and purchase of all of the outstanding capital stock of Franchisor.
Sellers own the Sites and the Other Sites, and Buyer desires to purchase the
Sites and, other than the Vacant Site, lease the same to DenAmerica pursuant to
the Leases. Buyer desires to purchase the Vacant Site and lease the same to
DenAmerica pursuant to the Vacant Site Lease. DenAmerica, as lessee under the
Leases, will, on the Sale and Lease Closing Date, grant to Buyer, as lessor, a
first-priority lien and security interest in and to all of the Equipment owned
by DenAmerica in connection with the operation of a Blackeyed Pea restaurant on
each Site. Borrower will purchase certain personal property and lease the same
to DenAmerica pursuant to the Equipment Lease. Note Guarantors will acquire all
of the issued and outstanding capital stock of Borrower. Buyer has agreed to
make the Loan to Borrower to provide purchase money financing for the personal
property to be leased to DenAmerica pursuant to the Equipment Lease. The Loan
will be evidenced by the Note. Note Guarantors will execute the Note Guaranty to
secure the performance of Borrower's duties and obligations under the Note. Note
Guarantors will also execute the Stock Pledge Agreement for the benefit of Buyer
to secure the performance of the obligations described in the Stock Pledge
Agreement. Buyer will purchase the Sites and make the Loan pursuant to the terms
and conditions of the Sale and Lease Operative Documents and the Loan Operative
Documents. Simultaneously with the execution and delivery of this Agreement by
Sellers, Borrower shall execute and deliver to Buyer the Loan Agreement. The
consummation of the transactions contemplated by this Agreement and by the Loan
Agreement shall occur concurrently.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings
for all purposes of this Agreement:
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"Affiliate" means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
"BEP Holdings" means BEP Holdings, Inc., a Delaware corporation, or its
successor.
"Borrower" means LH LEASING COMPANY, INC., an Arizona corporation, or
its successor.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et
seq., as amended.
"Commitment" means that certain Commitment Letter dated May 2, 1996,
between Buyer and DenAmerica with respect to the transaction described in this
Agreement.
"Counsel" means legal counsel to Sellers and DenAmerica, as selected by
Sellers and DenAmerica, and approved by Buyer, licensed in the state(s) in which
(i) each Site is located, (ii) Sellers and DenAmerica are incorporated or
formed, and (iii) Sellers and DenAmerica maintain their principal places of
business.
"DenAmerica" means DenAmerica Corp., a Georgia corporation, or its
successor.
"Environmental Condition" means any condition with respect to soil,
surface waters, groundwaters, land, stream sediments, surface or subsurface
strata, ambient air and any environmental medium, including, without limitation,
Hazardous Materials, comprising or surrounding the Sites, whether or not yet
discovered, which could or does result in any damage, loss, cost, expense,
claim, demand, order or liability to or against any or all of the Sellers or
Buyer by any third party (including, without limitation, any government entity),
including, without limitation, any condition resulting from the operation of the
respective Seller's business and/or the operation of the business of any other
property owner or operator in the vicinity of the Sites and/or any activity or
operation formerly conducted by any person or entity on or off the Sites.
"Environmental Laws" means all applicable present statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises, agreements and similar items, of
or with any and all governmental agencies, departments, commissions, boards,
bureaus or instrumentalities of the United States, the states in which the Sites
are located and political subdivisions thereof and all applicable judicial and
administrative and regulatory decrees, judgments and orders relating to the
protection of human health or the environment, including, without limitation:
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(i) all requirements, including, without limitation, those
pertaining to reporting, licensing, permitting, investigation and
remediation of emissions, discharges, Releases or Threatened Releases
of Hazardous Materials into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials; and
(ii) all requirements pertaining to the protection of the
health and safety of employees or the public.
"Equipment" means all of the appliances, furniture, fixtures, equipment
and other personal property to be owned as of the Sale and Lease Closing Date by
DenAmerica situated on the Sites and used in connection with the operation of
Black-eyed Pea restaurants on the Sites. As of the date of this Agreement, each
Seller owns the Equipment located on or at the Site owned by such Seller as
shown on Schedule A attached hereto.
"Equipment Lease" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Fee" means an underwriting and processing fee equal to one percent
(1%) of the sum of the Loan Amount and the Purchase Price. DenAmerica paid Buyer
an amount equal to $250,000.00 toward the Fee at the time of DenAmerica's
execution of the Commitment; the balance of the Fee will be paid by Sellers to
Buyer at the Sale and Lease Closing.
"Franchisor" means BLACK-EYED PEA U.S.A., INC., a Texas corporation, or
its successor.
"Hazardous Materials" means (a) any toxic substance or hazardous waste,
substance or related material, or any pollutant or contaminant; (b) radon gas,
asbestos in any form which is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment which contains dielectric fluid
containing levels of polychlorinated biphenyls in excess of federal, state or
local safety guidelines, whichever are more stringent, or any petroleum product;
(c) any substance, gas, material or chemical which is or may be defined as or
included in the definition of "hazardous substances," "toxic substances,"
"hazardous materials," hazardous wastes" or words of similar import under any
federal, state or local statute, law, code or ordinance or under the regulations
adopted or guidelines promulgated pursuant thereto, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. SectionSection 9601 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. SectionSection 1801 et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. SectionSection
6901 et seq.; and the Federal Water Pollution Control Act, as amended, 33 U.S.C.
SectionSection 1251 et seq.; and (d) any other chemical, material, gas or
substance the exposure to or release of which is prohibited, limited or
regulated by any governmental or quasi-governmental entity or authority that
asserts or may assert jurisdiction over the Sites or the operations or activity
at the Sites, or any chemical, material, gas or substance that does pose a
hazard to the health and/or safety of the occupants of the Sites.
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"Lease" or "Leases" means, as the context requires, the lease agreement
substantially in the form attached hereto as Schedule B, executed and delivered
by DenAmerica, as lessee, and Buyer, as lessor, with respect to each Site, other
than the Vacant Site. A Lease shall be executed for each Site, other than the
Vacant Site. Except as otherwise specifically provided in this Agreement,
however, reference to a Lease or the Leases herein shall include reference to
the Vacant Site Lease.
"Loan" shall have the meaning set forth in Section 1 of the Loan
Agreement.
"Loan Agreement" means the Loan Agreement, in the form of Schedule C
attached hereto, to be dated and executed by Borrower and Buyer, as lender, as
of the date hereof relative to the Loan Transaction.
"Loan Amount" shall have the meaning set forth in Section 1 of the Loan
Agreement.
"Loan Closing" shall have the meaning set forth in Section 4 of the
Loan Agreement.
"Loan Closing Date" means the date specified as the closing date in
Section 4 of the Loan Agreement.
"Loan Transaction" means the transaction contemplated by the Loan
Agreement.
"Loan Operative Documents" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Material Adverse Effect" means, with respect to (i) any or all of the
Sellers, a material adverse effect on the business, operations, assets, or
financial condition of any one or all of the Sellers, (ii) any or all of the
Sites, a material adverse effect on the business, operations, assets, financial
or physical condition of any one or all of the Sites, and/or (iii) the
Equipment, a material adverse effect on the use, operation or physical condition
of the Equipment located on or at any one or all of the Sites if such effect
could reasonably be expected to materially impair the ability of DenAmerica, or
a Sublessee, to conduct business activities on or at any one or all of the Sites
with respect to the operation of Black-eyed Pea restaurants (except with respect
to the Vacant Site which will remain vacant and the Steak House Site which is
operated as a steak house restaurant).
"Memorandum of Lease" means a memorandum of lease substantially in the
form attached hereto as Schedule D, executed and delivered by DenAmerica, as
lessee, and Buyer, as lessor, and recorded with respect to each Lease. A
Memorandum of Lease shall be executed for each Lease.
"Non-Foreign Seller Certificate" means the certificate to be delivered
by each Seller on the Sale and Lease Closing Date substantially in the form
attached hereto as Schedule E.
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"Note" shall have the meaning set forth in Section 1 of the Loan
Agreement.
"Note Guarantors" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Note Guaranty" shall have the meaning set forth in Section 1 of the
Loan Agreement.
"Other Agreements" means the Sale and Lease Operative Documents (except
this Agreement), the Equipment Lease and any and all agreements, leases, loan
agreements, documents, assignments, instruments, promissory notes, mortgages,
deeds of trust, and indemnities (other than the remaining Loan Operative
Documents) entered into, now and hereafter, between (or by) (a) DenAmerica or
any Affiliate of DenAmerica, and (or for the benefit of) (b) Buyer or any
Affiliate of Buyer.
"Other Site" or "Other Sites" means, as the context requires, one or
more of the parcel or parcels of real estate, the addresses of which are listed
on Schedule F attached hereto and made a part hereof, together with all rights,
easements, privileges and appurtenances associated therewith and all buildings,
fixtures and other improvements now or hereafter located thereon (whether or not
affixed to such real estate). Each of the Other Sites is owned by the
corresponding Seller identified on Schedule F.
"Permitted Exceptions" means those exceptions to title approved in
writing by Buyer pursuant to Section 11.A.
"Person" or "Persons" means, as the context requires, any individual,
corporation, trust, partnership, limited liability company, unincorporated
organization, governmental authority or any other form of entity.
"Purchase Price" means the amount specified in Section 3.
"Release" means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping into soil, surface waters, groundwaters, land, stream sediments, surface
or subsurface strata, ambient air or any other environmental medium comprising
or surrounding the Sites in such a manner that violates any applicable
Environmental Laws.
"Sale and Lease Closing" shall have the meaning set forth in Section 5.
"Sale and Lease Closing Date" shall have the meaning set forth in
Section 5.
"Sale and Lease Operative Documents" means, collectively, this
Agreement, the Leases, Non-Foreign Seller Certificate(s), each Deed (defined in
Subsection 11.A), UCC-1 Financing Statements, each Memorandum of Lease and all
other documents, instruments, agreements, affidavits, notices, certifications
and estoppels executed (or to be executed before or after the
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Sale and Lease Closing) in connection with the transaction contemplated by this
Agreement (other than the Loan Operative Documents).
"Site" or "Sites" means, as the context requires, one or more of the
parcel or parcels of real estate, the addresses of which are listed on Schedule
A attached hereto and made a part hereof, together with all rights, easements,
privileges and appurtenances associated therewith and all buildings, fixtures
and other improvements now or hereafter located thereon (whether or not affixed
to such real estate). Except as otherwise specifically provided herein,
reference to a Site, each Site or the Sites in this Agreement shall include
reference to the Vacant Site and the Steak House Site. Each Site is owned by the
corresponding Seller as shown on the attached Schedule A.
"Steak House Site" means the Site identified on Schedule A as FFCA No.
8000-4428 located in Knoxville, Tennessee.
"Stock Pledge Agreement" shall have the meaning set forth in Section 1
of the Loan Agreement.
"Stock Purchase Agreement" means that certain Stock Purchase Agreement
dated as of May 31, 1996, between BEP Holdings, as seller, and DenAmerica, as
buyer, for the sale and purchase of all of the issued and outstanding capital
stock of Franchisor.
"Sublease" shall have the meaning set forth in Section 1 of the Lease.
"Sublessee" shall have the meaning set forth in Section 1 of the Lease.
"Threatened Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
or any other environmental medium comprising or surrounding the Sites which may
result from such Release.
"Title Company" means LAWYERS TITLE INSURANCE CORPORATION, 40 East
Mitchell Drive, Suite 100, Phoenix, Arizona 85012.
"Transaction Costs" means all reasonable costs and expenses incurred in
connection with the transaction contemplated by this Agreement including,
without limitation, preparation of the environmental report(s) for each Site
described in Subsection 11.E, review of the condition of title for each Site by
Buyer, title insurance charges and premiums relative to the title insurance
described in Subsection 11.C(i), preparation and review of a survey for each
Site by Buyer as set forth in Subsection 11.D, Uniform Commercial Code search
relative to the UCC Search Parties and each Site as described in Subsection
11.C(ii), Sellers' legal fees and Buyer's outside counsel legal fees, all
escrow, recording and filing fees and charges, stamp taxes, and transfer fees.
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"UCC-1 Financing Statement" or "UCC-1 Financing Statements" means, as
the context requires, the UCC-1 Financing Statements executed by DenAmerica, as
debtor, for the benefit of Buyer, as secured party, in accordance with the terms
of the Leases. One or more UCC-1 Financing Statements will be executed and filed
for each Site with respect to each Lease in the appropriate state, county or
other applicable offices.
"UCC Search Parties" means, collectively, Sellers, DenAmerica and such
other parties as Buyer shall reasonably request.
"Vacant Site" means the parcel of real estate located in Chesapeake,
Virginia, identified on the attached Schedule A as store No. 2100/FFCA No.
8000-4412, owned by the corresponding Seller identified on Schedule A, together
with all rights, easements, privileges and appurtenances associated therewith
and all buildings, fixtures and other improvements now or hereafter located
thereon (whether or not affixed to such real estate).
"Vacant Site Lease" means the lease agreement in the form attached
hereto as Schedule G to be executed and delivered by DenAmerica, as lessee, and
Buyer, as lessor, with respect to the Vacant Site.
2. TRANSACTION. On the terms and subject to the conditions set forth
herein, Sellers shall convey to Buyer title to the Sites that each Seller owns,
Buyer shall purchase the Sites, Buyer shall lease the Sites to DenAmerica
pursuant to the Leases. DenAmerica shall grant to Buyer a perfected
first-priority lien and security interest in the Equipment owned by DenAmerica
located at each Site pursuant to each Lease and the corresponding UCC-1
Financing Statements. The sale and purchase of the Sites pursuant to this
Agreement and the lease of the Sites to DenAmerica pursuant to the Leases,
together with the Loan to be made by Buyer to Borrower in accordance with the
Loan Operative Documents, are not severable and shall be considered a single
integrated transaction.
3. PURCHASE PRICE. The purchase price for all of the Sites (the
"Purchase Price") shall be THIRTY-FIVE MILLION SEVEN HUNDRED FIFTY THOUSAND AND
NO/100 Dollars ($35,750,000.00). The Purchase Price shall be allocated among the
Sites as shown on Schedule A-1 attached hereto and made a part hereof. The
Purchase Price shall be paid at the Sale and Lease Closing in cash or its
equivalent subject to any prorations and adjustments required by this Agreement.
4. TRANSACTION COSTS AND FEE; TERMINATION. Sellers shall be responsible
for payment of all Transaction Costs, except Buyer shall pay its in-house Site
inspection expenses from the Fee. Sellers shall reimburse Buyer for all
Transaction Costs incurred by Buyer in connection with the transaction
contemplated hereunder other than Buyer's in-house Site inspection expenses to
be paid out of the Fee.
The portion of the Fee paid to Buyer at the time of DenAmerica's
execution of the Commitment was deemed fully earned and non-refundable upon
Buyer's receipt thereof,
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provided that if, after completion of Buyer's review and inspection of the
Sites, Buyer does not approve one or more of the Sites and, thereafter, if Buyer
and DenAmerica are unable, after negotiating in good faith, to agree on a
reduction in, and reallocation of, the Purchase Price based upon Buyer's
disapproval of one or more Sites, then, this Agreement, including all of the
obligations, duties and liabilities of the parties hereto, including, without
limitation, Buyer's obligation to make the Loan pursuant to the Loan Agreement,
shall terminate, in which event, Buyer shall refund to DenAmerica the portion of
the Fee paid to Buyer, less Buyer's reasonable out-of-pocket costs and expenses
incurred or paid in connection with the transactions contemplated by this
Agreement and the Loan Agreement, including reasonable attorneys' fees, through
the date of termination of this Agreement and the Loan Agreement, and the
parties hereto shall have no further liability or obligation to each other
hereunder or under the Loan Agreement, provided that after the Sale and Lease
Closing, no termination of this Agreement shall occur pursuant to this Section
4. The balance of the Fee shall be paid at the Sale and Lease Closing, shall be
deemed fully earned upon Buyer's receipt and will be nonrefundable at that time.
In the event the transaction set forth in this Agreement fails to close due to a
breach or default by any or all of the Sellers under this Agreement, Buyer shall
retain the portion of the Fee paid to Buyer at the time of DenAmerica's
execution of the Commitment (without affecting or limiting Buyer's remedies set
forth in this Agreement).
5. SALE AND LEASE CLOSING DATE. The purchase and sale of the Sites
shall be closed (the "Sale and Lease Closing") within 30 days following the
satisfaction of all of the terms and conditions contained herein, but in no
event shall the date of the Sale and Lease Closing be extended beyond July 8,
1996 (the "Sale and Lease Closing Date"), and any such extension shall not be
effective unless approved by Buyer in its reasonable discretion.
6. TITLE COMPANY. Prior to the execution of this Agreement by the
parties hereto, Sellers ordered a title insurance commitment from Title Company
for each Site, along with a Uniform Commercial Code search relative to each Site
and the UCC Search Parties. Prior to the Sale and Lease Closing Date, the
parties hereto shall deposit with Title Company all documents and moneys
necessary to comply with their obligations under this Agreement. Title Company
shall not cause the transaction to close unless and until it has received
written instructions from DenAmerica and Buyer to do so. All real and personal
property and other applicable taxes and assessments and other charges relating
to the Sites which are due and payable on or prior to the Sale and Lease Closing
Date, as well as such taxes and assessments due and payable subsequent to the
Sale and Lease Closing Date but which Title Company requires to be paid at Sale
and Lease Closing as a condition to the issuance of the title insurance policy
described in Subsection 11.C(i), shall be paid by Sellers at or prior to the
Sale and Lease Closing; and all other taxes and assessments shall be paid by
Sellers or DenAmerica, in its capacity as lessee under each Lease, in accordance
with the terms of such Lease. The Sale and Lease Closing documents shall be
dated as of the Sale and Lease Closing Date.
Sellers and Buyer hereby employ Title Company to act as escrow agent in
connection with this transaction. Sellers and Buyer will deliver to Title
Company all documents, pay to Title Company all sums and do or cause to be done
all other things necessary or required by this
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Agreement, in the reasonable judgment of Title Company, to enable Title Company
to comply herewith and to enable any title insurance policy provided for herein
to be issued. Title Company is authorized to pay, from any funds held by it for
Buyer's or Sellers' respective credit all amounts necessary to procure the
delivery of such documents and to pay, on behalf of Buyer and Sellers, all
charges and obligations payable by them, respectively. Sellers will pay all
charges payable by it to Title Company. Title Company is authorized, in the
event any conflicting demand is made upon it concerning these instructions or
the escrow, at its election, to hold any documents and/or funds deposited
hereunder until an action shall be brought in a court of competent jurisdiction
to determine the rights of Sellers and Buyer or to interplead such documents
and/or funds in an action brought in any such court. Deposit by Title Company of
such documents and funds, after deducting therefrom its reasonable charges and
its expenses and attorneys' fees incurred in connection with any such court
action, shall relieve Title Company of all further liability and responsibility
for such documents and funds. Title Company's receipt of this Agreement and
opening of an escrow pursuant to this Agreement shall be deemed to constitute
conclusive evidence of Title Company's agreement to be bound by the terms and
conditions of this Agreement pertaining to Title Company. Disbursement of any
funds shall be made by wire transfer, as directed by the respective Seller and
Buyer. Title Company shall be under no obligation to disburse any funds
represented by check or draft, and no check or draft shall be payment to Title
Company in compliance with any of the requirements hereof, until it is advised
by the bank in which such check or draft is deposited that such check or draft
has been honored. Title Company is authorized to act upon any statement
furnished by the holder or payee, or a collection agent for the holder or payee,
of any lien on or charge or assessment in connection with the Sites, concerning
the amount of such charge or assessment or the amount secured by such lien
without liability or responsibility for the accuracy of such statement. The
employment of Title Company as escrow agent shall not affect any rights of
subrogation under the terms of any title insurance policy issued pursuant to the
provisions thereof.
7. REPRESENTATIONS AND WARRANTIES OF BUYER. The representations and
warranties of Buyer contained in this Section are being made to induce Sellers
to enter into this Agreement and consummate the transactions contemplated
herein, and Sellers have relied upon such representations and warranties. Buyer
represents and warrants to Sellers as follows:
A. Organization of Buyer. Buyer has been duly incorporated, is
validly existing and has taken all necessary corporate action to
authorize the execution, delivery and performance by Buyer of this
Agreement.
B. Authority of Buyer. The person who has executed this
Agreement on behalf of Buyer is duly authorized so to do.
C. Enforceability. Upon execution by Buyer, the Sale and Lease
Operative Documents to which Buyer is a party shall constitute the
legal, valid and binding obligation of Buyer, enforceable against Buyer
in accordance with their terms.
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D. Good Standing of Buyer. Buyer is in good standing under the
laws of its state of incorporation.
All representations and warranties of Buyer made in this Agreement
shall be and will remain true and complete as of the Sale and Lease Closing Date
as if made and restated in full as of such date.
8. REPRESENTATIONS AND WARRANTIES OF SELLERS. The representations and
warranties of Seller contained in this Section are being made to induce Buyer to
enter into this Agreement and consummate the transactions contemplated herein,
and Buyer has relied upon such representations and warranties. For purposes of
this Section 8, each Seller shall be deemed to have made the following
representations and warranties with respect to itself and with respect to all of
the Sites and all of the Equipment that each respective Seller owns, provided
that Franchisor shall be deemed also to have made the following representations
and warranties with respect to all of the Sellers (and DenAmerica, to the extent
applicable to DenAmerica) and with respect to all of the Sites and all of the
Equipment. Each Seller, as applicable, represents and warrants to Buyer as
follows:
A. Information and Financial Statements. Sellers have
delivered to Buyer financial statements (either audited financial
statements or, if any Seller does not have audited financial
statements, certified financial statements) and certain other
information concerning themselves, which financial statements and other
information are true, correct and complete in all material respects;
and no material adverse change has occurred with respect to any such
financial statements and other information provided to Buyer since the
date such financial statements and other information were prepared or
delivered to Buyer. Sellers understand that Buyer is relying upon such
financial statements and information and Sellers represent that such
reliance is reasonable. All such financial statements were prepared in
accordance with generally accepted accounting principles consistently
applied and accurately reflect, as of the date of this Agreement and
the Sale and Lease Closing Date, the financial condition of each
individual, partnership or entity to which they pertain.
B. Organization and Authority of Sellers. (i) Each Seller is
duly organized or formed, validly existing and in good standing under
the laws of each respective Seller's state of incorporation or
formation, and is qualified as a foreign corporation, partnership or
limited liability company, as the case may be, to do business in any
jurisdiction where any Site owned by such Seller is located and in any
other jurisdiction where such qualification is required, where the
failure to so qualify might reasonably be expected to result in a
Material Adverse Effect.
(ii) All necessary corporate, partnership or limited liability
company action, as the case may be, has been taken by each Seller to
authorize the execution, delivery and performance of all of the Sale
and Lease Operative Documents to which each is a party.
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(iii) The persons who have executed or will execute the Sale
and Lease Operative Documents on behalf of each Seller are duly
authorized so to do.
