10(j)
ASSET PURCHASE AGREEMENT
BETWEEN
SHOWBIZ PIZZA TIME, INC.
AND
MCBIZ CORPORATION
MCBIZ LIMITED PARTNERSHIP,
MCBIZ OF IOWA LIMITED PARTNERSHIP
AND JOINED IN FOR CERTAIN LIMITED PURPOSES BY
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SAUVAGE GAS COMPANY
SAUVAGE GAS SERVICES, INC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
September 16, 1996
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
Section Page
------- ----
1. Definitions...................................... 2
2. Basic Transaction................................ 8
a. Purchase and Sale of Assets................. 8
b. Assumption of Liabilities................... 9
c. Purchase Price.............................. 9
d. Preliminary Closing Schedule................ 10
e. Directed Payments........................... 10
f. Post-Closing Adjustment..................... 11
g. The Closing................................. 12
h. Deliveries at the Closing................... 12
i. Allocation.................................. 12
j. Proration................................... 12
3. Representations and Warranties of Sellers and Principal
Officer........................................... 13
a. Organization of Sellers...................... 13
b. Authorization of Transaction................. 13
c. Noncontravention............................. 13
d. Brokers' Fees................................ 14
e. Title to Assets.............................. 14
f. Real Property................................ 14
g. Financial Statements......................... 15
h. Material Adverse Change...................... 16
i. Legal Compliance............................. 17
j. Tax Matters.................................. 17
k. Intellectual Property........................ 18
l. Tangible Assets.............................. 18
m. Inventory.................................... 18
n. Contracts.................................... 18
▇. ▇▇▇▇▇▇ of Attorney........................... 19
p. Insurance.................................... 20
q. Litigation................................... 20
r. Employees.................................... 20
s. Employee Benefits............................ 21
t. Environment, Health and Safety............... 22
u. Books of Accounts............................ 22
v. United States Person......................... 23
w. Certain Owners............................... 23
x. Remodels..................................... 23
y. Disclosure................................... 23
4. Representations and Warranties of the Buyer....... 23
a. Organization of Buyer........................ 23
b. Authorization of Transaction................. 23
c. Noncontravention............................. 24
d. Intellectual Property........................ 24
e. Brokers' Fees................................ 24
f. Employee Vacation............................ 24
5. Pre-Closing Covenants............................. 24
a. General...................................... 24
b. Notices and Consents......................... 24
c. Operation of Business........................ 25
d. Preservation of Business..................... 26
e. Full Access.................................. 26
f. Notice of Developments....................... 26
g. Exclusivity.................................. 26
h. Environmental Reports........................ 27
i. McBiz LP Obligations Regarding Title......... 27
j. Renegotiation of Real Property Leases........ 29
k. Licenses, Permits and Qualifications......... 29
l. Encumbrances................................. 29
m. Assessments.................................. 29
n. Violations................................... 30
o. Modifications................................ 30
p. Fees and Expenses............................ 30
6. Conditions to Obligation to Close................. 30
a. Conditions to Obligation of Buyer............ 30
b. Conditions to Obligations of Sellers......... 33
7. Termination....................................... 34
a. Termination of Agreement..................... 34
b. Effect of Termination........................ 35
c. Specific Performance......................... 35
8. Indemnification................................... 35
a. General Indemnification Obligation of Sellers,
Principal Officer and the Owners............. 35
b. General Indemnification Obligation of Buyer.. 36
c. Method of Asserting Claims, Etc.............. 36
d. Guaranty..................................... 38
e. Limitation of Liability...................... 39
f. Payment...................................... 39
g. Arbitration.................................. 39
h. Other Rights and Remedies Not Affected....... 40
i. Bulk Sales Law............................... 40
9. Survival of Representations and Warranties........ 40
10. Actions After Closing............................. 41
11. Miscellaneous Agreements Relating to the Conveyance of the
Boise Property.................................... 42
12. Miscellaneous..................................... 42
Schedule 3(c) Noncontravention
Schedule 3(e) Title to Assets
Schedule 3(f) Real Property
Schedule 3(h) Material Adverse Change
Schedule 3(i) Legal Compliance
Schedule 3(l) Tangible Assets
Schedule 3(n) Contracts
Schedule 3(p) Insurance
Schedule 3(q) Litigation
Schedule 3(r) Employees
Schedule 3(s) Employee Benefits
Schedule 3(t) Environment, Health and Safety
Exhibit A Personal Property
Exhibit B Assumed Contracts and Leases
Exhibit C Licenses, Permits and Authorizations
Exhibit D Prepaid Items
Exhibit E Excluded Assets
Exhibit F Leased Real Property
Exhibit G Escrow Agreement
Exhibit H Option Agreement
Exhibit I ▇▇▇▇ of Sale
Exhibit J Assignment of Leases
Exhibit K Assignment of Franchises
Exhibit L [intentionally omitted]
Exhibit M General Assignment
Exhibit M-1 Assignment of Joint Venture Interest
Exhibit N Allocation of Purchase Price
Exhibit O Financial Statements
Exhibit P Survey Requirements
Exhibit Q Special Warranty Deed
Exhibit R Affidavit
Exhibit S Noncompetition Agreement
ASSET PURCHASE AGREEMENT
------------------------
This Asset Purchase Agreement ("Agreement"), dated as of
September 16, 1996, is executed and entered into by and between McBiz
Corporation, a Kansas corporation ("McBiz Corp."), McBiz Limited
Partnership, a Kansas limited partnership ("McBiz LP"), McBiz of Iowa
Limited Partnership, an Iowa limited partnership ("McBiz IA") (McBiz
Corp., McBiz LP and McBiz IA are each sometimes referred to as a
"Seller" and are collectively referred to herein as "Sellers"),
ShowBiz Pizza Time, Inc., a Kansas corporation ("Buyer"), and joined
in for certain limited purposes by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Principal
Officer"), and each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Sauvage Gas Company, a Nevada corporation, and Sauvage Gas
Services, Inc., a Nebraska corporation (each an "Owner" and
collectively the "Owners").
WHEREAS, Sellers are engaged in the operation of 20 ▇▇▇▇▇ ▇.
Cheese's restaurants in ten states primarily in the Midwestern and
Eastern United States (the "Business");
WHEREAS, Buyer, Sellers, Principal Officer and the Owners desire
to enter into a transaction in which Buyer will purchase
(i) substantially all of the assets of Sellers used in, or related to,
the operation of 19 ▇▇▇▇▇ ▇. Cheese's restaurants operated by Sellers
under franchise arrangements with Buyer (the "Franchise Restaurants"),
and (ii) Seller's joint venture and franchise interest in a ▇▇▇▇▇ ▇.
Cheese's restaurant located in Lancaster, Pennsylvania (the "Joint
Venture Restaurant"), in return for cash and certain other
consideration;
WHEREAS, McBiz Corp. is the sole general partner of each of
McBiz LP and McBiz IA and is authorized to act for and on behalf of
such limited partnerships in all respects;
WHEREAS, the Principal Officer and Owners own all of the issued
and outstanding common stock of McBiz Corp. and, together with McBiz
Corp., own one hundred percent (100%) of the partnership interests of
each of McBiz LP and McBiz IA; and
WHEREAS, in connection with the transactions contemplated by this
Agreement, Buyer will enter into leases and other arrangements with
certain entities owned or controlled by Principal Officer and Owners.
THEREFORE, in consideration of the premises and the mutual
promises herein made and in consideration of the representations,
warranties and covenants herein contained, and for other good and
valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the parties agree as follows.
1. Definitions.
----------------
"Accounts Receivable" means all accounts receivable and notes
receivable, and credit card receipts and other evidence of
indebtedness and rights to receive payment from any person owed to
Sellers relating to the Business on the Closing Date.
"Acquired Assets" means all rights, property and assets of every
kind, character and description, whether tangible or intangible,
whether real, personal or mixed, whether accrued, contingent or
otherwise, of Sellers which are owned, held or used by Sellers in
connection with the Business, wherever located and whether or not
reflected in its books and records, other than Excluded Assets. The
Acquired Assets shall include, without limitation, the following:
(i) All Intellectual Property owned, held or used by Sellers in
the Business, including, without limitation, any patents,
trademarks, service marks, trade names, technologies, methods,
formulations, data bases, trade secrets, know-how, franchises,
licenses, business permits and certificates and customer lists
owned, held or used by Sellers in the Business and all right,
title and interest thereto and all information, files, records,
data, plans and recorded information, including suppliers lists
relating to the foregoing; provided that the names "McBiz
Corporation," "McBiz," "McBiz Limited Partnership," "McBiz of
Iowa Limited Partnership," "Ad Images, Ltd." and the other names,
trademarks and logos identified on Exhibit E hereto shall not
constitute Acquired Assets; and
(ii) The Boise Property, together with all buildings,
structures, installations, fixtures and other improvements
appurtenant thereto or situated thereon and all other rights,
interests and appurtenances of McBiz LP pertaining thereto; and
(iii) All right, title and interest of Sellers in and to the
Leased Real Property; and
(iv) All machinery, equipment, computer hardware, improvements,
furniture, furnishings, decorations, costumes, fixtures, games
and other personal property, including, without limitation, the
personal property listed on Exhibit A hereto, and such additional
personal property owned by Sellers with respect to or for use in
connection with the operation of the Business or located in or
upon the Boise Property or any Leased Real Property on the
Closing Date; provided that the computer software, hardware,
office furniture, office equipment, telephones, supplies,
fixtures, office decorations and other property listed on
Exhibit E or owned by McBiz Corp. and located at (and for use at)
the offices of McBiz Corp. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇, shall not constitute Acquired Assets; and
(v) All machinery, inventory and equipment in the hands of
Sellers or in the hands of suppliers which Sellers are committed
to purchase as of the Closing Date; and
(vi) All contracts, personal property leases and other
agreements to which Sellers are a party and which are designated
by Buyer on Exhibit B attached hereto as assets it wishes to
acquire (the "Assumed Contracts and Leases"); and
(vii) All Inventory of Sellers but specifically excluding Excess
Inventory; and
(viii) All of the rights of Sellers in all government licenses,
permits and authorizations (and applications for any of the
foregoing) necessary for the operation of the Business, including
the licenses, permits and authorizations listed on Exhibit C
hereto, but specifically excluding licenses/permits in respect of
the service of alcoholic beverages; and
(ix) All prepaid items related to the Business that are
transferable, including, without limitation, the prepaid items
listed on Exhibit D;
(x) The Acquired Assets shall not include (a) operating data and
records of Sellers used in the Business; provided that, Buyer
shall be permitted to review such data and records at any time
during regular business hours and, at Buyer's expense, copy such
data and records, which records shall be retained by Sellers for
at least three (3) years after the Closing Date, (b) the assets
listed on Exhibit E attached hereto, (c) any state or local
income tax refunds or claims related to the operation of Sellers
other than condemnation awards relating to the Boise Property or
any Leased Real Property, (d) all casualty, liability or other
insurance policies owned by or obtained on behalf of Sellers and
any insurance claims or recoveries relating to the Excluded
Assets (as defined below), (e) the corporate charter,
qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books and other documents relating
to the organization, maintenance and existence of Sellers;
provided that Buyer shall be permitted to review and, at Buyer's
expense, copy such books and records retained by Sellers,
(f) Cash of Sellers other than cash drawers at the restaurants,
(g) the Accounts Receivable, (h) assets other than those owned,
held, or used by Sellers in connection with the Business to the
extent specifically identified to Buyer in writing, (i) causes of
action, judgments, claims and demands of whatever nature except
those relating to the Acquired Assets or the Assumed Liabilities
and (j) rights in and with respect to Employee Benefit Plans
(collectively, the "Excluded Assets").
"Assumed Liabilities" means (i) all contractual obligations of
Sellers arising on or after the Closing Date as lessees under the
leases for the Leased Real Property listed on Exhibit F attached
hereto (the "Real Property Leases"), (ii) any obligations of Sellers
under the agreements, contracts, leases, licenses and other
arrangements included in the definition of Acquired Assets either
(A) to furnish goods and services on or after the Closing Date or
(B) to pay for goods and services that another party will furnish to
it on or after the Closing Date, and (iii) any Liability for injury to
person or property, regardless of when made or asserted, which arises
out of or is based upon any injury to restaurant patrons, employees or
others while on the premises or arising out of the operations of the
Joint Venture Restaurant as to which Buyer has agreed to indemnify
McBiz LP pursuant to Section 13.3 of the Joint Venture Agreement;
provided that, the Assumed Liabilities shall include only the
foregoing and no other liabilities or obligations of Sellers, whether
arising before, on or after the Closing Date. Specifically, Buyer
shall not assume, and the term "Assumed Liabilities" shall not
include, any liabilities, obligations, losses, claims, demands, suits,
actions, damages, costs, expenses or commitments of Sellers,
including, without limitation, the following:
(i) Any Liability or similar claim ("Liability Claim")
for injury to person or property, regardless of when made or
asserted, which arises out of or is based upon any injury to
restaurant patrons, employees of Sellers or others while on
the Boise Property or any Leased Real Property, or which is
imposed or asserted to be imposed by operation of law, in
connection with any service performed or products sold by or
on behalf of Sellers prior to the Closing Date, including,
without limitation, any claim relating to any slip and fall
or any product delivered in connection with the performance
of such services and any claim seeking recovery for
consequential damage, lost revenue or income; or
(ii) Any Liability for injury to person or property,
regardless of when made or asserted, which arises out of or
is based upon any injury to restaurant patrons, employees or
others while on the premises or arising out of the
operations of the Joint Venture Restaurant as to which
McBiz LP has agreed to indemnify Buyer pursuant to
Section 13.2 of the Joint Venture Agreement; or
(iii) Any federal, state or local income or other Tax
payable with respect to the business, assets, properties or
operations of Sellers; or
(iv) Any Liability under the Real Property Leases for
accruals of rent (whether based upon a percentage of sales of the
business operated at the location or otherwise) covered by such
leases and which occurred prior to the Closing Date; or
(v) Any Liability or obligation under or in connection
with the Excluded Assets, including, without limitation, any
Liability or obligation relating to the real property or the
lease for the real property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇; or
(vi) Any Liability or obligation in connection with
Trade Accounts Payable; or
(vii) Any obligation of Sellers to indemnify any Person
by reason of the fact that such Person was a director,
officer, employee or agent of any Seller or was serving at
the request of any such entity as a partner, trustee,
director, officer, employee or agent of another entity
(whether such indemnification is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such indemnification is
pursuant to any statute, charter document, bylaw, agreement
or otherwise); or
(viii) Any Liability to present or former employees or
independent contractors of any Seller, whether or not
employed by Buyer after the Closing, including any claims
for accrued bonuses, severance pay upon termination of their
employment by such Seller as contemplated herein and any
employee related health claims relating to employment by
such Seller up to and including the Closing Date.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction that forms or could
form the basis for any specified consequence.
"Boise Property" means that certain real property located at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇.
"Cash" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance with
GAAP applied on a basis consistent with the preparation of the
Financial Statements.
