ASSET SALE AND PURCHASE AGREEMENT
THIS ASSET SALE AND PURCHASE AGREEMENT (the "Agreement") is made
on this 7th day of July, 1995, by and between RTM, INC., a Georgia
corporation having its principal executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("RTM"); SHONEY'S, INC., a Tennessee corporation
having its principal executive offices at ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller"); and SHONEY'S OF CANADA, INC., a Canadian
corporation having its principal executive offices at Suite 6200, Scotia
Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
("Subsidiary").
WITNESSETH:
WHEREAS, as of July 5, 1995, Seller (or Shoney's Real Estate,
Inc., a wholly owned subsidiary of Seller ("Realco")) owned and/or
operated the sixty (60) restaurants listed on SCHEDULE 1.A hereto (the
"Company Restaurants"); and
WHEREAS, as of July 5, 1995, Seller or Subsidiary also licensed
the operation of two hundred seventeen (217) restaurants listed,
respectively, on SCHEDULE 1.B. and SCHEDULE 1.D. hereto (collectively, the
"Franchised Restaurants"); and
WHEREAS, Seller desires to sell the Purchased Assets (as defined
in SECTION 1 below), and RTM, through Persons that it shall designate as
Buyers, desires to purchase Seller's interest in such Purchased Assets and
assume certain Assumed Liabilities (as defined in SECTION 4.A. below) of
Seller as set forth herein;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, it is agreed as follows:
1. DEFINITIONS
For purposes of this Agreement, in addition to the terms defined
elsewhere herein, unless the context otherwise requires, the following
terms shall have the meanings indicated:
"ASSIGNED CONTRACTS" shall have the meaning set forth in SECTION
2.A.(8).
"BENEFIT PLANS" means all benefit plans, contracts and
arrangements of Seller in effect as of the date hereof, including, without
limitation, all pension, retirement profit sharing, savings and thrift,
bonus, incentive or deferred compensation, severance pay, vacation and
medical, dental and life and disability insurance plans, policies or
arrangements of Seller, or any member of the "controlled group" within the
meaning of Section 4001(a)(14) of ERISA of which Seller is a member (the
"Controlled Group") pursuant to which any employees or former employees
of Seller who are or have been employed at the Company Restaurants and/or
beneficiaries of any such persons (collectively, "Restaurant Employees")
may receive benefits or compensation.
"BUYER" means one of the Persons designated by RTM as a purchaser
of all or a portion of the Purchased Assets. "BUYERS" means all such
Persons collectively.
"CHATTEL MORTGAGES" shall have the meaning set forth in SECTION
8.M.
"CLOSING" means the consummation of the purchase and sale of the
Purchased Assets as provided in this Agreement on the Closing Date.
"CLOSING DATE" means September 1, 1995, or any other Friday as may
be agreed upon by the parties hereto immediately preceding the designated
Effective Date.
"COBRA" means Part 6 of Subtitle B of Title I of ERISA and Section
4980B of the Code.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSARY AGREEMENT" means the commissary services agreement
substantially in the form attached hereto as EXHIBIT A pursuant to which
Commissary Operations, Inc., a subsidiary of Seller, agrees to provide
certain services to RTM or a Buyer designated by RTM as set forth therein.
"COMPANY RESTAURANT" means one of the Restaurants listed on
SCHEDULE 1.A. "COMPANY RESTAURANTS" means such sixty (60) Restaurants,
collectively.
"CONTRACT ASSIGNMENT" means one of the contract assignments
between Seller and RTM or a Buyer designated by RTM pursuant to which an
Assigned Contract is assigned to and assumed by RTM or such Buyer, in form
and substance reasonably acceptable to the parties.
"CONTROLLED GROUP" means every trade or business, whether or not
incorporated, which has employees who are or have been at any date of
determination occurring within the preceding six (6) years, treated
pursuant to Section 4001(a)(14) of ERISA and/or Section 414 of the Code
as employees of a single employer which includes Seller. A "member of the
Controlled Group" means any such trade or business.
"DEED" and "DEEDS" shall have the meaning[s] set forth in SECTION
2.C.(1).
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"EFFECTIVE DATE" means September 4, 1995, or any other Monday as
may be agreed upon by the parties hereto immediately following the
designated Closing Date.
"ENVIRONMENTAL LAWS" shall have the meaning set forth in SECTION
8.Y.(3).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"FF&E" means furniture, fixtures, equipment, machinery, signage,
inventories of china, glass and silver, utensils and small wares and
uniforms and all other like personalty located at the Company Restaurants
and used in connection with the operation of the Company Restaurants.
"FOOD INVENTORIES" means inventories of usable food and beverages
located in the Company Restaurants and retail goods that are sold
primarily at the cashier stands located in the Company Restaurants
determined as of 12:01 a.m. on the Effective Date by mutual agreement of
the parties.
"FRANCHISE AGREEMENT" means one of the agreements listed on
SCHEDULE 1.B.. "FRANCHISE AGREEMENTS" means such agreements,
collectively.
"FRANCHISED RESTAURANT" means one of the Restaurants listed on
SCHEDULE 1.B. or SCHEDULE 1.D.. "FRANCHISED RESTAURANTS" means such two
hundred seventeen (217) Restaurants, collectively.
"GENERAL ASSIGNMENT" means an assignment between Seller and RTM
or a Buyer designated by RTM, in form and substance reasonably acceptable
to the parties, pursuant to which all of Seller's right, title and
interest in prepaid expenses and deposits, purchase orders and permits,
guarantees, warranties and licenses, and any and all other Purchased
Assets not otherwise specifically assigned, conveyed or transferred by
separate instrument pursuant to this Agreement, are assigned to RTM or
such Buyer, and pursuant to which any Assumed Liabilities (as defined in
SECTION 4.A.) not otherwise specifically assumed by separate instrument
are assumed by RTM or such Buyer.
"HAZARDOUS MATERIALS" means and shall include, without limitation,
gasoline, petroleum products, explosives, radioactive materials,
polychlorinated biphenyls or related or similar materials, or any other
substance or material defined as of the date hereof as hazardous or toxic
by any federal, state or local law, ordinance, rule or regulation, but
excluding Asbestos, as defined in SECTION 8.Y.(2).
"INVENTORIES" means, collectively, the Food Inventories and the
Non-Food Inventories.
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"LEASE" means one of the leases listed on SCHEDULE 1.C.. "LEASES"
means such twelve (12) Leases, collectively.
"LEASE ASSIGNMENTS" means an assignment between Seller and RTM or
a Buyer designated by RTM pursuant to which all of Seller's right, title
and interest in each of the Leases are assigned to and assumed by RTM or
such Buyer, in form and substance reasonably acceptable to the parties.
"LEASE ASSIGNMENTS" means such twelve (12) Lease Assignments,
collectively.
"LEASED RESTAURANT" means one of the Company Restaurants, the land
and/or building for which is leased by Seller pursuant to a Lease
described on SCHEDULE 1.C.. "LEASED RESTAURANTS" means such twelve (12)
Leased Restaurants, collectively.
"NEW LEASE" means a lease of an Owned Restaurant that is not
conveyed to RTM or a Buyer designated by RTM but is leased pursuant to
SECTION 11, with terms as described in SECTION 11.
"NONCOMPETITION AGREEMENT" means an agreement between Seller and
RTM pursuant to which Seller agrees to certain restrictions upon its
business activities, which agreement shall be substantially in the form
attached hereto as EXHIBIT B.
"NON-FOOD INVENTORIES" means all inventories, with the exception
of Food Inventories, located in the Company Restaurants that are used in
connection with the operation of the Company Restaurants, including,
without limitation, cleaning and maintenance supplies, paper goods, forms
and office supplies, in each case determined as of 12:01 a.m. on the
Effective Date.
"NOTE" means the promissory note substantially in the form
attached hereto as EXHIBIT C executed by RTM or a Buyer designated by RTM
in favor of Seller in the original principal amount of Four Million
Dollars ($4,000,000).
"OFFICE FF&E" means furniture, fixtures and equipment located in
the premises encompassed by the Office Lease.
"OFFICE LEASE" means a lease of office premises at ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ (▇▇▇▇▇ ▇-▇) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ containing terms and
conditions reasonably satisfactory to RTM and Seller; provided, however,
that the duration of such lease need not exceed twelve (12) months.
"OWNED RESTAURANT" means one of the Company Restaurants, the land
and/or building for which is owned in fee simple by Seller. "OWNED
RESTAURANTS" means such forty-eight (48) owned Company Restaurants,
collectively.
"PERMITTED ENCUMBRANCES" shall have the meaning set forth in
SECTION 11.A.(1).
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"PERSON" means an individual, partnership, corporation, trust or
other similar entity, or a government or agency or instrumentality
thereof.
"PURCHASED ASSETS" shall have the meaning set forth in SECTION
2.A.
"PURCHASE PRICE" shall have the meaning set forth in SECTION 3.A..
"RTM GUARANTY" means the guaranty by RTM substantially in the form
attached hereto as EXHIBIT D executed by RTM pursuant to which RTM
guarantees the obligations of the Buyer designated by RTM to execute the
Note if the maker of the Note is a Person other than RTM.
"RTM'S COUNSEL" means Arnall Golden & ▇▇▇▇▇▇▇ of Atlanta, Georgia.
"REAL ESTATE MORTGAGES" shall have the meaning set forth in
SECTION 8.M..
"REALCO" shall have the meaning set forth in the FIRST RECITAL of
this Agreement.
"SECURITY AGREEMENT" means the security agreement substantially
in the form attached hereto as EXHIBIT E executed by RTM or the Buyer
designated by RTM to purchase the Trademarks, the Franchise Agreements and
certain other assets pursuant to which RTM or such Buyer pledges its
interests in the Trademarks, the Franchise Agreements and such certain
other assets to Seller as security for the Note.
"SELLER" shall have the meaning set forth in the INTRODUCTORY
PARAGRAPH of this Agreement.
"SELLER'S COUNSEL" means Tuke ▇▇▇▇ & ▇▇▇▇▇▇▇ of Nashville,
Tennessee.
"SUBSIDIARY" shall have the meaning set forth in the PREAMBLE of
this Agreement.
"SUBSIDIARY FRANCHISE AGREEMENT" means one of the agreements
listed on SCHEDULE 1.D.. "SUBSIDIARY FRANCHISE AGREEMENTS" means such
nineteen (19) agreements, collectively.
"TAX" means any federal, state, local or foreign income, sales,
property, excise, payroll, gross receipts, use, transfer, value added,
capital stock, franchise or other tax of any kind whatsoever, including
any interest, penalty or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
amendment thereto.
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"TERMINATION DATE" means October 15, 1995, or such other date as
is determined pursuant to SECTION 15 of this Agreement.
"TITLE COMPANY" shall have the meaning set forth in SECTION
11.A.(1).
"TRADEMARK" means one of the service marks or trademarks or
applications therefor listed on SCHEDULE 1.E.. "TRADEMARKS" means such
nineteen (19) service marks and trademarks or applications therefor,
collectively.
"TRADEMARK ASSIGNMENT" means one of the assignments between Seller
and RTM or a Buyer designated by RTM pursuant to which one or more
Trademarks are assigned to RTM or such Buyer, in form and substance
reasonably acceptable to the parties.
"TRADE SECRET" means the formula described to on SCHEDULE 1.F..
"TRADE SECRET ASSIGNMENT" means an assignment between Seller and
RTM or a Buyer designated by RTM pursuant to which the Trade Secret is
assigned or transferred to RTM or such Buyer, in form and substance
reasonably acceptable to the parties.
"VEHICLES" means the vehicles listed on SCHEDULE 1.G..
All references herein to "Sections," "Schedules" and "Exhibits"
shall, unless otherwise indicated, refer to the sections, schedules and
exhibits which (through attachment or incorporation by reference) are a
part of this Agreement.
2. PURCHASE AND SALE OF ASSETS
A. RESTAURANT ASSETS. RTM shall designate Buyers to which
Seller shall assign, transfer and deliver all of the Purchased Assets.
In the absence of a designation of a Person as a Buyer for all or any
portion of the Purchased Assets, RTM shall fulfill the obligations of a
Buyer hereunder as to such Purchased Assets (or portion thereof) for which
RTM has failed to designate a Buyer. At the Closing, but effective on the
Effective Date, Seller agrees to sell, assign, transfer and deliver (or,
in the case of Company Restaurants held by Realco, to cause Realco to
sell, assign, transfer and deliver) to a Buyer or Buyers (it being
expressly acknowledged and agreed by Seller that different Persons may be
designated by RTM for the purchase of different portions of the Purchased
Assets and/or for the assumption of the Assumed Liabilities (as defined
below), and that the Purchase Price shall be allocated among and between
the Purchased Assets in the manner provided for below), and such Buyer or
Buyers designated by RTM shall purchase from Seller, for the Purchase
Price and upon and subject to the terms and conditions hereinafter set
forth, the following described assets (the "Purchased Assets") as they
exist on the Effective Date:
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(1) OWNED REAL PROPERTY AND IMPROVEMENTS. Fee simple
title to the real property on which the Owned Restaurants are
situated and the improvements thereon (subject to certain Owned
Restaurants being leased pursuant to SECTION 11) and, to the
extent not conveyed pursuant to the Lease Assignments, all of
Seller's (or Realco's) right, title and interest in and to the
leasehold improvements to the property containing the Leased
Restaurants, together with any and all rights, titles, interests,
privileges and/or appurtenances pertaining thereto included
therewith, or which are a part thereof.
(2) LEASEHOLD INTEREST. All of Seller's leasehold
right, title and interest in and to real property on which the
Leased Restaurants are situated and the improvements thereon.
(3) TRADEMARKS AND TRADE SECRET. All of Seller's
and/or Subsidiary's right, title and interest in and to the
Trademarks and the Trade Secret.
(4) FRANCHISE AGREEMENTS. All of Seller's and
Subsidiary's right, title and interest in and to the Franchise
Agreements and Subsidiary Franchise Agreements.
(5) FURNITURE, FIXTURES AND EQUIPMENT. All right,
title and interest of Seller in and to the FF&E (including,
without limitation, any spare and replacement parts and surplus
restaurant equipment located in the Company Restaurants) used in
connection with the operation and maintenance of the Company
Restaurants.
(6) INVENTORIES. All right, title, and interest of
Seller in and to the Inventories located in the Company
Restaurants.
(7) DEFERRED FRANCHISE FEES. All right, title and
interest of Seller in and to any and all deferred franchise fees
set forth on SCHEDULE 2.A.(7) (the "Deferred Franchise Fees").
(8) CONTRACTS. All right, title and interest of
Seller in, to and under those contracts relating to the use or
operation of the Company Restaurants that are set forth on
SCHEDULE 2.A.(8), which RTM or a Buyer designated by RTM agrees
to assume as provided below (the "Assigned Contracts"). Within
thirty (30) days following the execution of this Agreement,
Seller shall provide to RTM copies of all contracts relating to
the use or operation of the Company Restaurants, including,
without limitation, billboard contracts, music service
agreements, equipment leases and/or service contracts and pest
control service agreements, easements, rights of way, reciprocal
easement agreements and nondisturbance agreements, which RTM or
a Buyer designated by RTM shall
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assume so long as any such contract or agreement is cancelable by
Seller (or RTM or such Buyer, after its assumption) without
penalty, on a "no default" basis and upon not more than ninety
(90) days notice. RTM or a Buyer designated by RTM may, but
shall not be required to, assume any contract or agreement not so
cancelable.
(9) PERMITS AND LICENSES. All right, title and
interest of Seller in and to all permits and licenses owned and
held by Seller in connection with the operation of the Company
Restaurants, to the extent that such permits and licenses are
assignable.
