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 (date of earliest event reported): June 30, 1995
The Marcus Corporation
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation)
1-12604 39-1139844
(Commission File Number) (IRS Employer Identification No.)
250 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 272-6020
<PAGE>
ITEM 2. DISPOSITION OF ASSETS.
Pursuant to an Asset Purchase Agreement, dated as of April 12,
1995, as amended, with Apple South, Inc., a Georgia corporation ("Buyer"),
on June 30, 1995, The Marcus Corporation, a Wisconsin corporation through
its subsidiaries (collectively, "Company"), completed the sale to Buyer of
18 of the Company's existing franchised Applebee's Neighborhood Grill &
Bar restaurants, along with two Applebee's restaurants under construction,
five Applebee's restaurants under development and the Company's
development rights in the Chicago metropolitan area and a significant
portion of Wisconsin, including Milwaukee, Madison, Green Bay, La Crosse,
Eau Claire and Wausau ("Sold Assets"). The sale price for the Sold Assets
was approximately $48.3 million in cash and was negotiated at arm's length
between the Buyer and the Company. The 18 existing Applebee's restaurants
sold had aggregate annualized sales of approximately $40 million or about
$2.2 million per existing restaurant.
The description in this Form 8-K of the terms and provisions of
the Asset Purchase Agreement is a summary only and is qualified in its
entirety by reference to the text thereof, which is attached as an exhibit
to this Form 8-K and incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
b. Pro Forma Financial Statements.
The Marcus Corporation
Unaudited Pro Forma Consolidated Financial Statements
Basis of Presentation
The pro forma consolidated statements of earnings for the year ended May
26, 1994, and for the thirty-six weeks ended February 2, 1995, present the
operating results of The Marcus Corporation (the Company), excluding the
operations of its' Applebee's restaurants, as if such operations had been
disposed of at the beginning of the respective periods. The pro forma
consolidated balance sheet has been prepared assuming the Applebee's
restaurants disposition took place as of February 2, 1995.
The unaudited pro forma consolidated statements of earnings, balance sheet
and notes thereto should be read in conjunction with the consolidated
financial statements and notes thereto of the Company, incorporated by
reference from the Company's Annual Report on Form 10-K for the audited
fiscal year ended May 26, 1994, and the Company's Quarterly Report on Form
10-Q for the unaudited fiscal quarter ended February 2, 1995.
The unaudited pro forma information is not necessarily indicative of the
consolidated results of operations or consolidated financial position that
would have resulted had the Applebee's restaurants disposition occurred as
described above, nor is it necessarily indicative of the results of
operations of future periods or future consolidated financial position.
<PAGE>
THE MARCUS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF EARNINGS
Year Ended May 26, 1994
(in thousands, except for per share data)
Historical
Year Ended Pro Forma
May 26,1994 Adjustments Pro Forma
Revenues:
Rooms and telephone $100,691 $100,691
Food and beverage 81,948 ($24,438)(B) 57,510
Theatre operations 50,263 50,263
Other income 13,413 1,193(C) 14,606
--------- --------- ---------
Total revenues 246,315 (23,245) 223,070
Costs and expenses:
Room and telephone 37,100 37,100
Food and beverage 64,241 (7,206)(B) 57,035
Theatre operations 30,212 30,212
Administrative and
selling 36,056 (13,025)(B) 23,031
Depreciation and
amortization 20,385 (672)(B) 19,713
Rent 3,572 (725)(B) 2,847
Property taxes 8,873 (347)(B) 8,526
Other operating
expenses 4,291 (1,480)(B) 2,811
Interest 6,931 (1,020)(C) 5,911
------- --------- ---------
Total costs and expenses 211,661 (24,475) 187,186
Earnings before income
taxes 34,654 1,230 35,884
Income taxes 13,607 486(D) 14,093
--------- --------- ---------
Net earnings $21,047(1) $744 $21,791
======= ===== =======
Net earnings per share $1.60(1) $1.66
===== =====
Weighted average shares
outstanding 13,107 13,107
====== =======
See accompanying notes
(1) Excludes cumulative effect of change in accounting for income
taxes
<PAGE>
THE MARCUS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF EARNINGS
Thirty-Six Weeks Ended February 2, 1995
(in thousands, except for per share data)
Historical
Thirty-Six
Weeks Ended
February 2, Pro Forma
1995 Adjustments Pro Forma
Revenues:
Rooms and telephone $83,206 $83,206
Food and beverage 66,224 ($24,136)(B) 42,088
Theatre operations 40,670 40,670
Other income 11,945 826(C) 12,771
-------- ------- ---------
Total revenues 202,045 (23,310) 178,735
Costs and expenses:
Room and telephone 30,804 30,804
Food and beverage 50,461 (7,161)(B) 43,300
Theatre operations 24,497 24,497
Administrative and selling 28,049 (12,118)(B) 15,931
Depreciation and
amortization 16,353 (616)(B) 15,737
Rent 4,101 (586)(B) 3,515
Property taxes 6,433 (329)(B) 6,104
Other operating expenses 5,832 (1,560)(B) 4,272
Interest 6,379 (706)(C) 5,673
--------- --------- ---------
Total costs and expenses 172,909 (23,076) 149,833
Earnings before income taxes 29,136 (234) 28,902
Income taxes 11,993 (92)(D) 11,901
-------- --------- --------
Net earnings $17,143 ($142) $17,001
======= ======== =======
Net earnings per share $1.31 $1.29
==== ======
Weighted average shares
outstanding 13,132 13,132
======= =======
See accompanying notes
<PAGE>
THE MARCUS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
February 2, 1995
(in thousands)
Historical
February 2, Pro forma
1995 Adjustments Pro forma
ASSETS
Current Assets:
Cash and cash equivalents $9,506 $30,696(A) $40,202
Accounts and notes
receivable 7,149 7,149
Receivables from joint
ventures 6,485 6,485
Other current assets 3,996 (735)(A) 3,261
-------- ------- -------
Total current assets 27,136 29,961 57,097
Property and equipment, net 354,799 (18,019)(A) 336,780
Other assets 10,171 (1,370)(A) 8,801
-------- -------- ---------
$392,106 $10,572 $402,678
======== ======= ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $4,683 $4,683
Accounts payable 12,581 12,581
Income taxes 4,771 10,866(A) 15,637
Taxes other than income
taxes 7,707 (25)(A) 7,682
Accrued compensation 2,886 2,886
Other accrued liabilities 8,999 89(A) 9,088
Current maturities on
long-term debt 4,546 4,546
-------- -------- --------
Total current liabilities 46,173 10,930 57,103
Long-term debt 118,419 (17,000)(A) 101,419
Deferred income taxes 16,840 16,840
Deferred compensation and
other 3,690 3,690
--------- --------- --------
Total liabilities 185,122 (6,070) 179,052
Shareholders' equity:
Preferred stock, $1 par;
authorized 1,000,000
shares; none issued --- ---
Common stock, $1 par;
authorized 30,000,000
shares; issued
7,521,968 shares 7,522 7,522
Class B common stock, $1
par; authorized
20,000,000 shares; issued
6,069,352 shares 6,069 6,069
Capital in excess of par 44,746 44,746
Retained earnings 152,689 16,642(A) 169,331
-------- -------- ---------
211,026 16,642 227,668
Less cost of treasury stock
Common stock, 546,823
shares 4,042 4,042
--------- --------- ---------
Total shareholders'
equity 206,984 16,642 223,626
--------- ---------- ----------
$392,106 $10,572 $402,678
======== ======= =======
See accompanying notes
The Marcus Corporation
Notes to Unaudited Pro Forma
Consolidated Financial Statements
Note A Pursuant to an Asset Purchase Agreement (the "Agreement"),
effective June 30, 1995 the Company completed the sale of its Applebee's
restaurants along with the Company's development rights for additional
Applebee's restaurants. The Company received approximately $48 million
in cash proceeds pursuant to the Agreement, resulting in a gain on sale
before tax effect of $27.5 million ($16.6 million gain after tax effect).