"Closing" has the meaning set forth in Section 2(g) below.
"Closing Date" has the meaning set forth in Section 2(g) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Employee Benefit Plan" means any (a) Employee Welfare Benefit
Plan as defined in ERISA Sec. 3(l), (b) Employee Pension Benefit Plan
as defined in ERISA Sec. 3(2), or (c) other material benefit plan or
program (including, but not limited to, Code Sec. 125 cafeteria plans,
employment agreements, bonus programs and severance agreements).
"Environmental, Health and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Resource Conservation and Recovery Act of 1976 and the Occupational
Safety and Health Act of 1970, each as amended, together with all
other laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings and charges thereunder) of
federal, state, local and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants or chemical, industrial, hazardous or toxic
materials or wastes into air, surface water, ground water, or lands or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous or toxic materials or
wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" means the escrow agent appointed pursuant to the
Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement in the form
attached hereto as Exhibit G.
"Excess Inventory" means inventories of Sellers, including,
without limitation, food and beverage, paper goods, merchandise and
the like, determined by Buyer, in the reasonable exercise of its
discretion, to be not reasonably necessary in the ordinary course of
business.
"Extremely Hazardous Substance" has the meaning set forth in Sec.
302 of the Emergency Planning and Community Right-to-Know Act of 1986,
as amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statements" has the meaning set forth in Section 3(g)
below.
"Franchise Restaurants" shall mean the ▇▇▇▇▇ ▇. Cheese's
restaurants, identified on Schedule 3(f).
"GAAP" means generally accepted accounting principles as in
effect from time to time, as consistently applied.
"Intellectual Property" means (a) all trademarks, service marks,
trade dress, logos, trade names and corporate names, together with all
translations, adaptations, derivations and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (b) all
copyrightable works, all copyrights and all applications,
registrations and renewals in connection therewith, (c) all trade
secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists,
pricing and cost information and business and marketing plans and
proposals), (d) all computer software (including data and related
documentation but excluding any software which is licensed to any
Seller and nontransferable), (e) all other proprietary rights and
(f) all copies and tangible embodiments thereof (in whatever form or
medium).
"Inventory" means all inventories of Sellers with respect to or
for use in connection with the operations of the Business, whether
located in or upon the Boise Property or the Leased Real Property,
including without limitation, all on hand inventory of food and
beverage, paper goods, merchandise and the like but excluding Excess
Inventory.
"Joint Venture Agreement" shall mean that certain McBiz/ShowBiz
Joint Venture Agreement dated December 17, 1993, by and between
McBiz LP and Buyer.
"Joint Venture Restaurant" shall mean the ▇▇▇▇▇ ▇. Cheese's
restaurant located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇.
"Knowledge" or "to the Knowledge of Sellers and Principal
Officer" means actual knowledge of Principal Officer and the
directors, officers and partners of Sellers, Sauvage Gas Company,
Sauvage Gas Services, Inc., or any of them.
"Leased Real Property" means the real property listed on
Exhibit F which is leased to Seller pursuant to the Real Property
Leases.
"Liability" means any liability (whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due),
including any liability for Taxes.
"Material Adverse Change" means a change or a breach which causes
a material adverse change to the operations or prospects of the
Business, or results in a significant diminution in value of the
Acquired Assets taken as a whole.
"Most Recent Balance Sheet" means the balance sheet contained
within the Financial Statements.
"Multiemployer Plan" has the meaning set forth in ERISA Sec.
3(37).
"Option Agreement" means the agreement pursuant to which Buyer
has the option to purchase the Optioned Property in the form attached
hereto as Exhibit H.
"Optioned Property" means the real property Buyer has an option
to purchase pursuant to the Option Agreement.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with
respect to quantity and frequency).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, partnership, corporation, an
association, joint stock company, trust, joint venture, unincorporated
organization or governmental entity (or any department, agency or
political subdivision thereof).
"Prohibited Transaction" has the meaning set forth in ERISA Sec.
406 and Code Sec. 4975.
"Purchase Price" has the meaning set forth in Section 2 below.
"Remodel Costs" means the actual cost incurred by Sellers in
connection with the remodelling of a Franchise Restaurant, exclusive
of capitalized overhead.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge or other security interest, rights of first
refusal, options to purchase, easements or licenses other than liens
for Taxes not yet due and payable or for Taxes that the taxpayer is
contesting in good faith through appropriate proceedings and purchase
money liens and liens securing rental payments under capital lease
arrangements.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
"Tax" or "Taxes" means any federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code Sec. 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on
minimum, estimated 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 schedule or attachment thereto, and including any amendment
thereof.
"Trade Accounts Payable" means all trade payables of Sellers
arising in the Ordinary Course of Business and related to the
operations of Sellers or any of them.
2. Basic Transaction.
----------------------
a. Purchase and Sale of Assets. Subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Sellers,
and Sellers agree to sell, transfer convey and deliver to Buyer, all
of the Acquired Assets at the Closing for the consideration specified
below in this Section 2.
b. Assumption of Liabilities. On and subject to the terms
and conditions of this Agreement, Buyer agrees to assume and become
responsible for all of the Assumed Liabilities at the Closing. Buyer
will not assume or have any responsibility, however, with respect to
any other obligation or Liability of Sellers of any kind or nature
whatsoever not specifically included within the definition of Assumed
Liabilities.
c. Purchase Price. Buyer shall, in addition to assuming
the Assumed Liabilities, pay to Sellers for the purchase by Buyer of
the Acquired Assets, an amount equal to the sum of (i) $2,562,500,
plus (ii) $1,231,385.70 in respect of Remodel Costs incurred by
Sellers in the remodel of the Wilmington, Delaware; Greenville, South
Carolina; and Davenport, Iowa, Franchise Restaurants, plus (iii) the
Inventory and cash drawers of the restaurants, and any prepaid rent
(including common area maintenance charges or rents provided for under
leases except percentage rents) to the extent reflected on the
Preliminary Closing Schedule (as defined below) as of the Closing Date
and (iv) minus the sum of the following items which shall be set forth
in the amended Preliminary Closing Schedule (as defined below)
delivered at the Closing (1) accrued liabilities and obligations of
Sellers as of the Closing Date relating to vacation and holiday pay as
to any employee of Sellers who is employed by Buyer from and after the
Closing Date, (2) franchise and royalty fees payable to Buyer as of
the Closing Date, (3) association fees or dues arising under franchise
agreements that are unpaid as of the Closing Date, including in
respect of the advertising, entertainment, media and international
association funds, and (4) all other receivables and amounts due to
Buyer, including, without limitation, under cooperative advertising
agreements as of the Closing Date (the "Purchase Price"). The
Purchase Price shall be paid or delivered at the Closing as follows:
(A) $250,000 shall be deposited by Buyer with the
Escrow Agent to hold such funds in accordance with
this Agreement and the Escrow Agreement;
(B) An amount equal to Directed Payments (as defined
herein) made at Closing shall be applied as
contemplated by Section 2(e) below;
(C) An amount equal to the outstanding principal and
interest owed to Commerce Bank and Trust
$607,737.07 shall be delivered to American Title
Company by wire transfer of immediately available
federal funds in satisfaction of such
indebtedness; and
(D) The remainder of the Purchase Price shall be
delivered to Bank IV Kansas, N.A. by wire transfer
of immediately available federal funds and applied
as follows: (i) $910,632.99 shall be applied in
satisfaction of indebtedness owed to Bank IV
Kansas, N.A. by Sellers; (ii) $175,000.00 shall be
transferred to a trust account at Bank IV Kansas,
N.A. established by Newbery & ▇▇▇▇▇▇▇, and applied
to the satisfaction of certain claims liabilities;
and (iii) the remainder shall be applied by
Sellers to the payment of Undischarged Liabilities
and for such other purposes as Sellers may direct.
d. Preliminary Closing Schedule. On the fifth business day
prior to the Closing, Sellers will deliver to Buyer a preliminary
closing schedule (the "Preliminary Closing Schedule"). The
Preliminary Closing Schedule will set forth a good faith estimate of
cash drawers at the restaurants, and any prepaid rent (including
common area maintenance charges or rents provided for under the leases
except percentage rents) as of the close of business on the day
preceding the Closing Date. The Preliminary Closing Schedule will
reflect Inventory equal to the lesser of actual Inventory as of
July 28, 1996 or Inventory based on a preliminary inventory count
taken at the close of business on the day immediately preceding the
delivery of the Preliminary Closing Schedule. The Preliminary Closing
Schedule will also set forth certain liabilities and obligations of
Sellers to the extent not performed, paid or discharged as of the date
of preparation of the Preliminary Closing Schedule ("Undischarged
Liabilities"). Undischarged Liabilities shall mean any Liability or
obligation under Real Property Leases, any Liability or obligation in
connection with Trade Accounts Payable and any Liability to present or
former employees or independent contractors of any Seller to the
extent they are to be employed by Buyer after the Closing (excluding
any liability of any Seller relating to vacation pay and holiday pay).
In addition, the Preliminary Closing Schedule shall reflect
(1) accrued liabilities and obligations of Sellers as of the Closing
Date relating to vacation and holiday pay as to any employee of
Sellers who is employed by Buyer from and after the Closing Date,
(2) franchise and royalty fees payable to Buyer as of the Closing
Date, (3) association fees or dues arising under franchise agreements
that are unpaid as of the Closing Date, including in respect of the
advertising, entertainment, media and international association funds,
and (4) all other receivables and amounts due to Buyer, including,
without limitation, under cooperative advertising agreements as of the
Closing Date. The Preliminary Closing Schedule shall be amended in
connection with the Closing to update the information contained
therein, including, without limitation, the Inventory and cash drawer
count at the closing of business on the night preceding the Closing
Date, to add Undischarged Liabilities not previously disclosed on the
Preliminary Closing Schedule and to subtract Undischarged Liabilities
previously disclosed on the Preliminary Closing Schedule that have
been performed, paid or discharged by any Seller prior to the Closing
Date.
e. Directed Payments. Sellers shall be responsible for the
payment, performance or discharge of any and all Undischarged
Liabilities, whether or not reflected on the Preliminary Closing
Schedule. In the event the Preliminary Closing Schedule reflects
Undischarged Liabilities, Buyer shall have the right to pay (a
"Directed Payment") for and on behalf of Sellers any or all of such
Undischarged Liabilities at the Closing. Any amounts used to make
such Directed Payments shall be deducted from the Purchase Price as
contemplated by Section 2(c) above. Further, after the Closing, Buyer
shall have the right, but not the obligation, to pay Undischarged
Liabilities (or any of them) that are not reflected on the Preliminary
Closing Schedule. Any such payments shall be made through the
disbursement of Escrow Funds pursuant to the Escrow Agreement.
f. Post-Closing Adjustment. Following the Closing, the
Purchase Price shall be adjusted, if necessary, to credit Sellers for
any payments made prior to the Closing necessary for the continued
operation of the Franchise Restaurants after the Closing to the extent
reasonably approved by Buyer after the Closing and to credit Buyer for
any amounts due to Buyer from Sellers which were not satisfied at
Closing to the extent Buyer demonstrates that such amounts are owed to
Buyer. In addition, the Purchase Price shall be adjusted, if
necessary, to credit Buyer with an amount equal to Sellers' pro rata
portion of any electric, telephone and utility charges incurred at the
restaurant locations to the extent not paid at Closing in accordance
with Section 2(j) hereof and to credit Sellers with an amount equal to
Buyer's pro rata portion of any electric, telephone and utility
charges incurred at the restaurant locations to the extent not paid at
Closing in accordance with Section 2(j) hereof. The Purchase Price
shall also be adjusted, if necessary to reflect adjustments to the
Preliminary Closing Schedule determined as hereinafter set forth.
(i) If Buyer has any objections to the Preliminary Closing
Schedule, it will deliver a detailed statement describing its
objections to the Sellers as soon as reasonably practicable and
in any event within thirty (30) calendar days after the Closing
Date. Buyer and Sellers will use reasonable efforts to resolve
any such objections themselves. If the parties do not reach a
final resolution within thirty (30) calendar days after Sellers
have received the statement of objections, however, the Dallas,
Texas, office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇")
shall resolve any remaining objections. The determination of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be delivered within thirty (30) days after
its receipt of the statement of objections, will be set forth in
writing and will be conclusive and binding upon the parties,
without right of appeal. Sellers will revise the Preliminary
Closing Schedule as appropriate to reflect the resolution of any
objections thereto pursuant to this Section 2(f)(i) hereof. The
"Closing Schedule" shall mean the Preliminary Closing
Schedule together with any revisions thereto pursuant to this
Section 2(f)(i) hereof.
(ii) In the event the parties submit any unresolved objections
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for resolution as provided in Section 2(f)(i)
above, Buyer will pay 50% and Sellers will pay 50% of the fees
and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(iii) Sellers will make the work papers and back-up materials
used in preparing the Preliminary Closing Schedule and the books,
records and financial staff of Sellers, available to Buyer and
its accountants and other representatives at reasonable times and
upon reasonable notice at any time during (A) the review by Buyer
of the Preliminary Closing Schedule and (B) the resolution by the
parties of any objections thereto. Buyer shall be allowed to
observe the Inventory and cash drawer counts to be reflected in
the Preliminary Closing Schedule.
(iv) Any adjustment to the Purchase Price shall be paid by
disbursement of Escrow Funds pursuant to the Escrow Agreement.
g. The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., 5400 Renaissance Tower,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, at 9:00 a.m. local time on the latter
to occur of (a) September 16, 1996, or (ii) the second business day
after the satisfaction or waiver of all the closing conditions set
forth in Section 6 of this Agreement (the "Closing Date"); provided,
however, that the Closing Date shall be no later than September 30,
1996.
h. Deliveries at the Closing. At the Closing, (i) Sellers
will deliver to Buyer the various certificates, instruments and
documents referred to in Section 6(a) below, (ii) Buyer will deliver
to Sellers the various certificates, instruments and documents
referred to in Section 6(b) below; (iii) Sellers will execute,
acknowledge (if appropriate) and deliver to Buyer (A) a ▇▇▇▇ of Sale
in the form attached hereto as Exhibit I; (B) assignments of the Real
Property Leases in the form attached hereto as Exhibit J, the Option
Agreements in the form attached hereto as Exhibit H, the Assignments
of Franchises in the form attached hereto as Exhibit K and General
Assignment in the form attached hereto as Exhibit M, (C) the
Assignment of Joint Venture Interest in the form attached hereto as
Exhibit M-1, and (D) such other instruments of sale, transfer,
conveyance and assignment as Buyer and its counsel may reasonably
request; and (iv) Buyer will execute, acknowledge (if appropriate) and
deliver to Sellers the Purchase Price by wire transfer of funds as
specified in Section 2(c) above and such other instruments and
documents as Sellers may reasonably request.
i. Allocation. The parties agree to allocate the Purchase
Price (and all other costs which may be capitalized) among the
Acquired Assets for all purposes (including financial accounting and
tax purposes) in accordance with the allocation schedule attached
hereto as Exhibit N.
j. Proration. Real property and ad valorem taxes levied
upon the Acquired Assets (including, without limitation, the Boise
Property) for the calendar year in which the Closing occurs and
electric, telephone and utility charges incurred at the restaurant
locations operated by Sellers shall be prorated on the basis of the
actual amount thereof, if known, and shall otherwise be prorated based
upon the best available estimates of the amount of such taxes that
will be due and payable, and Sellers shall pay to Buyer, in cash at
the Closing, Sellers' pro rata portion of such amounts, with the
result that Sellers shall pay for those amounts attributable to the
period of time prior to Closing, Buyer shall pay for those amounts
attributable to the period of time from and after Closing. The terms,
provisions and agreements of this paragraph shall survive the Closing.
