<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report - July 2, 1997
------------
AmeriKing, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
2215 Enterprise Drive, Suite 1502
Westchester, Illinois
(Address of principal executive offices)
36-3970707
(I.R.S. employer
identification no.)
60154
(Zip code)
Registrant's telephone number, including area code 708-947-2150
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant
Not applicable
Item 2. Acquisition or Disposition of Assets
On June 16, 1997, the Company successfully completed the acquisition
of 26 restaurants in the Fayetteville and Raleigh Durham areas (the "North
Carolina Acquisition")from a franchisee for an aggregate purchase price of
approximately $42.2 million including acquisition related real estate.
Simultaneously with the acquisition the Company amended its current credit
agreement (the "Credit Agreement") increasing the credit available thereunder
from $15 million to $75 million. The North Carolina acquisition was funded
through the use of the available credit under the Credit Agreement and the
Company's cash on hand and was accounted for under the purchase method of
accounting.
The North Carolina Acquisition was the tenth acquisition the Company has made
since its incorporation in September, 1994. As a result of the North Carolina
Acquisition the Company currently operates 204 Burger King Restaurants in
Illinois, Virginia, Indiana, Colorado, Texas, Tennessee, Kentucky, Wisconsin,
Ohio, North Carolina and Georgia.
For the year ended December 31, 1996, the combined revenues of the 26 stores
purchased totaled $32.3 million.
Item 3. Bankruptcy or Receivership
Not applicable
Item 4. Change in Registrant's Certifying Accountant
Not applicable
Item 5. Other Events
The registrant is filing amendments as exhibits listed in Item 7(c)
below.
Item 6. Resignations of Registrant's Directors
Not applicable
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits. The following exhibits are being filed along with this
Current Report on Form 8-K.
<TABLE>
<CAPTION>
Exhibit
No. Document Description
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<S> <C> <C>
2.23 AMENDMENT NO.2 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among F&P ENTERPRISES, INC., THE
SHAREHOLDERS OF F&P ENTERPRISES, INC. AND NATIONAL
RESTAURANT ENTERPRISES, INC.
2.24 AMENDMENT NO.3 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among F&P ENTERPRISES, INC., THE
SHAREHOLDERS OF F&P ENTERPRISES, INC. AND NATIONAL
RESTAURANT ENTERPRISES, INC.
2.25 AMENDMENT NO.2 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among NORTH FOODS, INC., THE SHAREHOLDERS
OF NORTH FOODS, INC. AND NATIONAL RESTAURANT
ENTERPRISES, INC.
2.26 AMENDMENT NO.3 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among NORTH FOODS, INC., THE SHAREHOLDERS
OF NORTH FOODS, INC. AND NATIONAL RESTAURANT
ENTERPRISES, INC.
2.27 REAL ESTATE PURCHASE AGREEMENT dated March 7, 1997 among
T&B LEASING, THOMAS FICKLING AND WILLIAM PRENTICE (the
"PARTNERS"), AND CASTLE PROPERTIES, LLC.
2.28 AMENDMENT NO.1 TO THE REAL ESTATE PURCHASE AGREEMENT
dated April 8, 1997 among T&B LEASING, THOMAS FICKLING
AND WILLIAM PRENTICE (the "PARTNERS") AND CASTLE
PROPERTIES, LLC.
2.29 AMENDMENT NO.2 TO THE REAL ESTATE PURCHASE AGREEMENT
dated June 16, 1997 among T&B LEASING, THOMAS FICKLING
AND WILLIAM PRENTICE (the "PARTNERS"),CASTLE PROPERTIES,
LLC AND NATIONAL RESTAURANT ENTERPRISES, INC.
2.30 AMENDMENT NO.3 TO THE REAL ESTATE PURCHASE AGREEMENT
dated June 16, 1997 among T&B LEASING, THOMAS FICKLING
AND WILLIAM PRENTICE, INVESTORS TITLE EXCHANGE
CORPORATION, AND NATIONAL RESTAURANT ENTERPRISES, INC.
2.31 REAL ESTATE PURCHASE AGREEMENT dated March 7, 1997 among
W&W INVESTMENTS LIMITED PARTNERSHIP, THOMAS FICKLING AND
WILLIAM PRENTICE (the "GENERAL PARTNERS"), AND CASTLE
PROPERTIES, LLC.
2.32 AMENDMENT NO.1 TO THE REAL ESTATE PURCHASE AGREEMENT
dated April 8, 1997 among W&W INVESTMENTS LIMITED
PARTNERSHIP, THOMAS FICKLING AND WILLIAM PRENTICE (the
"PARTNERS") AND CASTLE PROPERTIES, LLC.
2.33 AMENDMENT NO.2 TO THE REAL ESTATE PURCHASE AGREEMENT
dated June 16, 1997 among W&W INVESTMENT LIMITED
PARTNERSHIP, THOMAS FICKLING AND WILLIAM PRENTICE (the
"GENERAL PARTNERS"), CASTLE PROPERTIES, LLC AND NATIONAL
RESTAURANT ENTERPRISES, INC.
</TABLE>
Item 8. Change in Fiscal Year
Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Westchester, State of
Illinois.
Ameriking, Inc.
______________________ _________________________________
Date Lawrence E. Jaro
Managing Owner, Chairman and
Chief Executive Officer
<PAGE>
2.23
AMENDMENT NO. 2
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT (this "Amendment") is made
and entered into this 16th day of June, 1997, among F & P ENTERPRISES, INC., a
North Carolina corporation ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "Shareholders"), and NATIONAL RESTAURANT
ENTERPRISES, INC. d/b/a AMERIKING CORPORATION, a Delaware corporation
("Purchaser").
R E C I T A L S:
WHEREAS, Seller, the Shareholders and Purchaser are parties to an Asset
Purchase Agreement, dated March 7, 1997, as amended by Amendment No. 1 to Asset
Purchase Agreement, dated April 8, 1997 (as amended, the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to further
clarify the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms. Capitalized terms used without definition
herein shall have the meanings assigned to them in the Agreement.
2. Purchase Price Amended. The parties hereto agree that the
Purchase Price is hereby amended to be Fourteen Million Nine Hundred Fifty Six
Thousand Eight Hundred Eighty Nine and no/100 Dollars ($14,956,889.00).
3. Scope. To the extent not amended or modified herein, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
F & P ENTERPRISES, INC.
By:__________________________________
___________________________, President
Shareholders:
_____________________________________
Thomas Fickling
_____________________________________
William Prentice
<PAGE>
Purchaser:
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By:___________________________________
Joel Aaseby, Secretary
2
<PAGE>
2.24
AMENDMENT NO. 3
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 3 TO ASSET PURCHASE AGREEMENT (this "Amendment") is made
and entered into this 16th day of June, 1997, among F & P ENTERPRISES, INC., a
North Carolina corporation ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "Shareholders"), and NATIONAL RESTAURANT
ENTERPRISES, INC. d/b/a AMERIKING CORPORATION, a Delaware corporation
("Purchaser").
R E C I T A L S:
WHEREAS, Seller, the Shareholders and Purchaser are parties to an Asset
Purchase Agreement, dated March 7, 1997 (the "Original Agreement"), as amended
by Amendment No. 1 to Asset Purchase Agreement, dated April 8, 1997, and
Amendment No. 2 to Asset Purchase Agreement, dated June 16, 1997 (collectively
and with the Original Agreement, the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to further
clarify the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms. Capitalized terms used without definition herein
shall have the meanings assigned to them in the Agreement.
2. Use of Escrow for Adjustments. The parties hereby agree that all sums to
be escrowed with Poyner & Spruill, L.L.P. pursuant to Section 3.20 of the
Original Agreement shall be available to reimburse Purchaser for any
overpayments at Closing made in respect of any prorations pursuant to Section
1.7. To the extent practicable, the parties shall "true-up" such amounts within
15 days following the Closing Date, and, for all other prorations, the parties
shall "true-up" such amounts as promptly as possible. Funds in respect of any
such "true-up" shall be distributed by Poyner & Spruill, L.L.P. to Purchaser as
soon as practicable following receipt of instructions with respect thereto from
Seller and Purchaser, provided that no funds shall be distributed to Seller out
of such escrowed amounts pursuant to Section 3.20 of the Original Agreement so
long as any good faith claim of Purchaser against such funds shall remain
outstanding.
3. License to Use Name. Seller hereby grants to Purchaser and its assigns a
license to continue to use the name "F & P Food Mart" and reasonable variations
thereon, in connection with the convenience store businesses located adjacent
to, and operated in conjunction with, Burger King Store Nos. 9821, 7627 and
8884. Such license shall include the right to use such name and reasonable
variations thereon on all signage, advertising and other publications incidental
to the operation of such businesses. The license granted hereby shall not
authorize Purchaser or its assigns to use the name "F & P Food Mart" or any
variations thereon in connection with any other businesses or locations. In the
event Seller elects to dissolve its corporate existence at such time as
Purchaser and its assigns are still using the license granted hereunder, Seller
shall give to Purchaser 90 days advance notice of its intention to effect such
dissolution and cooperate with and use its reasonable efforts to assign to
Purchaser or its assign the right to continued use of the name "F & P Food Mart"
and reasonable variations thereon.
4. Scope. To the extent not amended or modified herein, the Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
F & P ENTERPRISES, INC.
By:________________________________
___________________________, President
Shareholders:
___________________________________
Thomas Fickling
___________________________________
William Prentice
Purchaser:
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By:___________________________________
Joel Aaseby, Secretary
2497-1 05201-024
2
<PAGE>
AMENDMENT NO. 2
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT (this "Amendment") is made
and entered into this 16th day of June, 1997, among NORTH FOODS, INC., a North
Carolina corporation ("Seller"); THOMAS FICKLING, WILLIAM PRENTICE and THOMAS
TROY FICKLING (collectively referred to as the "Shareholders"), and NATIONAL
RESTAURANT ENTERPRISES, INC. d/b/a AMERIKING CORPORATION, a Delaware corporation
("Purchaser").
R E C I T A L S:
WHEREAS, Seller, the Shareholders and Purchaser are parties to an Asset
Purchase Agreement, dated March 7, 1997, as amended by Amendment No. 1 to Asset
Purchase Agreement, dated April 8, 1997 (as amended, the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to further
clarify the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms. Capitalized terms used without definition herein
shall have the meanings assigned to them in the Agreement.
2. Purchase Price Amended. The parties hereto agree that the
Purchase Price is hereby amended to be Eight Million and no/100 Dollars
($8,000,000.00).
3. Scope. To the extent not amended or modified herein, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
NORTH FOODS, INC.
By:
----------------------------------
---------------------------,President
Shareholders:
-------------------------------------
Thomas Fickling
-------------------------------------
William Prentice
-------------------------------------
Thomas Troy Fickling
<PAGE>
Purchaser:
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By:
----------------------------------
Joel Aaseby, Secretary
2
<PAGE>
AMENDMENT NO. 3
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 3 TO ASSET PURCHASE AGREEMENT (this "Amendment") is made
and entered into this 16th day of June, 1997, among NORTH FOODS, INC., a North
Carolina corporation ("Seller"); THOMAS FICKLING, WILLIAM PRENTICE and THOMAS
TROY FICKLING (collectively referred to as the "Shareholders"), and NATIONAL
RESTAURANT ENTERPRISES, INC. d/b/a AMERIKING CORPORATION, a Delaware corporation
("Purchaser").
R E C I T A L S:
WHEREAS, Seller, the Shareholders and Purchaser are parties to an Asset
Purchase Agreement, dated March 7, 1997 (the "Original Agreement"), as amended
by Amendment No. 1 to Asset Purchase Agreement, dated April 8, 1997, and
Amendment No. 2 to Asset Purchase Agreement, dated June 16, 1997 (collectively
and with the Original Agreement, the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement to further
clarify the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed
to be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms. Capitalized terms used without definition herein
shall have the meanings assigned to them in the Agreement.
2. Use of Escrow for Adjustments. The parties hereby agree that all sums to
be escrowed with Poyner & Spruill, L.L.P. pursuant to Section 3.20 of the
Original Agreement shall be available to reimburse Purchaser for any
overpayments at Closing made in respect of any prorations pursuant to Section
1.7. To the extent practicable, the parties shall "true-up" such amounts within
15 days following the Closing Date, and, for all other prorations, the parties
shall "true-up" such amounts as promptly as possible. Funds in respect of any
such "true-up" shall be distributed by Poyner & Spruill, L.L.P. to Purchaser as
soon as practicable following receipt of instructions with respect thereto from
Seller and Purchaser, provided that no funds shall be distributed to Seller out
of such escrowed amounts pursuant to Section 3.20 of the Original Agreement so
long as any good faith claim of Purchaser against such funds shall remain
outstanding.
3. License to Use Name. Seller hereby grants to Purchaser and its assigns a
license to continue to use the name "North Foods Food Mart" and reasonable
variations thereon, in connection with the convenience store businesses located
adjacent to, and operated in conjunction with, Burger King Store Nos. 7626 and
9053. Such license shall include the right to use such name and reasonable
variations thereon on all signage, advertising and other publications incidental
to the operation of such businesses. The license granted hereby shall not
authorize Purchaser or its assigns to use the name "North Foods Food Mart" or
any variations thereon in connection with any other businesses or locations. In
the event Seller elects to dissolve its corporate existence at such time as
Purchaser and its assigns are still using the license granted hereunder, Seller
shall give to Purchaser 90 days advance notice of its intention to effect such
dissolution and cooperate with and use its reasonable efforts to assign to
Purchaser or its assign the right to continued use of the name "North Foods Food
Mart" and reasonable variations thereon.
4. Scope. To the extent not amended or modified herein, the Agreement shall
remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
NORTH FOODS, INC.
By:________________________________
___________________________, President
Shareholders:
___________________________________
Thomas Fickling
___________________________________
William Prentice
___________________________________
Thomas Troy Fickling
Purchaser:
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By:___________________________________
Joel Aaseby, Secretary
2494-1 05201-024
2
<PAGE>
REAL ESTATE PURCHASE AGREEMENT
among
T & B LEASING, A NORTH CAROLINA GENERAL PARTNERSHIP,
THE PARTNERS OF T & B LEASING
and
CASTLE PROPERTIES, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
<PAGE>
REAL ESTATE PURCHASE AGREEMENT
THIS REAL ESTATE PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 7th day of March, 1997, among T & B LEASING, a North Carolina general
partnership ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE (collectively
referred to as the "Partners"), and CASTLE PROPERTIES, L.L.C., a Delaware
limited liability company ("Purchaser").
RECITALS
WHEREAS, Seller owns the real estate and improvements for thirteen (13)
Burger King(R) restaurants and the improvements only on two (2) other Burger
King(R) restaurants;
WHEREAS, each of the Partners is a general partner of Seller and the
Partners are the only general partners of Seller;
WHEREAS, Seller desires to sell, assign, transfer and deliver to Purchaser,
and Purchaser desires to purchase from Seller, such real estate and
improvements, as described in Article I hereof, on the terms and subject to the
conditions hereinafter contained;
WHEREAS, Purchaser and the Partners desire to enter into certain agreements
between them on the terms and subject to the conditions hereinafter contained.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Agreement, and the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
ARTICLE I -- PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, at the Closing on the Closing Date (as such terms are
defined in Section 2.1 hereof), Seller shall sell, convey, assign, transfer and
deliver to Purchaser and Purchaser shall purchase and accept from Seller all of
the right, title and interest of Seller in and to the property described below:
1.1.1 Fee simple title to all of the land (the "Land") and
improvements (the "Improvements") more fully described on Exhibit 1.1 attached
hereto and incorporated by reference herein.
1.1.2 All of Seller's right, title and interest as lessor in all
leases covering the Land and Improvements (said leases, together with any and
all amendments, modifications or supplements thereto, are hereinafter referred
to collectively as the "Store Leases").
1.1.3 All of Seller's right, title and interest as lessee in all
ground leases upon which any of the Improvements are situated (said leases,
together with any and all amendments, modifications or supplements thereto, are
hereinafter referred to collectively as the "Ground Leases" and are identified
on Exhibit 1.1.3 attached hereto and incorporated by reference herein).
1
<PAGE>
1.1.4 All rights, privileges, easements and appurtenances to the
Land and the Improvements, if any, including, without limitation, all of
Seller's right, title and interest in and to all mineral and water rights and
all easements, rights-of-way and other appurtenances used or connected with the
beneficial use or enjoyment of the Land and the Improvements (the Land, the
Improvements and all such easements and appurtenances, including, without
limitation, Seller's interest as lessor under the Store Leases and as lessee
under the Ground Leases, are sometimes collectively hereinafter referred to as
the "Real Property").
1.1.5 All fixtures, if any, owned by Seller and located on the Land
and/or Improvements including, but not limited to, the items described on
Exhibit 1.1.5 attached hereto and incorporated by reference herein (the
"Fixtures").
1.1.6 The service contracts listed and described on Exhibit 1.1.6
attached hereto and incorporated by reference herein (the "Assumed Service
Contracts").
1.1.7 All right, title and interest of Seller, if any, in and to all
site plans, surveys, soil and substratus studies, architectural drawings, plans
and specifications, engineering, electrical and mechanical plans and studies,
floor plans, landscape plans, and other plans and studies of any kind if
existing and in Seller's possession or control that relate to the Real Property
or the Fixtures (collectively the "Property Documents"). (The Real Property,
Fixtures, Assumed Service Contracts and Property Documents are sometimes
collectively hereinafter referred to as the "Property").
1.2 Purchase Price; Allocations. The purchase price for the Property is
Fifteen Million Two Hundred Seventy Five Thousand Five Hundred Fifty One and
no/100 Dollars ($15,275,551.00) (the "Purchase Price"), and shall be subject to
the adjustments and prorations provided herein. The parties agree that the
Purchase Price for the Property shall be allocated among the Property in the
manner set forth on Exhibit 1.2 attached hereto.
1.3 Liabilities of Seller. Except as set forth in this Section 1.3, Seller
shall be and remain solely liable and responsible for all debts, obligations,
duties, and liabilities of Seller and its business. Purchaser does not and shall
not assume, agree to pay or pay any debts, obligations, duties or liabilities of
any nature of Seller or its business. Notwithstanding the foregoing, Purchaser
agrees to assume from and after the Closing Date all of the rights and
obligations of Seller attributable to the period from and after the Closing Date
under the Store Leases, the Ground Leases and the Assumed Service Contracts.
(The Store Leases, the Ground Leases and the Assumed Service Contracts are
sometimes collectively hereinafter referred to as the "Assumed Contracts").
1.4 Prorations. All rents payable under the Ground Leases, utilities and
all other operating expenses for the Property, pre-paid or incurred, for the
current year and general real estate, personal property and ad valorem taxes and
special assessments, if any, pertaining to the Property for the current tax year
shall be prorated at the Closing effective as of 12:01 AM on the Closing Date.
If the Closing shall occur before the tax rate(s) are fixed for any ad valorem
taxes to be prorated hereunder, the apportionment of such taxes shall be upon
the basis of the most recent ascertainable taxes, and shall be represented and
adjusted between the parties upon availability of the actual bills therefor. At
the Closing, the parties shall execute a "Proration Adjustment Letter,"
substantially in the form attached hereto as Exhibit 1.4, pursuant to which the
parties shall agree to adjust the proration of operating expenses and taxes of
the Property for the year 1997.
2
<PAGE>
Pursuant to the Proration Adjustment Letter, the parties shall also agree to
adjust the proration of real estate taxes for the year 1997. Security deposits,
if any, pursuant to the Ground Leases shall be paid by and credited to
Purchaser. Except as set forth in this Section 1.4, all items of income and
expense which accrue for the period prior to the Closing will be for the account
of Seller and all items of income and expense which accrue for the period on and
after the Closing will be for the account of Purchaser. The provisions of this
Section 1.4 shall survive the Closing.
