ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered into
as of February 10, 2001, by and among Einstein/Noah Bagel Corp. ("E/N Corp."),
Einstein/Noah Bagel Partners, L.P. ("E/N Partners" and together with E/N Corp.,
the "Sellers") and Einstein Acquisition Corp., a Delaware Corporation, and
Greenlight New World, LLC (collectively the "Buyer"). Capitalized terms not
otherwise defined in the body of this Agreement are defined in Section 12.
PRELIMINARY STATEMENTS
A. Sellers are debtors in certain chapter 11 cases (Case Nos. 00-04447-CGC
and 00-04448-CGC) (together, the "Cases") pending before the United States
Bankruptcy Court for the District of Arizona (the "Bankruptcy Court");
▇. ▇▇▇▇▇▇▇ own and operate a chain of specialty retail stores doing
business under the names "Einstein Bros. Bagels" and "Noah's New York Bagels,"
selling fresh-baked bagels, proprietary cream cheeses, specialty coffees and
teas, among other items, and engage in certain related licensing and other
business activities (collectively, the "Business"); and
C. Upon the terms and subject to the conditions set forth in this Agreement
and in accordance with, among other provisions, Sections 363 and 365 of title 11
of the United States Code (the "Bankruptcy Code"), Sellers desire to sell,
transfer and assign to Buyer (or its Affiliates) substantially all of the assets
and rights of Sellers used in or related to such Business (excluding in all
cases the Excluded Assets) in return for cash and the assumption by Buyer of
certain liabilities of Sellers related to the Business, and Buyer desires to
purchase, acquire and accept the assignment of such assets and rights and to
assume such liabilities, all upon the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, and in consideration of the representations, warranties and
covenants herein contained, the parties hereby agree as follows.
1. Purchase and Sale of Assets.
1.1 Purchased Assets. Pursuant to Sections 363 (b) and (f) and 365 of the
Bankruptcy Code, Sellers agree to sell, transfer, assign and deliver to Buyer
(or its Affiliates) at the Closing, and Buyer agrees to purchase and accept from
Sellers at the Closing, each Seller's right, title and interest to all of its
respective assets, properties and rights, real and personal, tangible and
intangible, whether owned or leased that are used, usable or necessary in
connection with the Business (all of the foregoing, but in all cases excluding
the Excluded Assets, the "Purchased Assets"), free and clear of all mortgages,
pledges, liens, charges, equities, encumbrances, security interests and the like
(collectively, "Liens"), upon the terms and subject to the conditions and
exceptions set forth in this Agreement. Unless indicated otherwise in the
respective subsections, all schedules referred to in this Section 1 or elsewhere
in this Agreement have been mutually agreed to by Buyer and Sellers. Without
limiting the generality of the foregoing, the Purchased Assets shall include the
following:
1.1.1 Cash. All Operating Cash as of the Closing Time including without
limitation any cash in any "concentration account" or similar account;
1.1.2 Receivables. All trade receivables, note receivables, insurance
receivables and other receivables of either Seller as of the Closing Time,
including receivables under any franchise or licensing agreements (collectively,
"Receivables") and any security or collateral for Receivables. Specifically
excluded from the Receivables are the Excluded Receivables;
1.1.3 Inventory. All items of inventory, components, assembled or finished
goods, work in process, parts, raw materials and supplies as of the Closing Date
(collectively, "Inventory");
1.1.4 Assumed Contracts. To the extent such Contracts are assignable under
the Bankruptcy Code, all of either Seller's right, title and interest in and to
or under all Contracts other than Excluded Contracts listed on Schedule 1.2.3
(the "Assumed Contracts");
1.1.5 Personal Property. All owned furniture, fixtures, fixed assets,
equipment (including office equipment), supplies, manuals, vehicles, and other
personal property owned by either Seller (collectively, the "Personal
Property");
1.1.6 Claims and Causes of Action. (i) Any and all intellectual property
claims (to the extent related to the Intellectual Property) and (ii) any and all
other claims and causes of action that may be asserted by Sellers against (x)
any vendor to the extent that the relevant contract with such vendor is an
"Assumed Contract" hereunder or the obligations to such vendor are Assumed Total
Liabilities hereunder or (y) employees of the Business who become employees of
Buyer as of the Closing Date; excluding from all of the foregoing, (A) claims or
causes of action against parties listed on Schedule 1.2.4 hereto that are
unrelated to the Business, (B) claims or causes of action under the avoidance
provisions of the Bankruptcy Code or state fraudulent conveyance laws, and (C)
claims against vendors (including claims for indemnity, contribution and
reimbursement) that arose prior to the Closing Date (whether or not asserted
prior to the Closing Date) with respect to services or supplies provided by such
vendors to Sellers prior to the Closing Date and that do not relate to Assumed
Contracts or Assumed Real Property Leases;
1.1.7 Intentionally Omitted
1.1.8 Assumed Real Property Leases. To the extent such Real Property Leases
are assignable under the Bankruptcy Code, all of Sellers' right, title and
interest in and to all Real Property Leases other than the Excluded Real
Property Leases listed on Schedule 1.2.5 (the "Assumed Real Property Leases");
1.1.9 Books and Records. All books and records of Sellers relating to the
Business or Purchased Assets, including, without limitation, (i) all computer
data files stored, used, held or kept in connection with the Business or
Purchased Assets, and (ii) to the extent in possession of Sellers, copies of the
Organizational Books and Records of Einstein/Noah Bagel Partners, Inc. ("ENBPI")
(all of the foregoing, the "Books and Records");
1.1.10 Intellectual Property. All of Sellers' right, title and interest
with respect to:
(i) patents, patent applications, inventor's certificates, invention
disclosures, reissues, divisions, continuations-in-part and extensions
thereof;
(ii) trademarks (whether registered or unregistered), trademark applications,
trade names, brand names, assumed names, trade dress, service marks
(whether registered or unregistered), service ▇▇▇▇ applications, internet
domain name registrations and other indications of origin and all renewals,
modifications and extensions thereof;
(iii)copyrights (whether registered or unregistered), copyright applications
and all renewals and extensions thereof;
(iv) the Management Information Systems;
(v) to the extent transferable under the Bankruptcy Code, all of Sellers' other
intellectual property, trade secrets, inventions, confidential or
proprietary business information, know-how, ideas, formulas, compositions,
technical data, operating manuals and guides, writings and other works of
authorship, whether copyrightable or not, including software programs or
applications (including source code and object code and all documentation
therefor) developed by or on behalf of Sellers, algorithms, databases,
financial, marketing and business data, pricing and cost information,
recipes, processes, techniques, vendor lists and records, customer lists
and records, licensing records, plans, designs, drawings, sketches,
specifications, proposals, rights to limit the use or disclosure of
confidential information by any person, advertising and promotional
materials, business and marketing plans and similar assets;
(vi) the goodwill associated with each of the foregoing;
(vii) the right to use or exploit any of the foregoing;
(viii) any similar tangible or intangible intellectual property or proprietary
rights, information and technology;
(ix) any of the foregoing used pursuant to an express or implied license, to the
extent transferable under the Bankruptcy Code; and
(x) any claims or causes of action arising out of or related to any
infringement or misappropriation of any of the foregoing; in each case in
any jurisdiction
(all of the foregoing being referred to collectively as the "Intellectual
Property");
1.1.11 Governmental Permits. All of Sellers' licenses, consents,
qualifications, approvals or other regulatory authorizations issued by any
governmental entity pursuant to any law, rule, regulation, decree or
administrative or industry practice ("Governmental Permits") that are
transferable and that are necessary or useful for the operation of the Business
and held by Sellers in connection with the operation of the Business or the
ownership of the Purchased Assets (and "Purchased Assets" shall expressly
exclude any other Governmental Permits);
1.1.12 Prepaid Expenses, Deposits, and Certain Rights. All of Sellers'
prepaid expenses, media barter credits, utility, lease and other deposits
(including the Prepaid Rent and Prepaid Advertising), rights under indemnities
(including, without limitation, from manufacturers, vendors and others), rights
arising out of or under any express or implied warranties from any suppliers, or
rights otherwise arising in connection with the operation of the Business, but
in all cases only to the extent related directly to the Purchased Assets (and
"Purchased Assets" shall expressly exclude any of the foregoing types of rights
and interests not related directly to the Purchased Assets);
1.1.13 Vendor Allowances. All vendor allowances, including volume and
promotional incentive allowances, spoilage credits, and any other credits of
Sellers received by or accruing to Sellers, related to (i) the vendor contracts
that are Assumed Contracts hereunder or (ii) vendors with respect to which all
of Sellers' obligations are Assumed Total Liabilities hereunder;
1.1.14 Bank Account Agreements. Each bank account agreement with respect to
which Buyer (to the extent Buyer has determined that it wants such agreement
transferred to it) and the relevant bank or financial institution have agreed to
a transfer of such agreement to Buyer effective on or immediately after the
Closing Date; provided, that Sellers shall have no obligation with respect to
the foregoing other than to execute an Assumption and Assignment Agreement and
to pay all fees current through Closing (other than account transfer fees);
1.1.15 Insurance Policies and Insurance Claims. To the extent assignable
under the Bankruptcy Code, all of Sellers' contracts of insurance with respect
to the Business and the Purchased Assets, any unearned premiums thereunder, and
any outstanding claims against insurance policies; provided, that Sellers shall
remain listed as additional insureds under any such policies, at Sellers'
expense;
1.1.16 Equity Interest in ENBPI. All of E/N Corp.'s right, title and
interest in the capital stock of ENBPI;
1.1.17 Other Assets. All other assets of Sellers that are not Excluded
Assets and that are used, usable, or necessary for the operation of the
Business.