(10) VEHICLES. All right, title and interest of
Seller in and to the Vehicles.
(11) ▇▇▇▇▇ CASH. All right, title and interest of
Seller in and to the amount of all ▇▇▇▇▇ cash on hand at the
Company Restaurants as of 12:01 a.m. on the Effective Date (the
"▇▇▇▇▇ Cash").
(12) MISCELLANEOUS. To the extent they relate to the
Company Restaurants, all training and operations manuals (and all
rights therein, including copyrights); copies of personnel
records, to the extent permissible by law; and, to the extent
they relate to either or both the Company Restaurants and/or the
Franchised Restaurants and are owned by Seller, non-exclusive
(i.e. as to the franchisees or licensees under the Franchise
Agreements, but otherwise exclusive) rights to the use and
reproduction of television and radio commercial and advertising
material, newspaper mats and other advertising material, menus
and computer programs (including, without limitation, that
certain computer program used to monitor "Famous Recipe" spice
sales) including, without limitation, all copyrights therein
owned by Seller; business forms and copies of historical
accounting records; and non-exclusive (i.e. as to the franchisees
or licensees under the Franchise Agreements, but otherwise
exclusive) rights to the Trade Secret.
B. ASSETS NOT BEING PURCHASED AND SOLD. No asset, property
or item not specifically described above or in the Schedules attached
hereto is being conveyed to RTM or a Buyer designated by RTM hereunder.
Furthermore, RTM and Seller acknowledge and agree that the real property
comprising the Company Restaurant located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (Seller's unit # 5727) is subject to a right of
first refusal to repurchase such Company Restaurant in favor of Seller's
grantors. Notwithstanding any provision of this Agreement to the
contrary, Seller and RTM or a Buyer designated by RTM shall enter into a
New Lease with respect to Company Restaurant No. 5727 and this Agreement
shall not be deemed to be a contract to sell the Real Property comprising
such Company Restaurant; provided, however, that, in the event Seller and
RTM or a Buyer designated by RTM
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obtain the consent of, and waiver of such right of first refusal to
repurchase by, the holders thereof to a conveyance of such Company
Restaurant pursuant to terms of this Agreement, RTM or a Buyer designated
by RTM shall purchase such Company Restaurant on the terms and conditions
set forth in this Agreement.
C. TRANSFER OF PURCHASED ASSETS. On the Closing Date, but
effective on the Effective Date, Seller shall transfer the Purchased
Assets, free of all mortgages, liens and encumbrances other than Permitted
Encumbrances, to RTM or a Buyer designated by RTM in the following manner:
(1) TRANSFER OF OWNED RESTAURANTS AND IMPROVEMENTS.
Seller shall (or, in the case of Company Restaurants held by
Realco, shall cause Realco to) transfer the real property and
improvements relating to the Owned Restaurants to RTM or a Buyer
designated by RTM pursuant to special warranty deeds (i.e. a deed
by a corporation containing warranties of title as against any
claims of the grantor and of all persons or parties holding or
claiming by, through or under the grantor) in recordable form,
free of all mortgages, liens and encumbrances other than
Permitted Encumbrances. Such instruments of transfer are
referred to herein collectively as the "Deeds." Alternatively,
if an Owned Restaurant is not conveyed but is leased pursuant to
SECTION 11, Seller shall lease the real property and improvements
relating to such Owned Restaurant to RTM or a Buyer designated by
RTM pursuant to a New Lease.
(2) TRANSFER OF LEASES. Seller shall transfer all
right, title and interest in the Leases together with the
improvements related thereto, to RTM or a Buyer designated by RTM
pursuant to lease assignments in recordable form, free of all
mortgages, liens and encumbrances other than Permitted
Encumbrances; provided, however, that, with the mutual agreement
of the parties, Seller may sublease all of its right, title and
interest in a particular Leased Restaurant to RTM or a Buyer
designated by RTM. Such instruments of transfer are referred to
herein collectively as the "Lease Assignments."
(3) TRANSFER OF TRADEMARKS AND OF TRADE SECRET.
Seller shall transfer the Trademarks to RTM or a Buyer designated
by RTM, and Seller shall transfer the Trade Secret to RTM or a
Buyer designated by RTM, including without limitation (as to both
and/or as to the Purchased Assets generally) all of the goodwill
of the business appurtenant thereto and the right to ▇▇▇ for past
infringements or breaches of non-disclosure agreements, pursuant
to assignments which, with respect to the Trademarks, shall be in
suitable form for recordation with the United States Patent and
Trademark Office. Such instruments of transfer are referred to
herein as the "Trademark Assignments" and the "Trade Secret
Assignments", respectively.
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(4) TRANSFER OF FRANCHISE AGREEMENTS. Seller and
Subsidiary shall transfer all of their respective right, title
and interest in and to the Franchise Agreements and Subsidiary
Franchise Agreements pursuant to general assignments. Such
instruments of transfer are referred to herein as the "Franchise
Assignments."
(5) TRANSFER OF INVENTORIES. Seller shall transfer
the Inventories to RTM or a Buyer designated by RTM pursuant to
bills of sale, in form and substance reasonably satisfactory to
the parties, free and clear of all mortgages, liens and
encumbrances.
(6) TRANSFER OF FF&E. To the extent not leased and
transferred as an Assigned Contract, Seller shall transfer the
FF&E and Office FF&E to RTM or a Buyer designated by RTM pursuant
to bills of sale, in form and substance reasonably satisfactory
to the parties, free and clear of all leases, mortgages, liens
and encumbrances.
(7) TRANSFER OF THE ASSIGNED CONTRACTS. Seller shall
transfer the Assigned Contracts to RTM or a Buyer designated by
RTM pursuant to Contract Assignments, free and clear of all
mortgages, liens and encumbrances.
(8) TRANSFER OF VEHICLES. Seller shall transfer all
of Seller's right, title and interest in and to any and all owned
Vehicles by ▇▇▇▇ of sale and endorsed certificate or registration
of title documents (collectively, the "Vehicle Transfer
Documents"), free and clear of all security interests, liens,
claims or encumbrances.
(9) TRANSFER OF OTHER PURCHASED ASSETS. Seller shall
transfer the other Purchased Assets to RTM or a Buyer designated
by RTM pursuant to General Assignments, free and clear of all
mortgages, liens and encumbrances.
D. FORMS OF TRANSFER, ASSIGNMENT AND/OR CONVEYANCE
DOCUMENTS. The documents and/or instruments referred to in SECTION
2.C.(1) to 2.C.(9) above, and any and all other documents, instruments
and/or agreements necessary hereunder or required to be executed by either
or both of the parties hereto in order to consummate the transaction
contemplated by and/or effectuate the intent of this Agreement, shall all
be in form and substance reasonably satisfactory to the parties.
3. PURCHASE PRICE
A. PURCHASE PRICE FOR PURCHASED ASSETS. In addition to the
assumption of Seller's obligations under the Assigned Contracts, the
Franchise Agreements and the Leases by RTM or a Buyer designated by RTM,
the purchase price to be paid by RTM
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or a Buyer designated by RTM to Seller for the Purchased Assets shall be
the sum of the following (collectively, the "Purchase Price"), subject to
adjustment as provided for elsewhere in this Agreement:
(1) CASH PAYMENT. A payment of Twenty-Six Million
Nine Hundred Eighty-Five Thousand Three Hundred Six and No/100
Dollars ($26,985,306.00) in cash (the "Cash Payment");
(2) PROMISSORY NOTE: The Note, in the original
principal amount of Four Million and No/100 Dollars
($4,000,000.00), which shall secured by a pledge of the
Trademarks and the Franchise Agreements pursuant to the Security
Agreement and, if executed and delivered by a Buyer designated by
RTM, shall be guaranteed by RTM pursuant to the RTM Guaranty;
(3) INVENTORY COST: A cash payment in the amount of
the original cost of the Inventories;
(4) CREDIT OR PAYMENT FOR PRORATIONS: An amount
equal to the sum due Seller or minus the credit due RTM or a
Buyer designated by RTM, as the case may be, as a result of the
prorations to be made as of the Effective Date relating to the
Company Restaurants in accordance with SECTION 5;
(5) CREDIT FOR DEFERRED FRANCHISE FEES: A credit in
an amount equal to the Deferred Franchise Fees; and
(6) ▇▇▇▇▇ CASH: An amount equal to the ▇▇▇▇▇ Cash.
B. MEANS OF PAYMENT. RTM or a Buyer designated by
RTM shall execute and deliver the Note to Seller and pay the Cash
Payment to Seller by wire transfer of immediately available funds
on the Closing Date. Within five (5) days after determination of
the amount of any of the items in SECTIONS 3.A.(3)-(6) (but in no
event later than sixty (60) days after the Closing Date), the net
payment for such portion of the Purchase Price so determined and
attributable shall be paid by wire transfer of immediately
available funds by the appropriate party to the other .
C. ALLOCATION. RTM and any Buyers designated by RTM and
Seller, prior to Closing, shall allocate the portion of the Purchase Price
payable pursuant to SECTION 3.A.(1). and SECTION 3.A.(2). in a manner
mutually agreed between RTM and Seller based upon their joint
determination, as of the Closing Date, of the fair market value of various
portions of the Purchased Assets. Seller and RTM and a Buyer designated
by RTM agree to cooperate as appropriate for all relevant tax purposes
relating to the transactions contemplated by this Agreement, including the
filing of a mutually acceptable IRS Form 8594, Asset Acquisition Agreement
under Section 1060 of the
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Code, and to report consistently for tax purposes the transactions
provided for in this Agreement as allocated in or pursuant to this
Agreement. RTM and a Buyer designated by RTM agree to send to Seller a
completed copy of its Form 8594 ("Asset Acquisition Statement under
Section 1060") with respect to this transaction prior to filing such form
with the Internal Revenue Service.
4. ASSUMPTION OF CERTAIN OBLIGATIONS AND LIABILITIES
A. ASSUMPTION OF CERTAIN OBLIGATIONS AND LIABILITIES BY RTM
OR A BUYER DESIGNATED BY RTM. At the Closing, but effective on the
Effective Date, upon and subject to the terms and conditions hereinafter
set forth, RTM or a Buyer designated by RTM shall assume and agree to
perform or discharge the following obligations and liabilities of Seller
(collectively, the "Assumed Liabilities"):
(1) ASSIGNED CONTRACTS. The obligations of Seller
to be performed from and after the Effective Date under the
Assigned Contracts for services performed or goods delivered on
or after the Effective Date.
(2) UTILITIES. The utility payments for the
utilities serving the Company Restaurants accruing on and after
the Effective Date.
(3) DISCOUNT COUPONS. The obligations of Seller with
respect to normal amounts of any usual and customary
complimentary meals or gift certificates issued by Seller to the
general public before the Effective Date.
(4) LEASES. The obligations of Seller under the
Leases which first accrue from and after the Effective Date.
(5) FRANCHISE AGREEMENTS. The obligations of Seller
and Subsidiary under the Franchise Agreements and Subsidiary
Franchise Agreements, respectively, which first accrue from and
after the Effective Date and the obligations of Seller under
those certain guaranties of the Subsidiary Franchise Agreements
as listed on SCHEDULE 2.A.(8) which first accrue from and after
the Effective Date.
B. NO OTHER LIABILITIES ASSUMED. With the exception of the
Assumed Liabilities described above in SECTION 4.A. or as expressly
provided in any other provision of this Agreement, neither RTM nor a Buyer
designated by RTM shall assume hereunder, or be responsible or liable in
any way or amount for or in respect of, any obligations, commitments,
indebtedness or liabilities of Seller, Realco or Subsidiary of any kind
or character whatsoever (including, without limitation, those obligations
of Seller set forth on SCHEDULE 8.H. and/or SCHEDULE 8.V.(3)) (all such
obligations, liabilities, commitments and obligations that are not being
assumed by
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RTM or a Buyer designated by RTM being collectively referred to herein as
the "Excluded Liabilities"), including without limitation any liability
for any acts, omissions, occurrences, conditions or events which first
arose or accrued prior to the Effective Date (even if a claim or demand
pertaining thereto is not asserted or made until or after the Effective
Date), for any Litigation involving Seller or Subsidiary, for any existing
Asbestos or Hazardous Materials at any of the Company Restaurants, any
liability to Seller's or Subsidiary's vendors or sellers of goods,
merchandise, materials, foods or beverages, or any produce, product or
thing included in Inventories (other than liabilities which first accrue
from and after the Effective Date under or pursuant to the Assigned
Contracts), and any liability for any sales, use, excise, income or other
taxes attributable to the ownership, operation or management of the
Company Restaurants prior to the Effective Date. Seller and/or Subsidiary
is liable and responsible for, and shall be and remain liable and
responsible for, any and all Excluded Liabilities, and neither RTM nor a
Buyer designated by RTM shall have any liability or responsibility for the
same.
5. PRORATIONS
The following items related to the Company Restaurants shall be
prorated between Seller (or Realco, as applicable) and RTM or a Buyer
designated by RTM as of 12:01 a.m. on the Effective Date:
A. UTILITIES. Utilities relating to the Company
Restaurants, to the extent that the utilities have not been transferred
to RTM or a Buyer designated by RTM as of the Effective Date. If and to
the extent that any utilities have been so transferred, then Seller shall
be and remain liable for the same as an Excluded Liability to the extent
that they relate to the ownership, operation and/or management of the
Company Restaurants prior to the Effective Date.
B. REAL ESTATE TAXES. Real estate taxes and assessments
relating to the Company Restaurants based upon the latest tax ▇▇▇▇
available (to be redetermined based upon actual bills as soon as actual
bills are received).
C. PERSONAL PROPERTY TAXES. Personal property taxes and
assessments, if any, relating to the Purchased Assets based upon the
latest tax ▇▇▇▇ available (to be redetermined based upon actual bills as
soon as actual bills are received).
D. RENT. Rents in arrears, prepaid rents and other charges
in connection with the Company Restaurants or in respect of the Leases and
the Assigned Contracts, including transferable equipment leases,
agreements or contracts or permitted renewals or replacements thereof
relating to the Company Restaurants. With respect to the Leases, RTM or
a Buyer designated by RTM shall pay RTM's or such Buyer's share of the
percentage rent due under the terms of the Leases, determined as provided
below. RTM's or such Buyer's share of the percentage rent
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for the period of time commencing on the Effective Date to the end of the
then current lease year (or lease quarter, if rent for a Lease is
calculated and paid on a quarterly basis) under a Lease shall be
calculated by multiplying the total percentage rents owed for such lease
year (or lease quarter) based upon the gross sales generated by a Leased
Restaurant by both Seller and RTM or such Buyer by a fraction, the
numerator of which shall be RTM's or such Buyer's gross sales from the
Leased Restaurant during such lease year (or lease quarter) and the
denominator of which shall be the total gross sales of RTM or such Buyer
and Seller from the Leased Restaurant during such lease year (or lease
quarter). Calculation of RTM's or such Buyer's share of the percentage
rent under a Lease shall be made by RTM or such Buyer and communicated to
Seller promptly after the end of the lease year (or lease quarter) for a
Lease and Seller or RTM or such Buyer, as the case may be, shall make the
allocation payments due the other within ten (10) business days after such
communication.
In the event that all information necessary to make any one or more
prorations is not available as of the Effective Date, no payment shall be
made therefor at such time but, as soon as such information becomes
available, the determination of the exact amount of proration shall be
made and appropriate payments promptly rendered by Seller and/or RTM or
such Buyer. To the extent any proration errors are discovered after the
Effective Date, the parties agree to promptly make the appropriate
payments necessary to correct such errors.