3. Representations and Warranties of Sellers and Principal
Officer. Each Seller and Principal Officer represents and warrants,
jointly and severally, to Buyer that the statements contained in this
Section 3 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date.
a. Organization of Sellers. McBiz Corp. is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Kansas. Each of McBiz LP and McBiz IA is a limited
partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization. Each Seller
is duly authorized to conduct business and is in good standing as a
foreign corporation, or limited partnership, as the case may be, under
the laws of each jurisdiction in which (i) it owns or leases real
property or otherwise maintains an office or (ii) the nature of its
business or activities makes such qualification necessary, except,
with respect to clause (ii), where the failure to qualify would not
result in a Material Adverse Change.
b. Authorization of Transaction. Each Seller has full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Without limiting the generality of
the foregoing, (i) the board of directors and, if required,
shareholders, of McBiz Corp. have duly authorized the execution,
delivery and performance of this Agreement by McBiz Corp. and
(ii) McBiz Corp., as the sole general partner of McBiz LP and
McBiz IA, and, if and to the extent required, the limited partners of
McBiz LP and McBiz IA have duly authorized the execution, delivery and
performance of this Agreement by such limited partnerships. This
Agreement constitutes the valid and legally binding obligation of each
Seller, enforceable in accordance with its terms and conditions,
subject to applicable bankruptcy, insolvency and other laws affecting
the enforceability of creditors' rights generally and the discretion
of the courts in granting or denying, equitable remedies.
c. Noncontravention. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby will (i) violate any provision of the charter or bylaws or
partnership agreement, as the case may be, of any Seller so as to
result in a Material Adverse Change, or violate any judgment, order,
decree, ruling, charge or other restriction of any government,
governmental agency or court to which any Seller is subject or violate
in any material respect any constitution, statute, regulation, rule,
injunction or (ii) except as set forth on Schedule 3(c) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any Person the right to accelerate,
terminate, modify or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement
to which Sellers is a party or by which it is bound or to which any of
its assets is subject so as to result in the imposition against any of
Buyer's assets of a Security Interest. Neither McBiz Corp., McBiz LP,
nor McBiz IA is required to give any notice to, make any filing with,
or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions
contemplated by this Agreement.
d. Brokers' Fees. Neither McBiz Corp., McBiz LP, nor
McBiz IA has any Liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
e. Title to Assets. Sellers have good and marketable title
to, or a valid leasehold interest in, the properties and assets used
in the Business, located on the Boise Property (if applicable) or any
Leased Real Property, or shown on the Most Recent Balance Sheet or
acquired after the date thereof, free and clear of all Security
Interests except as disclosed on Schedule 3(e), except for properties
and assets disposed of in the Ordinary Course of Business since the
date of the Most Recent Balance Sheet. Without limiting the
generality of the foregoing, Sellers have good and marketable title to
all of the Acquired Assets, including, without limitation, all
machinery, game machines, vending machines, and token dispensers and
other equipment used in or located at the Boise Property or any Leased
Real Property, free and clear of Security Interests or restriction on
transfer except those Security Interests disclosed on Schedule 3(e).
f. Real Property.
(i) McBiz LP has delivered to Buyer correct and complete
copies of the real property deed(s) relating to the Boise
Property.
(ii) Each of McBiz LP and MRV/SGS joint venture has
delivered to Buyer correct and complete copies of the real
property deeds for the Optioned Real Property owned by it.
(iii) Each Seller that is a lessee in respect of any Leased
Real Property has delivered to Buyer a correct and complete copy
of the Real Property Lease, including, without limitation, any
Subordination, Non-Disturbance and Attornment Agreements, in
respect thereof. Except for the lease for the real property at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, Sellers have no leases
relating to real property other than those relating to the Leased
Real Property which have previously been delivered to Buyer.
(iv) With respect to the Boise Property and each Real
Property Lease:
(A) the Boise Property and the premises covered by
each Real Property Lease are currently zoned so as to allow
Sellers to conduct the Business as presently conducted and
to the Knowledge of Sellers and Principal Officer, there are
no threatened changes in such zoning;
(B) there are no governmental or private regulations,
orders, agreements or instruments restricting the use and
operation of the Boise Property and the premises covered by
each Real Property Lease for the conduct of the Business as
it is currently being conducted;
(C) except as disclosed on Schedule 3(f), no Seller
has assigned, transferred, conveyed, mortgaged, deeded in
trust or encumbered any interest in the Boise Property or in
any leasehold covered by a Real Property Lease;
(D) to the Knowledge of Sellers and Principal Officer
and except as disclosed in Schedule 3(i), all facilities
located on the Boise Property or leased under the Real
Property Leases have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the operation thereof and have been operated
and maintained in accordance with applicable laws, rules and
regulations;
(E) all facilities located on the Boise Property or
leased under the Real Property Leases are supplied with
utilities and other services necessary for the operation of
said facilities after the Closing Date, have ample ingress
and egress to and from public highways, streets and roads
abutting such property, and there are no pending, or to the
Knowledge of Sellers and Principal Officer, threatened
condemnation, proceedings or other actions or events which
would limit or otherwise threaten the provision of utilities
or ingress, egress or access to the facilities;
(F) each Real Property Lease is legal, valid, binding,
enforceable and is in full force and effect with no rights
of setoff against future rents;
(G) subject to obtaining the landlord's consent, each
Real Property Lease will continue to be legal, valid,
binding, enforceable and in full force and effect on
identical terms following the consummation of the
transactions contemplated hereby, except as such leases may
be renegotiated through the cooperation of Buyer and
Sellers; and
(H) there is no breach or default by any Seller under
any Real Property Lease, and no event has occurred which,
with notice or lapse of time, would constitute a breach or
default or permit termination modification or acceleration
thereunder.
g. Financial Statements. Attached to this Agreement as
Exhibit O are true and correct copies of the following financial
statements (the "Financial Statements"):
(i) the unaudited balance sheets of each of McBiz Corp.,
McBiz LP and McBiz IA at December 31, 1995 and July 28, 1996; and
(ii) the unaudited statements of profit and loss of each of
McBiz Corp., McBiz LP and McBiz IA for the fiscal year ended
December 31, 1995 and the seven (7) months ended July 28, 1996.
To the Knowledge of Sellers and Principal Officer, the Financial
Statements present fairly the financial position of each Seller at the
dates specified therein. The Financial Statements have been prepared
on a tax basis.
(h) Material Adverse Change. Since December 31, 1995,
except as disclosed on Schedule 3(h), there has not been any Material
Adverse Change. Without limiting the generality of the foregoing,
since that date, no Seller has:
(i) except in the Ordinary Course of Business and except
for sales of Excluded Assets made in accordance with Section 5(c)
hereof, sold, leased, transferred or assigned any of its assets,
tangible or intangible;
(ii) except for agreements and contracts entered into in
connection with the remodeling of the Wilmington, Delaware;
Greenville, South Carolina; and Davenport, Iowa, Franchise
Restaurants, entered into any agreement, contract, lease or
license (or series of related agreements, contracts, leases, and
licenses) either involving the payment of more than $10,000
annually or outside the Ordinary Course of Business;
(iii) imposed any Security Interest upon any of its assets,
tangible or intangible, except as may be disclosed on
Schedule 3(e);
(iv) except for expenditures incurred in respect of the
remodeling of the Wilmington, Delaware; Greenville, South
Carolina; and Davenport, Iowa, Franchise Restaurants, made any
capital expenditure (or series of related capital expenditures)
either involving more than $10,000 or outside the Ordinary Course
of Business;
(v) delayed or postponed the payment of accounts payable
and other Liabilities outside the Ordinary Course of Business;
(vi) experienced any damage, destruction or loss (whether
or not covered by insurance) to its property which resulted in a
Material Adverse Change;
(vii) entered into any employment contract or collective
bargaining agreement, written or oral or modified the terms of
any existing such contract or agreement;
(viii) granted any increase in the base compensation of any
of its officers or employees outside the Ordinary Course of
Business;
(ix) adopted, amended, modified or terminated any bonus,
profit-sharing, incentive, severance or other plan, contract or
commitment for the benefit of any of its officers or employees
(or taken any such action with respect to any other Employee
Benefit Plan);
(x) made any other change in employment terms for any of
its directors, officers, partners or employees outside the
Ordinary Course of Business;
(xi) suffered any Material Adverse Change and no Seller has
any Knowledge of any threatened or prospective event or condition
of any character whatsoever which could result in a Material
Adverse Change; or
(xii) committed to do any of the foregoing.
i. Legal Compliance. Except as disclosed on Schedule 3(i),
each Seller has complied in all material respects with all applicable
laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings and charges thereunder) of
federal, state, local and foreign governments (and all agencies
thereof), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand or notice has been filed or commenced
against any of them alleging any failure so to comply.
j. Tax Matters.
(i) Each Seller has timely filed all Tax Returns known to
be due. All such Tax Returns were correct and complete in all
material respects. All Taxes shown as due on such Tax Returns,
or for which Seller has received any notice, have been paid. No
claim has ever been made by an authority in a jurisdiction where
such Seller does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no Security
Interests on any of the assets of such Seller that arose in
connection with any failure (or alleged failure) to pay any Tax.
(ii) To the best Knowledge of Seller, and in compliance
with any notices received from any tax authority or agency,
Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
employee.
(iii) Notwithstanding the foregoing and regardless of
whether Sellers knew or should have known of obligations thereof,
Sellers shall remain responsible for, and each Seller, Principal
Officer and Owner agrees to indemnify Buyer, for any and all
Taxes arising out of or attributable to any Seller's operation of
the Business.
k. Intellectual Property. No Seller has received at any
time any charge, complaint, claim, demand or notice alleging that any
Seller has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of
third parties (including any claim that such Seller must license or
refrain from using any Intellectual Property rights of any third
party). To the Knowledge of Sellers and Principal Officer, no third
party has, interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of
Sellers.
l. Tangible Assets. Except as disclosed on Schedule 3(l),
each Seller owns or leases all tangible assets used in the conduct of
the Business as presently conducted. All machinery and equipment used
by Sellers in the conduct of the Business is owned by Sellers, except
for the machinery and equipment identified on Schedule 3(l). Except
as disclosed on Schedule 3(l), each such tangible asset, has been
maintained in accordance with normal industry practice and is in good
operating condition and repair, subject to normal wear and tear.
m. Inventory. The Inventory consists of food and beverage
items, condiments, paper goods, merchandise and supplies, each of
which is fit for the purpose for which it was procured and none of
which is out of date, damaged or defective, subject only to the
reserve for Inventory write down set forth on the Most Recent Balance
Sheet as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of Sellers. The levels
of Inventory currently maintained by Sellers are consistent with past
custom and practice of Sellers.
n. Contracts. Schedule 3(n) lists the following contracts
and other agreements to which each Seller is a party:
(i) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for
lease payments in excess of $1,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies,
products or other personal property or for the furnishing or
receipt of services, the performance of which will extend over a
period of more than one year, result in a material loss to such
Seller or involve consideration in excess of $5,000;
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed or guaranteed any
indebtedness for borrowed money or any capitalized lease
obligation, in excess of $5,000 or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any collective bargaining agreement;
(vii) any agreement for the employment of any individual on
a full-time, part-time, consulting or other basis providing
annual compensation in excess of $20,000 or providing severance
benefits;
(viii) any agreement under which it has advanced or loaned
any amount of money to any of its directors, officers and
employees outside the Ordinary Course of Business;
(ix) any agreement under which the consequences of a
default or termination could result in a Material Adverse Change;
(x) any other agreement (or group of related agreements)
the performance of which involves consideration in excess of
$10,000; or
(xi) any management, service, supply, maintenance or other
agreement or understanding respecting the Boise Property or any
premises covered by a Real Property Lease providing for payments
in excess of $1,000 per annum.
Except for agreements as to which Buyer is a signatory and those
agreements relating solely to Excluded Assets, each Seller has
delivered to Buyer a correct and complete copy of each written
agreement and any amendments thereto listed on Schedule 3(n) and a
written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 3(n). With respect to each such
agreement: (A) the agreement is legal, valid, binding, enforceable and
in full force and effect; (B) except as disclosed on Schedule 3(n),
the agreement will continue to be legal, valid, binding, enforceable
and in full force and effect on identical terms following the
consummation of the transactions contemplated hereby (including the
assignments and assumptions referred to in Section 2 above); (C) such
Seller is not and, to the Knowledge of Sellers and Principal Officer,
no other party to the agreement is in breach or default, and no event
has occurred which with the giving of notice or lapse of time, or
both, would constitute a breach or default or permit termination,
modification or acceleration, under the agreement; and (D) such Seller
has not and, to the Knowledge of Sellers and Principal Officer, no
other party has repudiated any provision of the agreement.
▇. ▇▇▇▇▇▇ of Attorney. There are no outstanding powers of
attorney executed on behalf of Sellers or any of them.
p. Insurance. Schedule 3(p) sets forth the following
information with respect to each insurance policy (including policies
providing property, casualty, liability, and workers' compensation
coverage and bond and surety arrangements) to which Sellers has been a
party, a named insured or otherwise the beneficiary of coverage at any
time within the past two years:
(i) the name, address and telephone number of the agent
through whom coverage was obtained;
(ii) the name of the insurer, the name of the policyholder
and the name of each covered insured;
(iii) the scope (including an indication of whether the
coverage was on a claims made, occurrence or other basis) and
amount (including a description of how deductibles and ceilings
are calculated and operate) of coverage; and
(iv) a description of any retroactive premium adjustments
or other loss-sharing arrangements.
With respect to each such insurance policy as to which Sellers are
indicated to be a party as of the date of this Agreement: (A) the
policy is legal, valid, binding, enforceable and in full force and
effect; (B) neither the insured nor any other party to the policy is
in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which,
with the giving of notice or the lapse of time, or both, would
constitute such a breach or default, or permit termination,
modification or acceleration under the policy; and (C) no party to the
policy has repudiated any provision thereof. Schedule 3(p) describes
any self-insurance arrangements affecting Sellers.
q. Litigation. Schedule 3(q) sets forth each instance in
which a Seller (i) is subject to any outstanding injunction, judgment,
order decree, ruling or charge or (ii) is a party or is threatened to
be made a party to any action, suit, proceeding, hearing or
investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local or foreign
jurisdiction or before any arbitrator, where the amount in controversy
is in excess of $10,000.
r. Employees. To the Knowledge of Sellers and Principal
Officer, no district manager, general manager or other key operating
employee has any plans to terminate employment with Sellers, and
during the 12-month period preceding the date hereof, no Seller has
experienced any strikes, grievances, claims of unfair labor practices
or other collective bargaining disputes. Except as set forth on
Schedule 3(r), no Seller has engaged in any patterns or practices
which have resulted or may result in claims being filed against such
Seller with the Equal Employment Opportunity Commission or any similar
federal or state agency. The employees of each Seller with
responsibility for employment matters do not have any Knowledge of any
organizational effort presently being made or threatened by or on
behalf of any labor union with respect to employees of such Seller.