1.5 Casualty Loss. All risk of loss to the Property shall remain upon
Seller prior to the Closing. If, prior to the Closing, any portion of the
Property is damaged or destroyed by fire or other casualty to a material extent,
Purchaser may, at its option, (a) terminate this Agreement by written notice to
Seller, in which event this Agreement will become null and void and be of no
further effect, and neither Seller nor Purchaser will have any further rights or
obligations hereunder, except for those obligations which, by their express
terms, survive termination of this Agreement, or (b) receive an assignment of
insurance proceeds (with payment by Seller of any deductible) as below
described. Unless otherwise provided herein, the term "material" shall mean
damage or destruction, the cost of repairing which exceeds One Hundred Thousand
Dollars ($100,000). If, prior to the Closing, any portion of the Property is
damaged or destroyed by fire or other casualty to less than a material extent,
Purchaser shall have no right to terminate this Agreement by reason thereof, and
Seller shall either repair the same prior to Closing, at Seller's expense, or
reimburse Purchaser for the cost of repairing the same by assigning any
insurance proceeds resulting therefrom to Purchaser and paying to Purchaser the
difference between the amount of the proceeds and the cost of repair, or by
allowing Purchaser to deduct such cost from the cash payable to Seller at the
Closing. If the extent of damage or the amount of insurance proceeds to be made
available is not able to be determined prior to the Closing Date specified
below, or the repairs are not able to be completed prior to said date, then
either party, by written notice to the other, may postpone the date of the
Closing to such date as shall be designated in such notice, but not more than
thirty (30) days after the Closing Date specified below.
ARTICLE II -- CLOSING AND TERMINATION
2.1 Time, Date and Place. The closing of the purchase and sale of the
Property and the other transactions contemplated by this Agreement (referred to
throughout this Agreement as the "Closing") shall take place at the offices of
Poyner & Spruill, L.L.P., Suite 4000, 100 North Tryon Street, Charlotte, North
Carolina, or such other place that Purchaser shall determine. The time, place
and date of the Closing are referred to throughout this Agreement as the
"Closing Date."
Unless this Agreement is terminated as provided for herein, the Closing
shall occur on May 23, 1997, or ten (10) days following the completion of all of
the Conditions Precedent outlined in Article VII below, whichever is later.
2.2 Termination.
2.2.1 If the Closing contemplated hereunder has not occurred on or
before June 30, 1997, either Purchaser or Seller may terminate this Agreement
upon written notice to the other party.
2.2.2 If any of the representations, warranties or covenants of
Seller or the Partners are found to be untrue or breached in any material
respect, at or prior to Closing, and Seller or the Partners shall
3
<PAGE>
not have cured such breach within 30 days after Purchaser shall have given
written notice to Seller of the existence of such breach, Purchaser may
terminate this Agreement upon written notice to Seller.
2.2.3 If any of the representations, warranties or covenants of
Purchaser are found to be untrue or breached in any material respect, at or
prior to Closing, and Purchaser shall not have cured such breach within 30 days
after Seller shall have given written notice to Purchaser of the existence of
such breach, Seller may terminate this Agreement upon written notice to
Purchaser.
2.2.4 This Agreement may be terminated by the written agreement of
Purchaser and Seller. This Agreement may be terminated by Purchaser in its sole
discretion if any of the contingencies set forth in Section 7.2 is not met to
Purchaser's satisfaction.
2.2.5 This Agreement may be terminated by Purchaser if the Exhibits
hereto are not furnished in accordance with Section 5.1.14 hereof, or are found,
in Purchaser's sole discretion, to be unacceptable within five (5) business days
following receipt by Purchaser thereof and of the letter required by Section
5.1.14.
2.3 Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 2.2, this Agreement shall be of no further
force and effect, and except as specifically provided herein, with no
liabilities or obligations to any party under this Agreement; provided, however,
that the parties shall not be released from any liabilities, claims or actions
regarding the falsity in any material respect of a representation or warranty
set forth in Article III or Article IV or a failure to perform or comply with
any material obligation under this Agreement.
2.4 Expenses. Seller shall pay the following closing costs: (1) the cost
of preparing the Surveys (as hereinafter defined) and (2) state, county, and, if
applicable, municipal transfer taxes, sales taxes, documentary fees and deed
recording costs. Purchaser shall pay the following closing costs: (1) the
premium and other charges of the title company for issuing the Title Policy (as
hereinafter defined) and (2) the fees of the title company or its affiliate for
handling the Closing. Each party shall pay the fees and expenses of its own
legal counsel and, except as provided above, the cost of obtaining or preparing
each document to be delivered by such party at Closing. Except as provided
above and set forth below, Purchaser shall pay all expenses associated with
Purchaser's investigation of the Property, including, but not limited to, the
fees and expenses of any third parties, such as environmental consultants
conducting Phase I or Phase II environmental assessments, engaged by Purchaser
with respect thereto.
ARTICLE III -- REPRESENTATIONS AND WARRANTIES
OF SELLER AND PARTNERS
Seller and the Partners, jointly and severally, represent and warrant to
Purchaser as of the date hereof and as of the Closing on the Closing Date each
of the following:
3.1 Ownership of Seller. The Partners are the sole and exclusive owners
of all of the partnership interests of Seller. The Partners have duly approved
Seller's sale, assignment, transfer and delivery of the Property to Purchaser in
accordance with the terms of this Agreement and the consummation of all the
transactions contemplated hereby.
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3.2 Due Organization; Name and Address; Good Standing, Authority of
Seller. Seller is a general partnership duly organized, validly existing and in
good standing under the laws of the State of North Carolina. The only name and
business address of Seller which has been used by Seller at any time within the
past three years ending at the date of this Agreement is T & B Leasing, 3932
Breezewood Avenue, Fayetteville, North Carolina. Seller has full right, power
and authority to own and lease its properties and assets. Seller is not, and has
not been within the past three years ending at the date of this Agreement,
engaged in any active line of business and, during such period, its sole
business has been owning and leasing its properties and assets. Seller is duly
licensed, qualified and authorized to do business in each jurisdiction in which
the location or nature of the Property make such licensing, qualification and
authorization legally necessary. Except as disclosed on Exhibit 3.2, Seller is
not in breach or violation of, and the execution, delivery and performance of
this Agreement will not result in a breach or violation of, any of the
provisions of Seller's partnership agreement, as amended to the date of this
Agreement or other governing documents (the "Governing Documents"), or any
agreement to which it is a party.
3.3 Authorization and Validity of Agreements. Seller and the Partners
have the legal capacity, right, power, and authority to enter into this
Agreement. Seller has the full right, power and authority to execute,
acknowledge and deliver this Agreement and to perform the transactions
contemplated by this Agreement. The execution, acknowledgment and delivery of
this Agreement by Seller and the Partners and the performance by Seller and the
Partners of the transactions contemplated hereby have been duly and validly
authorized by all necessary partnership and partner action. This Agreement has
been duly executed, acknowledged and delivered by Seller and the Partners and is
the legal, valid and binding obligation of Seller and the Partners enforceable
against Seller and the Partners, respectively, in accordance with its terms,
except in each case as such enforceability may be limited by general principles
of equity, bankruptcy, insolvency, moratorium and similar laws relating to
creditors rights generally.
3.4 Agreement Not in Conflict with Other Instruments; Required Approvals
Obtained. Except as disclosed on Exhibit 3.4, the execution, acknowledgment,
delivery, and performance of this Agreement by the parties thereto, and the
consummation of the transactions contemplated by this Agreement will not (a)
materially violate or require any consent, approval, or filing under, (i) any
common law, law, statute, ordinance, rule or regulation (collectively referred
to throughout this Agreement as "Laws") of any federal, state or local
government (collectively referred to throughout this Agreement as "Governments")
or any agency, bureau, commission, instrumentality or judicial body of any of
the Governments (collectively referred to throughout this Agreement as
"Governmental Agencies") except that which may be required by the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or (ii)
any judgment, injunction, order, writ or decree of any court, arbitrator,
Government or Governmental Agency by which Seller or any of the Property is
bound; (b) conflict with, require any consent, approval, or filing under, result
in the breach or termination of any provision of, constitute a default under, or
result in the creation of any claim, security interest, lien, charge, or
encumbrance upon any of the Property pursuant to (i) Seller's Governing
Documents, (ii) any indenture, mortgage, deed of trust, license, permit,
approval, consent, franchise, lease, contract, or other instrument, document or
agreement to which Seller is a party or by which Seller, or any of the Property
is bound, or (iii) any judgment, injunction, order, writ or decree of any court,
arbitrator, Government or Governmental Agency by which Seller or any of the
Property is bound. All permits, licenses and authorizations of any Government or
Governmental Agency required to be obtained by Seller prior to the Closing,
shall have been obtained and shall be in full force and effect as of the Closing
Date.
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3.5 Conduct of Business in Compliance with Regulatory and Contractual
Requirements. Seller has conducted and is conducting its business in material
compliance with all applicable Laws of all Governments and Governmental
Agencies.
3.6 Legal Proceedings. There is no action, suit, proceeding, claim or
arbitration, or to the best of Seller's and the Partners' knowledge any
investigation by any person or entity, including, but not limited to, any
Government or Governmental Agency, (i) pending, to which Seller or the Partners
are a party, or threatened against or relating to Seller, Seller's business or
the Property, or (ii) challenging Seller's or the Partners' right to execute,
acknowledge, deliver, perform under or consummate the transactions contemplated
by this Agreement or (iii) asserting any right with respect to any of the
Property, and, in each such case, there is no basis for any such action, suit,
proceeding, claim, arbitration or investigation.
3.7 Financial Information. Attached hereto as Exhibit 3.7 are copies of
the unaudited Balance Sheets of Seller as of December 31, 1994, 1995, 1996, and
the Operating Statements of Seller for each of the three fiscal years then
ended, which are being provided by Seller and the Partners to Purchaser (the
"Financial Statements"). The Financial Statements are in accordance with the
books and records of Seller, are true and correct and accurately present
Seller's financial position in all material respects as of the dates set forth
therein and the results of Seller's operations for the periods then ended; all
such Financial Statements are in conformity with the accounting principles
historically utilized by Seller and applied on a consistent basis during each
period and on a basis consistent with that of prior periods. Until the Closing
Date, Seller shall deliver to Purchaser month end balance sheets and income
statements within twenty (20) days of the end of each month.
3.8 Tax Matters. All tax returns of Seller as filed by Seller with the
Internal Revenue Service (the "IRS") and all information reported on the returns
are true, accurate, and complete in all material respects. Seller is not a
party to any pending , and is not aware of any threatened action, suit,
proceeding, or assessment against it for the collection of taxes by any
Government or Governmental Agency. Seller has duly and timely filed with all
appropriate Governments and Governmental Agencies, all tax returns, information
returns, and reports required to be filed by Seller. Seller has paid in full
all taxes, interest, penalties, assessments and deficiencies owed by Seller to
all taxing authorities, except for such amounts not yet due and payable. All
taxes and other assessments and levies which Seller is required by applicable
Law to withhold or to collect have been duly withheld and collected and have
been paid over to the proper Governments and Governmental Agencies or are
properly held by Seller for such payment. All claims by the IRS or any state
taxing authorities for taxes due and payable by Seller have been paid by Seller.
Seller is not a party to any pending , and is not aware of any threatened
action, suit, proceeding, or assessment against it for the collection of taxes
by any Government or Governmental Agency.
3.9 Title to Property. Except for the Permitted Exceptions (as
hereinafter defined), Seller has sole and exclusive, good and marketable title
to all of the Property and the same shall be free and clear of any and all
pledges, claims, threats, liens, restrictions, agreements, leases, security
interests, charges and encumbrances at the time of Closing. All of the Property
is in good, working and operating condition and repair, reasonable wear and tear
excepted and free from any material defects known to Seller or to the Partners.
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3.10 Records. Seller's books and records pertaining to the Property (the
"Records") have been delivered by Seller to Purchaser or shall be delivered by
Seller to Purchaser, and such Records are true, complete and correct in all
material respects.
3.11 Absence of Certain Changes or Events. Since December 31, 1996,
Seller has not engaged in or experienced any of the following:
3.11.1 Sold, assigned, transferred, leased, disposed of, or agreed to
sell, assign, transfer, lease, or dispose of, any of the Property, except in the
ordinary course of Seller's business, as such business has been operated
historically.
3.11.2 Suffered any material adverse change in Seller's operations,
earnings, assets, liabilities, or business (financial or otherwise).
3.11.3 Except as set forth in Exhibit 3.11.3, failed to pay any
indebtedness or other obligation, including any taxes and other charges, when
due.
3.12 Adverse Conditions. Except as set forth in Exhibit 3.12, attached
hereto and incorporated by reference herein, there are no past, present or
future conditions, facts or circumstances which have materially affected or
which might materially affect adversely the Property or Purchaser's intended use
thereof, excluding general economic, financial and market conditions that are
known to the public.
3.13 Leases and Contracts. Except for the Assumed Contracts, and except
for service contracts that will be canceled as of the Closing Date, there are no
leases, contracts, licenses, agreements or other commitments of Seller as
obligor involving a liability, obligation, contingent liability or contingent
obligation in excess of $5,000 per Restaurant. Each of the Assumed Contracts
are in full force and effect and have not been modified, and Seller has no
knowledge of any current material default in the performance of the obligations
of any party under the Assumed Contracts. Other than tenants who will vacate
the Property at or prior to Closing, there are no parties in possession of any
portion of the Property as lessees, tenants at sufferance or trespassers.
3.14 Title to Land and Improvements. At the Closing, Seller will convey
to Purchaser fee simple title to the Land and Improvements by general warranty
deeds, free and clear of any and all liens, assessments, unrecorded easements,
security interests and other encumbrances, except for the Permitted Exceptions.
Delivery of the Title Policy shall be deemed to satisfy the obligation of Seller
as to the sufficiency of title required hereunder.
3.15 Hazardous Materials. Except as disclosed on Exhibit 3.15 attached
hereto, the Real Property (including the land, surface water, ground water, and
improvements), is free of "contamination" from (A) any "hazardous waste," any
"hazardous substance," and any "oil, petroleum products, and their by-products,"
as such terms are defined by any federal, state, county or local law, ordinance,
regulation or requirement applicable to any portion of such Real Property, as
the same may be amended from time to time, and including any regulations
promulgated thereunder, and (B) any substance the presence of which on any of
the Real Property is regulated or prohibited by any law (collectively,
"Hazardous Substances"). "Contamination" means the uncontained presence of
Hazardous Substances at such Real Property or arising from such Real Property
that may require remediation or cleanup under any applicable law. Seller has
not
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used any Hazardous Substances on, from or affecting any of the Real Property in
any manner that violates any applicable law, and to the best of Seller's
knowledge, no prior owner or user of any of the Real Property has used such
substances on, from, or affecting any of the Real Property in any manner which
violates any applicable law. There is not now, nor, to the best of Seller's
knowledge, has there ever been on or in any of the Real Property underground
storage tanks or surface impoundments, asbestos-containing materials, or any
material spills of polychlorinated biphenyls, including those used in hydraulic
oils, electric transformers or other equipment. Without limiting in any respect
the generality of the foregoing, there are no actual, alleged or perceived
health issues applicable to any of the Real Property. The copies of any
environmental reports that may have been delivered by Seller to Purchaser, are
complete and accurate copies of the same and Seller has no other environmental
reports, tests or audits in its possession or under its control, and Seller has
no knowledge of any other environmental reports, tests or audits regarding any
of the Real Property existing elsewhere. In addition, Seller has received no
notice from any government authority claiming that any of the Real Property
(including the improvements located thereon) is contaminated by Hazardous
Substances.
3.16 Full Disclosure. This Agreement (including the Exhibits hereto) does
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained herein not misleading.
There is no fact known to Seller or to the Partners that is not disclosed in
this Agreement that materially adversely affects the accuracy of the
representations and warranties contained in this Agreement or Seller's financial
condition, operations, business, earnings, assets, or liabilities.
3.17 No Brokerage. Other than the obligations owed to the Cypress
Consulting Group, Inc., which Seller agrees to pay, neither Seller nor the
Partners has incurred any obligation or liability, contingent or otherwise, for
brokerage fees, finder's fees, agent's commissions, or the like in connection
with this Agreement or the transactions contemplated hereby.
3.18 Notice of Violations. Seller has received no notice of and, to the
best of Seller's knowledge, there is no violation or alleged violation of any
legal requirement affecting, the Property, including, without limitation, any
violation or alleged violation of any local, state or federal environmental,
zoning, handicap or fire law, ordinance, code, regulation, rule or order, and
specifically including, without limitation, variances or special permits
affecting the Property. Seller has performed all conditions to any permits or
other governmental approvals or licenses with respect to the Property,
including, without limitation, the payment of all development impact or other
fees and developer exactions.
3.19 Condition of Property. The Real Property and Fixtures comply, in all
material respects, with the current Burger King Corporation Repairs and
Maintenance Standards (the "Standards"). In the event Burger King Corporation
requires any modification to the Real Property and/or Fixtures as a result of
their failure to meet the Standards, Seller shall, at its sole cost and expense,
effect such repairs to bring all Real Property and Fixtures into compliance with
the Standards; provided, however, that Seller shall not be required to make any
improvements to the Real Property and/or Fixtures to comply with the Burger King
Corporation's Project Jennifer standards or any merely cosmetic changes to the
Real Property and/or Fixtures that are not related to the operation,
functionality or safety of same.
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and the Partners, jointly and
severally, as of the date hereof and as of the Closing on the Closing Date each
of the following:
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4.1 Due Organization; Good Standing; Power. Purchaser is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Purchaser has full right, power and
authority to enter into this Agreement and to perform its obligations hereunder.
Purchaser is not in breach or violation of, and the execution, delivery and
performance of this Agreement will not result in a breach or violation of, any
of the provisions of Seller's articles of organization or operating agreement
(the "Governing Documents").
4.2 Authorization and Validity of Documents. The execution, delivery and
performance by Purchaser of this Agreement, and the transactions contemplated
hereby and thereby, have been duly and validly authorized by Purchaser. This
Agreement has been duly executed, acknowledged and delivered by Purchaser and is
a legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors' rights generally.
4.3 No Brokerage. Purchaser has not incurred any obligation or liability,
contingent or otherwise, for brokerage fees, finder's fees, agent's commissions,
or the like in connection with this Agreement or the transactions contemplated
hereby.
4.4 Obligations Assumed. Purchaser covenants that it will pay all
obligations assumed by it under this Agreement.
ARTICLE V -- COVENANTS
5.1 Seller's and Partners' Covenants. Seller and the Partners, jointly
and severally, covenant, promise and agree that from the date hereof and until
the Closing, Seller and the Partners shall, and the Partners shall cause Seller
to perform and comply with each of the following:
5.1.1 Preserve the Property.
5.1.2 Maintain and continue normal and usual maintenance and
repair of the Property.
5.1.3 Cooperate with Purchaser to achieve an orderly transfer of the
Property.
5.1.4 Pay or provide for payment of all sales, use, personal
property, social security, withholding, payroll, unemployment compensation,
income and other taxes, assessments, fees and public charges due and payable by
Seller in respect of its business and the Property through the Closing Date and
any portion thereof applicable to any period prior to the Closing Date unless
otherwise provided herein.
5.1.5 Maintain in effect all insurance policies covering the
Property.
5.1.6 Fully perform and comply with all covenants, promises and
agreements hereunder which are required to be performed or complied with by
Seller and the Partners prior to or at the Closing, and exert their best efforts
to completely satisfy and fulfill all conditions precedent to Seller's and the
Partners' obligations to close hereunder at the Closing on the Closing Date.
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5.1.7 Exert their best efforts to prevent the occurrence of any event
which could result in any of Seller's or the Partners' representations and
warranties contained in this Agreement not being true and correct at or as of
the time immediately after the occurrence of such event, and Seller and the
Partners shall promptly notify Purchaser of the occurrence of any event or the
discovery of any fact which would cause any of their covenants, promises and
agreements to be breached or violated or any of their representations and
warranties to become not true and correct or which could interfere with or
prevent the consummation of the transactions contemplated hereby.
5.1.8 Provide Purchaser and its representatives with access during
normal business hours to all of Seller's Property and Records, provide Purchaser
and its representatives with such financial and operating data and other
information with respect to the Property as Purchaser shall from time to time
reasonably request, and permit Purchaser and its representatives, at Purchaser's
sole expense, to consult with Seller's representatives, officers, employees and
accountants up to the time of Closing and for 120 days thereafter.
5.1.9 Take no action which is or would cause a material violation of
any Laws of any Government or Governmental Agency.
5.1.10 Take, or cause to be taken, all reasonable actions necessary to
permit Purchaser to furnish all information required under the HSR Act and
promptly cooperate with and furnish information to Purchaser in connection with
any such requirements imposed upon Purchaser or its parent in connection with
the transaction as set forth herein. The parties acknowledge and agree that the
filing fees for any filings required under the HSR Act shall be paid by
Purchaser.
5.1.11 Not to further encumber any of the Property or allow any
further encumbrance upon title to the Property, or modify the terms of any
Assumed Service Contract, or enter into any new service contract which would be
binding upon Purchaser or the Property after Closing, without the prior written
consent of Purchaser.