6. INVENTORIES; ACCOUNTS RECEIVABLE
A. After the close of business on the night before the
Effective Date, representatives of Seller and representatives of RTM or
a Buyer designated by RTM jointly shall conduct a physical inventory of
the Inventories at the Company Restaurants to be transferred on such
Effective Date.
B. All receivables that are: (1) royalties due from a
franchisee/licensee that accrue prior to the Effective Date or (2)
accounts receivable for any goods or equipment shipped to a
franchisee/licensee prior to the Effective Date shall be the property of
Seller. Seller shall furnish a listing of these receivables existing as
of the Effective Date as soon as practicable following the Closing. After
the Closing, Seller shall have the duty to collect any receivables that
are its property. In order to facilitate and expedite the collections of
these sums by Seller, RTM agrees that, for a period of six (6) months
following the Effective Date, either RTM or a Buyer designated by RTM,
subject to the following two sentences, upon the request of Seller (after
Seller has undertaken commercially reasonable collection efforts (not
including litigation)), shall: (1) notify any franchisee/licensee who is
delinquent in its accounts with Seller that such delinquency constitutes
a default under the franchisee/licensee's Franchise Agreement and that a
possible remedy is termination
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of that franchisee/licensee's Franchise Agreement(s); and (2) thereafter,
terminate such Franchise Agreements if such default is not cured within
the time period set forth in the applicable Franchise Agreement(s).
Seller shall not, and shall not have the ability to require RTM (or a
Buyer designated by RTM) to, send a franchisee/licensee a notice that it
is in default under a Franchise Agreement because of a delinquency in
payment of its accounts receivable unless and until an Actionable Account
Receivable has been outstanding in excess of fifty-six (56) days.
Furthermore, Seller shall not, and shall not have the ability to require
RTM (or a Buyer designated by RTM) to, terminate the Franchise Agreement
of a franchisee/licensee because of a delinquency in payment of its
accounts receivable unless and until an Actionable Account Receivable has
been outstanding in excess of one hundred eleven (111) days. "Actionable
Account Receivable" shall mean an account receivable that is not disputed
in good faith attributable to a Franchised Restaurant that exceeds $1,000
or that is attributable to a franchisee/licensee that operates multiple
Franchised Restaurants that exceeds $2,500 in the aggregate, in either
case in the applicable aging category previously described. Neither RTM
nor any Buyer designated by RTM shall take any action to impede Seller's
collections of its accounts receivable nor will RTM or any Buyer
designated by RTM give any franchisee/licensee any assurances with respect
to actions that may be taken with respect to that franchisee/licensee's
Franchise Agreement in the event its accounts receivable to Seller are not
paid. If a franchisee/licensee's Franchise Agreement(s) are terminated
because of an uncured default of its obligations thereunder to Seller,
Neither RTM nor any Buyer designated by RTM shall grant a new
franchise/license agreement to such franchisee/licensee until such time
as the franchisee/licensee pays all amounts owed to Seller. Further,
notwithstanding Seller's inability (as agreed to in the foregoing
provisions) to send a notice of the franchisee/licensee's being in default
of its Franchise Agreement(s), Seller shall not be prohibited from
pursuing any other collection efforts for amounts owed, including
litigation. In the event that RTM or any Buyer designated by RTM desires
that the Franchise Agreement(s) of a franchisee/licensee that has been
notified of a default in monies owed to Seller not be terminated, RTM or
any Buyer designated by RTM, at its option, may apply fifty percent (50%)
of the current payments then being received from such franchisee/licensee
to amounts owed to Seller, in which event Seller shall have no right of
termination with respect to such franchisee/licensee's Franchise
Agreement(s) so long as such payments continue to be applied to Seller's
outstanding receivables until they are paid in full. If so applied and
a franchisee/licensee pays additional monies to Seller, Seller agrees to
promptly remit such sums to RTM or any Buyer designated by RTM.
7. TRANSFERS OR ISSUANCE OF LICENSES; HSR NOTIFICATION
A. Promptly following the execution hereof, RTM or a Buyer
designated by RTM shall, with Seller's reasonable assistance and
cooperation, prepare and file with the appropriate licensing authorities
applications for the issuance or transfer of all
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state and local permits and licenses required for RTM or such Buyer to
operate the Company Restaurants that it is acquiring in the manner in
which RTM or such Buyer intends to operate such Restaurants. Seller and
RTM agree to use their best reasonable efforts to secure such transfers,
or new permits and licenses, with respect to the Company Restaurants on
or prior to the Effective Date. RTM and Seller each shall be responsible
for and shall pay one-half the fees imposed by governmental entities in
connection with the transfer of any permits or licenses, and RTM shall be
responsible for the cost of any new permits or licenses relating to the
Company Restaurants.
B. Promptly following execution hereof, RTM shall prepare
and file the premerger notification required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvement Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") and pay any fees
associated with such filing. Seller shall cooperate with RTM in preparing
and filing such notification. Seller shall reimburse RTM for one-half of
any filing fees (but not related legal and other costs of preparation)
associated with such filing at the earlier of: (1) the Closing; or (2) if
the Closing does not occur, within thirty (30) days after the Termination
Date unless the failure of the Closing to occur resulted solely from the
failure of RTM to satisfy its obligations hereunder or to satisfy the
conditions set forth in Section 13.B.. Seller shall reimburse RTM for all
of any filing fees (but not related legal and other costs of preparation)
associated with such filing within thirty (30) days after the Termination
Date if the Closing does not occur, if the failure of the Closing to occur
resulted solely from the failure of Seller to satisfy its obligations
hereunder or to satisfy the conditions set forth in SECTION 13.A..
8. SELLER'S AND SUBSIDIARY'S REPRESENTATIONS AND WARRANTIES
In order to induce RTM to enter into this Agreement and to induce
RTM and a Buyer designated by RTM to consummate the transactions
contemplated hereby, Seller and Subsidiary represent and warrant to RTM
and each Buyer designated by RTM as follows:
A. GENERAL. The statements contained in SECTION 8.B.
through SECTION ▇.▇▇. are true and correct as of the date hereof and will,
except where specific reference is made to the date of this Agreement or
to another date, be true and correct in all material respects as of the
Closing Date and as of the Effective Date.
B. GOOD STANDING OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Tennessee. Seller is duly authorized to conduct business and is
in good standing under the laws of the States of Alabama, Florida,
Illinois, Kentucky and Missouri. Seller has all requisite corporate power
and authority to own, operate and lease its property and to carry on its
business as now being conducted and to enter into and perform its
obligations under this Agreement and under all other agreements
contemplated by this Agreement.
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C. GOOD STANDING OF SUBSIDIARY AND REALCO. Subsidiary is
a corporation duly organized, validly existing and in good standing under
the laws of Canada and in good standing under the laws of the provinces
of Alberta, British Columbia, Manitoba, Saskatchewan and Ontario. Realco
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Tennessee. Realco is duly authorized to
conduct business and is in good standing under the laws of the States of
Alabama, Illinois and Missouri. Both Subsidiary and Realco have all
requisite corporate power and authority to own, operate and lease their
respective properties and to carry on their respective businesses as now
being conducted.
D. BOARD AND SHAREHOLDER AUTHORIZATION. Each of Seller,
Realco and Subsidiary has received, or will have received as of the
Closing Date, the approval of this Agreement and all other agreements
contemplated by this Agreement from each of their respective boards of
directors. The individuals executing this Agreement on behalf of and in
the name of Seller and Subsidiary are duly authorized and empowered to so
act. There is no requirement that the execution or performance of this
Agreement be authorized or approved by Seller's shareholders.
E. CONSENTS. Each of Seller, Realco and Subsidiary has
received, or will have received as of the Closing Date, any and all
consents to the transactions contemplated by this Agreement which are
necessary or required, including without limitation those required of
parties to the Assigned Contracts, the Leases, the Franchise Agreements,
parties to restrictive covenants affecting the Company Restaurants or
issuers of the permits and licenses to be transferred to Buyer
(collectively, the "Required Consents"), and neither the execution or
performance of this Agreement and all other agreements contemplated by
this Agreement by Seller, Realco and Subsidiary nor the consummation of
the transactions contemplated hereby will require the consent, approval
or authorization of any other Person.
F. LEGALITY AND ENFORCEABILITY. This Agreement has been
duly executed and delivered by Seller and Subsidiary and is the legal,
valid and binding obligation of Seller and Subsidiary, respectively,
enforceable against Seller and Subsidiary, as the case may be, in
accordance with its terms, subject to applicable bankruptcy laws and
judicial limitations on the availability of equitable remedies.
G. OWNERSHIP OF REALCO AND SUBSIDIARY. Seller is the sole
shareholder of each of Realco and Subsidiary, and will remain and continue
to be such shareholder of both Subsidiary and Realco through the Closing
Date and will not sell or otherwise transfer or assign any of its stock
in either Subsidiary or Realco prior to the Closing Date.
H. LITIGATION. Except as set forth on SCHEDULE 8.H., there
is no pending, or, to either Seller's or Subsidiary's knowledge,
threatened litigation relating to the Purchased Assets. Neither Seller,
Realco nor Subsidiary is a party to any litigation,
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proceeding or controversy pending before any court or administrative
agency, nor is Seller, Realco or Subsidiary in receipt of any inquiry,
notice, citation, investigation or complaint from any governmental agency
or department, which might materially adversely affect Seller's or
Subsidiary's ability to perform their respective obligations under this
Agreement, or cause or result in a material adverse change in any of the
Company Restaurants or in the aggregate value of the Purchased Assets, nor
does Seller or Subsidiary have knowledge of any occurrence or condition
that might properly constitute a basis for such litigation or proceeding
or such inquiry, notice, citation, investigation or complaint, and neither
Seller, Realco nor Subsidiary is in default with respect to any judgment,
order, writ, injunction or decree of any court or administrative agency
which might materially adversely affect Seller's or Subsidiary's ability
to perform their respective obligations hereunder (all of the matters
discussed in this SECTION 8.H. being collectively referred to as
"Litigation").
I. FINANCIAL INFORMATION. Seller has delivered to RTM
copies of the financial information listed on SCHEDULE 8.I. hereto
(collectively, the "Seller Financial Information"). The Seller Financial
Information is true and correct in all material respects, was prepared in
the ordinary course of business consistent with the internal accounting
practices of Seller and/or of Subsidiary, consistently applied, and
accurately presents, for the periods indicated, the information presented
therein. There will not be any materially adverse difference between: (i)
the financial condition of Seller as of the Effective Date; and (ii) the
financial condition of Seller, as reflected in the Seller Financial
Information.
J. NO DEFAULT. Neither the execution, delivery nor
performance of this Agreement or the other agreements contemplated herein
in accordance with their respective terms, does or will, after the giving
of notice, the lapse of time or otherwise:
(1) conflict with, result in a breach of, or
constitute a default under, in a manner which would materially
adversely affect the Purchased Assets, the charter or bylaws of
Seller, Realco and/or Subsidiary, or any contract or any
agreement to which Seller, Realco and/or Subsidiary is a party or
by which Seller, Realco and/or Subsidiary, or the Purchased
Assets, are bound after giving effect to the Required Consents
referred to in SECTION 8.E. (including without limitation, the
Assigned Contracts, the Franchise Agreements, the Leases, the
Chattel Mortgages and the Real Estate Mortgages), or any federal
(i.e. U.S. or Canada), provincial, state or local law, statute,
ordinance, rule or regulation, or any court or administrative
order or process;
(2) result in the creation of any lien, encumbrance,
claim or security interest upon or in any of the Purchased
Assets; or
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(3) terminate, amend or modify, or give any party the
right to terminate, amend, modify, abandon or refuse to perform
any contract (including, without limitation, the Assigned
Contracts, the Franchise Agreements and the Leases after giving
effect to the Required Consents referred to in SECTION 8.E.),
agreement, arrangement, commitment or plan pertaining to the
Purchased Assets or the Company Restaurants to which Seller,
Realco and/or Subsidiary is a party.
K. NO RESTRICTIONS. Neither Subsidiary, Realco nor Seller
is party to, subject to or bound by any agreement, judgment, order, writ,
injunction or decree of any court or governmental body that could prevent
the consummation of the transactions contemplated herein. No applicable
federal (i.e. U.S. or Canada), provincial, state or local law or ordinance
prevents or prohibits the consummation of the transactions contemplated
herein or the continued operation of the Company Restaurants (or to the
knowledge of Seller, the Franchised Restaurants) under the "▇▇▇'▇ Famous
Recipe" concept or necessitates any filing or the taking of any action by
either or both of Subsidiary and/or Seller other than actions that have
been or that will be taken prior to the Closing Date or the Effective
Date, as contemplated herein.
L. NO MISSTATEMENTS, ETC. Neither this Agreement, the
Exhibits or Schedules attached hereto, nor any of the factual information
referenced in this Agreement that was provided or produced by Seller or
Subsidiary, when read together, contains any misstatement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
M. MORTGAGES. Except for the real estate mortgages listed
on SCHEDULE 8.M.1. (the "Real Estate Mortgages") and the equipment leases,
equipment financing or chattel mortgages listed on SCHEDULE 8.M.2. (the
"Chattel Mortgages"), there are no mortgages, security interests or other
liens affecting the Purchased Assets or the Company Restaurants. Seller
has not received any notice of default, nor are there any defaults, or
events which, but for the passage of time or the giving of notice, would
constitute defaults, under the Real Estate Mortgages or Chattel Mortgages.
All payments of principal, interest and other payments as are required to
be made by Seller as of the date hereof relating to such Real Estate
Mortgages and Chattel Mortgages have been made and shall be made as of the
Effective Date, and, as of the Effective Date, Seller shall at its sole
cost and expense satisfy, discharge and remove of record all such Real
Estate Mortgages and all such Chattel Mortgages.
N. CHANGES, DAMAGES, AND DISPUTES. Since April 1, 1995,
there has not been any damage or destruction, whether or not covered by
insurance, materially adversely affecting any one or more of the Company
Restaurants or the use, operation or business of any one or more of the
Company Restaurants.
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O. ASSIGNMENTS OR TRANSFERS. Except as disclosed on
SCHEDULE 8.O., since April 1, 1995, neither Seller nor Realco has:
(1) Removed from the premises occupied by any of the
Company Restaurants any assets of the type which would be
Purchased Assets other than Inventories sold in the ordinary
course of business, and immaterial assets disposed of in the
ordinary course of business; or
(2) Operated any of the Company Restaurants except
in the usual, regular and ordinary manner or made any material
change in the manner of conducting its business at any of the
Company Restaurants, suffered any extraordinary loss with respect
to any of the Company Restaurants, or waived or released any
rights of a substantial character with respect to the Company
Restaurants.
P. TAX MATTERS. Except as described on SCHEDULE 8.P.,
each of Seller, Realco and Subsidiary timely has filed or received
extensions with respect to all Tax Returns required to be filed by Seller,
Realco and Subsidiary, respectively, relating, in whole or in part, to the
Company Restaurants, the Purchased Assets and/or the Restaurant Employees,
and each of Seller, Realco and Subsidiary has paid all Taxes required, in
whole or in part, to be paid in respect of the Company Restaurants, the
Purchased Assets and/or the Restaurant Employees. Neither Seller, Realco
nor Subsidiary is a party to any pending action or proceeding nor is there
any threatened action or proceeding for assessment or collection of Taxes
against Seller, Realco or Subsidiary relating, in whole or in part, to any
of the Company Restaurants, the Purchased Assets or the Restaurant
Employees, and no claims for assessment or collection of such Taxes have
been asserted against Seller, Realco or Subsidiary. From and after the
Effective Date, each of Seller, Realco and Subsidiary, respectively, shall
file any and all Tax Returns, and shall each pay any and all such Taxes,
with respect to, in whole or in part, the ownership, operation or
management of the Company Restaurants and/or the Purchased Assets, and/or
pertaining to the Restaurant Employees, and in either case attributable
to periods of time prior to the Effective Date. All such Taxes of Seller,
Realco or Subsidiary as described in or contemplated by this SECTION 8.P.
are Excluded Liabilities under this Agreement.
Q. TITLE. Seller (or Realco or Subsidiary, as applicable)
has good and valid title to, and is the sole owner of, all of the
Purchased Assets to be sold, transferred and assigned by Seller to Buyer
hereunder. On the Effective Date, good, valid and marketable title to
such Purchased Assets shall, as applicable, be sold, conveyed, assigned,
transferred and leased to Buyer, free and clear of any and all liens,
claims, demands or encumbrances of any kind or nature (except such
Permitted Encumbrances as are specifically applicable to each Purchased
Asset), and free and clear of all Excluded Liabilities under this
Agreement.
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R. TRADEMARK AND TRADE SECRET MATTERS.
(1) Seller has good and valid title to, and is the
sole owner of, the Trademarks in the respective jurisdictions set
forth on SCHEDULE 1.D. for goods and services with which the
Trademarks are used and the registrations thereof are valid and
subsisting and in full force and effect. Seller is not aware of:
(a) any proceedings to cancel any of the Trademarks; (b) any
allegation that any of the Trademarks infringes upon the rights
of another; or (c) any existing infringement of the Trademarks.
(2) From their respective date of registrations,
Seller has used and, through the Effective Date, Seller (either
itself or through its licensees) will continue to use the
Trademarks on each and every trademark class of goods and/or
services applicable to its operations in order to maintain the
Trademarks in full force and effect free from any claim of
abandonment for nonuse, and Seller will not (and will not permit
Subsidiary or any licensee thereof to) do any act or knowingly
omit to do any act whereby any Trademark may become invalid.
(3) Through the Effective Date, Seller will take all
necessary steps in any proceeding before the United States Patent
and Trademark Office to maintain each application and
registration of the Trademarks, including, without limitation,
filing of renewals, extensions, affidavits of use and
incontestability, and opposition, interference and cancellation
proceedings. Through the Effective Date, Seller shall notify RTM
promptly in writing if any application or registration relating
to any Trademark is contested or opposed, or is or may become
abandoned or dedicated or subject to an adverse final
determination in any proceeding in the United States Patent and
Trademark Office or any court regarding Seller's ownership of any
Trademark, its right to register same, or to keep or maintain the
validity of same.
(4) Seller has maintained the confidentiality of the
Trade Secret and has not disclosed the Trade Secret directly or
indirectly to any third party, except to those Persons set forth
on SCHEDULE 1.F..
S. FRANCHISE MATTERS.
(1) The Franchise Agreements are in full force and
effect and enforceable against the franchisees/licensees
thereunder in accordance with their terms, subject only to the
applicable bankruptcy laws and judicial limitations on
availability of equitable remedies. The consent of the
franchisees/licensees is not required for execution, performance
and effectiveness of the Franchise Assignments relating to the
Franchise Agreements. Except as disclosed on SCHEDULE 8.S.(1),
(i) to the knowledge of
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Seller, all royalties and other sums due and owing have been paid
in full as of the date hereof and will be paid in full as of the
Effective Date, (ii) Seller has not given or received notice
under any Franchise Agreement of any existing default or event of
default, (iii) to the knowledge of Seller, there is no event
which, with notice or lapse of time, or both, either would
constitute a default of Seller, and in respect of which Seller
has not taken adequate steps to prevent a default from occurring,
or, to the knowledge of Seller, would constitute a default by a
franchisee/licensee thereunder, (iv) to the knowledge of Seller,
there is no pending or threatened bankruptcy relating to a
franchisee/licensee under any of the Franchise Agreements, (v)
neither Seller nor, to the knowledge of Seller, any
franchisee/licensee under the Franchise Agreements, have
commenced any action or given or received any notice for the
purpose of terminating any Franchise Agreement, and (vi) there
are no offsets, defenses or abatements to the payment of the
royalties or other sums payable under any Franchise Agreement.
(2) The Subsidiary Franchise Agreements are in full
force and effect and enforceable against the
franchisees/licensees thereunder in accordance with their terms,
subject only to the applicable bankruptcy laws and judicial
limitations on availability of equitable remedies. The consent
of the franchisee/licensees is not required for execution,
performance and effectiveness of the Franchise Assignments
relating to the Subsidiary Franchise Agreements. Except as
disclosed on SCHEDULE 8.S.(2), (i) to the knowledge of Seller all
royalties and other sums due and owing under the Subsidiary
Franchise Agreements have been paid in full as of the date hereof
and will be paid in full as of the Effective Date, (ii) neither
Subsidiary nor Seller has given or received notice under any
Subsidiary Franchise Agreement of any existing default or event
of default, (iii) to the knowledge of Seller there is no event
which, with notice or lapse of time, or both, either would
constitute a default of Subsidiary under any Subsidiary Franchise
Agreement, and in respect of which Subsidiary has not taken
adequate steps to prevent a default from occurring, or, to the
knowledge of Seller, would constitute a default by a
franchisee/licensee thereunder, (iv) to the knowledge of Seller
there is no pending or threatened bankruptcy relating to a
franchisee/licensee under any Subsidiary Franchise Agreement, (v)
neither Subsidiary nor, to the knowledge of Seller, any
franchisee/licensee under the Subsidiary Franchise Agreements,
have commenced any action or given or received any notice for the
purpose of terminating any Subsidiary Franchise Agreement, and
(vi) there are no offsets, defenses or abatements to the payment
of the royalties or other sums payable under any Subsidiary
Franchise Agreement.
(3) SCHEDULE 8.S.(3) contains a list of all states
where Seller has registered to sell "▇▇▇'▇ Famous Recipe"
franchises, constituting each jurisdiction within the United
States where such registration presently is
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required. The effective dates of said registrations are set
forth on SCHEDULE 8.S.(3).
(4) SCHEDULE 8.S.(4) contains a list of all provinces
within Canada where Subsidiary has registered to sell "▇▇▇'▇
Famous Recipe" franchises, constituting each jurisdiction within
Canada where such registration presently is required. The
effective dates of said registrations are set forth on SCHEDULE
8.S.(4).
(5) All franchisees/licensees of Seller and
Subsidiary have been supplied with all disclosures required by
applicable law, including without limitation, all rules and
regulations of the Federal Trade Commission. Such disclosures
complied, in all material respects, with applicable law. Seller
has delivered to RTM a true and correct copy of Seller's current
Uniform Franchise Offering Circular used by Seller in each state
within the United States in which registration of the sale of
franchisee is not required.
(6) Except as described on SCHEDULE 8.S.(6), neither
Seller nor Subsidiary has any agreement with any Person giving
any Person the right to receive commissions for the sale of
franchises for "▇▇▇'▇ Famous Recipe" restaurants nor does any
Person have any claim to any portion of the royalties payable
under the Franchise Agreements. Any obligations under these
agreements shall be Excluded Liabilities under this Agreement.
(7) For purposes of SECTIONS 8.S.(1) and (2) above,
the phrase "to the knowledge of Seller" means and refers to the
best knowledge, information and belief of Seller, having made
diligent inquiry.
T. LEASES IN FORCE. The Leases are in full force and effect
and enforceable against the lessors thereunder in accordance with their
terms, subject only to applicable bankruptcy laws and judicial limitations
on the availability of equitable remedies. Except for the necessity of
obtaining the lessors' consents to the Lease Assignments, and, if
applicable, the consents of any holders of any real estate mortgages of
such lessors, (i) all rents, additional rents, taxes, installments of
assessments and other sums due and owing with respect to the Leased
Restaurants, and the real property located thereunder and under the Leases
have been paid in full as of the date hereof and will be paid in full as
of the Effective Date, (ii) Seller has not received notice under any Lease
of any existing default, (iii) there is no event which, with notice or
lapse of time, or both, either would constitute a default of Seller, and
with respect to which Seller has not taken adequate steps to prevent a
default from occurring, or which, to the knowledge of Seller, would
constitute a default by a lessor thereunder, (iv) to the knowledge of
Seller, there is no pending or threatened bankruptcy relating to a lessor
or sublessor under any of the Leases, (v) neither Seller nor, to the
knowledge of Seller, any lessors under the Leases have commenced any
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action or given or received any notice for the purpose of terminating any
Lease, and (vi) there are no offsets, defenses or abatements to the
payment of the rents, additional rents or other sums payable under any
Lease, and there are no claims or counterclaims against the lessors
thereunder. Seller shall promptly request, and shall use its best
reasonable efforts to procure on or before the Closing Date, an estoppel
certificate or estoppel letter from the lessor of each Lease being
assigned by Seller to Buyer. The form of such estoppel certificate or
letter to be requested by Seller shall be mutually agreed upon by Seller
and RTM. RTM shall assist and cooperate with Seller in requesting and
procuring such estoppel certificates or consents, to the extent that it
is reasonably necessary for RTM to do so.
U. CONFORMANCE TO LAW. Seller, Realco and Subsidiary are in
compliance in all material respects with, and neither Subsidiary, Realco
nor Seller has received any notice or claim from any governmental
authority to the effect that Seller, any of the Company Restaurants,
Realco or Subsidiary, are in violation of any applicable law, ordinance,
regulation, order, codes or requirement relating to the ownership, use or
operation of any of the Company Restaurants, or to any of the Purchased
Assets which would materially interfere with the business operations
presently conducted by Seller at any of the Company Restaurants.
V. LABOR MATTERS.
(1) LABOR AGREEMENTS; RETIREMENT; VACATION AND SICK
PAY. Seller is not assigning or otherwise conveying to RTM or a
Buyer designated by RTM, and RTM or such Buyer is not assuming,
any of the following, each of which is an Excluded Liability
under this Agreement: (i) an agreement for the employment of any
Restaurant Employees, (ii) a collective bargaining agreement or
other agreement with any labor organization covering any
Restaurant Employees, or (iii) any Benefit Plans. Seller shall
discharge its obligations to the Restaurant Employees for
vacation or sick leave that has been earned as of, or is
attributable to any periods prior to, the Effective Date, or for
(iv) any liability of Seller with respect to a claimed failure to
comply with the Immigration Reform and Control Act prior to the
Effective Date.
(2) UNION; LABOR; WORK STOPPAGES. Seller is not a
party to any collective bargaining agreement or any other
contract, written or oral, with any trade or labor union,
employees' association or similar organization with respect to
the Company Restaurants or any Restaurant Employees. There are
no strikes, work stoppages, picketing or the like in process or,
to the knowledge of Seller, threatened with respect to any of the
Company Restaurants. During the two years preceding the date of
this Agreement, there have not been any strikes, significant
labor disputes, work stoppages or other events related to working
conditions materially adversely affecting any one or more of the
Company Restaurants or business of any of the Company
Restaurants, and
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during the two years preceding the date of this Agreement, there
has not been a union which is the recognized bargaining agent for
the Restaurant Employees of any one or more of the Company
Restaurants, nor, to Seller's knowledge, has there been any union
campaign or other activity or effort to organize or cause the
recognition of a union as the bargaining agent of any Company
Restaurant.
(3) BENEFIT PLAN MATTERS.
(a) SCHEDULE 8.V.(3) sets forth a true and
complete list of each Benefit Plan and, except as disclosed on
such Schedule, there are no other Benefit Plans pursuant to which
any Restaurant Employee is entitled to any benefits or for which
Seller has any obligation to any Restaurant Employee. Except as
otherwise agreed by RTM or a Buyer designated by RTM, RTM or such
Buyer shall not, as a result of the transactions contemplated by
this Agreement, become obligated under or liable with respect to
any Benefit Plan.
(b) No member of the Controlled Group
maintains or contributes to, is required to maintain or
contribute to, or, since January 1, 1989, has maintained or
contributed to, a "multiemployer plan" (as defined by Section
4001(a)(3) of ERISA).
(c) No member of the Controlled Group has
ceased operations at a facility so as to become subject to the
provisions of Section 4062(e) of ERISA.
(4) COBRA. Each member of the Controlled Group,
each Benefit Plan and each Benefit Plan "sponsor" or
"administrator" (within the meaning of Section 3(16) of ERISA)
has complied in all material respects with the applicable
requirements of COBRA. Seller is providing and will continue to
provide any "continuation coverage" as described in COBRA to and
will continue to comply with all of the requirements of COBRA
with respect to, Restaurant Employees who have or may become
entitled as a result of a qualifying event which occurs or
occurred on or prior to the Effective Date, including a loss of
coverage resulting from the transactions contemplated in this
Agreement.
(5) WARN. If required, Seller will provide any
notification required by the Worker Adjustment and Retraining
Notification Act as a result of the transactions contemplated in
this Agreement.
W. LICENSES AND PERMITS. Seller possesses all occupation
and other licenses and permits required for the operation of the Company
Restaurants, as presently being operated by Seller. Seller is in
compliance in all material respects with the
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requirements of such permits and licenses and all of such licenses and
permits are in good standing and no proceeding for the suspension or
revocation of any of them is pending or, to the knowledge of Seller,
threatened by any governmental authority.
X. BROKERS. With the exception of the assistance of
Salomon Brothers Inc, which was engaged by Seller, all negotiations
relative to this Agreement and the transactions contemplated hereby have
been carried on directly by Seller with RTM without the intervention of
any broker or other Person so as to afford a basis for any claim for
brokerage or other commissions or fees made by any brokers engaged by
Seller. Seller shall, at its sole cost and expense, pay any and all fees
or other payments owed to Salomon Brothers Inc, as an Excluded Liability
under this Agreement.
Y . HAZARDOUS MATERIALS; ASBESTOS.
(1) Except as set forth on SCHEDULE 8.Y., at all
times during Seller's use and occupancy of the Company
Restaurants through and including the date of this Agreement: (a)
Seller has not, and to Seller's knowledge, no other Person has
used, stored, released or disposed of Hazardous Materials on or
at the real property on which any of the Company Restaurants are
located (the "Real Property" (which term shall include the
building and improvements thereon)), except in compliance with
all applicable federal, state and local laws, ordinances, rules
and regulations in connection with Seller's use and occupancy of
each of the Company Restaurants and the Real Property and, to the
knowledge of Seller, there has been no release of Hazardous
Materials on to or affecting the Real Property from elsewhere,
(b) Seller has complied in all material respects with all
applicable federal, state and local environmental laws,
ordinances, rules and regulations; and (c) Seller has not
received any notice or advice from any governmental agency or any
source whatsoever with respect to Hazardous Materials on, from or
affecting the Real Property. Seller covenants to RTM that, as of
the date of this Agreement and until the Effective Date, neither
Seller nor any occupants of the Real Property shall use,
transport, store, release, dispose of or in any manner deal with
Hazardous Materials on the Real Property except in compliance
with all applicable federal, state and local environmental laws,
ordinances, rules and regulations. Seller covenants to RTM that,
through and including the Effective Date, Seller shall keep the
Real Property free and clear of any liens imposed pursuant to
such laws, ordinances, rules or regulations. In the event that
Seller receives any notice or advice from any governmental agency
or any source whatsoever with respect to Hazardous Materials, on,
from or affecting the Real Property (even if from elsewhere),
Seller shall immediately notify RTM.
(2) Seller represents and warrants to RTM that, to
the knowledge of Seller, there is no asbestos or material
containing asbestos ("Asbestos") on the
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Real Property. Seller covenants to RTM that, until the Effective
Date, the Real Property shall be kept free of Asbestos, and
Seller shall not install, or permit to be installed, Asbestos on
the Real Property. Seller covenants to RTM that Seller shall
comply, and ensure compliance by all occupants of the Real
Property, with all applicable federal, state and local laws,
ordinances, rules and regulations with respect to Asbestos, and
shall keep the Real Property free and clear of any liens imposed
pursuant to such laws, ordinances, rules or regulations. In the
event that Seller receives any notice or advice from any
governmental agency or any source whatsoever with respect to
Asbestos on which on, affecting or installed on the Real Property
(even if from elsewhere), Seller shall immediately notify RTM.
Seller agrees to reimburse RTM or a Buyer of a Company Restaurant
designated by RTM for any costs and expenses (in an amount not to
exceed $5,000.00 for each such Company Restaurant) incurred by
Buyer within three (3) year after the Closing Date in connection
with the removal or disposal of Asbestos from such Company
Restaurant.
(3) Except as set forth on SCHEDULE 8.Y., the Real
Property is in compliance in all material respects with, and
Seller has not received any notice or advice from any
governmental agency or any source whatsoever that the Real
Property is in material violation of any federal, state and local
Environmental Laws. For purposes of this Agreement,
"Environmental Laws" include but are not limited to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601, et seq., the Superfund
Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), Public Law
99-499, 100 Stat. 1613, the Resource Conservation and Recovery
Act ("RCRA"), 42 U.S.C. Section 6901, et seq., and all other federal,
state or local environmental statutes, ordinances, rules and
regulations including but not limited to those relating to
emissions, discharges, or releases of pollutants, contaminants,
chemicals, including any Hazardous Materials or waste, into the
environment or otherwise relating to the manufacture, processing,
use, treatment, storage, disposal, transportation or handling of
pollutants, chemicals, contaminants or industrial, toxic
substances, Hazardous Materials or wastes.
(4) Except as set forth on SCHEDULE 8.Y., to the
knowledge of Seller: (a) there currently are no above ground or
underground storage tanks on the Real Property; and (b) no above
ground or underground storage tanks formerly located on the Real
Property or at any time located elsewhere have discharged or
released any Hazardous Materials onto or in the Real Property.
(5) Except as set forth on SCHEDULE 8.Y., there are
no agreements between the Seller and any governmental body or
agency (federal, state or local) or any private entity concerning
the Environmental Laws or relating in any
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way to the presence, spill, discharge, release, threat of
release, storage, treatment or disposal of any Hazardous
Materials.
(6) Seller has delivered to RTM or shall, on or
before July 27, 1995, deliver to RTM, copies of all reports or
tests with respect to the compliance of the Real Property with
the Environmental Laws and/or the presence of any Hazardous
Materials on the Real Property that were (a) prepared for Seller;
or (b) prepared for other parties and are in the possession of
Seller and, to the knowledge of Seller, all such reports and
tests contain no material misstatements or omissions.
(7) Except as set forth on SCHEDULE 8.Y., to the
knowledge of Seller, neither Seller nor the Real Property is
subject to any liability or obligation as a result of (a) the
environmental conditions on or under the Real Property (whether
originating on the Real Property or from any other property); or
(b) the past or present use, management, transportation,
treatment, generation, storage, disposal or release of Hazardous
Materials on, at or from the Real Property.
Z. FIRPTA. The sale of the Company Restaurants by Seller
and/or Realco constitutes a transfer of a "U.S. Real Property Interest"
as that term in defined in the Foreign Investments Real Property Tax Act
of 1980, as amended ("FIRPTA"), and at Closing Seller and/or Realco each
shall provide to RTM or a Buyer designated by RTM a FIRPTA certificate so
that RTM or such Buyer will have no duty under such Act to collect
withholding taxes for Seller and/or Realco. Neither Seller nor Realco is
a "Foreign Person" for the purposes of FIRPTA or the Federal Deficit
Reduction Act of 1984, as amended ("FDRA"). Seller is, and shall be and
remain, liable and responsible for any and all sums or amounts owed under
FIRPTA and/or FDRA as a result of the consummation of the transaction
contemplated by this Agreement, as Excluded Liabilities hereunder.
AA. ZONING. Seller has no knowledge that any of the Company
Restaurants is not properly zoned for its present use or that the
buildings or other improvements which are a part of the Company
Restaurants, nor their use or manner of use thereof as Company
Restaurants, violates or is in non-compliance with any applicable zoning
laws.
BB. ASSETS. At the Closing, the Inventories at each Company
Restaurant will be adequate for the operation of such Company Restaurant
and shall be at usual and customary levels in accordance with past
practice. At the Closing, the FF&E at each Company Restaurant will be
adequate for the operation of such Company Restaurant, and such FF&E will
be in good operating condition, normal wear and tear excepted. Subsidiary
has no material assets related to the "▇▇▇'▇ Famous Recipe" System with
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the exception of the Subsidiary Franchise Agreements and the two
Trademarks noted on SCHEDULE 1.E..
9. BUYER'S REPRESENTATIONS AND WARRANTIES
In order to induce Seller to enter into this Agreement and
consummate the transactions contemplated hereby, RTM represents and
warrants to Seller as follows:
GENERAL. The statements contained in SECTIONS 9.B.
through 9.L. are true, and correct and will, except where specific
reference is made to the date of this Agreement or to another date, be
true, and correct in all material respects as of the Closing Date and as
of the Effective Date.
B. GOOD STANDING. RTM is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Georgia. RTM has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its businesses as now
being conducted and to enter into and perform its obligations under this
Agreement and under all other agreements contemplated by this Agreement.
Each Buyer designated by RTM (other than Investor) shall be a corporation
or other entity duly organized, validly existing and in good standing
under the laws of the state of its incorporation or organization and each
state in which any of the Purchased Assets to be purchased by such Buyer
are located. Each Buyer designated by RTM (other than Investor) shall
have all requisite corporate power and authority to own, operate and lease
its properties and to carry on its businesses as now being conducted and
to enter into and perform the obligations of a Buyer under this Agreement
and under all other agreements contemplated by this Agreement with respect
to the Purchased Assets to be purchased by such Buyer.
C. BOARD AND SHAREHOLDER AUTHORIZATION. The execution,
delivery and performance of this Agreement and all other agreements
contemplated by this Agreement have been duly authorized by the Board of
Directors of RTM. The individuals executing this Agreement and all other
agreements contemplated by this Agreement on behalf of and in the name of
RTM are duly authorized and empowered to so act. There is no requirement
that the execution or performance of this Agreement be authorized or
approved by RTM's shareholders.
D. CONSENTS. RTM and each Buyer designated by RTM has, or
will have as of the Closing Date, all consents of Persons required for the
execution and performance of this Agreement by RTM and such Buyer, and all
other agreements contemplated by this Agreement, and the consummation of
the transactions contemplated hereby will not require the consent,
approval or authorization of any other Person or public authority.
-▇▇-
▇. ▇▇▇▇▇▇▇▇ AND ENFORCEABILITY. This Agreement has been
duly executed and delivered by RTM and is the legal, valid and binding
obligation of RTM enforceable against RTM in accordance with its terms,
subject to applicable bankruptcy laws and judicial limitations on the
availability of equitable remedies.
F. LITIGATION. RTM is not a party to any litigation,
proceeding or controversy pending before any court or administrative
agency, nor is RTM in receipt of any inquiry, notice, citation,
investigation or complaint from any governmental agency or department,
which might materially adversely affect either RTM's abilities to perform
its obligations under this Agreement or any other agreements contemplated
by this Agreement, nor does RTM know or have reasonable grounds to know
of any occurrence or condition that might adversely affect RTM's abilities
to perform its obligations under this Agreement or any other agreements
contemplated by this Agreement, nor does RTM know or have reasonable
grounds to know of any occurrence or condition that might properly
constitute a basis for such litigation, proceeding or controversy or such
inquiry, notice, citation, investigation or complaint.
G. NO DEFAULT. Neither the execution, delivery nor
performance of this Agreement or the other agreements contemplated herein
in accordance with their respective terms, does or will, after the giving
of notice, the lapse of time or otherwise, conflict with, result in a
breach of, or constitute a default under the charter or bylaws of RTM or
any contract or any agreement to which RTM is a party (except those for
which consent has been or will be obtained) or by which RTM is bound, or
any federal or state law, statute, ordinance, rule or regulation, or any
court or administrative order or process.
H. NO RESTRICTIONS. RTM is not a party to, subject to or
bound by any agreement, judgment, order, writ, injunction or decree of any
court or governmental body which could prevent the consummation of the
transactions contemplated herein. No applicable federal, state or local
law or ordinance prevents or prohibits the consummation of the
transactions contemplated herein or necessitates any filing or the taking
of any action by RTM other than actions that have been or that will be
taken prior to the Closing Date or the Effective Date, as contemplated
herein.
I. NO MISSTATEMENTS, ETC.. Neither this Agreement, the
Exhibits or Schedules attached hereto, nor any of the factual information
referenced in this Agreement that was provided or produced by RTM, when
read together, contains any misstatement of a material fact or omits to
state a material fact necessary to make the statements contained herein
or therein not misleading.
J. NO BROKER. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on directly by
RTM with Seller without the intervention of any broker or other person
engaged by RTM so as to afford a basis for any claim for brokerage or
other commissions or fees relative to this
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Agreement or the transactions contemplated hereby. RTM agrees to bear
sole responsibility for any claims for brokerage or other commissions or
fees made by brokers engaged by RTM or a Buyer designated by RTM.
K. FINANCIAL STATEMENTS. RTM has delivered to Seller copies
of the financial information as listed on SCHEDULE 9.K. hereto
(collectively, the "RTM Financial Information"), which is incorporated
herein by reference. The RTM Financial Information, including any notes
thereto, have been prepared in accordance with generally accepted
accounting principles and practices consistently followed throughout the
periods indicated, and present fairly as of such date the financial
condition and assets and liabilities of RTM, and the results of operations
of RTM, to the extent presented for the periods indicated. There will not
be any materially adverse difference between: (i) the financial condition
of RTM as of the Effective Date; and (ii) the financial condition of RTM,
as reflected in the RTM Financial Information.
L. SOLVENCY. RTM is solvent as of the date of execution of
this Agreement and is generally paying its debts as they become due.
10. COVENANTS OF SELLER
Seller covenants and agrees with respect to the Company
Restaurants that, during the period from the date hereof to the Effective
Date, and, as specified below in SECTION 10.D., from and after the
Effective Date, Seller will:
A. OPERATE IN REGULAR MANNER. Operate each of the Company
Restaurants only in the usual, regular and ordinary manner and use
reasonable efforts (without entering into any written employment
agreements) to preserve intact its present business organization at the
restaurant level directly connected with the operations of the Company
Restaurants and not remove from the premises occupied by any of the
Company Restaurants any assets of a type which would be Purchased Assets
other than Inventories sold in the ordinary course of business; and
replenish and maintain Inventories at regular or normal intervals in
accordance with its past practice through the Effective Date.
B. MAINTENANCE OF PROPERTY. Maintain the Purchased Assets
(except Inventories, which may be used and replenished by Seller in
accordance with SECTION 10.A. above) in their current condition of repair,
ordinary wear and tear excepted.
C. BOOKS AND RECORDS. Maintain the books of account and
records relating to the operations of the Company Restaurants in the
usual, regular and ordinary manner on a basis consistent with past
practices.
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D. TAXES AND ASSESSMENTS. Pay when due and payable all
Taxes and assessments relating to the operation of the Company Restaurants
by Seller on or before such Effective Date and file all Tax Returns
relating to such Taxes and assessments whether such returns are required
to be filed before or after the Effective Date.
E. INSPECTION. Permit the representatives of RTM, including
engineers, architects and construction personnel, to inspect any of the
Company Restaurants and to inspect Seller's business records with respect
to any of the Company Restaurants or the Franchised Restaurants upon
reasonable notice and at any and all reasonable times during ordinary
business hours of Seller so long as the same does not materially or
unreasonably disrupt Seller's operation of the Company Restaurants.
F. RETENTION OF ASSETS. Not sell, assign, lease, convey,
encumber or otherwise dispose of or remove (without replacing) any assets
of a type which would be Purchased Assets (except Inventories, which may
be used and replenished by Seller in accordance with SECTION 10.A. above)
owned or used by it in connection with the operations of any of the
Company Restaurants other than with the prior written consent of RTM; not
engage in any activity or transaction in connection with any of the
Company Restaurants other than in the usual and ordinary course of
business or with the prior written consent of RTM.
G. NO AMENDMENTS; NEW AGREEMENTS. Except in the ordinary
course of business, not modify, amend or terminate any of the Assigned
Contracts, the Leases or the permits or licenses being assigned to and
assumed by RTM or a Buyer designated by RTM pursuant to this Agreement,
nor enter into any new agreements or contracts regarding any of the
Company Restaurants or Purchased Assets with terms beyond the Effective
Date which cannot be cancelled on not more than thirty (30) days' notice
without penalty by RTM or such Buyer, without the prior written consent
of RTM or such Buyer.
H. NO TAX SETTLEMENTS. Not withdraw, settle or otherwise
compromise any protest or reduction proceeding affecting real estate or
personal property taxes assessed against any Purchased Assets for any
fiscal period in which the Effective Date is to occur or any subsequent
fiscal period, without the prior written consent of RTM.
I. NOTICE OF CERTAIN EVENTS. Notify RTM in writing as soon
as possible upon Seller's receipt of any notices from any Persons or
governmental authorities pertaining to alleged illegal activities or
conditions at any of the Company Restaurants, and breach or alleged or
threatened breach of any Assigned Contract, Lease and/or Franchise
Agreement, or any other material adverse developments relating to any of
the Company Restaurants.
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J. FRANCHISE MATTERS. After the date of this Agreement,
Seller shall not enter into any new Franchise Agreement, nor modify, amend
or terminate (except in response to an uncured default pursuant to SECTION
6.B.) any existing Franchise Agreement, and shall cause Subsidiary not to
enter into any new Subsidiary Franchise Agreement or modify, amend or
terminate (except in response to an uncured default pursuant to SECTION
6.B.) any existing Subsidiary Franchise Agreement, unless (a) the prior
written consent of RTM is first had and obtained and (b) the prospective
franchisee is advised of the existence of this Agreement and the pending
sale of the Purchased Assets. From the date of this Agreement to the
Closing Date, Seller agrees that it will provide, on a timely basis, all
disclosure information required to be given to prospective franchisees
pursuant to the rules and regulations of the Federal Trade Commission and
applicable state franchise or similar laws. From the date of this
Agreement to the Closing Date, Seller shall file and diligently pursue all
required annual franchise renewals and take all other actions necessary
to maintain the effectiveness of any franchise filing which is required
for the offering of franchises in a particular state. For so long as the
Uniform Franchise Offering Circular Guidelines (as the same may be amended
from time to time) require RTM or a Buyer designated by RTM to provide to
prospective franchisees after the Closing Date information regarding
Seller (i.e., as a "predecessor" franchisor), Seller agrees to cooperate
with RTM or such Buyer and to promptly provide such information to RTM or
such Buyer (with RTM or such Buyer to pay any out-of-pocket costs (except
counsel fees) incurred by Seller in providing such information) following
Seller's receipt of a written request for the same from RTM or such Buyer.
K. INTERIM OPERATING RESULTS. Supply to RTM through the
Closing Date or Termination Date, whichever first occurs, copies of all
"weekly sheets" and periodic operating statements relating to the Company
Restaurants and copies of the sales reported by the Franchised
Restaurants, when they are received by Seller.