Each Seller has complied in all material respects, with all laws and
regulations relating to the employment of foreign individuals.
s. Employee Benefits.
(i) Schedule 3(s) lists each Employee Benefit Plan
maintained by each Seller or to which such Seller contributes or
as to which Seller is obligated to contribute.
(ii) Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) complies in form (except with
respect to certain changes to the form of such Employee Benefit
Plans that according to the applicable government regulatory
authority do not have to be implemented until a future date) and
in operation in all respects with the applicable requirements of
ERISA, the Code, and other applicable laws.
(iii) All required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, PBGC-l's, and
Summary Plan Descriptions) known to be due have been filed or
distributed in accordance with applicable laws and related
regulations. All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been paid to each such Employee Benefit Plan which
is an Employee Pension Benefit Plan and all contributions for any
period ending on or before the Closing Date which are not yet due
will be paid to each such Employee Pension Benefit Plan or
accrued in accordance with the past custom and practice. All
premiums or other payments for all periods ending on or before
the Closing Date which are due have been paid with respect to
each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
(iv) No Seller (or any predecessor thereto) contributes to,
has contributed to, and has ever been required to contribute to
any Multiemployer Plan or has any Liability (including withdrawal
liability under Section 4201 of ERISA) under any Multiemployer
Plan.
(v) Except as set forth on Schedule 3(s), no Seller
maintains or has ever maintained, contributed to, or ever
been required to contribute to any Employee Welfare Benefit
Plan providing medical, health, or life insurance or other
welfare-type benefits for current retired employees or
future retired or terminated employees, their spouses or
their dependents, and the Seller does not have any
obligation to provide retiree medical, health, life or other
welfare-type benefits to any current retired employees or
either of their spouses or dependents.
t. Environment, Health and Safety.
(i) Subject to Section 8(e), each Seller, Principal Officer
and Owner warrants to indemnify Buyer against and in respect of
any and all damages, losses, deficiencies, liabilities, costs and
expenses incurred or suffered by Buyer that result from, relate
to or arise out of any noncompliance by any Seller with
Environmental, Health and Safety Laws.
(ii) Without limiting the foregoing, except as disclosed on
Schedule 3(t), Seller is not aware of any noncompliance with
Environmental, Health and Safety Laws and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim,
demand or notice has been held or commenced against it alleging
any failure so to comply. Each Seller has obtained and been in
compliance with all of the material terms and conditions of all
permits, licenses and other authorizations which are required
under, and have complied with all other material limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables which are contained in all
Environmental, Health and Safety Laws.
(iii) To each Seller's best Knowledge, no Seller has
handled or disposed of any substance, arranged for the disposal
of any substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or
facility in violation of any Environmental, Health or Safety
Laws. Subject to Section 8(e), each Seller, Principal Officer
and Owner shall indemnify Buyer against any future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or
demand arising out of any violation of Environmental, Health and
Safety Laws while Sellers operated the Business or which
otherwise gives rise to any liabilities or damage to any site,
location or body of water (surface or subsurface), for any
illness of or personal injury to any employee or other
individual, or for any reason under any Environmental, Health and
Safety law.
(iv) To the Knowledge of Sellers and Principal Officer, all
properties and equipment used in the business of each Seller are
and have been free of asbestos, PCB's, methylene chloride,
trichloroethylene, 1, 2-transdichloroethylene, dioxins,
dibenzofurans and Extremely Hazardous Substances.
u. Books of Accounts. The books, records and accounts of
each Seller maintained with respect to such Seller's business
accurately and fairly reflect, in reasonable detail, the transactions
and the assets and liabilities of such Seller. No Seller has engaged
in any transaction with respect to its business, maintained any bank
account or used any of its funds in the conduct of its business,
except for transactions, bank accounts and funds which have been and
are reflected in the normally maintained books and records of such
Seller.
v. United States Person. McBiz LP is not a "foreign
person" but is a "United States person" as such terms are defined in
Sections 1445 and 7701 of the Internal Revenue Code of 1986, as
amended (the "Code"); that is to say, McBiz LP is a domestic entity
which is not a foreign estate or foreign trust within the meaning of
Section 7701(a)(31) of the Code.
w. Certain Owners. Each of Sauvage Gas Company and Sauvage
Gas Services, Inc. is a corporation duly organized, validly exiting
and in good standing under the laws of the jurisdiction of its
incorporation. Each of Sauvage Gas Company and Sauvage Gas Services,
Inc. has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. Each of Sauvage
Gas Company and Sauvage Gas Services, Inc. is financially solvent with
adequate financial resources to perform its obligations under this
Agreement. This Agreement constitutes the valid and legally binding
obligation of Sauvage Gas Company and Sauvage Gas Services, Inc.,
enforceable in accordance with its terms.
x. Remodels. The remodels of the Wilmington, Delaware;
Greenville, South Carolina; and Davenport, Iowa, Franchise Restaurants
have been undertaken and completed in a good and workmanlike manner
and all known defects or deficiencies of workmanship, materials or
otherwise in respect of such remodelled Franchise Restaurants have
been remedied. The Remodel Costs reflected in Section 2(c) of this
Agreement are net of any and all landlord contributions.
y. Disclosure. The representations and warranties
contained in this Section 3 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements and information contained in this Section 3 not
misleading.
4. Representations and Warranties of the Buyer. Buyer
represents and warrants to Sellers that the statements contained in
this Section 4 are correct and complete as of the date of this
Agreement and, will be correct and complete as of the Closing Date.
a. Organization of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Kansas. Buyer is duly authorized and in good standing, or
will be as of the Closing Date, under the laws of each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties so requires it to be qualified, except where the failure to
qualify would not result in a Material Adverse Change.
b. Authorization of Transaction. Buyer has full power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder and at the Closing will have full power and
authority to execute the agreements required in connection with the
consummation of the transactions contemplated in this Agreement.
Without limiting the generality of the foregoing, the board of
directors of Buyer have duly authorized the execution, delivery and
performance of this Agreement by Buyer. This Agreement constitutes
the valid and legally binding obligation of Buyer, enforceable in
accordance with its terms and conditions, subject to applicable
bankruptcy, insolvency and other laws affecting the enforceability of
creditors' rights generally and the discretion of the courts in
granting or denying equitable remedies and, when executed, all other
agreements required in connection with consummation of the
transactions contemplated in this Agreement will constitute the valid
and legally binding obligations of Buyer, enforceable in accordance
with their terms and conditions.
c. Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency or court
to which Buyer is subject or any provision of its charter or bylaws or
(ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any Person the right to
accelerate, terminate, modify or cancel or require any notice under
any agreement, contract, lease, license, instrument or other
arrangement to which Buyer is a party or by which it is bound or to
which any of its assets is subject. Buyer does not need to give any
notice to, make any filing with or obtain any authorization, consent
or approval of any government or governmental agency to consummate the
transactions contemplated by this Agreement.
d. Intellectual Property. Buyer owns or has the right to
use pursuant to license, sublicense, agreement or permission all
Intellectual Property licensed to Sellers pursuant to franchise
agreements in respect of the Franchise Restaurants and the Joint
Venture Restaurant. Buyer has taken all necessary action to maintain
and to protect each item of Intellectual Property that it owns or
uses.
e. Brokers' Fees. Buyer has no Liability or obligation to
pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
f. Employee Vacation. Solely for the purpose of
determining the amount of vacation to which an employee of Buyer is
entitled under Buyer's vacation policy, Buyer will credit each
employee hired by Buyer after the Closing Date, who was an employee of
Sellers at any Franchised Restaurant as of the Closing Date, and whose
employment is not terminated on or before the 90th day following the
Closing Date, with an equal number of months of service to the number
of months of service such employee is credited with by Seller as of
the Closing Date.
5. Pre-Closing Covenants. Buyer and Sellers agree as follows
with respect to the period between the execution of this Agreement and
the Closing:
a. General. Buyer and each of the Sellers will use its
reasonable best efforts to take all action and to do all things
necessary, proper or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 6 below).
b. Notices and Consents. Each Seller will give any notices
to third parties, and will use its reasonable and best efforts to seek
and obtain any third party consents, including the consent of the
lessors under the Real Property Leases, that Buyer reasonably may
request. Buyer shall provide such assistance to each Seller as Buyer
deems appropriate in order to obtain the consent of lessors under the
Real Property Leases. Buyer and each of the Sellers will give any
notices to, make any filings with and use its reasonable best efforts
to obtain any authorizations, consents and approvals required from
governmental agencies.
c. Operation of Business. From the date hereof until the
Closing Date, no Seller will engage in any practice, take any action
or enter into any transaction outside the Ordinary Course of Business.
Without limiting the generality of the foregoing, each Seller shall
not, without the prior written consent of Buyer:
(i) Make or enter into any contract or commitment for the
purchase of assets having a value in excess of $10,000 (except as
contemplated by Section 5(c)(vii) hereof) or make any material
operational changes including, but not limited to, changes in
customer prices or supplier credit terms;
(ii) Modify or amend any of the Assumed Contracts and
Leases, except as may be specifically requested by Buyer in
connection with the renegotiation of the Real Estate Leases, or
waive or assign to any third party any rights thereunder or enter
into any material agreement or arrangement;
(iii) Incur or guarantee any material obligation for
borrowed money or permit any part of the Acquired Assets to
become subject to a Security Interest;
(iv) Issue, sell or redeem any capital stock;
(v) Enter into any material employment or material deferred
compensation contract or increase or announce any increase of any
salaries, wages, incentive compensation, bonus or other employee
benefits or programs for employees or retirees;
(vi) Enter into any labor agreement;
(vii) Sell or otherwise dispose of any assets outside of
the Ordinary Course of Business and having a value in excess of
$1,000.00; provided that McBiz Corp. may sell Excluded Assets if
such sale of Excluded Assets could not reasonably be anticipated
to impair or otherwise negatively affect the operation of the
Business;
(viii) Purchase inventories or other items in excess of
those necessary for the current operations of such Seller and
consistent with past practices of such Seller;
(ix) Amend, modify, restate or otherwise change in any
respect its governing corporate or partnership documents; or
(x) Otherwise engage in any practice, take any action or
enter into any transaction of the sort described in Section 3(h)
above.
d. Preservation of Business. Each Seller will keep its
business and properties substantially intact, including its present
operations, physical facilities, working conditions and relationships
with lessors, licensors, suppliers, customers and employees; provided
that McBiz Corp. may sell Excluded Assets if such sale of Excluded
Assets could not reasonably be anticipated to impair or otherwise
negatively affect the operation of the Business. Without in any way
limiting the foregoing, each Seller agrees that it shall promptly
repair or replace defective or otherwise inoperative machinery and
equipment used in the Business. Each Seller further agrees to
undertake all necessary or appropriate maintenance and no regularly
scheduled maintenance shall be deferred or cancelled without the prior
consent of Buyer.
e. Full Access. Each Seller will permit representatives of
Buyer to have full access at all reasonable times to all premises,
properties, books, records (including Tax records), contracts and
documents of or pertaining to such Seller. Each Seller represents
that its books, records, contracts and other documents are located at
the offices of McBiz Corp. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇.
Buyer will use its best efforts to maintain the confidentiality of all
information and materials regarding Sellers reasonably designated by
such Seller as confidential, and, if the transaction contemplated by
this Agreement is not consummated, Buyer and its representatives will
return to such Seller originals and destroy copies of all materials
obtained from such Seller in connection with the transactions
contemplated by this Agreement. If the transactions contemplated by
this Agreement are consummated, each Seller agrees to maintain the
confidentiality of all proprietary and other nonpublic information
regarding such Seller.
f. Notice of Developments. Buyer, each Seller and
Principal Officer will give prompt written notice to the other parties
hereto of any material adverse development causing or reasonably
likely to cause a breach of any of its own representations and
warranties in Sections 3 and 4 above. No disclosure by Buyer, any
Seller or Principal Officer pursuant to this Section 5(f), however,
shall be deemed to amend or supplement any Schedule hereto or to
prevent or cure any misrepresentation, breach of warranty or breach of
covenant.
g. Exclusivity. Each Seller agrees not to (i) solicit,
initiate or encourage the submission of any proposal or offer from any
Person relating to the acquisition of any capital stock or other
voting securities or any assets of such Seller (including any
acquisition structured as a merger, consolidation or share exchange)
except such Seller shall be allowed to sell or otherwise dispose of
any Excluded Assets or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to,
assist or participate in or facilitate in any other manner any effort
or attempt by any Person to do or seek any of the foregoing. Each
Seller, Principal Officer and Owner agrees to notify Buyer immediately
if any Person makes any proposal, offer, inquiry or contact with
respect to any of the foregoing.
h. Environmental Reports. Buyer has engaged an
environmental engineer to inspect and prepare a written Phase I report
with respect to the Boise Property (the "Environmental Report"). The
Environmental Report, copies of which shall be furnished to Sellers,
shall be completed no later than August 28, 1996. If the
Environmental Reports indicate that remedial work is necessary with
respect to Boise Property, Sellers shall cause such remedial work to
be completed prior to the Closing Date, or, if Sellers choose not to
undertake such remedial work or if such remedial work cannot be
completed prior to the Closing Date (and Sellers elect not to cause a
performance bond naming Sellers and Buyer as dual obligee to be issued
to secure performance of the remediation work), Buyer may either
(i) accept the Boise Property without the remedial work set forth in
the Environmental Report having been performed and without further
recourse to Sellers, or (ii) terminate the Agreement without any
further liability to Sellers. All fees, expenses and other costs
associated with the Environmental Report shall be paid 50% by Buyer
and 50% by Sellers. All remedial work, if undertaken, shall be
completed to the reasonable satisfaction of the environmental engineer
which has prepared the Environmental Report.