5.1.12 Order from Chicago Title Insurance Company ("Title Company"),
and promptly, but in no event later than April 4, 1997, deliver to Purchaser one
or more ALTA Form B extended coverage title commitments pertaining to each
parcel of the Land, the Ground Leases and the Improvements providing for the
deletion of standard printed exceptions pertaining to survey matters, mechanic's
liens and rights of parties in possession (the "Commitments"), together with
copies of all documents relating to the title exceptions referred to in such
Commitments and a tax certificate issued by the treasurer of each of the
counties in which the Land and/or the Improvements are located. Purchaser shall
bear the expense of obtaining such Commitments.
5.1.13 Deliver to Purchaser on or before April 4, 1997, an as-built
ALTA/ACSM survey (or update to existing survey) for each parcel of the Land, the
Ground Leases and the Improvements prepared by a licensed surveyor (the
"Surveys"). The Surveys shall be sufficient to enable Title Company to update
the Commitments to: (i) delete the standard survey matters, (ii) add any new
title exceptions which are revealed by said Surveys and an inspection of the
Real Property, and (iii) enable Title Company at the Closing to issue, or to
unequivocally agree in writing to issue, an extended owner's policy of title
insurance (with the standard printed exceptions pertaining to survey matters
deleted), and shall be certified to Seller, Purchaser and Title Company.
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5.1.14 Deliver to Purchaser within 14 business days of the date of
execution of this Agreement all exhibits to be furnished by Purchaser, together
with a letter certifying that all such exhibits have been furnished and that the
information contained therein is true and complete in all material respects.
5.2 Joint Covenants. Seller and the Partners, jointly and severally, on
the one hand, and Purchaser, on the other hand, covenant, promise and agree to
each other as follows: That, on or before April 25, 1997, Purchaser shall notify
Seller in writing of any title exceptions identified in the Commitments and/or
matters reflected in the Surveys of which Purchaser disapproves. Any exception
or matter not disapproved in writing on or before such date shall be deemed
approved by Purchaser, and shall constitute a "Permitted Exception" hereunder.
Within ten (10) business days after Seller's receipt of Purchaser's disapproved
title exceptions and/or Survey matters (but, provided that Seller has had at
least five (5) business days in which to review Purchaser's disapproved
exceptions and/or Survey matters, but in no event later than ten (10) business
days prior to the Closing), Seller shall notify Purchaser in writing of any
disapproved title exceptions and/or Survey matters which Seller is unable or
unwilling to cause to be removed or insured against prior to or at Closing and,
with respect to such exceptions and/or Survey matters, Purchaser then shall
elect, by giving written notice to Seller within five (5) calendar days
thereafter, (x) to terminate this Agreement, or (y) to waive its disapproval of
such exceptions and/or Survey matters, in which case such exceptions and/or
matters shall then be deemed to be Permitted Exceptions.
ARTICLE VI -- OPINIONS OF COUNSEL
6.1 Opinion of Seller's and Partners' Counsel. At the Closing, Seller and
the Partners shall deliver to Purchaser the opinion of their counsel, dated as
of the Closing Date, in substantially the form attached hereto as Exhibit 6.1.
6.2 Opinion of Purchaser's Counsel. At the Closing, Purchaser shall
deliver to Seller and to the Partners the opinion of its counsel, dated as of
the Closing Date, in substantially the form attached hereto as Exhibit 6.2.
ARTICLE VII -- CONDITIONS
7.1 Seller's Conditions to Close. Seller's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Seller (but no such waiver
of any such condition precedent shall be or constitute a waiver of any covenant,
promise, agreement, representation or warranty made by Purchaser in this
Agreement):
7.1.1 All representations and warranties made by Purchaser in this
Agreement shall be complete and accurate at and as of the Closing on the Closing
Date. Seller shall have been furnished with a certificate, signed by Purchaser,
and dated the Closing Date to the foregoing effect.
7.1.2 All covenants, promises and agreements made by Purchaser in
this Agreement and all other actions required to be performed or complied with
by Purchaser under this Agreement prior to or at the Closing shall have been
fully performed or complied with by Purchaser. Seller shall have been furnished
with a certificate, signed by Purchaser, and dated the Closing Date to the
foregoing effect.
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7.1.3 Purchaser shall have delivered to the Title Company the items
described in Section 8.1.
7.1.4 Seller shall have received an opinion of counsel for Purchaser
as of the Closing Date, as required by Section 6.2.
7.1.5 Purchaser shall not have received, prior to Closing, any
notification under the HSR Act that seeks to prohibit Purchaser and Seller from
consummating the transaction set forth in this Agreement.
7.1.6 Seller shall have received consent from the lessors under the
Ground Leases to the assignment of each such Ground Leases to Purchaser.
7.2 Purchaser's Conditions to Close. Purchaser's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Purchaser (but no such
waiver of any such condition precedent shall be or constitute a waiver of any
covenant, promise, agreement, representation or warranty made by Seller and the
Partners in this Agreement):
7.2.1 All representations and warranties made by Seller and the
Partners in this Agreement shall be complete and accurate at and as of the
Closing on the Closing Date. Purchaser shall have been furnished with a
certificate, signed by the Partners and Seller, and dated the Closing Date, to
the foregoing effect.
7.2.2 All covenants, promises and agreements made by Seller and the
Partners in this Agreement and all other actions required to be performed or
complied with by Seller and the Partners under this Agreement prior to or at the
Closing shall have been fully performed or complied with by Seller and the
Partners. Purchaser shall have been furnished with a certificate, signed by the
Partners and Seller, and dated the Closing Date, to the foregoing effect.
7.2.3 Seller shall have obtained, and delivered to Purchaser, copies
of all consents, approvals or other authorizations which Seller is required to
obtain from, and any filing which Seller is required to make with, any
governmental authority or agency or any other person including, but not limited
to, consents required from Burger King Corporation (the "Burger King Consents")
in connection with the execution, delivery and consummation of this Agreement
and the other documents associated herewith and the consummation of the
transactions contemplated hereby or thereby (collectively, the "Required
Consents"), in form and substance reasonably satisfactory to Purchaser.
7.2.4 Within ten (10) business days after the effective date of this
Agreement, Seller shall have delivered to Purchaser, true, correct and complete
copies of all information in the possession of Seller or Seller's property
manager, or otherwise reasonably subject to Seller's control, pertaining to the
Property which is of the following types or categories: (i) Seller's current
title insurance policies and commitments issued to Seller thereafter; (ii) plans
and specifications (including all "as built" and other architectural plans and
drawings), permits, licenses, approvals and inspection reports pertaining to the
Real Property and Fixtures; (iii) information relating to environmental
conditions at the Property; (iv) the most recent plat of survey of the Real
Property; (v) copies of all Store Leases, Ground Leases, Service Contracts and
any other
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contracts materially affecting the Property, together with all amendments
thereto; and (vi) a detailed summary of all unresolved legal or administrative
actions, suits or proceedings in any way affecting the Property or any interest
therein. At the time Seller delivers the Property information to Purchaser,
Seller shall also deliver to Purchaser the certificate of the Partners that the
Property information so delivered constitutes all of the information which
Seller is required to deliver to Purchaser hereunder.
7.2.5 Purchaser shall have received all things required to be
delivered or furnished to Purchaser by Seller and the Partners hereunder prior
to or at the Closing, including the Surveys and the Commitments.
7.2.6 All necessary permits, licenses and approvals required to be
obtained by Purchaser shall have been obtained by Purchaser.
7.2.7 There shall not have occurred any material adverse change in
the Property.
7.2.8 Purchaser shall have received an opinion of counsel for Seller
and the Partners, as of the Closing Date, as required by Section 6.1 hereof.
7.2.9 Purchaser and its representatives shall have completed, to
their complete satisfaction, an investigation and examination of all aspects of
the Property, including the Financial Statements. No employee or representative
of Purchaser will perform on-site due diligence of the Property without Seller's
prior approval, at which time such employee or representative will be
accompanied by Seller or its designee. Purchaser shall have completed its review
of the Property to confirm that the Property conforms in all material respects
to the standards described in Section 3.22 hereof and to confirm the physical
condition of the Property, including the conduct of engineering and all
environmental studies and assessments (the "Inspection") on or before forty-five
(45) days following the execution of this Agreement (the "Inspection Deadline").
The Inspection shall not include title and survey matters, which shall be
governed by Sections 5.1.12 and 5.1.13. If written notice of any unsatisfactory
condition, signed by or on behalf of Purchaser is not received by Seller on or
before the Inspection Deadline, the physical condition of the Property shall be
deemed to be satisfactory to Purchaser. If such notice is received by Seller as
set forth above, and if Purchaser and Seller have not agreed in writing to a
settlement thereof on or before fifteen (15) days following the Inspection
Deadline (the "Resolution Deadline"), this Agreement shall terminate three (3)
business days following the Resolution Deadline; unless, within such three (3)
business day period, Seller receives written notice from Purchaser waiving
objection to any unsatisfactory condition.
7.2.10 Within forty-five (45) days of execution of this Agreement,
Purchaser's auditor shall have (i) reviewed the financial and accounting system
of Seller; (ii) reviewed and confirmed the Financial Statements and results set
forth in the Financial Statements; and (iii) found no material objection to the
financial and accounting system of Seller, or Seller and Purchaser shall have
resolved any objection raised by the auditor and presented to Seller by
Purchaser.
7.2.11 Seller shall have delivered to Purchaser the following
documents:
7.2.11.1 fully executed original counterparts of each Assumed
Contract in Seller's possession;
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7.2.11.2 if available, certificates dated no earlier than thirty
(30) days prior to the Closing Date, from the Secretary of State for the State
of North Carolina as to the good standing of Seller;
7.2.11.3 the Commitments and the Surveys;
7.2.11.4 state, county and, if applicable, municipal, transfer
tax declarations executed by or on behalf of Seller;
7.2.11.5 to the extent in Seller's possession or under Seller's
control, originals (or if originals are not so available, copies) of the plans
and specifications for the Real Property, the Service Contracts, and any other
agreements, licenses or permits used for the operation of the Property and
assigned to Purchaser; and
7.2.11.6 all other documents, instruments and agreements
required to be delivered by Seller to Purchaser pursuant to this Agreement.
7.2.12 The Title Company shall be irrevocably committed to issue, at
the Closing, one or more ALTA owner's policies of title insurance with extended
coverage and endorsements (if any) to insure over any title exceptions and/or
Survey matters pursuant to Section 5.2 hereof (the "Title Policy") insuring
Purchaser's interest in the Land, the Ground Leases and the Improvements, dated
the Closing Date, with liability in the amount of the Purchase Price, subject
only to the Permitted Exceptions.
7.2.13 The Boards of Directors of National Restaurant Enterprises,
Inc. d/b/a AmeriKing, Inc. and the members and managers of Purchaser shall have
approved this Agreement and the transactions contemplated herein.
7.2.14 Purchaser shall have concurrently consummated the transactions
set forth in the F & P Enterprises, Inc. Asset Purchase Agreement, the North
Foods, Inc. Asset Purchase Agreement, and the W & W Investments Limited
Partnership Real Estate Purchase Agreement.
7.2.15 [intentionally omitted]
7.2.16 Subject to the Permitted Exceptions and rights of parties
under the Assumed Service Contracts, Seller shall have delivered possession of
the Property to Purchaser at Closing.
7.2.17 Seller shall have delivered to the Title Company the items
listed in Section 8.1.
7.3 Contemporaneous Transfer. All transfers, assignments, conveyances, and
transactions under this Agreement shall be effected contemporaneously for
present value between and among Seller, the Partners and Purchaser.
ARTICLE VIII - CLOSING DELIVERIES
8.1 Purchaser's Closing Deliveries. At or prior to the Closing, Purchaser
shall deliver or cause to be delivered to the Title Company the following:
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8.1.1 The Purchase Price, together with such other sums as the Title
Company shall require to pay the Closing costs, prorations, reimbursements and
adjustments as set forth herein, in immediately available funds.
8.1.2 A General Assignment executed in duplicate by the Purchaser, in
the form of Exhibit 8.1.2(a) (the "General Assignment"), whereby Purchaser shall
assume the obligations under the Assumed Service Contracts, and an Assignment of
Leases, in the form of Exhibit 8.1.2(b) (the "Assignment of Leases"), whereby
Purchaser shall assume the obligations under the Ground Leases and the Store
Leases.
8.1.3 A certificate from Purchaser stating that all of Purchaser's
conditions precedent to Closing have been satisfied.
8.1.4 Any other documents, instruments or agreements reasonably
necessary or customary in North Carolina or the localities in which any of the
Property is located, or required by the Title Company, to effectuate the
transaction contemplated by this Agreement.
8.2 Seller's Closing Deliveries. At or prior to the Closing, Seller shall
deliver or cause to be delivered to the Title Company the following:
8.2.1 A General Warranty Deed for each parcel of the Land and the
Improvements in the form attached hereto as Exhibit 8.2.1.
8.2.2 A Bill of Sale and Assignment in the form attached hereto as
Exhibit 8.2.2.
8.2.3 Two executed counterparts of the General Assignment and the
Assignment of Leases, assigning to Purchaser the Assumed Contracts and any
warranties, guaranties and indemnities relating to the Property, to the extent
such items are assignable, and the Store Leases and Ground Leases, and Consents
to Assignment, Estoppel, and Releases pertaining to the Ground Leases.
8.2.4 Any required easement assignments.
8.2.5 An affidavit from Seller and any other parties required
pursuant to Section 1445 of the Internal Revenue Code and/or regulations
relating thereto stating, under the penalty of perjury (a) that Seller is not a
foreign person; (b) the U.S. Taxpayer identification number of Seller; and (c)
such other information as may be required by regulations enacted by the
Department of Treasury, in connection with Section 1445 of the Internal Revenue
Code.
8.2.6 A certificate from Seller stating that all of Seller's
conditions precedent to Closing have been satisfied.
8.2.7 Any other documents, instruments or agreements reasonably
necessary or customary in North Carolina or the localities in which any of the
Property is located, or required by the Title Company, to effectuate the
transactions contemplated in this Agreement.
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ARTICLE IX -- ESCROW
9.1 Escrow.
9.1.1 Instructions. Not less than ten (10) business days prior to
Closing, Purchaser and Seller each shall deposit a copy of this Agreement
executed by such party (or either of them shall deposit a copy executed by both
Purchaser and Seller) with the Title Company. This Agreement, together with such
further instructions, if any, as the parties shall provide to the Title Company
by written agreement, shall constitute the escrow instructions. If any
requirements relating to the duties or obligations of the Title Company
hereunder are not acceptable to the Title Company, or if the Title Company
requires additional instructions, the parties hereto agree to make such
deletions, substitutions and additions hereto as counsel for Purchaser and
Seller shall mutually approve, which additional instructions shall not
substantially alter the terms of this Agreement unless otherwise expressly
agreed to by Seller and Purchaser.
9.1.2 Deposits into Escrow. Seller shall make its deposits into
escrow in accordance with Section 8.2. Purchaser shall make its deposits into
escrow in accordance with Section 8.1. The Title Company is hereby authorized to
close the escrow only if and when: (i) the Title Company has received all items
to be delivered by Seller and Purchaser pursuant to Article VIII; and (ii) the
Title Company can and will issue the Title Policy.
9.1.3 Close of Escrow. If and when Purchaser and Seller have
deposited into escrow the items required by this Agreement and Title Company can
and will issue the Title Policy concurrently with the Closing, Title Company
shall:
9.1.3.1 Deliver to Purchaser: (i) the General Warranty Deeds by
causing them to be recorded in the records of the clerk and recorder for the
respective Counties in which the Land and Improvements are located; (ii) the
Bill of Sale and Assignment; (iii) the affidavit of non-foreign status; (iv) one
copy of the General Assignment; and (v) one copy of the Assignment of Leases.
9.1.3.2 Deliver to Seller: (i) the Purchase Price, after
satisfying the prorations and adjustments to be paid by Seller; (ii) one copy of
the General Assignment and (iii) one copy of the Assignment of Leases.
9.1.3.3 Deliver to Purchaser: any funds deposited by Purchaser,
and any interest earned thereon, in excess of the amount required to be paid by
Purchaser hereunder.
9.1.3.4 Deliver the Title Policy issued by the Title Company to
Purchaser.
9.1.4 Real Estate Reporting Person. The Title Company is hereby
designated the "real estate reporting person" for purposes of Section 6045 of
title 26 of the United States Code and Treasury Regulation 1.6045-4 and any
instructions or settlement statement prepared by the Title Company shall so
provide. Upon the consummation of the transaction contemplated by this
Agreement, the Title Company shall file Form 1099 information return and send
the statement to Seller as required under the aforementioned statute and
regulation
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<PAGE>
ARTICLE X -- INDEMNIFICATION
10.1 Indemnification By Seller And Partners. Seller and the Partners,
jointly and severally, shall defend, indemnify and hold harmless Purchaser, its
managers, members, agents, servants and employees and their respective heirs,
personal and legal representatives, guardians, successors and assigns, from and
against any and all claims, threats, liabilities, taxes, interest, fines,
penalties, suits, actions, proceedings, demands, damages, losses, costs and
expenses (including reasonable attorneys' and experts' fees and court costs) of
every kind and nature arising out of, resulting from, or in connection with the
following:
10.1.1 Any material misrepresentation or breach by Seller or the
Partners of any representation or warranty contained in this Agreement.
10.1.2 Any material nonperformance, failure to comply or breach by
Seller or the Partners of any covenant, promise or agreement of Seller or the
Partners contained in this Agreement.
10.1.3 Any debts, obligations, duties and liabilities of Seller and
the Partners (except those assumed by Purchaser).
10.1.4 The past or future failure of the Seller or the Partners to
comply with any applicable Environmental Laws (as hereinafter defined) or the
presence of Hazardous Materials (as hereinafter defined) in the soil or ground
water on the Real Property at the time of Closing.
10.1.5 Any matter, act, thing or occurrence caused by or resulting
from any act or omission of Seller or the Partners prior to or at the Closing.
For purposes of this Section 10.1, the following terms shall have the
meaning set forth below:
(i) "Environmental Law" shall mean any and all laws, statutes,
ordinances, rules, regulations, judgments, orders, decrees, permits,
concessions, grants, agreements, licenses, or other governmental restrictions or
requirements regulating Hazardous Materials or relating to health, safety, the
environment or the release of Hazardous Materials into the environment, now or
hereafter in effect.
(ii) "Hazardous Materials" shall mean any chemical, substance,
material, object, condition, waste or combination thereof which is or may be
hazardous to human health or safety due to its radioactivity, ignitability,
corrosivity, reactivity, explosiveness, toxicity, carcinogenicity,
infectiousness or other harmful or potentially harmful properties or effects,
including, without limitation, all of those chemicals, substances, materials,
objects, conditions, wastes or combinations thereof which are now or become
listed, defined or regulated in any manner by any Environmental Law.
10.2 Indemnification by Purchaser. Purchaser shall defend, indemnify and
hold harmless Seller, the Partners and their respective heirs, personal and
legal representatives, guardians, successors and assigns, from and against any
and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including
reasonable attorneys' and experts' fees and court costs) of every kind and
nature arising out of, resulting from, or in connection with the following:
17
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10.2.1 Any material misrepresentation, omission or breach by
Purchaser of any representation or warranty contained in this Agreement.
10.2.2 Any material nonperformance, failure to comply or breach by
Purchaser of any covenant, promise or agreement of Purchaser contained in this
Agreement.
10.3 Defense of Claims. In the event of any claim, threat, liability, tax,
interest, fine, penalty, suit, action, proceeding, demand, damage, loss, cost or
expense with respect to which indemnity is or may be sought hereunder (an
"Indemnity Claim"), the indemnified party shall promptly notify the indemnifying
party in writing of such Indemnity Claim, specifying in reasonable detail the
Indemnity Claim and the circumstances under which it arose. The indemnifying
party may elect to assume the defense of such Indemnity Claim, at its own
expense, by written notice to the indemnified party given within 10 days after
the indemnifying party receives written notice of the Indemnity Claim, and the
indemnifying party shall promptly engage counsel reasonably acceptable to the
indemnified party to direct and conduct such defense; provided, however, that
the indemnified party shall have the right to engage its own counsel, at its own
expense, to participate in such defense. In the event the indemnifying party
does not so elect to assume the defense of such Indemnity Claim in the manner
specified above, or if, in the reasonable opinion of counsel to the indemnified
party, there are defenses available to the indemnified party which are different
from or additional to those available to the indemnifying party or which give
rise to a material conflict between the defense of the indemnified party and of
the indemnifying party, then upon notice to the indemnifying party, the
indemnified party may elect to engage separate counsel to conduct its defense,
at the expense of the indemnifying party.
In the event the indemnifying party assumes the defense of any Indemnity
Claim, it may at any time notify the indemnified party of its intention to
settle, compromise or satisfy such Indemnity Claim and may make such settlement,
compromise or satisfaction (at its own expense) unless within twenty (20) days
after the giving of such written notice the indemnified party shall give written
notice to the indemnifying party of its intention to assume the defense of the
Indemnity Claim, in which event the indemnifying party shall be relieved of its
duty hereunder to indemnify the indemnified party. Unless the indemnified party
shall have given the notice referred to in the preceding sentence, (i) the
indemnified party shall not consent to or make any settlement, compromise or
satisfaction with respect to the Indemnity Claim without the prior written
consent of the indemnifying party, which consent shall not be unreasonably
withheld, and (ii) any settlement, compromise or satisfaction made by the
indemnifying party with respect to such Indemnity Claim shall be deemed to have
been consented to by and shall be binding upon the indemnified party.
10.4 Arbitration. Any dispute arising out of or relating to this Agreement
which occurs after the date of Closing, which has not been resolved by non-
binding means within thirty (30) days, shall be finally settled by arbitration
conducted in accordance with the American Arbitration Association Commercial
Arbitration Rules by a sole arbitrator selected by the parties. In the event the
parties cannot agree upon an arbitrator, each party shall select an arbitrator
and the two arbitrators so selected shall select the arbitrator to hear the
dispute. The place for arbitration shall be Chicago, Illinois.
ARTICLE XI -- MISCELLANEOUS
11.1 Survival of Representations, Warranties and Agreements. All of the
representations, warranties, covenants, promises and agreements of the parties
contained in this Agreement (or in any
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document delivered or to be delivered pursuant to this Agreement or at or in
connection with the Closing) shall survive the execution, acknowledgment and
delivery of this Agreement and the consummation of the transactions contemplated
hereby for a period of five (5) years from the date of Closing.
11.2 Post-Closing Obligation. Within fifteen (15) days following the
Closing Date, Seller shall pay all wages, bonuses, commissions and other
benefits and sums (and all required taxes, insurance, social security and
withholding thereon), including all accrued vacation, accrued sick leave,
accrued benefits and accrued payments (and pro rata accruals for a portion of a
year) due to Seller's employees for all periods prior to and through the Closing
Date.
11.3 Notices. All notices, requests, demands, consents, and other
communications which are required or may be given under this Agreement
(collectively, the "Notices") shall be in writing and shall be given either (a)
by personal delivery with a receipted copy of such delivery, (b) by certified or
registered United States mail, return receipt requested, postage prepaid, or (c)
by facsimile transmission with an original mailed by first class mail, postage
prepaid, to the following addresses:
(i) If to Seller, to:
T & B Leasing
3932 Breezewood Avenue
Fayetteville, NC 28303
Attn: Thomas Fickling
Fax: (910) 486-0863
with a copy to:
Mark B. Edwards
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, NC 28202-4010
Fax: (704) 342-5264
(ii) If to the Partners, to:
Thomas Fickling
William Prentice
3932 Breezewood Avenue
Fayetteville, NC 28303
Fax: (910) 486-0863
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with a copy to:
Mark B. Edwards
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, NC 28202-4010
Fax: (704) 342-5264
(iii) If to Purchaser:
Lawrence E. Jaro, Manager
Castle Properties, L.L.C.
2215 Enterprise Drive
Westchester, IL 60154
Telefax No.: (708) 947-2160
with copies to:
A. Richard Caputo
The Jordan Company
9 West 57th Street, Suite 4000
New York, New York 10019
Telefax No.: (212) 755-5263
and
Ernest J. Panasci, Esq.
Slivka Robinson Waters & O'Dorisio, P.C.
1099 18th Street
Suite 2600
Denver, CO 80202
Telefax No.: (303) 297-2750
or to such other address of which written notice in accordance with this Section
11.3 shall have been provided to the other parties. Notices may only be given in
the manner hereinabove described in this Section 11.3 and shall be deemed
received three (3) days after given in such manner; provided however, that any
notice sent by facsimile shall be deemed to have been given as of the date of
the transmission.
11.4 Entire Agreement. This Agreement (including the Exhibits hereto,
which constitute a part of this Agreement) constitutes the full, entire and
integrated agreement between the parties hereto with respect to the subject
matter hereof, and supersedes all prior negotiations, correspondence,
understandings and agreements among the parties hereto respecting the subject
matter hereof.
11.5 Assignability. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other parties hereto; provided,
however, that Purchaser may assign this Agreement to another subsidiary of
AmeriKing Corporation.
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11.6 Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
personal and legal representatives, guardians, successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
other person any rights, remedies, obligations, or liabilities.
11.7 Severability. Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable only shall be
ineffective only to the extent of such prohibition or unenforceability, without
invalidating or rendering unenforceable the remaining provisions of this
Agreement.
11.8 Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of all of the
parties hereto. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement herein contained. The waiver by any party hereto
of a breach of any provision or condition contained in this Agreement shall not
operate or be construed as a waiver of any subsequent breach or of any other
conditions hereof.
11.9 Recording. This Agreement shall not be recorded by either party in
the Office of the clerk and recorder of the county in which any of the Real
Property is located or in any other office or place of public record and, if
Purchaser shall record this Agreement or cause or permit same to be recorded,
Seller may, at its option, elect to treat such act as a breach of this
Agreement.
11.10 Confidentiality. Each party agrees that, except as otherwise set
forth in this Agreement or provided by law or unless compelled by an order of a
court, it shall keep the contents of this Agreement and any information related
to the transaction contemplated hereby confidential and further agrees to
refrain from generating or participating in any publicity statement, press
release, or other public notice regarding this transaction without the prior
written consent of the other party unless required under applicable law or by a
court order. The provisions of this Section 11.10 shall survive the Closing or
any termination of this Agreement and shall not be merged into any instrument or
conveyance delivered at the Closing.
11.11 Section Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
11.13 Applicable Law; Jurisdiction and Venue; Service of Process. This
Agreement shall be governed by, construed, interpreted and enforced in
accordance with the laws of the State of North Carolina.
11.14 Remedies. The parties hereto acknowledge that in the event of a
breach of this Agreement by Seller, any claim for monetary damages hereunder may
not constitute an adequate remedy, and that it may therefore be necessary for
the protection of the Purchaser to carry out the terms of this Agreement to
apply for the specific performance of the provisions hereof. It is accordingly
hereby agreed by Seller that no objection to the form of the action or the
relief prayed for in any proceeding for specific performance of this
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Agreement shall be raised by Seller, the Partners or any of their affiliates, in
order that such relief may be expeditiously obtained by Purchaser.
11.15 Further Assurances. Seller and the Partners jointly and severally
agree to execute, acknowledge and deliver, after the date hereof, without
additional consideration, such further assurances, instruments and documents,
and to take such further actions, as Purchaser may reasonably request in order
to fulfill the intent of this Agreement and the transactions contemplated
hereby.
11.16 Use of Genders. Whenever used in this Agreement, the singular shall
include the plural and vice versa, and the use of any gender shall include all
genders and the neuter.
11.17 Negotiations with Other Persons. Until the earlier of the Closing
or the termination of this Agreement as provided herein, neither Seller nor the
Partners shall initiate, encourage the initiation by others, or participate in
any discussion or negotiations with any other person or entity relating to the
sale of any or all of the Property, the business of Seller or any securities of
Seller. From the date of this Agreement and until after the Closing and the
consummation of the transactions contemplated by this Agreement, the Partners
shall not offer for sale, sell or otherwise transfer (with or without
consideration) any securities of Seller owned of record or beneficially by him.
11.18 Tax Deferred Exchange. Seller shall have the right and option to
engage in a tax-deferred exchange of the Land pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, and Purchaser shall cooperate with
Seller to the extent necessary to accomplish such an exchange, so long as
Purchaser's rights hereunder are not prejudiced in any manner, as determined by
Purchaser in its sole discretion. The representations and warranties made by
Seller and the Partners to Purchaser in this Agreement shall apply to any
intermediary which becomes a seller of the Land by virtue of such a tax-deferred
exchange.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
ATTEST: T & B LEASING
_________________________________ ______________________________________
By:___________________________________
Its: General Partner
WITNESS: Partners:
_________________________________ ______________________________________
Thomas Fickling
______________________________________
William Prentice
Purchaser:
ATTEST: CASTLE PROPERTIES, L.L.C.
_________________________________ By:___________________________________
Joel Aaseby, Manager Lawrence E. Jaro, Manager
23
<PAGE>
EXHIBIT LIST
<TABLE>
<CAPTION>
<S> <C>
1.1 Legal Descriptions of Land and Improvements
1.1.3 Ground Leases
1.1.5 Fixtures
1.1.6 Assumed Service Contracts
1.2 Allocation of Purchase Price
1.4 Proration Adjustment Letter
3.2 Breaches or Violations of Governing Documents
3.4 Disclosure of Exceptions regarding Authority
3.7 Financial Statements
Unaudited Balance Sheets as of December 31, 1994
Unaudited Balance Sheets as of December 31, 1995
Unaudited Balance Sheets as of December 31, 1996
Operating Statements for January 1, 1994 through December 31, 1994
Operating Statements for January 1, 1995 through December 31, 1995
Operating Statements for January 1, 1996 through December 31, 1996
3.11.3 Payment of Indebtedness and Taxes
3.12 Adverse Conditions
3.15 Hazardous Materials
6.1 Opinion of Seller's and Partners' Counsel
6.2 Opinion of Purchaser's Counsel
8.1.2(a) General Assignment
8.1.2(b) Assignment of Leases
8.2.1 Form of General Warranty Deed
8.2.2 Form of Bill of Sale and Assignment
</TABLE>
24
<PAGE>
AMENDMENT NO. 1
TO
REAL ESTATE PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO REAL ESTATE PURCHASE AGREEMENT (this "Amendment")
is made and entered into this 8th day of April, 1997, among T & B LEASING, a
North Carolina general partnership ("Seller"); THOMAS FICKLING and WILLIAM
PRENTICE (collectively referred to as the "Partners"), and CASTLE PROPERTIES,
L.L.C., a Delaware limited liability company ("Purchaser").
R E C I T A L S:
WHEREAS, Seller, the Partners and Purchaser entered into a Real Estate
Purchase Agreement, dated March 7, 1997 (the "Agreement");
WHEREAS, Seller's and the Partners' representations erroneously provided
that Seller owns the real estate and improvements for thirteen (13) Burger
King(R) restaurants and the improvements only on two (2) other Burger King(R)
restaurants;
WHEREAS, the parties desire to amend the Agreement to provide that Seller
owns the real estate and improvements for twelve (12) Burger King(R) restaurants
and the improvements only on three (3) other Burger King(R) restaurants and to
otherwise more closely reflect the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms; Section References. Capitalized terms used
without definition herein shall have the meanings assigned to them in the
Agreement. Unless the context requires otherwise, section references herein
refer to sections in the Agreement.
2. Real Property Purchased. Purchaser acknowledges that Exhibit 1.1
attached to the Agreement will contain legal descriptions of twelve (12) parcels
of real property, owned in fee simple by Seller, upon which Restaurants are
situated, and three (3) parcels of real property leased by Seller on which
Improvements owned by Seller are situated. The parties hereto agree that Seller
owns the Improvements at Burger King Restaurant No. 3173, located at 1004 East
Cumberland, Dunn, North Carolina, but that Seller leases the land on which such
Restaurant is situated.
3. Purchase Price Amended. The parties hereto agree that the Purchase
Price is hereby amended to be Fourteen Million One Hundred Four Thousand Seven
Hundred Forty One and no/100 Dollars ($14,104,741.00).
4. Time Periods Adjusted. The following time periods and deadlines are
adjusted as follows:
a. In Section 5.1.12, the deadline for delivery of the Commitments
is hereby extended to April 17, 1997.
b. In Section 5.1.13, the deadline for delivery of the Surveys is
hereby extended to April 17, 1997.
c. In Section 5.1.14, the time period is hereby extended to 20
business days.
d. In Section 5.2, the deadline for Purchaser to notify Seller in
writing of any title exceptions identified in the Commitments
and/or matters reflected in the Surveys of which Purchaser
disapproves is hereby extended to May 9, 1997.
e. In Section 7.2.9, the Inspection Deadline is hereby extended to
May 9, 1997.
<PAGE>
f. In Section 7.2.10, the period for review of Seller's financial
and accounting system and the Financial Statements, and for
raising or resolving any objections thereto, is hereby extended
to May 9, 1997.
5. Amendments to Text.
a. The last sentence of Section 3.2 is hereby amended in its
entirety to read as follows: "Except as disclosed on Exhibit 3.2,
Seller is not in breach or violation of, and the execution,
delivery and performance of this Agreement will not result in a
breach or violation of, any of the provisions of Seller's
partnership agreement, as amended to the date of this Agreement,
or other governing documents (the "Governing Documents"), or, to
the best of Seller's knowledge, any agreement to which it is a
party.
b. The first sentence of Section 3.13 is hereby amended in its
entirety to read as follows: "Except for the Assumed Contracts,
service contracts that will be canceled as of the Closing Date,
or as set forth on Exhibit 3.13, there are no leases, contracts,
licenses, agreements or other commitments of Seller as obligor
involving a liability, obligation, contingent liability or
contingent obligation in excess of $5,000 per Restaurant."
c. Exhibit 3.13 is hereby added to the Exhibit List.
6. Scope. To the extent not amended or modified herein, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
T & B LEASING
By:
----------------------------------
, General Partner
---------------------
Partners:
---------------------------------------
Thomas Fickling
---------------------------------------
William Prentice
Purchaser:
CASTLE PROPERTIES, L.L.C.
By:
----------------------------------
Lawrence E. Jaro, Manager
2
<PAGE>
AMENDMENT NO. 2
TO
REAL ESTATE PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 TO REAL ESTATE PURCHASE AGREEMENT (this "Amendment")
is made and entered into this 16th day of June, 1997, among T&B LEASING, a North
Carolina general partnership ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "Partners"), CASTLE PROPERTIES, L.L.C., a
Delaware limited liability company ("Purchaser") and NATIONAL RESTAURANT
ENTERPRISES, INC. d/b/a AMERIKING CORPORATION, a Delaware corporation ("NRE").
R E C I T A L S:
WHEREAS, Seller, the Partners and Purchaser entered into a Real Estate
Purchase Agreement, dated March 7, 1997, and an Amendment No. 1 thereto, dated
April 8, 1997 (as amended, the "Agreement");
WHEREAS, the parties desire to amend the Agreement to more closely reflect
the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Assignment. Purchaser hereby assigns the Agreement, as amended by this
Amendment, and all rights and obligations thereunder, to NRE, and each and every
reference to Purchaser (other than in this Section 1) in the Agreement, as
amended by this Amendment, shall be deemed to refer to NRE. NRE hereby accepts
such assignment.
2. Purchase Price Amended. The parties hereto agree that the Purchase
Price is hereby amended to be Ten Million Four Hundred Ten Thousand Six Hundred
Eighty Six and no/100 Dollars ($10,410,686.00).
3. Removal of Store 2860. The parties hereto acknowledge that the Real
Estate does not and shall not include the Land or Improvements, commonly known
as 1672 Owen Drive, Fayetteville, North Carolina, upon and in which is situated
Burger King Store No. 2860, which Land and Improvements are owned by a third
party.
4. Scope. To the extent not amended or modified herein, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
T&B LEASING GENERAL PARTNERSHIP
By:_________________________________
W. Thomas Fickling, General Partner
General Partners:
____________________________________
Thomas Fickling
____________________________________
William Prentice
<PAGE>
Purchaser:
CASTLE PROPERTIES, L.L.C.
By:
--------------------------------------------
Lawrence E. Jaro, Manager
NRE:
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By:
--------------------------------------------
Lawrence E. Jaro, Chief Executive Officer
2
<PAGE>
AMENDMENT NO. 3 TO
REAL ESTATE PURCHASE AGREEMENT
This Amendment No. 3 to Real Estate Purchase Agreement (this "Amendment")
is entered into this 16th day of June, 1997, among T&B LEASING, a North Carolina
general partnership ("Seller"); W. THOMAS FICKLING and WILLIAM L. PRENTICE;
NATIONAL RESTAURANT ENTERPRISES, INC., d/b/a AMERIKING CORPORATION, a Delaware
corporation ("Purchaser"); and INVESTORS TITLE EXCHANGE CORPORATION, a North
Carolina corporation ("Qualified Intermediary").
Recitals
--------
1. Seller, Castle Properties, L.L.C., Thomas Fickling and William Prentice
entered into that certain Real Estate Purchase Agreement dated March 8, 1997
(the "Original Contract") involving the conveyance of certain interests in real
property and improvements thereon as specified in Section 1.1 therein.
2. The Original Contract was amended by Amendment No. 1 to Real Estate
Purchase Agreement, dated April 8, 1997, and Amendment No. 2 to Real Estate
Purchase Agreement, dated June 16, 1997 (the "Prior Amendments"). Pursuant to
the Prior Amendments, Purchaser was substituted for Castle Properties, L.L.C. as
a party to the Original Contract, as amended. (The Original Contract, as amended
by the Prior Amendments, is referred to herein as the "Contract.")
3. Consistent with Section 11.18 of the Original Contract, Seller desires
to engage in a like-kind exchange pursuant to (S)1031 of the Internal Revenue
Code of 1986, as amended, and therefore, the parties hereto desire to modify
certain provisions of the Contract prior to closing in accordance with the terms
provided below in order that Seller may avail itself to the benefits of (S)1031
of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, for and in consideration of One Dollar ($1.00) in hand paid
by Seller to Purchaser and the mutual premises contained herein and other good
and valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and modify the Contract as
follows:
l. Section 8.1 of the Original Contract is hereby modified as follows:
a. Purchase Price. Both the Purchaser and the Seller intend the
conveyance of the properties set forth on Exhibit A attached hereto
(collectively, the "Property") and the receipt of consideration by the Seller in
return therefor shall constitute a like-kind exchange with respect to the Seller
within the meaning of (S) 1031 of the Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, the Seller shall locate and designate Exchange
Parcels (as hereinafter defined), and the Qualified Intermediary shall expend
the sums deposited into escrow as provided herein in order to deliver or cause
to be delivered to the Seller title to the Exchange Parcels as consideration to
the Purchaser of the Property, all as more specifically provided herein.
<PAGE>
b. First Closing. The closing of the transfer of the Property by the
Seller to the Purchaser shall occur at the offices designated in Section 2.1 of
the Contract at the time and place set forth in the Contract ("First Closing
Date"), at which time all parties agree to execute any and all documents and
papers necessary to consummate the transactions contemplated in the Contract and
herein with regard to the conveyance of the Property to Purchaser. The deed for
the Property shall be to Purchaser. The transactions to occur at such time and
place are referred to herein as the "First Closing." At the First Closing,
Purchaser shall cause to be paid to the Qualified Intermediary all of the sums
allocated to the Property under Section 1.2 of the Contract (the "Purchase
Price") less closing, costs, prorations and adjustments, to be held in
accordance with the provisions herein.
c. Identification of Like-Kind Exchange Property. Within 45 days of
the First Closing Date, Seller shall identify in writing one or more fee simple
or leasehold interests in parcels of real estate (hereinafter called "Exchange
Parcels") which are to be acquired by the Qualified Intermediary and transferred
to the Seller at the Second Closing Date, as hereinafter defined. Identification
of the Exchange Parcels by the Seller shall be deemed to have occurred only if
the identification is in writing, specifically designates the identified
properties, is signed by the Seller, and is hand delivered, mailed or telecopied
to the Qualified Intermediary within 45 days of the First Closing Date.
d. Like-Kind Exchange. The Seller shall negotiate the terms and
conditions of the contracts of sale or the leases for the Exchange Parcels and
shall furnish execution copies of such contracts of sale or leases to the
Qualified Intermediary. All contracts so furnished to the Qualified Intermediary
shall be executed by the Qualified Intermediary within ten (10) days after their
submission by Seller. The Qualified Intermediary shall not enter into any such
contracts or lease regarding the Exchange Parcels except those furnished thereto
by the Seller. If the contract or lease for an Exchange Parcel shall require the
payment of an earnest money deposit or any other funds, the amount of the
earnest money deposit or any other funds shall be advanced by the Qualified
Intermediary from the funds deposited therewith pursuant to paragraph b hereof
to the seller, landlord or other party named in the contract or lease regarding
the Exchange Parcel.