11. TITLE, ENVIRONMENTAL AND ENGINEERING MATTERS
A. TITLE MATTERS.
(1) TITLE POLICIES. The obligations of RTM to
consummate the transactions contemplated by this Agreement shall
be subject to RTM's ability to obtain an owner's or leasehold
title insurance policy, as applicable, issued by Chicago Title
Insurance Company ("Chicago") and/or Lawyer's Title Insurance
Company ("Lawyer's") (Chicago and Lawyer's are collectively
referred to as the "Title Company") with respect to each fee
simple or leasehold interest to be conveyed or assigned hereunder
on the regular and customary forms of title insurance policies
then being issued by the Title Company, with extended coverage,
insuring that RTM or a Buyer designated by RTM is the valid
owner, as of the Effective Date, of the fee simple or leasehold
estate
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being conveyed to it by the Deeds, New Leases or Lease
Assignments, as applicable. The costs of updating Seller's
existing title Commitments and/or Surveys, and the costs of
issuing such title policies at Closing, shall be paid one-half
(1/2) each by Seller and RTM; provided, however, that to the
extent the cost of the title policies issued by Lawyer's exceeds
the cost that would have been incurred had such title policies
been issued by Chicago, such excess cost shall be the
responsibility of RTM and shall be excluded in determining
Seller's share of such total costs. Each title policy (or the
final commitment if a policy is not obtained) shall contain no
exceptions to coverage other than the following exceptions, if
and to the extent approved by RTM in the manner provided below,
but only to the extent any specific exception is, in fact,
applicable to each specific Deed, New Lease or Lease Assignment
(each, a "Permitted Encumbrance"): (i) the liens of real estate
taxes not due and payable as of the Effective Date; (ii) license
and easements for public utilities; (iii) easements and
restrictions of record; (iv) all applicable zoning ordinances for
the governing municipality and other governmental regulations,
laws and ordinances; (v) such matters as are set forth on the
preliminary title commitments of the Title Company listed on
SCHEDULE 11.A(1) hereto (whether or not issued at the time of
execution of this Agreement) (the "Commitments"); (vi) the
underlying or prime lease[s] in the case of a Leased Restaurant;
and (vii) any other encumbrances which affect or burden a
specific Company Restaurant and which, either individually or in
the aggregate, do not materially interfere with or restrict the
use or operation of such Company Restaurant to be sold to RTM or
a Buyer designated by RTM.
(2) PRELIMINARY COMMITMENTS. Upon execution of this
Agreement, Seller shall provide to RTM copies of the Commitments
which were heretofore obtained by Seller, copies of each proposed
Permitted Encumbrance as set forth thereon, and copies of the
Surveys described in SECTION 11.A(4). Within thirty (30) days
after the date hereof, RTM shall specify to Seller and to the
Title Company any exceptions set forth in any such Commitment,
and/or revealed by any such Survey, which RTM objects to as a
Permitted Encumbrance. Any exception not so specified shall be
deemed approved by RTM. If Seller agrees that any proposed
Permitted Encumbrance to which RTM shall have objected should not
be a Permitted Encumbrance, then Seller shall use reasonable
efforts to cure, satisfy, discharge or remove each such proposed
Permitted Encumbrance to which RTM has objected, provided,
however, that Seller shall have no obligation to remove any title
exceptions to which RTM has objected. Seller shall notify RTM if
it disagrees with any objection to a proposed Permitted
Encumbrance by RTM within fifteen (15) days after Seller's
receipt of RTM's notice of such objection. If Seller fails or is
unable to remove any title exception to which RTM has objected
and such title exception, in the reasonable business judgement of
Seller and RTM, would have a material adverse effect on RTM's
ability to operate or finance the Company Restaurant
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affected thereby, and if any such matter is not otherwise
eliminated as an encumbrance prior to the Closing Date, then RTM
may elect not to purchase the Company Restaurant affected thereby
and to postpone such purchase, in which case RTM shall lease such
Company Restaurant in accordance with SECTION 11.C below. In
such event, a reduction shall be made in the Purchase Price for
such excluded Company Restaurant in accordance with SECTION 12.F.
of this Agreement.
(3) CONSENTS. Seller and Buyer shall cooperate in
taking all actions as shall be reasonably necessary to obtain (a)
any Required Consent of a lessor under a Lease which requires the
consent of such lessor to a Lease Assignment pertaining to such
Lease, and (b) any Required Consent of the parties under any
Assigned Contracts which require consents to the assignment of
such Assigned Contracts, and (c) any Required Consent under any
Permitted Encumbrance which requires consent to the transaction
contemplated in this Agreement, and (d) an estoppel letter or
estoppel certificate from each lessor under the Leases, as
contemplated in SECTION 8.T. above.
(4) SURVEYS. Upon execution of this Agreement,
Seller shall furnish to RTM copies of the surveys of the Real
Property for each Company Restaurant to be conveyed hereunder,
which surveys were heretofore obtained by Seller at its sole cost
and expense (collectively, the "Surveys"). Each such Survey
shall indicate the as-built location of buildings and structures
on the Real Property in question. The expense of any surveyor's
inspection reports and/or any updates to the Surveys required by
RTM or a Buyer designated by RTM and/or Title Company shall be
borne one-half each by RTM and Seller.
B. ENVIRONMENTAL MATTERS. Prior to the execution of this
Agreement, Seller has furnished to RTM Phase I environmental site
assessments (the "Assessments") prepared by Law Engineering ("Law")
relating to each of the Company Restaurants and/or parcel of Real
Property. Except with respect to the properties described in SECTION
11.D., RTM shall have a study period of thirty (30) days after the date
hereof within which to take such actions as may be recommended (e.g..,
additional testing or further file review) by Law in the Assessments or
as may be reasonably required by RTM or by a Buyer designated by RTM to
determine if there has been a release of Hazardous Material affecting any
of the Real Property and/or Company Restaurants. If there has been such
a release of Hazardous Material, Seller shall either pay directly for, or
shall reimburse RTM for the costs which RTM paid for such recommended
actions taken at such location; provided, however, that Seller's
obligation to pay for any such recommended actions taken by RTM shall not
exceed $12,500.00 at any one location and $150,000.00 in the aggregate.
If such actions taken indicate that there has been a release of Hazardous
Material affecting any of the Company Restaurants or Real Property. RTM
shall have the option to extend the study period an additional thirty (30)
days (or such longer period of time as is required by RTM's
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environmental consultants, at RTM's sole discretion); subject, however,
to the provisions of SECTION 15. If RTM discovers that there has been a
release of Hazardous Material affecting any of the Company Restaurants or
Real Property, then RTM may elect not to purchase the Company Restaurant
or Real Property in question (provided, however, in such event, the FF&E
for such Company Restaurant shall nevertheless be transferred and conveyed
at Closing by Seller to RTM or a Buyer designated by Buyer), but shall
lease the Company Restaurant in question, in accordance with SECTION 11.C.
below. In such event, a reduction shall be made in the Purchase Price in
accordance with SECTION 12.F. below. RTM agrees that it will engage Law
to undertake any recommended actions to determine the existence of
Hazardous Materials affecting the Real Property and/or Company Restaurants
to the extent Law is licensed and qualified to perform such services,
provided, however, that the terms and conditions of such engagement are
reasonably satisfactory to Seller and RTM.
C. EXCLUSION OF A RESTAURANT DUE TO TITLE OR ENVIRONMENTAL
MATTERS. Notwithstanding the foregoing, RTM shall have no right to refuse
to purchase any Company Restaurant because of an unsatisfied title
objection, or due to the presence of any Hazardous Material, if such
Company Restaurant is and remains fully operational and, prior to the
Closing of the purchase of such Company Restaurant by RTM or a Buyer
designated by RTM, Seller fully cures such title objection or fully
remediates such environmental condition at such Company Restaurant (to the
reasonable satisfaction of RTM and its consultants) at Seller's sole cost
and expense, as an Excluded Liability hereunder. If any such title
objection curative work or any such environmental remediation has not been
completed by the Closing Date or Seller chooses not to engage in such
curative work on remediation, RTM or a Buyer designated by RTM shall lease
such Company Restaurant pursuant to a New Lease pending the completion of
such curative and/or remedial work unless RTM or such Buyer would be
exposed to liability as an "operator" under applicable Environmental Laws,
in which event such Real Property and/or Company Restaurant shall be
excluded, without a New Lease unless RTM elects to lease the same under
a New Lease. Each New Lease have an initial term of twenty years (with
three five year renewal options) and require payment of annual rental
equal to 11% of the amount set forth on SCHEDULE 12.F.(1) with respect to
the applicable Company Restaurant and shall provide for an annual increase
of 2% of such rental, adjusted every two years. Each New Lease shall also
contain a purchase option in favor of RTM or such Buyer and a "put" option
requiring RTM or such Buyer to purchase the Company Restaurant in the
event Seller supplies RTM or such Buyer with either (a) a supplement from
Law to its Assessment for such Company Restaurant indicating that there
is no significant risk of Hazardous Materials affecting such Company
Restaurant or (b) a Phase II environmental assessment concluding either
that there is no significant risk of Hazardous Materials affecting such
Company Restaurant or that the environmental condition referred to in the
first sentence of SECTION 11.C. has been fully remediated. The purchase
price upon exercise of such purchase or put option shall be the amount
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by which the Purchase Price was originally reduced hereunder pursuant to
SECTION 12.F.. Each New Lease shall also provide that Seller shall be
responsible for any condition existing as of the Closing Date that exposes
Buyer to liability as an owner or operator under Environmental Laws and
that Seller shall indemnify and hold RTM or the Buyer designated by RTM
to purchase such Company Restaurant harmless for all losses, costs, claims
and liabilities incurred by RTM or such Buyer as a result of such
conditions existing prior to the Effective Date. The other terms and
conditions of any such New Lease shall be subject to the parties' mutual
agreement, which shall not be unreasonably withheld or conditioned by
either party.
D. LEASED RESTAURANTS. The parties agree that the Company
Restaurants listed on SCHEDULE 11.D. shall not be purchased on the Closing
Date, but shall be leased on the Closing Date pursuant to New Leases on
the terms set forth on SCHEDULE 11.D.. Accordingly, there will be no
further environmental testing conducted with respect to such Company
Restaurants listed on SCHEDULE 11.D..
12. CONDITIONS OF CLOSING
A. CONDITIONS FOR THE BENEFIT OF RTM. The obligations of
RTM to consummate the transactions provided for herein shall be subject
to the satisfaction, on or before the Closing Date, or such earlier date
as may be specified herein, of the following conditions, in addition to
such other conditions as may be provided for in this Agreement:
(1) Seller and Subsidiary have made all of the
deliveries required by SECTION 13.A.
(2) The representations and warranties of Seller and
Subsidiary contained herein shall have been true, and correct in
all material respects as of the date hereof and shall be true,
and correct in all material respects as of and at the Closing
Date and the Effective Date with the same effect as if made at
and as of such dates, except as provided or permitted hereunder,
and Seller shall have performed and complied in all material
respects with all agreements, covenants and conditions required
by this Agreement to be performed and complied with by them, at
or prior to the Closing Date.
(3) All consents (including all Required Consents)
and/or approvals (including those of the lenders of and the
boards of directors of RTM and Buyers designated by RTM)
necessary for the consummation of the transactions contemplated
by this Agreement shall have been obtained.
(4) Consents to the Lease Assignments under the
Leases shall have been obtained.
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(5) RTM shall have obtained all permits and licenses
and/or administrative approvals necessary for the operation of
the Company Restaurants, unless under local law or administrative
practice such permits and licenses and/or administrative
approvals are not available until title has passed. Seller shall
cooperate fully with RTM in obtaining such licenses and/or
administrative approvals.
(6) No suit, action or other proceeding (including
action under federal antitrust laws) to prohibit, delay or
otherwise materially and adversely affect the consummation of
this Agreement or to subject RTM to any liability resulting
directly or indirectly from the transactions contemplated hereby
shall have been instituted or threatened.
(7) RTM shall have received the opinion, dated as of
the Closing Date, of Seller's Counsel, in form and substance
reasonably satisfactory to Seller's Counsel and RTM's Counsel (it
being understood that, with respect to matters of Canadian law,
Seller's Counsel may rely upon foreign certificates or the
opinions of Canadian counsel), to the effect that:
(a) Seller is duly organized, validly
existing and in good standing under the laws of the State
of Tennessee. Seller is duly authorized to conduct
business and is in good standing under the laws of the
States of Alabama, Florida, Illinois, Kentucky and
Missouri.
(b) Subsidiary is duly organized, validly
existing and in good standing under the laws of Canada.
Subsidiary is duly authorized to conduct business and is
in good standing under the laws of the Provinces of
Alberta, British Columbia, Manitoba, Saskatchewan and
Ontario.
(c) Each of Subsidiary and Seller has the
requisite corporate power to carry on its business as it
is now being conducted.
(d) Neither the execution and delivery of
this Agreement or the other agreements contemplated
herein nor Seller's performance in accordance with their
respective terms are restricted by or violate the terms
of any existing constitution, law or administrative rule
or regulation applicable to Seller and/or to Subsidiary,
the charter or bylaws of Seller and/or Subsidiary, or, to
the best of counsel's current knowledge and belief, any
lease, option, agreement, mortgage, loan agreement or any
contractual or other obligation of Seller and/or of
Subsidiary, the effect of which would have a material
adverse effect on the transactions contemplated by this
Agreement.
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(e) To the best of counsel's current
knowledge and belief, no legal action or proceeding
against Seller is pending or threatened at the Closing
Date which, if successful, would prohibit consummation or
require substantial rescission of the transactions
contemplated by this Agreement.
(f) Seller has full power to execute,
deliver and perform this Agreement, and the other
agreements and instruments executed on even date herewith
pursuant to this Agreement.
(g) This Agreement, and the other agreements
and instruments executed on the Closing Date pursuant to
this Agreement have been duly and validly executed and
delivered by Seller and they constitute legal, valid and
binding obligations of Seller, enforceable in accordance
with their respective terms (subject to applicable
bankruptcy, insolvency and other laws affecting the
enforceability of creditor's rights generally and subject
to general principles of equity and subject to public
policy considerations as expressed in the Securities Act
of 1933 which may render certain indemnification
provisions unenforceable and subject to the provisions of
applicable securities laws).
(8) The required waiting periods under the HSR Act
have either expired or been terminated by the Federal Trade
Commission and the Antitrust Division of the United States
Department of Justice.
(9) Seller shall have delivered to RTM a certificate,
dated as of the Closing Date, certifying to the fulfillment of
the foregoing conditions. Seller may, conditioned upon prior
receipt of the written approval of RTM, amend the Schedules
attached hereto for the purpose of making immaterial corrections
and clarifications thereon applicable to Seller and consistent
with the terms and agreements contained herein which amendments
shall be attached to the certificate delivered pursuant to this
SECTION 12.A.(9). Unless otherwise agreed to in writing by the
parties hereto, if the Closing occurs, RTM shall be deemed to
waive any rights for breach of representation or warranty by
Seller to the extent that such amendment corrects such
representation or warranty. Nothing in this SECTION 12.A.(9)
shall impose any obligation on RTM either to accept any material
amendment to the Schedules provided for herein or to close the
transaction notwithstanding such amendment, unless RTM elects to
do so in its sole and absolute discretion.
B. CONDITIONS FOR THE BENEFIT OF SELLER. The obligations of
Seller to consummate the transactions provided for herein shall be subject
to the satisfaction, or before the Closing Date, of the following
conditions, in addition to such other conditions as may be provided for
in this Agreement:
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(1) RTM and a Buyer designated by RTM have made all
of the deliveries required by SECTION 13.B.
(2) The representations and warranties of RTM
contained herein shall have been true and correct in all material
respects as of the date hereof and (as to both RTM and any Buyer
designated by RTM) shall be true and correct at and as of the
Closing Date and the Effective Date with the same effect as if
made on and as of such dates, except as otherwise provided or
permitted hereunder, and RTM and a Buyer designated by RTM shall
have performed and complied in all material respects with all
agreements, covenants and conditions required by this Agreement
to be performed and complied with by it, at or prior to the
Closing Date.
(3) All consents and/or approvals (including those
of Seller's board of directors and lenders) necessary for the
consummation of the transactions contemplated by this Agreement
shall have been obtained.
(4) Consents to the Lease Assignments from the
lessors that are required under the Leases shall have been
obtained.
(5) No suit, action or other proceeding (including
action under federal antitrust laws) to prohibit, delay or
otherwise materially and adversely affect the consummation of
this Agreement or to subject Seller to any liability resulting
directly or indirectly from the transactions contemplated hereby
shall have been instituted or threatened.
(6) Seller shall have received an opinion, dated as
of the Closing Date from RTM's Counsel, in form and substance
reasonably satisfactory to Buyer's Counsel and Seller's Counsel
(which, notwithstanding anything hereinafter to the contrary,
shall not require any opinion with respect to the Investor) to
the effect that:
(a) RTM is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Georgia and each state in which any of the
Purchased Assets to be purchased by RTM are located.
Each Buyer designated by RTM is a corporation duly
organized, validly existing and in good standing under
the laws of the state of its incorporation and each state
in which any of the Purchased Assets to be purchased by
such Buyer are located.
(b) RTM and any Buyer designated by RTM have
the requisite corporate power to carry on their
businesses as they now are being conducted.
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(c) Neither the execution and delivery of
this Agreement or the other agreements contemplated
herein (including the RTM Guaranty) nor performance in
accordance with their respective terms by RTM and any
Buyer designated by RTM are restricted by or violate the
terms of any existing constitution, law or administrative
rule or regulation applicable to either RTM or any Buyer
designated by RTM, the charter or bylaws of either RTM or
any Buyer designated by RTM, or, to the best of counsel's
current knowledge and belief, any lease, option,
agreement, mortgage, loan agreement or any contractual or
other obligation of either RTM or any Buyer designated by
RTM.
(d) To the best of counsel's current
knowledge and belief, no legal action or proceeding
against either RTM or any Buyer designated by RTM is
pending or threatened at the Closing Date which, if
successful, would prohibit consummation or require
substantial rescission of the transactions contemplated
by this Agreement.
(e) RTM and any Buyer designated by RTM have
full power to execute, deliver and perform this
Agreement, and the other agreements and instruments
executed on even date herewith pursuant to this
Agreement.
(f) This Agreement, and the other agreements
and instruments executed on the Closing Date pursuant to
this Agreement have been duly and validly executed and
delivered by RTM and any Buyer designated by RTM and they
constitute legal, valid and binding obligations of RTM
and any Buyer designated by RTM, enforceable in
accordance with their respective terms (subject to
applicable bankruptcy, insolvency and other laws
affecting the enforceability of creditor's rights
generally and subject to general principles of equity and
subject to public policy considerations as expressed in
the Securities Act of 1933 which may render certain
indemnification provisions unenforceable).
(7) The required waiting periods under the HSR Act
have either expired or been terminated by the Federal Trade
Commission and the Antitrust Division of the United States
Department of Justice.
(8) RTM and any Buyer designated by RTM shall have
delivered to Seller a certificate, dated as of the Closing Date,
certifying to the fulfillment of the foregoing conditions. RTM
may, conditioned upon prior receipt of the written approval of
Seller, amend the Schedules attached hereto for the purpose of
making immaterial corrections and clarifications thereon
applicable to RTM or a Buyer designated by RTM and consistent
with the terms and agreements contained herein, which amendments
shall be attached to the
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certificate delivered pursuant to this SECTION 12.B.(8). Unless
otherwise agreed to in writing by the parties hereto, if the
Closing occurs, Seller shall be deemed to waive any rights for
breach of representation or warranty by RTM or a Buyer designated
by RTM to the extent that such amendment corrects such
representation or warranty. Nothing in this SECTION 12.B.(8)
shall impose any obligation on Seller either to accept any
material amendment to the Schedules provided for herein or to
close the transaction notwithstanding such amendment, unless
Seller elects to do so in its sole and absolute discretion.
C. BEST EFFORTS AND RIGHT TO PERFORM. Seller and RTM each
shall use their best efforts to fulfill all of their respective pre-
Closing obligations under this Agreement; provided, however, that, unless
otherwise required by this Agreement, no party shall be required to make
any out-of-pocket payments (other than customary fees and charges and
salary and travel expenses) or incur any additional obligations to satisfy
such obligations or conditions. Seller and RTM shall have the right, but
not the obligation (unless otherwise required by this Agreement), to
assist the other in performing any pre-closing obligations or conditions
precedent of the other party.
D. FAILURE OF CONDITIONS. Except as otherwise specifically
provided for herein, if any of the foregoing conditions precedent to
Seller's obligations fail with respect to any Company Restaurant, Seller,
subject to SECTION 15, may elect, in its sole discretion, not to sell such
Company Restaurant but shall proceed with the purchase and sale hereunder
of the other Company Restaurants with a reduction of the applicable
Purchase Price made in accordance with SECTION 12.F. below. Except as
otherwise specifically provided for herein, if any of the foregoing
conditions precedent to RTM's obligations fail with respect to any
particular Company Restaurant, RTM, subject to SECTION 15, may elect, in
its sole discretion, not to purchase such Company Restaurant but shall
proceed with the purchase and sale hereunder of the other Company
Restaurants with a reduction of the applicable Purchase Price made in
accordance with SECTION 12.F. of this Agreement.
E. WAIVER OF CONDITIONS. Seller or RTM, as the case may be,
may waive any condition precedent to their respective obligations under
this Agreement; provided, however, that such waiver can be granted only
on the waiving party's behalf and only to the extent that it does not
affect any other party's rights hereunder.
F. REDUCTION OF PURCHASE ▇▇▇▇▇.▇▇ the event that a
Company Restaurant is excluded from the Purchased Assets as permitted by
SECTION 2.B., SECTION 11.A.(2), SECTION 11.B or SECTION 11.C. and leased
pursuant to a New Lease, the Purchase Price and the Cash Payment shall
each be reduced by an amount equal to
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the amount set forth on SCHEDULE 12.F.(1) with respect to that Company
Restaurant. In the event that a Company Restaurant is excluded from the
Purchased Assets and is not leased to RTM or a Buyer designated by RTM
pursuant to a New Lease, the Purchase Price and the Cash Payment shall
each be reduced by an amount equal to the amount set forth on SCHEDULE
12.F.(2) with respect to that Company Restaurant. If a Company Restaurant
is leased pursuant to a New Lease but later purchased by RTM or a Buyer
designated by RTM, the purchase price for such Company Restaurant at the
time of such purchase shall be the amount by which the Purchase Price was
previously reduced pursuant to SCHEDULE 12.F.(1).
13. DELIVERIES AT THE CLOSING
A. SELLER'S DELIVERIES TO RTM. At the Closing, Seller shall
deliver to RTM or a Buyer designated by RTM, in addition to any and all
other instruments required hereunder to be so delivered by Seller, the
following:
(1) The Deeds (or New Leases, as applicable), each
duly executed by Seller or Realco, as applicable;
(2) The Lease Assignments in recordable form, each
duly executed by Seller and the lessors under each of the Leases,
if required;
(3) The Franchise Assignments, each duly executed by
Seller or Subsidiary, as applicable;
(4) The Trademark Assignments and Trade Secret
Assignment, each duly executed by Seller;
(5) The Contract Assignments, each duly executed by
Seller;
(6) The General Assignments, bills of sale and other
appropriate instruments of transfer, each duly executed by
Seller;
(7) Copies of the charter and bylaws of Seller and
Subsidiary and of resolutions adopted by the Board of Directors
of Seller authorizing and approving the execution and performance
of this Agreement and the other agreements contemplated by this
Agreement and the sale and transfer of the Company Restaurants,
all as certified by an appropriate officer of Seller as of the
Closing Date;
(8) A certificate as to the incumbency of each person
executing this Agreement and the other agreements contemplated by
this Agreement on behalf of Seller;
(9) A current certificate of corporate good standing
for Seller issued by the Tennessee Secretary of State and by the
Secretary of State of other
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appropriate office of the States of Alabama, Florida, Illinois,
Kentucky and Missouri;
(10) A current certificate of corporate good standing
for Realco issued by the Tennessee Secretary of State and by the
Secretary of State or other appropriate officer of the States of
Alabama, Illinois and Missouri;
(11) A current certificate of corporate good standing for
Subsidiary issued by appropriate authorities within Canada;
(12) The opinion of Seller's counsel referred to in
SECTION 12.A.(7);
(13) The certificate of Seller required by SECTION
12.A.(9);
(14) A certificate of "nonforeign" status of Seller
as described in the FIRPTA;
(15) The Noncompetition Agreement, duly executed by
Seller;
(16) Any and all Required Consents; estoppel letters
and/or estoppel certificates; release and/or satisfaction
documentation as to all encumbrances other than the Permitted
Encumbrances (including, without limitation, such releases and/or
satisfactions as to all Real Estate Mortgages and Chattel
Mortgages); or marked title commitments or binders showing the
satisfaction of all requirements, and containing only the
Permitted Encumbrances;
(17) The Vehicle Transfer Documents, duly executed by
Seller;
(18) The Office Lease, duly executed by Seller;
(19) The Commissary Agreement, duly executed by
Commissary Operations, Inc.; and
(20) Such additional instruments and documents as
Buyer's Counsel may reasonably request in order to fulfill the
terms and conditions of this Agreement.
B. BUYER'S DELIVERIES TO SELLER. At the Closing, RTM or a
Buyer designated by RTM shall deliver to Seller, in addition to any and
all other instruments required hereunder to be so delivered to Seller by
Buyer, the following:
(1) The Cash Payment;
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(2) The Deeds (or New Leases, as applicable), each
duly executed by RTM and/or a Buyer designated by RTM, if
necessary;
(3) The Lease Assignments, each duly executed by RTM
or a Buyer designated by RTM;
(4) The Franchise Assignments, each duly executed by
RTM or a Buyer designated by RTM;
(5) The Contract Assignments, each duly executed by
RTM or a Buyer designated by RTM;
(6) The General Assignments, bills of sale and other
appropriate instruments of transfer, each duly executed by RTM or
a Buyer designated by RTM, if necessary;
(7) Copies of the charter and bylaws of RTM and any
Buyer designated by RTM and of resolutions adopted by the Boards
of Directors of RTM and any Buyer designated by RTM authorizing
execution and performance by RTM and such Buyer, respectively, of
this Agreement and the other agreements contemplated by this
Agreement and the purchase of the Company Restaurants, all as
certified by appropriate officers of RTM and such Buyer,
respectively, as of the Closing Date;
(8) A certificate as to the incumbency of each person
executing this Agreement and the other agreements contemplated by
this Agreement on behalf of RTM and a Buyer designated by RTM;
(9) Current certificates or telegrams of corporate
good standing or qualification to do business of RTM and a Buyer
designated by RTM as certified by the secretary of state or other
appropriate officer of the States of Alabama, Florida, Illinois,
Kentucky, Missouri and Tennessee;
(10) The opinion of RTM's Counsel referred to in SECTION
12.B.(6);
(11) The certificate of RTM and any Buyer designated by
RTM required by SECTION 12.B.(8) ;
(12) The Note, duly executed by RTM or a Buyer
designated by RTM;
(13) The RTM Guaranty, duly executed by RTM, if the
Note is executed and delivered by a Buyer designated by RTM;
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(14) The Security Agreement, together with any other
documents or instruments required by the Security Agreement, each
duly executed by RTM or a Buyer designed by RTM to purchase the
Purchased Assets described in the Security Agreement; and
(15) Such additional instruments and documents Seller's
Counsel may reasonably request in order to fulfill the terms and
conditions of this Agreement.
C. OTHER DELIVERIES. At the Closing, all other consents,
permits, licenses and administrative approvals required to be obtained as
conditions precedent to the consummation of the transactions provided for
herein shall be delivered.
14. RISK OF LOSS AND CONDEMNATION
A. RISK OF LOSS. The risk of any destruction, loss or
damage to any of the Company Restaurants shall be the sole responsibility
of Seller until the Effective Date. For purposes of this SECTION 14, the
term "loss" shall include but not be limited to any condemnation or the
institution of any condemnation proceedings which affect the real property
on which any of the Company Restaurants is located. If any of the Company
Restaurants shall be destroyed or damaged by fire or other casualty or
shall suffer any loss prior to the Effective Date, RTM, subject to SECTION
15, may either (i) elect not to purchase such Company Restaurant but
proceed with the purchase and sale hereunder of the other Company
Restaurants being purchased with an appropriate reduction and/or refund
of the Purchase Price based upon the Company Restaurants and related
assets not being conveyed, or (ii) upon closing the purchase and sale of
such Company Restaurant hereunder, require Seller to remit to RTM (and RTM
shall be entitled to retain) all insurance proceeds received by Seller in
respect of such destruction, damage or loss to such Purchased Assets, and
assign to RTM the right to collect and retain any such insurance proceeds
not so received by RTM.
B. CONDEMNATION. In the event condemnation proceedings
which would have a material adverse effect on the intended use or
operation of a Company Restaurant by RTM or a Buyer designated by RTM are
instituted or threatened by the taking authority's submission of a firm
offer in lieu of condemnation or otherwise prior to the Closing Date, RTM
may either (i) elect not to purchase such Company Restaurant, subject to
SECTION 15, but proceed with the purchase and sale hereunder of the other
Company Restaurants being purchased with an appropriate reduction of the
Purchase Price based upon the Company Restaurants and related assets not
being conveyed, or (ii) proceed with the purchase of such Company
Restaurant without any reduction in the Purchase price and receive an
assignment from Seller of all of Seller's right, title and interest in and
to any proceeds or award resulting from such condemnation. In the event
such condemnation proceedings are instituted or threatened which would not
have a material adverse effect on RTM's intended use or
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operation of a Company Restaurant, RTM or a Buyer designated by RTM shall
proceed with the purchase of the Company Restaurant without any reduction
in the Purchase Price and receive an assignment from Seller of all of
Seller's right, title and interest in and to any proceeds or award
resulting from such condemnation. Seller agrees not to settle any
condemnation award with respect to any of the Company Restaurants without
Buyer's approval.
15. TERMINATION
A. BY AGREEMENT OR FAILURE OF CONDITIONS. This Agreement
may be terminated:
(1) By mutual consent of all parties hereto;
(2) By RTM if any of the conditions to RTM's
obligations to consummate the transactions contemplated in this
Agreement shall not have been satisfied, or waived by RTM, on or
prior to the Termination Date; or
(3) By Seller if any of the conditions to Seller's
obligations to consummate the transactions contemplated in this
Agreement shall not have been satisfied, or waived by Seller, on
or prior to the Termination Date; or
(4) By Seller if the aggregate number of Company
Restaurants that are to be excluded or leased pursuant to SECTION
11 (not including restaurants excluded under SECTIONS 2.B. or
11.D.) exceeds six (6) or if the Purchase Price is reduced by
more than Three Million Dollars ($3,000,000.00) (not including
restaurants excluded under SECTIONS 2.B. or 11.D.) pursuant to
SECTION 12.F..