i. McBiz LP Obligations Regarding Title. With respect to
the Boise Property, McBiz LP shall, on or before the dates set forth
hereinbelow, deliver to Buyer, make the following available to Buyer
or cause the following to occur, as the case may be:
(i) Title Commitment. At the Closing, McBiz LP shall
deliver or cause to be delivered to Buyer a commitment for
issuance of the Title Policy (as hereinafter defined) to be
issued to the Buyer by American Title Company (the "Title
Company"), as agent for an underwriter acceptable to Buyer,
together with legible copies of any restrictive covenants,
easements, and other items listed as title exceptions therein
(all of the foregoing being herein collectively referred to as
the "Title Commitment"). The Title Commitment shall (1) be
issued by the Title Company, (2) describe the Boise Property
(which legal description, unless modified by the Survey as
described hereinbelow, shall be incorporated in this Agreement
and used in all closing documents contemplated hereunder),
(3) specify Buyer as the prospective named insured, (4) show the
portion of the Purchase Price allocable to the Boise Property as
the prospective amount of the Owner's Policy, and (5) show the
status of title of the Land and all exceptions (including, but
not limited to, easements, restrictions, rights-of-way,
covenants, reservations, encumbrances, liens and other
conditions, if any) affecting the Boise Property which would
appear in an Owner's Policy, if and when issued. With regard to
the standard printed exceptions and other exceptions commonly
included in title commitments issued in the State of Idaho, the
exception for areas and boundaries ("survey exception") shall be
endorsed in the Title Commitment to provide that the exception
shall be amended at Closing to except only to "shortages in area"
upon receipt of a survey acceptable to the Title Company; the
exception for restrictive covenants in the Title Commitment
shall, if there are none, be deleted, or, if there shall be any
such restrictive covenants affecting the Boise Property, shall
include an express description by applicable recording data of
those restrictive covenants affecting the Boise Property; the
exception for taxes in the Title Commitment shall be limited to
taxes for the year in which the Closing occurs and subsequent
years and subsequent assessments for prior years due to change in
land usage and endorsed "not yet due and payable"; any exception
in the Title Commitment for parties in possession of the Boise
Property or improvements thereon shall be deleted; and there
shall be no general exception in the Title Commitment for yet to
be filed materialmen's and mechanic's liens or for visible and
apparent easements or roads and highways or similar items (with
any such exception for any such matters to be specifically
referenced to, and shown on, the Survey and also identified by
any applicable recording data);
(ii) Survey. At the Closing, McBiz LP shall deliver to
Buyer at least two (2) copies of a boundary survey of the Boise
Property, dated subsequent to the date hereof, prepared by a
licensed surveyor approved by Buyer and duly licensed by the
State of Idaho, and containing a certificate addressed to Buyer
and the Title Company in form and content satisfactory to both
the Buyer and the Title Company and satisfying the Survey
Requirements set forth in Exhibit P attached to this Agreement
(the "Survey"); provided further, that to the extent that the
Survey, once approved by Buyer, reflects a different description
for the Boise Property than that which is reflected on Exhibit P
attached hereto, the field notes for the approved Survey shall be
substituted for the legal description set forth on Exhibit P
attached hereto pursuant to an amendment to this Agreement to be
executed in form and content acceptable to Buyer; and
(iii) Other Material. At the Closing, McBiz LP shall
deliver to Buyer original counterparts or true and complete
copies of any and all (i) reciprocal easement agreements,
declarations of restrictions or any such similar documents
affecting the Boise Property (hereinafter collectively referred
to as the "REA"); and (ii) site plans, plats, surveys, soil and
substrata studies, environmental investigations, reports or
studies, plat or replat or zoning applications or studies,
architectural drawings, plans and specifications, engineering
plans, reports and studies, landscape plans, and other plans and
studies and reports of any kind in McBiz LP's possession or
control that relate to the Boise Property (all of the foregoing
being herein collectively called the "Other Material"), all of
which Other Material shall be certified by McBiz LP as being
true, complete and correct and as constituting all such plans,
studies and reports of such kind in McBiz LP's possession or
control of which McBiz LP has knowledge.
Buyer shall have until the Closing Date in which to review the Title
Commitment Survey and Other Materials and to deliver to McBiz LP in
writing such objections as Buyer may have to anything contained or set
forth in the said Title Commitment (and documents referred to therein
as conditions or exceptions to title to the Property), Survey and
Other Materials. Any items to which Buyer does not so object shall be
deemed to be "Permitted Exceptions" (herein so called). As to items
to which Buyer so makes objection, McBiz LP shall use McBiz LP's best
good faith efforts to effectuate the cure of such objections. In the
event McBiz LP is not able to cure any such objections prior to
Closing, Buyer shall have the right to either (a) terminate this
Agreement by written notice of such election to terminate by Buyer to
McBiz LP, or (b) waive such objections and proceed to Closing,
whereupon any such waived title matters shall also be deemed
"Permitted Exceptions" hereunder for all purposes.
j. Renegotiation of Real Property Leases. Each Seller,
Owner and Principal Officer agrees to cooperate with, and provide
assistance to, Buyer in connection with the renegotiation of the Real
Property Leases in respect of Leased Real Property leased from third
party lessors and consents to the Assignment of the Real Property
Leases as contemplated by this Agreement. Without in any way limiting
the foregoing, each Seller, Owner and Principal Officer agrees to
(i) execute such documents (including, without limitation, assignments
of leasehold interests), (ii) provide Buyer with copies of any
correspondence received from lessors of any Leased Real Property and
(iii) notify Buyer of any developments in respect of, or related to,
any Leased Real Property.
k. Licenses, Permits and Qualifications. Buyer agrees to
use its best efforts to obtain all permits, licenses or qualifications
necessary or advisable in respect to the conduct of the Business to
the extent such permits, licenses or qualifications are not
transferable to Buyer in connection with the transactions contemplated
by this Agreement. In the event any such permits, licenses or
qualifications are not transferable to Buyer or have not been so
transferred prior to the Closing, each Seller agrees to enter into
such agreements or arrangements with Buyer or its designee or to take
such actions as may be necessary or advisable, as reasonably
determined by Buyer, to permit Buyer to conduct the Business after the
Closing in the same manner the Business was conducted prior to the
Closing so that the inability to (i) transfer any permits, licenses or
qualifications prior to the Closing, or (ii) obtain new permits,
licenses or qualifications shall not cause or contribute to, the
interruption or curtailment of any operations or services; provided
that, Sellers shall have no obligation in respect of alcoholic
beverage licenses under this Section 5(k).
l. Encumbrances. Sellers will not grant or purport to
grant in any third party any interest in the Boise Property or any
premises covered by a Real Property Lease or further encumber the same
without the prior written approval of Buyer.
m. Assessments. Sellers will promptly notify Buyer in
writing of any levy (or threatened levy) of any special governmental
assessment or similar occurrence with respect to the Boise Property or
any premises covered by a Real Property Lease for which Seller is
responsible pursuant to the terms of such Real Property Lease, and
Seller shall pay any such assessment prior to Closing.
n. Violations. Sellers will promptly notify Buyer in
writing of any violation, alleged violation or anticipated violation
of any law, regulation, ordinance, order or other requirement of any
governmental authority having jurisdiction over or affecting the Boise
Property or any premises covered by a Real Property Lease, of which
Sellers gain knowledge or is notified and Sellers will cure any such
violation prior to Closing.
o. Modifications. Sellers will not permit any structural
modifications or additions to the Boise Property.
p. Fees and Expenses. Sellers will promptly discharge all
ownership fees, costs and expenses incurred with respect to the Boise
Property for all periods prior to Closing.
6. Conditions to Obligation to Close.
a. Conditions to Obligation of Buyer. The obligation of
Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) each Seller shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing;
(iii) each Seller shall have procured all of the third
party consents specified in Section 5(b) above except if not
material to the operations of the Business;
(iv) Seller shall have entered into a trust agreement
regarding medical, dental and general liability insurance in an
aggregate amount of not less than one hundred and seventy-five
thousand dollars ($175,000.00) for the purpose of satisfying any
obligation arising as a result of such medical, dental and
general liability insurance.
(v) the Real Property Leases shall be in form and substance
satisfactory to Buyer and any amendments required by Buyer in
respect of any of the Real Property Leases shall have been agreed
to in writing by the lessor in respect thereof;
(vi) Each of McBiz LP and MRV/SGS Joint Venture shall have
entered into the Option Agreements with Buyer (or its designee)
in respect of the Optioned Property and a memorandum, in the form
attached to the Option Agreements, shall have been filed in the
real estate records in each county in which an Optioned Property
is located.
(vii) each Seller shall have procured the consent of the
lessors under the Real Property Leases to which it is a party to
the assignment of such leases thereunder to Buyer with such
assignment to be on terms and in the form of Exhibit J attached
hereto;
(viii) McBiz LP shall have delivered to Buyer a Special
Warranty Deed duly executed by McBiz LP in the form attached
hereto as Exhibit Q in respect of the Boise Property, conveying
the Boise Property to Buyer, subject to no exceptions other than
Permitted Exceptions;
(ix) McBiz LP shall have delivered an ALTA Form B-1970
Owner's Policy of Title Insurance (the "Title Policy") to Buyer,
naming Buyer as insured, containing expanded coverage and such
endorsements as Buyer may (in Buyer's reasonable discretion)
request, in the amount of $950,000, insuring that Buyer owns good
and marketable fee simple title to the Boise Property subject
only to such exceptions as Buyer may approve, and, with regard to
the standard printed exceptions and other exceptions commonly
included in such title policies issued in the State of Idaho,
conforming to the requirements of Section 5(i) herein regarding
the Title Commitment;
(x) McBiz LP shall have delivered to Buyer an affidavit
duly executed on behalf of McBiz LP certifying that McBiz LP is
not a "foreign person," as defined in the federal Foreign
Investment in Real Property Tax Act of 1980, and the 1984 Tax
Reform Act, as amended, in the form and content of the sample of
such instrument attached hereto as Exhibit R to this Agreement;
(xi) no action, suit or proceeding shall be pending or
threatened before any court or quasi judicial or administrative
agency of any federal, state or local jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling or charge would (A) prevent consummation of any of
the transactions contemplated by this Agreement, (B) cause any of
the transactions contemplated by this Agreement to be rescinded
following consummation or (C) affect adversely the right of Buyer
to own any of the Acquired Assets and to operate the Business;
(xii) from and after July 28, 1996, until the Closing Date,
there shall have been no change in the business, prospects or
properties of any Seller or in the financial condition of its
business or property, other than changes occurring in the
Ordinary Course of Business or as otherwise disclosed herein or
in any Schedule attached hereto, which in the aggregate shall not
have resulted in a Material Adverse Change; no material license
or permit held by any Seller and necessary for the conclusion of
the transactions contemplated by this Agreement shall have been
revoked, terminated, or otherwise materially and adversely
affected; no action or proceeding shall be pending or threatened
by any person, which challenges the right of any Seller to own
the Acquired Assets or to conduct its business in the normal
course, as its business has been carried on in the past; no
legislation shall have been enacted or introduced which adversely
affects its business; and the property, business or operations of
its business (considered collectively) shall not have been
adversely affected in any material way by fire, accident or other
casualty (whether or not covered by insurance);
(xiii) each Seller shall have delivered to Buyer a
certificate executed by an officer of such Seller to the effect
that each of the conditions specified in Section 6(a)(i-iv),
(vii), and (xii) is satisfied in all respects;
(xiv) McBiz Corp. shall have delivered to Buyer copies of
the resolutions of its Board of Directors authorizing and
approving the execution of this Agreement and the consummation of
the transactions contemplated hereby by each Seller, certified as
true and correct on the Closing Date by its corporate secretary;
(xv) each Seller shall have delivered to Buyer copies of
resolutions adopted by its shareholders or partners, as the case
may be, authorizing and approving the execution of this Agreement
and the consummation of the transactions contemplated hereby,
certified as true and correct on the Closing Date by its
corporate secretary.
(xvi) Buyer shall have entered into a noncompetition
agreement in substantially the form attached hereto as Exhibit S
(the "Noncompetition Agreement") with each Owner (other than
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇);
(xvii) Buyer and Sellers shall have entered into the Escrow
Agreement;
(xviii) Buyer shall have entered into Assignment of
Franchises with each franchisee (and franchise guarantor) in
respect of Franchise Restaurants and the Joint Venture
Restaurant;
(xix) Buyer shall have received tax clearance certificates
in respect of each Seller in such states or jurisdictions as may
be designated by Buyer;
(xx) Each Seller shall have delivered to Buyer proof of the
existence of the liability insurance referred to in Section 5(i);
(xxi) Buyer shall have received an opinion of Seller's
counsel in form reasonably satisfactory to Buyer;
(xxii) Bank IV Kansas, N.A. shall have delivered UCC-3's
and other such releases to Buyer as Buyer may reasonably request
providing for the termination of all Security Interests in
respect of the Acquired Assets;
(xxiii) Commerce Bank and Trust shall have delivered
UCC_3's and other such releases to Buyer as Buyer may reasonably
request providing for the termination of all Security Interests
in respect of the Boise Property; and
(xxiv) all actions to be taken by Sellers in connection
with the consummation of the transactions contemplated hereby and
all certificates, opinions, instruments and other documents
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Buyer.
Buyer may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
b. Conditions to Obligations of Sellers. The obligation of
each Seller to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the
Closing;
(iii) no action, suit or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state or local jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling or charge would (A) prevent consummation of any of
the transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction
judgment, order, decree, ruling or charge shall be in effect);
(iv) Buyer shall have delivered to Sellers copies of the
resolutions of its Board of Directors authorizing and approving
the execution of this Agreement, and the consummation of the
transactions contemplated hereby, certified as true and correct
on the Closing Date by its corporate secretary;
(v) Buyer and Sellers shall have entered into the Escrow
Agreement;
(vi) Buyer shall have entered into Assignment of Franchises
with each franchisee (and franchise guarantor) in respect of
Franchise Restaurants and the Joint Venture Restaurant;
(vii) Buyer shall have delivered to Sellers a certificate
to the effect that each of the conditions specified in
Section 6(b)(i)-(iii) is satisfied in all respects;
(viii) Sellers, Principal Officer and each Owner shall have
been released from any personal guarantees in respect of Real
Property Leases or shall have been provided indemnification
reasonably satisfactory to Sellers, Principal Officers and each
Owner in respect of the Real Property Leases;
(ix) Sellers shall have received an opinion of Buyer's
counsel in form reasonably satisfactory to Sellers; and
(x) all actions to be taken by Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to Seller.
A Seller may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
a. Termination of Agreement. This Agreement may be
terminated as provided below:
(i) Buyer and Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving written
notice to Sellers at any time prior to the Closing (A) in
the event any Seller, Principal Officer or Owner has
breached in any material respect any representation,
warranty or covenant contained in this Agreement, Buyer has
notified such Seller. Principal Officer or Owner of the
breach, and the breach has continued without cure for a
period of fifteen (15) days after the notice of breach or
(B) if the Closing shall not have occurred on or before
September 30,1996, by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure
results primarily from Buyer itself breaching any
representation, warranty or covenant contained in this
Agreement); and
(iii) Sellers may terminate this Agreement by giving
written notice to Buyer at any time prior to the Closing
(A) in the event Buyer has breached in any material respect
any representation, warranty or covenant contained in this
Agreement, Sellers have notified Buyer of the breach, and
the breach has continued without cure for a period of
fifteen (15) days after the notice of breach or (B) if the
Closing shall not have occurred on or before September 30,
1996, by reason of the failure of any condition precedent
under Section 6(b) hereof (unless the failure results
primarily from any Seller, Principal Officer or any Owner
breaching any representation, warranty or covenant contained
in this Agreement).
b. Effect of Termination. If this Agreement is terminated
and abandoned as provided in this Section 7, all obligations of the
parties hereunder will terminate without liability of any party to the
other party (except for any liability of any party then in breach).
c. Specific Performance. Sellers, on the one hand, and
Buyer, on the other hand, acknowledge and agree that the other would
be damaged irreparably in the event either Sellers or Buyer failed to
close in accordance with the terms of this Agreement. Accordingly,
each Seller agrees that Buyer, and Buyer agrees that Sellers shall be
entitled to enforce specifically this Agreement in any court of the
United States or any state thereof having jurisdiction over the
parties and the matter.