The pro forma adjustment to cash and cash equivalents and long term debt
reflects the assumption that the proceeds would have been used to pay down
long term debt of $17 million, with the remaining proceeds maintained as
cash and cash equivalents.
The pro forma adjustment to the income tax liability reflects the tax
liability relating to the gain on sale using a 39.5% effective rate.
The pro forma adjustments to other current assets, property and equipment,
other assets, taxes other than income taxes, and other accrued liabilities
reflect the sale of certain assets or adjustment to certain liabilities
related to the Company's Applebee's restaurants pursuant to the Agreement.
Note B The pro forma adjustment removes the direct revenues and direct
operating expenses related to Company's Applebee's restaurant operations.
Note C The pro forma adjustment to interest expense reflects the
decrease in interest expense resulting from the assumed use of sales
proceeds to reduce long-term debt by $17 million. The long-term debt to
be paid with the proceeds had an average interest rate of 6%.
The increase in other income results from the assumed investment of the
remaining sales proceeds in various short-term investments with average
yields of 6%.
Note D The pro forma adjustment of income taxes reflects the income tax
effect of the above adjustments assuming a 39.5% effective rate.
c. Exhibits.
99.1* Asset Purchase Agreement, dated as of April 12, 1995.
99.2 First Amendment to Asset Purchase Agreement, dated as of
June 5, 1995.
* The schedules and exhibits to the Asset Purchase Agreement are not
being filed herewith because the Company believes that the information
contained in such schedules and exhibits should not be considered
material to an investment decision in the Company or such information
is otherwise adequately disclosed in this Form 8-K. The Asset Purchase
Agreement identifies internally the contents of all omitted schedules
and exhibits. The Company agrees to furnish supplementally (but not to
"file") a copy of any such schedule or exhibit to the Commission upon
request.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 30, 1995 THE MARCUS CORPORATION
By: /s/ Thomas F. Kissinger
Thomas F. Kissinger
Secretary and General Counsel
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit Page
Number Description Number
99.1* Asset Purchase Agreement, dated as of
April 12, 1995.
99.2 First Amendment to Asset Purchase
Agreement dated June 5, 1995.
* The schedules and exhibits to the Asset Purchase Agreement are not
being filed herewith because the Company believes that the information
contained in such schedules and exhibits should not be considered
material to an investment decision in the Company or such information
is otherwise adequately disclosed in this Form 8-K. The Asset Purchase
Agreement identifies internally the contents of all omitted schedules
and exhibits. The Company agrees to furnish supplementally (but not to
"file") a copy of any such schedule or exhibit to the Commission upon
request.
ASSET PURCHASE AGREEMENT
DATED AS OF APRIL 12, 1995,
AMONG
APPLE SOUTH, INC.
AND
MARCUS RESTAURANTS, INC., B&G REALTY, INC.,
CAPTAINS-KENOSHA, INC., B&G LEASING, INC.,
HASTY HOST DISTRIBUTING CORP., AND TOPS, INC.
<PAGE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as od April 12, 1995, by
and among MARCUS RESTAURANTS, INC., a Wisconsin corporation, B&G REALTY,
INC., a Wisconsin corporation, CAPTAINS-KENOSHA, INC., a Wisconsin
corporation, HASTY HOST DISTRIBUTING CORP., an Illinois corporation, TOPS,
INC., an Illinois corporation, and B&G LEASING, INC., a Wisconsin
corporation (collectively the "Sellers"), and APPLE SOUTH, INC., a Georgia
corporation (the "Purchaser"),
W I T N E S S E T H
WHEREAS, Sellers are engaged, among other businesses, in the
business of developing and operating Applebee's Neighborhood Grill & Bar
franchise restaurants; and
WHEREAS, the Sellers desire to sell to Purchaser certain assets,
and Purchaser desires to purchase such assets all on the terms and subject
to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants, and agreements set forth herein,
and intending to be legally bound, the parties hereby agree as follows:
ARTICLE I - DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
"Assets" shall mean the following assets, rights, interests, and
properties of the Sellers:
(i) all restaurant equipment, appliances, machinery,
utensils, furniture, furnishings, decorations, supplies,
other tangible personal property, signage, leasehold
improvements, and fixtures used in connection with the
Business and located at or used on the site of a
Restaurant, including but not limited to the items listed
on SCHEDULE 1.1 (A), and all Restaurant uniforms, and
salable Restaurant food and beverage inventory, including
beer, liquor, and wine;
(ii) all cash normally maintained in the Restaurants and
otherwise paid for by Purchaser under Section 2.3 (ii);
(iii) all advertising and promotional materials related to
the Restaurants;
(iv) all prepaid items and deposits related to the
Restaurants;
(v) all assignable rights under the Permits;
(vi) all assignable methods, technologies, know-how, trade
secrets, formulations, or other assignable intellectual
property used in connection with the Business;
(vii) all rights, claims, or causes of action (including
all rights under express or implied warranties) of Sellers
against third parties relating to the Assets, except to the
extent that they relate to liabilities of Sellers which are
not Assumed Liabilities;
(viii) copies of all files, records, data, and plans,
including supplier lists, demographic, statistical, and
other information related solely to the Business, copies of
employee records of those current employees working
exclusively in Sellers' Applebee's division (subject to
execution of a release by each affected employee allowing
for the disclosure of such files), and financial records
pertaining to the operation of the Restaurants;
(ix) all rights and interests of Sellers in, to, and under
the Assigned Agreements;
(x) the two Restaurant buildings, fixtures, and other
improvements located on the premises covered by the Ground
Leases in Naperville, Illinois, and Madison, Wisconsin; and
(xi) the Transferred Real Property.
"Assigned Agreements" shall mean the Franchise Agreements,
Contracts, Leases, Ground Leases, and Equipment Leases.