In addition to the above, Qualified Intermediary shall enter into a
construction contract or construction contracts negotiated and selected by
Seller and shall use the Escrow Account Balance (as hereinafter defined) to
construct improvements upon the Exchange Parcel to be transferred or assigned to
Seller pursuant to this Agreement as directed by Seller. Seller shall require
the construction company or general contractor constructing improvements on any
Exchange Parcel to have adequate liability insurance and to name Qualified
Intermediary as a certificate holder. Qualified Intermediary shall convey each
Exchange Parcel to Seller by limited warranty deed or by assignment of lease
with regard to a leasehold estate. Seller shall be responsible for all real
estate taxes applicable to each Exchange Parcel from the date of acquisition of
same by Qualified Intermediary.
Notwithstanding anything herein to the contrary, in no event shall
Qualified Intermediary be required to expend more than the Escrow Account
Balance for the acquisition and construction of
2
<PAGE>
one or more Exchange Parcels. Accordingly, if the total cost for the acquisition
and construction of one or more Exchange Parcels are greater than the amount of
the Escrow Account Balance held by Qualified Intermediary, Seller shall be
responsible for any deficiency from time to time or at the Second Closing (as
hereinafter defined).
e. Second Closing. For each Exchange Parcel, the closing of the
conveyance or assignment of the Qualified Intermediary's interest in the
Exchange Parcels to the Seller shall occur at the office designated by Seller on
the earliest of (i) a date agreed upon by the Qualified Intermediary and Seller,
(ii) the date which is 180 days after the First Closing Date or (iii) the due
date (including extensions) of the Seller's tax return for the taxable year of
the First Closing Date ("Second Closing Date"). The transactions to occur at
such time and place are referred to herein as the "Second Closing." At the
Second Closing, the Qualified Intermediary shall cause each Exchange Parcel or
leasehold interest therein to be conveyed or assigned to the Seller by deeds or
assignments containing such covenants of title as are required by the terms of
the contracts relating to such Exchange Parcel. The Qualified Intermediary shall
pay such sums of money held by the Qualified Intermediary ("Escrow Account
Balance") which are necessary to effectuate the transfer of the Exchange
Parcels. The title to each Exchange Parcel or interest therein shall be as
required by the contract of sale or lease relating to such Exchange Parcel. If
the aggregate cost of the Exchange Parcels less any earnest money deposit or
other sums previously paid by the Qualified Intermediary is greater than the
Escrow Account Balance, then the Seller shall pay to the Qualified Intermediary
in cash upon demand, as additional consideration for the Exchange Parcels, an
amount equal to the excess of the aggregate cost of the Exchange Parcels less
any earnest money deposit or other sums previously paid by the Qualified
Intermediary over the Escrow Account Balance. If any funds remain in the
possession of the Qualified Intermediary at the last of the Exchange Parcels to
be acquired at the Second Closing after the payment of the aggregate costs of
the Exchange Parcels, such funds shall be distributed to the Seller. The
aggregate cost of an Exchange Parcel shall include the cost of the acquisition,
transfer, assignment and exchange of the Exchange Parcel and the construction of
improvements thereon actually paid in cash by the Qualified Intermediary and not
otherwise reimbursed to the Qualified Intermediary, including, without limiting
the generality of the foregoing, all settlement costs and expenses, all
obligations of the contract purchaser under the contract of sale for the
Exchange Parcels and the reasonable cost of legal services rendered to the
Qualified Intermediary with respect to the Exchange Parcels, it being the intent
of this Contract that the Seller shall reimburse the Qualified Intermediary for
all costs and expenses which would have been incurred by the Qualified
Intermediary if the Seller had not selected any Exchange Parcels and the
Purchaser had paid the entire Purchase Price for the Property to the Seller in
cash. The cost of an Exchange Parcel shall not include the amount of any
mortgage or encumbrance, if any, to which an Exchange Parcel is subject at the
time of its conveyance or assignment to the Seller. The Qualified Intermediary
shall not enter into any other contract, incur any expense, execute any note or
mortgage, or agree to any encumbrance in connection with an Exchange Parcel
unless the Seller has first approved such contract expense, indebtedness or
encumbrance. No contract relating to any Exchange Parcel shall be amended or
modified without the prior written consent of the Seller, and the Qualified
Intermediary shall perform all of its obligations under each contract of sale or
lease relating to an Exchange Parcel during the period in which the Qualified
Intermediary has an interest. The Seller shall report, for federal income tax
purposes, that the exchange of Exchange Parcels for the Property is subject to
the provision of (S) 1031 of the Code, and the Purchaser shall refrain from
taking any
3
<PAGE>
position inconsistent with this reporting without the Seller's prior written
consent. The provisions of the preceding sentence shall survive settlement
pursuant to this Contract.
f. Failure to Identify Exchange Parcels. If the Seller fails to
identify any Exchange Parcels within 45 days of the First Closing Date in
accordance with the provisions of paragraph c, the Qualified Intermediary shall,
upon the expiration of the 45 day period, distribute the funds held in escrow to
the Seller. In the further event that the Seller properly identifies one or
more Exchange Parcels within 45 days of the First Closing Date in accordance
with the provisions of paragraph c, but the Qualified Intermediary fails for any
reason to acquire an interest in at least one of the properly identified
Exchange Parcels by the Second Closing Date, the Qualified Intermediary shall
distribute to the Seller the funds held in escrow on the earlier of the date
which is 180 days after the First Closing Date or the due date (including
extensions) of the Seller's tax return for the taxable year of the First Closing
Date.
g. Qualified Intermediary's Funds. All monies deposited with the
Qualified Intermediary hereunder shall be held in a separate interest bearing
demand account or other form at a bank insured by the Federal Deposit Insurance
Corporation and approved by Seller. All interest earned on such funds shall be
for the direct or indirect benefit of Seller and shall be added to and become a
part of the Escrow Account Balance.
h. Limitation of Liability. Qualified Intermediary shall not be
liable for anything which Qualified Intermediary may do or refrain from doing in
connection with this Agreement and all documents referred to herein including
without limitation (i) the failure of the Property to close in a timely fashion;
(ii) the failure of Seller to locate or properly identify appropriate Exchange
Parcels within such forty-five (45) day period after the First Closing; (iii)
the failure of the Property or the Exchange Parcels to qualify as like-kind
exchange property within the meaning of (S) 1031 of the Internal Revenue Code of
1986, as amended; (iv) the failure of the Exchange Parcels to close within the
required period; and (v) the failure for any reason of the exchange of the
Property or the Exchange Parcels by Seller to qualify as a like-kind exchange
pursuant to (S) 1031 of the Internal Revenue Code of 1986, as amended, unless
such failure is caused by the negligence or willful misconduct of the Qualified
Intermediary.
Seller represents and warrants to Qualified Intermediary that it has
requested and received satisfactory review and advice regarding the legal and
tax implications of the contemplated like-kind exchange, and related documents
and agreements, including without limitation, this Agreement. Qualified
Intermediary makes no representations or warranties, express or implied, that
the transaction contemplated in this Agreement qualifies as a like-kind exchange
pursuant to (S) 1031 of the Internal Revenue Code of 1986, as amended, and
Seller has not relied upon any statements or representations made by Qualified
Intermediary, its of officers, directors, shareholders, agents or employees
regarding the legal or tax implications of the transactions contemplated in this
Agreement.
i. Indemnity of Qualified Intermediary. Seller shall indemnify and
hold harmless Qualified Intermediary, its shareholders, directors, officers,
employees, agents, representatives, and
4
<PAGE>
the successors and assigns thereof, from and against any and all claims,
disputes, liabilities, losses, costs, damages, or expenses of any kind,
including reasonable attorney's fees actually incurred and costs and expenses
incurred in the investigation, prosecution, defense or settlement of any claims,
which may be threatened against, incurred or undertaken by Qualified
Intermediary and (i) which arise out of or in connection with any breach;
inadequacy, incompleteness or inaccuracy of any representation or warranty made
by or on behalf of Seller in, or any failure of Seller to perform any of the
Seller's covenants or obligations pursuant to this Agreement and any and all
other documents or agreement referred to herein or entered into in connection
herewith, and (ii) which otherwise arise out of or in connection with this
Agreement and any and all documents or agreements referred to herein or entered
into in connection herewith, except those claims for which Qualified
Intermediary may be held liable to Seller for the negligence or willful
misconduct of Qualified Intermediary.
Seller shall indemnify and hold harmless Qualified Intermediary, its
shareholders, directors, officers, employees, agents, representatives, and the
successors and assigns thereof, from and against any and all claims, disputes,
liabilities, penalties, forfeitures, violations of Environmental Laws (as
hereinafter defined), losses, costs, damages, or expenses of any kind, including
reasonable attorneys' fees actually incurred and costs and expenses incurred in
the investigation, prosecution, defense or settlement of any claims, or death
of, or injury to any person or damage to any property whatsoever, which may be
threatened against, incurred or undertaken by Qualified Intermediary and arising
from or caused in whole or in part, directly or indirectly, by the presence in,
on, under or relating to the Property or the Exchange Parcels or any
improvements thereon of any Hazardous Substances Materials or Wastes (as
hereinafter defined), or the use, analysis, generation, discharge, release (or
threatened release), storage, treatment, transport or disposal of Hazardous
Substances Materials or Wastes to, in, on, under, or about or from any such
property or improvements thereon. Seller's obligation hereunder shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary repair, removal, assessment, remediation, or
detoxification or decontamination of any of said property or any improvements,
and the preparation and implementation of any comprehensive site assessment,
closure, remedial action or other required plans in connection therewith, and
these obligations shall survive the transfer to Qualified Intermediary's
successor in interest of any such property or improvements. For purposes of the
indemnity provisions hereof, any acts or omissions of or by employees, agents,
assignees, or of Seller or others acting for or on behalf of Seller (whether or
not they are negligent, intentional, willful or unlawful) strictly shall be
attributable to Seller.
For purposes of this Agreement, "Hazardous Substance Materials or Wastes"
means and includes, without limitation, petroleum products, petroleum byproducts
and any petroleum constituents (including, but not limited to, crude oil, diesel
oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other
waste, oil sludge and all other liquid hydrocarbons regardless of specific
gravity), any flammable explosives, radioactive materials, asbestos or any
asbestos-containing materials, solid or liquid wastes, and/or any hazardous,
toxic, regulated or dangerous waste, substance or material defined as such by
the United States Environmental Protection Agency or for the purpose of or by
any Environmental Laws as may now or at any time hereafter be in effect. For
purposes of this Agreement, "Environmental Laws" means and includes, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, the Hazardous Materials
5
<PAGE>
Transportation Act, the Resource Conservation and Recovery Act, the Clean Water
Act, the Clean Air Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, any "Superfund" or "Superlien" law,
applicable State Groundwater Regulations, applicable State Underground Storage
Tank regulations, or any other federal, state or local law, ordinance,
regulation, rule, order or decree regulating, relating to or imposing liability,
responsibility or standards of conduct applicable to environmental, health or
safety conditions and/or releases (or threatened releases) of Hazardous
Substances Materials or Wastes in, on, at or affecting the Property or the
Exchange Parcels, as such may now or at any time hereafter be defined or in
effect.
If any matter subject to indemnification hereunder arises in the form of a
claim against Qualified Intermediary, its shareholders, directors, officers,
employees, agents, representatives, or the successors and assigns thereof
(collectively, "Indemnitee") (herein referred to as a "Third Party Claim"), the
applicable Indemnitee promptly shall give notice and details thereof, including
copies of all pleadings and pertinent documents to Seller. Within fifteen (15)
days of such notice, Seller either (i) shall pay the Third Party Claim either in
full or upon agreed compromise; or (ii) shall notify the applicable Indemnitee
and Qualified Intermediary that Seller disputes the Third Party Claim and
intends to defend against it, and thereafter shall so defend and pay any adverse
final judgment or award in regard thereto. Such defense shall be controlled by
Seller and the cost of such defense shall be borne by Seller except that the
applicable Indemnitee and Qualified Intermediary shall have the right to
participate in such defense at their own expense and provided that Seller shall
have no right in connection with any such defense or the resolution of any such
Third Party Claim to impose any cost, restriction, limitation or condition of
any kind upon any of the parties comprising Indemnitee hereunder. Qualified
Intermediary agrees that it shall cooperate in all reasonable respects in the
defense of any such Third Party Claim, including making personnel, books and
records relevant to the Third Party Claim available to Seller without charge
therefor except for out-of-pocket expenses. If Seller fails to take action
within fifteen (15) days as hereinabove provided or, having taken such action,
thereafter fails diligently to defend and resolve the Third Party Claim, the
parties comprising Indemnitee shall have the right to pay, compromise or defend
the Third Party Claim and to assert the indemnification provisions hereof. Each
of the parties comprising Indemnitee also shall have the right, exercisable in
good faith, to take such action as may be necessary to avoid a default prior to
the assumption of the defense of the Third Party Claim by Seller.
If Qualified Intermediary institutes litigation or any other dispute
resolution action (including without limitation, arbitration or mediation)
against Seller for any reason in connection with this Agreement, Seller shall
pay all costs and expenses, including without limitation attorneys' fees,
incurred by Qualified Intermediary in such action.
2. Assignment.
a. Seller hereby assigns to the Qualified Intermediary its rights
under the Contract with regard to the Property only to the extent necessary to
consummate the contemplated like-kind exchange. The Qualified Intermediary
hereby accepts such assignment; and, subject to the provisions of paragraph 2.b
hereof, the Qualified Intermediary hereby agrees to assume the Seller's
obligation and duty to convey the Property to the Purchaser pursuant to the
Contract. In connection with such
6
<PAGE>
assignment, the Qualified Intermediary is hereby substituted in place of the
Seller under the Contract solely for the purpose of conveying the Property to
the Purchaser in order to facilitate and effectuate the exchange. The Purchaser
hereby consents to such assignment upon the terms and conditions set forth
herein.
b. The Purchaser agrees to cooperate with the Seller and the
Qualified Intermediary to effect the exchange and the Purchaser and the
Qualified Intermediary acknowledge and agree that:
(i) The Qualified Intermediary will acquire the Property from the
Seller in order to complete the exchange. The Qualified Intermediary, as
seller, hereby instructs the Seller to execute and the settlement agent to
record a warranty deed conveying the Property at the First Closing directly from
the Seller, as grantor, to the Purchaser, as grantee. Further, any and all
bills of sale, tenant lease assignments, general assignments, and similar
closing documents shall be executed by the Seller for the direct benefit of the
Purchaser. The Qualified Intermediary has not made or assumed, nor shall it
make, assume, or be liable for, any covenant, duty, or obligation of the Seller
under the Contract as set forth in the Contract except for the limited
obligations undertaken herein, which are assumed expressly, and only to the
extent necessary to consummate this like-kind exchange, and the Purchaser hereby
releases and discharges the Qualified Intermediary from and against any claim,
demand, liability, loss, damage, cost, or expense in connection with any matter
relating to the Property and/or any term, condition, or instrument referred to
in these instructions or otherwise relating to the First Closing or the
Contract. The Purchaser hereby agrees that it shall be and remain solely
responsible and liable to the Seller for the performance of each and every
warranty, representation and obligation, if any, of the Purchaser with respect
to the Property and that the Seller shall look solely to it for such performance
and liability.
(ii) The Purchaser's sole recourse shall be against the Seller with
respect to any claim or allegation concerning the Property or any performance,
agreement, or obligation arising from or in connection with the First Closing or
the Contract. The Seller and its general partners hereby agree that they shall
be and remain solely responsible and liable to the Purchaser for the performance
of each and every warranty and obligation, if any, of the Seller with respect to
the Purchaser's purchase of the Property and that the Purchaser shall look
solely to them for such performance and liability.
(iii) The assignment set forth in paragraph 2.a. above shall not
affect, limit, modify, or impair in any way the representations, warranties,
covenants, or indemnifications, if any, made by the Purchaser or the Seller or
the obligations of the Purchaser or the Seller under the Contract and all such
representations, warranties, covenants, and indemnifications made by them shall
inure to the benefit of the other and shall not be affected in any way by the
assignment set forth in paragraph 2.a. hereof. Nothing set forth herein shall
in any way release the Purchaser or the Seller from any of their obligations,
liabilities, indemnifications, covenants, representations, or warranties
(whether express or implied in fact or implied at law), if any, made under the
Contract for the benefit of the other thereunder, or under any documents
executed in connection with the Contract for the benefit of the other
thereunder, or executed in connection with the First Closing for the benefit of
the other thereunder, including without limitation, all warranty deeds,
assignments of contracts, assignments of leases, assignments of warranties,
general assignments, bills of sale, and estoppel certificates.
7
<PAGE>
3. This Amendment may be executed in counterparts, each of which shall be
deemed as original, but all of which, when taken together, shall constitute but
one (1) and the same instrument.
4. This Amendment may be executed by any or all of the parties hereto and
delivered to the Qualified Intermediary by facsimile, and the Qualified
Intermediary is hereby authorized to act upon all such facsimile copies as if
they were originals.
5. Except as otherwise modified herein, the Contract is hereby ratified
and confirmed.
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and sealed, all as of the day and year first above written.
PURCHASER
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION,
[CORPORATE SEAL] a Delaware corporation
Attest:
By:__________________________________
Joel Aaseby, Secretary
________________________
Name: __________________
SELLER
T&B LEASING
a North Carolina general partnership
By:_______________________________ (SEAL)
W. Thomas Fickling, General Partner
QUALIFIED INTERMEDIARY
INVESTORS TITLE EXCHANGE
CORPORATION
By:__________________________________
Title:_______________________________
Date:________________________________
[CORPORATE SEAL]
ATTEST:
_________________________________
Its:__________________ Secretary
___________________________________(SEAL)
W. Thomas Fickling
_____________________________________(SEAL)
William L. Prentice
9
<PAGE>
Exhibit A
to Amendment to
Real Estate Purchase Agreement
<TABLE>
<CAPTION>
Store Allocated
Number Location of Store Sales Price
- --------------------------------------------------------------------------
<S> <C> <C>
5512 Cedar Creek, Fayetteville, North Carolina $ 956,076
- --------------------------------------------------------------------------
7234 Lillington, North Carolina $1,057,239
- --------------------------------------------------------------------------
7321 Apex, North Carolina $1,069,678
- --------------------------------------------------------------------------
9821 Ramsey Street, North Carolina $1,370,970
- --------------------------------------------------------------------------
</TABLE>
10
<PAGE>
2.31
REAL ESTATE PURCHASE AGREEMENT
among
W & W INVESTMENTS LIMITED PARTNERSHIP,
A DELAWARE LIMITED PARTNERSHIP,
THE PARTNERS OF W & W INVESTMENTS LIMITED PARTNERSHIP
and
CASTLE PROPERTIES, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
<PAGE>
REAL ESTATE PURCHASE AGREEMENT
THIS REAL ESTATE PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 7th day of March, 1997, among W & W INVESTMENTS LIMITED PARTNERSHIP, a
Delaware limited partnership ("Seller"); THOMAS FICKLING and WILLIAM PRENTICE
(collectively referred to as the "General Partners"), and CASTLE PROPERTIES,
L.L.C., a Delaware limited liability company ("Purchaser").
R E C I T A L S
WHEREAS, Seller owns the real estate and improvements for four (4) Burger
King(R) restaurants;
WHEREAS, each of the General Partners is a general partner of Seller and
the General Partners are the only general partners of Seller;
WHEREAS, Seller desires to sell, assign, transfer and deliver to Purchaser,
and Purchaser desires to purchase from Seller, such real estate and
improvements, as described in Article I hereof, on the terms and subject to the
conditions hereinafter contained;
WHEREAS, Purchaser and the General Partners desire to enter into certain
agreements between them on the terms and subject to the conditions hereinafter
contained.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Agreement, and the mutual covenants, promises,
agreements, representations and warranties contained in this Agreement, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
ARTICLE I -- PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, at the Closing on the Closing Date (as such terms are
defined in Section 2.1 hereof), Seller shall sell, convey, assign, transfer and
deliver to Purchaser and Purchaser shall purchase and accept from Seller all of
the right, title and interest of Seller in and to the property described below:
1.1.1 Fee simple title to all of the land (the "Land") and
improvements (the "Improvements") more fully described on Exhibit 1.1 attached
hereto and incorporated by reference herein.