8. Indemnification.
a. General Indemnification Obligation of Sellers, Principal
Officer and the Owners. From and after the Closing, Sellers,
Principal Officer and Owners will reimburse, indemnify and hold
harmless Buyer and its successors and assigns against and in respect
of:
(i) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by Buyer that result
from, relate to or arise out of:
(A) any and all liabilities and obligations of Sellers
of any nature whatsoever, except for those liabilities and
obligations which Buyer specifically assumes pursuant to
this Agreement;
(B) any and all actions, suits, claims or legal,
administrative, arbitration, governmental or other
proceedings or investigations against Buyer that relate to
any Seller or Owner in which the principal event giving rise
thereto occurred prior to the Closing Date or which result
from or arise out of any action or inaction prior to the
Closing Date of any Seller or Owner or any director,
officer, employee, partner, agent, representative or
subcontractor of any Seller, except for those which Buyer
specifically assumes pursuant to this Agreement; or
(C) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of
any Seller or Principal Officer under this Agreement or from
any misrepresentation in or omission from any certificate,
schedule, statement, document or instrument furnished to
Buyer pursuant thereto or in connection with the
negotiation, execution or performance of this Agreement; and
(ii) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments,
costs and other expenses (including, without limitation,
reasonable legal fees and expenses) incident to any of the
foregoing or to the enforcement of this Section 8(a).
b. General Indemnification Obligation of Buyer. From and
after the Closing, Buyer will reimburse, indemnify and hold harmless
the Sellers, the Principal Officer, the Owners and their respective
successors or assigns against and in respect of:
(i) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by Sellers that result
from, relate to or arise out of:
(A) any and all liabilities and obligations of Sellers
which have been specifically assumed by Buyer to this
Agreement;
(B) any and all actions, suits, claims or legal
administrative, arbitration, governmental or other
proceedings or investigations against Sellers that relate to
Buyer in which the principal event giving rise thereto
occurred after the Closing Date or which result from or
arise out of any action or inaction after the Closing Date
of Buyer or any director, officer, employee, agent,
representative or subcontractor of Buyer, except for those
which a Seller specifically retains pursuant to this
Agreement; or
(C) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of
Buyer under this Agreement or from any misrepresentation in
or omission from any certificate, schedule, statement,
document or instrument furnished to Sellers pursuant hereto
or in connection with the negotiation, execution or
performance of this Agreement; and
(ii) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines judgments,
costs and other expenses (including, without limitation,
reasonable legal fees and expenses) incident to any of the
foregoing or to the enforcement of this Section 8(b).
c. Method of Asserting Claims, Etc.
(i) In the event that any claim or demand for which any
Seller would be liable to Buyer hereunder is asserted against or
sought to be collected from Buyer by a third party, Buyer shall
promptly notify such Seller, Principal Officer or Owner of such
claim or demand, specifying the nature of such claim or demand
and the amount or the estimated amount thereof to the extent then
feasible (which estimate shall not be conclusive of the final
amount of such claim and demand) (the "Claim Notice"). Such
Seller, Principal Officer or Owner shall have thirty (30)
business days from the personal delivery or mailing of the Claim
Notice (the "Notice Period") to notify Buyer, (A) whether or not
it disputes its liability to Buyer hereunder with respect to such
claim or demand and (B) notwithstanding any such dispute, whether
or not it desires, at its sole cost and expense, to defend Buyer
against such claim or demand; provided, however, if during the
Notice Period, Buyer is required to act in order to preserve its
rights and protect its assets, such Seller, Principal Officer or
Owner shall pay all reasonable costs and expenses incurred by
Buyer in connection with such action.
(ii) If any Seller, Principal Officer or Owner disputes its
liability with respect to such claim or demand or the amount
thereof (whether or not a Seller, Principal Officer or Owner
desires to defend Buyer against such claim or demand as provided
in paragraphs (iii) and (iv) below), such dispute shall be
resolved in accordance with Section 8(e) hereof. Pending the
resolution of any dispute by any Seller, Principal Officer or
Owner of its liability with respect to any claim or demand, such
claim or demand shall not be settled without the prior written
consent of Buyer which consent shall not be unreasonably
withheld.
(iii) In the event that a Seller, Principal Officer or
Owner notifies Buyer within the Notice Period that it desires to
defend Buyer against such claim or demand then, except as
hereinafter provided, such Seller, Principal Officer or Owner
shall have the right to defend Buyer by appropriate proceedings,
which proceedings shall be promptly settled or prosecuted by them
to a final conclusion in such a manner as to avoid any risk of
Buyer becoming subject to liability for any other matter;
provided, however, such Seller, Principal Officer or Owner shall
not, without the prior written consent of Buyer, consent to the
entry of any judgment against Buyer or enter into any settlement
or compromise which does not include, as an unconditional term
thereof, the giving by the claimant or plaintiff to Buyer of a
release in form and substance satisfactory to Buyer from all
liability in respect of such claim or litigation. If Buyer
desires to participate in, but not control, any such defense or
settlement, it may do so, at its sole cost and expense. If, in
the reasonable opinion of Buyer, any such claim or demand or the
litigation or resolution of any such claim or demand involves an
issue or matter which could have a material adverse effect on the
business, operations, assets, properties or prospects of Buyer,
including without limitation, the administration of the tax
returns and responsibilities under the tax laws of any Buyer,
then Buyer shall have the right to jointly conduct or direct,
through counsel, the defense or settlement of any such claim or
demand and its reasonable costs and expenses shall be included as
part of the indemnification obligation of such Seller, Principal
Officer or Owner hereunder; provided, however, that Buyer shall
not settle any such claim or demand without the prior written
consent of such Seller, Principal Officer or Owner which consent
shall not be unreasonably withheld. If Buyer should elect to
exercise such right, such Seller, Principal Officer or Owner
shall have the right to participate in, but not control, the
defense or settlement of such claim or demand, at its sole cost
and expense.
(iv) (A) If any Seller, Principal Officer or Owner elects
not to defend Buyer against such claim or demand, whether by
not giving Buyer timely notice as provided above or
otherwise, then the amount of any such claim or demand or if
the same be defended by such Seller, Principal Officer or
Owner or by Buyer (but Buyer shall not have any obligation
to defend any such claim or demand), then that portion
thereof as to which such defense is unsuccessful, in each
case shall be conclusively deemed to be a liability of such
Seller, Principal Officer or Owner hereunder, unless such
Seller, Principal Officer or Owner shall have disputed its
liability to Buyer hereunder, as provided in (i) above, in
which event such dispute shall be resolved as provided in
Section 8(e) hereof.
(B) In the event Buyer should have a claim against a
Seller, Principal Officer or Owner hereunder that does not
involve a claim or demand being asserted against or sought
to be collected from it by a third party, Buyer shall
promptly send a Claim Notice with respect to such claim to
Seller, Principal Officer or Owner. If such Seller,
Principal Officer or Owner disputes its liability with
respect to such claim or demand, such dispute shall be
resolved in accordance with Section 8(e) hereof. If such
Seller, Principal Officer or Owner does not notify Buyer
within the Notice Period that it disputes such claim, the
amount of such claim shall be conclusively deemed a
liability of such Seller, Principal Officer or Owner
hereunder.
(v) Any claims for indemnification by any Seller, Principal
Officer or Owner under this Agreement shall be asserted and resolved
under the procedures set forth above substituting in the appropriate
place "Seller," "Principal Officer" or "Owner" for "Buyer" and
variations thereof.
d. Guaranty. Buyer has agreed not to require Owners to
make the representations and warranties set forth in Section 3 of this
Agreement on the condition that each Owner agrees to promptly pay,
reimburse and hold harmless, Buyer for any and all damages, losses,
deficiencies, costs and expenses incurred or suffered by Buyer that
result from, relate to or arise out of any breach of representations
or warranties by Sellers or Principal Officer. Accordingly, each
Owner hereby irrevocably and unconditionally agrees to pay, reimburse
and hold harmless Buyer in respect of any and all damages, losses,
deficiencies, costs and expenses incurred or suffered by Buyer that
result from, relate to or arise out of any breach of the
representations and warranties set forth in Section 3 of this
Agreement.
e. Limitation of Liability. The maximum liability of
Sellers, Principal Officer and each Owner under this Section 8 shall
not exceed in the aggregate an amount equal to twenty-five percent
(25%) of the proceeds of the Purchase Price received by him or it
pursuant to Section 2(c) hereof; provided that, no such limitation of
liability shall apply in respect of any breach or breaches of the
representations and warranties contained in Section 3(j) of this
Agreement.
f. Payment. Upon the determination of the liability under
Sections 8(c) or 8(f) hereof, the appropriate party shall pay to the
other, as the case may be, within ten (10) days after such
determination, the amount of any claim for indemnification made
hereunder; provided, however, if a payment is required to be made by a
Seller during the period of time in which funds are still held by the
Escrow Agent, Buyer shall notify the Escrow Agent of the amount of
such required payment and the Escrow Agent shall deliver such amount,
together with interest earned thereon, to Buyer. Upon the payment in
full of any claim, either by setoff or otherwise, the entity making
payment shall be subrogated to the rights of the indemnified party
against any person, firm or corporation with respect to the subject
matter of such claim.
g. Arbitration. (i) All disputes under this Section 8 shall
be settled by arbitration in Dallas, Texas, before a single arbitrator
pursuant to the commercial rules of the American Arbitration
Association. Arbitration may be commenced at any time by any party
hereto by giving written notice to each other party to a dispute that
such dispute has been referred to arbitration under this Section 8(f).
The arbitrator shall be selected by the joint agreement of McBiz Corp.
and Buyer, but if they do not so agree within twenty (20) days after
the date of the notice referred to above, the selection shall be made
pursuant to the rules from the panels of arbitrators maintained by
such association. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto; provided, however,
that any such award shall be accompanied by a written opinion of the
arbitrator giving the reasons for the award. This provision for
arbitration shall be specifically enforceable by the parties and the
decision of the arbitrator in accordance herewith shall be final and
binding and there shall be no right of appeal therefrom. Each party
shall pay its own expenses of arbitration and the expenses of the
arbitrator shall be equally shared; provided, however, that if in the
opinion of the arbitrator any claim for indemnification or any defense
or objection thereto was unreasonable, the arbitrator may assess, as
part of his award, all or any part of the arbitration expenses of the
other party (including reasonable attorneys' fees) and of the
arbitrator against the party raising such unreasonable claim, defense
or objection.
(ii) To the extent that arbitration may not be legally
permitted hereunder and the parties to any dispute hereunder may
not at the time of such dispute mutually agree to submit such
dispute to arbitration, any party may commence a civil action in
a court of appropriate jurisdiction to solve disputes hereunder.
Nothing contained in this Section 8(f) shall prevent the parties
from settling any dispute by mutual agreement at any time.
h. Other Rights and Remedies Not Affected. The
indemnification rights of the parties under this Section 8 are
independent of and in addition to such rights and remedies as the
parties may have at law or in equity or otherwise for any
misrepresentation, breach of warranty or failure to fulfill any
agreement or covenant hereunder on the part of any party hereto,
including, without limitation, the right to seek specific performance,
rescission or restitution, none of which rights or remedies shall be
affected or diminished hereby. Additionally, each Seller, on the one
hand, and Buyer, on the other hand, agrees to indemnify and hold
harmless each other against any and all claims, losses, liabilities
and expenses which may be asserted against or incurred by it as a
result of Sellers's or Buyer's dealings, arrangements or agreements
with any broker or finder.
i. Bulk Sales Law. Buyer and Sellers waive compliance, if
applicable, with the provisions of any bulk sales law including,
without limitation, the bulk transfer provisions of the Uniform
Commercial Code of any state or any similar statute, if and to the
extent applicable to the transactions contemplated by this Agreement.
Each Seller agrees to indemnify, defend and hold harmless Buyer and
its officers, agents and employees from any loss, cost, expenses
(including related counsel fees), liability or damage which Buyer or
its officers, agents or employees may suffer or incur by virtue of the
noncompliance by a Seller with any such Bulk Sales Law.
9. Survival of Representations and Warranties.
a. All of the representations and warranties of Sellers and
Principal Officer contained in Section 3 above (other than the Tax
Representations (as hereinafter defined)) and the other agreements and
covenants of Sellers, Principal Officer and Owners set forth in this
Agreement shall survive the Closing hereunder (even if Buyer knew or
had reason to know of any misrepresentation or breach of warranty at
the time of Closing) and continue in full force and effect for a
period of twelve (12) months thereafter.
b. All the representations, warranties and covenants
contained in Section 3(j) ("Tax Representations") shall survive the
Closing (even if the Buyer knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) until
the expiration of the last applicable statute of limitations for the
particular representation and warranty that has been breached.
c. All of the representations and warranties of Buyer
contained in Section 4 above shall survive the Closing hereunder (even
if Sellers knew or had reason to know of any misrepresentation or
breach of warranty at the time of Closing) and continue in full force
and effect for a period of twelve (12) months thereafter.
10. Actions After Closing.
a. From and after the Closing Date, the parties shall use
their reasonable best efforts to effectuate the transfer of the
ownership of the Acquired Assets.
b. Upon the request of Buyer, Sellers and, to the extent
necessary, Principal Officer and Owners, shall execute, acknowledge
and deliver all such further deeds, bills of sale, assignments,
transfers, conveyances, powers of attorney and assurances as may be
reasonably required to convey and transfer to and vest in Buyer and
protect its right, title and interest in the Acquired Assets and as
may be appropriate otherwise to carry out the transaction contemplated
by this Agreement.
c. For a period of eighteen (18) months after the Closing
Date, each Seller agrees that (i) without the prior written consent of
Buyer, such Seller will not recruit, hire or attempt to recruit or
hire, directly or indirectly, any employee of Buyer; provided that the
restriction on solicitation of employees set forth in this
Section 10(c) shall apply only to employees of Buyer that are working
at a Franchise Restaurant or the Joint Venture Restaurant or who were
employees of any Seller prior to the consummation of the transactions
contemplated by this Agreement.
d. For a period of three (3) years from the date of this
Agreement, each Seller agrees that it will not, directly or
indirectly, engage in, participate in and shall have no interest as a
shareholder, partner, joint venturer, agent, creditor or consultant,
or in any other capacity, or have any other direct or indirect
financial interest in the business or operations of any business,
firm, person, partnership, corporation, enterprise or concern, that
operates restaurants in the United States that have like menus as the
Business as of the date hereof or that employ the same or similar
restaurant themes as the Business on the date hereof or that have
entertainment facilities (including games or rides) the same or
similar to the Business on the date hereof; provided, however, nothing
in this Agreement shall be deemed to prevent or limit the right of any
Seller to (i) engage or participate in the business of leasing real
estate, or (ii) own capital stock or other securities of any
corporation, the securities of which are publicly owned or regularly
traded in the over-the-counter market or on any securities exchange,
provided that any Seller does not acquire beneficial ownership (as
determined under Rule 13d-3 of the Securities Exchange Act of 1934) of
more than five percent of issuer's outstanding securities of that
class and that any Seller does not otherwise engage in any other
activity that is restricted by the foregoing provisions of this
subsection.
e. Buyer agrees, with respect to the Leased Real Property,
prior to exercising any renewal option set forth in a Real Property
Lease or obtaining extension of such lease, to use reasonable efforts
to obtain the release from such lease of Sellers who are lessees under
such lease as well as any Owners or Principal Officers who are
guarantors of such lease.