1.2 Excluded Assets. The Purchased Assets shall not include, and Sellers
shall retain, the following assets, without duplication (the "Excluded Assets"):
1.2.1 Interseller Claims. All claims or obligations between or among any
Sellers or either of the Sellers and ENBPI;
1.2.2 Excluded Receivables. All receivables due from one Seller to the
other Seller, from either Seller to ENBPI, or from ENBPI to either Seller (the
"Excluded Receivables");
1.2.3 Excluded Contracts. All Contracts of Sellers (i) listed in Schedule
1.2.3 and (ii) all Contracts between Sellers (but not any third parties) (all of
the foregoing, the "Excluded Contracts");
1.2.4 Excluded Claims and Causes of Action. All claims and causes of action
against parties set forth on Schedule 1.2.4 and causes of action that are not
specifically described as being "Purchased Assets" pursuant to Section 1.1.6;
1.2.5 Excluded Real Property Leases. (i) All Real Property Leases between
Sellers (collectively, the "Interseller Leases"), and (ii) all Real Property
Leases listed in Schedule 1.2.5 (all of the foregoing, the "Excluded Real
Property Leases");
1.2.6 Organizational Books and Records. The corporate charters, bylaws,
partnership agreements, regulations, minute books, taxpayer and other
identification numbers, seals, securities transfer books, registries, blank
stock certificates, and other organizational documents and records of each
Seller and each subsidiary or affiliate of any Seller or other entity in which
any Seller may have an equity interest other than ENBPI (the "Organizational
Books and Records");
1.2.7 Sellers' Rights Under this Agreement. Either Seller's rights under
this Agreement or any ancillary agreements executed by Buyer and either of the
Sellers pursuant hereto (the "Related Agreements"), including without
limitation, the right to receive the Purchase Price;
1.2.8 Tax Refunds. Tax refunds payable to either Seller in respect of (i)
Excluded Assets or (ii) any Tax paid prior to the Closing Date; and
1.2.9 Seller's Rights Under D & O Insurance. Seller's rights under director
and officer liability insurance policies, provided that Seller shall not cancel
any such policies covering persons who have been engaged or employed by Buyer
without Buyer's consent.
1.2.10 Other Excluded Assets. All items of property or other assets
expressly excluded from the Purchased Assets pursuant to Section 1.1 or
otherwise in this Agreement.
2. Purchase Price; Assumption of Liabilities; Deposit.
2.1 Amount and Payment of Purchase Price.
(a) Amount. The aggregate consideration (the "Purchase Price") to be paid by
Buyer pursuant to this Agreement shall be: not less than $182.7 million nor
more than $190 million, consisting of cash in the amount of $160 million,
as adjusted pursuant to this Section 2.1(a), and the assumption of Assumed
Current Liabilities, the cash portion of the Purchase Price shall be:
(i) decreased by the amount by which the Assumed Current Liabilities at
the Closing Date exceed $30 million; and
(ii) increased by the amount by which the Assumed Current Liabilities on
the Closing Date are less than $22.7 million.
(b) Cash at Closing. On the Closing Date, Buyer shall pay to Sellers by wire
transfer of immediately available funds to the Designated Seller Account an
amount equal to:
(i) $160 million, less
(ii) the Escrowed Purchase Price Portion, which shall be delivered to an
escrow agent acceptable to Buyer and Sellers (the "Escrow Agent"), to
be held in an interest-bearing account by the Escrow Agent (and to be
invested as Buyer may reasonably direct), which amount shall be
released in accordance with Section 9.1, less
(iii)the Deposit Amount to be delivered by the Escrow Agent in accordance
with Section 2.5.
(c) Final Determination of Assumed Current Liabilities. Promptly after the
determination of Assumed Current Liabilities as provided for in Section
9.1, the parties shall make the payments provided for in Section 9.1.3 and
any portion of the Escrowed Purchase Price Portion due to Sellers or Buyer,
as the case may be, shall be released to Sellers or Buyer in accordance
with Section 9.1.
(d) Allocation of Purchase Price. The Purchase Price shall be allocated for tax
purposes among the Purchased Assets in a manner to be determined by Buyer
based on the advice or recommendation of a nationally recognized appraisal
firm. Sellers and Buyer agree to use the allocations determined pursuant to
this Section 2.1(d) for all tax purposes, including without limitation,
those matters subject to Section 1060 of the Internal Revenue Code of 1986,
as amended.
(e) IRS Form 8594. Buyer and Sellers each agree to file Internal Revenue
Service Form 8594. Buyer and Sellers each agree to provide the other
promptly with any other information required to complete Form 8594.
2.2 Assumed Liabilities. Subject to the terms and conditions of this
Agreement, Buyer shall assume:
(a) all current liabilities of Sellers incurred in the ordinary course of
business determined in accordance with GAAP (including without
duplications, the outstanding float consisting of checks or other payment
items (including Outstanding ACHs) issued and outstanding against Sellers'
operating accounts) as of the Closing Date;
(b) (i) with respect to Employees in Good Standing, Sellers' obligation to make
payments under and in accordance with the terms of the Retention Bonus
Program, in each case only to the extent that the Closing occurs before the
relevant payment is required to be made; provided , that payments under the
Retention Bonus Program otherwise due upon confirmation of Sellers' plan of
reorganization shall instead be payable at Closing, and (ii) all COBRA
liabilities of Sellers; and
(c) liabilities and obligations under all Assumed Contracts (including, without
limitation, the ▇▇▇▇▇▇▇▇ Employment Agreement and the Severance Agreements)
and the Assumed Real Property Leases.
The liabilities described in Sections 2.2(a) and 2.2(b) shall hereinafter be
referred to as the "Assumed Current Liabilities". The Assumed Current
Liabilities and the liabilities described in Section 2.2(c), shall hereinafter
be referred to collectively as the "Assumed Total Liabilities"; provided,
however that, the current liability portion of the Assumed Contracts and Assumed
Real Property Leases shall be included in the Assumed Current Liabilities. Other
than the Assumed Total Liabilities, no indebtedness, obligation or liability of
Sellers is assumed by Buyer, including without limitation any liability for the
payment of (i) any professional person retained in the Cases, (ii) any Taxes of
the Sellers for any period through the day before the Closing Date except for
accrued real estate taxes, related to real estate leases, that are not yet
payable, (iii) any liability for inter-Seller payables, or (iv) liability for
deferred rent. Personal property taxes shall be prorated as of the Closing Date.
Assumed Current Liabilities shall not include personal property taxes accrued as
of the Closing Date.
2.3 No Expansion of Third Party Rights. The assumption by Buyer of the
Assumed Total Liabilities shall in no way expand the rights or remedies of any
third party against Buyer or Sellers as compared to the rights and remedies
which such third party would have had against Sellers (absent their chapter 11
filings) had Buyer not assumed such liabilities. Without limiting the generality
of the preceding sentence, the assumption by Buyer of the Assumed Total
Liabilities shall not create any third-party beneficiary rights other than with
respect to the person whose debt is assumed.
2.4 Taxes.
2.4.1 With respect to Taxes (whether assessed or unassessed) that are not
included in the Assumed Total Liabilities and that relate to the Business or the
Purchased Assets, and except as otherwise provided in Section 2.4.2, (i) Sellers
shall be liable for and shall to the extent required or permitted by
Bankruptcy-Related Requirements pay all such Taxes to the extent attributable to
periods (or portions thereof) ending on or prior to the Closing Date, and (ii)
Buyer shall be liable for and shall pay all such Taxes to the extent
attributable to periods (or portions thereof) beginning after the Closing Date;
provided, that, Buyer shall not be liable for any Taxes arising or incurred with
respect to the operations of the Business prior to Closing other than those that
are included in the Assumed Total Liabilities.
2.4.2 Sellers shall be liable for and shall pay any and all Taxes to the
extent required or permitted by Bankruptcy-Related Requirements (including,
without limitation, any Taxes payable in respect of any Internal Revenue Code
Section 338(h)(10) election, sales tax, use tax, transfer tax or documentary or
stamp tax) arising out of or in connection with the sale of the Purchased
Assets. Buyer shall not be liable for any Taxes arising out of or in connection
with the sale of the Purchased Assets.
2.4.3 In connection with Sellers' preparation of tax and related forms and
documents relating to any tax periods through and including the tax period in
which the Closing Date occurs, including, without limitation, any and all income
tax returns, Form W-2s, Form K-1s, Form 5500s and Form 1099s, required to be
filed by Sellers, Buyer shall provide Sellers or their representatives with such
access to the necessary information as Sellers reasonably request in advance of
the relevant filing deadline for such forms and documents. Buyer shall have no
obligation to prepare all or any part of Sellers' tax returns for any period.
2.5 Deposit. Within two business days following the execution hereof, Buyer
shall have delivered to the Escrow Agent $3,000,000 (such amount, together with
the interest or income thereon, the "Deposit Amount"), to be held in an
interest-bearing account reasonably acceptable to Sellers by the Escrow Agent to
serve as a down payment on the Purchase Price, and to be released in accordance
with the following procedure:
(a) On the Closing Date, the Escrow Agent shall cause the Deposit Amount to be
transferred, by wire transfer, to the Designated Seller Account (and such
amount shall be applied towards the payment of the Purchase Price);
(b) Upon termination of this Agreement by Sellers due to a breach of this
Agreement by Buyer, the Escrow Agent shall cause the Deposit Amount to be
transferred, by wire transfer, to the Designated Seller Account to be
retained by Sellers; and
(c) Upon termination of this Agreement other than as set forth in Section
2.5(b), the Escrow Agent shall cause the Deposit Amount to be transferred,
by wire transfer, to the Buyer to be retained by Buyer (without limiting
Buyer's right to payment of the Termination Payment in the circumstances
specified in Section 10.2).
3. Employees.
(a) Buyer (or its Affiliates) shall offer Employment on substantially similar
terms, with substantially similar compensation and benefits in the
aggregate, as of the Closing Date (with such employees receiving credit for
prior service in connection with vacation leave, sick leave, and the like),
to each of Sellers' employees who, on the Closing Date, is an Employee in
Good Standing.
(b) The names and the material terms of the employment of all employees shall
be provided by Sellers to Buyer upon request. Sellers shall use their best
efforts to assist Buyer in communicating any offers of employment to such
employees and in no case will Sellers interfere with the hiring of any such
employees. In addition, Sellers shall have provided Buyer with all
information reasonably necessary for, and requested by, Buyer to administer
COBRA with respect to any remaining COBRA liabilities, such information to
be updated monthly until Closing.
(c) In no event shall this Section 3 constitute or be deemed to be an
employment contract for any purposes whatsoever, and no employee of Sellers
shall be entitled to any rights or interests under this Agreement nor in
any event shall any employees constitute or be deemed to be third party
beneficiaries under this Agreement or otherwise be entitled to enforce or
make any claim under this Agreement.
4. Representations and Warranties of Sellers. Sellers each jointly and
severally hereby represent and warrant to Buyer as follows:
4.1 Organization. Each Seller is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. Each
Seller is duly qualified and licensed to do business as a foreign entity in good
standing in all jurisdictions in which the character or the location of the
assets owned or leased by it or the nature of the Business conducted by it
requires licensing or qualification and where the failure to be so qualified
could have a Material Adverse Effect on the Business.
4.2 Authorization. Giving pro forma effect to the Preliminary Order and
Sale Order, as the case may be, the execution, delivery and performance of this
Agreement by Sellers have been duly and validly authorized by all necessary
action on the part of Sellers. Giving pro forma effect to the Preliminary Order
and Sale Order, as the case may be, this Agreement and the Related Agreements
constitutes the legal, valid and binding obligation of Sellers, enforceable
against Sellers in accordance with their respective terms. No vote of, or
consent by, the holders of any class or series of capital stock issued by the
Sellers is necessary to authorize the execution and delivery of this agreement
and any Related Agreements.
4.3 No Conflicts. Giving pro forma effect to the Preliminary Order and Sale
Order, as the case may be, the execution, delivery and performance of this
Agreement by Sellers will not violate the provisions of, or constitute a breach
or default whether upon lapse of time and/or the occurrence of any act or event
or otherwise under (a) the organizational documents of Sellers, (b) any law to
which Sellers are subject, or (c) any agreement, contract, instrument, mortgage,
lien or other document to which Sellers are a party, except to the extent that
any such violation, breach or default is excused by, or unenforceable as a
result of, the filing of the Cases or to the extent that it would not have a
Material Adverse Effect on the Business. Other than the filings under the HSR
Act, and the approval of the Bankruptcy Court, no other consent, approval, order
or authorization of, or representation, declaration or filing with any
governmental entity is required to be obtained or made by or with respect to
Sellers in connection with the execution or delivery of this Agreement and any
Related Agreements by Sellers or the transactions contemplated by this Agreement
or any Related Agreement by Sellers.
4.4 Leased Real Property. Schedule 4.4 lists all of Sellers' real property
leases other than any Interseller Leases (collectively, the "Real Property
Leases"). Giving pro forma effect to the terms of the Sale Order, with respect
to each Assumed Real Property Lease with respect to which a Seller is the lessee
or sublessee, such Seller will transfer each such Assumed Real Property Lease
free and clear of any Liens other than landlord liens. To the knowledge of
Sellers, each Assumed Real Property Lease is legal, valid, binding, enforceable
and in full force and effect. Each Assumed Real Property Lease was either
assumed by Sellers pursuant to Section 365 of the Bankruptcy Code or will be
assumed as part of the Sale Order.
4.5 Personal Property. Giving pro forma effect to the terms of the Sale
Order, Sellers have good and marketable title (in the case of owned Personal
Property) and a valid leasehold interest (in the case of Personal Property
leased under equipment leases) to all items of tangible Personal Property, free
and clear of any Liens (other than any landlord liens). EXCEPT FOR THE FOREGOING
WARRANTY OF TITLE, ALL ITEMS OF EQUIPMENT AND OTHER TANGIBLE PERSONAL PROPERTY,
ALL IMPROVEMENTS, ALL ITEMS LEASED PURSUANT TO OPERATING OR OTHER LEASES AND ALL
LEASEHOLD IMPROVEMENTS ARE CONVEYED PURSUANT HERETO ON AN "AS IS, WHERE IS"
BASIS, WITH NO WARRANTY OR REPRESENTATION OF SELLERS, EXPRESS OR IMPLIED, AS TO
THE CONDITION OF SUCH ASSETS OTHER THAN AS SET FORTH IN THIS AGREEMENT.
4.6 Intellectual Property. Schedule 4.6 lists the copyrights, patents,
service marks, trademarks, trade names, internet domain names, and registrations
or applications for registration of any of the foregoing, used in the Business
or in which Sellers have an interest and the nature of such interest (but
excluding any of the foregoing that is an Excluded Asset), including the
material licenses or other rights in effect with respect to any of the
foregoing. Giving pro forma effect to the terms of the Sale Order, the
Intellectual Property is assignable free and clear of any Liens, and no consent
from or payment to any third party is required for the purchase or use of such
Intellectual Property by Buyer. Except as set forth in Schedule 4.6, neither the
Sellers nor ENBPI has received any notice to the effect (or otherwise has actual
knowledge) that the Intellectual Property or any use by Sellers of any of the
Intellectual Property conflicts with or allegedly conflicts with or infringes
the rights of any person or entity, and none of the Intellectual Property is
currently involved in any proceedings challenging its availability or
enforceability.
4.7 Employees and Employment-Related Matters. There is no labor strike,
material dispute, request for representation, slowdown or stoppage actually
pending or, to the actual knowledge of Sellers, threatened against or affecting
Sellers. All workers' compensation and unemployment compensation insurance
premiums which have become due and payable have been fully paid.
4.8 Employee Benefit Plans. Schedule 4.8 lists each employee benefit plan
that any Seller maintains or to which either Seller contributes, and to the
knowledge of Sellers:
(a) Each such employee benefit plan (and each related trust, insurance
contract, or fund) complies in form and in operation in all material
respects with the applicable requirements of ERISA and the Code; and
(b) All contributions (including all employer contributions and employee salary
reduction contributions) which are due have been paid to each such employee
benefit plan which is an employee pension benefit plan, as defined in
Section 3 of ERISA. Sellers have not maintained any defined contribution
plan other than E/N Corp.'s 401(k) plan (the "Seller 401(k) Plan") and have
not maintained any defined benefit pension plan at any time. The Seller
401(k) Plan is qualified under Section 401(a) of the Code and its related
trust is exempt under Section 501(a) of the Code.
4.9 Contracts. Schedule 4.9 lists or describes all of Sellers' material
written Contracts other than any bank account agreements. Each of the Assumed
Contracts as of the date hereof was either assumed by Sellers pursuant to
Section 365 of the Bankruptcy Code, will be assumed as part of the Sale Order or
was entered into after the Petition Date and prior to the date hereof. Giving
pro forma effect to the terms of the Sale Order, to the knowledge of Sellers,
each of the Assumed Contracts is legal, valid, binding, enforceable and in full
force and effect.
4.10 Litigation. Except as set forth on Schedule 4.10 and garnishment
actions, a schedule of which has been provided to Buyer, no action, suit,
proceeding or investigation is pending or, to Sellers' best knowledge,
threatened by or before any federal, state or local court, governmental agency,
tribunal or any other forum, in which Sellers are named or likely to be named as
a party or otherwise relating to or affecting the Business or any of the
Purchased Assets and that would have a Material Adverse Effect on the Business.
4.11 ▇▇▇▇▇▇▇▇ Employment Agreement and Severance Agreements. Sellers have
provided Buyer with true and correct copies of the ▇▇▇▇▇▇▇▇ Employment Agreement
and Severance Agreements as amended to the date hereof.
4.12 SEC Documents; Financial Statements. E/N Corp. has filed in a timely
manner all documents that E/N Corp. was required to file with the Securities and
Exchange Commission (the "Commission") under Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the 12
months preceding the date of this Agreement. As of their respective filing
dates, all documents filed by E/N Corp. with the Commission (the "SEC
Documents") complied as to form in all material respects with the requirements
of the Exchange Act or the Securities Act of 1933, as amended, as applicable.
The SEC Documents did not contain any untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements contained in E/N Corp.'s 10-Q for
the quarter ended October 2000 and the Sellers' unaudited year-end financial
statements for the fiscal year ended January 2, 2001 previously delivered to
Buyer have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied and fairly present the
consolidated financial position of E/N Corp. at the dates thereof and the
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited financial statements, to normal, recurring adjustments
and the absence of footnotes).
4.13 ENBPI. ENBPI is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization. The stock transferred to
the Buyer pursuant to Section 1.1.16 represents all of the outstanding
securities of ENBPI and, giving pro forma effect to the Sale Order, such stock
is free and clear of any and all Liens.
4.14 Amount of Assumed Current Liabilities. The pro forma amount of Assumed
Current Liabilities of the Sellers as of March 27, 2001 was approximately $30.2
million.
5. Representations and Warranties of Buyer. Buyer represents and warrants
to Sellers as follows:
5.1 Organization. It isduly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and has the
necessary power and authority to execute, deliver and perform this Agreement.
5.2 Authorization. Its xecution, delivery and performance of this Agreement
have been duly and validly authorized by all necessary action on its part. This
Agreement and the Related Agreements to which it is a party constitute its
legal, valid and binding obligations, enforceable against it in accordance with
their respective terms.
5.3 No Conflicts. Its execution delivery and performance of this Agreement
will not violate the provisions of, or constitute a breach or default whether
upon lapse of time and/or the occurrence of any act or event or otherwise under,
(a) its organizational documents, (b) any law to which it is subject, or (c) any
agreement, contract, instrument, mortgage, lien or other document to which it is
a party. Other than the filings under the HSR Act, no other consent, approval,
order or authorization of, or representation, declaration or filing with any
governmental entity is required to be obtained or made by or with respect to
Buyer in connection with the execution or delivery of this Agreement by such
party or the transactions contemplated by this Agreement to which it is a party.
5.4 Financial Capacity. As of the date hereof, Buyer has cash and assets
having a value of at least $9 million. As of the Closing Date, the Buyer shall
have available sufficient funds to consummate the transactions contemplated by
this Agreement.