B. LAPSE OF TIME. Any provision of this Agreement to the
contrary notwithstanding, if the Closing has not been held for any reason
whatsoever (other than a breach by a party of its obligations under this
Agreement, in which case that party shall not be entitled to terminate
this Agreement pursuant to this SECTION 15.B.) on or before the
Termination Date, either party may terminate this Agreement by fifteen
(15) days' prior written notice to the other party. Such notice may be
given on or after the fifteenth (15th) day prior to the Termination Date,
unless the terminating party has caused the event, or failed to satisfy
the condition, which is the reason for the failure to close. In the event
a termination notice is validly given by either party to the other
pursuant to this paragraph, such termination shall be effective at 11:59
p.m. on the last day of such 15-day notice period. Until such time each
party shall be obligated to use its best reasonable efforts, in good
faith, to consummate the transaction contemplated by this Agreement.
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C. NOTICE; REMEDIES. The rights of termination hereof as
provided herein shall be exercised by written notice of termination given
by the terminating party to the other party in the manner hereinafter
provided. Any such right of termination shall not preclude any legal or
equitable remedies which may be available to any non-defaulting party
hereto arising out of any default hereunder by the other party hereto.
In the event of a default by any party, the non-defaulting party shall
have such remedies against the defaulting party as may be available to the
non-defaulting party either pursuant to this Agreement and/or at law or
in equity, including the right to recover all costs, expenses or damages
resulting to such non-defaulting party from such default and the right to
specifically enforce this Agreement.
16. INDEMNIFICATION
A. INDEMNIFICATION BY SELLER. Seller will indemnify, defend
and hold RTM and a Buyer designated by RTM harmless after the Closing Date
from and against any costs (including, without limitation, reasonable
attorneys' fees and court costs and costs of investigation), losses,
damages, liabilities or expenses incurred by RTM or such Buyer as a result
of any of the following (the "Seller Indemnified Claims"):
(1) The breach of any of Seller's representations and
warranties made under or pursuant to this Agreement or any of the
other agreements contemplated by this Agreement;
(2) The non-fulfillment of any covenant, agreement
or obligation to be performed by Seller under or pursuant to this
Agreement or any of the other agreements contemplated by this
Agreement;
(3) Any claim for brokerage, finders fees or other
commissions relative to this Agreement or any of the other
agreements contemplated by this Agreement asserted by or on
behalf of any broker or finder claiming to have been retained by
Seller or to have rendered services on Seller's behalf;
(4) Any litigation (including without limitation, the
Litigation), proceedings, controversies or claims against RTM or
such Buyer arising from, in connection with, or incident to acts
or omissions of Seller or other occurrences occurring prior to
the Effective Date relating to any of the Purchased Assets;
(5) Any litigation, proceedings, controversies or
claims against RTM or such Buyer arising from, in connection with
or incident to RTM's or such Buyer's terminating any
franchisee/licensee at Seller's request pursuant to SECTION 6.B.;
or
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(6) All Excluded Liabilities and any and all other
obligations or liabilities of Seller or Subsidiary or relating to
the Purchased Assets not expressly assumed by RTM or a Buyer
designated by RTM in this Agreement as a part of the Assumed
Liabilities.
B. INDEMNIFICATION BY RTM. RTM will indemnify and hold
Seller harmless on and after the Closing Date from and against all losses,
damages, liabilities or expenses incurred by Seller as a result of any of
the following (the "RTM Indemnified Claims"):
(1) The breach of any of representations and
warranties by RTM or a Buyer designated by RTM made under or
pursuant to this Agreement or any of the other agreements
contemplated by this Agreement;
(2) The non-fulfillment of any covenant, agreement
or obligation to be performed by RTM or a Buyer designated by RTM
under or pursuant to this Agreement or any of the other
agreements contemplated by this Agreement;
(3) Any claim for brokerage, finders fees or other
commissions relative to this Agreement or any of the other
agreements contemplated by this Agreement asserted by or on
behalf of any broker or finder claiming to have been retained by
RTM or a Buyer designated by RTM or to have rendered services on
RTM's or such Buyer's behalf; or
(4) Any litigation, proceedings, controversies or
claims against Seller arising from, in connection with or
incident to acts or omissions of RTM or a Buyer designated by RTM
or other occurrences occurring on or after the Effective Date
relating to any of the Purchased Assets.
C. PARTICIPATION. Should any claim be made by a person not
a party to this Agreement with respect to any matter to which either of
the foregoing indemnities relates, the indemnified party (the
"Indemnitee") shall promptly notify the indemnifying party (the
"Indemnitor") thereof. The Indemnitee, on not less than thirty (30) days'
written notice to the Indemnitor containing the terms of the proposed
settlement, may make settlement of such claim and such settlement shall
be binding on both parties hereto for the purposes of this Section;
provided, however, that if within such thirty (30) day period the
Indemnitor shall have requested the Indemnitee to contest any such claim
at the expense of the Indemnitor, the Indemnitee shall promptly comply,
and the Indemnitor shall have the right to direct the defense of such
claim or any litigation based thereon at its own expense through counsel
of it own choosing. The Indemnitee shall also have the right to
participate in the settlement of any such claim or in any such litigation
so long as its participation is at its own expense and with the
understanding that the Indemnitor may settle in its own discretion. Any
payment or settlement made by the Indemnitor in such contest, together
with the total expense
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thereof, shall be binding on the Indemnitee and the Indemnitor for the
purposes only of this Section. Notwithstanding anything herein to the
contrary, an Indemnitor shall not, without the prior written consent of
the indemnified party, settle any claim in any manner which adversely
affects the Indemnitee.
D. TIME LIMITATIONS. The Indemnitor will have no liability
to the Indemnitee under or in connection with: (a) any Seller Indemnified
Claim or RTM Indemnified Claim under this Agreement (other than the
matters set forth below in items (b) and (c)) unless written notice
asserting an indemnification claim based thereon is given to the
Indemnitor prior to the later of (i) the second (2nd) anniversary of the
Closing Date or (ii) the first (1st) anniversary of the date on which a
covenant or agreement is to be performed hereunder; (b) any Seller
Indemnified Claim related to any Taxes unless written notice asserting
such an indemnification claim is given prior to the ninetieth (90th) day
after the day upon which any potential Tax liability is barred by all
applicable statutes of limitation; (c) any Seller Indemnified Claim
related to any environmental matters, unless written notice asserting such
indemnification claim is given prior to the sixth (6th) anniversary of the
Closing Date; provided, however, the liability of Seller relating to,
arising out of or based upon any covenants, agreements, representations
and warranties relating to the title to the Purchased Assets, the due
authorization of this Agreement or the Litigation described on SCHEDULE
8.H. may be asserted by RTM or a Buyer designated by RTM at any time; and,
provided, further, as to any Company Restaurant which is excluded from the
initial Closing Date purchase and sale pursuant to SECTION 2.B. or SECTION
11.C., the time periods set forth above shall be tolled until the actual
closing date as to such Company Restaurant(s).
17. EMPLOYEES
A. MEETINGS WITH EMPLOYEES. After the date hereof and at
any time prior to the Effective Date, RTM or its representatives shall
have the right meet with Restaurant Employees to arrange for the
transition of ownership of the Company Restaurants, provided, however,
that such meetings shall be held after notification to Seller but with a
representative of Seller being present and at such times and in such
manner so as not to materially adversely interfere with Seller's normal
business operations. After the Effective Date, RTM or a Buyer designated
by RTM, to the extent it hires any Restaurant Employees, will make
employees and files available to Seller at reasonable times to assist
Seller in connection with processing of claims and preparing for and
proceeding with litigation, if any, with respect to such claims.
B. RTM'S OFFER OF EMPLOYMENT. RTM or a Buyer designated by
RTM shall have the right, but not the obligation, to offer employment to
Restaurant Employees, effective on or after the Effective Date. Except
as provided in this Agreement, Seller shall be responsible for all
compensation to which such Restaurant Employees may
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be entitled with respect to service, claims or events giving rise to
claims, which occurred on or prior to the Effective Date. Nothing in this
Agreement shall be deemed to restrict the right of RTM or a Buyer
designated by RTM to deal with Restaurant Employees who accept employment
with buyer as employees at will and without regard to such employees'
prior service or seniority as employees of Seller, in the same manner as
it would be free to deal with such employees in the absence of this
Agreement.
C. NON-SOLICITATION OF EMPLOYEES. For a period of one (1)
year following the Closing Date, Seller agrees not to actively solicit any
of the employees of RTM or a Buyer designated by RTM who are employed in
connection with the Company Restaurants who, prior to the Effective Date,
were employed by Seller in connection with the Company Restaurants.
18. BULK TRANSFERS
RTM and any Buyer designated by RTM hereby waive compliance by
Seller with any applicable bulk sales laws. Seller shall indemnify RTM
and a Buyer designated by RTM against any liability (including, without
limitation, any reasonable attorneys fees) arising out of or resulting
from Seller's failure to comply with such laws, as an Excluded Liability
under this Agreement.
19. SURVIVAL OF TERMS
The representations, warranties, covenants, indemnities and
agreement of the respective parties hereto, as contained herein, in the
Schedules hereto, or any certificate or other document delivered pursuant
hereto, shall survive the Closing Date and the Effective Date and shall
continue thereafter in full force and effect only for such period(s) of
time as set forth in SECTION 16.D. notwithstanding any investigation
heretofore or hereafter made by or on behalf of the parties hereto.
20. WAIVER AND AMENDMENT
Any of the provisions of this Agreement may be waived in writing
at any time, by the party or parties which is or are entitled to the
benefit of such provision. Any of the provisions of this Agreement may
be amended at any time by written agreement of all parties.
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21. CONFIDENTIAL INFORMATION AND RETENTION OF DOCUMENTS
A. CONFIDENTIAL INFORMATION. All information given by any
party hereto to any other party shall be used only for the purposes of
this Agreement and the transactions contemplated in this Agreement and
shall be treated as confidential and not disclosed to others except the
parties' attorneys, accountants, agents, affiliates and lenders and, in
addition, as to RTM, to any Buyer designated by Buyer, and except insofar
as such data or information is published or is a matter of public
knowledge or is required to be disclosed by applicable law or legal
process. In the event that RTM or a Buyer designated by RTM does not
consummate the acquisition provided for herein for any reason whatsoever,
RTM and any such Buyer shall return to Seller all copies of data supplied
by Seller to RTM or any such Buyer or their representatives.
B. RETENTION OF DOCUMENTS. Seller agrees that, after the
Effective Date, all documents relating to the ownership and operation of
any of the Company Restaurants during the period prior to the Effective
Date shall be open for inspection by representatives of RTM or the Buyer
of such Company Restaurant(s) at any time during regular business hours
of Seller for any proper purpose until such time as such documents are
destroyed or possession thereof is given to RTM or such Buyer as provided
for in the following sentences, and that RTM or such Buyer at its expense
may during such period make such copies thereof as it may reasonably
request. Without limiting the generality of the foregoing, for a period
ending on the third (3rd) anniversary of the Closing Date, Seller shall
not destroy or give up possession of any document referred to in the
preceding sentence without first offering to RTM or such Buyer the
opportunity, at RTM's or such Buyer's expense (but without any other
payment), to obtain the same. Thereafter, Seller shall be free to dispose
of such documents as it deems fit.
22. ADDITIONAL TRANSFERS AND INSTRUMENTS
From time to time after the Effective Date and at the request of
RTM and without further consideration, Seller will execute and deliver to
RTM or a Buyer designated by RTM such other and further instruments of
assignment and transfer as may be necessary to complete the sale and
transfers hereunder and to give further assurances to RTM or such Buyer
with respect to the title to the Purchased Assets sold and transferred to
RTM or such Buyer hereunder.
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23. FEES AND EXPENSES
Except as otherwise specifically provided in this Agreement,
Seller and RTM, respectively, shall each bear their own costs and expenses
incurred in connection herewith and with the transactions contemplated
hereby, whether or not the sale of the Company Restaurants hereunder shall
be consummated or this Agreement subsequently shall be terminated. RTM
and Seller shall each pay one-half (1/2) of the recording fees (but not
related legal and other costs) incurred in connection with the recordation
of the Deeds or the Lease Assignments.
24. TRANSFER TAXES, ETC.
RTM and Seller shall each be responsible for and shall each pay
all one-half (1/2) of transfer taxes, sales taxes, documentary stamp and
similar transfer taxes, fees or charges imposed by state or local
governments which arise solely from the sale and transfer of the Purchased
Assets from Seller to RTM or a Buyer designated by RTM. Seller shall
cooperate with RTM to permit such sale to qualify for any exceptions to
such taxes, fees or charges which might be available.
25. NOTICES
Any notice which any party hereto may desire or may be required
hereunder to give to the other parties hereto shall be in writing and
shall be deemed to be duly given when received (or when first refused, if
that be the case) by personal delivery, by overnight delivery service
which provides return receipts, or by express, registered or certified
U.S. mail, postage prepaid, return receipt requested, addressed to such
other party as follows:
SELLER:Shoney's, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
copy to: Tuke ▇▇▇▇ & ▇▇▇▇▇▇▇
17th Floor
Third National Bank Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
BUYER: RTM, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
copies to: RTM, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Golden & ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address as a party hereto hereafter may designate to the
other parties in writing.
26. CONSTRUCTION
As herein used, the singular number shall include the plural, the
plural the singular, and the use of any gender shall be applicable to all
genders, unless the context would clearly not admit such construction.
This instrument shall be construed and interpreted in accordance with the
laws of the State of Tennessee. Section or paragraph headings are
employed herein solely for convenience of reference, and such headings
shall not be used in construing any terms or provisions of this
instrument.
27. SUCCESSORS AND ASSIGNS
This Agreement and all of the provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective heirs, successors and assigns, provided, however, that neither
this Agreement nor any of the rights or obligations of any party hereto
may be assigned without the prior written consent of the other party
hereto; provided further, however, that RTM may assign any or all of its
rights and interests hereunder to one or more entities which are either:
(a) unaffiliated investors who purchase the Company Restaurants and lease
such Company Restaurants to RTM or one of RTM's Affiliates (as hereinafter
defined); or (b) controlled by or under common control with RTM (control
for these purposes meaning ownership of more than fifty percent (50%) of
the voting interests in an entity) (each, an "Affiliate"), in any or all
of which cases RTM nonetheless shall remain responsible for the
performance of all of its obligations hereunder.
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28. SEVERABILITY
Whenever possible, each provision and term of this Agreement shall
be interpreted in such manner as to be valid and enforceable; provided,
however, that in the event any provision or term of this Agreement should
be determined to be invalid or unenforceable, all other provisions and
terms of this Agreement and the application thereof to all persons and
circumstances subject thereto shall remain unaffected to the extent
permitted by law. If any application of any provision or term of this
Agreement to any person or circumstances should be determined to be
invalid or unenforceable, the application of such provision or term to
other persons and circumstances shall remain unaffected to the extent
permitted by law.
29. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original hereto and all of which together
shall constitute but one Agreement.
30. ENTIRE AGREEMENT
This Agreement and the Exhibits and Schedules hereto constitute
the entire agreement among the parties hereto and supersede all prior and
contemporaneous agreements and undertakings of the parties pertaining to
the subject matter hereof and there are no representations or warranties,
express or implied, other that those contained in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed the day and year first above written.
SHONEY'S, INC.
/s/
___________________________________
By: W. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Executive Vice-
President and Chief Financial
Officer
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SHONEY'S OF CANADA, INC.
/s/
______________________________________
By: W. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
RTM, INC.
/s/
______________________________________
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
/s/
______________________________________
By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President and
Corporate Secretary
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EXHIBITS AND SCHEDULES
OMITTED FOR
FILING PURPOSES