1.1.2 All of Seller's right, title and interest as lessor in all
leases covering the Land and Improvements (said leases, together with any and
all amendments, modifications or supplements thereto, are hereinafter referred
to collectively as the "Store Leases").
1.1.3 [intentionally omitted]
1.1.4 All rights, privileges, easements and appurtenances to the Land
and the Improvements, if any, including, without limitation, all of Seller's
right, title and interest in and to all mineral
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and water rights and all easements, rights-of-way and other appurtenances used
or connected with the beneficial use or enjoyment of the Land and the
Improvements (the Land, the Improvements and all such easements and
appurtenances, including, without limitation, Seller's interest as lessor under
the Store Leases, are sometimes collectively hereinafter referred to as the
"Real Property").
1.1.5 All fixtures, if any, owned by Seller and located on the Land
and/or Improvements including, but not limited to, the items described on
Exhibit 1.1.5 attached hereto and incorporated by reference herein (the
"Fixtures").
1.1.6 The service contracts listed and described on Exhibit 1.1.6
attached hereto and incorporated by reference herein (the "Assumed Service
Contracts").
1.1.7 All right, title and interest of Seller, if any, in and to all
site plans, surveys, soil and substratus studies, architectural drawings, plans
and specifications, engineering, electrical and mechanical plans and studies,
floor plans, landscape plans, and other plans and studies of any kind if
existing and in Seller's possession or control that relate to the Real Property
or the Fixtures (collectively the "Property Documents"). (The Real Property,
Fixtures, Assumed Service Contracts and Property Documents are sometimes
collectively hereinafter referred to as the "Property").
1.2 Purchase Price; Allocations. The purchase price for the Property is
Four Million Three Hundred Twenty Eight Thousand Two Hundred Fifteen and no/100
Dollars ($4,328,215.00) (the "Purchase Price"), and shall be subject to the
adjustments and prorations provided herein. The parties agree that the Purchase
Price for the Property shall be allocated among the Property in the manner set
forth on Exhibit 1.2 attached hereto.
1.3 Liabilities of Seller. Except as set forth in this Section 1.3,
Seller shall be and remain solely liable and responsible for all debts,
obligations, duties, and liabilities of Seller and its business. Purchaser does
not and shall not assume, agree to pay or pay any debts, obligations, duties or
liabilities of any nature of Seller or its business. Notwithstanding the
foregoing, Purchaser agrees to assume from and after the Closing Date all of the
rights and obligations of Seller attributable to the period from and after the
Closing Date under the Store Leases and the Assumed Service Contracts. (The
Store Leases and the Assumed Service Contracts are sometimes collectively
hereinafter referred to as the "Assumed Contracts").
1.4 Prorations. All utilities and other operating expenses for the
Property, pre-paid or incurred, for the current year and general real estate,
personal property and ad valorem taxes and special assessments, if any,
pertaining to the Property for the current tax year shall be prorated at the
Closing effective as of 12:01 AM on the Closing Date. If the Closing shall
occur before the tax rate(s) are fixed for any ad valorem taxes to be prorated
hereunder, the apportionment of such taxes shall be upon the basis of the most
recent ascertainable taxes, and shall be represented and adjusted between the
parties upon availability of the actual bills therefor. At the Closing, the
parties shall execute a "Proration Adjustment Letter," substantially in the form
attached hereto as Exhibit 1.4, pursuant to which the parties shall agree to
adjust the proration of operating expenses and taxes of the Property for the
year 1997. Pursuant to the Proration Adjustment Letter, the parties shall also
agree to adjust the proration of real estate taxes for the year 1997. Except as
set forth in this Section 1.4, all items of income and expense which accrue for
the period prior to the Closing will be for the account of Seller and all items
of income and expense which accrue for the period on and after the Closing will
be for the account of Purchaser. The provisions of this Section 1.4 shall
survive the Closing.
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1.5 Casualty Loss. All risk of loss to the Property shall remain upon
Seller prior to the Closing. If, prior to the Closing, any portion of the
Property is damaged or destroyed by fire or other casualty to a material extent,
Purchaser may, at its option, (a) terminate this Agreement by written notice to
Seller, in which event this Agreement will become null and void and be of no
further effect, and neither Seller nor Purchaser will have any further rights or
obligations hereunder, except for those obligations which, by their express
terms, survive termination of this Agreement, or (b) receive an assignment of
insurance proceeds (with payment by Seller of any deductible) as below
described. Unless otherwise provided herein, the term "material" shall mean
damage or destruction, the cost of repairing which exceeds One Hundred Thousand
Dollars ($100,000). If, prior to the Closing, any portion of the Property is
damaged or destroyed by fire or other casualty to less than a material extent,
Purchaser shall have no right to terminate this Agreement by reason thereof, and
Seller shall either repair the same prior to Closing, at Seller's expense, or
reimburse Purchaser for the cost of repairing the same by assigning any
insurance proceeds resulting therefrom to Purchaser and paying to Purchaser the
difference between the amount of the proceeds and the cost of repair, or by
allowing Purchaser to deduct such cost from the cash payable to Seller at the
Closing. If the extent of damage or the amount of insurance proceeds to be made
available is not able to be determined prior to the Closing Date specified
below, or the repairs are not able to be completed prior to said date, then
either party, by written notice to the other, may postpone the date of the
Closing to such date as shall be designated in such notice, but not more than
thirty (30) days after the Closing Date specified below.
ARTICLE II -- CLOSING AND TERMINATION
2.1 Time, Date and Place. The closing of the purchase and sale of the
Property and the other transactions contemplated by this Agreement (referred to
throughout this Agreement as the "Closing") shall take place at the offices of
Poyner & Spruill, L.L.P., Suite 4000, 100 North Tryon Street, Charlotte, North
Carolina, or such other place that Purchaser shall determine. The time, place
and date of the Closing are referred to throughout this Agreement as the
"Closing Date."
Unless this Agreement is terminated as provided for herein, the Closing
shall occur on May 23, 1997, or ten (10) days following the completion of all of
the Conditions Precedent outlined in Article VII below, whichever is later.
2.2 Termination.
2.2.1 If the Closing contemplated hereunder has not occurred on or
before June 30, 1997, either Purchaser or Seller may terminate this Agreement
upon written notice to the other party.
2.2.2 If any of the representations, warranties or covenants of
Seller or the General Partners are found to be untrue or breached in any
material respect, at or prior to Closing, and Seller or the General Partners
shall not have cured such breach within 30 days after Purchaser shall have given
written notice to Seller of the existence of such breach, Purchaser may
terminate this Agreement upon written notice to Seller.
2.2.3 If any of the representations, warranties or covenants of
Purchaser are found to be untrue or breached in any material respect, at or
prior to Closing, and Purchaser shall not have cured such
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breach within 30 days after Seller shall have given written notice to Purchaser
of the existence of such breach, Seller may terminate this Agreement upon
written notice to Purchaser.
2.2.4 This Agreement may be terminated by the written agreement of
Purchaser and Seller. This Agreement may be terminated by Purchaser in its sole
discretion if any of the contingencies set forth in Section 7.2 is not met to
Purchaser's satisfaction.
2.2.5 This Agreement may be terminated by Purchaser if the Exhibits
hereto are not furnished in accordance with Section 5.1.14 hereof, or are found,
in Purchaser's sole discretion, to be unacceptable within five (5) business days
following receipt by Purchaser thereof and of the letter required by Section
5.1.14.
2.3 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 2.2, this Agreement shall be
of no further force and effect, and except as specifically provided herein, with
no liabilities or obligations to any party under this Agreement; provided,
however, that the parties shall not be released from any liabilities, claims or
actions regarding the falsity in any material respect of a representation or
warranty set forth in Article III or Article IV or a failure to perform or
comply with any material obligation under this Agreement.
2.4 Expenses. Seller shall pay the following closing costs: (1) the cost
of preparing the Surveys (as hereinafter defined) and (2) state, county, and, if
applicable, municipal transfer taxes, sales taxes, documentary fees and deed
recording costs. Purchaser shall pay the following closing costs: (1) the
premium and other charges of the title company for issuing the Title Policy (as
hereinafter defined) and (2) the fees of the title company or its affiliate for
handling the Closing. Each party shall pay the fees and expenses of its own
legal counsel and, except as provided above, the cost of obtaining or preparing
each document to be delivered by such party at Closing. Except as provided
above and set forth below, Purchaser shall pay all expenses associated with
Purchaser's investigation of the Property, including, but not limited to, the
fees and expenses of any third parties, such as environmental consultants
conducting Phase I or Phase II environmental assessments, engaged by Purchaser
with respect thereto.
ARTICLE III -- REPRESENTATIONS AND WARRANTIES
OF SELLER AND PARTNERS
Seller and the General Partners, jointly and severally, represent and
warrant to Purchaser as of the date hereof and as of the Closing on the Closing
Date each of the following:
3.1 Ownership of Seller. The General Partners are the sole and exclusive
owners of all of the general partnership interests of Seller. The General
Partners, on the one hand, and the limited partner(s) of Seller, on the other
hand, have duly approved Seller's sale, assignment, transfer and delivery of the
Property to Purchaser in accordance with the terms of this Agreement and the
consummation of all the transactions contemplated hereby.
3.2 Due Organization; Name and Address; Good Standing, Authority of
Seller. Seller is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware. The only name and
business address of Seller which has been used by Seller at any time within the
past three years ending at the date of this Agreement is W & W Investments
Limited Partnership, 3932
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Breezewood Avenue, Fayetteville, North Carolina. Seller has full right, power
and authority to own and lease its properties and assets. Seller is not, and
has not been within the past three years ending at the date of this Agreement,
engaged in any active line of business and, during such period, its sole
business has been owning and leasing its properties and assets. Seller is duly
licensed, qualified and authorized to do business in each jurisdiction in which
the location or nature of the Property make such licensing, qualification and
authorization legally necessary. Except as disclosed on Exhibit 3.2, Seller is
not in breach or violation of, and the execution, delivery and performance of
this Agreement will not result in a breach or violation of, any of the
provisions of Seller's partnership agreement, as amended to the date of this
Agreement or other governing documents (the "Governing Documents"), or any
agreement to which it is a party.
3.3 Authorization and Validity of Agreements. Seller and the General
Partners have the legal capacity, right, power, and authority to enter into this
Agreement. Seller has the full right, power and authority to execute,
acknowledge and deliver this Agreement and to perform the transactions
contemplated by this Agreement. The execution, acknowledgment and delivery of
this Agreement by Seller and the General Partners and the performance by Seller
and the General Partners of the transactions contemplated hereby have been duly
and validly authorized by all necessary partnership and general and limited
partner action. This Agreement has been duly executed, acknowledged and
delivered by Seller and the General Partners and is the legal, valid and binding
obligation of Seller and the General Partners enforceable against Seller and the
General Partners, respectively, in accordance with its terms, except in each
case as such enforceability may be limited by general principles of equity,
bankruptcy, insolvency, moratorium and similar laws relating to creditors rights
generally.
3.4 Agreement Not in Conflict with Other Instruments; Required Approvals
Obtained. Except as disclosed on Exhibit 3.4, the execution, acknowledgment,
delivery, and performance of this Agreement by the parties thereto, and the
consummation of the transactions contemplated by this Agreement will not (a)
materially violate or require any consent, approval, or filing under, (i) any
common law, law, statute, ordinance, rule or regulation (collectively referred
to throughout this Agreement as "Laws") of any federal, state or local
government (collectively referred to throughout this Agreement as "Governments")
or any agency, bureau, commission, instrumentality or judicial body of any of
the Governments (collectively referred to throughout this Agreement as
"Governmental Agencies") except that which may be required by the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or (ii)
any judgment, injunction, order, writ or decree of any court, arbitrator,
Government or Governmental Agency by which Seller or any of the Property is
bound; (b) conflict with, require any consent, approval, or filing under, result
in the breach or termination of any provision of, constitute a default under, or
result in the creation of any claim, security interest, lien, charge, or
encumbrance upon any of the Property pursuant to (i) Seller's Governing
Documents, (ii) any indenture, mortgage, deed of trust, license, permit,
approval, consent, franchise, lease, contract, or other instrument, document or
agreement to which Seller is a party or by which Seller, or any of the Property
is bound, or (iii) any judgment, injunction, order, writ or decree of any court,
arbitrator, Government or Governmental Agency by which Seller or any of the
Property is bound. All permits, licenses and authorizations of any Government or
Governmental Agency required to be obtained by Seller prior to the Closing,
shall have been obtained and shall be in full force and effect as of the Closing
Date.
3.5 Conduct of Business in Compliance with Regulatory and Contractual
Requirements. Seller has conducted and is conducting its business in material
compliance with all applicable Laws of all Governments and Governmental
Agencies.
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3.6 Legal Proceedings. There is no action, suit, proceeding, claim or
arbitration, or to the best of Seller's and the General Partners' knowledge any
investigation by any person or entity, including, but not limited to, any
Government or Governmental Agency, (i) pending, to which Seller or the General
Partners are a party, or threatened against or relating to Seller, Seller's
business or the Property, or (ii) challenging Seller's or the General Partners'
right to execute, acknowledge, deliver, perform under or consummate the
transactions contemplated by this Agreement or (iii) asserting any right with
respect to any of the Property, and, in each such case, there is no basis for
any such action, suit, proceeding, claim, arbitration or investigation.
3.7 Financial Information. Attached hereto as Exhibit 3.7 are copies of
the unaudited Balance Sheets of Seller as of December 31, 1994, 1995, 1996, and
the Operating Statements of Seller for each of the three fiscal years then
ended, which are being provided by Seller and the General Partners to Purchaser
(the "Financial Statements"). The Financial Statements are in accordance with
the books and records of Seller, are true and correct and accurately present
Seller's financial position in all material respects as of the dates set forth
therein and the results of Seller's operations for the periods then ended; all
such Financial Statements are in conformity with the accounting principles
historically utilized by Seller and applied on a consistent basis during each
period and on a basis consistent with that of prior periods. Until the Closing
Date, Seller shall deliver to Purchaser month end balance sheets and income
statements within twenty (20) days of the end of each month.
3.8 Tax Matters. All tax returns of Seller as filed by Seller with the
Internal Revenue Service (the "IRS") and all information reported on the returns
are true, accurate, and complete in all material respects. Seller is not a
party to any pending, and is not aware of any threatened action, suit,
proceeding, or assessment against it for the collection of taxes by any
Government or Governmental Agency. Seller has duly and timely filed with all
appropriate Governments and Governmental Agencies, all tax returns, information
returns, and reports required to be filed by Seller. Seller has paid in full
all taxes, interest, penalties, assessments and deficiencies owed by Seller to
all taxing authorities, except for such amounts not yet due and payable. All
taxes and other assessments and levies which Seller is required by applicable
Law to withhold or to collect have been duly withheld and collected and have
been paid over to the proper Governments and Governmental Agencies or are
properly held by Seller for such payment. All claims by the IRS or any state
taxing authorities for taxes due and payable by Seller have been paid by Seller.
Seller is not a party to any pending, and is not aware of any threatened action,
suit, proceeding, or assessment against it for the collection of taxes by any
Government or Governmental Agency.
3.9 Title to Property. Except for the Permitted Exceptions (as
hereinafter defined), Seller has sole and exclusive, good and marketable title
to all of the Property and the same shall be free and clear of any and all
pledges, claims, threats, liens, restrictions, agreements, leases, security
interests, charges and encumbrances at the time of Closing. All of the Property
is in good, working and operating condition and repair, reasonable wear and tear
excepted and free from any material defects known to Seller or to the General
Partners.
3.10 Records. Seller's books and records pertaining to the Property (the
"Records") have been delivered by Seller to Purchaser or shall be delivered by
Seller to Purchaser, and such Records are true, complete and correct in all
material respects.
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3.11 Absence of Certain Changes or Events. Since December 31, 1996,
Seller has not engaged in or experienced any of the following:
3.11.1 Sold, assigned, transferred, leased, disposed of, or agreed to
sell, assign, transfer, lease, or dispose of, any of the Property, except in the
ordinary course of Seller's business, as such business has been operated
historically.
3.11.2 Suffered any material adverse change in Seller's operations,
earnings, assets, liabilities, or business (financial or otherwise).
3.11.3 Except as set forth in Exhibit 3.11.3, failed to pay any
indebtedness or other obligation, including any taxes and other charges, when
due.
3.12 Adverse Conditions. Except as set forth in Exhibit 3.12, attached
hereto and incorporated by reference herein, there are no past, present or
future conditions, facts or circumstances which have materially affected or
which might materially affect adversely the Property or Purchaser's intended use
thereof, excluding general economic, financial and market conditions that are
known to the public.
3.13 Leases and Contracts. Except for the Assumed Contracts, and except
for service contracts that will be canceled as of the Closing Date, there are no
leases, contracts, licenses, agreements or other commitments of Seller as
obligor involving a liability, obligation, contingent liability or contingent
obligation in excess of $5,000 per Restaurant. Each of the Assumed Contracts
are in full force and effect and have not been modified, and Seller has no
knowledge of any current material default in the performance of the obligations
of any party under the Assumed Contracts. Other than tenants who will vacate
the Property at or prior to Closing, there are no parties in possession of any
portion of the Property as lessees, tenants at sufferance or trespassers.
3.14 Title to Land and Improvements. At the Closing, Seller will convey
to Purchaser fee simple title to the Land and Improvements by general warranty
deeds, free and clear of any and all liens, assessments, unrecorded easements,
security interests and other encumbrances, except for the Permitted Exceptions.
Delivery of the Title Policy shall be deemed to satisfy the obligation of Seller
as to the sufficiency of title required hereunder.
3.15 Hazardous Materials. Except as disclosed on Exhibit 3.15 attached
hereto, the Real Property (including the land, surface water, ground water, and
improvements), is free of "contamination" from (A) any "hazardous waste," any
"hazardous substance," and any "oil, petroleum products, and their by-products,"
as such terms are defined by any federal, state, county or local law, ordinance,
regulation or requirement applicable to any portion of such Real Property, as
the same may be amended from time to time, and including any regulations
promulgated thereunder, and (B) any substance the presence of which on any of
the Real Property is regulated or prohibited by any law (collectively,
"Hazardous Substances"). "Contamination" means the uncontained presence of
Hazardous Substances at such Real Property or arising from such Real Property
that may require remediation or cleanup under any applicable law. Seller has
not used any Hazardous Substances on, from or affecting any of the Real Property
in any manner that violates any applicable law, and to the best of Seller's
knowledge, no prior owner or user of any of the Real Property has used such
substances on, from, or affecting any of the Real Property in any manner which
violates any applicable law. There is not now, nor, to the best of Seller's
knowledge, has there ever been on or in any of
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the Real Property underground storage tanks or surface impoundments, asbestos-
containing materials, or any material spills of polychlorinated biphenyls,
including those used in hydraulic oils, electric transformers or other
equipment. Without limiting in any respect the generality of the foregoing,
there are no actual, alleged or perceived health issues applicable to any of the
Real Property. The copies of any environmental reports that may have been
delivered by Seller to Purchaser, are complete and accurate copies of the same
and Seller has no other environmental reports, tests or audits in its possession
or under its control, and Seller has no knowledge of any other environmental
reports, tests or audits regarding any of the Real Property existing elsewhere.
In addition, Seller has received no notice from any government authority
claiming that any of the Real Property (including the improvements located
thereon) is contaminated by Hazardous Substances.
3.16 Full Disclosure. This Agreement (including the Exhibits hereto) does
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements contained herein not misleading.
There is no fact known to Seller or to the General Partners that is not
disclosed in this Agreement that materially adversely affects the accuracy of
the representations and warranties contained in this Agreement or Seller's
financial condition, operations, business, earnings, assets, or liabilities.
3.17 No Brokerage. Other than the obligations owed to the Cypress
Consulting Group, Inc., which Seller agrees to pay, neither Seller nor the
General Partners has incurred any obligation or liability, contingent or
otherwise, for brokerage fees, finder's fees, agent's commissions, or the like
in connection with this Agreement or the transactions contemplated hereby.
3.18 Notice of Violations. Seller has received no notice of and, to the
best of Seller's knowledge, there is no violation or alleged violation of any
legal requirement affecting, the Property, including, without limitation, any
violation or alleged violation of any local, state or federal environmental,
zoning, handicap or fire law, ordinance, code, regulation, rule or order, and
specifically including, without limitation, variances or special permits
affecting the Property. Seller has performed all conditions to any permits or
other governmental approvals or licenses with respect to the Property,
including, without limitation, the payment of all development impact or other
fees and developer exactions.
3.19 Condition of Property. The Real Property and Fixtures comply, in all
material respects, with the current Burger King Corporation Repairs and
Maintenance Standards (the "Standards"). In the event Burger King Corporation
requires any modification to the Real Property and/or Fixtures as a result of
their failure to meet the Standards, Seller shall, at its sole cost and expense,
effect such repairs to bring all Real Property and Fixtures into compliance with
the Standards; provided, however, that Seller shall not be required to make any
improvements to the Real Property and/or Fixtures to comply with the Burger King
Corporation's Project Jennifer standards or any merely cosmetic changes to the
Real Property and/or Fixtures that are not related to the operation,
functionality or safety of same.
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and the General Partners,
jointly and severally, as of the date hereof and as of the Closing on the
Closing Date each of the following:
4.1 Due Organization; Good Standing; Power. Purchaser is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Purchaser has full right, power and
authority to enter into this Agreement and to perform its obligations hereunder.
Purchaser
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is not in breach or violation of, and the execution, delivery and performance of
this Agreement will not result in a breach or violation of, any of the
provisions of Seller's articles of organization or operating agreement (the
"Governing Documents").
4.2 Authorization and Validity of Documents. The execution, delivery and
performance by Purchaser of this Agreement, and the transactions contemplated
hereby and thereby, have been duly and validly authorized by Purchaser. This
Agreement has been duly executed, acknowledged and delivered by Purchaser and is
a legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors' rights generally.
4.3 No Brokerage. Purchaser has not incurred any obligation or liability,
contingent or otherwise, for brokerage fees, finder's fees, agent's commissions,
or the like in connection with this Agreement or the transactions contemplated
hereby.
4.4 Obligations Assumed. Purchaser covenants that it will pay all
obligations assumed by it under this Agreement.
ARTICLE V -- COVENANTS
5.1 Seller's and General Partners' Covenants. Seller and the General
Partners, jointly and severally, covenant, promise and agree that from the date
hereof and until the Closing, Seller and the General Partners shall, and the
General Partners shall cause Seller to perform and comply with each of the
following:
5.1.1 Preserve the Property.
5.1.2 Maintain and continue normal and usual maintenance and repair
of the Property.
5.1.3 Cooperate with Purchaser to achieve an orderly transfer of the
Property.
5.1.4 Pay or provide for payment of all sales, use, personal
property, social security, withholding, payroll, unemployment compensation,
income and other taxes, assessments, fees and public charges due and payable by
Seller in respect of its business and the Property through the Closing Date and
any portion thereof applicable to any period prior to the Closing Date unless
otherwise provided herein.
5.1.5 Maintain in effect all insurance policies covering the
Property.
5.1.6 Fully perform and comply with all covenants, promises and
agreements hereunder which are required to be performed or complied with by
Seller and the General Partners prior to or at the Closing, and exert their best
efforts to completely satisfy and fulfill all conditions precedent to Seller's
and the General Partners' obligations to close hereunder at the Closing on the
Closing Date.
5.1.7 Exert their best efforts to prevent the occurrence of any event
which could result in any of Seller's or the General Partners' representations
and warranties contained in this Agreement not being true and correct at or as
of the time immediately after the occurrence of such event, and Seller and the
General Partners shall promptly notify Purchaser of the occurrence of any event
or the discovery of any fact
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which would cause any of their covenants, promises and agreements to be breached
or violated or any of their representations and warranties to become not true
and correct or which could interfere with or prevent the consummation of the
transactions contemplated hereby.
5.1.8 Provide Purchaser and its representatives with access during
normal business hours to all of Seller's Property and Records, provide Purchaser
and its representatives with such financial and operating data and other
information with respect to the Property as Purchaser shall from time to time
reasonably request, and permit Purchaser and its representatives, at Purchaser's
sole expense, to consult with Seller's representatives, officers, employees and
accountants up to the time of Closing and for 120 days thereafter.
5.1.9 Take no action which is or would cause a material violation of
any Laws of any Government or Governmental Agency.
5.1.10 Take, or cause to be taken, all reasonable actions necessary to
permit Purchaser to furnish all information required under the HSR Act and
promptly cooperate with and furnish information to Purchaser in connection with
any such requirements imposed upon Purchaser or its parent in connection with
the transaction as set forth herein. The parties acknowledge and agree that the
filing fees for any filings required under the HSR Act shall be paid by
Purchaser.
5.1.11 Not to further encumber any of the Property or allow any
further encumbrance upon title to the Property, or modify the terms of any
Assumed Service Contract, or enter into any new service contract which would be
binding upon Purchaser or the Property after Closing, without the prior written
consent of Purchaser.
5.1.12 Order from Chicago Title Insurance Company ("Title Company"),
and promptly, but in no event later than April 4, 1997, deliver to Purchaser one
or more ALTA Form B extended coverage title commitments pertaining to each
parcel of the Land and the Improvements providing for the deletion of standard
printed exceptions pertaining to survey matters, mechanic's liens and rights of
parties in possession (the "Commitments"), together with copies of all documents
relating to the title exceptions referred to in such Commitments and a tax
certificate issued by the treasurer of each of the counties in which the Land
and/or the Improvements are located. Purchaser shall bear the expense of
obtaining such Commitments.
5.1.13 Deliver to Purchaser on or before April 4, 1997, an as-built
ALTA/ACSM survey (or update to existing survey) for each parcel of the Land and
the Improvements prepared by a licensed surveyor (the "Surveys"). The Surveys
shall be sufficient to enable Title Company to update the Commitments to: (i)
delete the standard survey matters, (ii) add any new title exceptions which are
revealed by said Surveys and an inspection of the Real Property, and (iii)
enable Title Company at the Closing to issue, or to unequivocally agree in
writing to issue, an extended owner's policy of title insurance (with the
standard printed exceptions pertaining to survey matters deleted), and shall be
certified to Seller, Purchaser and Title Company.
5.1.14 Deliver to Purchaser within 14 business days of the date of
execution of this Agreement all exhibits to be furnished by Purchaser, together
with a letter certifying that all such exhibits have been furnished and that the
information contained therein is true and complete in all material respects.
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5.2 Joint Covenants. Seller and the General Partners, jointly and
severally, on the one hand, and Purchaser, on the other hand, covenant, promise
and agree to each other as follows: That, on or before April 25, 1997, Purchaser
shall notify Seller in writing of any title exceptions identified in the
Commitments and/or matters reflected in the Surveys of which Purchaser
disapproves. Any exception or matter not disapproved in writing on or before
such date shall be deemed approved by Purchaser, and shall constitute a
"Permitted Exception" hereunder. Within ten (10) business days after Seller's
receipt of Purchaser's disapproved title exceptions and/or Survey matters (but,
provided that Seller has had at least five (5) business days in which to review
Purchaser's disapproved exceptions and/or Survey matters, but in no event later
than ten (10) business days prior to the Closing), Seller shall notify Purchaser
in writing of any disapproved title exceptions and/or Survey matters which
Seller is unable or unwilling to cause to be removed or insured against prior to
or at Closing and, with respect to such exceptions and/or Survey matters,
Purchaser then shall elect, by giving written notice to Seller within five (5)
calendar days thereafter, (x) to terminate this Agreement, or (y) to waive its
disapproval of such exceptions and/or Survey matters, in which case such
exceptions and/or matters shall then be deemed to be Permitted Exceptions.
ARTICLE VI -- OPINIONS OF COUNSEL
6.1 Opinion of Seller's and General Partners' Counsel. At the Closing,
Seller and the General Partners shall deliver to Purchaser the opinion of their
counsel, dated as of the Closing Date, in substantially the form attached hereto
as Exhibit 6.1.
6.2 Opinion of Purchaser's Counsel. At the Closing, Purchaser shall
deliver to Seller and to the General Partners the opinion of its counsel, dated
as of the Closing Date, in substantially the form attached hereto as Exhibit
6.2.
ARTICLE VII -- CONDITIONS
7.1 Seller's Conditions to Close. Seller's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Seller (but no such waiver
of any such condition precedent shall be or constitute a waiver of any covenant,
promise, agreement, representation or warranty made by Purchaser in this
Agreement):
7.1.1 All representations and warranties made by Purchaser in this
Agreement shall be complete and accurate at and as of the Closing on the Closing
Date. Seller shall have been furnished with a certificate, signed by Purchaser,
and dated the Closing Date to the foregoing effect.
7.1.2 All covenants, promises and agreements made by Purchaser in
this Agreement and all other actions required to be performed or complied with
by Purchaser under this Agreement prior to or at the Closing shall have been
fully performed or complied with by Purchaser. Seller shall have been furnished
with a certificate, signed by Purchaser, and dated the Closing Date to the
foregoing effect.
7.1.3 Purchaser shall have delivered to the Title Company the items
described in Section 8.1.
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7.1.4 Seller shall have received an opinion of counsel for Purchaser
as of the Closing Date, as required by Section 6.2.
7.1.5 Purchaser shall not have received, prior to Closing, any
notification under the HSR Act that seeks to prohibit Purchaser and Seller from
consummating the transaction set forth in this Agreement.
7.1.6 [intentionally omitted]
7.2 Purchaser's Conditions to Close. Purchaser's obligation to close the
transactions contemplated hereby at the Closing shall be subject to the complete
satisfaction and fulfillment of all of the following conditions precedent, any
or all of which may be waived in whole or in part by Purchaser (but no such
waiver of any such condition precedent shall be or constitute a waiver of any
covenant, promise, agreement, representation or warranty made by Seller and the
General Partners in this Agreement):
7.2.1 All representations and warranties made by Seller and the
General Partners in this Agreement shall be complete and accurate at and as of
the Closing on the Closing Date. Purchaser shall have been furnished with a
certificate, signed by the General Partners and Seller, and dated the Closing
Date, to the foregoing effect.
7.2.2 All covenants, promises and agreements made by Seller and the
General Partners in this Agreement and all other actions required to be
performed or complied with by Seller and the General Partners under this
Agreement prior to or at the Closing shall have been fully performed or complied
with by Seller and the General Partners. Purchaser shall have been furnished
with a certificate, signed by the General Partners and Seller, and dated the
Closing Date, to the foregoing effect.
7.2.3 Seller shall have obtained, and delivered to Purchaser, copies
of all consents, approvals or other authorizations which Seller is required to
obtain from, and any filing which Seller is required to make with, any
governmental authority or agency or any other person including, but not limited
to, consents required from Burger King Corporation (the "Burger King Consents")
in connection with the execution, delivery and consummation of this Agreement
and the other documents associated herewith and the consummation of the
transactions contemplated hereby or thereby (collectively, the "Required
Consents"), in form and substance reasonably satisfactory to Purchaser.
7.2.4 Within ten (10) business days after the effective date of this
Agreement, Seller shall have delivered to Purchaser, true, correct and complete
copies of all information in the possession of Seller or Seller's property
manager, or otherwise reasonably subject to Seller's control, pertaining to the
Property which is of the following types or categories: (i) Seller's current
title insurance policies and commitments issued to Seller thereafter; (ii) plans
and specifications (including all "as built" and other architectural plans and
drawings), permits, licenses, approvals and inspection reports pertaining to the
Real Property and Fixtures; (iii) information relating to environmental
conditions at the Property; (iv) the most recent plat of survey of the Real
Property; (v) copies of all Store Leases, Service Contracts and any other
contracts materially affecting the Property, together with all amendments
thereto; and (vi) a detailed summary of all unresolved legal or administrative
actions, suits or proceedings in any way affecting the Property or any interest
therein. At the time Seller delivers the Property information to Purchaser,
Seller shall also deliver
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to Purchaser the certificate of the General Partners that the Property
information so delivered constitutes all of the information which Seller is
required to deliver to Purchaser hereunder.
7.2.5 Purchaser shall have received all things required to be
delivered or furnished to Purchaser by Seller and the General Partners hereunder
prior to or at the Closing, including the Surveys and the Commitments.
7.2.6 All necessary permits, licenses and approvals required to be
obtained by Purchaser shall have been obtained by Purchaser.
7.2.7 There shall not have occurred any material adverse change in
the Property.
7.2.8 Purchaser shall have received an opinion of counsel for Seller
and the General Partners, as of the Closing Date, as required by Section 6.1
hereof.
7.2.9 Purchaser and its representatives shall have completed, to
their complete satisfaction, an investigation and examination of all aspects of
the Property, including the Financial Statements. No employee or representative
of Purchaser will perform on-site due diligence of the Property without Seller's
prior approval, at which time such employee or representative will be
accompanied by Seller or its designee. Purchaser shall have completed its
review of the Property to confirm that the Property conforms in all material
respects to the standards described in Section 3.22 hereof and to confirm the
physical condition of the Property, including the conduct of engineering and all
environmental studies and assessments (the "Inspection") on or before forty-five
(45) days following the execution of this Agreement (the "Inspection Deadline").
The Inspection shall not include title and survey matters, which shall be
governed by Sections 5.1.12 and 5.1.13. If written notice of any unsatisfactory
condition, signed by or on behalf of Purchaser is not received by Seller on or
before the Inspection Deadline, the physical condition of the Property shall be
deemed to be satisfactory to Purchaser. If such notice is received by Seller as
set forth above, and if Purchaser and Seller have not agreed in writing to a
settlement thereof on or before fifteen (15) days following the Inspection
Deadline (the "Resolution Deadline"), this Agreement shall terminate three (3)
business days following the Resolution Deadline; unless, within such three (3)
business day period, Seller receives written notice from Purchaser waiving
objection to any unsatisfactory condition.
7.2.10 Within forty-five (45) days of execution of this Agreement,
Purchaser's auditor shall have (i) reviewed the financial and accounting system
of Seller; (ii) reviewed and confirmed the Financial Statements and results set
forth in the Financial Statements; and (iii) found no material objection to the
financial and accounting system of Seller, or Seller and Purchaser shall have
resolved any objection raised by the auditor and presented to Seller by
Purchaser.
7.2.11 Seller shall have delivered to Purchaser the following
documents:
7.2.11.1 fully executed original counterparts of each Assumed
Contract in Seller's possession;
7.2.11.2 if available, certificates dated no earlier than thirty
(30) days prior to the Closing Date, from the Secretary of State for the State
of Delaware as to the good standing of Seller;
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7.2.11.3 the Commitments and the Surveys;
7.2.11.4 state, county and, if applicable, municipal, transfer
tax declarations executed by or on behalf of Seller;
7.2.11.5 to the extent in Seller's possession or under Seller's
control, originals (or if originals are not so available, copies) of the plans
and specifications for the Real Property, the Service Contracts, and any other
agreements, licenses or permits used for the operation of the Property and
assigned to Purchaser; and
7.2.11.6 all other documents, instruments and agreements required
to be delivered by Seller to Purchaser pursuant to this Agreement.
7.2.12 The Title Company shall be irrevocably committed to issue,
at the Closing, one or more ALTA owner's policies of title insurance with
extended coverage and endorsements (if any) to insure over any title exceptions
and/or Survey matters pursuant to Section 5.2 hereof (the "Title Policy")
insuring Purchaser's interest in the Land and the Improvements, dated the
Closing Date, with liability in the amount of the Purchase Price, subject only
to the Permitted Exceptions.
7.2.13 The Boards of Directors of National Restaurant Enterprises,
Inc. d/b/a AmeriKing, Inc. and the members and managers of Purchaser shall have
approved this Agreement and the transactions contemplated herein.
7.2.14 Purchaser shall have concurrently consummated the transactions
set forth in the F & P Enterprises, Inc. Asset Purchase Agreement, the North
Foods, Inc. Asset Purchase Agreement, and the T & B Leasing Real
Estate Purchase Agreement.
7.2.15 [intentionally omitted]
7.2.16 Subject to the Permitted Exceptions and rights of parties
under the Assumed Service Contracts, Seller shall have delivered possession of
the Property to Purchaser at Closing.
7.2.17 Seller shall have delivered to the Title Company the items
listed in Section 8.1.
7.3 Contemporaneous Transfer. All transfers, assignments, conveyances,
and transactions under this Agreement shall be effected contemporaneously for
present value between and among Seller, the General Partners and Purchaser.
ARTICLE VIII - CLOSING DELIVERIES
8.1 Purchaser's Closing Deliveries. At or prior to the Closing, Purchaser
shall deliver or cause to be delivered to the Title Company the following:
8.1.1 The Purchase Price, together with such other sums as the Title
Company shall require to pay the Closing costs, prorations, reimbursements
and adjustments as set forth herein, in immediately available funds.
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8.1.2 A General Assignment executed in duplicate by the Purchaser,
in the form of Exhibit 8.1.2(a) (the "General Assignment"), whereby Purchaser
shall assume the obligations under the Assumed Service Contracts, and an
Assignment of Leases, in the form of Exhibit 8.1.2(b) (the "Assignment of
Leases"), whereby Purchaser shall assume the obligations under the Store Leases.
8.1.3 A certificate from Purchaser stating that all of Purchaser's
conditions precedent to Closing have been satisfied.
8.1.4 Any other documents, instruments or agreements reasonably
necessary or customary in North Carolina or the localities in which any of the
Property is located, or required by the Title Company, to effectuate the
transaction contemplated by this Agreement.
8.2 Seller's Closing Deliveries. At or prior to the Closing, Seller
shall deliver or cause to be delivered to the Title Company the following:
8.2.1 A General Warranty Deed for each parcel of the Land and the
Improvements in the form attached hereto as Exhibit 8.2.1.
8.2.2 A Bill of Sale and Assignment in the form attached hereto as
Exhibit 8.2.2.
8.2.3 Two executed counterparts of the General Assignment and the
Assignment of Leases, assigning to Purchaser the Assumed Contracts and any
warranties, guaranties and indemnities relating to the Property, to the extent
such items are assignable, and the Store Leases.
8.2.4 Any required easement assignments.
8.2.5 An affidavit from Seller and any other parties required
pursuant to Section 1445 of the Internal Revenue Code and/or regulations
relating thereto stating, under the penalty of perjury (a) that Seller is not a
foreign person; (b) the U.S. Taxpayer identification number of Seller; and (c)
such other information as may be required by regulations enacted by the
Department of Treasury, in connection with Section 1445 of the Internal Revenue
Code.
8.2.6 A certificate from Seller stating that all of Seller's
conditions precedent to Closing have been satisfied.
8.2.7 Any other documents, instruments or agreements reasonably
necessary or customary in North Carolina or the localities in which any of the
Property is located, or required by the Title Company, to effectuate the
transactions contemplated in this Agreement.
ARTICLE IX -- ESCROW
9.1 Escrow.
------
9.1.1 Instructions. Not less than ten (10) business days prior to Closing,
Purchaser and Seller each shall deposit a copy of this Agreement executed by
such party (or either of them shall deposit
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a copy executed by both Purchaser and Seller) with the Title Company. This
Agreement, together with such further instructions, if any, as the parties shall
provide to the Title Company by written agreement, shall constitute the escrow
instructions. If any requirements relating to the duties or obligations of the
Title Company hereunder are not acceptable to the Title Company, or if the Title
Company requires additional instructions, the parties hereto agree to make such
deletions, substitutions and additions hereto as counsel for Purchaser and
Seller shall mutually approve, which additional instructions shall not
substantially alter the terms of this Agreement unless otherwise expressly
agreed to by Seller and Purchaser.
9.1.2 Deposits into Escrow. Seller shall make its deposits into
escrow in accordance with Section 8.2. Purchaser shall make its deposits into
escrow in accordance with Section 8.1. The Title Company is hereby authorized to
close the escrow only if and when: (i) the Title Company has received all items
to be delivered by Seller and Purchaser pursuant to Article VIII; and (ii) the
Title Company can and will issue the Title Policy.
9.1.3 Close of Escrow. If and when Purchaser and Seller have
deposited into escrow the items required by this Agreement and Title Company can
and will issue the Title Policy concurrently with the Closing, Title Company
shall:
9.1.3.1 Deliver to Purchaser: (i) the General Warranty Deeds by
causing them to be recorded in the records of the clerk and recorder for the
respective Counties in which the Land and Improvements are located; (ii) the
Bill of Sale and Assignment; (iii) the affidavit of non-foreign status; (iv) one
copy of the General Assignment; and (v) one copy of the Assignment of Leases.
