ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made as of July 10,
1998, by and between FAST FOOD OPERATORS, INC., a New York
corporation with a business office at ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereafter "Seller") and POPYORK LLC, a
New York limited liability company with a business office at c/o
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (hereafter "Purchaser").
This Agreement sets forth the terms and conditions
pursuant to which Purchaser will acquire from Seller certain
fixed assets relating to four (4) Popeye's Famous Fried Chicken
and Biscuits Restaurants presently operated by Seller, and set
forth on Schedule 1.01 (the "Stores").
In consideration of the representations, warranties,
covenants and agreements contained herein, intending to be
legally bound, the parties hereto agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND LIABILITIES
1.01. Assets to be Conveyed. Subject to the terms and
conditions of this Agreement, Seller will, at the closing
provided for in Section 1.04 hereof (the "Closing"), sell,
convey, assign, lease, transfer or deliver to Purchaser any and
all fixed assets, tangible and intangible, used in or associated
with the Stores free and clear of all liens and encumbrances,
including, but not limited to, the following (the "Assets"):
(a) subject to the approval of each respective lessor,
the real estate, buildings and related improvements used in the
operation of the Stores listed on Schedule 1.01(a) ("Leased
Property") which Leased Property will be leased to Purchaser at
Closing on the same terms and conditions as are presently set
forth in the lease agreements or any lease amendments acceptable
to the Purchaser, for the location of each of the Stores (the
"Lease Agreements");
(b) furniture, trade fixtures and equipment owned by
Seller and used in the operation of and located at the Stores as
of the date hereof (the "Equipment");
(c) subject to the approval of America's Favorite
Chicken Company ("AFC"), the assignment of the Franchise
Agreements pertaining to the Store;
(d) Seller's rights, if any, under the contracts,
agreements and commitments of Seller listed in Schedule 1.01(d)hereto
relating to the business conducted at the Stores but only to the extent
provided in Section 2.05;
(e) the prepaid items, deposits, customary cash "bank"
for the Stores, and other special items listed on Schedule
1.01(e) hereto; and
(f) all of Seller's inventory of goods and supplies
that are useable in the ordinary course of business, which are
typically characterized as inventory, and that are located at the
Stores as of the Closing Date (as defined in Section 1.04 below)
(the "Inventory").
1.02. Liabilities to be Assumed. Subject to the terms and
conditions of this Agreement, in partial consideration of the
transfer, conveyance and assignment to Purchaser of the Assets,
Purchaser will assume the following liabilities and obligations
of Seller that arise from and after the Closing Date in respect
of, and to the extent related to, the business conducted at the
Stores and will assume no other liabilities or obligations of
Seller:
(a) all liabilities arising under the Lease Agreements
for the Leased Property; and
(b) all of Seller's obligations and liabilities under
service contracts, licenses and concessions, if any, referred to
in Section 2.05 and listed in Schedule 1.01(d) hereto.
1.03. Consideration.
(a) Subject to the terms and conditions of this
Agreement, in consideration of the transfer, conveyance and
assignment of the Assets, Purchaser shall deliver to Seller:
(i) at the Closing, cash in the amount of Nine
Hundred Thousand ($900,000) Dollars (the "Purchase Price") by
certified or official bank check or by wire transfer in
immediately available federal funds;
(ii) at the Closing, with respect to the
Inventory and the Stores' "bank," cash in the amount of the
value of such Inventory and such Stores "bank" as determined in
accordance with this Agreement;
(b) The Purchase Price for the Assets set forth herein
shall be allocated in accordance with Schedule 1.03 hereto; and
(c) To the extent that after Closing either Seller or
Purchaser shall receive any payments from any third parties
relating to the operations at the Stores and attributable to the
period prior to (in the case of receipt by Purchaser) or after
(in the case of receipt by Seller) the Closing Date, the party
receiving the same shall promptly make delivery thereof to the
other party hereto who was entitled to such payment from such
third party.
1.04. Closing. The Closing of the transactions
contemplated in this Agreement shall take place at the offices of
counsel for Seller by wire transfer, fax and telephone on or
about July 31, 1998, or on such later date when all conditions
precedent to the Closing shall have been met or waived, but in no
event later than December 30, 1998. (The date on which the
Closing occurs shall be referred to as the "Closing Date.")
Purchaser shall be entitled to possession of the Assets and to
begin operating the Stores as of the beginning of business on the
Closing Date if Closing is consummated by 10:00 a.m., New York
City time, on such date. If Closing is not consummated by such
time, Purchaser shall be entitled to possession of the Assets and
to begin operating the Stores as of the beginning of business on
the next business day following the Closing Date.
1.05. Condition Precedent to Closing. The transactions
contemplated in this Agreement are specifically conditioned upon:
(a) written approval by AFC for the transactions
contemplated by the parties pursuant to the provisions of this
Agreement and for the assignments of the franchise rights and
agreements, which approval may consist of the forwarding by AFC
to the parties of the documentation necessary to effectuate the
transfer of the franchise rights to Purchaser;
(b) approval by the stockholders of Seller of the
transactions contemplated by the parties pursuant to the
provisions of this Agreement, which approval is to be requested
by Seller at a duly called and convened special meeting of the
stockholders of Seller;
(c) the parties' full and timely compliance with the
notice provisions of Articles 6 and 9 of the Uniform Commercial
Code; and
(d) written approval by each lessor of the Leased
Property of the assignments to Purchaser, and assumption by
Purchaser of the Lease Agreements in a form which is reasonably
acceptable to counsel for each of Seller and Purchaser.