▇. ▇▇▇▇▇▇▇ shall be responsible for (a) all transfer,
recording, real estate excise and other similar taxes and fees,
arising out of or in connection with the transactions contemplated by
this Agreement and (b) all applicable sales and use taxes arising on
or before the Closing Date.
11. Miscellaneous Agreements Relating to the Conveyance of the
Boise Property.
a. Possession of the Boise Property shall be delivered to
Buyer at the Closing.
b. Each of Sellers and Buyer hereby designate the Title
Company as the "Reporting Person" as such term is utilized in Section
6045 of the Code and regulations thereunder. Sellers agree to provide
the Title Company with such information as may be required for the
Title Company to file a Form 1099 and/or any and all required form(s)
relative to the Closing with the Internal Revenue Service. A copy of
the filed Form 1099 and any and all applicable filed form(s) shall be
provided to Sellers and Buyer simultaneously with its being provided
to the Internal Revenue Service.
▇. ▇▇▇▇▇▇▇ assume all risks and liability for loss, damage,
destruction or injury by fire, storm, accident or any other casualty
to the Boise Property from all causes until the Closing, if any, has
been consummated. If there is any casualty or damage to the Boise
Property prior to the Closing, all insurance proceeds payable by
reason of or in respect to such casualty or damage shall be paid or
assigned (as appropriate) by Sellers to Buyer at the Closing and, in
addition, Sellers shall pay to Buyer at Closing the entire amount of
any applicable deductible amount under any such insurance policy
payable by reason of or in respect to such casualty or damage.
▇. ▇▇▇▇▇▇▇ shall pay, on the Closing Date, one-half of the
title insurance premium for the Owner's Policy (including one-half of
the costs of endorsements thereto and expanded coverage thereunder),
one-half of any escrow fees, and all other charges of the Title
Company customarily paid by Sellers in real estate transactions in the
Boise, Idaho, area. Buyer shall pay, on the Closing Date, one-half of
the title insurance premium for the Owner's Policy (including one-half
of all costs of endorsements thereto and expanded coverage
thereunder), one-half of any escrow fees, and all other charges of the
Title Company customarily paid by the Buyer in real estate
transactions in the Boise, Idaho, area.
12. Miscellaneous.
a. No party shall issue any press release or make any
public announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of the other
party; however, Sellers acknowledge and agree that disclosures
relating to the proposed transaction may be made by Buyer to the
extent necessary or advisable in light of the disclosure requirements
of applicable federal and state laws, including federal securities
laws. After the Closing, Buyer shall issue a press release which
shall be in form and content determined by Buyer.
b. This Agreement shall not confer any rights or remedies
upon any Person other than the parties and their respective successors
and permitted assigns.
c. This Agreement (including the documents, Exhibits and
Schedules referred to herein) constitutes the entire agreement between
the parties and supersedes any prior understandings, agreements or
representations by or among the parties, written or oral, to the
extent they related in any way to the subject matter hereof.
d. This Agreement shall be binding upon and inure to the
benefit of the Parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the
prior written approval of the other party; provided, however, that
Buyer may (i) assign any or all of its rights and interests hereunder
to one or more of its affiliates and (ii) designate one or more of its
affiliates to perform its obligations hereunder (in any or all of
which cases Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
e. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
f. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
g. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly
given if (and then three business days after) it is sent by registered
or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to Sellers: McBiz Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
If to Buyer: ShowBiz Pizza Time, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Principal Officer
or any Owner: To the address set forth below their
respective signatures below.
Any party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail
or electronic mail), but no such notice, request, demand, claim or
other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any party
may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.
h. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Texas without giving
effect to any choice or conflict of law provision or rule (whether of
the State of Texas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Texas.
i. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by Buyer and
Sellers. No waiver by any party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default,
misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
j. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
k. Except as otherwise provided in this Agreement in
respect of certain disputes, each party will bear its own costs and
expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.
l. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
SELLERS: BUYER:
McBIZ CORPORATION SHOWBIZ PIZZA TIME, INC.
By: By:
Title: Title:
McBIZ LIMITED PARTNERSHIP,
a Kansas limited partnership
By:
McBiz Corporation,
its sole general partner
By:
Title:
McBIZ OF IOWA LIMITED PARTNERSHIP,
an Iowa limited partnership
By:
McBiz Corporation,
its sole general partner
By:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address:
SAUVAGE GAS COMPANY
By:
Name:
Title:
Address:
SAUVAGE GAS SERVICES, INC.
By:
Name
Title:
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Address:
SCHEDULE 3(c)
NONCONTRAVENTION
SCHEDULE 3(e)
TITLE TO ASSETS
SCHEDULE 3(f)
REAL PROPERTY
SCHEDULE 3(g)
FINANCIAL STATEMENTS
SCHEDULE 3(h)
MATERIAL ADVERSE CHANGE
SCHEDULE 3(i)
LEGAL COMPLIANCE
SCHEDULE 3(k)
INTELLECTUAL PROPERTY
SCHEDULE 3(l)
TANGIBLE ASSETS
SCHEDULE 3(n)
CONTRACTS
SCHEDULE 3(p)
INSURANCE
SCHEDULE 3(q)
LITIGATION
SCHEDULE 3 (r)
EMPLOYEES
SCHEDULE 3(s)
EMPLOYEE BENEFITS
SCHEDULE 3(t)
ENVIRONMENT, HEALTH AND SAFETY
EXHIBIT A
PERSONAL PROPERTY
EXHIBIT B
ASSUMED CONTRACTS AND LEASES
EXHIBIT C
LICENSES, PERMITS AND AUTHORIZATIONS
EXHIBIT D
PREPAID ITEMS
EXHIBIT E
EXCLUDED ASSETS
EXHIBIT F
LEASED REAL PROPERTY
EXHIBIT G
ESCROW AGREEMENT
EXHIBIT H
OPTION AGREEMENT
EXHIBIT I
▇▇▇▇ OF SALE
▇▇▇▇ OF SALE ASSIGNMENT
AND ASSUMPTION
THIS ▇▇▇▇ OF SALE, ASSIGNMENT AND ASSUMPTION ("▇▇▇▇ Of Sale"),
made this ------ day of August, 1996, by and between McBiz
Corporation, a Kansas Corporation ("Seller") and ShowBiz Pizza Time,
Inc., a Kansas corporation ("Buyer").
Pursuant to an Asset Purchase Agreement dated August ---, 1996
(the "Agreement") among Seller and Buyer, Seller agreed to transfer
and deliver to Buyer at the Closing under the Agreement, substantially
all of the operating assets of Seller used in the operation of 20
▇▇▇▇▇ ▇. Cheese's (the "Business") at the locations listed on Exhibit
"A" attached hereto. Capitalized terms used in this ▇▇▇▇ of Sale and
not defined herein shall have the meaning assigned to them in the
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller hereby sells,
transfers, assigns and conveys to Buyer, its successors and assigns
forever, all of Seller's right, title and interest, legal or
equitable, in and to the following assets (the "Assets"):
a. All Intellectual Property owned by Seller or used in the
Business, including patents, trademarks, trade names,
technologies, methods, formulations, data bases, trade
secrets, know-how, franchises, licenses, business permits
and certificates and customer lists used by Seller in the
Business and all right, title and interest thereto and all
information, files, records, data, plans and recorded
information, including suppliers lists relating to the
foregoing;
b. All right, title and interest of Seller in and to the
personal property, furniture and fixtures used by Seller and
located on the owned Real Property or the Leased Real
Property;
c. All machinery, inventory and equipment in the hands of
Seller or suppliers which Seller is committed to purchase as
of the Closing Date;
d. All contracts, personal property, leases and other
agreements to which Seller is party and which are designated
by Buyer on Exhibit "B" attached hereto as assets it wishes
to acquire (the "Assumed Contracts"); and
e. All operating data and records of Seller used in the
Business, including, without limitation, all information,
files, customer lists, employee files, credit records,
correspondence, office and other supplies, budgets and other
similar documents and records.
To Have and To Hold, all of the foregoing assets, unto Buyer, its
successors and assigns forever.
Seller hereby covenants to execute and deliver to Buyer, upon its
request therefor, such instruments and documents of further assurance
or otherwise, suitable for recording if appropriate, as Buyer may
reasonably request to obtain benefits under the Agreement.
In consideration of the transfer of the Acquired Assets
transferred hereby to Buyer, Buyer hereby assumes certain liabilities
and obligations of Seller, but only those liabilities and obligations
of Seller constituting Assumed Liabilities (as defined in the
Agreement).
Neither the making nor the acceptance of the within assignment
and transfer shall constitute a waiver or release by Seller or Buyer
of any liabilities, duties or obligations imposed upon any of them by
the terms of the Agreement, including, without limitation, the
representations and warranties or other provisions which the Agreement
provides shall survive the date hereof.
IN WITNESS WHEREOF, Seller and Buyer have caused this ▇▇▇▇ of
Sale to be executed effective as of the date first above written.
MCBIZ CORPORATION
By:
Title:
SHOWBIZ PIZZA TIME, INC.
By:
Title:
EXHIBIT J
ASSIGNMENT OF LEASES
ASSIGNMENT OF LEASE
STATE OF------------&
&
COUNTY OF-----------&
THIS ASSIGNMENT OF LEASE ("Assignment"), dated as of August ------,
1996, is executed and entered into by and between McBiz Corporation
("Assignor") and ShowBiz Pizza Time, Inc. ("Assignee").
W I T N E S S E T H
-------------------
WHEREAS, Assignor and Assignee entered into that certain Asset
Purchase Agreement dated as of August ----, 1996 ("Asset Purchase
Agreement"), whereby Assignee contracted to purchase certain assets of
Assignor set forth more particularly in said Asset Purchase Agreement;
and
WHEREAS, one of the assets to be conveyed to Assignee by Assignor
under said Asset Purchase Agreement is all of Assignor's right, title
and interest in and to that certain Lease Agreement dated -----------
("Lease"), by and between Assignor, as Tenant, and -----------, as
Landlord, with respect to those premises ("Property") more particularly
described on Exhibit "A" attached hereto and incorporated herein for all
purposes (a true and correct copy of said Lease together with all
amendments and modifications thereto being attached hereto as Exhibit
"B" and incorporated herein for all purposes); and
WHEREAS, the Lease, or a memorandum thereof, was filed for record
in the Real Property Records of ------------ County, ---------------;said
instrument being recorded at Volume ------, Page ------- of the
Deed Records of ------------ County.
THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties have agreed as follows :
1. Assignment of Lease. For and in consideration of the sum of Ten
Dollars ($10.00) and other good and valuable consideration in hand paid
by Assignee to Assignor, the receipt and sufficiency of which are hereby
acknowledged, Assignor does hereby assign, transfer, set over, convey
and deliver unto Assignee, its heirs, legal representatives, successors
and assigns, all of the rights, powers, privileges and interests of
Assignor in and to the Lease, including, without limitation, any options
to extend the Lease and the rights to any security deposits.
2. Assumption of Obligations. By acceptance hereof, Assignee shall
become obligated to keep, fulfill, observe, perform and discharge each
and every covenant, duty, debt and obligation that may accrue and become
performable, due or owing after the effective date hereof by Assignor
under the terms, provisions and conditions of the Lease, but only to the
extent shown on Exhibit "B" attached hereto; provided, however, that
Assignee shall be deemed to assume only such covenants, duties, debts
and obligations under the Lease as shall grow out of the ownership,
control and operation of the Property by Assignee.
3. Indemnification of Assignee. Assignor agrees to indemnify and hold
Assignee harmless of and from any and all liabilities, claims, demands
and expenses, of any kind or nature (except those items which by this
Assignment specifically become the obligation of Assignee) arising or
occurring prior to the effective date hereof and which are in any way
related to the Lease or the maintenance or operation of the Property,
and all expenses related thereto, including, without limitation, court
costs and attorneys' fees.
4. Indemnification of Assignor. Assignee agrees to indemnify and hold
Assignor harmless of any from any and all liabilities, claims, demands
and expenses, of any kind or nature (except those items which by this
Assignment specifically become the obligation of Assignor) arising or
occurring after the effective date hereof and which are in any way
related to the Lease or the maintenance or operation of the Property,
and all expenses related thereto, including, without limitation, court
costs and attorneys' fees.
5. Entire Agreement. This Assignment (together with the other
agreements and documents referred to herein) constitutes the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings,
whether oral or written, relating to the subject matter hereof. No
amendment or modification of the terms of this Assignment shall be
binding or effective unless expressed in writing and signed by each
party.
6. Governing Law. This Assignment shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to
conflicts of law. The parties to this Assignment agree that any legal
suit, action or proceeding arising out of or relating in any way to this
Assignment, including but not limited to issues of specific performance
and indemnity, may be instituted exclusively in the United States
District Court for the Northern District of Texas, United States of
America, and each party waives any objection whatsoever which it may
have now or hereafter to the laying of the venue of any such suit,
action or proceeding exclusively in the United State District Court for
the Northern District of Texas, and irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Northern
District of Texas in any such suit, action or proceeding. In the event
any legal suit, action or proceeding of any kind is commenced in or
brought in any court other than in the United States District Court for
the Northern District of Texas, both parties agree to, and shall cause
their respective subsidiaries and affiliates to, transfer and/or remove
any such legal suit, action or proceeding to the United States District
Court for the Northern District of Texas, or to dismiss such legal suit,
action or proceeding immediately.
7. Counterparts. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
8. Successors and Assigns. This Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns.
9. Captions; Definitions. The titles or captions of sections
contained in this Assignment are inserted only as a matter of
convenience and for reference and in no way define, limit, extend or
describe the scope of this Assignment or the intent of any provision
hereof. The parties agree to all definitions in the statement of
parties to this Assignment and in the other introductory language to
this Assignment.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
to be duly executed as of the date first above written.
ASSIGNOR: ASSIGNEE:
MCBIZ CORPORATION SHOWBIZ PIZZA TIME, INC.