6. Covenants.
6.1 Access; Confidentiality. Sellers shall, to the extent practicable
without material disruption of the Sellers' business, during normal business
hours, provide Buyer and its employees and representatives with full and
complete access to the books, records, facilities, contracts, assets,
properties, employees, vendors, suppliers, landlords, franchisees, licensees,
and creditors of Sellers, the Purchased Assets and the Business, relating to the
transactions contemplated by this Agreement and the Related Agreements;
provided, that Buyer shall give Sellers advance notice before meeting or
otherwise communicating with any third party or employee, and Sellers or their
authorized representatives shall be given a reasonable opportunity to
participate in any such meeting or communication. Buyer and its representatives
shall have the right to review and make copies of all documents and other
information relating to Sellers, the Business and the Purchased Assets, in all
cases at Buyer's expense.
6.2 Operation of Business. Except as otherwise contemplated by the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the operation and
information requirements of the Office of United States Trustee, and any orders
entered or approvals or authorizations granted by the Bankruptcy Court in the
Cases (collectively, "Bankruptcy-Related Requirements") or by this Agreement,
during the period between the date hereof and the Closing, the Business shall be
conducted by Sellers in the ordinary course and in compliance with all other
applicable laws and regulations, and, to the extent consistent therewith,
Sellers shall, unless agreed to in writing by Buyer, use all commercially
reasonable efforts to:
(i) preserve intact their respective business organizations and operate in the
normal course, consistent with past practice;
(ii) keep their respective physical assets in good working condition, ordinary
wear and tear excepted, and maintain such assets in accordance with
industry standard;
(iii) pay all Taxes as they become due and payable;
(iv) maintain insurance on their respective Business and assets (in amounts and
types consistent with past practice);
(v) maintain staffing levels that are adequate to properly operate the Business
in the ordinary course;
(vi) preserve their relationships with customers, suppliers, landlords
(including the payment of all rents and other charges due on leased real
property) and others having business dealings with Sellers (to the extent
relating to the Purchased Assets), to the end that their goodwill and
ongoing business shall not be impaired in any material respect;
(vii)not enter into, renew, terminate or amend any Contract (a) outside the
ordinary course of business or (b) which obligates any Seller to pay an
aggregate amount in excess of $100,000 or the term of which is longer than
one year (unless prior approval of the Bankruptcy Court is obtained
therefor);
(viii) retain at each open Store an adequate supply of good and useable
operating inventories consistent with each Store's reasonably anticipated
usage requirements;
(ix) not terminate or amend any Real Property Leases, or exercise or not
exercise any options on Real Property Leases, except to the extent that
such action would not cause a Material Adverse Effect on the Business;
(x) maintain in good standing and keep in full force and effect all
Governmental Permits applicable to the Business and comply in all material
respects with all laws applicable thereto;
(xi) not change the accounting principles or methods employed in the calculation
of Assumed Total Liabilities;
(xii)perform and comply in all material respects with the terms of all Assumed
Contracts;
(xiii) maintain their books and records in the usual, regular and ordinary
manner;
(xiv)except as otherwise provided in this Agreement, not increase above normal
and usual merit or cost-of-living increases the compensation payable or to
become payable by Sellers to any of their officers or employees or increase
the coverage or benefits available under (or create any new or otherwise
amend) any severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred compensation,
bonus or other incentive compensation, insurance, pension or other employee
benefit plan, payment or arrangement made to, for, or with any of the
officers or employees of Sellers (unless prior Bankruptcy Court approval
therefor is obtained);
(xv) provide prompt notice to Buyer of (a) any losses or damages in excess of an
aggregate of $100,000 suffered by Sellers with respect to the Purchased
Assets whether or not such losses or damages are covered by insurance, (c)
any material legal proceeding commenced by or against Sellers or any motion
or pleading filed in such cases (other than proceedings in the Cases), and
(d) any material legal proceeding commenced or, to the best knowledge of
Sellers, threatened against Sellers relating to the transactions
contemplated by this Agreement or relating to any of the Purchased Assets;
(xvi)regularly confer with Buyer concerning operational matters relating to the
Business;
(xvii) make contractual payments only in accordance with the terms of the
applicable Contract; and
(xviii) not agree to do anything that would violate this Section 6.2.
6.3 Reasonable Efforts. Sellers, on the one hand, and Buyer, on the other
hand, agree that from the date hereof, they shall use their reasonable efforts
to satisfy the conditions precedent to the Closing (to the extent that such
conditions are to be satisfied by Sellers and Buyer, as the case may be) on or
prior to the first possible date upon which the Closing can occur.
6.4 Publicity. Except as may be required by law or regulation, until the
earlier of the termination of this Agreement and the Closing Date, no party
hereto (nor any of their respective affiliates) shall make any public
announcement or other public disclosure regarding the terms of, or transactions
contemplated by, this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.
6.5 Notice of Developments. Each party will give prompt written notice to
the other party of any material adverse development causing a breach of any of
its own representations and warranties. No disclosure by any party pursuant to
this Section 6.5, however, shall be deemed to amend or supplement the schedules
attached hereto or to prevent or cure any misrepresentation or breach of
warranty.
6.6 HSR Filings. If required by law, each party shall promptly, but in no
event later than 20 business days after the date hereof, make their respective
filing under the HSR Act, and thereafter make any other required submissions
under the HSR Act and use reasonable commercial efforts and diligence to satisfy
any other conditions necessary to comply with the HSR Act and to obtain an early
termination of any waiting period pursuant thereto.
6.7 Intentionally omitted.
6.8 Acquisition Proposals.
(a) Neither Sellers nor any of their affiliates nor any of their affiliates'
respective directors, officers, employees, agents or representatives shall
solicit, or initiate, directly or indirectly, any inquiries, discussions or
proposals for an Acquisition Proposal or engage in or continue any
discussions with any party that has made or who may make any Acquisition
Proposal until after the Preliminary Order shall have been entered by the
Bankruptcy Court; provided, that, subject to compliance with the provisions
of Section 6.8(b), Sellers may respond to any unsolicited proposal received
from a third party relating to an Acquisition Proposal, and after entry of
the Preliminary Order, Seller may solicit Acquisition Proposals from third
parties, provide information to such third parties and negotiate and
discuss any such Acquisition Proposal with such third party in accordance
with the terms of the Preliminary Order.
(b) Upon receipt of an Acquisition Proposal, Sellers will promptly notify Buyer
and indicate in such notice the identity of the offeror and a complete and
accurate description of the material terms thereof and provide Buyer with a
copy of any writing evidencing such Acquisition Proposal, and thereafter
keep Buyer informed on a current basis, of the status and terms of such
Acquisition Proposal.
6.9 Cooperation and Access. From and after the date hereof, Sellers shall
use their commercially reasonable efforts to provide reasonable access and
information to Buyer concerning the Business.
6.10 Intentionally omitted.
6.11 Sale Order. The Company shall use its reasonable best efforts to
obtain entry by the Bankruptcy Court on or before twenty (20) days after the
date on which the Court has entered an order denying confirmation of the Boston
Chicken Trustee Plan of an order (the "Sale Order") which:
(a) approves a sale of the Purchased Assets to Buyer pursuant to Sections 363
and 365 of the Bankruptcy Court, free and clear of Liens, claims and
interests (except to the extent of Assumed Total Liability);
(b) contains findings of fact and conclusions of law that buyer is a good faith
purchaser entitled to the protections of Section 363(m) of the Bankruptcy
Code;
(c) contains provisions allowing for all purposes claims against the Sellers
held by NWC and Greenlight, in the aggregate amount of not less than the
principal plus accrued interest as of the Petition Date on all Debentures
held by NWC and Greenlight as of the date of entry of the sale order, which
is assumed to be not less than $61,500,000 in principal, plus interest;
(d) contains full and final releases by the Sellers in favor of Buyer or its
Affiliates, and their respective officers, directors and affiliates except
with respect to obligations arising hereunder or under any Related
Agreement;
(e) authorizes the assumption by Sellers and assignment to Buyer of all Assumed
Real Property Leases and Assumed Contracts; and
(f) is otherwise reasonably acceptable to Buyer.
6.12 ENBPI. Prior to the Closing Date, ENBPI will enter into an agreement
reasonably acceptable to ENBPI, E/N Corp. and Buyer which provides for (i) the
transfer of the general partnership interest in E/N Partners held by ENBPI, (ii)
the transfer of the intercompany receivables representing the amounts owed by
E/N Corp. and /or E/N Partners to ENBPI to a subsidiary of E/N Corp. ("Sub"),
and (iii) the satisfaction by ENBPI or Sellers at or before Closing of (A) all
currently outstanding lease obligations of ENBPI under leases for open Stores;
and (B) all outstanding lease obligations under any other leases. Such agreement
shall, among other things, provide that ENBPI will be indemnified by Sub for
claims arising out of its ownership of the E/N Partners general partnership
interest, and Sub and the Sellers will be indemnified by ENBPI for claims
arising out of ENBPI's operations following the Closing Date.
6.13 401(k) Plan. Effective as of the Closing Date, Buyer shall assume
sponsorship of the Seller 401(k) Plan and shall assume the assets and
liabilities thereunder. Buyer and Seller shall take all steps reasonably
necessary to give effect to the intent of the preceding sentence.
6.14 Transitional Services Agreement. Prior to the Closing Date, Buyer and
Sellers shall enter into a transitional services agreement, in form and
substance mutually satisfactory to the parties, which will provide Sellers with
the services of employees of Buyer to the extent reasonably necessary to wind up
the affairs of the Sellers (the "Transitional Services Agreement").
7. Conditions Precedent to Parties' Obligation.
7.1 Conditions to Obligations of All Parties. The respective obligation of
each party to consummate the transactions to be performed by it in connection
with the Closing is subject to the satisfaction or waiver by that party of the
following conditions:
7.1.1 HSR Act. Any waiting period (and any extensions thereof) applicable
to the consummation of the transactions contemplated hereby under the HSR Act
shall have expired or been terminated.
7.1.2 Orders. The Sale Order shall have been entered by the Bankruptcy
Court in accordance with Section 6.11 and shall have become a Final Order.
7.2 Conditions to Buyer's Obligations. Unless waived by Buyer, the
obligations of Buyer under this Agreement are subject to satisfaction by Sellers
of the following conditions on or before the Closing Date:
7.2.1 Covenants, Representations and Warranties. All of the covenants,
terms and conditions of this Agreement to be complied with and performed by
Sellers at or before the Closing Date shall have been complied with and
performed in all material respects, and the representations and warranties made
by Sellers in this Agreement shall be correct in all material respects, at and
as of the Closing Date, with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date. Any
representation or warranty which by its terms is made with reference to a
specific date shall have been correct in all material respects as of such date.
For purposes of determining compliance with this provision and for all other
purposes, representations and warranties shall be deemed not to be correct in
all material respects only if:
(a) to the extent made as of the date hereof, the difference between the facts,
circumstances and conditions as represented and the facts, circumstances
and conditions as subsequently determined to exist as of the date hereof
constitutes a Material Adverse Change.
(b) to the extent deemed made as of the Closing Date, the difference between
the facts, circumstances and conditions as represented and the facts,
circumstances and conditions as determined to exist as of the Closing Date
constitutes a Material Adverse Change.
7.2.2 Closing Documents. With respect to the Purchased Assets existing as
of the Closing Date, Sellers shall have executed the following documents, which
shall have been approved by Buyer, subject to the reasonable comments of
Sellers. Sellers shall use their respective best efforts to deliver such
reasonable comments, if any, within five business days of receipt of such
documents. Each of such documents shall be without representation or warranty
and shall otherwise be in form acceptable to Buyer and Sellers. The documents
are as follows:
(a) A ▇▇▇▇ of Sale with respect to the Purchased Assets constituting Personal
Property to transfer all of Sellers' right, title and interest thereto, in
a customary form (the "▇▇▇▇ of Sale"), duly executed by Sellers;
(b) An Assignment of Equipment Leases to transfer all of Sellers' right, title
and interest in the equipment leases that are "Assumed Contracts"
hereunder, in a customary form ("Equipment Lease Assignment"), duly
executed by Sellers;
(c) An Assignment of Real Property Leases to transfer all of Sellers' right,
title and interest in all Assumed Real Property Leases hereunder, in a
customary form ("Real Property Lease Assignment"), duly executed by
Sellers;
(d) An Assignment of Intellectual Property Rights to transfer all of Sellers'
right, title and interest in and to all Intellectual Property, in a
customary form ("Assignment of Intellectual Property Rights"), duly
executed by Sellers;
(e) One or more Assumption and Assignment Agreements evidencing the transfer of
Sellers' right, title and interest in the Assumed Contracts and all other
Assumed Liabilities and Buyer's assumption of Sellers' obligations
thereunder to the extent contemplated hereby, in a customary form (the
"Assumption and Assignment Agreements"), duly executed by Sellers;
(f) A certificate issued by each Seller certifying that as of the Closing Date,
such Seller is not a foreign person (as described in Treasury Regulation
Section 1.1445-2(b)(i)), such certificate to be in form similar to that
described in Treasury Regulation Section 1.1445-2(b)(2)(iii)(B) or
otherwise meeting the requirements of Treasury Regulation Section
1.1445-2(b)(2);
(g) An assignment, in form and substance satisfactory to Buyer, duly executed
and acknowledged by the applicable Sellers, transferring and assigning to
Buyer the Sellers' interest in all title insurance policies relating to the
Assumed Real Property Leases;
(h) Stock certificates representing all of the issued and outstanding stock of
ENBPI duly endorsed for transfer by the Sellers; and
(i) Such other agreements and documents as are necessary and appropriate for
Sellers to carry out the terms and provisions of this Agreement.
7.2.3 Material Adverse Change. Since January 2, 2001, there shall have been
no Material Adverse Change in the Business.
7.2.4 Intentionally omitted.
7.3 Conditions to Sellers' Obligations. Unless waived by Sellers, the
obligations of Sellers under this Agreement are subject to satisfaction of the
following conditions on or before the Closing Date:
7.3.1 Covenants, Representations and Warranties. All of the covenants,
terms and conditions of this Agreement to be complied with and performed by
Buyer at or before the Closing Date shall have been complied with and performed
in all material respects, and the representations and warranties made by Buyer
in this Agreement shall be correct in all material respects, at and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made at and as of the Closing Date. Any representation or
warranty which by its terms is made with reference to a specific date shall have
been correct in all material respects as of such date.
7.3.2 Closing Documents. With respect to the Purchased Assets existing as
of the Closing Date, the Buyer shall have delivered the following documents in
the form referred to in Section 7.2.2 or as otherwise set forth below:
(i) The Real Property Lease Assignment, duly executed by Buyer;
(ii) The Assumption and Assignment Agreements, duly executed by Buyer;
(iii)The Assignment of Intellectual Property Rights, duly executed by Buyer;
and
(iv) Such other agreements and documents as are necessary and appropriate for
Buyer or Seller to carry out the provisions of this Agreement.
8. Closing and Closing Deliveries; Calculations and Payments at Closing.
8.1 Closing. Subject to the terms and conditions of this Agreement, the
closing of the transactions provided for in this Agreement (the "Closing") shall
take place at 12:01 p.m. (Eastern Time) on the date that is not less than
fifteen (15) days after the sale order has been entered and has become a Final
Order, or at such date and time as may be mutually agreed by the parties (the
"Closing Date"), but in no event later than June 20, 2001.
8.2 Sellers' Obligations at Closing.
8.2.1 At the Closing, Sellers shall deliver or cause to be delivered to
Buyer the certificates, consents, agreements and other documents specified in
Section 7.2 hereof.
8.2.2 At the Closing, Sellers shall transfer the Purchased Assets to Buyer.
8.3 Buyer's Obligations at Closing. At the Closing, in addition to its
obligations under Section 2.1, Buyer shall deliver or cause to be delivered the
certificates, consents, agreements and other documents specified in Section
7.3.2.
9. Certain Post Closing Matters.
9.1 Post Closing Determination of Assumed Current Liabilities
9.1.1 Preparation of Closing Statement. Within 75 calendar days after the
Closing Date, Buyer shall prepare and deliver to Sellers a statement setting
forth a detailed calculation, in accordance with GAAP, of the Assumed Current
Liabilities as of the Closing Date (the "Closing Statement"). If neither Seller
disputes the Closing Statement within 45 calendar days after receipt thereof,
the amounts set forth thereon shall be deemed to have been "finally determined"
as set forth thereon. If either of the Sellers wishes to dispute the Closing
Statement, it shall deliver to the other Seller and to Buyer a notice specifying
in reasonable detail those items or amounts as to which it disagrees, the reason
for such disagreement, and its resulting proposed adjustments ("Dispute
Notice"). Only those items specifically identified in a Dispute Notice (the
"Disputed Item") shall be deemed to be disputed by the relevant disputing party.
9.1.2 Expert Determination re: Disputes. If a Dispute Notice is delivered,
Sellers and Buyer shall use their commercially reasonable efforts to reach
agreement on the Disputed Items. If such parties cannot reach agreement within
30 days from the date of delivery of the Dispute Notice, the Disputed Items
shall be submitted to the Independent Accountants for determination in
accordance with this Section 9.1.2 (which determination shall incorporate the
undisputed items or amounts from the Closing Statement as applicable). The
Independent Accountants shall deliver to Sellers and Buyer as promptly as
practicable, a written report setting forth their determination of the Disputed
Items (which shall incorporate the undisputed items from the Closing Statement),
which determination shall be final, conclusive and binding upon the parties, and
shall not be subject to appeal to any court or tribunal. Upon delivery of such
report, Assumed Current Liabilities shall be deemed to have been "finally
determined" as set forth in such report. Each party will bear its own expenses
in connection with any disputes regarding the Closing Statement except that the
Independent Accountant's fees and expenses will be allocated fifty percent to
Buyer and fifty percent to Sellers.
9.1.3 Calculations and Payments Upon "Final Determination".
(a) If the Assumed Current Liabilities are finally determined to exceed $30
million, the excess amount (the "Excess Portion") shall be paid by wire
transfer of immediately available funds to the account designated by Buyer
(the "Designated Buyer Account") by the Escrow Agent, in the case of the
Escrowed Purchase Price Portion, and Sellers, in the case of any amount in
excess of the Escrowed Purchase Price Portion;
(b) If the Escrowed Purchase Price Portion exceeds the Excess Portion, such
excess amount shall be paid out of the Escrowed Purchase Price Portion to
Sellers by wire transfer of immediately available funds to the Designated
Seller Account by the Escrow Agent, and the balance of the Escrowed
Purchase Price Portion shall be paid by wire transfer of immediately
available funds to the Designated Buyer Account by the Escrow Agent;
(c) If the Assumed Current Liabilities are finally determined to be equal to or
less than $22.7 million, the Escrowed Purchase Price Portion shall be paid
by wire transfer of immediately available funds to the Designated Seller
Account and to the extent the Assumed Current Liabilities are less than
$22.7 million, Buyer shall pay, by wire transfer of immediately available
funds, the difference between $22.7 million and the amount of the Assumed
Current Liabilities, as determined; and
(d) Interest accrued on the Escrowed Purchase Price Portion shall be paid pro
rata with the distribution of the Escrowed Purchase Price Portion.
9.1.4 Access. Sellers, the Independent Accountants and their respective
representatives will have reasonable access to the books, records and accounts
of Buyer for any purposes related to their preparation or review, as the case
may be, of the Closing Statement and the determination of Assumed Current
Liabilities.
9.1.5 GAAP Rules. Each item to be listed on the Closing Statement in
connection with the determination of the Assumed Current Liabilities shall be
determined in accordance with GAAP, consistently applied.
9.2 Use of Intellectual Property and Other Information. Except in
connection with Sellers' completion of such administrative, ministerial or other
matters as may be required to effectuate an orderly conclusion and winding up of
the business and affairs of Sellers (including, without limitation, the
prosecution of claims and causes of action that are Excluded Assets), after the
Closing Date, Sellers shall not communicate, disclose, divulge, or use for their
own benefit or for the benefit of any other person or entity, or misuse in any
way, any of the Intellectual Property or other proprietary or confidential
information of Buyer relating to the Business or the Purchased Assets, except as
consented to by Buyer in writing.