"Assumed Liabilities" shall mean only (i) obligations that
accrue after the Closing under the express written terms of the Assigned
Agreements, (ii) all obligations due under the express written terms of
the Assigned Agreements that accrued prior to the Closing but which are
not due for payment until after the Closing, and reduce the Purchase Price
pursuant to Section 2.6, (iii) obligations arising after the Closing under
any Permits which are assigned to Purchaser, and (iv) other obligations
expressly assumed by Purchaser hereunder. Assumed Liabilities shall not
include any liability, obligation, payment, duty, or responsibility of any
nature except as expressly described above and specifically shall not
include (i) liabilities or obligations of Sellers arising out of any
breach by Sellers of any Assigned Agreement; (ii) except as provided in
clause (ii) above, liabilities or obligations of Sellers for any payment
or performance due under any Assigned Agreement prior to the Closing or
which would have been due prior to the Closing had notice thereof been
given or a grace period not existed; (iii) any liability of Sellers for
product liability, personal injury, property damage, or otherwise based on
any tort claim or statutory liability (including but not limited to any
"dram shop" liability) prior to Closing; (iv) any federal, state, or local
tax liability of Sellers; (v) any contractual claim based on any lease,
contract, or agreement of Sellers other than the Assigned Agreements; (vi)
any liability, obligation, or responsibility of Sellers to employees,
agents, or independent contractors of Sellers, with respect to wages,
salaries, bonuses, or other compensation or benefits earned or accrued
prior to the Closing, except as otherwise provided herein; and (vii) any
liability or obligation of Sellers arising out of the negotiation,
execution, or performance of this Agreement, including fees and expenses
of attorneys and accountants, except as otherwise provided herein.
"Bill of Sale" shall mean an instrument in substantially the
form of the Bill of Sale and Assignment Agreement attached hereto as
EXHIBIT A pursuant to which the Assets (except for the Transferred Real
Property) will be transferred and assigned to Purchaser at the Closing and
Purchaser will assume the Assumed Liabilities.
"Business" shall mean the business of owning and operating the
Restaurants and developing Applebee's Neighborhood Grill & Bar restaurants
in the Territory, as conducted prior to the Closing by the Sellers.
"Closing" shall have the meaning set forth in Section 2.5
hereof.
"Closing Date" shall mean the time and date the Closing occurs.
"Code" shall mean the United Stated Internal Revenue Code of
1986, as amended. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Consents" shall mean (i) the consents and approvals of parties
other than Sellers and Purchaser which are required to be obtained to
authorize and permit the assignment, transfer, and conveyance to Purchaser
of the Assigned Agreements and the other Assets and which are material to
the operation of a Restaurant or the Business after Closing in the manner
presently conducted and in compliance with the requirements of the
Franchisor, and (ii) estoppel certificates of the lessors under the Leases
and Ground Leases.
"Contracts" shall mean those contracts and agreements listed on
SCHEDULE 1.1 (B) attached hereto and those contracts and agreements
relating to the Business entered into in the normal ordinary course of
business by Seller between the date hereof and the Closing Date or
otherwise with the consent of Purchaser, which shall not be unreasonably
withheld.
"Deeds" shall mean limited warranty deeds conveying fee simple
title to the Transferred Real Property to Purchaser free and clear of all
liens, mortgages, deeds of trust, easements, restrictive covenants, use
restrictions, and other encumbrances of any nature arising by, through, or
under Sellers' own acts, except for Permitted Encumbrances and for
Purchaser to obtain Owner's Title Policies as defined in Section 5.7
below.
"Equipment Leases" shall mean those leases of personal property
described on SCHEDULE 1.1(C) attached hereto, and those leases of personal
property relating to the Business entered into in the normal ordinary
course of business by Sellers between the date hereof and the Closing Date
or otherwise with the consent of Purchaser, which will not be unreasonably
withheld.
"Franchise Agreements" shall mean those development agreements,
franchise agreements, and other agreements between Sellers and Franchisor,
all of which are more particularly described on SCHEDULE 1.1(D).
"Franchisor" shall mean Applebee's International, Inc.
"Ground Leases" shall mean (i) the three leases described in
SCHEDULE 1.1(e) covering the real property on which the Madison East,
Wisconsin, and Crestwood and Naperville, Illinois, Restaurants are
located, and (ii) other ground leases of sites for future Applebee's
Neighborhood Grill and Bar restaurants (including potential sites located
at Kenosha, Bradley, and Tinley Park, Illinois) entered into by Sellers
after the date hereof with the prior written consent of Purchaser, which
consent shall not be unreasonably withheld.
"Knowledge of Sellers" (or words of like effect) when used to
qualify a representation, warranty or other statement shall mean the
actual knowledge of Stephen H. Marcus, Bruce J. Olson, Thomas F.
Kissinger, Fred Delmenhorst, Axel Wolff, and Al Tholen, without further
inquiry or investigation.
"Leases" shall mean (i) the six leases described on SCHEDULE
1.1(F) pursuant to which Sellers, as lessee, operate the Restaurants
located in Mayfair, Bay Shore, and Racine, Wisconsin and Schaumburg,
Deerfield, and Randhurst, Illinois, and (ii) leases, pursuant to which
Sellers will operate Applebee's Neighborhood Grill & Bar restaurants,
entered into by Sellers after the date hereof with the prior written
consent of Purchaser, which consent shall not be unreasonably withheld.
"Permits" shall mean all permits, licenses (including liquor,
alcoholic beverage, beer, and wine licenses), certificates of occupancy,
approvals, franchises, and authorizations from governmental and regulatory
authorities, of every kind and nature, which relate to the Business, the
Restaurants, or the Real Property that are assignable to Purchaser.
"Permitted Encumbrances" shall mean, in the case of all Real
Property, such easements, restrictions, covenants and other encumbrances
which are shown as exceptions on the "Title Commitments" referred to in
Section 5.6 below and ordinances (municipal and zoning) and survey matters
to which Purchaser does not object or which Purchaser waives pursuant to
Section 5.6 below, and such easements, restrictions, covenants, and other
encumbrances which become matters of public record after the date of the
"Title Commitments" and before the Closing, to the extent that such are
accepted by Purchaser in writing at the Closing (which respect to which in
the case of any mortgages covering the real property subject to the Seller
Leases non-disturbance agreements in favor of Purchaser are in effect).
Permitted Encumbrances shall include all liens for taxes not yet due and
payable.
"Project Development Costs" shall mean (i) the price paid by
Sellers for Development Parcels; (ii) acquisition and closing expenses for
Development Parcels such as legal fees, engineering fees, surveys,
transfer taxes, and the like; (iii) Sellers' out-of-pocket expenditures
(which shall include capitalized costs for in-house architects and
engineers and real estate commissions) for the development and improvement
of Development Parcels and the construction of restaurant facilities
thereon, including, without limitation, costs and expenses (including
attorneys' fees) incurred in obtaining or attempting to obtain permits,
conditional use permits, variances, approvals or rezoning for the
development of Development Parcels; (iv) Sellers' out-of-pocket expenses,
as described above, incurred to obtain leases of restaurant sites entered
into after the date hereof with the prior written consent of Purchaser
(which consent shall not be unreasonably withheld) which are included as
Leases or "Ground Leases" and assigned to Purchase hereunder; and (v)
Seller's cost of any personal property acquired for restaurants to be
competed on Development Parcels or pursuant to such leases. For the
purpose of this paragraph, "Development Parcels" means the two parcels of
land in Wausau and Mequon, Wisconsin, owned by Sellers and the parcel of
land in Crestwood, Illinois, held by Sellers pursuant to a Ground Lease,
all of which are currently under development, and any other parcels
acquired by Sellers prior to Closing with the prior written consent of
Purchaser, which shall not be unreasonably withheld, and which are
included as "Transferred Real Property" or are subject to a "Ground
Lease."
"Purchase Price" shall mean the purchase price specified in
Section 2.3 hereof to be paid by Purchaser to Sellers.
"Real Property" shall mean (i) the Transferred Real Property,
(ii) the tracts and parcels of land leased by Sellers pursuant to the
Leases and the Ground Leases, and (iii) the tracts and parcels of land to
be leased by Sellers to Purchaser pursuant to the Seller Leases.
"Restaurants" shall mean the eighteen Applebee's Neighborhood
Grill & Bar restaurants operated by Sellers pursuant to franchise
agreements with the Franchisor at the locations set forth on SCHEDULE
1.1(G).
"Seller Leases" shall mean the two leases to be executed by
Sellers as lessor and Purchaser as lessee at the Closing, whereby Sellers
leases to Purchaser the Restaurants and sites of the West Point-Brookfield
and Appleton, Wisconsin, Restaurants, such leases to be in substantially
the form attached hereto as EXHIBIT B.
"Transferred Real Property" shall mean those tracts and parcels
of land described in the legal description set forth on SCHEDULE 1.1(H)
and all buildings, fixtures, and other improvements located thereon, which
constitute (i) the premises of the Southridge, Madison West, Green Bay
West, and Eau Claire, Wisconsin Restaurants and the Bloomingdale,
Streamwood, Hodgkins, and Crystal Lake, Illinois Restaurants, (ii) a
parcel of land in Mequon, Wisconsin, (iii) a parcel of land in Wausau,
Wisconsin and (iv) other restaurant sites acquired by Sellers after the
date hereof with the prior written approval of Purchaser, which consent
shall not be unreasonably withheld.
"Territory" shall mean the geographic area described in SCHEDULE
1.1(I) which constitutes the Sellers' exclusive development territory for
Applebee's Neighborhood Grill & Bar restaurants granted by the Franchisor.
1.2 Singular/Plural; Gender. Where the context so requires or
permits, in this Agreement the use of the singular form includes the
plural, and the use of the plural form includes the singular, and the use
of any gender includes any and all genders.
ARTICLE II - PURCHASE AND SALE
2.1 Purchase and Sale. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing the Sellers shall sell,
transfer, and assign to Purchaser all of the Sellers' right, title, and
interest in and to the Assets owned by Sellers on the Closing Date, such
assignments to be made free and clear of any and all mortgages, deeds of
trust, pledges, security interest, liens, charges, conditional sales
agreements, title retention arrangement, easements, use restrictions,
restrictive covenants, or other encumbrances or claims, except for the
Permitted Encumbrances, and Purchaser shall purchase and acquire the
Assets from the Sellers.
2.2 Assumption of Liabilities. Effective as of the Closing,
Purchaser shall assume all of the Assumed Liabilities. Except as
expressly provided herein and in the Bill of Sale, Purchaser does not
assume or agree to assume or pay any obligations, liabilities,
indebtedness, duties, responsibilities, or commitments of the Sellers of
any nature whatsoever, whether known or unknown, absolute or contingent,
due or to become due.
2.3 Purchase Price. The purchase price ("Purchase Price") for the
Assets shall be $45,300,000 plus (i) an amount equal to the Sellers' cost
of the salable Restaurant food and beverage (including beer, wine, and
liquor) inventory of Sellers as determined by the parties at the close o
business on the day preceding the Closing Date; (ii) the amount of cash in
registers in the Restaurants at the close of business on the day preceding
the Closing Date; (iii) the present value of recoverable leasehold
improvements costs which the parties have calculated at $1,003,129; and
(iv) Sellers' Project Development Costs.
2.4 Payment of Purchase Price. The Purchase Price shall be paid by
Purchaser by wire transfer of immediately available funds to an account or
accounts designated by Sellers on the Closing Date. At least five days
prior to the Closing Date, Sellers have the right to notify Purchaser of
the amount of the Purchase Price, if any, that Sellers desire to have
Purchaser place into an escrow arrangement in order to facilitate deferred
like kind tax-free exchanges of properties between the Purchaser and
Sellers under Section 1031 of the Code. Purchaser agrees to participate
in and to cooperate with Sellers in creating and facilitating such
arrangements, including executing any documents reasonably necessary to
accomplish any tax-free exchange of properties, and Sellers agree, jointly
and severally, to indemnify and hold Purchaser harmless from any and all
liability, obligation, loss, cost, or expense (including, without
limitation, reasonable attorneys' fees) relating thereto.
2.5 Closing. The closing of the purchase and sale of the Assets
(the "Closing") shall take place at the offices of Foley & Lardner,
Firstar Center, 777 East Wisconsin Avenue, Milwaukee, Wisconsin on May 15,
1995, or on such other date as the parties hereto may mutually agree in
writing.
2.6 Post-Closing Adjustment. The Purchase Price shall be adjusted
after the Closing as follows:
(a) The Purchase Price shall be reduced by amounts accrued
under the Assigned Agreements prior to the Closing but for which
payment is due, and is made by Purchaser, after the Closing;
(b) The Purchase Price shall be increased by the amount of
payments made by Sellers prior to Closing under the Assigned
Agreements with respect to the period after the Closing; and
(c) The Purchase Price shall be further readjusted to reflect
(i) the proration of personal property taxes with respect to the
Assets that constitute personal property and ad valorem property
taxes with respect to the Transferred Real Property, the Leases, and
the Ground Leases as of midnight on the day before the Closing Date;
and (ii) any reimbursements due under Section 9.2 below.
The parties shall complete and execute a document setting forth the mutual
calculation of the foregoing adjustment and the party owing a net payment
to the other as a result thereof shall make such payment by check within
sixty days after the Closing Date. If any tax information is not
available by that time, such tax prorations will be based on estimates
from the previous year and shall be later adjusted based on actual tax
amounts when available by a payment from the party that underpaid its
share (but only if such underpayment exceeded $5,000).
2.7 Allocation of Purchase Price. The Purchase Price shall be
allocated among the various Assets in accordance with SCHEDULE 2.7
attached hereto. Each party hereby agrees that it will not take a
position on any income tax return, before any governmental agency charged
with the collection of any income tax, or in any judicial proceeding that
is inconsistent with the terms of this Section unless otherwise required
by law or governmental order.
2.8 Further Assurances. Sellers from time to time after the
Closing, at Purchaser's request and expense, shall execute, acknowledge,
and deliver to Purchaser such other instruments of conveyance and transfer
and shall take such other actions and execute and deliver such other
documents, certifications and further assurances as Purchaser may
reasonably require to vest more effectively in Purchaser or to put
Purchaser more fully in possession of, any of the Assets, or to better
enable Purchaser to complete, perform and discharge the Assumed
Liabilities. Each of the parties hereto will cooperate with the other and
execute and deliver to the other party hereto such other instruments and
documents and take such other actions as may be reasonably requested from
time to time by any other party hereto as necessary to carry out,
evidence, and confirm the intended purchase of this Agreement.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to
Purchaser as follows, subject to the limitations set forth below in
Article VIII:
3.1 Organization, Qualifications and Corporate Power. Each Seller
is a corporation duly incorporated and organized, validly existing and in
good standing under the laws of Wisconsin or Illinois. Each Seller has
the corporate power and authority to execute, deliver, and perform this
Agreement, the Bill of Sale, the Seller Leases, and the Deeds.
3.2 Authorization. The execution, delivery and performance by each
Seller of this Agreement, the Bill of Sale, the Seller Leases, and the
Deeds, as of the Closing Date, will have been duly authorized by all
requisite corporate action and will not violate any provision of law, any
order of any court or other agency of government, the Articles of
Incorporation or Bylaws of Sellers, or any provision of any indenture,
agreement or other instrument to which any Seller is a party or by which
any Seller or any of the Assets is bound or affected (subject to obtaining
the Consents), or conflict with, result in breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument, or result in the creation or imposition of
any lien, charge or encumbrance of any nature whatsoever upon any of the
Assets (subject to obtaining the Consents).
3.3 Validity. This Agreement has been duly executed and delivered
by each Seller, and constitutes the legal, valid, and binding obligation
of such Seller, enforceable in accordance with its terms, subject to
general equity principles and to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws from time to time in effect
affecting the enforcement of creditors' rights. When the Bill of Sale,
the Seller Leases, and the Deeds have been executed and delivered in
accordance with this Agreement, each of them will constitute the legal,
valid, and binding obligation of each Seller, enforceable in accordance
with its terms, subject to general equity principles and to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws from
time to time in effect affecting the enforcement of creditors' rights.
3.4 Title to assets. Except as set forth on SCHEDULE 3.4 hereto and
Permitted Encumbrances, the Sellers have good and valid title (or in the
case of Assets that consist of real property, marketable title) to all of
the Assets (other than the Assigned Agreements), free and clear of any and
all mortgages, deeds of trust, pledges, security interests, liens,
charges, conditional sales agreements, title retention arrangements,
easements, use restrictions, restrictive covenants, and other
encumbrances. SCHEDULE 1.1 (A) hereto is a complete and correct
description of all the Assets described in item (i) under the definition
of "Assets" in Section 1.1 as of a recent date prior to the date hereof
that constitute tangible assets of Sellers carrier on the books of Sellers
in an amount of $2,500 or more. From the date hereof the Sellers will not
dispose of any material Assets except in the ordinary course of business
consistent with past practice and will continue their normal maintenance
practices with respect to the Assets.
3.5 Assigned Agreements.
(a) Except as shown on SCHEDULE 3.5, each Assigned Agreement is
a valid and subsisting agreement, without any default of Sellers
thereunder, and to the knowledge of Sellers, without any default on the
part of the other party thereto. To Sellers' knowledge, no event or
occurrence has transpired which with the passage of time or giving of
notice or both will constitute a default by Sellers under any Assigned
Agreement. A true and correct copy of each Assigned Agreement has been
delivered to Purchaser. Except as set forth on the Schedules attached
hereto describing the Assigned Agreements, there have been no amendments
or modifications to any of the Assigned Agreements. At the time of
Closing, Sellers shall have paid all amounts and performed all required
obligations due through the Closing Date under each Assigned Agreement.
(b) Except as set forth in the Assigned Agreements on SCHEDULE
3.4 or Permitted Encumbrances, no Assigned Agreement has been assigned by
Sellers or any interest granted therein by Sellers to any third party, or
is subject to any mortgage, pledge, hypothecation, security interest,
lien, or other encumbrance or claims. To Seller's knowledge, no other
party has any interest to or rights therein or thereunder except the other
named parties to the Assigned Agreements.
(c) Each Equipment Lease allows the lessee the full use of the
equipment and other property described on SCHEDULE 1.1 (C) in accordance
with the terms of the respective Equipment Lease, and all of such
equipment and other property is present on the premises of the
Restaurants.
3.6 Sufficiency of Assets. All furniture, trade fixtures,
equipment, supplies, and other property present on the premises of the
Restaurants and used in the Business is owned by the Sellers except for
those items subject to Equipment Leases and the Leases. Except as
provided herein, upon the acquisition of the Assets and the execution of
the Seller Leases, Purchaser will have all the property and rights
currently used by Sellers to conduct the Business as presently conducted
by Sellers and required to conduct the Business in accordance with the
present requirements of the Franchisor, in each case in all material
respects, except for permits and licenses that are not assignable.
3.7 Real Property. Except as set forth in SCHEDULE 3.7:
(a) The water, electric, gas, and sewer utility services, and
storm drainage facilities currently available to each parcel of Real
Property are adequate for the current conduct of the Business, and to
Sellers' knowledge, there is no condition which will result in the
termination of the present access form each parcel of Real Property to
such utility services and other facilities.
(b) Sellers have obtained all authorizations and rights-of-way
which are necessary to ensure vehicular and pedestrian ingress and egress
to and from the site of each Restaurant, all of which are assignable and
shall be assigned to Purchaser at the Closing. There are no restrictions
on any existing entrance to or existing exit from any Restaurant site to
adjacent existing public streets, roadways, or parking lots presently used
and, to Sellers' knowledge, no conditions exist which will result in the
termination of the present access to existing highways and roads and
parking lots or private drives presently used.
(c) Sellers have received no written notices that any
governmental body having the power of eminent domain over any parcel of
Real Property has commenced or intends to exercise the power of eminent
domain or a similar power with respect to any part of the Real Property.
(d) To Sellers' knowledge, the Real Property and the present
uses thereof comply with all regulations of all governments bodies having
jurisdiction over the Real Property, and Sellers have received no written
notices from any governmental body, and have no knowledge that the Real
Property or any improvements erected or situated thereon, or the uses
conducted thereon or therein, violate any laws or regulations of any
governmental body having jurisdiction over the Real Property.
(e) The side of each Restaurant provides adequate access and
parking for the current operation of the Restaurant located thereon in
accordance with standards established by Franchisor at the time of its
approval thereof and the assignment of the Leases, the execution of the
Seller Leases, and the purchase of the Transferred Real Property will
convey to Purchaser leased or owned sites sufficient for such operation by
Purchaser.
(f) To Seller's knowledge, no work for municipal improvements
has been commenced on or in connection with any parcel of Real Property or
any street adjacent thereto which may result in a special assessment on
the Real Property or materially impede access to the Real Property and to
the knowledge of Sellers no such improvements are contemplated. To
Seller's knowledge, no assessment for public improvements has been made
against the Real Property which remains unpaid. No written notice from
any county, township, or other governmental body has been served upon the
Real Property or received by Sellers, or to Sellers' knowledge received by
the owner of any Real Property, requiring or calling attention to the need
to any work, repair, construction, alteration, or installation on or in
connection with the Real Property which has not been complied with.
(g) To Sellers' knowledge, there are no "hazardous materials"
located on the Real Property in violation of applicable law; Sellers have
received no written notice of and have no knowledge of any violation or
claimed violation of any law, rule, or regulation relating to hazardous
materials on the Real Property; the Real Property has not been used by
Sellers for the storage of hazardous materials (except in compliance with
all applicable laws); there have been no material spills or leaks by
Sellers of hazardous materials on the Real Property in violation of
applicable law or requiring clean-up under current law; to Sellers'
knowledge, there are no underground storage tanks on the Real Property; to
Sellers' knowledge, the Real Property has not been the subject of either
an investigation as a result of the presence or handling of hazardous
materials; and, to Sellers knowledge, no significant accident or other
incident that results in hazardous materials contamination in violation of
applicable law or requiring clean-up under current law has ever occurred
on the Real Property. For the purposes of this Agreement, the phrase
"hazardous materials" shall mean the following: asbestos materials; PCB
transformers; toxic, hazardous or contaminated wastes, substance or
material; oil; petroleum; and oil and petroleum byproducts.
3.8 Governmental Approvals. Except for filing and clearance of the
transaction set froth in this Agreement in accordance with the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 and other Consents and approvals
necessary to assign the Permits, no registration or filing with, or
consent or approval of, or other action by, any federal, state, or other
governmental agency or instrumentality is or will be necessary for the
valid execution, delivery and performance by Sellers of this Agreement.
3.9 Litigation. Except as set forth in SCHEDULE 3.09, there is
no action, suit, investigation or proceeding pending or, to the knowledge
of Sellers, threatened against or affecting the Assets or the Business
before any court or by or before any governmental body or arbitration
board or tribunal, except for actions, suits,. investigations, or
proceedings that do not pertain to or affect the Business or the Assets or
the transactions contemplated hereby and that will not adversely affect
Purchaser or the Assets or the Business after the Closing.
3.10 Permits. Sellers have all permits as are necessary to conduct
the Business as currently conducted. To Sellers' knowledge, Sellers hold
the Permits free of any claims or restrictions other than as provided
therein and have fulfilled and performed all of their material obligations
with respect to such Permits, and to Sellers' knowledge, other than the
transaction contemplated hereby no event has occurred which allows, nor
after notice of lapse of time or both would allow, revocation or
termination thereof or would result in any other impairment of the rights
of the holder of any such Permits. Sellers make no representation or
warranty about the assignability of the Permits to Purchaser.
3.11 Defaults. Sellers are not in default under any material note,
mortgage, lease, contract, agreement, or obligation of any kind that
pertains to or affects the Business or the Assets.
3.12 Compliance with Law. Sellers are not in default under any order
of any court, governmental authority, arbitration board or tribunal to
which it is or was subject, nor, to the knowledge of Sellers, in violation
of any laws, ordinances, governmental rules or regulations, in either
case, the violation of which would have a material adverse effect on the
Business or the Assets.
3.13 Labor Matters. Sellers are not and never have been a party to
any collective bargaining or other labor agreement. There is no pending
or to Sellers' knowledge threatened labor dispute, strike, work stoppage,
union representation election, negotiation of collective bargaining
agreement or similar labor matter relating to the Business. Sellers are
not involved in any controversy with any organization representing any
employees, and, to Sellers knowledge, Sellers are in compliance with all
applicable federal and state laws and regulations concerning the
employer/employee relationship. To Sellers knowledge, Sellers are in
compliance with all of its agreements relating to the employment of its
employees, including, without limitation, provisions thereof relating to
wages, bonuses, hours of work and the payment of Social Security taxes,
and Sellers are not liable for any unpaid wages, bonuses or commissions or
any tax, penalty, assessment or forfeiture for failure to comply with any
of the foregoing.
3.14 Employee Benefits.
(a) SCHEDULE 3.14 hereto contains a true and complete list of
all the following agreements or plans of Sellers which are presently in
effect:
(i) "employee welfare benefit plans" and "employee pension
benefit plans," as defined in Sections 3(1) and 3(2), respectively,
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA");
(ii) any other pension, profit sharing, retirement,
deferred compensation, stock purchase, stock option, incentive,
bonus, vacation, severance, disability, health, hospitalization,
medical, life insurance, vision, dental, prescription drug,
supplemental unemployment, layoff, automobile, apprenticeship and
training, day care, scholarship, group legal benefits, fringe
benefits, or other employee benefit plan, program, policy, or
arrangement, whether written or unwritten, formal or informal, which
Sellers maintain or to which Sellers have any outstanding, present,
or future obligation to contribute or to make payments under, whether
voluntary, contingent, or otherwise (the plans, programs, policies or
arrangements described in clauses (i) or (ii) are herein collectively
referred to as the "Sellers Plans").
(b) Except as described on SCHEDULE 3.14, Sellers have no
employee stock ownership plan as defined in Section 4975(e)(7) or 409 of
the Code.
(c) With respect to employees of the Business, Sellers
presently do not contribute and have never contributed or been obligated
to contribute to a multiemployer plan as defined in section 3 (37) (A) of
ERISA.
(d) No Sellers Plan is subject to Title IV of ERISA.
3.15 Condition of Assets. All Assets that constitute tangible
personal property, all property subject to Equipment Leases, and all
improvements to the Real Property (including all mechanical, electrical,
computerized, and other systems located therein) are in working condition,
subject to normal wear and tear, and, in the case of the improvements,
structurally sound.
3.16 Financial Information. The historical or trailing financial
information set forth on SCHEDULE 3.16 with respect to sales and expenses
of the Restaurants and the Businesses is accurate in all material
respects, with no representation or warranty being made with respect to
such historical financial information by Sellers regarding any future
prospects, trends, implications, potentials, results, or financial
condition of or relating to the Business.
3.17 Geographic Scope of Operations. Sellers have conducted the
Business only in the states of Illinois and Wisconsin, and only (1) in the
counties in such states where the Restaurants and the Real Property are
located and (2) in Milwaukee County, Wisconsin, where each Seller's
principal place of business is located (collectively, such counties
referred to as the "Geographic Area"). All of the Assets are located in
the Geographic Area and have bene located in the Geographic Area at all
times since their acquisition by Sellers.
3.18 Affiliates. The Sellers conduct, and have conducted, the
Business and own, and have owned, the Assets directly and not through any
subsidiary, affiliate, or other related entity. The Sellers conduct, and
have conducted, the Business solely under the names "Marcus Restaurantes,
Inc.," "B&G Realty, Inc.," "Captains-Kenosha, Inc.," "B&G Leasing, Inc.,"
"Hasty Host Distributing Corp.," "Tops, Inc." and "Applebee's Neighborhood
Bar & Grill."
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
4.1 Organization, Qualifications and Corporate Power. Purchaser is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Georgia. Purchaser has the power to execute,
deliver and perform this Agreement, the Bill of Sale, and the Seller
Leases.
4.2 Authorization. The execution, delivery and performance by
Purchaser of this Agreement, the Bill of Sale, and the Seller Leases, have
been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the articles of incorporation or bylaws of Purchaser, or any
provision of any indenture, agreement or other instrument to which
Purchaser is a party or by which Purchaser or any of its properties or
assets is bound or affected, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument.
4.3 Validity. This Agreement has been duly executed and delivered
by Purchaser, and constitutes the legal, valid and binding obligations of
Purchaser, enforceable in accordance with its terms, subject to general
equity principles and to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws from time to time in effect
affecting the enforcement of creditors' rights. When each of the Bill of
Sale, and the Seller Leases has been executed and delivered in accordance
with its terms, subject to general equity principles and to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws from
time to time in effect affecting the enforcement of creditors' rights.'
4.4 Governmental Approvals. No registration or filing with, or
consent or approval of, or other action by, any federal, state or other
governmental agency or instrumentality is or will be necessary for the
valid execution, delivery and performance by Purchaser of this Agreement
that has not or will not timely be done by the Closing.
4.5 Financial Ability. Purchaser has adequate existing capital
resources or otherwise obtained all necessary financing commitments to
allow Purchaser to pay the Purchase Price required herein,
4.6 Non-Contravention. The execution and delivery of this Agreement
and the Seller Leases by Purchaser do not and the consummation by Purchase
of the transactions contemplated hereby and thereby will not violate any
provision of the articles of incorporation or bylaws of Purchaser, or
violate, or result with the giving of notice or the lapse of time or both
in a violation of, any provision of any mortgage, lien, lease, agreement,
license, instrument, law, ordinance, regulation, order, arbitration
awarded, judgment or decree to which Purchase is a party or by which it is
bound and do not and will not violate or conflict with any other material
restriction of any kind or character to which Purchaser is subject.
ARTICLE V - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
All of the obligations of Purchaser under this Agreement are subject
to the fulfillment prior to or at the Closing of each of the following
conditions, each of which the Sellers insofar as such matters are within
its control or influence, shall use their best efforts to cause to be
satisfied:
5.1 Accuracy of Representations and Warranties. The representations
and warranties of Sellers contained herein or in any certificate required
to be delivered under Section 5.9 shall be true and correct on and as of
the Closing Date in all material respects except for changes contemplated
herein.
5.2 Compliance with Agreement. Sellers shall have in all material
respects performed and complied with all conditions and agreements
required by this Agreement to be performed or complied with by them prior
to or at the Closing.
5.3 No Material Adverse Change. There shall not have been any
material adverse change in the Assets or the Business since the date
hereof, except changes contemplated and permitted by this Agreement.
5.4 No Actions. Other than as provided in SCHEDULE 3.9 no material
litigation, action, suit, investigation, claim or proceeding shall be
pending or threatened against or affecting the Business or any of the
Assets, or against or affecting any of the transactions contemplated
hereby, which, in the reasonable judgment of Purchaser, renders it
inadvisable to proceed with the transactions contemplated herein.
5.5 Consents and Approvals. Sellers shall have obtained (i) the
consent of Franchisor to the assignment of the Franchise Agreements, the
sale of the Restaurants, and the form of the Seller Leases; (ii) the
waiver by Franchisor of any applicable right of first refusal under the
Franchise Agreements relating to the transfer of the Assets; (iii) the
Consents; and (iv) all to the arterial consents and approvals required to
effectuate the transactions contemplated hereby, all of which consents,
waivers, and approvals shall be in form and substance reasonably
satisfactory to the Purchaser. Purchaser shall cooperate in obtaining all
such consents and approvals, including the Consents.
5.6 Title and Objections to Title. Purchase shall have obtained and
reviewed (i) title surveys and title insurance commitments with respect to
the Transferred Real Property ("Owner's Title Commitments") pursuant to
which the Title Company will agree to issue at Closing owner's policies
of title insurance ("Owner's Title Policies") on American Land Title
Association standard Form B-1990, without exceptions except as shown in
the Owner's Title Commitments, to be issued by a reputable title insurance
company of Sellers' choice an reasonably acceptable to Purchaser ("Title
Company"), at negotiated agreed upon rates, in an amount in the case of
each parcel equal to the purchase price allocated to each parcel of the
Transferred Real Property, and (ii) title surveys and title insurance
commitments with respect to the Real Property other than the Transferred
Real Property (collectively, the "Other Real Estate") (the "Lessee Title
Commitments", and collectively with the Owner's Title Commitments, the
"Title Commitments") pursuant to which the Title Company will agree to
issue at Closing lessee's policies of title insurance ("Lessee's Title
Policies") on American Land Title Association standard form of leasehold
owner's policy to insure leasehold estates, showing no exceptions except
as shown in the Lessee Title Commitments. The Owner's Title Policies
shall insure the Purchaser that, upon consummation of the purchase and
sale herein contemplated, Purchaser will be vested with good, fee simple,
marketable and insurable title to the Transferred Real Property, subject
only to the Permitted Encumbrances or arising out of acts of the insured.
The Lessee's Title Policies shall insure the Purchaser that, upon
consummation of the transactions herein contemplated, Purchaser will be
vested with a good, valid, marketable and insurable leasehold estate in
and to the Other Real Estate, subject only to the Permitted Encumbrances.