9.1.3.2 Deliver to Seller: (i) the Purchase Price, after
satisfying the prorations and adjustments to be paid by Seller; (ii) one copy of
the General Assignment and (iii) one copy of the Assignment of Leases.
9.1.3.3 Deliver to Purchaser: any funds deposited by Purchaser,
and any interest earned thereon, in excess of the amount required to be paid by
Purchaser hereunder.
9.1.3.4 Deliver the Title Policy issued by the Title Company to
Purchaser.
9.1.4 Real Estate Reporting Person. The Title Company is hereby
designated the "real estate reporting person" for purposes of Section 6045 of
title 26 of the United States Code and Treasury Regulation 1.6045-4 and any
instructions or settlement statement prepared by the Title Company shall so
provide. Upon the consummation of the transaction contemplated by this
Agreement, the Title Company shall file Form 1099 information return and send
the statement to Seller as required under the aforementioned statute and
regulation
ARTICLE X -- INDEMNIFICATION
10.1 Indemnification By Seller And General Partners. Seller and the
General Partners, jointly and severally, shall defend, indemnify and hold
harmless Purchaser, its managers, members, agents, servants and employees and
their respective heirs, personal and legal representatives, guardians,
successors and assigns, from and against any and all claims, threats,
liabilities, taxes, interest, fines, penalties, suits, actions,
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proceedings, demands, damages, losses, costs and expenses (including reasonable
attorneys' and experts' fees and court costs) of every kind and nature arising
out of, resulting from, or in connection with the following:
10.1.1 Any material misrepresentation or breach by Seller or the
General Partners of any representation or warranty contained in this Agreement.
10.1.2 Any material nonperformance, failure to comply or breach by
Seller or the General Partners of any covenant, promise or agreement of Seller
or the General Partners contained in this Agreement.
10.1.3 Any debts, obligations, duties and liabilities of Seller and
the General Partners (except those assumed by Purchaser).
10.1.4 The past or future failure of the Seller or the General
Partners to comply with any applicable Environmental Laws (as hereinafter
defined) or the presence of Hazardous Materials (as hereinafter defined) in the
soil or ground water on the Real Property at the time of Closing.
10.1.5 Any matter, act, thing or occurrence caused by or resulting
from any act or omission of Seller or the General Partners prior to or at the
Closing.
For purposes of this Section 10.1, the following terms shall have the
meaning set forth below:
(i) "Environmental Law" shall mean any and all laws, statutes,
ordinances, rules, regulations, judgments, orders, decrees, permits,
concessions, grants, agreements, licenses, or other governmental restrictions or
requirements regulating Hazardous Materials or relating to health, safety, the
environment or the release of Hazardous Materials into the environment, now or
hereafter in effect.
(ii) "Hazardous Materials" shall mean any chemical, substance,
material, object, condition, waste or combination thereof which is or may be
hazardous to human health or safety due to its radioactivity, ignitability,
corrosivity, reactivity, explosiveness, toxicity, carcinogenicity,
infectiousness or other harmful or potentially harmful properties or effects,
including, without limitation, all of those chemicals, substances, materials,
objects, conditions, wastes or combinations thereof which are now or become
listed, defined or regulated in any manner by any Environmental Law.
10.2 Indemnification by Purchaser. Purchaser shall defend, indemnify and
hold harmless Seller, the General Partners and their respective heirs, personal
and legal representatives, guardians, successors and assigns, from and against
any and all claims, threats, liabilities, taxes, interest, fines, penalties,
suits, actions, proceedings, demands, damages, losses, costs and expenses
(including reasonable attorneys' and experts' fees and court costs) of every
kind and nature arising out of, resulting from, or in connection with the
following:
10.2.1 Any material misrepresentation, omission or breach by
Purchaser of any representation or warranty contained in this Agreement.
10.2.2 Any material nonperformance, failure to comply or breach by
Purchaser of any covenant, promise or agreement of Purchaser contained in this
Agreement.
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10.3 Defense of Claims. In the event of any claim, threat, liability,
tax, interest, fine, penalty, suit, action, proceeding, demand, damage, loss,
cost or expense with respect to which indemnity is or may be sought hereunder
(an "Indemnity Claim"), the indemnified party shall promptly notify the
indemnifying party in writing of such Indemnity Claim, specifying in reasonable
detail the Indemnity Claim and the circumstances under which it arose. The
indemnifying party may elect to assume the defense of such Indemnity Claim, at
its own expense, by written notice to the indemnified party given within 10 days
after the indemnifying party receives written notice of the Indemnity Claim, and
the indemnifying party shall promptly engage counsel reasonably acceptable to
the indemnified party to direct and conduct such defense; provided, however,
that the indemnified party shall have the right to engage its own counsel, at
its own expense, to participate in such defense. In the event the indemnifying
party does not so elect to assume the defense of such Indemnity Claim in the
manner specified above, or if, in the reasonable opinion of counsel to the
indemnified party, there are defenses available to the indemnified party which
are different from or additional to those available to the indemnifying party or
which give rise to a material conflict between the defense of the indemnified
party and of the indemnifying party, then upon notice to the indemnifying party,
the indemnified party may elect to engage separate counsel to conduct its
defense, at the expense of the indemnifying party.
In the event the indemnifying party assumes the defense of any Indemnity
Claim, it may at any time notify the indemnified party of its intention to
settle, compromise or satisfy such Indemnity Claim and may make such settlement,
compromise or satisfaction (at its own expense) unless within twenty (20) days
after the giving of such written notice the indemnified party shall give written
notice to the indemnifying party of its intention to assume the defense of the
Indemnity Claim, in which event the indemnifying party shall be relieved of its
duty hereunder to indemnify the indemnified party. Unless the indemnified party
shall have given the notice referred to in the preceding sentence, (i) the
indemnified party shall not consent to or make any settlement, compromise or
satisfaction with respect to the Indemnity Claim without the prior written
consent of the indemnifying party, which consent shall not be unreasonably
withheld, and (ii) any settlement, compromise or satisfaction made by the
indemnifying party with respect to such Indemnity Claim shall be deemed to have
been consented to by and shall be binding upon the indemnified party.
10.4 Arbitration. Any dispute arising out of or relating to this
Agreement which occurs after the date of Closing, which has not been resolved by
non-binding means within thirty (30) days, shall be finally settled by
arbitration conducted in accordance with the American Arbitration Association
Commercial Arbitration Rules by a sole arbitrator selected by the parties. In
the event the parties cannot agree upon an arbitrator, each party shall select
an arbitrator and the two arbitrators so selected shall select the arbitrator to
hear the dispute. The place for arbitration shall be Chicago, Illinois.
ARTICLE XI -- MISCELLANEOUS
11.1 Survival of Representations, Warranties and Agreements. All of the
representations, warranties, covenants, promises and agreements of the parties
contained in this Agreement (or in any document delivered or to be delivered
pursuant to this Agreement or at or in connection with the Closing) shall
survive the execution, acknowledgment and delivery of this Agreement and the
consummation of the transactions contemplated hereby for a period of five (5)
years from the date of Closing.
11.2 Post-Closing Obligation. Within fifteen (15) days following the
Closing Date, Seller shall pay all wages, bonuses, commissions and other
benefits and sums (and all required taxes, insurance, social
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security and withholding thereon), including all accrued vacation, accrued sick
leave, accrued benefits and accrued payments (and pro rata accruals for a
portion of a year) due to Seller's employees for all periods prior to and
through the Closing Date.
11.3 Notices. All notices, requests, demands, consents, and other
communications which are required or may be given under this Agreement
(collectively, the "Notices") shall be in writing and shall be given either (a)
by personal delivery with a receipted copy of such delivery, (b) by certified or
registered United States mail, return receipt requested, postage prepaid, or (c)
by facsimile transmission with an original mailed by first class mail, postage
prepaid, to the following addresses:
(i) If to Seller, to:
W & W Investments Limited Partnership
3932 Breezewood Avenue
Fayetteville, NC 28303
Attn: Thomas Fickling
Fax: (910) 486-0863
with a copy to:
Mark B. Edwards
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, NC 28202-4010
Fax: (704) 342-5264
(ii) If to the General Partners, to:
Thomas Fickling
William Prentice
3932 Breezewood Avenue
Fayetteville, NC 28303
Fax: (910) 486-0863
with a copy to:
Mark B. Edwards
Poyner & Spruill, L.L.P.
100 North Tryon Street, Suite 4000
Charlotte, NC 28202-4010
Fax: (704) 342-5264
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(iii) If to Purchaser:
Lawrence E. Jaro, Manager
Castle Properties, L.L.C.
2215 Enterprise Drive
Westchester, IL 60154
Telefax No.: (708) 947-2160
with copies to:
A. Richard Caputo
The Jordan Company
9 West 57th Street, Suite 4000
New York, New York 10019
Telefax No.: (212) 755-5263
and
Ernest J. Panasci, Esq.
Slivka Robinson Waters & O'Dorisio, P.C.
1099 18th Street
Suite 2600
Denver, CO 80202
Telefax No.: (303) 297-2750
or to such other address of which written notice in accordance with this Section
11.3 shall have been provided to the other parties. Notices may only be given
in the manner hereinabove described in this Section 11.3 and shall be deemed
received three (3) days after given in such manner; provided however, that any
notice sent by facsimile shall be deemed to have been given as of the date of
the transmission.
11.4 Entire Agreement. This Agreement (including the Exhibits hereto,
which constitute a part of this Agreement) constitutes the full, entire and
integrated agreement between the parties hereto with respect to the subject
matter hereof, and supersedes all prior negotiations, correspondence,
understandings and agreements among the parties hereto respecting the subject
matter hereof.
11.5 Assignability. This Agreement shall not be assignable by any party
hereto without the prior written consent of the other parties hereto; provided,
however, that Purchaser may assign this Agreement to another subsidiary of
AmeriKing Corporation.
11.6 Binding Effect; Benefit. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, personal
and legal representatives, guardians, successors and permitted assigns. Nothing
in this Agreement, express or implied, is intended to confer upon any other
person any rights, remedies, obligations, or liabilities.
11.7 Severability. Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable only shall be
ineffective only to the extent of such prohibition
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or unenforceability, without invalidating or rendering unenforceable the
remaining provisions of this Agreement.
11.8 Amendment; Waiver. No provision of this Agreement may be amended,
waived or otherwise modified without the prior written consent of all of the
parties hereto. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement herein contained. The waiver by any party hereto
of a breach of any provision or condition contained in this Agreement shall not
operate or be construed as a waiver of any subsequent breach or of any other
conditions hereof.
11.9 Recording. This Agreement shall not be recorded by either party in
the Office of the clerk and recorder of the county in which any of the Real
Property is located or in any other office or place of public record and, if
Purchaser shall record this Agreement or cause or permit same to be recorded,
Seller may, at its option, elect to treat such act as a breach of this
Agreement.
11.10 Confidentiality. Each party agrees that, except as otherwise set
forth in this Agreement or provided by law or unless compelled by an order of a
court, it shall keep the contents of this Agreement and any information related
to the transaction contemplated hereby confidential and further agrees to
refrain from generating or participating in any publicity statement, press
release, or other public notice regarding this transaction without the prior
written consent of the other party unless required under applicable law or by a
court order. The provisions of this Section 11.10 shall survive the Closing or
any termination of this Agreement and shall not be merged into any instrument or
conveyance delivered at the Closing.
11.11 Section Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
11.13 Applicable Law; Jurisdiction and Venue; Service of Process. This
Agreement shall be governed by, construed, interpreted and enforced in
accordance with the laws of the State of North Carolina.
11.14 Remedies. The parties hereto acknowledge that in the event of a
breach of this Agreement by Seller, any claim for monetary damages hereunder may
not constitute an adequate remedy, and that it may therefore be necessary for
the protection of the Purchaser to carry out the terms of this Agreement to
apply for the specific performance of the provisions hereof. It is accordingly
hereby agreed by Seller that no objection to the form of the action or the
relief prayed for in any proceeding for specific performance of this Agreement
shall be raised by Seller, the General Partners or any of their affiliates, in
order that such relief may be expeditiously obtained by Purchaser.
11.15 Further Assurances. Seller and the General Partners jointly and
severally agree to execute, acknowledge and deliver, after the date hereof,
without additional consideration, such further assurances, instruments and
documents, and to take such further actions, as Purchaser may reasonably request
in order to fulfill the intent of this Agreement and the transactions
contemplated hereby.
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11.16 Use of Genders. Whenever used in this Agreement, the singular shall
include the plural and vice versa, and the use of any gender shall include all
genders and the neuter.
11.17 Negotiations with Other Persons. Until the earlier of the Closing or
the termination of this Agreement as provided herein, neither Seller nor the
General Partners shall initiate, encourage the initiation by others, or
participate in any discussion or negotiations with any other person or entity
relating to the sale of any or all of the Property, the business of Seller or
any securities of Seller. From the date of this Agreement and until after the
Closing and the consummation of the transactions contemplated by this Agreement,
the General Partners shall not offer for sale, sell or otherwise transfer (with
or without consideration) any securities of Seller owned of record or
beneficially by him.
11.18 Tax Deferred Exchange. Seller shall have the right and option to
engage in a tax-deferred exchange of the Land pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, and Purchaser shall cooperate with
Seller to the extent necessary to accomplish such an exchange, so long as
Purchaser's rights hereunder are not prejudiced in any manner, as determined by
Purchaser in its sole discretion. The representations and warranties made by
Seller and the General Partners to Purchaser in this Agreement shall apply to
any intermediary which becomes a seller of the Land by virtue of such a tax-
deferred exchange.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
ATTEST: W & W INVESTMENTS
LIMITED PARTNERSHIP
______________________________ _________________________________________
By:
Its: General Partner
WITNESS: General Partners:
______________________________ _______________________________________
Thomas Fickling
_______________________________________
William Prentice
Purchaser:
ATTEST: CASTLE PROPERTIES, L.L.C.
________________________________ By:____________________________________
Joel Aaseby, Manager Lawrence E. Jaro, Manager
22
<PAGE>
EXHIBIT LIST
<TABLE>
<CAPTION>
<S> <C>
1.1 Legal Descriptions of Land and Improvements
1.1.5 Fixtures
1.1.6 Assumed Service Contracts
1.2 Allocation of Purchase Price
1.4 Proration Adjustment Letter
3.2 Breaches or Violations of Governing Documents
3.4 Disclosure of Exceptions regarding Authority
3.7 Financial Statements
Unaudited Balance Sheets as of December 31, 1994
Unaudited Balance Sheets as of December 31, 1995
Unaudited Balance Sheets as of December 31, 1996
Operating Statements for January 1, 1994 through December 31, 1994
Operating Statements for January 1, 1995 through December 31,1995
Operating Statements for January 1, 1996 through December 31, 1996
3.11.3 Payment of Indebtedness and Taxes
3.12 Adverse Conditions
3.15 Hazardous Materials
6.1 Opinion of Seller's and General Partners' Counsel
6.2 Opinion of Purchaser's Counsel
8.1.2(a) General Assignment
8.1.2(b) Assignment of Leases
8.2.1 Form of General Warranty Deed
8.2.2 Form of Bill of Sale and Assignment
</TABLE>
23
<PAGE>
AMENDMENT NO. 1
TO
REAL ESTATE PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO REAL ESTATE PURCHASE AGREEMENT (this "Amendment")
is made and entered into this 8th day of April, 1997, among W & W INVESTMENTS
LIMITED PARTNERSHIP, a Delaware limited partnership ("Seller"); THOMAS FICKLING
and WILLIAM PRENTICE (collectively referred to as the "Partners"), and CASTLE
PROPERTIES, L.L.C., a Delaware limited liability company ("Purchaser").
R E C I T A L S:
WHEREAS, Seller, the Partners and Purchaser entered into a Real Estate
Purchase Agreement, dated March 7, 1997 (the "Agreement");
WHEREAS, the parties desire to amend the Agreement to more closely reflect
the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Definitions of Terms; Section References. Capitalized terms used
without definition herein shall have the meanings assigned to them in the
Agreement. Unless the context requires otherwise, section references herein
refer to sections in the Agreement.
2. Time Periods Adjusted. The following time periods and deadlines are
adjusted as follows:
a. In Section 5.1.12, the deadline for delivery of the Commitments
is hereby extended to April 17, 1997.
b. In Section 5.1.13, the deadline for delivery of the Surveys is
hereby extended to April 17, 1997.
c. In Section 5.1.14, the time period is hereby extended to 20
business days.
d. In Section 5.2, the deadline for Purchaser to notify Seller in
writing of any title exceptions identified in the Commitments
and/or matters reflected in the Surveys of which Purchaser
disapproves is hereby extended to May 9, 1997.
e. In Section 7.2.9, the Inspection Deadline is hereby extended to
May 9, 1997.
f. In Section 7.2.10, the period for review of Seller's financial
and accounting system and the Financial Statements, and for
raising or resolving any objections thereto, is hereby extended
to May 9, 1997.
3. Amendments to Text.
a. The last sentence of Section 3.2 is hereby amended in its
entirety to read as follows: "Except as disclosed on Exhibit 3.2,
Seller is not in breach or violation of, and the execution,
delivery and performance of this Agreement will not result in a
breach or violation of, any of the provisions of Seller's
partnership agreement, as amended to the date of this Agreement,
or other governing documents (the "Governing Documents"), or, to
the best of Seller's knowledge, any agreement to which it is a
party.
b. The first sentence of Section 3.13 is hereby amended in its
entirety to read as follows: "Except for the Assumed Contracts,
service contracts that will be canceled as of the Closing Date,
or as set forth on Exhibit 3.13, there are no leases, contracts,
licenses, agreements or
<PAGE>
other commitments of Seller as obligor involving a liability,
obligation, contingent liability or contingent obligation in
excess of $5,000 per Restaurant."
c. Exhibit 3.13 is hereby added to the Exhibit List.
4. Scope. To the extent not amended or modified herein, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
W & W INVESTMENTS LIMITED PARTNERSHIP
By:
-----------------------------------
, General Partner
---------------------
General Partners:
---------------------------------------
Thomas Fickling
---------------------------------------
William Prentice
Purchaser:
CASTLE PROPERTIES, L.L.C.
By:
-----------------------------------
Lawrence E. Jaro, Manager
2
<PAGE>
AMENDMENT NO. 2
TO
REAL ESTATE PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 TO REAL ESTATE PURCHASE AGREEMENT (this "Amendment")
is made and entered into this 16th day of June, 1997, among W & W INVESTMENTS
LIMITED PARTNERSHIP, a Delaware limited partnership ("Seller"), THOMAS FICKLING
and WILLIAM PRENTICE (collectively referred to as the "General Partners"),
CASTLE PROPERTIES, L.L.C., a Delaware limited liability company ("Purchaser")
and NATIONAL RESTAURANT ENTERPRISES, INC. d/b/a AMERIKING CORPORATION, a
Delaware corporation ("NRE").
R E C I T A L S:
WHEREAS, Seller, the General Partners and Purchaser entered into a Real
Estate Purchase Agreement, dated March 7, 1997, and an Amendment No. 1 thereto,
dated April 8, 1997 (as amended, the "Agreement"); WHEREAS, the parties desire
to amend the Agreement to more closely reflect
the parties' intentions.
NOW THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Amendment, and the mutual covenants, promises,
agreements, representations and warranties contained in this Amendment, the
parties hereto do hereby covenant, promise, agree, represent and warrant as
follows:
1. Assignment. Purchaser hereby assigns the Agreement, as amended by this
Amendment, and all rights and obligations thereunder, to NRE, and each and every
reference to Purchaser (other than in this Section 1) in the Agreement, as
amended by this Amendment, shall be deemed to refer to NRE. NRE hereby accepts
such assignment.
2. Purchase Price Amended. The parties hereto agree that the Purchase
Price is hereby amended to be Four Million Three Hundred Twenty Eight Thousand
Four Hundred Sixty Two and no/100 Dollars ($4,328,462.00).
3. Scope. To the extent not amended or modified herein, the Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment, with the intention of making it a valid and binding instrument, on
the date first above written.
Seller:
W & W INVESTMENTS LIMITED PARTNERSHIP
By:____________________________________
W. Thomas Fickling, General Partner
General Partners:
_______________________________________
Thomas Fickling
_______________________________________
William Prentice
<PAGE>
Purchaser:
CASTLE PROPERTIES, L.L.C.
By:____________________________________________
Lawrence E. Jaro, Manager
NRE:
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION
By:____________________________________________
Lawrence E. Jaro, Chief Executive Officer
2