1.06. Deliveries by Seller. At the Closing, Seller will
deliver the following to Purchaser:
(a) a duly executed and acknowledged ▇▇▇▇ of Sale
substantially in the form of Exhibit A hereto (the "▇▇▇▇ of
Sale") transferring to Purchaser all of the Assets being
transferred hereunder as of the Closing Date;
(b) duly executed and acknowledged agreements for the
assignment and assumption of the Lease Agreements for the Leased
Property;
(c) the officer's certificate referred to in Section
8.03 hereof;
(d) the opinion of counsel referred to in Section 8.05
hereof; and
(e) such other documents as may be reasonably necessary
to effect the transactions contemplated hereby.
1.07. Deliveries by Purchaser. At the Closing, Purchaser
will deliver the following to Seller:
(a) cash in the amount of Nine Hundred Thousand
($900,000) Dollars by certified or official bank check or by wire
transfer in immediately available federal funds;
(b) cash in an amount equal to the value of the
Assets, as described in Section 1.01(e), plus a sum representing
the Inventory for the Stores as of the Closing Date, as described
in Section 1.01(f), by certified or official bank check or by
wire transfer in immediately available federal funds.
(c) duly executed and acknowledged agreements for the
assignment and assumption of the Lease Agreements for the Leased
Property;
(d) the officer's certificate referred to in Section
7.03 hereof;
(e) the opinion of counsel referred to in Section 7.05
hereof; and
(f) such other documents as may be necessary to effect
the transactions contemplated hereby.
ARTICLE II
RELATED MATTERS
2.01. Physical Inventories. A physical count shall be
taken of the Inventories at the Stores immediately prior to the
close of business on the day preceding the Closing Date; a
closing adjustment will be made pursuant to Sections 2.03(c) and
(d) based upon such count.
2.02. Franchise Documents. At the Closing, Seller shall
assign to Purchaser executed Restaurant Franchise Agreements for
the Stores, including the addenda thereto if any, (collectively,
the "Franchise Documents").
2.03. Apportionments.
(a) On the Closing Date, Purchaser and Seller shall
apportion the following expenses with regard to the Stores:
(i) Seller's pro rata share of ad valorem taxes,
real estate taxes, assessments and fees payable for the Stores on
such tax year or fiscal year basis, as the case may be;
(ii) Seller's pro rata share of fees, charges,
parking lot and shopping center expenses or similar expenses, if
any, as prescribed by all operating agreements, easements, leases
or other instruments;
(iii) if arrangements cannot be made for separate
billing, any apportionable utility charges and any other charges
that are properly apportionable in accordance with the terms of
this Agreement; and
(iv) Seller's pro rata share of payments under
all contracts, agreements and concessions assumed by Purchaser
pursuant to the terms of this Agreement.
(b) The foregoing, however, shall not operate to
relieve Seller of its obligations to pay its rightful share of
any taxes, assessments or other fees, utility charges or other
charges that are properly payable by Seller as apportioned as of
the Closing Date. Real estate taxes, personal property and other
taxes, and all other expenses and charges relating to the
ownership or operation of the Stores, shall be shared on a pro
rata basis in proportion to the period of occupancy of each
party.
(c) The parties agree that any payments due to each
other as a result of the apportionments made on the Closing Date
shall be paid within twenty (20) days after the Closing Date.
(d) The parties agree to make payments to each other
on a timely basis with respect to adjustments not correctly
ascertainable on the Closing Date as soon as the correct amount
of any amounts to be adjusted or apportioned pursuant to this
Section 2.03 are ascertained.
2.04. Cash and Cash Equivalents. Immediately prior to
the Closing Date, Seller shall remove all cash and cash
equivalents (excluding the cash constituting the Stores' "banks")
from the Stores.
2.05. Contracts and Commitments. Seller has delivered
to Purchaser copies, where available, of all service contracts,
licenses and concessions referred to in Schedule 1.01(d) relating
to the business conducted at the Stores. Purchaser shall assume
all of Seller's obligations arising from and after the Closing
Date with respect to said service contracts. Each such
assignment and assumption may, if required by Seller, be pursuant
to a written instrument in form reasonably satisfactory to the
parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents, covenants and warrants to
Purchaser the following:
3.01. Corporate Organization, Etc. Seller is a
corporation duly incorporated and in good standing under the laws
of the State of New York.
3.02. Authority. Seller has full corporate power and
authority in accordance with its Articles of Incorporation and
By-laws to carry on its business in connection with the Stores as
it is now being conducted, to enter into and perform its
obligations under this Agreement, and to carry out the
transactions contemplated hereby.
3.03. Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will violate any provision
of the Articles of Incorporation and By-laws of Seller; or, to
the best knowledge of Seller, violate, conflict with, constitute
a default (or constitute an event which, with notice or lapse of
time or both, would constitute a default) under, or give rise to
any right of termination, cancellation or acceleration under, any
note, bond, mortgage, indenture, license, agreement, lease or
other instrument or obligation to which Seller is a party or by
which it or any of the Assets may be bound; or violate any
statute or law of any judgment, decree, order, regulation or rule
of any court or governmental authority applicable to either
Seller or any of the Assets.
3.04. Title to Assets; Encumbrances. With respect to
all Assets, Seller represents that: (i) it has good and
marketable title to all such Assets related to the operation of
the Stores that it purports to own; and (ii) all such Assets
shall be conveyed free and clear of title defects, liens, claims,
charges, security interests or other encumbrances.
3.05. Compliance with Applicable Law. To the best of
Seller's knowledge, Seller possesses all permits, consents and
licenses of every kind required by the jurisdiction in which the
Stores are located that are necessary to carry on its business at
the Stores as presently conducted, and which are required to own
or lease and operate the Assets, the failure of which possession
would have a material adverse effect on the operation of the
Stores. Seller represents that it has complied with all laws,
regulations and orders applicable to its business at the Stores,
including, but not limited to, those relating to zoning, health,
safety and employment; and the present operation of the Stores
does not violate any such laws, regulations or orders in any
material respects.
3.06. Leased Property.
(a) Schedule 1.01(a) contains an accurate and complete
description of the Leased Property. Seller has delivered to
Purchaser copies of the Lease Agreements, with all supplements,
amendments and modifications thereof, if any, (collectively, the
"Lease Agreements"); the Lease Agreements have not been further
modified, amended or assigned (unless such modification,
amendment or assignment was agreed to by the Purchaser), and they
are in full force and effect; there is no existing default by
Seller under the Lease Agreements, and to the best knowledge of
Seller, no event has occurred nor do any circumstances exist
which (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute any
default thereunder.
(b) Seller hereby agrees that it shall not modify,
extend or amend any Lease Agreements without the prior written
consent of Purchaser in each instance.
3.07. Contracts. Schedule 1.01(d) contains an accurate
and complete list of all material contracts relating to the
Stores, the Assets and/or the equipment located within the Stores
(the "Contracts"). Seller has delivered to Purchaser copies of
all such Contracts and any amendments or modifications thereto.
The Contracts are in full force and effect; there is no existing
default by Seller under any of the Contracts and to the best of
Seller's knowledge, no default has occurred nor does any
circumstance exist which (whether with or without notice, lapse
of time or the happening or occurrence of any other event) would
constitute any default thereunder.
3.08. Litigation. As of the date hereof, Seller has not
received notice that as to the operation of the Stores it is or
may be in violation of any material order, writ, injunction,
rule, regulation or decree of any court or of any federal, state,
municipal or other governmental authority or agency having
jurisdiction with respect to the Stores. Seller is neither
engaged in, nor to the best knowledge of Seller is Seller
threatened with, any legal action or other proceeding that, if
adversely determined, would have a material adverse effect on the
business being conducted at the Stores. Seller has not received
any notice of taking or condemnation, actual or proposed, with
respect to the Stores.
3.09. Brokers and Finders. Neither Seller nor any of
its respective officers, directors or employees has taken any
action with respect to any broker or finder that would give rise
to any liability on the part of Purchaser or incurred any
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement
which would give rise to any liability on the part of Purchaser.
Seller hereby indemnifies Purchaser from and against any claim,
action or proceeding by any person or entity in connection with
any alleged fee or commission arising from this transaction.
3.10. Public Utilities . All public utilities necessary
for the operation of the Stores presently serve the Stores and,
to the best of Seller's knowledge, no fact or condition exists
which would result in the permanent discontinuance of sewer,
electric, gas, telephone or other utilities presently located at
the Stores.
3.11. Franchise Rights. Seller is in material
compliance with the terms, conditions and obligations set forth
in the Franchise Agreements for the Stores.
3.12. Financial Reports, Statements of Operations.
Seller hereby represents that the Statements of Operations for
the years ended December 29, 1996 and December 28, 1997 and the
Statement of Operations for the quarter ended March 29, 1998 are,
to the best of Seller's knowledge, materially correct and fairly
represent the business operations conducted at the Stores by
Seller.
3.13 No Omission or Misrepresentation. No representation,
warranty or statement, or information furnished by Seller in
connection with the transactions contemplated by this Agreement,
contains or will contain any untrue statement of fact or will
omit any fact required to make the statements or information so
furnished not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, covenants and warrants to
Seller the following (if applicable):
4.01. Corporate Organization, Etc. Purchaser is a limited
liability company duly formed and in good standing under the laws
of the State of New York.
4.02. Authority. Purchaser has full corporate power and
authority, in accordance with its Articles of Organization and
Operating Agreement, to carry out its business as presently
conducted and to enter into and perform its obligations under
this Agreement and to carry out the transactions contemplated
hereby.
4.03. Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will violate any provision
of the Certificate of Organization and Operating Agreement of
Purchaser; or, to the best knowledge of Purchaser, violate,
conflict with, constitute a default (or constitute an event
which, with notice or lapse of time or both, would constitute a
default) under, or give rise to any right of termination,
cancellation or acceleration under, any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or
obligation to which Purchaser is a party or by which it or any of
the Assets may be bound; or violate any statute or law of any
judgment, decree, order, regulation or rule of any court or
governmental authority applicable to either Purchaser or any of
the Assets.
4.04. Brokers and Finders. Neither Purchaser nor any of
its officers, directors or employees has taken any action with
respect to any broker or finder that would give rise to any
liability on the part of Seller, or has incurred any liability
for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement
that would give rise to any liability on the part of Seller.
Purchaser hereby indemnifies Seller from and against any claim,
action or proceeding by any person or entity in connection with
any alleged fee or commission arising from this transaction.
4.05. No Further Consents and Approvals Required. No
consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required by Purchaser in connection with the execution, delivery
and performance of this Agreement or the consummation of the
transactions contemplated hereby.
4.06. Litigation. As of the date hereof, Purchaser has not
received notice that it is or may be in violation of any material
order, writ, injunction, rule, regulation or decree of any court
or of any federal, state, municipal or other governmental
authority or agency having jurisdiction over Purchaser. There is
no decree or judgment of any kind in existence enjoining or
restraining Purchaser, or any of Purchaser's officers, directors
or stockholders, from taking any action required or contemplated
by this Agreement. Purchaser is not engaged in, nor to the best
knowledge of Purchaser is Purchaser threatened with, any legal
action or other proceeding. Purchaser has not incurred or been
charged with, nor to the best knowledge of Purchaser is Purchaser
under investigation with respect to, any violation of any
federal, state or local law or administrative regulation with
respect to which, if adversely determined, there is a reasonable
probability of a material adverse effect on Purchaser's ability
to acquire any of the Assets or to conduct the business being
conducted at the Stores in substantially the same manner as
heretofore conducted.
4.07. Knowledge. Neither Purchaser nor its officers or
directors have knowledge of any present facts or circumstances
relating to Purchaser that would materially adversely affect the
ability of Purchaser to perform its obligations under this
Agreement.
4.08 No Omission or Misrepresentation. No representation,
warranty or statement, or information furnished by Purchaser in
connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of fact or will
omit any fact required to make the statements or information so
furnished not misleading.
ARTICLE V
COVENANTS OF THE PARTIES
5.01. Purchaser's Rights of Inspection. From and after
the date hereof, Seller shall, from time to time, on business
days and during business hours, make the Stores and their assets
and business records available to Purchaser or Purchaser's
representatives for inspection upon not less than three (3) days'
notice of Purchaser's intention to inspect the Stores. Seller
may have a representative or employee of Seller accompany
Purchaser's representative during any such inspection. Purchaser
shall have the right to inspect the Stores, business records and
the Assets at anytime up until the Closing Date provided herein.
Purchaser recognizes and acknowledges that the Assets are being
sold in an "as is" condition. However, such Assets shall be in
good working order at the time of Closing. In the event that
upon Purchaser's inspection of the Stores and/or Assets,
Purchaser determines in good faith that there is any deficiency
with respect to the physical condition of the Assets and/or the
Stores, Purchaser shall provide written notice to Seller prior to
the Closing Date of the alleged deficiencies. Upon receipt of
such notice, Seller shall (i) agree to correct the deficiency, in
which case Purchaser shall cooperate with Seller in such
correction; (ii) reduce the Purchase Price to be paid by
Purchaser by such sum; or (iii) terminate the Agreement without
further obligation on the part of Seller.
5.02. Consents. Seller will use its best efforts to
obtain at the earliest practicable date and prior to the Closing
all consents of lessors of the Assigned Properties required for
the consummation of the transactions contemplated hereby.
Purchaser agrees to assist Seller in securing the release and
discharge of Seller from any and all obligations arising under
the Lease Agreements after the Closing Date.
5.03. Sales and Transfer Taxes and Fees.
(a) All sales, ad valorem and transfer, recording,
filing and similar taxes and fees (including any penalties or
interest) incurred in connection with this Agreement and the
transactions contemplated hereby will be borne by Purchaser. In
addition, Purchaser will be responsible for taxes due in
connection with Bulk Sales as defined by the Uniform Commercial
Code; the parties will assist each other in the filing of all
necessary tax returns and other documentation with respect to all
such sales, ad valorem, transfer and recording taxes and fees
and, if required by applicable law, will join in the execution of
any such tax returns or other documentation. Any and all fees of
any nature imposed on either party by AFC relative to the
assignment or other transfer of any franchise right in the Stores
shall be the responsibility of Purchaser.
(b) In connection with the Bulk Sales notice to
Seller's creditors under the Uniform Commercial Code, the parties
agree that they shall cooperate in preparing such notices as may
be required.
5.04. Expenses. Whether or not the transactions
contemplated hereby are consummated, and except as provided in
Section 5.03 above, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby will
be borne by the respective parties. Any and all fees of any
nature imposed by AFC relative to the assignment of the Franchise
Agreements shall be the responsibility of Purchaser.
5.05. Notices. The parties hereto shall immediately
inform the other parties hereto in writing of the occurrence of
any events or the existence of any circumstances the effect of
which would constitute a breach of any covenant or warranty in
this Agreement, or which would result in any representation in
this Agreement being or becoming untrue or misleading.
5.06. Utilities. Seller shall use its best efforts
(without obligation to incur any expenses) to make certain that
gas and electrical utilities serving the Stores shall not be
terminated by the suppliers thereof on the Closing Date. Seller
and Purchaser shall notify those utility companies which service
the Stores that Purchaser shall be responsible for the payment of
any and all obligations incurred therefor after the Closing Date
for the utilities serving the Stores, and shall, to the extent
practicable, cause meters to be read on or immediately prior to
the Closing Date. Telephone service for the Stores shall be
transferred to Purchaser's account by Purchaser, with Seller's
assistance, as of the Closing Date.
5.07. Conduct of Business at the Stores Pending the
Closing Date. Seller agrees that from the date hereof until the
Closing Date, unless otherwise consented to by Purchaser in
writing, Seller will carry on the business at the Stores in
substantially the same manner as heretofore conducted and will
not enter into any agreement or make any commitment relating to
the business conducted in the Stores except in the ordinary
course of business and consistent with past practice.
5.08. Computer/Cash Register Systems. Seller agrees to
provide such cooperation to Purchaser as Purchaser may reasonably
request to enable Purchaser to program and operate the
computer/cash register systems at the Stores.
5.09 Approval by Seller's Stockholders. Seller shall use
its best efforts to (i) hold a duly called meeting of its
stockholders for the purpose, among other things, of obtaining
the requisite approval of the stockholders in accordance with the
Business Corporation Law of the State of New York, of the
transactions embodied by this Agreement, and (ii) request and
solicit from its stockholders proxies voting in favor of the
transactions embodied by this Agreement, in accordance with the
requirements of the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
ARTICLE VI
EMPLOYEES
6.01. Hiring of Seller's Employees. It is Purchaser's
intention, as of the Closing Date, to offer employment to all
employees of Seller then employed at the Stores (collectively,
the "Employees"), all such offers of employment to be pursuant to
Purchaser's standard employment practices and policies.
Purchaser's intent to offer employment to such Employees as of
the Closing Date shall not create any written contractual right
of employment on the part of any such Employee.
6.02. Earned Vacation Pay. At Closing, Purchaser shall
assume the liability and obligation of Seller for the payment of
accrued vacation of all Employees hired by Purchaser.
6.03 Medical Insurance. Purchaser covenants and agrees
that it shall obtain medical insurance covering all qualified
employees of Seller to whom it offers employment, such medical
insurance to be comparable in scope of coverage and expense to
employees as that which is currently offered by Seller to its
employees of the Stores.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
Each and every obligation of Seller under this
Agreement to be performed at the Closing shall be subject to the
satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by Seller:
7.01. Representations and Warranties True. The
representations and warranties of Purchaser contained herein
shall be true, complete and accurate in all material respects as
of the date when made and at and as of the Closing Date as though
such representations and warranties were made at and as of such
date, except for changes expressly permitted or contemplated by
the terms of this Agreement.
7.02. Performance. Purchaser shall have performed and
complied with all agreements, obligations and conditions required
by this Agreement to be performed or complied with on or prior to
the Closing Date.
7.03. Officer's Certificate. Purchaser shall have
delivered to Seller a certificate, dated the Closing Date,
executed by a duly authorized executive officer of Purchaser,
certifying the fulfillment of the conditions specified in
Sections 7.01 and 7.02 hereof.
7.04. No Injunction, Etc. On the Closing Date, (i) there
shall be no effective injunction, writ, preliminary restraining
order or any order of any nature issued or threatened by a court
or other governmental authority of competent jurisdiction
directing that the transactions provided for herein or any of
them not be consummated as so provided or imposing any conditions
on the consummation of the transactions contemplated hereby, and
(ii) no action, suit or proceeding shall be pending before any
such court or other governmental authority seeking such relief.
7.05. Opinion of Purchaser's Counsel. Purchaser shall have
delivered to Seller an opinion of Purchaser's counsel, dated as
of the Closing Date, in form and substance satisfaction to
Seller, to the effect that:
(a) Purchaser is a limited liability company duly
formed and in good standing under the laws of the State of New
York and is duly qualified and authorized to do business in the
State of New York;
(b) Purchaser has the requisite power and authority to
carry on the business conducted at the Stores and to own the
properties and assets used in such business;
(c) this Agreement has been duly executed and
delivered by Purchaser and is the valid and binding obligation of
Purchaser, enforceable in accordance with its terms except that
(i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights in the event of future
bankruptcy, insolvency or reorganization of Purchaser, and (ii)
the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought;
(d) neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will violate any provision of Purchaser's Articles of
Organization or Operating Agreement; or violate, conflict with,
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or give rise to
any termination, cancellation or acceleration under, any note,
bond, mortgage, indenture, license, agreement, lease or other
instrument to which Purchaser is bound.
7.06. Franchise and Other Consents and Approvals. AFC
shall have notified Seller and Purchaser in writing that it will
grant approval of the assignment of Seller's franchise rights to
operate the Stores as Popeye's Famous Fried Chicken and Biscuits
Restaurants to Purchaser and that Seller has satisfied all terms,
conditions and requirements pertaining to the granting of said
franchises. Seller shall have received, at a duly called and
convened meeting of its stockholders, the requisite vote in favor
of this Agreement in accordance with the Business Corporation Law
of the State of New York.
7.07 Lessor Approval. The lessors of the Leased Property
shall have provided to Seller and Purchaser duly executed and
acknowledged assignments and assumptions of the Leased Property,
in a form that is reasonably acceptable to counsel for Seller,
each assignment and assumption to be contingent upon the closing
of the transactions contemplated herein.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF PURCHASER
Each and every obligation of Purchaser under this Agreement
to be performed at the Closing shall be subject to the
satisfaction, on or before the Closing Date, of each of the
following conditions, unless waived in writing by Purchaser:
8.01. Representations and Warranties True. The
representations and warranties of Seller contained herein shall
be true, complete and accurate in all material respects as of the
date when made and at and as of the Closing Date as though such
representations and warranties were made at and as of such date,
except for changes expressly permitted or contemplated by the
terms of this Agreement.
8.02. Performance. Seller shall have performed and
complied with all agreements, obligations and conditions required
by this Agreement to be performed or complied with on or prior to
the Closing Date.
8.03. Officer's Certificate. Seller shall have delivered
to Purchaser a certificate, dated the Closing Date, executed by a
duly authorized executive officer of Seller, certifying the
fulfillment of the conditions specified in Sections 8.01 and 8.02
hereof.
8.04. No Injunction, Etc. On the Closing Date, (i) there
shall be no effective injunction, writ, preliminary restraining
order or any order of any nature issued or threatened by a court
or other governmental authority of competent jurisdiction
directing that the transactions provided for herein or any of
them not be consummated as so provided or imposing any conditions
on the consummation of the transactions contemplated hereby, and
(ii) no action, suit or proceeding shall be pending before any
such court or other governmental authority seeking such relief.
8.05. Opinion of Seller's Counsel. Seller shall have
delivered to Purchaser an opinion of its counsel, dated as of the
Closing Date, in form and substance satisfactory to Purchaser, to
the effect that:
(a) Seller is a corporation duly incorporated and in
good standing under the laws of the State of New York;
(b) Seller has corporate power and authority to carry
on the business conducted at the Stores as it is now being
conducted and to own the properties and assets used in such
business;
(c) this Agreement has been duly executed and
delivered by Seller and is the valid and binding obligation of
Seller, enforceable in accordance with its terms except that (i)
such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights in the event of the
future bankruptcy, insolvency or reorganization of Seller, and
(ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding
therefor may be brought; and
(d) neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will violate any provision of the respective Articles of
Incorporation or By-Laws of Seller; or violate, conflict with,
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or give rise to
any right of termination, cancellation or acceleration under, any
note, bond, mortgage, indenture, license, agreement, lease (other
than the Lease Agreements) or other instrument known to Seller to
which Seller is a party or by which it or any of the Assets may
be bound.
8.06. Franchise Approval. AFC shall have notified Seller
and Purchaser in writing that it will grant approval of the
assignment of Seller's franchise right to operate the Stores as
Popeye's Famous Fried Chicken and Biscuits Restaurants to
Purchaser and that Seller has satisfied all terms, conditions and
requirements pertaining to the granting of said franchises.
8.07 Lessor Approval. The lessors of the Leased Property
shall have provided to Seller and Purchaser duly executed and
acknowledged assignments and assumptions of the Leased Property,
in a form that is reasonably acceptable to counsel for Purchaser,
each assignment and assumption to be contingent upon the closing
of the transactions contemplated herein.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.01. Survival of Representations. The representations
and warranties made by Seller under this Agreement or pursuant
hereto shall survive the Closing only to the extent provided for
in this Article IX. The representations and warranties made by
Purchaser in this Agreement shall survive Closing forever.
9.02. Agreement of Seller to Indemnify Purchaser. Subject
to the terms and conditions of this Article IX, Seller hereby
agrees to indemnify, defend and hold Purchaser harmless, at any
time after consummation of the Closing, from and against all
demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including
without limitation, interest, penalties and attorneys' fees and
expenses (collectively, "Damages") asserted against, resulting
to, imposed upon or incurred by Purchaser by reason of or
resulting from (a) liabilities, obligations or claims (whether
absolute, accrued, contingent or other) existing as of the
Closing Date or arising out of facts or circumstances existing at
or prior thereto, whether or not such liabilities or obligations
were known at the time of the Closing, relating to or arising out
of the ownership, possession or use of the Assets or the conduct
of business at the Stores by Seller prior to the Closing, except
those disclosed to Purchaser in connection herewith; (b) a breach
of any representation, warranty or agreement or any facts or
circumstances constituting such a breach; or (c) the employment
or termination of such employment by Seller of any employees of
Seller.
9.03. Agreement of Purchaser to Indemnify Seller.
Subject to the terms and conditions of this Article IX, Purchaser
hereby agrees to indemnify, defend and hold Seller harmless, at
any time after consummation of the Closing, from and against all
Damages asserted against, resulting to, imposed upon or incurred
by Seller, directly or indirectly, by reason of or resulting from
(a) liabilities, obligations or claims (whether absolute,
accrued, contingent or other) arising from and after the Closing
Date relating to or arising out of the ownership, possession or
use of the Assets or the conduct of business at the Stores by
Purchaser following the Closing Date, except those expressly
assumed or agreed to by Seller herein; (b) a breach of any
representation, warranty or agreement of Purchaser contained in
or made pursuant to this Agreement or any facts or circumstances
constituting such a breach; or (c) the employment or termination
of employment of Employees by Purchaser.
9.04. Limitation of Liability.
(a) With respect to representations and warranties of
Seller contained in Article III of this Agreement, which
representations and warranties shall survive Closing only to the
extent provided herein, no indemnification by Seller under
Section 9.02 shall be required to be made:
(i) with respect to Damages resulting from claims
as to which Seller has not received written notice within one (1)
year following the Closing, (whether or not such Damages have
then actually been sustained);
(ii) unless and to the extent that the aggregate
amount of Damages sustained by Purchaser with respect to claims
for breaches of representations and warranties hereunder exceeds
Five Thousand ($5,000) Dollars in the aggregate, and then only
with respect to the amount in excess of Five Thousand ($5,000)
Dollars; and
(iii) for any amounts in the aggregate (including
without limitation fees and expenses of counsel) in excess of the
Purchase Price.
(b) All Damages shall be computed net of any net
recovery under any insurance coverage with respect thereto which
reduces the Damages that would otherwise be sustained.
9.05. Procedures Relating to Indemnification. The
obligations and liabilities of the party making the indemnity
pursuant to Sections 9.02 and 9.03 (the "Indemnitor") with
respect to claims made by third parties against the party or
parties being indemnified pursuant to such Sections (the
"Indemnitee") shall be subject to the following terms and
conditions:
(a) the Indemnitee will give the Indemnitor prompt
notice of any such claim, and Indemnitor shall have the right to
undertake (at the Indemnitor's sole cost and expense) the defense
thereof by representatives chosen by it and reasonably acceptable
to the Indemnitee;
(b) if the Indemnitor, within a reasonable time after
notice of any such claim, fails to defend the Indemnitee against
which such claim has been asserted, the Indemnitee will (upon
further notice to the Indemnitor) have the right to undertake the
defense, compromise or settlement of such claim on behalf of and
for the account and risk of the Indemnitor, subject to the right
of the Indemnitor to assume the defense of such claim at any time
prior to settlement, compromise or final determination thereof;
(c) anything in this Section 9.05 to the contrary
notwithstanding, (i) if there is a reasonable probability that a
claim may materially and adversely affect the Indemnitee other
than as a result of money damages or other money payments, the
Indemnitee shall have the right, at its own cost and expense, to
defend, compromise or settle such claim, and (ii) the Indemnitor
shall not, without the written consent of the Indemnitee, settle
or compromise any claim or consent to the entry of any judgment;
and
(d) in connection with all claims defended hereunder,
the Indemnitee shall give the Indemnitor prompt written notice of
all material developments in connection with all claims, will
promptly supply the Indemnitor with all papers, documents and
evidence in the Indemnitee's possession and such other
information within the Indemnitee's knowledge pertinent to such
claims, and will produce at the appropriate place or places, at
reasonable times, such witnesses under the Indemnitee's control
as may reasonably be requested by the Indemnitor or its
representatives.
ARTICLE X
TERMINATION
10.01. Methods of Termination. Except as otherwise
provided, this Agreement may be terminated prior to the Closing:
(a) by mutual written agreement of Purchaser and
Seller;
(b) by Purchaser if the Closing has not occurred by
December 30, 1998, provided that a default by Purchaser
hereunder is not responsible for the Closing not having occurred;
(c) by Seller if the Closing has not occurred by
December 30, 1998, provided that a default by Seller hereunder
is not responsible for the Closing not have occurred; or
(d) by Seller if it has not, by December 30, 1998,
received approval by the stockholders of Seller of this
transaction in accordance with the Business Corporation Law of
the State of New York.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.01. Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented
only by written agreement of the parties at any time prior to the
Closing with respect to any of the terms contained herein.
11.02. Waiver of Compliance. Any failure of Purchaser, on
the one hand, or Seller, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be
expressly waived in writing by Purchaser or Seller, but such
waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure.
11.03. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given if delivered
by hand or mailed, certified or registered mail with postage
prepaid:
(a) if to Purchaser, to:
POPYORK LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
or to such other person or address as Purchaser shall furnish to
Seller in writing:
(b) if to Seller, to:
FAST FOOD OPERATORS, INC.
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ Raysman ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or to such other person or address as Seller shall furnish to
Purchaser in writing.
11.04. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
permitted assigns. The parties hereto agree that neither
Purchaser nor Seller shall have the right to assign its rights
and obligations as set forth herein without prior notice and
consent of other party.
11.05. Governing Law. This Agreement and the legal
relations among the parties hereto shall be governed by and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed in that state.
11.06. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
11.07. Headings. The headings of the Sections and Articles
of this Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
11.08. Entire Agreement. This Agreement, including the
Schedules and Exhibits hereto, and the other documents and
certificates delivered pursuant to the terms hereof or referred
to herein, set forth the entire agreement and understanding of
the parties hereto in respect of the subject matter contained
herein, and supersede all prior agreements, promises, covenants,
arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or
representative of any party hereto.
11.09. Third Parties. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any
person or corporation other than the parties hereto and their
successors or assigns, any rights or remedies under or by reason
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be affixed hereto, all as of the day and year first
above written.
FAST FOOD OPERATORS, INC.
By: ________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
POPYORK LLC
By: ________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Manager
ASSIGNMENT, ▇▇▇▇ OF SALE AND CONVEYANCE
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
FAST FOOD OPERATORS, INC. (the "Seller"), in accordance
with the provisions of the Asset Purchase Agreement dated July
10, 1998 (the "Agreement") between Seller and POPYORK LLC
("Purchaser"), pursuant to which Purchaser is purchasing and
Seller is selling the fixed assets, tangible and intangible, used
in or associated with the Store as defined in the Agreement,
including, but not limited to, the following: the real estate,
buildings and related improvements used in the operation of the
Stores ("Leased Property") which Leased Property will be leased
to Purchaser at Closing on the same terms and conditions as are
presently set forth in the lease agreement for the location of
the Stores; furniture, trade fixtures and equipment owned by
Seller and used in the operation of and located at the Stores as
of the date hereof; subject to the approval of America's Favorite
Chicken Company, the assignment of the Franchise Agreements
pertaining to the Stores; Seller's rights, if any, under the
contracts, agreements and commitments of Seller listed in
Schedule 1.01(d) to the Agreement relating to the business
conducted at the Stores but only to the extent provided in
Section 2.05 of the Agreement; the prepaid items, deposits,
customary cash "bank" for the Stores, and other special items
listed on Schedule 1.01(e) to the Agreement; and, all of Seller's
inventory of goods and supplies which are useable in the ordinary
course of business and which are typically characterized as
inventory and which are located at the Stores as of the Closing
Date (as defined in Section 1.04 of the Agreement) (collectively,
the "Assets"). Such Assets being granted, bargained, sold,
conveyed, assigned, transferred and delivered to Purchaser by
Seller in consideration of (i) cash in the amount of Nine Hundred
Thousand ($900,000.00) Dollars; (ii) cash in an amount equal to
the value of the Assets described in Section 1.01(e) of the
Agreement, plus a sum representing the Inventory for the Stores
as of the date of Closing as described in Section 1.01(f); (iii)
assumption by Purchaser of the following liabilities and
obligations of Seller that arise from and after the Closing Date
(as defined in the Agreement) in respect of and to the extent
related to the business conducted at the Stores: (a) all
liabilities arising under the Lease Agreement for the Leased
Property; and (b) all of Seller's obligations and liabilities
under service contracts, licenses and concessions, if any,
referred to in Section 2.05 and listed in Schedule 1.01(d) of the
Agreement; (iv) assumption buy Purchaser of Seller's obligation
for earned vacation pay to all Employees hired by Purchaser
pursuant to Section 6.02; and (v) other good and valuable
consideration, the receipt of which is hereby acknowledged.
TO HAVE AND TO HOLD, all and singular, the foregoing
unto Purchaser, its successors and assigns to use for its and
their use and benefit forever.
Except as expressly stated in the Agreement or listed
on the Schedules thereto, assets and property sold hereunder are
owned exclusively, and are sold and conveyed to Purchaser by
Seller, free and clear of any lien, mortgage, pledge,
encumbrance, or charge of any kind, or interest or claim of title
or right of third parties, and Seller hereby covenants and agrees
with Purchaser to warrant and defend this conveyance, transfer,
sale and assignment and the title of Purchaser, its successors
and assigns, hereunder against the claims and demands of any and
all persons whomever, SAVE AND EXCEPT for those liens,
encumbrances, charges, mortgages, pledges, interests, claims or
contingency items set out in the Agreement.
This Assignment, ▇▇▇▇ of Sale and Conveyance is
executed and delivered pursuant to and subject to the terms and
conditions of the Agreement, and the representations and
warranties contained in the Agreement shall survive the execution
and delivery hereof. Seller agrees that at any time and from time
to time on and after the Closing Date, at Purchaser's request and
without further consideration, Seller shall execute and deliver
such other instruments of conveyance and transfer and take such
other action as Purchaser reasonably may request more effectively
to convey to, transfer to and vest in Purchaser, or to put
Purchaser, or its successors and assigns, in possession of, any
or all of the assets and property to be conveyed, transferred,
sold, assigned and delivered hereunder or intended so to be.
Capitalized terms not defined herein shall have the meaning
ascribed to them in the Agreement.
IN WITNESS WHEREOF, the parties hereto have duly
executed this instrument the 10th day of July, 1998.
FAST FOOD OPERATORS, INC.
By: __________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
POPYORK LLC
By: __________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Manager
Schedule 1.01
The Stores
----------
1. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
2. ▇▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
4. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Schedule 1.01(a)
Property
--------
[TO BE PROVIDED]
Schedule 1.01(d)
Material Contracts
------------------
1. Lease Agreements for the Leased Property
2. Franchise Agreements with America's Favorite Chicken Company
for the Stores
[ADDITIONAL INFORMATION TO BE PROVIDED]
Schedule 1.01(e)
Special Items
-------------
[TO BE PROVIDED]
Schedule 1.03
Allocation of Purchase Price
----------------------------
[TO BE PROVIDED]
Schedule 3.08
Creditors
---------
[TO BE PROVIDED]