9.3 Further Assurances.
(a) In addition to Sellers' obligations under this Agreement and the Related
Agreements, Sellers, at any time on or after the Closing Date, will,
subject to Buyer's payment of Sellers' reasonable costs, execute,
acknowledge and deliver any further assignments, conveyances and other
assurances, documents and instruments of transfer, reasonably requested by
Buyer, and will take any other reasonable action consistent with the terms
of this Agreement that may reasonably be requested by Buyer, for the
purpose of assigning, transferring, granting, conveying and confirming to
Buyer, or reducing to Buyer's possession, any or all of the Purchased
Assets, including any Purchased Assets which come into the possession or
control of Sellers after the Closing Date.
(b) In addition to all of Buyer's obligations under this Agreement and the
Related Agreements, Buyer, at any time on or after the Closing Date, will
execute, acknowledge and deliver any further assurance, documents or
instruments reasonably requested by Sellers, and will take any other
reasonable action consistent with the terms of this Agreement that may
reasonably be requested by Sellers, for the purpose of the assumption by
Buyer of the Assumed Total Liabilities, and for purposes of reducing to
Sellers' possession any or all of the Excluded Assets which may come into
the possession or control of Buyer after the Closing Date.
(c) To the extent deemed reasonable by Buyer, Buyer shall make available, at
Sellers' cost, its management, staff and resources for purposes of
permitting Sellers to complete such administrative, ministerial or other
matters as may be required to effectuate an orderly and timely conclusion
and winding up of the business and affairs of Sellers.
9.4 Survival of Representations and Warranties. The representations and
warranties in this Agreement or in any instrument delivered pursuant to the
Agreement shall survive the Closing for six (6) months. This Section 9.4 shall
not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Closing.
9.5 Post Closing Access to Books and Records. For a period of five years
after the Closing Date, Buyer shall (subject to the last sentence of this
Section 9.5) maintain all of the pre-Closing Books and Records. At all times
during which Buyer maintains the Books and Records, Buyer shall provide Sellers
and their representatives, during normal business hours and upon reasonable
notice from Sellers, with reasonable access to such Books and Records. If,
during the five years after the Closing Date, Buyer proposes to dispose of any
Books and Records, Buyer shall provide Sellers with written notice and, if
requested, shall deliver the same to Sellers at Sellers' expense.
9.6 Change of Corporate Name. Each Seller entity whose corporate or entity
name contains the trade names "Einstein Bros. Bagels" or "Noah's New York
Bagels, " or any part thereof, shall take, as promptly as practicable after the
Closing Date, such action as may be legally required to effectuate a change in
the name of such entity to a new name not including any such trade names or any
other trade names that are included in the Intellectual Property.
10. Termination.
10.1 Termination Rights. This Agreement and the transactions contemplated
hereby may be terminated at any time prior to the Closing Date with written
notice thereof (a "Termination Notice") by any of the following:
(a) By mutual consent of Sellers and Buyer at any time;
(b) By Buyer or Sellers if any of the conditions set forth in Section 7.1 have
not been, or are not capable of being, satisfied at Closing;
(c) By Buyer if (i) any of the conditions set forth in Section 7.2 have not
been, or are not capable of being, satisfied at Closing or (ii) in the
event of a Material Adverse Change at any time after the date hereof;
(d) By Sellers if any of the conditions set forth in Section 7.3 have not been,
or are not capable of being, satisfied at Closing;
(e) By Buyer or Sellers if the Closing Date has not occurred on or prior to
June 25, 2001; provided, that Sellers may not exercise their right to
terminate the Agreement under this Section 10.1(e)(ii) if the reasons for
the failure to consummate the transaction by June 25, 2001 are attributable
to the Sellers;
(f) By Buyer, if at any time after the date hereof, Sellers materially violate
(i) Section 6.2 (and have not cured such violations within 10 days of
written notice to the Sellers, of such violations); or Section 6.8(a); and
(g) By either Sellers of Buyers if there shall be in effect a final,
nonappealable order of the Bankruptcy Court retraining, enjoining, or
otherwise prohibiting the consummation of the transactions contemplated
hereby.
10.2 Intentionally omitted.
11. General.
11.1 Third Party Beneficiaries. Other than the assumption by the Buyer of
the Assumed Total Liabilities, nothing in this Agreement, including, without
limitation, Section 3, is intended to confer any right or remedy under or by
reason of this Agreement on any person or entity, other than the parties and
their respective successors and permitted assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
other person or entity to any party, nor shall any provision of this Agreement
give any other person or entity any right of subrogation or action over or
against any party.
11.2 Amendments, Waivers. This Agreement and any Schedule or exhibit
attached hereto may be amended only by agreement in writing of all parties;
provided, that Schedules may be amended as expressly provided herein. No waiver
of any provision nor consent to any exception to the terms of this Agreement or
any agreement contemplated hereby shall be effective unless in writing and
signed by the party to be bound and then only to the specific purpose, extent
and instance so provided.
11.3 Schedules; Integration. Each Schedule delivered pursuant to the terms
of this Agreement shall be in writing and shall constitute a part of this
Agreement. This Agreement, together with such Schedules, constitute the entire
agreement among the parties pertaining to the subject matter hereof and thereof
and supersede all prior agreements and understandings of the parties in
connection therewith, excepting the Confidentiality Agreement to the extent
inconsistent with this Agreement. Any Schedule which, pursuant to the express
terms of this Agreement, is required to be amended at any time (either by adding
or deleting an item thereon) shall be deemed to have been so amended as of such
time.
11.4 Governing Law. This Agreement and the Related Agreements and the legal
relations between the parties shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and
performed in such State and without regard to conflicts of law doctrines except
to the extent that certain matters are preempted by federal law.
11.5 No Assignment. Neither this Agreement nor any rights or obligations
under it are assignable except that Buyer may assign substantially all of its
rights hereunder to any subsidiary or Affiliate of Buyer on the condition that
Buyer shall remain primarily liable to Sellers for Buyer's obligations.
11.6 Headings. The descriptive headings of the Sections and subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
11.7 Counterparts. This Agreement and any amendment hereto or any other
agreement (or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document) and
shall become effective (unless otherwise provided therein) when one or more
counterparts have been signed by each party and delivered to the other party.
11.8 Parties in Interest. Other than the assumption by the Buyer of the
Assumed Total Liabilities, this Agreement shall be binding upon and inure to the
benefit of each party hereto and their respective successors and assigns, and,
nothing in this Agreement, express or implied, is intended to confer upon any
other person any rights or remedies of any nature whatsoever under or by reason
of this Agreement. Nothing in this Agreement is intended to relieve or discharge
the obligation of any third person to (or to confer any right of subrogation or
action over or against) any party to this Agreement.
11.9 Notices. Any notice or other communication hereunder must be given in
writing and either (a) delivered in person, (b) transmitted by facsimile, or (c)
mailed by first class mail, postage prepaid, as follows:
To Buyer: To Sellers:
Prior to and post Closing: Prior to and post Closing:
New World Coffee-Manhattan Bagel, Inc. Einstein/Noah Bagel Corp. and
Einstein/Noah Bagel Partners L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
With a copy to: With a copy to:
▇▇▇▇▇▇▇, Del Deo, ▇▇▇▇▇ Skadden, Arps, Slate, Meagher, &
Griffinger & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq. Fax: ▇▇▇-▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective and deemed to have been received (i) if given
by facsimile, when transmitted to the applicable number so specified in (or
pursuant to) this Section and an appropriate confirmation is received, (ii) if
given by mail, three (3) days after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (iii) if given by
personal delivery, when actually delivered at such address.
11.10 Expenses. Sellers and Buyer shall each pay their own expenses
incident to the negotiation, preparation, approval and performance of this
Agreement and the transactions contemplated hereby, including but not limited to
the fees, expenses and disbursements of their respective counsel and financial
advisors; provided that transfer taxes paid on the transfer of Sellers' interest
in Leased Real Property shall be borne by Sellers or Buyer in accordance with
the standard practice of the jurisdiction in which such Sellers' interest in
Leased Real Property is located.
11.11 Waiver. No failure on the part of any party to exercise or delay in
exercising any right hereunder shall be deemed a waiver thereof, nor shall any
single or partial exercise preclude any further or other exercise of such or any
other right. The waiver of any breach of any term or condition of this Agreement
shall not be deemed to constitute the waiver of any other breach of the same or
any other term or condition.
11.12 Representation By Counsel; Interpretation. Sellers and Buyer each
acknowledge that each party to this Agreement has been represented by counsel in
connection with this Agreement and the transactions contemplated by this
Agreement. Accordingly, any rule of law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the intent
of the parties.
11.13 Severability. If any provision of this Agreement is determined to be
invalid, illegal or unenforceable, the remaining provisions of this Agreement
shall remain in full force and effect provided that the essential terms and
conditions of this Agreement for all of the parties remain valid, binding and
enforceable.
11.14 Jurisdiction. SELLERS AND BUYER HEREBY IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF
ARIZONA FOR THE PURPOSE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND SELLERS AND BUYER HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS
IN RESPECT TO SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH
COURT. SELLERS AND BUYER AGREE THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
11.15 Indemnification.
(a) Sellers shall indemnify and hold Buyer (and its officers, directors,
employees, consultants, attorneys, and affiliates) harmless from and with
respect to any and all claims, liabilities, losses, damages, costs and
expenses (including without limitation the reasonable fees and
disbursements of counsel), net of insurance proceeds, related to or
arising, directly or indirectly, out of (i) any liabilities arising from
the operation of the Business accruing and relating to events occurring on
and before the Closing Time (excluding in all cases any Assumed Total
Liabilities), (ii) any failure by Sellers to discharge any obligation or
undertaking made by them in this Agreement or (iii) any breach by either
Seller of any of its representation and warranties herein.
(b) Buyer shall indemnify and hold Sellers (and each of their respective
officers, directors, employees, consultants, attorneys, and affiliates)
harmless from and with respect to any and all claims, liabilities, losses,
damages, costs and expenses (including without limitation the reasonable
fees and disbursements of counsel), net of insurance proceeds, related to
or arising, directly or indirectly, out of (i) any liabilities arising from
the operation of the Business accruing and relating to events occurring on
and after the Closing Time, (ii) any failure by Buyer to discharge any
Assumed Total Liabilities or any obligation or undertaking made by it in
this Agreement or (iii) any breach by Buyer of any of its representations
and warranties herein.
(c) An indemnifying party shall, after receipt of written notice from an
indemnified party of any claims, liabilities, losses, damages, costs and
expenses recognized by the indemnifying party as indemnification
obligations pursuant to this Section 11.15, appoint counsel reasonably
satisfactory to the indemnified party for the purpose of defending or
contesting such claims, liabilities, losses, damages, costs and expenses.
11.16 Evaluation of Alternative Structure. Buyer shall discuss with Sellers
the restructuring of the transactions contemplated by this Agreement as a stock
transaction; provided, that in no event shall Sellers, Agents or Buyer be
required to enter into or obligated to pursue any such alternative structure.
12. Definitions. Capitalized terms used in this Agreement and any Related
Documents or any Schedules shall have (unless otherwise provided) the following
respective meanings:
"Acquisition Proposal" means a proposal involving a third party and any
Seller or any of their affiliates relating to any merger, consolidation,
business combination, sale of significant assets, sale of shares of capital
stock or any restructuring, recapitalization or similar transaction involving
any of the assets to be purchased by Buyer pursuant to this Agreement, including
through a plan of reorganization.
"Affiliates" means, with respect to any person, any other person
controlling, controlled by or under common control with, or the parents, spouse,
lineal descendants or beneficiaries of, such person.
"Agreement" see the preamble.
"Assumption and Assignment Agreements" see Section 7.2.2(e).
"Assignment of Intellectual Property Rights" see Section 7.2.2(d).
"Assumed Contracts" see Section 1.1.4.
"Assumed Current Liabilities" see Section 2.2.
"Assumed Total Liabilities" see Section 2.2.
"Assumed Real Property Leases" ee Section 1.1.8.
"Bankruptcy Code" see Recital C.
"Bankruptcy Court" see Recital A.
"Bankruptcy-Related Requirements" see Section 6.2.
"▇▇▇▇ of Sale" see Section 7.2.2(a).
"Books and Records" see Section 1.1.9.
"Business" see Recital B.
"Buyer" see the preamble.
"Cases" see Recital A.
"Closing" see Section 8.1.
"Closing Date" see Section 8.1.
"Closing Statement" see Section 9.1.1.
"Closing Time" means 12:01 p.m. (Eastern Time) on the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Comparable Position" means, with respect to each employee, a job: (i) with
the opportunity to earn Equivalent Compensation; (ii) with the same or
substantially similar job title; (iii) with the same or substantially similar
benefits as those received by such employee, as the case may be, as of the
Closing Date; (iv) within a 25-mile radius (unless otherwise agreed by such
employee) of such employee's place of employment as of the Closing Date; and (v)
with Buyer or any of its direct or indirect subsidiaries, affiliates or
franchisees.
"Commission" see Section 4.12
"Confidentiality Agreement" means that certain letter agreement regarding
confidentiality dated as of the date of this Agreement between Sellers and Three
Cities Fund III L.P..
"Contracts" means all of Sellers' contracts and agreements, including
franchise agreements, license agreements, loan agreements with financed area
developers and others, service agreements, vendor contracts, employment, bonus
and retention bonus agreements, consulting agreements, equipment leases and
confidentiality and similar agreements.
"Deposit Amount" see Section 2.5.
"Designated Buyer Account" see Section 9.1.3(a).
"Designated Seller Account" means an account to be designated by E/N Corp.
as the account into which any payments to Sellers on account of the Purchase
Price are to be deposited.
"Dispute Notice" see Section 9.1.1.
"Disputed Items" see Section 9.1.1.
"Employee in Good Standing" means any employee of Sellers as of the Closing
Date, including those on short term disability leave, workers' compensation
leave or other authorized leave of absence on the Closing Date, other than any
such employee: (i) who has been absent from work without authorization for one
or more weeks on the Closing Date or (ii) who is on long term disability on the
Closing Date; provided, that any employee of Sellers on short term disability
leave, workers' compensation leave or other authorized leave of absence on the
Closing Date will cease to be an Employee in Good Standing as of the Closing
Date unless such employee returns to his or her Employment within 90 days of the
date on which such employee's disability leave began.
"Employment" means, with respect to each employee, either (i) such
employee's position as of the Closing Date or (ii) in the event that, in Buyer's
sole discretion, such position is no longer available, a Comparable Position.
"E/N Corp." see the preamble.
"E/N Partners" see the preamble.
"ENBPI" see Section 1.1.9
"Equipment Lease Assignment" see Section 7.2.2(b).
"Equivalent Compensation" means salary or wages, bonus and incentives of
the Buyer (or its affiliates), which, in the aggregate, are substantially
equivalent to the Sellers' salary or wages, as the case may be, and applicable
Incentives in the aggregate of such employee as of the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.
"Escrow Agent" see Section 2.1(b)(ii).
"Escrowed Purchase Price Portion" means $3.0 million.
"Exchange Act" see Section 4.12
"Excluded Assets" see Section 1.2.
"Excluded Contracts" see Section 1.2.3.
"Excluded Real Property Leases" see Section 1.2.5.
"Excluded Receivables" see Section 1.2.2.
"Final Order" means an order of the Bankruptcy Court with respect to which
(a) no appeal has been filed within the time period specified by Rule 8002(a),
Federal Rules of Bankruptcy Procedure, (b) in the event a timely appeal has been
filed, the effectiveness of such order has not been stayed in accordance with
Rule 8005, Federal Rules of Bankruptcy Procedure, or (c) in the event such order
was stayed pending appeal, such stay has been terminated by subsequent court
order.
"GAAP" see Section 4.12.
"Government Permits" see Section 1.1.11.
"Greenlight" means Greenlight New World LLC.
"▇▇▇▇▇▇▇▇ Employment Agreement" means the amended and restated executive
employment agreement between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and E/N Corp., as of February
10, 2001.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Independent Accountants" means an independent public accounting firm to be
mutually agreed by Sellers and Buyer
"Intellectual Property" see Section 1.1.10.
"Interseller Leases" see Section 1.2.5.
"Inventory" see Section 1.1.3.
"Liens" see Section 1.1.
"Management Information Systems" means the computer systems of the Sellers
that provide information about their business operations.
"Material Adverse Change" means any event or circumstance or series of
related events or circumstances that have caused a material adverse change in
the operations, properties or assets of the Business.
"Material Adverse Effect" means any event or circumstance or series of
related events or circumstances that have caused a material adverse effect in
the operations, properties or assets of the Business.
"NWC" means New World Coffee-Manhattan Bagel, Inc.
"Organizational Books and Records" see Section 1.2.6.
"Outstanding ACHs" means all Automated Clearing House liabilities that have
been initiated by Sellers but not settled on or before the Closing Time.
"Personal Property" see Section 1.1.5.
"Preliminary Order" see Section 6.7.
"Prepaid Advertising" means network, spot, and print advertising paid for
by Sellers prior to the Closing Date prorated (with respect to any such payments
that are for a payment period that include both pre- and post Closing Date)
based on the number of days from the Closing Date to the end of the payment
period.
"Prepaid Rent" means all rent payments and other landlord related payments
(for such items as, without limitation, taxes, insurance, C.A.M., and utilities
payable to any Seller's landlords or any assignee thereof) made by any Seller to
the extent such payments (i) were made as of the Closing Date, (ii) related to
Real Property Leases (other than Excluded Real Property Leases), (iii) are (in
whole or in part) for a payment period after the Closing Date, prorated (with
respect to any such payments that are for a payment period that include both the
pre- and post-Closing Date) from the Closing Date to the end of such payment
period.
"Petition Date" means April 27, 2000.
"Purchase Price" see Section 2.1.
"Purchased Assets" see Section 1.1.
"Real Property Leases" see Section 4.4.
"Real Property Lease Assignment" see Section 7.2.2(c).
"Receivables" see Section 1.1.2.
"Related Agreements" see Section 1.2.7.
"Retention Bonus Program" means the amended and Restated Einstein/Noah
Bagel Corp. Employee Retention Program as in effect on the date hereof under
which $265,000 is payable in February 2001 and $530,000 is payable upon
confirmation of Sellers' plan or reorganization.
"Sale Order" see Section 6.11.
"Severance Agreements" means the 10 individual change of control severance
agreements for senior management previously approved by the Bankruptcy Court.
"Seller, Sellers" see the preamble.
"Store" means any location currently owned by or leased to any Seller at
which Sellers currently operates or formerly operated a retail food service
outlet under the tradename of "Einstein Bros. Bagels" or "Noah's New York
Bagels."
"Taxes" means federal, state, local and foreign taxes, assessments,
deficiencies, duties, fees and other governmental charges or impositions
(including without limitation on all income tax, gross receipts, unemployment
compensation, social security, payroll, sales and use, excise, privilege, real
and personal property, ad valorem, transfer, franchise, capital stock, license,
production, business and occupation, disability, employment, severance,
withholding and any other tax or similar governmental charge or imposition
whatsoever (including interest, penalties, or additions with respect thereto)
under laws of the United States or any state or municipal or political
subdivision thereof or any foreign country or political subdivision thereof).
"Termination Notice" see Section 10.1.
"Termination Payment" see Section 10.2.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first written
above.
SELLERS, each as a debtor and debtor-in possession
EINSTEIN/NOAH BAGEL CORP.
By:/s/______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
EINSTEIN/NOAH BAGEL PARTNERS, L.P.
By:/s/______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Vice President, Einstein/Noah Bagel
Partners, Inc.
Its: General Partner
BUYER
EINSTEIN ACQUISITION CORP.
By:/s/______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
GREENLIGHT NEW WORLD, LLC,
BY NEW WORLD COFFEE-MANHATTAN
BAGEL, INC. AS _______________
By:/s/______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO
TABLE OF CONTENTS
Page
1. Purchase and Sale of Assets..................................................................1
1.1 Purchased Assets.......................................................................1
1.2 Excluded Assets........................................................................5
2. Purchase Price; Assumption of Liabilities; Deposit...........................................6
2.1 Amount and Payment of Purchase Price...................................................6
2.2 Assumed Liabilities....................................................................7
2.3 No Expansion of Third Party Rights.....................................................8
2.4 Taxes..................................................................................8
2.5 Deposit................................................................................8
3. Employees....................................................................................9
4. Representations and Warranties of Sellers....................................................9
4.1 Organization...........................................................................9
4.2 Authorization.........................................................................10
4.3 No Conflicts..........................................................................10
4.4 Leased Real Property. ...............................................................10
4.5 Personal Property.....................................................................10
4.6 Intellectual Property.................................................................11
4.7 Employees and Employment-Related Matters..............................................11
4.8 Employee Benefit Plans................................................................11
4.9 Contracts.............................................................................11
4.10 Litigation............................................................................12
4.11 ▇▇▇▇▇▇▇▇ Employment Agreement and Severance Agreements................................12
4.12 SEC Documents; Financial Statements. ................................................12
4.13 ENBPI ...............................................................................12
4.14 Amount of Assumed Current Liabilities. ..............................................12
5. Representations and Warranties of Buyer.....................................................12
5.1 Organization..........................................................................12
5.2 Authorization.........................................................................13
5.3 No Conflicts. ......................................................................13
5.4 Financial Capacity. .................................................................13
6.Covenants....................................................................................13
6.1 Access; Confidentiality...............................................................13
6.2 Operation of Business.................................................................13
6.3 Reasonable Efforts....................................................................15
6.4 Publicity.............................................................................15
6.5 Notice of Developments................................................................15
6.6 HSR Filings...........................................................................16
6.7 Preliminary Order.....................................................................16
6.8 Acquisition Proposals.................................................................16
6.9 Cooperation and Access. ..............................................................16
6.10 Preliminary Order.....................................................................16
6.11 Sale Order............................................................................16
6.12 ENBPI. ..............................................................................17
6.13 401(k) Plan. ........................................................................17
6.14 Transitional Services Agreement. ....................................................17
7. Conditions Precedent to Parties' Obligation.................................................18
7.1 Conditions to Obligations of All Parties..............................................18
7.2 Conditions to Buyer's Obligations.....................................................18
7.3 Conditions to Sellers' Obligations....................................................20
8. Closing and Closing Deliveries; Calculations and Payments at Closing........................20
8.1 Closing...............................................................................20
8.2 Sellers' Obligations at Closing.......................................................20
8.3 Buyer's Obligations at Closing........................................................21
9. Certain Post Closing Matters................................................................21
9.1 Post Closing Determination of Assumed Current Liabilities.............................21
9.2 Use of Intellectual Property and Other Information....................................22
9.3 Further Assurances....................................................................22
9.4 Survival of Representations and Warranties............................................23
9.5 Post Closing Access to Books and Records..............................................23
9.6 Change of Corporate Name..............................................................23
10. Termination................................................................................23
10.1 Termination Rights....................................................................23
10.2 Termination Payment ..................................................................23
11. General....................................................................................24
11.1 Third Party Beneficiaries.............................................................24
11.2 Amendments, Waivers...................................................................24
11.3 Schedules; Integration................................................................24
11.4 Governing Law.........................................................................25
11.5 No Assignment.........................................................................25
11.6 Headings..............................................................................25
11.7 Counterparts..........................................................................25
11.8 Parties in Interest...................................................................25
11.9 Notices...............................................................................25
11.10 Expenses..............................................................................26
11.11 Waiver................................................................................26
11.12 Representation By Counsel; Interpretation.............................................26
11.13 Severability..........................................................................26
11.14 Jurisdiction..........................................................................27
11.15 Indemnification.......................................................................27
11.16 Evaluation of Alternative Structure. ................................................27
12. Definitions................................................................................28
ENB Acquisition LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇/▇▇▇▇ Bagel Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
and General Counsel
Agreement to Amend and Waive Certain Provisions of the Asset Purchase Agreement
dated as of February 10, 2001 (the "Purchase Agreement")
--------------------------------------------------------
Dear ▇▇. ▇▇▇▇▇▇▇:
This letter (this "Letter"), consistent with the terms of Section 11.2 of
the Purchase Agreement, sets forth the agreement between Einstein/Noah Bagel
Corp., ▇▇▇▇▇▇▇▇ ▇▇▇▇ Partners, L.P. (collectively, "Einstein/Noah") and ENB
Acquisition LLC ("ENB") to amend and waive certain provisions of the Purchase
Agreement in the manner set forth herein. Capitalized terms not otherwise
defined in this Letter shall have the meaning set forth in the Purchase
Agreement.
1. Assumed Contracts. Section 1.1.4 of the Purchase Agreement shall be
deleted in its entirety and replaced with the following:
"1.1.4 Assumed Contracts. To the extent such Contracts are assignable under
the Bankruptcy Code, all of either Seller's right title and interest in and
to or under all Contracts, including without limitation that certain
Commercial Insurance Premium Finance and Security Agreement between E/N
Corp. and Canonwill, Inc. dated as of February 28, 2001, (the "Premium
Financing Contract"), other than Excluded Contracts listed on Schedule
1.2.3 (the "Assumed Contracts")."
2. Allocation of Purchase Price. Section 2.1(d) of the Purchase Agreement
shall be deleted in its entirety and replaced with the following:
"(d) Allocation of Purchase Price. The Purchase Price shall be allocated
for tax purposes among the Purchased Assets in a manner to be determined by
Buyer and Sellers based on the advice or recommendation of a nationally
recognized appraisal firm. Sellers and Buyer agree to use the allocations
determined pursuant to this Section 2.1(d) for all tax purposes, including
without limitation, those matters subject to Section 1060 of the Internal
Revenue Code of 1986, as amended."
3. Assumed Liabilities. The final paragraph of Section 2.2 of the Purchase
Agreement shall be deleted in its entirety and replaced with the following:
The liabilities described in Sections 2.2(a) and 2.2(b) shall hereinafter
be referred to as the "Assumed Current Liabilities". The Assumed Current
Liabilities and the liabilities described in Section 2.2(c), shall
hereinafter be referred to collectively as the "Assumed Total Liabilities";
provided, however the, the current liability portion of the Assumed
Contracts (except with respect to the Premium Financing Contract) and
Assumed Real Property Leases shall be included in the Assumed Current
Liabilities. Other than the Assumed Total Liabilities, no indebtedness,
obligation or liability of Sellers is assumed by Buyer, including without
limitation any liability for the payment of (i) any professional person
retained in the Cases, (ii) any Taxes of the Sellers for any period through
the day before the Closing Date, or (iii) any liability for inter-Seller
payables."
4. Operation of Business. Section 6.2(xv) of the Purchase Agreement shall
be deleted in its entirety and replaced with the following:
(xv) provide prompt notice to Buyer of (a) any losses or damages in excess
of an aggregate of $100,000 suffered by Sellers with respect to the
Purchased Assets whether or not such losses or damages are covered by
insurance, (b) any material legal proceeding commenced by or against
Sellers or any motion or pleading filed in such cases (other than
proceedings in the Cases), and (c) any material legal proceeding commenced
or, to the best knowledge of Sellers, threatened against Sellers relating
to the transactions contemplated by this Agreement or relating to any of
the Purchased Assets;
5. Section 6.6 of the Purchase Agreement shall be deleted in its entirety
and replaced with the following:
"6.6 HSR Filings. If required by law, each party shall promptly make its
respective filing under the HSR Act, and thereafter make any other required
submissions under the HSR Act and use reasonable commercial efforts and
diligence to satisfy any other conditions necessary to comply with the HSR
Act and to obtain an early termination of any waiting period pursuant
thereto."
11. Notices. The address of Einstein/Noah Bagel Corp. and Einstein/Noah
Bagel Partners, L.P. as set forth in Section 11.9 of the Agreement shall be
deleted and replaced with the following:
"1687 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq."
12. Consent and Waiver. On March 1, 2001 Einstein/Noah paid insurance
premiums in the amount of $984,649.50 (the "Payment"), and Einstein/Noah
intends, prior to the Closing, to make additional monthly insurance premium
payments each in the approximate amount of $295,871.91 (together with the
Payment, the "Payments"). Provided Einstein/Noah complies, in all material
respects, with the terms of the Premium Financing Contract up tot he Closing
Date, ENB hereby consents to the Payments pursuant to Section 6.2 of the
Purchase Agreement and waives any right to terminate the Purchase Agreement, any
claim for indemnification for a breach of the Purchase Agreement or any other
claim against Sellers for making such Payments or entering into the Premium
Financing Contract. Einstein/Noah hereby acknowledges that ENB's aforementioned
waiver is only in respect of the Payments and the Premium Financing Contract,
and that ENB reserves the right to exercise all rights, remedies and claims that
may be available to it resulting from any breach by Sellers of the Purchase
Agreement.
13. Interpretation; Full Force and Effect of Agreement. All references to
the Purchase Agreement and all Related Agreements shall refer to the Purchase
Agreement as amended by this Agreement. Except as hereby specifically amended,
modified or supplemented, the Purchase Agreement and all other Related
Agreements are hereby confirmed and ratified in all respects and shall remain in
full force and effect according to their respective terms.
If the terms of this Letter are acceptable to Einstein/Noah, please so
indicate by signing below.
Very truly yours,
ENB ACQUISTION LLC
By:/s/___________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
ACCEPTED and AGREED:
EINSTEIN/NOAH BAGEL CORP.
By: /s/_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Senior Vice President
EINSTEIN/NOAH BAGEL PARTNERS, L.P.
By: /s/_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President,
Einstein/Noah Bagel Partners, Inc.,
(Its General Partner)