C. Enforceability of Documents. Upon execution by Sellers, the
Sale and Lease Operative Documents to which each Seller is a party
shall constitute the legal, valid and binding obligations of Sellers,
enforceable against Sellers in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally, and general principles of equity.
D. Litigation. Except as set forth on Schedule H attached
hereto, there are no suits, actions, proceedings or investigations
pending or, to the best knowledge of each Seller, threatened against or
involving any Seller or any of the Sites or Equipment before any court,
arbitrator, or administrative or governmental body which, if adversely
determined, might reasonably be expected to result in any Material
Adverse Effect. None of the matters, actions, demands or claims shown
on Schedule H, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect.
E. Absence of Breaches or Defaults. None of the Sellers is in
default, and the authorization, execution, delivery and performance of
the Sale and Lease Operative Documents will not result in any breach or
default under any other document, instrument or agreement to which any
Seller is a party or by which any Seller or any of the Sites or
Equipment is subject or bound, where such breach or default might
reasonably be expected to result in a Material Adverse Effect. The
authorization, execution, delivery and consummation of the Sale and
Lease Operative Documents to which each Seller is a party will not
violate any applicable law, statute, regulation, rule, ordinance, code,
rule or order, where such violation might reasonably be expected to
result in a Material Adverse Effect.
F. Utilities. As of the Sale and Lease Closing Date, each Site
will be served by public utilities which are adequate for the current
use of the Black-eyed Pea restaurant located on such Site and all
utility connection fees and use charges will have been paid when due.
G. Intended Use and Zoning; Compliance With Laws. DenAmerica
intends to sublease each Site to a Sublessee pursuant to a Sublease.
Sellers shall cause DenAmerica to occupy and use (or shall cause
DenAmerica to cause Sublessee to occupy and use) each of the Sites,
other than the Vacant Site and the Steak House Site, solely for the
operation of a Black-eyed Pea restaurant in accordance with the
standards of operations then in effect which are imposed by Franchisor
on its franchisees on a systemwide basis, and related ingress, egress
and parking, and for no other purposes. DenAmerica intends to sublease
the Steak House Site to Sublessee pursuant to the Sublease. Sellers
shall cause DenAmerica to occupy and use (or shall cause DenAmerica to
cause Sublessee to occupy and use) the Steak House Site solely for the
operation of
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a steak house restaurant in accordance with a standard of operations
that is customary and reasonable, and related ingress, egress and
parking, and for no other purposes. DenAmerica does not intend to use
the Vacant Site for any business purpose, and DenAmerica agrees not to
conduct business activities on the Vacant Site without Buyer's prior
written consent, which consent shall not be unreasonably withheld,
provided that DenAmerica agrees to maintain the Vacant Site in
accordance with the terms of the Vacant Site Lease. Such intended use
or uses, as the case may be, will not violate any zoning or other
governmental requirement applicable to the Sites. The Sites, other than
the Vacant Site and the Steak House Site, are suitable for Black-eyed
Pea restaurants in accordance with the standards of selection imposed
by Franchisor on its franchisees on a system-wide basis. The Steak
House Site is suitable for use as a steak house restaurant. The Sites
comply in all material respects with all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders and
approvals of any governmental agencies, departments, commissions,
bureaus, board or instrumentalities of the United States, the state in
which the Sites are located and all political subdivisions thereof,
including, without limitation, all health, building, fire, safety and
other codes, ordinances and requirements, all applicable standards of
the National Board of Fire Underwriters and the National Fire
Protective Association and the Americans With Disabilities Act of 1990,
where such failure to so comply might reasonably be expected to result
in a Material Adverse Effect.
H. Area Development; Wetlands. None of the Sellers has
received notice of the commencement of any condemnation or eminent
domain proceedings affecting any of the Sites and, to the best of each
Seller's knowledge, no such proceedings are contemplated. To the best
of each Seller's knowledge, the area where each Site is located has not
been declared blighted by any governmental authority. None of the Sites
is designated by any applicable federal, state and/or local
governmental authority as wetlands.
I. Licenses and Permits; Access. On or prior to the Sale and
Lease Closing Date, Sellers shall have obtained, or shall have caused
DenAmerica to obtain, all required licenses and permits, both
governmental and private, to use and operate the Sites and Equipment in
the intended manner, where the failure to so obtain such licenses and
permits might reasonably be expected to result in a Material Adverse
Effect. There are adequate rights of access to public roads and ways
available to each of the Sites to permit utilization of each Site for
its intended purpose and all such public roads and ways have been
completed and dedicated to public use.
J. Condition of the Sites. As of the Sale and Lease Closing
Date, each Site, other than the Vacant Site, including the Equipment
located thereon, will be of good workmanship and materials, fully
equipped and operational, other than the Vacant Site which may not be
fully operational, in good condition and repair, normal wear and tear
excepted, free from material structural defects, reasonably clean,
orderly and sanitary, safe, well-lit, landscaped, decorated and
well-maintained.
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K. Environmental. Based on Sellers' review of the
environmental reports described in Section 11.E, Sellers are familiar
with the present use of each of their respective Sites. Except as to
the matters set forth in the environmental reports described in Section
11.E, and to the best of each Seller's knowledge (i) no Hazardous
Materials have been used, handled, manufactured, generated, produced,
stored, treated, processed, transferred or disposed of at or on any of
the Sites, except in compliance with all applicable Environmental Laws,
and no Release or Threatened Release has occurred at or on any of the
Sites; (ii) the activities, operations and business undertaken on, at
or about each Site, including, but not limited to, any past or ongoing
alterations or improvements at such Site, are and have been at all
times, in compliance with all Environmental Laws; (iii) no further
action is required to remedy any Environmental Condition or violation
of, or to be in material compliance with, any Environmental Laws, and
no lien has been imposed on any of the Sites in any federal, state or
local governmental or quasi-governmental entity in connection with any
Environmental Condition, the violation or threatened violation of any
Environmental Laws or the presence of any Hazardous Materials on or off
any of the Sites.
There is no pending or threatened litigation or proceeding
before any court, administrative agency or governmental body in which
any person or entity alleges the violation or threatened violation of
any Environmental Laws or the presence, Release, Threatened Release on
or at any Site of any Hazardous Materials, and no Seller has any
knowledge of any facts which would give rise to any such action, nor
has any Seller (a) received any notice (and no Seller has any actual
knowledge) that any governmental or quasi-governmental authority or any
employee or agent thereof has determined or requires an investigation
to determine that there has been a violation of any Environmental Laws
at, on or in connection with any Site or that there exists a presence,
Release, Threatened Release of any Hazardous Materials on or at any
Site in violation of any applicable Environmental Laws, or the use,
handling, manufacturing, generation, production, storage, treatment,
processing, transportation or disposal of any Hazardous Materials at or
on any Site; (b) received any notice under the citizen suit provision
of any Environmental Law in connection with any Site or any facilities,
operations or activities conducted thereon, or any business conducted
in connection therewith; or (c) received any request for inspection,
request for information, notice, demand, administrative inquiry or any
formal or informal complaint or claim with respect to or in connection
with the violation or threatened violation of any Environmental Laws or
existence of Hazardous Materials relating to any Site or any
facilities, operations or activities conducted thereon or any business
conducted in connection therewith.
L. Title to the Sites. Title to each of the Sites is vested in
each respective Seller as shown on Schedule A. On the Sale and Lease
Closing Date, each Seller will convey to Buyer title to all of the
Sites owned by such Seller, free and clear of all liens, encumbrances,
charges and security interests of any nature whatsoever, except the
Permitted Exceptions.
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M. No Other Agreements and Options. Neither Sellers nor any of
the Sites are subject to any obligation or agreement, including, but
not limited to, any right of first refusal, option to purchase or lease
granted to a third party, which could or would prevent any Seller from
completing, or impair any Seller's ability to complete, the sale of the
Sites under this Agreement or which would bind Buyer, other than the
Permitted Exceptions, subsequent to consummation of the transaction
contemplated in this Agreement.
N. No Mechanics' Liens. There are no mechanics' liens, or
rights to claim a mechanics' lien in favor of any materialman, laborer,
or any other person or entity in connection with labor or materials
furnished to or performed on any portion of any of the Sites, and, to
the best of each Seller's knowledge, there are no delinquent
outstanding accounts payable which could result in the filing or
assertion of a mechanic's or materialman's lien relative to work
performed, materials furnished or services provided to, or for the
benefit of, any or all of the Sites; no work has been performed or is
in progress nor have materials been supplied to any of the Sites or
agreements entered into for work to be performed or materials to be
supplied to any of the Sites prior to the date hereof or prior to the
Sale and Lease Closing Date, which will not have been fully paid for on
or before the Sale and Lease Closing Date or which might provide the
basis for the filing of such liens against any Site or any portion
thereof; Sellers shall be responsible for any and all claims for
mechanics' liens and accounts payable that have arisen or may
subsequently arise due to agreements entered into for and/or any work
performed on, or materials supplied to any or all of the Sites prior to
the Sale and Lease Closing Date; and Sellers shall, and do hereby agree
to, defend, indemnify and forever hold Buyer harmless from and against
any and all such mechanics' lien claims, accounts payable or other
commitments relating to any and all of the Sites.
O. No Reliance. Sellers acknowledge that Buyer did not prepare
or assist in the preparation of any of the projected financial figures
used by Sellers in analyzing the economic viability and feasibility of
the transaction contemplated by this Agreement, and that Sellers have
not relied on any report or statement by Buyer in entering into this
Agreement. Furthermore, Sellers acknowledge that they have not relied
upon, nor may any Seller hereafter rely upon, the analysis undertaken
by Buyer in determining the Purchase Price, and such analysis will not
be made available to Sellers.
P. Net Worth. As of the Sale and Lease Closing Date, Sellers
shall cause DenAmerica to have a net worth of not less than
$15,000,000.00. For purposes of this Subsection, net worth shall mean
the book value of DenAmerica's shareholder's equity, as determined in
accordance with generally accepted accounting principles, consistently
applied from period to period.
Q. Approvals and Consents. As of the Sale and Lease Closing,
and except as otherwise shown on Schedule I attached hereto, Sellers
shall have obtained all
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consents, approvals and authorizations required to be obtained in
connection with the consummation of the transaction contemplated by
this Agreement.
R. Title to the Equipment; First-Priority Security Interest.
Title to the Equipment used in connection with a Black-eyed Pea
restaurant located on each of the Sites is vested in the corresponding
Seller as shown on Schedule A. On the Sale and Lease Closing Date, each
Seller will transfer and convey to DenAmerica title to all of the
Equipment owned by such Seller, free and clear of all liens, including
landlord, possessory and contractual liens, encumbrances, charges and
security interests of any nature whatsoever, except for the landlord's
lien and first-priority security interest granted in favor of Buyer
pursuant to the Leases and the security interest granted in favor of
Banque Paribas, as agent. The security interest in favor of Banque
Paribas, as agent, will, on the Sale and Lease Closing Date, be junior
and subordinate to Buyer's landlord's lien and security interest
granted pursuant to the Leases. From and after the Sale and Lease
Closing Date, Buyer shall have a landlord's lien and perfected
first-priority security interest on the Equipment located at each Site
pursuant to the Lease and UCC-1 Financing Statements that correspond to
such Site which landlord's lien and security interest will be senior
and superior to any lien or security interest in favor of Banque
Paribas, as agent.
S. Franchise Rights. Franchisor owns all of the rights and
privileges relative to the franchise rights associated with Black-eyed
Pea restaurants, including, without limitation, any and all trade
secrets, tradenames and trademarks relative thereto (collectively, the
"Franchise Rights"), free and clear of any and all rights, liens,
interests, claims, and encumbrances, except for the rights and
privileges granted to Franchisor's approved franchisees. As of the Sale
and Lease Closing Date, DenAmerica or Sublessee will have all of the
Franchise Rights required to operate the Sites as Blackeyed Pea
restaurants.
T. Other Sites. On and after the Sale and Lease Closing Date,
each of the Sellers identified on Schedule F shall own the Other Site
to which each such Seller's ownership corresponds, free of any monetary
lien, interest or encumbrance.
All representations and warranties of Sellers made in this Agreement shall be
and will remain true and complete as of the Sale and Lease Closing Date as if
made and restated in full as of such date and shall survive the Sale and Lease
Closing.
9. AGREEMENT OF SELLERS AND DENAMERICA. A. Inspection. Until the Sale
and Lease Closing Date, Sellers shall, at all reasonable times, (i) provide
Buyer and Buyer's officers, employees, agents, advisors, attorneys, accountants,
architects, and engineers with access to the Sites, all drawings, plans, and
specifications for each Site in possession of respective Seller, all engineering
reports relating to each Site in the possession of each such Seller, the files
and correspondence relating to each Site, and the financial books and records,
including lists of delinquencies, relating to the ownership, operation, and
maintenance of each Site, and (ii) allow
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such persons to make such inspections, tests, copies, and verifications as Buyer
reasonably considers necessary.
B. Execution of the Loan Agreement. Simultaneously with the execution
and delivery of this Agreement by Sellers, Borrower shall execute and deliver to
Buyer the Loan Agreement.
C. Other Sites; No Transfer or Encumbrance. Until all of the
obligations evidenced by the Note are paid and satisfied in full, each Seller
who owns any of the Other Sites agrees not to sell, convey, transfer, encumber,
hypothecate, finance or refinance any or all of the Other Sites, without the
prior written consent of Buyer.
D. Approvals, Consents and Authorizations. After the Sale and Lease
Closing Date, Sellers, and any successor of Sellers, shall, to the extent not
obtained prior to the Sale and Lease Closing, use good faith best efforts to
obtain all of the consents, approvals and authorizations required to have been
obtained in connection with the consummation of the transaction contemplated by
this Agreement, including, without limitation, the consents and approvals shown
on Schedule I, and shall deliver copies of all such consents, approvals and
authorizations to Buyer upon obtaining the same.
E. Agreement of DenAmerica. At or prior to the Sale and Lease Closing
Date, DenAmerica shall execute and deliver to Title Company or Buyer, as may be
appropriate, the Leases, each Memorandum of Lease, the UCC-1 Financing
Statements and such other documents, instruments and certificates, as Buyer or
Title Company may reasonably require in form reasonably acceptable to Buyer or
Title Company, respectively, and shall pay such sums as are reasonably required
by the Sale and Lease Operative Documents, to which DenAmerica is a party, to be
paid by DenAmerica.
10. TRANSACTION CHARACTERIZATION. A. It is the intent of the parties
that the conveyance of the Sites to Buyer be absolute conveyances in effect as
well as form, and the instruments of conveyance to be delivered at Sale and
Lease Closing are not intended to serve or operate as mortgages, equitable
mortgages, deeds of trust, security agreements, trust conveyance or financing or
trust arrangements of any kind, nor as preferences or fraudulent conveyances
against any creditors of BEP Holdings or Sellers. After the execution and
delivery of the special warranty deeds described in Section 11, neither BEP
Holdings nor any of the Sellers will have any legal or equitable interest or any
other claim or interest in the Sites. Furthermore, the parties intend for the
Leases to be true leases and not a transaction creating financing leases,
capital leases, equitable mortgages, mortgages, deeds of trust, security
interests or other financing arrangements, and the economic realities of the
Leases are those of true leases. Notwithstanding the existence of the Leases,
neither party shall contest the validity, enforceability or characterization of
the sale and purchase of any of the Sites by Buyer pursuant to this Agreement as
an absolute conveyance, and both parties shall support the intent expressed
herein that the purchase of the Sites by Buyer pursuant to this Agreement
provides for an absolute conveyance and does not create a joint venture,
partnership, equitable mortgage, trust,
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financing device or arrangement, security interest or the like, if, and to the
extent that, any challenge occurs.
B. This Agreement is a contract to extend a financial accommodation (as
such term is used in the Code) for the benefit of Sellers and may not be assumed
over the objection of Buyer in the event any Seller becomes a debtor or debtor
in possession in any bankruptcy proceeding. The financial accommodation made
through this Agreement is Buyer's acquisition of the Sites for the purpose of
leasing such Sites to DenAmerica pursuant to true leases.
11. CONDITIONS OF SALE AND LEASE CLOSING. The obligation of Buyer to
consummate the transaction contemplated by this Agreement is subject to the
fulfillment or waiver of each of the following conditions:
A. Title; Third-Party Beneficiary. Sellers shall convey to
Buyer title to all of the Sites by special warranty deeds (individually
the "Deed" or collectively the "Deeds"), free of all liens,
encumbrances, restrictions, encroachments and easements, except as
otherwise specifically agreed to in writing by Buyer ("Permitted
Exceptions"). Sellers or DenAmerica shall cause BEP Holdings to agree,
in form and substance reasonably acceptable to Buyer, that Buyer shall
have the right to bring an action against BEP Holdings for any breach
of the representations and warranties set forth in subsections 4(e),
(i), (k), (n) and (q) of the Stock Purchase Agreement that pertain to
the Sites and the Equipment, and that Buyer shall be an intended
third-party beneficiary of the Stock Purchase Agreement for such
purpose.
B. Condition of the Sites. Buyer shall have inspected and
approved each of the Sites, and each such Site shall be in good
condition and repair, normal wear and tear excepted, of good
workmanship and materials, fully equipped and operational (other than
the Vacant Site which may not be fully operational), clean, orderly,
sanitary, safe, well-lit, landscaped, decorated and with a suitable
layout, physical plant, traffic pattern and location all as determined
by Buyer in its reasonable discretion.
C. Evidence of Title. (i) Buyer shall have received a
preliminary title report and irrevocable commitment to insure title to
the Sites by means of an ALTA extended coverage policy of title
insurance (or its equivalent, in the event such form is not issued in
the jurisdiction where the Site or Sites are located) for each Site
issued by Title Company showing good and marketable title in each
respective Seller, based upon the ownership of the Sites as shown on
Schedule A, committing to insure Buyer's fee simple ownership in each
Site, subject only to Permitted Exceptions and containing the following
title endorsements as such may be available under the laws of the
states in which the Sites are located: contiguity, if applicable,
access, survey, tax parcel, owner's comprehensive 100, mechanic's lien,
surface, if applicable, and such additional title endorsements as Buyer
may reasonably require.
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(ii) Buyer shall have received the results of the
Uniform Commercial Code search for each Site and the UCC Search Parties
showing title to all of the Equipment located at each Site is vested in
the Seller that owns such Site, based upon the ownership of the Sites
shown on Schedule A, free and clear of any and all liens, encumbrances
and interests. On the Sale and Lease Closing Date Sellers shall
transfer to DenAmerica title to all of the Equipment situated on the
Sites, free and clear of any and all liens, encumbrances and interests,
except the landlord's lien and first-priority security interest in
favor of Buyer granted pursuant to the Leases and the security interest
in favor of Banque Paribas, as agent, which security interest shall be
junior and subordinate to Buyer's landlord's lien and first-priority
security interest granted pursuant to the Leases.
D. Survey. Buyer shall have received a current ALTA survey of
each Site, the form and substance of which shall be reasonably
satisfactory to Buyer in its reasonable discretion.
E. Environmental. Buyer shall have received a Phase I
environmental report with respect to each Site (and a Phase II
environmental report, if necessary, as determined by Buyer in its sole
discretion), the form, substance and conclusions of which shall be
satisfactory to Buyer in its sole discretion.
F. Compliance With Representations, Warranties and Covenants;
Certification. (i) All obligations of Sellers under this Agreement
shall have been performed and complied with in all material respects,
and no event shall have occurred or condition shall exist which, would
upon the Sale and Lease Closing Date, or, upon the giving of notice
and/or passage of time, constitute a breach or default hereunder or
under any or all of the Sale and Lease Operative Documents and no event
shall have occurred or condition shall exist or information shall have
been disclosed by Sellers or discovered by Buyer which has had or would
have a material adverse effect on any of the Sites, the Equipment if
such effect could reasonably be expected to materially impair the
ability of DenAmerica or a Sublessee to conduct business activities on
the Sites relative to the operation of Black-eyed Pea restaurants (or a
steak house restaurant on the Steak House Site), Sellers or Buyer's
willingness to consummate the transaction contemplated by this
Agreement, as determined by Buyer in its reasonable discretion.
(ii) At Buyer's request, Sellers shall have delivered to Buyer
a certificate dated as of the Sale and Lease Closing Date certifying
that (a) all representations and warranties of Sellers under this
Agreement are true, correct and complete as of such date in all
material respects, (b) Sellers have performed all of their obligations
under this Agreement in all material respects, and (c) all documents
and information delivered to Buyer by Sellers under this Agreement,
including the financial statements, are true, correct and complete as
of such date in all material respects, and that there have been no
amendments to such documents or material changes to such information
not disclosed in writing to Buyer.
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G. Proof of Insurance. Sellers shall have caused DenAmerica to
deliver to Buyer copies of insurance policies, showing that all
insurance required by each Lease and providing coverage and limits
reasonably satisfactory to Buyer are in full force and effect.
H. Opinion of Counsel to Sellers. Sellers shall have caused
Counsel to prepare and deliver to Buyer an opinion substantially in the
form attached hereto as Schedule J-1 pertaining to general corporate
matters relative to Sellers and DenAmerica, an opinion substantially in
the form of Schedule J-2 attached hereto relative to the Sites and the
laws of the states in which the Sites are located, and such other
opinions as Buyer shall reasonably request.
I. Sale and Lease Closing Documents. At or prior to the Sale
and Lease Closing Date, Buyer, DenAmerica and/or Sellers, as may be
appropriate, shall execute and deliver or cause to be executed and
delivered to Title Company, DenAmerica, Sellers or Buyer, as may be
appropriate, all documents required to be delivered by this Agreement,
and such other documents, payments, instruments and certificates, as
Buyer may reasonably require in form reasonably acceptable to Buyer,
including, without limitation, the following:
(i) Deed for each Site;
(ii) Lease for each Site;
(iii) Memorandum of Lease for each Site;
(iv) Proof of insurance under each Lease;
(v) Opinion(s) of Counsel;
(vi) Certificate of Sellers as to Representations and
Warranties, if requested by Buyer;
(vii) Non-Foreign Seller Certificates;
(viii) UCC-1 Financing Statements relative to the
Leases; and
(ix) Addition of Buyer as third-party beneficiary to the
Stock Purchase Agreement relative to
representations and warranties pertaining to the
Sites and the Equipment.
J. Loan Transaction. The Loan Transaction shall have closed
simultaneously with the Sale and Lease Closing.
K. Approvals relative to Acquisition of Black-eyed Pea
Restaurant Chain. Buyer shall have approved (which approval shall not
be unreasonably withheld) (i) the structure of the acquisition by
DenAmerica of the Black-eyed Pea restaurant chain pursuant to the Stock
Purchase Agreement, (ii) the 1995 year-end audited financial statements
for Denwest Restaurant Corp., a Delaware corporation, (iii)
DenAmerica's proposed balance sheet as of the date of DenAmerica's
acquisition of the Black-eyed Pea restaurant chain, (iv) DenAmerica's
five-year pro forma balance sheet and income statement, and (v) any and
all of the properties in connection with DenAmerica's
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acquisition of the Black-eyed Pea restaurant chain that DenAmerica
intends to close and not operate, and the properties that DenAmerica
intends to convert to uses other than as Black-eyed Pea restaurants.
L. Net Worth Financial Statements. Sellers shall have caused
DenAmerica to deliver to Buyer such financial statements, information
and records pertaining to DenAmerica as are reasonably necessary to
show that DenAmerica has achieved the net worth described in Subsection
8.P.
Upon fulfillment or waiver of all of the above conditions, Buyer shall deposit
funds necessary to close this transaction with the Title Company and this
transaction shall close in accordance with the terms and conditions of this
Agreement.
12. DEFAULT AND REMEDIES. A. Each of the following shall be deemed a
breach of this Agreement and a default by Sellers:
(i) If any representation or warranty of any Seller herein was
false in any material respect when made or becomes false in any
material respect prior to the Sale and Lease Closing Date;
(ii) If any Seller fails to keep or perform any of the terms
or provisions of this Agreement or if any condition precedent is not
satisfied by any Seller at or prior to the Sale and Lease Closing Date
or if DenAmerica fails to keep or perform any of its duties or
obligations under subsection 9.E;
(iii) If any Seller or DenAmerica is or becomes insolvent
within the meaning of the Code, files or notifies Buyer that it intends
to file a petition under the Code, initiates a proceeding under any
similar law or statute relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts (collectively, an
"Action"), becomes the subject of either a petition under the Code or
an Action, or is not generally paying its debts as the same become due;
or
(iv) If any event occurs or condition exists which does or
would upon or following the Sale and Lease Closing Date constitute a
breach or default under any or all of the Other Agreements.
B. In the event of any breach or default, Buyer shall be entitled to
exercise, at its option, concurrently, successively or in any combination, all
remedies available at law or in equity, including without limitation any one or
more of the following:
(i) To terminate this Agreement by giving written notice to
Sellers in which case neither party shall have any further obligation
or liability, except such liabilities as Sellers may have for such
breach or default;
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(ii) To bring an action for monetary damages against any or
all of the Sellers;
(iii) To bring an action to require any or all of the Sellers
specifically to perform their obligations hereunder;
(iv) To bring an action for specific performance to require
DenAmerica to perform its obligations under Subsection 9.E and, in such
event, to recover from DenAmerica any or all expenses, including
reasonable attorneys' fees, paid or incurred by Buyer in connection
with such action; and/or
(v) To recover from any or all of the Sellers all expenses,
including reasonable attorneys' fees, paid or incurred by Buyer as a
result of any breach or default by Sellers.
13. ASSIGNMENTS. A. Buyer may assign in whole or in part its rights
under this Agreement.
B. None of the Sellers shall, prior to the Sale and Lease Closing Date,
without the prior written consent of Buyer, which consent may be withheld in
Buyer's sole discretion, sell, assign, transfer, mortgage, convey, encumber or
grant any easements or other rights or interests of any kind in any of the
Sites, any of Sellers' rights under this Agreement or any interest in any of the
Sellers, whether voluntarily, involuntarily or by operation of law or otherwise,
including, without limitation, by merger, consolidation, dissolution or, a
transfer (by one or more transactions) of a majority of the voting stock of any
Seller or of a majority of the partnership interests in any Seller, regardless
of whether the transfer is made by one or more transactions or whether one or
more persons hold the controlling interest prior or subsequent to the transfer.
Sellers shall not permit DenAmerica, prior to the Sale and Lease Closing Date,
to assign, transfer, pledge or encumber any of DenAmerica's rights under this
Agreement or under any of the Sale and Lease Operative Documents without the
prior written consent of Buyer, which consent may be withheld in Buyer's sole
discretion.
14. INDEMNITY. A. Except for actions caused by the gross negligence or
wilful misconduct of the Indemnified Parties (as defined below), and excluding
Environmental Conditions that arise after the Sale and Lease Closing Date, all
of the Sellers agree to indemnify, protect, hold harmless and defend (with legal
counsel reasonably acceptable to Buyer) Buyer and its directors, officers,
shareholders, employees, successors, assigns, agents, as applicable
(collectively, the "Indemnified Parties"), from and against any and all losses,
costs, claims, liabilities, damages and expenses, including, without limitation,
Buyer's reasonable attorneys' fees arising as the result of an Environmental
Condition and/or a breach of any of the representations, warranties, covenants,
agreements or obligations of any of the Sellers set forth in this Agreement.
Without limiting the generality of the foregoing, such indemnity shall include,
without limitation, any damages incurred with respect to any engineering,
governmental inspection and reasonable attorneys' fees and expenses that the
Indemnified Parties may incur by reason of any Environmental Condition and/or
any representation or warranty set forth in Section 8.K being false, or by
reason of any investigation or claim of any governmental agency
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in connection therewith. The limitations, exceptions and exclusions set forth
hereinabove shall not affect, diminish, limit or impair the duties, obligations
and liabilities of Sellers or DenAmerica under the Leases or under any of the
other Sale and Lease Operative Documents.
B. Sellers agree to indemnify, protect, hold harmless and
defend (with legal counsel reasonably acceptable to Buyer) Buyer and the
Indemnified Parties from and against any and all losses, costs, claims,
liabilities, damages and expenses, including, without limitation, Buyer's
reasonable attorneys' fees arising as the result of the failure or inability of
Sellers to obtain all of the consents, approvals and authorizations required to
have been obtained in connection with the consummation of the transaction
contemplated by this Agreement, including, without limitation, the approvals,
consents and authorizations shown on Schedule I attached hereto.
15. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other
instruments required or permitted to be given by either party pursuant
to this Agreement shall be in writing and given by (i) hand delivery,
(ii) facsimile, (iii) express overnight delivery service or (iv)
certified or registered mail, return receipt requested, and shall be
deemed to have been delivered upon (a) receipt, if hand delivered, (b)
transmission, if delivered by facsimile with electronic confirmation,
(c) the next business day, if delivered by express overnight delivery
service, or (d) the third business day following the day of deposit of
such notice with the United States Postal Service, if sent by certified
or registered mail, return receipt requested. Notices shall be provided
to the parties and addresses (or facsimile numbers, as applicable)
specified below:
If to Sellers: c\o Mr. William J. Howard, Vice President
DenAmerica Corp.
7373 North Scottsdale Road
Scottsdale, Arizona 85253
Telephone: (602) 483-7055
Telecopy: (602) 483-9592
With a copy to: Jeffrey H. Verbin, Esq.
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Telephone: (602) 263-2728
Telecopy: (602) 263-2900
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If to Buyer: Stephen Y. Schwanz, Vice President
Corporate Finance
FFCA Acquisition Corporation
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2225
With a copy to: Dennis L. Ruben, Esq.
Senior Vice President and General Counsel
FFCA Acquisition Corporation
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2226
B. Risk of Loss. Sellers shall assume the risk of loss, damage
or destruction of the Sites or any part thereof prior to the Sale and
Lease Closing Date.
C. Condemnation. In the event of a taking of all or any part
of any Site, Buyer at its sole option shall have the right to either
(i) receive the proceeds of any condemnation award and, proceed to
close this transaction or (ii) terminate this Agreement.
D. Real Estate Commission. Buyer and Sellers represent and
warrant to each other that they have dealt with no real estate broker,
agent, finder or other intermediary in connection with the transactions
contemplated by this Agreement. Buyer and Sellers shall indemnify and
hold each other harmless from and against any costs, claims or
expenses, including attorneys' fees, arising out of the breach of their
respective representations and warranties contained within this
Section.
E. Waiver and Amendment. No provisions of this Agreement shall
be deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and signed by
the party against which enforcement of such waiver or amendment is
sought. Waiver of any matter shall not be deemed a waiver of the same
or any other matter on any future occasion.
F. Captions. Captions are used throughout this Agreement for
convenience of reference only and shall not be considered in any manner
in the construction or interpretation hereof.
G. Severability. The provisions of this Agreement shall be
deemed severable. If any part of this Agreement shall be held
unenforceable, the remainder shall remain in
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full force and effect, and such unenforceable provision shall be
reformed by such court so as to give maximum legal effect to the
intention of the parties as expressed therein.
H. Construction Generally. This is an agreement between
parties who are experienced in sophisticated and complex matters
similar to the transaction contemplated by this Agreement and is
entered into by both parties in reliance upon the economic and legal
bargains contained herein and shall be interpreted and construed in a
fair and impartial manner without regard to such factors as the party
which prepared the instrument, the relative bargaining powers of the
parties or the domicile of any party. Each of the Sellers, DenAmerica
and Buyer were each represented by legal counsel competent in advising
them of their obligations and liabilities hereunder.
I. Other Documents. Each of the parties agrees to sign such
other and further documents as may be appropriate to carry out the
intentions expressed in this Agreement.
J. Attorneys' Fees. In the event of any judicial or other
adversarial proceeding between the parties concerning this Agreement,
the prevailing party shall be entitled to recover all of its reasonable
attorneys' fees and other costs in addition to any other relief to
which it may be entitled. References in this Agreement to Buyer's
attorneys' fees and/or costs shall mean the fees and costs of
independent counsel retained by Buyer with respect to this transaction.
K. Entire Agreement. This Agreement and the other Sale and
Lease Operative Documents, together with any other certificates,
instruments or agreements to be delivered hereunder or thereunder,
constitute the entire agreement between the parties with respect to the
subject matter hereof, and there are no other representations,
warranties or agreements, written or oral, between Sellers or
DenAmerica and Buyer with respect to the subject matter of this
Agreement. Notwithstanding anything in this Agreement to the contrary,
upon the execution and delivery of this Agreement by Sellers,
DenAmerica and Buyer the Commitment shall be deemed null and void and
of no further force and effect and the terms and conditions of this
Agreement and the other Sale and Lease Operative Documents shall
control notwithstanding that such terms are inconsistent with or vary
from those set forth in the Commitment.
L. Forum Selection; Jurisdiction; Venue; Choice of Law. Buyer,
Sellers and DenAmerica acknowledge that this Agreement was
substantially negotiated in the State of Arizona, this Agreement was
signed by Sellers, DenAmerica and Buyer in the State of Arizona and
delivered by Sellers, DenAmerica and Buyer in the State of Arizona,
consummation of the transaction contemplated by this Agreement occurred
in the State of Arizona, all payments under the Leases will be
delivered in the State of Arizona and there are substantial contacts
between the parties and the transactions contemplated herein and the
State of Arizona. For purposes of any action or proceeding arising out
of this Agreement, the parties hereto hereby expressly submit to the
jurisdiction of all federal
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and state courts located in the State of Arizona and DenAmerica,
Sellers and Buyer consent that either may be served with any process or
paper by registered mail or by personal service within or without the
State of Arizona in accordance with applicable law. Furthermore,
DenAmerica, Sellers and Buyer each waives and agrees not to assert in
any such action, suit or proceeding that it is not personally subject
to the jurisdiction of such courts, that the action, suit or proceeding
is brought in an inconvenient forum or that venue of the action, suit
or proceeding is improper. It is the intent of the parties hereto that
all provisions of this Agreement shall be governed by and construed
under the laws of the State of Arizona. To the extent that a court of
competent jurisdiction finds Arizona law inapplicable with respect to
any provisions hereof, then, as to those provisions only, the law of
the state in which the Site that is the subject of such action, suit or
proceeding is located shall be deemed to apply. Nothing contained in
this Section shall limit or restrict the right of DenAmerica, Sellers
or Buyer to commence any proceeding in the federal or the state courts
located in the state in which the Site that is the subject of such
action, suit or proceeding is located to the extent Sellers or Buyer
deems such proceeding necessary or advisable to exercise remedies
available under the Agreement.
M. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
N. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Sellers, DenAmerica and Buyer and their
respective successors and permitted assigns, including, without
limitation, any United States trustee, any debtor-in-possession or any
trustee appointed from a private panel.
O. Survival. Except for the conditions of Sale and Lease
Closing set forth in Section 11, which shall be satisfied or waived as
of the Sale and Lease Closing Date, all representations, warranties,
covenants, waivers, agreements, obligations and indemnities of
DenAmerica, Sellers and Buyer set forth in this Agreement shall survive
the Sale and Lease Closing.
P. Waiver of Jury Trial and Punitive, Consequential, Special
and Indirect Damages. BUYER, SELLERS AND DENAMERICA HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES
HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE RELATIONSHIP
OF BUYER AND SELLERS, USE OR OCCUPANCY OF THE SITES BY SELLERS,
DENAMERICA OR SUBLESSEE, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY
RIGHT ANY OF THE PARTIES HERETO MAY HAVE TO A
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TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR
BARGAIN. FURTHERMORE, SELLERS, DENAMERICA AND BUYER EACH HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY
HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM
THE OTHER WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES HERETO
AGAINST THE OTHER OR SUCH OTHER PARTY'S SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY SELLERS,
DENAMERICA AND BUYER OF ANY RIGHT EITHER MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE
PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
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IN WITNESS WHEREOF, Sellers, DenAmerica and Buyer have entered into
this Agreement as of the date first above written.
BUYER:
FFCA ACQUISITION CORPORATION, a
Delaware corporation
By___________________________________________
Printed Name: Stephen Y. Schwanz
Its: Vice President
Corporate Finance
SELLERS:
ATTEST: BLACK-EYED PEA U.S.A., INC., a Texas
corporation
By___________________________ By___________________________________________
Printed Name_________________ Printed Name_________________________________
Its__________________________ Its__________________________________________
TEXAS BEP, L.P., a Texas limited
partnership
By: BLACK-EYED PEA U.S.A., INC., a
ATTEST: Texas corporation, its general partner
By___________________________ By___________________________________________
Printed Name_________________ Printed Name_________________________________
Its__________________________ Its__________________________________________
DENAMERICA HEREBY EXECUTES THIS SALE AND LEASE AGREEMENT FOR THE
SOLE PURPOSE OF (1) AGREEING TO PERFORM ITS OBLIGATIONS UNDER SUBSECTION 9.E,
AND (2) ACKNOWLEDGING AND AGREEING TO THE TERMS AND CONDITIONS UNDER SUBSECTIONS
12.A.ii AND 12.B.iv ABOVE.
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ATTEST: DENAMERICA CORP., a
Georgia corporation
By ________________________________ By______________________________________
Printed Name ______________________ Printed Name: Todd S. Brown
Its _______________________________ Its: Vice President
STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on July , 1996, by
Todd S. Brown, the Vice President of DenAmerica Corp., a Georgia corporation, on
behalf of the corporation.
________________________________________
Notary Public
My Commission Expires:
__________________________________
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on July ___ ,
1996, by Stephen Y. Schwanz, Vice President, Corporate Finance, of FFCA
Acquisition Corporation, a Delaware corporation, on behalf of the corporation.
________________________________________
Notary Public
My Commission Expires:
__________________________________
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on July ___, 1996,
by _____________________________, the _____________________________________ of
Black-eyed Pea U.S.A., Inc., a Texas corporation, on behalf of the corporation.
________________________________________
Notary Public
My Commission Expires:
__________________________________
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on July ___, 1996, by
_________________________________, the _____________________________________ of
Black-eyed Pea U.S.A., Inc., a Texas corporation, the general partner of Texas
BEP, L.P., a Texas limited partnership, on behalf of the limited partnership.
________________________________________
Notary Public
My Commission Expires:
__________________________________
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