By: By:
Title: Title:
STATE OF----------------&
&
COUNTY OF --------------&
This instrument was acknowledged before me on August ---, 1996, by -------of
McBiz Corporation, a Kansas corporation, on behalf of said
corporation.
Notary Public in and for
the State of ------------
[SEAL]
My Commission Expires:
In accordance with Section ----- of the Real Property Lease
referred to in the foregoing assignment ("Lease"), the undersigned,
being the Lessor under the Lease, hereby consents to the foregoing
assignment. The undersigned represents and warrants that the
undersigned is the sole owner of the lessor's interest under the Lease
subject only to a security assignment of such interest to ----------------Bank.
DATE:
In its capacity as the holder of a security assignment of the Real
Property Lease referred to in the foregoing assignment ("Lease"), ----------
---------------- Bank hereby consents to the foregoing assignment.
DATE:
EXHIBIT K
ASSIGNMENT OF FRANCHISES
AGREEMENT FOR THE ASSIGNMENT OF FRANCHISE
This Agreement for the Assignment of Franchise (the "Agreement")
dated as of ---------, 199--, is executed by and among,
a-----------------("Assignor"), , a ---------------,
("Assignee"), , a ------------------- resident
("Guarantor"), and ShowBiz Pizza Time, Inc., a Kansas corporation
("Franchisor") (hereinafter collectively referred to as "Parties").
WHEREAS, Assignor is a franchisee under a Franchise Agreement
between Assignor and Franchisor, dated -------------, for the site
located at ,
which is attached hereto and incorporated herein by reference for all
purposes ("Franchise Agreement");
WHEREAS, Assignor and Assignee have agreed to the transfer of any
and all rights and obligations owed by Assignors under the Franchise
Agreement; and
WHEREAS, Guarantor and Franchisor consents to the assignment,
transfer, and deliver of the rights and obligations under the Franchise
Agreement from Franchise to Assignee.
THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Parties have agreed as follows:
Section 1. ASSIGNMENT OF FRANCHISE.
1.01 Consent to Assignment. Franchisor conditions its consent to
this Agreement upon Assignor's compliance with the terms and conditions
under the Franchise Agreement in the event of a transfer of ownership
and Assignee's assumption of any and all rights and obligations owed by
Assignors in the Franchise Agreement and other agreements with
Franchisor and affiliates thereof, and agrees to perform any additional
obligations imposed upon it because of the transfer of ownership under
the Franchise Agreement. If Assignor or Assignee have not complied with
the covenants contained herein, then Franchisor's consent is null and
void, and without any force or effect.
1.02 Representations and Warranties. Franchisee agrees to comply
with the terms and conditions under the Franchise Agreement in the event
of a transfer of ownership.
1.03 Assumption by Assignee. Assignee hereby assumes any and all
rights and obligations owed by Assignors in the Franchise Agreement and
other agreements with Franchisor and affiliates thereof. Assignee also
agrees to perform any additional obligations imposed upon it because of
the assignment, transfer, and delivery under the Franchise Agreement.
1.04 Assignment by Assignor. Assignor, for and in complete and
consideration of the monies in hand and paid by Assignee, have
bargained, sold, assigned, transferred, and delivered and by these
presents do bargain, sell, assign, transfer, and deliver to Assignee all
of their right, title and interest in and to the Franchise acquired
under the Franchise Agreement to Assignees.
Section 2. MISCELLANEOUS PROVISIONS.
2.01 Notice. All written notices permitted or required to be
delivered by the provisions of this Agreement may be delivered by mail
service or telefax system, but shall (unless otherwise provided) be
deemed so delivered when actually received by hand or when placed into
the mail by certified mail, return receipt requested, postage prepaid
and addressed to the addresses identified at the beginning of this
Agreement, or at such other address as any person specified above may,
by written notice to the other persons specified above, designate as the
appropriate address for purposes of notice hereunder.
2.02 Successors and Assigns. The Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the Parties,
subject to the restrictions on assignment contained herein.
2.03 Assignment. The Agreement, including rights to moneys due or
to become due under the Agreement, or delegation of any duties under the
Agreement, shall not be assigned by either party hereto without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.
2.04 Waiver and Delay. No waiver by any party to the Agreement of
any breach or series of breaches or defaults in the performance by the
other party, and no failure, refusal or neglect of either party to
exercise any right, power or option given to it hereunder or to insist
upon strict compliance with or performance of either party's obligations
under the Agreement, shall constitute a waiver of the provisions of the
Agreement with respect to any subsequent breach thereof or a waiver by
either party of its right at any time thereafter to require exact and
strict compliance with the provisions thereof.
2.05 Arbitration. Any controversy or claim arising out of or
relating to the Agreement, or any breach thereof, including, without
limitation, any claim that any of said Agreement, or any part thereof,
is invalid, illegal or otherwise voidable or void, shall be submitted to
arbitration in accordance with the Commercial Rules of the American
Arbitration Association; provided, however, this clause shall not be
construed to limit or to preclude either party from bringing any action
in any court of competent jurisdiction for injunctive or other
provisional relief as is necessary or appropriate. Any award or
determination of the arbitration tribunal shall be final, nonappealable,
and conclusive upon the Parties, and judgment thereon may be entered by
any court of competent jurisdiction.
2.06 Attorneys' Fees. If any arbitration or other legal action is
initiated by either of the Parties, the prevailing party shall be
entitled to recover from the other party reasonable attorneys' fees in
addition to any other relief that may be awarded.
2.07 Titles for Convenience. Titles used in the Agreement are for
convenience only and shall not be deemed to affect the meaning or
construction of any of the terms, provisions, covenants, or conditions
of the Agreement.
2.08 Choice of Law and Forum. All disputes concerning the
validity, interpretation, or performance of the Agreement and any of its
terms or provisions, or any rights or obligations of the Parties, shall
be governed by and resolved in accordance with the laws of the State of
Texas, and be resolved in the appropriate forum located within Dallas,
Dallas County, Texas.
2.09 Severability. Nothing contained in the Agreement shall be
construed as requiring the commission of any act contrary to law.
Whenever there is any conflict between any provision of the Agreement
and any present or future statute, law, ordinance or regulation contrary
to which the Parties have no legal right to contract, the latter shall
prevail, but in such event the provision(s) of the Agreement thus
affected shall be curtailed and limited only to the extent necessary to
bring it within the requirements of the law. In the event that any
Section, part, sentence or clause of the Agreement shall be held to be
indefinite, invalid or otherwise unenforceable, the indefinite, invalid
or unenforceable provision(s) shall be deemed deleted, and the remaining
part of the Agreement shall continue in full force and effect. If any
tribunal or court of competent jurisdiction deems any provision(s)
hereof unenforceable, such provision(s) shall be modified only to the
extent necessary to render it enforceable and the Agreement shall be
valid and enforceable and the Parties agree to be bound by and perform
same as thus modified.
2.10 Counterparts. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
2.11. Signatory's Warranty. If any party hereto is a legal entity
(partnership, corporation, or trust), that party represents to the other
that this Agreement, the transaction contemplated by this Agreement, and
the execution and delivery hereof, have been duly authorized, including
without limitation, action on the part of the directors and/or
shareholders, if such action is required.
2.12 Entire Agreement. The Agreement contains all of the terms
and conditions agreed upon by the Parties with reference to the subject
matter hereof. No other agreements, oral or otherwise, shall be deemed
to exist or to bind either of the Parties, and all prior agreements and
understandings are suspended hereby. The Agreement cannot be modified
or changed except by written instrument executed by all of the Parties
in accordance with the terms and conditions of the Agreement.
APPROVED AND AGREED TO on this the ------ day of ----------, 19--.
ASSIGNOR: ASSIGNEE:
By: By:
Name: Name:
Title: Title:
FRANCHISOR: GUARANTOR:
ShowBiz Pizza Time, Inc.
By: By:
Name: Name:
Title: Title:
EXHIBIT L
[intentionally omitted]
EXHIBIT M
GENERAL ASSIGNMENT
EXHIBIT M-1
ASSIGNMENT OF JOINT VENTURE INTEREST
EXHIBIT N
ALLOCATION OF PURCHASE PRICE
EXHIBIT O
FINANCIAL STATEMENTS
EXHIBIT P
SURVEY REQUIREMENTS
EXHIBIT Q
SPECIAL WARRANTY DEED
EXHIBIT R
AFFIDAVIT
EXHIBIT S
NONCOMPETITION AGREEMENT
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT ("Agreement") is made as of the ------ day
of August, 1996, by and among McBiz Corporation, a Kansas
corporation ("Seller"), ------ shareholders of Seller (individually
referred to as "Owner" and collectively referred to as "Owners") and
ShowBiz Pizza Time, Inc., a Kansas corporation ("Buyer").
W I T N E S S E T H
-------------------
WHEREAS, Seller and Buyer have entered into an Asset Purchase
Agreement, dated August ---, 1996 ("Asset Purchase Agreement") which
provides for the purchase by Buyer of certain of the assets of Seller
("Assets") and further provides that a condition to the obligation to
complete the closing (as defined in the Asset Purchase Agreement) is
that this Agreement shall have been executed and delivered; and
WHEREAS, the Assets include substantially all of the assets used by
Seller in its operation of twenty (20) full service restaurants known as
▇▇▇▇▇ ▇. Cheese's (the "Restaurants"); and
WHEREAS, following the acquisition of the Assets, Buyer shall tend
to operate the Restaurants in a fashion similar to that undertaken by
Seller; and
WHEREAS, as a material inducement to the Buyer to enter into and
consummate the transactions described in the Asset Purchase Agreement,
Seller and Owners have agreed to refrain from engaging in a Competitive
Business (as hereinafter defined).
THEREFORE, in consideration of the premises herein contained and
for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Seller, Owners and Buyer
hereby agree as follows:
1. Noncompetition. For a period of three (3) years from the date of
this Agreement, Seller and each Owner will not, directly or indirectly,
engage in, participate in and shall have no interest as a shareholder,
partner, joint venturer, proprietor, employee, officer, director, agent,
security holder, creditor or consultant, or in any other capacity, or
have any other direct or indirect financial interest in the business or
operations of any business, firm, person, partnership, corporation,
enterprise or concern, that operates full service restaurants in the
United States that have like menus and prices as the Restaurants as of
the date hereof and as described on Schedule 1 hereto, assuming that the
Restaurants are operating substantially as described in Schedule 1 on or
before the first anniversary of this Agreement (a "Competitiveness
Business"); provided, however, nothing in this Agreement shall be deemed
to prevent or limit the right of an Owner from serving as a director of
a public or private company which derives no more than 25% of its
revenues from a Competitive Business, or Seller and/or an Owner to
(i) own capital in Buyer, or (ii) own capital stock or other securities
of any corporation, the securities of which are publicly owned or
regularly traded in the over-the-counter market or on any securities
exchange, provided that Seller and/or an Owner does not acquire
beneficial ownership (as determined under Rule 13d-3 of the Securities
Exchange Act of 1934) of more than five percent of issuer's outstanding
securities of that class and that Seller and/or an Owner does not
otherwise engage in any other activity that is restricted by the
foregoing provisions of this subsection.
2. Enforcement.
(a) The parties recognize that, because of the nature of the
subject matter of this Agreement, it would be impracticable and
extremely difficult to determine actual damages to Buyer in the event of
a breach of this Agreement by Seller or an Owner. Accordingly, if
Seller or an Owner commits a breach or threatens to commit a breach of
any of the provisions of this Agreement, Buyer shall have the right and
remedy to have the provisions of this Agreement specifically enforced by
any court having equity jurisdiction, it being acknowledged and agreed
that any such breach or threatened breach will cause irreparable injury
to Buyer and that money damages will not provide an adequate remedy to
Buyer. The rights of Buyer to equitable relief in the enforcement of
this Agreement shall be in addition to any and all other remedies
available through an action in law.
(b) If any of the covenants contained herein are held to be
unenforceable because of the duration of such provisions or the area
covered thereby, the undersigned agree that the court making such
determination shall have the power to reduce the duration and the area
or both of any such provision and, in its reduced form, said provision
shall then be enforceable. Should any other portion of this Agreement
be declared invalid for any reason, said provision shall be severed and
all other provisions shall continue to be effective and binding.
(c) The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Section 1 upon the courts of any
state within the United States. In the event that the courts of any one
or more of such states shall hold such covenants wholly unenforceable by
reason of the breadth of their scope or otherwise, it is the intention
of the parties hereto that such determination not bar or in any way
affect Buyer's right to the relief provided above in the courts of any
other state within the United States, as to breaches of such covenants
in such other respective jurisdictions, the above covenants as they
relate to each state being, for this purpose, severable into diverse and
independent covenants. Notwithstanding the foregoing provisions of this
Section 2(c), Buyer in its sole discretion may bring any enforcement
action hereunder in the jurisdiction where the alleged breach hereunder
has occurred, in Dallas County, Texas or in the jurisdiction where
Seller or Owners then resides and Seller and Owners hereby consent to
such action, if any, being brought in such jurisdictions.
3. Enforcement Costs. If Buyer is required to institute any legal
action or other proceeding for the enforcement of this Agreement, Buyer
shall be entitled to recover reasonable attorneys' fees, court costs and
all expenses of litigation incurred in that action or proceeding to the
extent Buyer was the prevailing party in respect thereof, in addition to
any other relief to which Buyer may be entitled.
4. Waiver. Neither the failure of any party hereto at any time to
require performance of any provisions hereof nor the waiver of any
breach hereof shall in any manner affect the right to subsequently
enforce the same. No waiver by any party hereto of any condition, or
of the breach of any term, provision, warranty, representation,
agreement or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed or construed as
a further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term,
provision, warranty, representation, agreement or covenant herein
contained.
5. Entire Agreement. This Agreement (together with the other
agreements and documents referred to herein) constitutes the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings,
whether oral or written, relating to the subject matter hereof. No
amendment or modification of the terms of this Agreement shall be
binding or effective unless expressed in writing and signed by each
party.
6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without regard to
conflicts of law. The parties to this Agreement agree that any legal
suit, action or proceeding arising out of or relating in any way to this
Agreement, including but not limited to issues of specific performance
and indemnity, may be instituted in the United States District Court for
the Northern District of Texas, United States of America, and each party
waives any objection whatsoever which it may have now or hereafter to
the laying of the venue of any such suit, action or proceeding in the
United State District Court for the Northern District of Texas, and
irrevocably submits to the jurisdiction of the United States District
Court for the Northern District of Texas in any such suit, action or
proceeding.
7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns.
9. Captions; Definitions. The titles or captions of sections
contained in this Agreement are inserted only as a matter of convenience
and for reference and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any provision hereof. The
parties agree to all definitions in the statement of parties to this
Agreement and in the other introductory language to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.
SELLER: BUYER:
MCBIZ CORPORATION SHOWBIZ PIZZA TIME, INC.
By: By
Title: Title:
OWNER: OWNER:
OWNER: OWNER:
OWNER: OWNER: