ASSET PURCHASE AGREEMENT Dated as of February 5, 2008, By and among Barnhill’s Buffet, Inc. as Seller And Starlite Holdings, Inc., as Buyer
Exhibit
10.17
Dated as
of
February
5, 2008,
By and
among
▇▇▇▇▇▇▇▇’▇
Buffet, Inc.
as
Seller
And
Starlite
Holdings, Inc.,
as
Buyer
ASSET
PURCHASE AGREEMENT (this “Agreement”), dated as
of February 5, 2008, is by and among ▇▇▇▇▇▇▇▇’▇ BUFFET, INC., a Tennessee
corporation (the “Seller or the Company”) and
STARLITE HOLDINGS, INC., a wholly owned subsidiary of Star Buffet, Inc., a
Delaware corporation, (together with any successor and assigns, the “Buyer”).
RECITALS
A. The
Seller is engaged in the business of operating a chain of restaurants known as
▇▇▇▇▇▇▇▇’▇ Buffet that specialize in Southern-style buffet dining and
catering.
B. On
the terms and subject to the conditions set forth in this Agreement, the Seller
desires to sell, and the Buyer desires to acquire certain assets and assume
certain liabilities of Seller’s restaurants listed on Exhibit A attached
hereto (collectively, the “Restaurants”), and to
assume certain real property and personal property leases as well as certain
contracts related thereto necessary for the operation of the
Restaurants.
C. On
or about December 3, 2007, the Seller commenced a proceeding (the “Bankruptcy Case”) in
the United States Bankruptcy Court for the Middle District of
Tennessee (the
“Bankruptcy
Court”) by filing a voluntary petition for relief under Chapter 11 of
Title 11 of the United States Code (the “Bankruptcy Code”)
(the date of such filing being the “Petition
Date”).
D. The
Seller and the Buyer have agreed that the transactions contemplated hereby shall
be accomplished through a sale and assignment of assets to the Buyer pursuant to
Sections 363 and 365 of the Bankruptcy Code.
E. The
Seller and the Buyer contemplate a closing of the transactions on the Target
Date (as defined in Section 2.3 herein)
following the entry of the Sale Order (as defined in Section 7.2), which
Sale Order shall not be subject to any stay, as of the Closing Date (as defined
in Section
2.3).
F. All
disclosure schedules and exhibits referred to herein are hereby incorporated by
reference and, taken together with this Agreement (including the foregoing
Recitals) shall constitute but a single agreement.
ARTICLE
1
PURCHASE
AND SALE
1.1 Assets. Subject to the
terms of this Agreement and pursuant to Sections 363 and 365 of the Bankruptcy
Code, Seller agrees to sell, transfer, convey and/or assign to Buyer, and Buyer
agrees to purchase and acquire from Seller at the Closing (as defined in Section 2.3), all of
Seller’s right, title and interest, whatsoever, in and to the assets described
below and in the following manner (collectively, the “Assets”) free and
clear of all Encumbrances (as defined in Article
10):
(a) Store
Inventory. At the
Closing but effective as of the Effective Time (as defined in Section 2.6), Seller
shall sell, transfer and assign to Buyer all of Seller’s right, title and
interest in and to all of the inventory on hand (including raw materials, work
in process and finished goods) at the Restaurant Sites.
(b) Real
Property Lease Assignments. Described in Exhibit A are
locations of certain restaurant sites leased by Seller (the “Restaurant Sites”)
that constitute all of the sites on which the Restaurants are
located. Subject to Section 1.6, at the
Closing but effective as of the Effective Time, Seller shall transfer, sell and
assign to Buyer all of Seller’s right, title and interest in and to the leases
for the Restaurant Sites (the “Assumed Leases”) free
and clear of all Encumbrances.
(c) Tangible
Personal Property. At the Closing but effective as of the
Effective Time, Seller shall sell, transfer and assign to Buyer, free and clear
of all Encumbrances, all of Seller’s right, title and interest in and to all
tangible personal property owned or leased by Seller and located at the
Restaurant Sites, including, without limitation, certain leasehold improvements
and fixtures located at the Restaurant Sites and further including, without
limitation, the items described on Exhibit B (the “Tangible Personal
Property”).
(d) Personal
Property Leases and Executory Contract Assignments. Described
in Exhibit C
are certain personal property leases (“Personal Property
Leases”) as well as certain licenses (including, without limitation,
licenses relating to computer hardware and software), contracts, third-party
warranties, arrangements and other agreements that may constitute executory
contracts under Section 365 of the Bankruptcy Code (“Executory Contracts”
and together with the Assumed Leases and the Personal Property Leases, the
“Assigned
Agreements”) to which the Seller is a party, relating to the business
conducted at the Restaurant
Sites.
(e) Books and
Records. At the Closing, Seller shall sell, convey, transfer
and assign to Buyer all of Seller’s right, title and interest in and to all
“Books and Records” (including the right of possession) located at the
Restaurants and/or Seller’s corporate headquarters that relate to the business
conducted at the Restaurant Sites and/or the ownership of the
Assets. Following the Closing, Seller shall have the right to retain
copies of any Books and Records transferred to
Buyer. “Books and Records”
means all sales records, purchase records, customer lists, supplier lists,
advertising and promotional materials, health inspection records including all
records regarding the Occupational Safety and Health Act and similar government
examinations and clearances, correspondence and other records, real estate and
developmental data, blueprints.
(f) Perpetual
License of Trade names. At the Closing but effective as of the
Effective Time, Seller shall grant to Buyer a perpetual license to use any trade
names, trademarked names, or graphics owned by Seller for purposes of operating
the Restaurants (the “License”).
1.2 Excluded
Assets. Except for the Assets set forth in Section 1.1, all
other assets of Seller are excluded from the purchase and sale contemplated by
this Agreement. For the avoidance of doubt, subject to Section 9.3, all
security deposits, refunds, deposits and prepaid expenses of Seller, whether or
not they relate to a property subject to an Assignment Agreement, are not Assets
to be transferred to Buyer (the “Prepaid
Charges”).
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1.3 Assumed
Liabilities. On the Closing Date, but effective as of the
Effective Time, Buyer shall assume and agree to discharge only the following
specifically enumerated obligations and liabilities of Seller (the “Assumed
Liabilities”):
(a) All
liabilities and obligations arising after the Closing Date with respect to or
arising under the Assets;
(b) All
liabilities, obligations and commitments under the Assigned Agreements accruing
with respect to any periods after the Effective Time or requiring payment of an
obligation which becomes due and payable after the Effective Time and which, in
any event, is attributable to the period after the Effective Time;
and
(c) All
liabilities, obligations and commitments accruing with respect to any periods
after the Effective Time requiring payment of an obligation which, in any event,
becomes due and payable after the Effective Time resulting from, caused by or
arising out of, directly or indirectly, the conduct by Buyer in operating the
business at the Restaurant Sites.
1.4 Retained
Liabilities. Notwithstanding anything contained in this
Agreement to the contrary, Buyer does not assume or agree to pay, satisfy,
discharge or perform, and shall not be deemed by virtue of the execution and
delivery of this Agreement or any document delivered at the Closing pursuant to
this Agreement, to have assumed, or to have agreed to pay, satisfy, discharge or
perform, any liability, obligation or indebtedness of Seller, whether primary or
secondary, direct or indirect, other than the Assumed
Liabilities. Seller shall retain all liabilities and obligations of
Seller other than the Assumed Liabilities to the extent specifically provided in
Section
1.3 subject to the prorations set forth in Section 9.3 (all such
liabilities and obligations retained by Seller being referred to herein as the
“Retained
Liabilities”). By way of illustration, and not of limitation,
Retained Liabilities include:
(a) All
liabilities, obligations and commitments of Seller or any predecessor(s) or
Affiliate(s) of Seller relating to Taxes (as defined in Article 10) with
respect to the Assets or otherwise, for all periods, or portions thereof, on or
prior to the Closing Date, subject to the prorations set forth in Section
9.3;
(b) All
liabilities, obligations and commitments for any legal, accounting, investment
banking, brokerage or similar fees or expenses incurred by Seller in connection
with, resulting from or attributable to the transactions contemplated by this
Agreement;
(c) Liabilities,
obligations and commitments for which Buyer does not expressly assume an
obligation or liability as described in Section
1.3;
(d) Liabilities,
obligations and commitments for any borrowed money incurred by Seller or any
predecessor(s) or Affiliate(s) of Seller; and
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(e) All
liabilities, obligations and commitments of Seller, whether known or unknown,
disclosed or undisclosed, resulting from, caused by or accruing out of, at any
time, directly or indirectly, the conduct of its business or ownership or lease
of any of its properties or assets or any properties or assets previously used
by Seller at any time prior to or on the Closing Date.
1.5 Sale and
Assignment Pursuant to Bankruptcy Code. All the sales,
assumptions and assignments contemplated by this Article 1 shall be
subject to Bankruptcy Court approval pursuant to, among other things, Sections
363 and 365 of the Bankruptcy Code.
1.6 Assigned
Agreements. Seller shall assume and
assign to the Buyer all of the Assigned Agreements. Set forth on
Exhibits A and
C is certain
information describing the monetary obligations associated with the Assigned
Agreements and any monetary defaults there under as of the Petition Date (the
“Cure
Amounts”). To the extent required by the Bankruptcy Court under the
Bankruptcy Code in order to permit the assumption and assignment of the Assigned
Agreements to the Buyer pursuant to this Agreement, (i) the Buyer hereby agrees
to pay the Cure Amounts listed in Exhibits A and C, (ii) the Buyer
shall provide adequate assurances of future performance as required by the
Bankruptcy Code with respect to each Assigned Agreement and (iii) at the
Closing, any obligations that have accrued but are not yet due for payment under
the Assigned Agreements shall be pro-rated between the Seller and Buyer as of
the Closing in accordance with Section
9.3.
ARTICLE
2
CONSIDERATION;
ALLOCATION; PAYMENT
2.1 Assumption;
Purchase; Consideration. In consideration
of the sale, conveyance, transfer and/or assignment of the Assets as provided in
Article 1, and subject to the provisions of this Agreement, at the Closing Buyer
shall:
(a) assume
the Assumed Liabilities; and
(b) purchase
the Assets for the Purchase Price (as defined below).
2.2 Purchase
Price. The
purchase price for the sale of the Assets shall be $1,000,000.00 in cash (the
“Purchase Price”).
2.3 Closing. The “Closing” of the
transactions contemplated herein, including payment of the Purchase Price, shall
take place at the offices of the Company or such other location in Nashville, TN
as may be agreed upon, no later than five (5) days following the entry of the
Sale Order (the “Target Date”) (or
such earlier date as Buyer and Seller may mutually agree, the “Closing Date”);
provided, that no stay of the Sale Order shall be in effect and provided,
further, that the Sale Order shall contain a waiver of the automatic ten (10)
day stay under Rule 6004(h) of the Federal Rules of Bankruptcy Procedure; provided, further, however, that in no
event unless otherwise agreed in writing shall the Closing take place on a date
which is after February 14, 2008 (the “Termination
Date”). At the Closing, Buyer shall pay the Purchase Price to
Seller by wire transfer of immediately available funds to one or more bank
accounts of Seller, or as directed by Seller in accordance with the terms of the
Sale Order approved by the Bankruptcy Court.
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2.4 Allocation. On
or before the date that is five (5) days before the Closing Date, the Seller and
the Buyer will agree upon an allocation of the Purchase Price covering the
Assets for federal, state and local Tax purposes. The Seller and the
Buyer will implement, report and accept such allocation for federal, state and
local Tax purposes. The parties agree that such allocations will not
in any way limit their respective rights and obligations under the Sale
Documents (as defined in Section 3.2) in
respect of representations, warranties, covenants and agreements and the breach
thereof or damages therefore.
2.5 Transfer
Taxes. Buyer shall pay all sales, transfer and use taxes, if
any, that arise from the Transaction. The parties will
reasonably cooperate to minimize any such taxes.
2.6 Effective
Time. The effective time of the transactions contemplated
hereby shall be 12:01 a.m. (Nashville, Tennessee time) on the first day
following the Closing (the “Effective Time”),
notwithstanding the fact that the actual physical exchange of documents shall
take place at the Closing.
2.7 Deposit. Upon
the execution of this Agreement, Buyer shall place in escrow with Seller’s
counsel a refundable purchase price deposit of $1,000 in cash. One
day prior to the Sale Hearing, an additional refundable purchase price deposit
in the amount of $99,000 in cash shall be placed in escrow with Seller’s counsel
(all such cash placed in escrow hereinafter referred to as the “Deposit”), all of
which shall be placed in an interest-bearing account. Upon Closing,
the Deposit will be applied against the Purchase Price. Otherwise,
the deposit will either be returned to Buyer or paid to Seller as specified in
Section
8.2.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF SELLER
Except
(i) as set forth in the schedules referenced herein, to the extent (ii) it would
not reasonably be expected to result in a Material Adverse Effect, (iii) the
Bankruptcy Court determines otherwise, and (iv) the Bankruptcy Code provides
otherwise, as an inducement to Buyer to enter into and perform its obligations
under this Agreement, Seller hereby represents and warrants to Buyer as
follows:
3.1 Organization
and Good Standing. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Tennessee and has full organizational power and organizational
authority to conduct its business as it is now being conducted and to own,
operate or lease the properties and assets it currently owns, operates or holds
under lease.
3.2 Power and
Authorization. Subject to
approval by the Bankruptcy Court, Seller has full power and authority to execute
and deliver this Agreement and any agreement, document, certificate or
instrument being delivered pursuant to or in connection with the transactions
contemplated by this Agreement (collectively, the “Sale Documents”) to
perform its obligations hereunder and there under and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the other Sale Documents, and the performance by
Seller of its obligations hereunder and there under, and the consummation of the
transactions contemplated hereunder and there under, have been duly authorized
by Seller. This Agreement and the other Sale Documents upon execution
and delivery by Seller and upon approval of the Bankruptcy Court will constitute
the legal, valid and binding obligations of Seller, enforceable against Seller
in accordance with their respective terms.
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3.3 No
Violation. Except as set
forth on Schedule
3.3 hereto, the execution, delivery and performance by Seller of this
Agreement and the other Sale Documents and the consummation or performance of
the transactions contemplated herein and therein do not and will
not:
(a) conflict
with, result in the breach, modification, termination or violation of, or loss
of any benefit under, constitute a default under, accelerate the performance
required by, result in or give rise to a right to amend or modify the terms of,
result in the creation of any lien upon any assets or properties, or in any
manner release any party thereto from any obligation under, any material
mortgage, note, bond, indenture, contract, agreement, lease, license or other
instrument or obligation of any kind or nature by which Seller, or any of its
properties or assets, may be bound or affected;
(b) contravene
or conflict with, or result in a violation of, result in any loss of benefit
under, or give any Person the right to challenge any of the transactions
contemplated by this Agreement and the other Sale Documents or to exercise any
remedy or obtain any relief under, any permit, concession, franchise, order,
judgment, writ, injunction, law, rule, ordinance, regulation, statute or decree
applicable to Seller; or
(c) conflict
with or violate any provision of the certificate of incorporation, bylaws or
resolutions adopted by the board of directors or stockholders, each as
heretofore amended, of Seller.
3.4 No
Consent Required. Except for
Bankruptcy Court approval or as otherwise contemplated by this Agreement [or as
set forth on Schedule
3.4 hereto], no consent, approval, order or authorization of, or
declaration, filing or registration with, any Person, entity or governmental
authority is required to be made or obtained by Seller in connection with the
authorization, execution, delivery or performance of this Agreement, the other
Sale Documents or the transactions contemplated hereby and thereby.
3.5 Compliance
with Laws; Permits. To the Knowledge
of the Seller, Seller is in material compliance with all laws, regulations,
rules, ordinances, orders and other requirements applicable to the operation,
conduct or ownership of the business conducted at the Restaurant
Sites. Seller holds all of the required permits, licenses, approvals
and authorizations of any Governmental Unit (as defined in Article 10) or third
parties (collectively, “Permits”) necessary
or appropriate for the conduct of its business at the Restaurant
Sites. To the Knowledge of the Seller, all such Permits are in full
force and effect, and will remain with Seller upon, and will not be affected by,
the Closing; there is no condition, nor has any event occurred, which
constitutes or with the giving of notice or passage of time or both would
constitute a violation of the terms of any Permit and no cancellation,
modification or revocation of any of the Permits is pending or
threatened.
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3.6 Property.
(a) Seller
has good and marketable title or rights as lessee to all real, personal, mixed,
tangible and intangible property of any kind or nature owned or used by Seller
at the Restaurant Sites, constituting the Assets, in each case free and clear of
all Encumbrances, except for Encumbrances identified on Schedule 3.6(a)
hereto on the date hereof. The Assets located at the Restaurant Sites
(a) constitute all the assets, of any nature whatsoever, necessary at the
Restaurant Sites in order for Seller to operate its business at the Restaurant
Sites in the manner such business is presently operated by Seller, and (b)
include all of the operating assets of Seller at the Restaurant
Sites. Upon the execution of this Agreement, Buyer shall have the
right to communicate with landlords (and other parties in the leasehold chain)
regarding the leaseholds related to the Restaurant Sites.
(b) Seller
has a valid leasehold interest to all of the Assumed Leases. Each of
the Assumed Leases is the subject of a written lease agreement and there are no
oral terms inconsistent with the written terms thereof. Except as set
forth on Schedule
3.6(b), to the Knowledge of the Seller, no work has been performed on, or
materials supplied to, any of the Assumed Leases within the applicable statutory
period which would give rise to any mechanic’s or materialmen’s liens for any
amount in excess of $1,000.
3.7 Condition
of Property and Related Matters.
(a) All
buildings, machinery, equipment and other tangible assets constituting the
Assets and used by Seller in the conduct of its business at the Restaurant
Sites, including but not limited to the Tangible Personal Property, are in fair
or good operating condition and repair, reasonable wear and tear excepted, are
usable in the ordinary course of business and are adequate and suitable for the
uses to which they are being put. All such assets and property are
located at real property locations constituting the Restaurant
Sites.
3.8 Material
Contracts. With respect to
the business conducted at the Restaurant Sites, Seller has not entered into nor
is it bound by any contract, agreement or commitment of an amount or value in
excess of $50,000 in the aggregate, written or oral, including without
limitation any obligations for money borrowed (the “Material Contracts”);
true, correct and complete copies of all written Material Contracts previously
have been furnished to Buyer. Except as set forth on Schedule 3.8, to the
Knowledge of the Seller, Seller is not in default, and no event has occurred or
circumstances exists that, with or without which, the giving of notice or the
passage of time or both, may contravene, conflict with, result in a breach of or
constitute a default by Seller, or any other party under any Material Contract
or any other obligation owed by Seller, and no event has occurred which, with
the giving of notice or the passage of time or both, would constitute a
default by any other party to any such Material Contract or
obligation. The consummation of the transactions contemplated by the
Sale Documents will not result in a breach of or constitute a default under, any
Material Contract or the right of any other party to the Material Contract to
terminate the same and there are no negotiations pending to revise the terms of
any such Material Contracts.
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3.9 Employee
Matters.
(a) Seller
is not a party to or bound by any collective bargaining agreement and there are
no labor unions or other organizations representing, purporting to represent or,
to the Knowledge of Seller, attempting to represent any employees employed in
the operation of the business conducted at the Restaurant
Sites. Since February 11, 2005, there has not occurred or, to the
Knowledge of Seller, been threatened any material strike, slowdown, picketing,
work stoppage, concerted refusal to work overtime or other similar labor
activity with respect to any employees employed in the operation of
the business conducted at the Restaurant Sites. There are no
labor disputes currently subject to any grievance procedure, arbitration or
litigation and there is no representation petition pending or, to the Knowledge
of Seller, threatened with respect to any employee employed in the
operation of the business conducted at the Restaurant Sites. The
Seller has complied with all provisions of all Legal Requirements (as defined in
Article 10)
pertaining to the employment of employees, including, without limitation, all
such Legal Requirements relating to labor relations, equal employment, fair
employment practices, entitlements, prohibited discrimination or other similar
employment practices, entitlements, prohibited discrimination or other similar
employment practices or acts, except for any failure so to comply that,
individually or together with all such other failures, has not and will not
result in a material Liability or obligation on the part of the Buyer, and has
not had or resulted in, and is not expected to have or result in, a Material
Adverse Effect (as defined in Article
10).
(b) Buyer
shall have no Liability on account or with respect to any benefits due Seller’s
employees (including without limitation any Liability arising in connection with
or with respect to any of the following: compensation, unemployment insurance
contributions, termination payments, severance payments, retirement, pension,
profit-sharing, retirement plans, bonus, vacation, disability, health, accrued
sick leave or other employee benefit plans, agreements or
understandings). The terms and conditions (including the scope and
amount of all benefits) under which any employment will be offered to employees
of Seller by Buyer shall be determined by Buyer in its sole
discretion.
3.10 Books and
Records. All the books,
records and accounts of Seller relating to the Restaurant Sites, all of which
have been made available to Buyer, are in all material respects accurate and
complete, accurately reflect all matters normally recorded in the books, records
or accounts of Seller in accordance with Seller’s historical practices, are in
all material respects in compliance with all laws and regulations applicable to
Seller as they relate to the business conducted at the Restaurant Sites and
accurately present and reflect in all material respects the transactions
described therein.
3.11 Taxes. Except as set
forth on Schedule
3.11, all Tax returns, reports and declarations required by any
governmental authority to be filed in connection with Seller’s ownership or
lease of the Assets or the operation of the business conducted at the Restaurant
Sites have been timely filed and, to the Knowledge of Seller, are complete and
correct in all material respects and all Taxes related thereto have been
paid.
3.12 Litigation. Except as set
forth in Schedule
3.12, there is no claim, counter-claim, action, suit, order, proceeding
or investigation pending, in law or in equity, or, to the Knowledge of Seller,
threatened against or involving Seller, with respect to the business conducted
at the Restaurant Sites (or pending or, to the Knowledge of Seller, threatened
against any of the officers, directors or key employees of Seller with respect
to business activities (including any products sold) at the Restaurant Sites
conducted on behalf of Seller) with respect to or affecting Seller, its
accounts, business, properties, assets or rights, or relating to the
transactions contemplated hereby, before any court, agency, regulatory,
administrative or other governmental body or officer or before any arbitrator;
nor to the Knowledge of Seller, is there any reasonable basis for any such
claim, action, suit, proceeding or governmental, administrative or regulatory
investigation that would result in a Material Adverse Effect. Seller
is not directly subject to or affected by any order, judgment, decree or ruling
of any court or governmental agency relating to affecting the Restaurant
Sites. Seller has not received any written opinion or memorandum of
legal advice from legal counsel to the effect that it is exposed to any
liability which may be material to the business, prospects, results of
operations, financial condition or assets of Seller at the Restaurant
Sites.
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3.13 Environmental
and Safety Requirements.
(a) To
the Knowledge of Seller, Seller is in material compliance with all applicable
Environmental and Safety Requirements (as defined below) at the Restaurant Sites
and Seller possesses all required permits, licenses and certificates for the
Restaurants, and has filed all notices or applications, required
thereby. To the Knowledge of Seller, Seller has not received
any notice or other communication from any party with respect to Seller’s
failure to comply with Environmental and Safety Requirements. For
purposes of this Agreement, “Environmental and
Safety
Requirements” means all federal, state, provincial, foreign and local
laws, bylaws, rules, regulations, ordinances, decrees, orders, statutes,
actions, guidelines, standards, arrangements, injunctions, policies and
requirements relating to public health and safety, worker health and safety,
disabilities, pollution and protection
of the environment (including without limitation the handling of any polluted,
toxic or hazardous materials), all as amended;
(b) To
the Knowledge of the Seller, the properties at the Restaurant Sites are not
subject to any, nor are there any facts or circumstances which Seller reasonably
believes could form the basis for any, Liability, contingent or otherwise
arising out of any Environmental and Safety Requirements. There are
no pending or, to the Knowledge of Seller, threatened claims or
Encumbrances for Seller’s failure to comply with any Environmental and Safety
requirements. Seller does not have in its possession or under its
control at the Restaurant Sites any hazardous substances, except those hazardous
substances as are used in the ordinary course of the business of Seller and are
used or maintained in compliance with the Environmental and Safety
Requirements;
(c) To
the Knowledge of the Seller, during the period Seller has occupied the
Restaurant Sites, there has been no Release (as defined in Article 10) or threat
of Release, of any hazardous materials at or from the Restaurant Sites or at any
other locations where any hazardous materials were generated, manufactured,
refined, transferred, produced, imported, used, or processed from or by the
Restaurant Sites, or from any other properties and assets (whether real,
personal, or mixed) in which Seller has or had an interest or, to the Knowledge
of Seller, any geologically or hydrologically adjoining property, whether by
Seller or any other Person; and
(d) Seller
has delivered to Buyer true and complete copies and results of any reports,
studies, analyses, tests, or monitoring possessed or initiated by Seller
pertaining to hazardous materials or hazardous activities in, or, or under the
Restaurant Sites, or concerning compliance by Seller or any other Person for
whose conduct it is or may be held responsible, with Environmental and Safety
Requirements.
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3.14 Store
Inventory. All of the Store Inventory is located at one or
more of the Restaurant Sites.
3.15 No
Undisclosed Liabilities. Seller has not
incurred any liabilities or obligations of any nature, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to become due,
arising out of or related to the business conducted at the Restaurant Sites,
except (a) as set forth in Schedule 3.15, (b) as
and to the extent disclosed or reserved against in the most recent balance sheet
of Seller provided to Buyer, and (c) for liabilities and obligations that were
(i) incurred in the ordinary course of business consistent with past practice
and (ii) individually or in the aggregate are not material to the business
conducted at the Restaurant Sites and have not had or resulted in, and would not
reasonably be expected to result in, a Material Adverse Effect.
3.16 Disclosure. No
representation or warranty or other statement made by Seller in this Agreement
or in connection with the transactions contemplated hereby omits to state a
material fact necessary to make any of them, in light of the circumstances in
which it was made, not misleading.
3.17 Brokers,
Finders, etc. Other than Brookwood Associates, retained by the
Seller as its investment banker in connection with the transactions set forth in
this Agreement, all negotiations relating to this Agreement and the transactions
contemplated hereby, have been carried on without the participation of any
Person acting on behalf of Seller in such manner as to give rise to any valid
claim against the Buyer or any of its subsidiaries for any brokerage or finder’s
commission, fee or similar compensation, or for any bonus payable to any
officer, director, employee, agent or sale representative of or consultant to
Seller upon consummation of the transactions contemplated hereby or
thereby. Buyer shall have no obligation to pay the fees and expenses
of Brookwood Associates.
3.18 Notice of
Sale. Notice of this Agreement and Notice of the Sale Order
and the hearings therefore will be duly and properly given to all known
creditors and parties in interest in the Bankruptcy Case, including but not
limited to, any parties holding consensual or nonconsensual liens on the Assets,
the non-Seller parties to the Assigned Agreements being assumed pursuant to this
Agreement, the employees at the Restaurant Sites, and applicable taxing and
governmental authorities.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF BUYER
As an
inducement to Seller to enter into and perform its respective obligations under
this Agreement, Buyer hereby represents and warrants to Seller as
follows:
4.1 Organization
and Good Standing; Power. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of [Delaware] and has full power and authority to conduct its
business as it is now being conducted and to own, operate or lease the
properties and assets it currently owns, operates or holds under
lease.
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4.2 Authorization. Buyer has full
power and authority to execute and deliver this Agreement and any agreement,
document, certificate or instrument being delivered pursuant to or in connection
with the transactions contemplated by this Agreement, to perform its obligations
hereunder and there under and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the
other Sale Documents, and the performance by Buyer of its obligations hereunder
and there under, and the consummation of the transactions contemplated hereunder
and there under, have been duly authorized by Buyer. This Agreement
and the other Sale Documents upon execution and delivery by Buyer shall
constitute the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms.
4.3 No
Violation. The execution,
delivery and performance by Buyer of this Agreement and the other Sale Documents
and the consummation of the transactions contemplated herein and therein do not
and will not:
(a) conflict
with, result in the breach, modification, termination or violation of, or loss
of any benefit under, constitute a default under, accelerate the performance
required by, result in or give rise to a right to amend or modify the terms of,
result in the creation of any Encumbrance upon any assets or properties, or in
any manner release any party thereto from any obligation under, any mortgage,
note, bond, indenture, contract, agreement, lease, license or other instrument
or obligation of any kind or nature by which Buyer or any of its properties or
assets may be bound or affected;
(b) conflict
with, violate or result in any loss of benefit under, any permit, concession,
franchise, order, judgment, writ, injunction, regulation, statute or decree;
or
(c) conflict
with or violate any provision of the articles of organization or operating agreement,
each as heretofore amended, of Buyer.
4.4 No
Consent Required.
Except as otherwise contemplated by this Agreement, no consent, approval,
order or authorization of, or declaration, filing or registration with, any
person, entity or governmental authority is required to be made or obtained by
Buyer in connection with the authorization, execution, delivery or performance
of this Agreement, the other Sale Documents or the transactions contemplated
hereby.
4.5 Financing
Commitment. Buyer has
sufficient funds to pay the Purchase Price or, alternatively, has secured a
financing commitment from a third party in an amount sufficient to pay the
Purchase Price.
4.6 “AS IS”
Transaction. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN ARTICLE 3 ABOVE,
THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE ASSETS. BUYER
FURTHER ACKNOWLEDGES THAT BUYER HAS CONDUCTED AN INDEPENDENT INSPECTION AND
INVESTIGATION OF THE PHYSICAL CONDITION OF THE ASSETS AND ALL SUCH OTHER MATTERS
RELATING TO OR AFFECTING THE ASSETS AS BUYER DEEMED NECESSARY OR APPROPRIATE AND
THAT, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE 3 AND THE
CONDITION OF TITLE TO THE ASSETS CONFERRED BY THE SALE ORDER, BUYER IS
PROCEEDING WITH ITS ACQUISITION OF THE ASSETS BASED SOLELY UPON SUCH INDEPENDENT
INSPECTIONS AND INVESTIGATIONS. ACCORDINGLY, BUYER WILL ACCEPT THE
ASSETS AT THE CLOSING "AS IS," "WHERE IS," AND "WITH ALL FAULTS."
11
ARTICLE
5
COVENANTS
AND OTHER TERMS
Except (i) to the extent it would not reasonably be
expected to result in a Material Adverse Effect, (ii) to the extent the
Bankruptcy Court determines otherwise, and (iii) to the extent the Bankruptcy
Code provides otherwise, Seller and Buyer
covenant and agree as follows:
5.1 Conduct
of Business. Seller agrees that from the date of this
Agreement through the earlier to occur of (x) the Closing Date, and (y) the date
on which this Agreement is terminated in accordance with the provisions of Section 8.1 hereof,
the Seller will:
(a) Conduct of
Business. Use commercially reasonable efforts to conduct the
business at the Restaurant Sites in the ordinary course and in substantially the
same manner as such business has previously been carried out, without limiting
the foregoing, the Seller will use commercially reasonable efforts to maintain
adequate inventory levels and adequate staffing levels, and the Seller will not
engage in any transactions not in the ordinary course.
(b) Representations and
Warranties; Conditions. Use commercially reasonable efforts
not to engage in any practice, take any action, fail to take any action or enter
into any transaction that could reasonably be expected to (i) cause any of the
representations and warranties herein to be untrue, inaccurate or incorrect at
any time, or (ii) result in any of the conditions set forth in Section 6.1 not being
satisfied on or prior to the Termination Date.
(c) Sale of Assets;
Liens. Not (i) transfer, convey, sell or encumber any of the
Assets, except inventory sold in the ordinary course of its business, or
Encumbrances granted under the Seller’s post-petition financing facility or
otherwise authorized by the Bankruptcy Court, or (ii) dispose of, or trade in,
any of the Tangible Personal Property.
(d) Maintenance of
Relationships. Subject to Seller’s responsibilities as a
debtor-in-possession under the Bankruptcy Code, use commercially reasonable
efforts to preserve its current relationships with its customers, suppliers,
vendors and other Persons with which it has significant business
relationships. Subject to Bankruptcy Court approval, continue to
honor gift certificates / coupons tendered by customers and take all
commercially reasonable steps to ensure that the Seller’s suppliers and vendors
continue to provide product and services to the Seller during the pendency of
the Bankruptcy Case and to the Buyer after Closing on ordinary trade and credit
terms. The Seller shall notify Buyer in writing within five (5)
Business Days of the receipt of any written notice or Knowledge of the Seller
(without due inquiry) to the effect that any current material vendor or supplier
of the Seller or other party to any Assigned Agreement could reasonably be
expected to terminate or materially alter its business relations with the
Seller, either as a result of the Bankruptcy Case, the transactions contemplated
herein or otherwise.
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5.2 Non-Interference. Seller
shall not take any actions that impair or interfere with the rights of Buyer
hereunder.
5.3 Notices
and Consents. Seller shall be responsible for obtaining prior to the Closing all waivers, permits,
consents, approvals or other authorizations from third Persons and Governmental
Units, if any, and to effect all such registrations, filings with and notices to
third Persons and Governmental Units, including all local, county, state and
federal taxing authorities, as may be necessary in order to permit the
consummation of the transactions contemplated by this Agreement free and clear
of all Encumbrances. Buyer shall use reasonable efforts to assist
Seller in obtaining such waivers, permits, consents, approvals and
authorizations and in making such registrations and filings.
5.4 Solicitation
of Employees. Upon execution of this Agreement by both Buyer
and Seller, Buyer may discuss with any of Seller’s employees at the Restaurants
their employment by Buyer after the Closing. Buyer may discuss
employment with other Seller employees only upon written request and
approval. Upon the Closing, Seller shall terminate all of the
employees employed by Seller at the Restaurants. Buyer will
have the right, but not the obligation, to interview and hire any such employee
of Seller, and Seller and Buyer shall cooperate to effect an orderly transition
of any present or former employees of Seller to be hired by Buyer, in its sole
discretion, upon or after the Closing.
5.5 Reasonable
Efforts. Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done as promptly as practicable,
all things necessary to consummate the transactions contemplated by this
Agreement, including, without limitations, the prompt preparation and filing by
Seller of all necessary pleadings, motions and notices in connection with the
approval by the Bankruptcy Court of this Agreement.
ARTICLE
6
CONDITIONS
PRECEDENT TO THE CLOSING
6.1 Conditions
Precedent to Obligations of Buyer. The obligations
of Buyer under this Agreement to consummate the transactions contemplated hereby
shall be subject to the satisfaction, at or prior to the Closing, of all of the
following conditions, any one or more of which may be waived at the option of
Buyer (provided, however, that (1) the parties acknowledge
and agree that any representations and warranties of the Seller contained in
Article 3 of this Agreement and referenced in this Section 6.1 are qualified in
their entirety by those qualifications set forth in clauses (i) through (iv) of
the introductory paragraph to such Article 3, and
(2) any covenants of the Seller contained in this Agreement and referenced in
this Section 6.1 are qualified in their entirety by those qualifications set
forth in clauses (i) through (iii) of the introductory paragraph to
Article 5):
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(a) Representations and
Warranties; Performance of Agreements. Subject to the
acknowledgments set forth in Section 4.6, (i) all
of the representations and warranties of the Seller set forth herein and any
related Sale Documents shall be true and correct in all material respects on and
as of the Closing Date with the same force and effect as though made on and as
of the Closing Date (or, if made as of a specified date, as of such date); (ii)
the Seller shall have performed and complied in all material respects with all
of their covenants and other obligations contained in this Agreement required to
be performed or complied with by Seller at or before the Closing; and (iii) the
Buyer shall have received a certificate on behalf of the Seller as to the
fulfillment of the conditions set forth in clauses (i) and (ii) above, which
certificate shall have the effect of a representation and warranty of the Seller
as to the matters set forth therein.
Required
Consents. The Buyer shall have received copies of all of the
consents, permits, and regulatory approvals necessary to consummate the
transactions contemplated by this Agreement.
(b) Ancillary
Agreements. The Buyer shall have received the following Sale
Documents, each dated as of the Closing Date and in full force and effect as of
the Closing Date:
(i) one
or more Bills of Sale, duly executed by the Seller, the forms of which shall be
submitted by Buyer on or before such date that is two (2) Business Days prior to
the Sale Hearing (each, a “▇▇▇▇ of
Sale”);
(ii) the
License, duly executed by the Seller, the form of which shall be identical to
the license granted by Seller to Star Buffet Management, Inc., pursuant to that
certain Asset Purchase Agreement dated as of December 2, 2007; and
(iii) all
other instruments of transfer, duly executed by the Seller as shall be
reasonably necessary or appropriate to vest in the Buyer good and indefeasible
title to the Assets and to permit the Buyer to conduct the business at the
Restaurant Sites without interruption.
(c) No Legal
Obstruction.
Except as is otherwise contemplated by the Bankruptcy Case, no suit,
action or proceeding not disclosed in the schedules to this Agreement by any
Person, entity or governmental agency shall be pending or threatened in writing,
which if determined adverse to Seller, or Buyer’s interests, could reasonably be
expected to have a Material Adverse Effect. No injunction,
restraining order or order of any nature shall have been issued by or be pending
before any court of competent jurisdiction or any governmental agency
challenging the validity or legality of the transactions contemplated hereby or
restraining or prohibiting the consummation of such transactions or compelling
Buyer to dispose of or discontinue or materially restrict the operations of a
significant portion of Seller’s business conducted at the Restaurants. The
obligations of the buyer under this Agreement to consummate the transaction
contemplated hereby shall be subject to Buyers confirmation that the restaurants
identified in the Agreement have been continuously operated since January 22,
2008 and continue to be in operation at the time of closing.
(d) Damage or
Destruction. From the date
hereof until the Closing, there shall have been no loss or destruction of any
portion of the properties or assets of Seller at the Restaurants, nor any
institution or threat of any condemnation or other proceedings to acquire or
limit the use of any of the properties or assets of Seller at the Restaurants,
which (in any such case) could reasonably be expected to result in a Material
Adverse Effect.
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(e) Bankruptcy
Court Approval. The Sale Order shall have been entered
and shall be in form and substance reasonably satisfactory to Seller and Buyer,
and shall have become a Final Order (as defined in Article 10); provided, however, that Buyer
will use its reasonable efforts to consummate the transactions contemplated
hereby under circumstances where an appeal of the Sale Order is pending, no stay has
been obtained, and Buyer reasonably believes that closing the transaction will
moot any such appeal(s). Any other orders of the Bankruptcy Court
with respect to this Agreement shall be in form and substance reasonably
satisfactory to Buyer.
6.2 Conditions
Precedent to Obligations of Seller. The obligations
of Seller under this Agreement to consummate the transactions contemplated
hereby will be subject to the satisfaction, at or prior to the Closing, of all
the following conditions, any one or more of which may be waived at the option
of Seller:
(a) No Breach
of Covenants; True and Correct
Representations and Warranties. There shall have
been no material breach by Buyer in the performance of any of the covenants
herein to be performed by it in whole or in part prior to the Closing, and the
representations and warranties of Buyer contained in this Agreement, if
specifically qualified by materiality, shall be true and correct in all respects
as of the date hereof and as of the Closing Date and, if not so qualified, shall
be true and correct in all material respects as of the date hereof and as of the
Closing Date, except for representations or warranties that are made by their
terms as of a date specified by month, day and year, which shall be true and
correct or true and correct in all material respects, as applicable, as of such
specified date. Seller shall receive at the Closing a
certificate dated as of the Closing and executed on behalf of Buyer, certifying
in such detail as Seller may reasonably require, the fulfillment of the
foregoing conditions, and restating and reconfirming as of the Closing all
of the covenants, representations and warranties of Buyer contained in this
Agreement, specifying in detail the extent of any breaches thereof.
(b) No Legal
Obstruction. Except as is
otherwise contemplated by the Bankruptcy Case, no suit, action or proceeding not
disclosed in this Agreement by any person, entity or governmental agency shall
be pending or threatened in writing, which could reasonably be expected to have
a material adverse effect upon (i) Buyer or (ii) the benefits to Seller of the
transactions contemplated hereby. No injunction, restraining order or
order of any nature shall have been issued by or be pending before any court of
competent jurisdiction or any governmental agency challenging the validity or
legality of the transactions contemplated hereby or restraining or prohibiting
the consummation of such transactions or compelling the disposition of or
discontinue or materially restrict the operations of a significant portion of
Buyer.
(c) Cure of
Defaults. Buyer shall have satisfied its obligations, if any,
under Section
1.6.
(d) Sale
Order. The Sale Order shall have been entered,
shall be in form and substance reasonably satisfactory to Buyer, and shall have
each become a Final Order; provided, however, that Buyer
will use its reasonable efforts to consummate the transactions contemplated
hereby under circumstances where an appeal of the Sale Order is pending, no stay
has been obtained, and Buyer reasonably believes that closing the transaction
will moot any such appeal(s). Any other orders of the Bankruptcy
Court with respect to this Agreement shall be in form and substance reasonably
satisfactory to Buyer.
15
6.3 Waiver of
Conditions. Buyer may unilaterally waive any of the conditions
to closing set forth in Section 6.1 of this
Agreement. Seller may unilaterally waive any of the condition to
closing set forth in Section 6.2 of this
Agreement.
ARTICLE
7
BANKRUPTCY
ACTIONS
7.1 Commencement
of the Case. Seller has filed a voluntary petition under
chapter 11 of the Bankruptcy Code.
7.2 Bankruptcy
Court Approvals.
The
Seller has sought and obtained an order setting a hearing to approve the sale of
the Assets and the assumption of the Assumed Liabilities (the “Sale Hearing”)
for February 12, 2008 at 9 a.m. At the Sale Hearing the Debtor shall
seek an order (the “Sale Order”) authorizing (A) Seller to sell the Assets to
Buyer pursuant to this Agreement and Sections 363 and 365 of the Bankruptcy
Code, free and clear of all interests in or to the Assets within the meaning of
the Bankruptcy Code Section 363(f), and otherwise free and clear of all other
liens, encumbrances, claims and liabilities, except for the Assumed Liabilities,
and (B) Buyer to assume the Assumed Liabilities and Seller to be relieved of
liability therefrom. The Seller shall use all reasonable
efforts to cause the Bankruptcy Court to enter the Sale Order as promptly as
practicable, but in no event later than one (1) Business Day after the
commencement of the Sale Hearing.
(i) The
Sale Order shall provide, among other things, that:
(A) The
Sale Motion is granted and the sale of the Assets (including the assumption and
assignment of the Assigned Agreements), in accordance with the terms and
conditions of this Agreement, is approved. The sale of the Assets is
necessary, essential and appropriate under the circumstances of the Seller’s
bankruptcy estate, which (together with the Seller’s creditors) would suffer
immediate and irreparable harm if the Seller were not permitted to sell the
Assets (including assumption and assignment of the Assigned Agreements) at this
time. The transactions contemplated by this Agreement are permissible
under Sections 363 and 365 of the Bankruptcy Code, and do not amount to a sub
▇▇▇▇ plan of reorganization. The Seller has engaged in fair and
reasonable marketing, advertising and other sale efforts and procedures in
connection with the transactions, both before and after the Petition Date, and
has complied with the Bid Procedures Order.
(B) The
Sellers have obtained a fair and reasonable price for the Assets.
16
(C) Notice
of the Sale Motion was appropriate and adequate in the circumstances and
complied in all respects with the requirements of the Bankruptcy Code, the
Federal Rules of Bankruptcy Procedure, the Local Bankruptcy Rules for the
Bankruptcy Court and the Bid Procedures Order, and is approved. No
further notice of, or hearing on the Sale Motion is
required. Adequate notice of and an opportunity to be heard with
respect to the Sale Motion has been given to all parties in interest, including
all Persons claiming any interest in or Lien on the Assets, including landlords
under any Assumed Leases, non-Seller parties to any Assigned Agreements and
governmental taxing authorities that may, as a result of the transactions
authorized hereby have claims, whether contingent, unliquidated, unknown or
otherwise.
(D) The
Assets (including the Assigned Agreements) will be sold to the Purchaser free
and clear of all Encumbrances, and of any other interests in the Assets because,
in each case as appropriate, the requirements of Section 363(f) of the
Bankruptcy Code have been satisfied. The sale free and clear and the
assumptions and assignments shall be self-executing and neither the Seller nor
the Buyer shall be required to execute or file releases, termination statements,
assignments, consents or other instruments in order to effectuate the sale of
the Assets free and clear, or to bind the non-Seller parties to the assumption
and assignment of the Assigned Agreements. Any Encumbrances and other
interests in the Seller’s interest in the Assets shall attach to the proceeds
from the sale in the order of their priority, with the same validity, force and
effect which they now have against the Assets.
(E) The
Assigned Agreements to be assumed and assigned under this Agreement and the Sale
Order shall be in full force and effect, with no oral or other modifications or
waivers thereof, and all payments due there under are current. If the
Closing occurs, the Buyer shall pay the portion of the Cure Amounts, if any, due
under Section
1.6 of this Agreement. If the Closing occurs, the Seller, not
the Buyer, shall be solely responsible for satisfying any other obligations that
accrue before the Effective Time under the Assigned Agreements, and the Buyer,
not the Sellers, shall be solely responsible for satisfying any obligations
accruing there under after the Effective Time. Subject to Section 7.5 herein,
no consents are necessary for the assumption and assignment of any of the
Assigned Agreements, and the assumption and assignment of each of the Assigned
Agreements shall be effective at the Closing notwithstanding any provisions
therein or in applicable law that restrict the assignability
thereof.
(F) This
Agreement was proposed, negotiated and entered into by the Sellers and the
Purchaser without collusion, in good faith and from arms’-length bargaining
positions.
(G) The
terms and conditions of the transactions set forth in this Agreement are
approved, this Agreement and the other Sale Documents (when executed) will
constitute valid and binding agreements of the Seller, enforceable against them
in accordance with their terms, and the Seller is authorized, empowered and
directed to take all such action as may be necessary or appropriate to
consummate the transactions, all without further order of the Bankruptcy
Court.
(H) The
Bankruptcy Court shall retain jurisdiction to implement and enforce the terms of
this Agreement and the Sale Order, including the terms on which the Assigned
Agreements are assumed and assigned. The Buyer has furnished adequate
assurance of future performance.
17
(I) No
bulk sales law or any similar law of any state or other jurisdiction shall apply
in any way to the transactions authorized herein.
(J) The
Sale Order is a final, appealable order, which shall be effective immediately
upon entry, except to the extent stayed by its terms. The ten (10)
day stay of the Sale Order, as provided in Rule 6004(h) and 6006(d) or any other
Rule of the Federal Rules of Bankruptcy Procedure, shall not
apply. Absent judicial imposition of a stay of the Sale Order pending
appeal, the Seller and the Buyer may immediately consummate the Transactions
approved hereby, notwithstanding whether an appeal of the Sale Order is pending
at any time.
7.3 [Intentionally
Omitted].
7.4 [Intentionally
Omitted].
7.5 Adequate
Assurance of Future Performance; Cooperation. The Buyer shall
be responsible for providing evidence and argument in support of the Sale Motion
in order to establish its ability to provide “adequate assurance of future
performance” (within the meaning of Section 365(f)(2)(B) of the Bankruptcy Code)
of each Assigned Agreement. The Seller agrees to use commercially
reasonable efforts to cooperate with the Buyer in the presentation of such
evidence and argument. The Bankruptcy Court’s refusal to approve the assumption
by the Buyer of any Assigned Agreement on the grounds that “adequate assurance
of future performance” by the Buyer of such Assigned Agreement has not been
provided shall not constitute grounds for termination pursuant to Section 8.1
hereof. In addition, the Buyer shall reasonably cooperate with the
Seller in the Seller’s efforts to obtain the approval of the Sale
Motion.
ARTICLE
8
TERMINATION
RIGHTS; CLOSING DELIVERIES
8.1 Termination
of Agreement. The parties may
terminate this Agreement and the transactions contemplated hereby may be
abandoned at any time prior to the Closing:
(a) by
mutual written consent of each of Seller and Buyer at any time prior to the
Closing;
(b) [Intentionally
Omitted];
(c) by
Seller, if (i) the Closing shall not have occurred on or prior to the
Termination Date (as defined in Section 2.3), unless
such failure to consummate the transactions herein is the result of a material
breach of any representation, warranty, covenant or other agreement contained in
the Sale Documents by the Seller, or (ii) upon written notice to Buyer at any
time prior to the Closing, and following written notice thereof and a cure
period of five (5) business days thereafter, if Buyer shall have breached any
representation, warranty or covenant contained in this Agreement in any material
respect;
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(d) by
Buyer, if (i) the Closing shall not have occurred on or prior to the Termination
Date, unless such failure to consummate the transactions herein is the result of
a material breach of any representation, warranty, covenant or other agreement
contained in the Sale Documents by the Buyer, or (ii) upon written notice to
Seller at any time prior to the Closing, and following written notice thereof
and a cure period of five (5) business days thereafter, if Seller shall have
breached any representation, warranty or covenant contained in this Agreement in
any material respect (provided, however, that (1) for purposes of this Section 8.1(d), any
representations and warranties of the Seller contained in Article 3 of this
Agreement are qualified in their entirety by those qualifications set forth in
clauses (i) through (iv) of the introductory paragraph to such Article 3, and (2) any covenants of the Seller contained in this
Agreement are qualified in their entirety by those qualifications set forth in
clauses (i) through (iii) of the
introductory paragraph to Article
5);
(e) by
either party, upon written notice to the other and following a cure period of
three (3) business days, if the Closing has not occurred by 5:00 p.m. Central
Time on the day that is two (2) business days following the entry of the Sale
Order; provided, that (i) no stay of the Sale Order shall be in effect, (ii) the
Sale Order shall contain a waiver of the automatic ten (10) day stay under Rule
6004(h) of the Federal Rules of Bankruptcy Procedure, and (iii) the terminating
party is not then in material breach of this Agreement; and
(f) by
either party, upon written notice to the other, if the Sale Order shall not have
been entered by the Bankruptcy Court on or prior to 5 p.m. Central Time on
February 13, 2008.
8.2 Procedure
and Effect of Termination. In the event that either Buyer or
Seller terminates this Agreement pursuant to Section 8.1, written
notice thereof shall forthwith be given to the other parties to this Agreement,
specifying the particular provision of Section 8.1 upon
which such termination is based, and this Agreement shall terminate (subject to
the retention of the Deposit by Seller in the event of termination under Section 8.1(c)) and
the transactions contemplated hereby shall be cancelled, without further action
by any of the parties hereto. If this Agreement is terminated as
provided herein:
(a) upon
request therefor, each party shall redeliver (or, at the option of the party
holding such documents, destroy the same) all documents, work papers and other
material of any other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party furnishing
the same; and
(b) no
party hereto shall have any liability or further obligation to any other party
to this Agreement resulting from such termination except that the provisions of
this Section
8.2 shall remain in full force and effect.
ARTICLE
9
OTHER
AGREEMENTS
9.1 Cooperation. Buyer and Seller
will, at any time, and from time to time, after the execution of this Agreement,
execute and deliver such further instruments of conveyance and transfer and take
such additional action as may be reasonably necessary to effect, consummate,
confirm or evidence the transactions contemplated by this Agreement and
the other Sale Documents (including the exercise of good faith in the
Bankruptcy Case and related proceedings).
19
9.2 Risk of
Loss. Seller assumes
all risk of loss due to fire or other casualty up to the Effective Time and
Buyer shall assumes all risk of loss subsequent to the Effective
Time.
9.3 Apportionment. Any unpaid rents,
taxes, assessments, common area maintenance charges, expenses and other charges
(“Unpaid Charges”) for which
Seller is directly or indirectly responsible and which relate to the Restaurant
Sites for periods both before and after the Effective Time shall be prorated
between Seller and Buyer on a daily basis, with Seller responsible for payment
of all such Unpaid Charges allocable to the time period up to and including the
Effective Time and with Buyer responsible for payment of all such Unpaid Charges
allocable to the time period thereafter. Seller and Buyer agree that
all such Unpaid Charges (except to the extent reasonably disputed) shall be paid
in full by either Seller or Buyer, as the case may be, within sufficient time to
prevent any taxing agency or other creditor from making any claim. If
Seller or Buyer pays any Unpaid Charges in full in accordance with the preceding
sentence, the other shall promptly reimburse its pro rata portion to the
paying party upon receipt of written notice of the fact and amount of such
payment (subject, in Seller’s case, to the approval of the Bankruptcy
Court). Buyer agrees to reimburse Seller for any Prepaid Charges,
including prepayments of rents, security deposits (but only to the extent of the
aggregate amount of security deposits with respect to which the estoppel
certificates for the lease to which the security deposit relates states that no
claim then exists against such deposits), taxes, expenses and other charges
made by Seller to the extent and in the proportion that such Prepaid Charges are
retained for the benefit of Buyer or relate to periods after the Effective
Time.
ARTICLE
10
DEFINITIONS
For
purposes of this Agreement, the following terms have the meaning set forth
below:
“Affiliate” has the
meaning ascribed to that term in Rule 405 of the Securities Act of 1933, as
amended.
“Encumbrance” means,
with regard to any asset, a mortgage, deed of trust, pledge, lien, collateral
agreement, security interest, claim (including, without limitation, as that term
is defined in Section 101(5) of the Bankruptcy Code), security arrangement,
liability, encumbrance, accrued but unpaid taxes, tax liens or any other
interest of any nature whatsoever in respect of such asset to the fullest extent
any such interest can be eliminated under Section 363(f) of the Bankruptcy Code;
provided, however, that the term Encumbrance shall not include the rights
pursuant to Section 365(n) of the Bankruptcy Code of any licensee under a
license of “intellectual property” (as such term is defined in Section 101(35A)
of the Bankruptcy Code) or fee interests in real property such as easements or
rights of way.
“Final Order” means an
order or judgment of the Bankruptcy Court which has not been reversed, stayed,
modified or amended and is no longer subject to appeal, certiorari proceeding or
other proceeding for review or rehearing (giving effect to any reduction or
elimination of the appeal period pursuant to an order of the Bankruptcy Court),
and as to which no appeal, certiorari proceeding, other proceeding for review or
rehearing shall then be pending.
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“Governmental Unit”
means the United States of America; any state; commonwealth; district;
territory; municipality or foreign state; and any department, agency or
instrumentality (including but not limited to any regulatory or administrative
authority or agency, court or arbitrational tribunal thereof) of the United
States of America (but not a United States Trustee while serving as a trustee in
a case under the Bankruptcy Code), or any state, commonwealth, district,
territory, municipality or foreign state; or other foreign or domestic
government.
“Knowledge” means the
actual knowledge by ▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇▇ in their capacity as officers
and directors of Seller.
“Legal Requirement”
means any federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.
“Liability” means, with
respect to any Person, any Liability or obligation of such Person of any kind,
character or description, whether known or unknown, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, secured or unsecured, joint or
several, due or to become due, vested or unvested, executory, determined,
determinable or otherwise and whether or not the same is required to be accrued
on the financial statements of such Person.
“Material Adverse
Effect” means an event, change or occurrence which, individually or
together with any other event, change, or occurrence, has a material adverse
impact on (i) the business conducted by Seller at the Restaurant Sites (taken as
a whole), (ii) the ability of Seller to perform its obligations under this
Agreement or to consummate the transactions contemplated by this Agreement, or
(iii) the Assets taken as a whole.
“Person” means any
shareholder, individual, corporation, partnership, firm, joint venture,
association, joint-stock seller, trust, unincorporated organization, regulatory
body or other entity.
“Release” means any
release, spill, emission, leaking, plumbing, pouring, dumping, emptying,
injection, deposit, disposal, discharge, dispersal, leaching, or migration on or
into the environment or into or out of any property.
“Taxes” means (whether
or not disputed) taxes of any kind, levies or other like assessments, customs,
duties, imposts, charges or fees, including, without limitation, income taxes,
gross receipts, ad valorem, value added, excise, real property, personal
property, occupancy, asset, sales, use, license, payroll, transaction, capital,
capital stock, net worth, estimated, withholding, employment, social security,
unemployment, unemployment compensation, workers' compensation, disability,
utility, severance, production, environmental, energy, business, occupation,
mercantile, franchise, premium, profits, windfall profits, documentary, stamp,
registration, transfer and gains taxes, toll charges (for example, toll charges
under Sections 367 and 1492 of the Bankruptcy Code), or other taxes of any kind
whatsoever, imposed by or payable to the United States, or any state, country,
local or foreign government or subdivision, instrumentality, authority or agency
thereof or under any treaty, convention or compact between or among any of them,
and in each instance such term shall include any interest (including interest on
deferred tax liability under Section 453A(c) of the Bankruptcy Code and
"look-back" interest under Section 460 of the Bankruptcy Code and similar
amounts of interest imposed by the Bankruptcy Code), penalties, additions to tax
or similar charges imposed in lieu of a Tax or attributable to any Tax, other
than taxes imposed on or payable by Seller that are, or that are in the nature
of taxes that are, based upon, measured by or imposed with respect to capital,
net worth, net receipts or net income (including without limitation minimum
taxes, tax preference items, alternative minimum taxes, capital gains taxes,
excise taxes, personal holding company taxes and excess profits
taxes).
21
ARTICLE
11
MISCELLANEOUS
11.1 Notices,
Consents, etc. Any notices,
consents or other communication required to be sent or given hereunder by any of
the parties shall in every case be in writing and shall be deemed properly
served if (a) delivered personally, (b) delivered by registered or certified
mail, in all such cases with first class postage prepaid, return receipt
requested, (c) delivered by courier, at the addresses as set forth below or at
such other addresses as may be furnished in writing, or (d) delivered by
facsimile transmission with confirmation of successful transmission, at the
numbers as set forth below or at such other numbers as may be furnished in
writing. Any notice required
herein shall be in writing (to the
individuals listed in Section 11.1, unless specified otherwise pursuant to Section 11.1) unless specifically permitted to be given orally.
All such
notices and communications shall be deemed received upon the actual delivery
thereof in accordance with the foregoing.
|
(a)
|
If
to Seller:
|
▇▇▇▇▇▇▇▇’▇
Buffet, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: W.
▇▇▇▇▇ ▇▇▇▇▇▇, President
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
With a
copy to Seller’s counsel:
The ▇▇▇▇▇▇▇ Law Firm
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
22
|
(b)
|
If
to Buyer:
|
Starlite
Holdings, Inc.
▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Chief Executive Officer
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
With a
copy to:
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP
Suite
400
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
11.2 Severability. The unenforceability or
invalidity of any provision of this Agreement shall not affect the
enforceability or validity of any other provision that shall remain in full
force and effect and be enforceable to the fullest extent permitted by
law.
11.3 Amendment
and Waiver. This Agreement may not
be amended, modified or waived except by an instrument in writing signed on
behalf of each of the parties hereto.
11.4 Actions
Necessary to Complete Transaction. Each party will execute all
documents and take such other actions as any other party may reasonably request
in order to consummate the transactions provided for herein and to accomplish
the purposes of this Agreement, provided that Seller’s obligations hereunder
shall be subject to any limitations imposed by the Bankruptcy Court or in
connection with the Bankruptcy Case.
11.5 Counterparts. For the
convenience of the parties, any number of counterparts of this Agreement may be
executed by the parties hereto. Each such counterpart shall be, and
shall be deemed to be, an original instrument, but all such counterparts taken
together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of the original executed counterpart of this
Agreement.
11.6 Expenses. Except as
otherwise provided herein, each party to this Agreement agrees to pay its own
reasonable costs and expenses incurred or to be incurred in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement and the other Sale Documents. Each
party will be responsible for their respective Taxes, directly or indirectly
attributable to the transactions contemplated by the Agreement.
11.7 Governing
Law. This Agreement
shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Agreement
shall be governed by, the laws of the State of Tennessee, without giving effect
to provisions thereof regarding conflicts of law. Each party and each
Person claiming hereunder hereby designates the Bankruptcy Court as the only
court of proper jurisdiction and venue for any actions or proceedings relating
to this Agreement, hereby irrevocably consents to such designation, jurisdiction
and venue; and hereby waives any objections or defenses relating to jurisdiction
or venue with respect to any action or proceeding initiated in the Bankruptcy
Court; and hereby consents to service of process under the statutes and rules
applicable to the Bankruptcy Court.
23
11.8 Headings. The subject
headings of Articles and Sections of this Agreement are included for purposes of
convenience only and shall not affect the construction or interpretation of any
of its provisions.
11.9 Incorporation
of Schedules and Exhibits. The Schedules and
Exhibits hereto are incorporated into this Agreement and will be deemed a part
hereof as if set forth herein in full. References to “this Agreement”
and the words “herein”, “hereof” and words of similar import refer to this
Agreement (including the Schedules and Exhibits) as an entirety. In
the event of any conflict between the provisions of this Agreement and any
Schedule or Exhibit, the provisions of this Agreement will
control. Capitalized terms used in the Schedules have the meanings
assigned to them in this Agreement. The Section references referred
to in the Schedules are to Sections of this Agreement, unless otherwise
expressly indicated.
11.10 Assignment. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned or delegated by Buyer or Seller in any
manner whatsoever, whether directly or by operation of law or otherwise, without
the prior written consent of the other party. Any assignment or
attempted assignment of all or any portion of this Agreement which is not
expressly permitted hereby shall be null and void and of no force or
effect.
11.11 Entire
Agreement. This Agreement,
the other Sale Documents, and the documents, schedules and exhibits described
herein or attached or delivered pursuant hereto collectively constitute the sole
and only agreement among the parties with respect to the subject matter
hereof. Any agreements, representations or documentation respecting
the transactions contemplated by this Agreement, and any correspondence,
discussions or course of dealing which are not expressly set forth in this
Agreement, the other Sale Documents, or the documents, schedules and exhibits
described herein or attached or delivered pursuant hereto or are null and void,
it being understood that no party has relied on any representation not set forth
in this Agreement, the other Sale Documents or the documents, schedules and
exhibits described herein or attached or delivered pursuant hereto.
11.12 Third
Parties. Nothing
herein express or implied is intended or shall be construed to confer upon or
give to any Person or entity, other than the parties to this Agreement and their
respective permitted successors and assigns, any rights or remedies under or by
reason of this Agreement.
11.13 Interpretative
Matters. Unless the
context otherwise requires, (a) all references to Articles, Sections, schedules
or exhibits are to Articles, Sections, schedules or exhibits in this Agreement,
and (b) words in the singular or plural include the singular and plural,
pronouns stated in either the masculine, the feminine or neuter gender shall
include the masculine, feminine and neuter, and (c) the term “including” shall
mean by way of example and not by way of limitation.
24
11.14 No Strict
Construction. The language used
in this Agreement will be deemed to be the language chosen by the parties hereto
to express their mutual intent, and no rule of strict construction will be
applied against any party hereto.
11.15 Time of
Essence. Time is of the essence with respect to this
Agreement.
11.16 Survival
of Representations and Warranties. All representations and
warranties of the parties set forth herein shall not survive the Closing and
shall not be of any force or effect thereafter. Without limiting the
foregoing, the parties agree and acknowledge that (a) any representations and
warranties of the Seller contained in Article 3 of this Agreement and referenced
in this Section 11.16 are qualified in their entirety by those qualifications
set forth in clauses (i) through (iv) of the introductory paragraph to such
Article 3, and (b) Seller’s liability with respect to representations and
warranties made by Seller hereunder are subject to the limitations set forth
herein and in Section 8.1.
25
IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first above written.
▇▇▇▇▇▇▇▇’▇
BUFFET, INC.
By: /s/ W. ▇▇▇▇▇
▇▇▇▇▇▇
Name: W. ▇▇▇▇▇
▇▇▇▇▇▇
Its: President
STARLITE
HOLDINGS, INC.
By: /s/ ▇▇▇
▇▇▇▇▇
Name: ▇▇▇
▇▇▇▇▇
Its: Secretary
26
SCHEDULES
TO ASSET PURCHASE AGREEMENT
The
following schedules (each a “Schedule” and
together the “Schedules”) to the
Asset Purchase Agreement (the “Agreement”), dated as
of the 29th day of
January , 2008, by and among Starlite Holdings, Inc., a Delaware corporation
(the “Buyer”),
and ▇▇▇▇▇▇▇▇’▇ Buffet, Inc., a Tennessee corporation (the “Seller”), are
incorporated by reference in and made a part of the
Agreement. Capitalized terms used but not defined in the Schedules
have the meanings ascribed thereto in the Agreement.
Each
disclosure in a particular Schedule is made specifically, and a disclosure made
in any particular Schedule or section thereof shall not be deemed to have been
disclosed in any other section of such Schedule or in any other
Schedule.
27
EXHIBIT
A
Restaurant
Locations
1.
Apopka, FL
2. Orange
City, FL
3.
Gulfport, MS
4. Moss
Point, MS
EXHIBIT
B
Tangible
Personal Property
EXHIBIT
C
Personal
Property Leases; Executory Contract; Additional Contracts
FIRST
AMENDMENT TO ASSET PURCHASE AGREEMENT
This
First Amendment to the ASSET PURCHASE AGREEMENT (this “Agreement”), dated as
of February 5, 2008, is by and among ▇▇▇▇▇▇▇▇’▇ BUFFET, INC., a Tennessee
corporation (the “Seller or the Company”) and
STARLITE HOLDINGS, INC., a wholly owned subsidiary of Star Buffet, Inc., a
Delaware corporation, (together with any successor and assigns, the “Buyer”).
RECITALS
WHEREAS, the Company and the
Buyer entered into the Agreement, such agreement being subject to terms and
conditions set forth therein; and
WHEREAS, the Company and the
Buyer desire to make modifications to certain terms within the
Agreement;
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:
1. Section
2.2 of the Agreement is hereby deleted in its entirety and replaced with the
following:
“Purchase
Price. The
purchase price for the sale of the Assets shall be $1,075,000.00 in cash (the
“Purchase Price”).”
2. Section
2.3 of the Agreement is hereby deleted in its entirety and replaced with the
following:
“Closing. The “Closing” of the
transactions contemplated herein, including payment of the Purchase Price, shall
take place at the offices of the Company or such other location in Nashville, TN
as may be agreed upon, no later March 31, 2008 (the “Target Date”) (or
such earlier date as Buyer and Seller may mutually agree, the “Closing Date”);
provided, that no stay of the Sale Order shall be in effect and provided,
further, that the Sale Order shall contain a waiver of the automatic ten (10)
day stay under Rule 6004(h) of the Federal Rules of Bankruptcy Procedure; provided, further, however, that in no
event unless otherwise agreed in writing shall the Closing take place on a date
which is after March 31, 2008 (the “Termination
Date”). At the Closing, Buyer shall pay the Purchase Price to
Seller by wire transfer of immediately available funds to one or more bank
accounts of Seller, or as directed by Seller in accordance with the terms of the
Sale Order approved by the Bankruptcy Court.”
3. Section
7.4 of the Agreement that is shown [Intentionally Omitted] shall be replaced
with the following
Payment
of Termination Fee.
(a) Subject
to approval of the Bankruptcy Court, if a Qualified Bid submitted in accordance
with the Bid Procedures Order is approved by Order of the Bankruptcy Court and
Buyer is not in breach under this Agreement, the Buyer shall be paid a
termination fee of Seventy-five Thousand Dollars ($75,000) (the “Buyer Termination
Fee”). Similarly, Buyer shall pay Seller a termination fee
equal to the amount of the Deposit (the “Seller Termination
Fee”) in the event Seller has satisfied its conditions to closing under
the Agreement (or is prevented from doing so by Buyer’s actions) and Buyer fails
to close the transactions contemplated by this Agreement. Payment of
the Seller Termination Fee to Seller by Buyer shall constitute liquidated and
agreed damages in respect of this Agreement and the transactions
contemplated by this Agreement, and Buyer shall have no further liability
to Seller. Seller believes that it is impossible to determine
accurately the amount of all damages that Seller would incur by virtue of a
breach by Buyer of its obligations to proceed with the transactions contemplated
by this Agreement, and its sole and exclusive remedy for any such breach shall
be to receive payment of the Seller Termination Fee. Buyer’s
obligation to pay the Seller Termination Fee to Seller shall be discharged upon
the release to Seller from the escrow described in Section 2.8 of the
full amount of the Deposit. If this Agreement is terminated for any
reason that does not result in the payment of the Seller Termination Fee, the
Deposit shall be released from escrow and refunded to Buyer not later than five
(5) business days following such termination.
(b) Payment
of the Buyer Termination Fee to Buyer shall (i) be full consideration for the
Buyer’s efforts and expenses in connection with the bidding process, this
Agreement and the transactions contemplated hereby, including the due diligence
efforts of the Buyer and its professionals and advisors and (ii) constitute
liquidated and agreed damages in respect of this Agreement and the transactions
contemplated by this Agreement, and Seller shall have no further liability to
Buyer. Buyer believes that it is impossible to determine accurately
the amount of all damages that Buyer would incur by virtue of a breach by Seller
of its obligations to proceed with the transactions contemplated by this
Agreement, and its sole and exclusive remedy for any such breach shall be to
receive payment of the Buyer Termination Fee. Except as provided in
this Section
7.4, Buyer shall have no right nor remedy against Seller, at law or in
equity, by reason of a breach by Seller of its obligation to proceed with the
transactions contemplated by this Agreement.
(c) The
Buyer Termination Fee shall be afforded administrative expense priority status
pursuant to Section 503(b)(1)(A) of the Bankruptcy Code and shall be paid upon
the earlier of (i) the closing of the transactions contemplated by an accepted
Qualified Bid and (ii) entry of any Order of the Bankruptcy Court directing
payment by Seller of such amounts.
(d) Notwithstanding
anything contained in this Agreement to the contrary, no Buyer Termination Fee
or Seller Termination Fee shall be payable to any party to this Agreement if
such party is in material breach of any provision of this
Agreement.
4. Capitalized
terms used in this Amendment which are not defined in this Amendment shall have
the meaning assigned to such term or terms in the Agreement.
5. No
other term or terms of the Agreement are changed, altered, modified or amended,
except as specifically set forth in this Amendment. The Agreement, as
amended and modified by this Amendment, is hereby ratified and remains in full
force and effect.
IN WITNESS WHEREOF, the
parties have executed this Agreement as of February 14, 2008.
▇▇▇▇▇▇▇▇’▇
BUFFET, INC.
By: /s/
W. ▇▇▇▇▇
▇▇▇▇▇▇
Name: W. ▇▇▇▇▇
▇▇▇▇▇▇
Its: President
STARLITE
HOLDINGS, INC.
By: /s/
▇▇▇
▇▇▇▇▇
Name: ▇▇▇
▇▇▇▇▇
Its: Secretary