Purchaser shall have until ten (10) business days following receipt by
Purchaser of the Title Commitments together with copies of all documents
listed as title exceptions, in which to furnish Sellers a written
statement of reasonable objections to exceptions which, in Purchaser's
reasonable judgment, would materially interfere with or impair Purchaser's
use of the Real Property for the operation of Applebee's Neighborhood
Grill & Bar restaurants or materially reduce the value of any of the
Transferred Real Property or Purchaser's leasehold estate. Sellers shall
have until the Closing Date, but not less than 30 days, to satisfy such
objections (but with no obligation to do so) in all material respects, and
if Sellers fail to satisfy all objections in all material respects on or
prior to the Closing Date, then Purchaser's sole right and remedy shall be
to either (i) waive the objections and elect to close, or (ii) extend the
Closing Date for a period of not more than sixty (60) days until such
objections are satisfied in all material respects by giving written notice
of such extension to Sellers, in which case the Closing Date shall be
extended to the date specified by Purchaser, or (iii) terminate this
Agreement by giving written notice of such termination to Sellers, in
which case all rights and obligations of the parties shall expire and this
Agreement shall become null and void. In the event of an extension of the
date of Closing under subparagraph (ii) above and the subsequent failure
or refusal of Sellers to satisfy the objections (but with no obligation to
do so) in all material respects, then Purchaser's sole right and remedy
shall be to elect between the options set forth in subparagraphs (i) and
(iii) above. If Purchaser fails to furnish Sellers a written statement of
objections affecting the marketability of such title within the ten
business day time period specified above, any matters appearing as
exceptions on such Title Commitments shall be deemed waived by Purchaser
(except that Purchaser may, in any event, with respect to the Transferred
Real Property and sellers' leasehold interest in the Other Real Estate,
satisfy in full from Sellers' proceeds at Closing any monetary
encumbrances, such as mortgages, deeds of trust, security interests,
liens, and money judgments other than Permitted Encumbrances and monetary
encumbrances on the estate or interest of any party other than Sellers,
including without limitation, the fee estate, in any of the Other Real
Estate or over which Sellers are able to obtain title insurance coverage
by the Title Company). Those title objections waived by Purchaser
pursuant to this paragraph shall also be deemed to be Permitted
Encumbrances. the parties acknowledge that the Real Property leased
pursuant to the Seller Leases and Leases is located in shopping centers,
and as such, unless the leased premises are a free standing building
located on a separate pad with its own legal description ("Free Standing
Premises") the Lessee Title Commitments for such Real Estate will contain
encumbrances for entire shopping centers. Notwithstanding anything to the
contrary contained herein, while Lessee Title Commitments will be
delivered for such Real Estate, no title surveys will be delivered and no
Lessee's Title Policies will be issued for Seller Leases or Leases unless
such Seller Leases or Leases are for Free Standing Premises. Purchaser
may not object to title encumbrances for such Real Estate (or satisfy any
monetary encumbrances) that do not affect the premises leased under the
Seller Leases and Leases, which such encumbrances shall be deemed to be
Permitted Encumbrances.
5.7 Hart-Scott-Rodino. Any applicable filings under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 shall have been made, and all
applicable waiting periods thereunder shall have expired or terminated.
5.8 Removal of Encumbrances. All the encumbrances related to the
Assets listed on SCHEDULE 3.4 shall have been removed and released to
Purchaser's reasonable satisfaction, except for those encumbrances which
are Permitted Encumbrances.
5.9 Closing Deliveries. At the Closing, Sellers shall deliver to
Purchaser:
(a) A certificate executed by Sellers, dated as of the Closing
Date, certifying in such form as Purchaser may reasonably request to the
fulfillment of the conditions specified in Sections 5.1 through 5.5
hereof, provided that fulfillment of the conditions in Section 5.3 and 5.4
shall be qualified to Sellers' knowledge;
(b) A certificate of the Secretary or Assistant Secretary of
Sellers, dated as of the Closing Date, certifying in such form as
Purchaser may reasonably request (i) that attached thereto is a true and
complete copy of all resolutions adopted by the Board of Directors of
Sellers authorizing the execution, delivery and performance of this
Agreement, the Bill of Sale, the Deeds, and the Seller Leases and that all
such resolutions are still in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated by
this Agreement, and (ii) as to the incumbency and specimen signature of
the officers of Sellers executing this Agreement, the Bill of Sale, the
Seller Leases, the Deeds, and any certificate required under Section 5.9,
and a certification by another officer of Sellers as to the incumbency and
signature of the officer signing the certificate referred to in this
Section;
(c) The opinion of Thomas F. Kissinger, Esq., General Counsel of
The Marcus Corporation, in substantially the form of EXHIBIT C hereto;
(d) The Bill of Sale, duly executed by Sellers;
(e) The Deeds duly executed by those Sellers holding fee simple
title to the Transferred Real Property; and such other documents as are
necessary or customary to enable Purchaser to record the Deeds and to
obtain owner's title insurance policies from the Title Company without
exceptions other than the Permitted Encumbrances.
(f) The Seller Leases duly executed by Sellers and memorandums
of leases and such other documents as are necessary or customary to enable
Purchaser to record its leasehold interests and to obtain title insurance
policies from the Title Company;
(g) Any deed and other assignment documents necessary to
transfer to Purchaser all of Sellers' interest in the buildings and
improvements located on the two sites subject to the Ground Leases free
and clear of any liens, encumbrances, tenancies and restrictions of any
kind and nature except as set forth in the Ground Leases and except for
Permitted Encumbrances.
(h) Copies of the Assigned Agreements and the obtained Consents
and any assignment documents reasonably deemed necessary or appropriate by
Purchaser at least two days prior to the Closing to effect the assignment
of the Assigned Agreements in addition to the Bill of Sale and to record
the assignments of the Leases and the Ground Lease;
(i) Any other documents that Purchaser may reasonably request
at least two days prior to the Closing.
5.10 Environmental Matters. Prior to the last day of review allowed
to Purchaser of the Schedules delivered under Section 9.13, Purchaser's
due diligence investigation shall not have discovered any conditions on
the Real Property that constitute a material violation of any
environmental laws or regulations or that under current laws or
regulations require material clean-up, removal, or remediation efforts;
provided, however, that Purchaser shall notify Sellers immediately upon
discovery of any circumstances covered by this Section and Sellers shall
have the opportunity (but not the obligation) to cure or mitigate such
condition or circumstances to Purchaser's reasonable satisfaction.
ARTICLE VI - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
All of the obligations of Sellers under this Agreement are subject to
the fulfillment prior to or at the Closing of each of the following
conditions, each of which Purchaser, insofar as such matters are within
its control or influence, shall use its best efforts to cause to be
satisfied:
6.1 Accuracy of Representations and Warranties. The representations
and warranties of Purchaser contained herein or in any certificate,
schedule, or other document delivered pursuant to the provisions hereof or
in connection herewith shall be true and correct on and as of the Closing
Date.
6.2 Compliance with Agreement. Purchaser shall have performed and
complied with all conditions and agreements required by this Agreement to
be performed or complied with by it prior to or at the Closing.
6.3 Consents and Approvals. Sellers shall have obtained (i) the
consent of Franchisor to the assignment of the Franchise Agreements, the
sale of the Restaurants, and the form of the Seller Leases; (ii) the
waiver of by Franchisor of any applicable right of first refusal under the
Franchise Agreements relating to the transfer of the Assets; (iii) the
Consents; and (iv) all other material consents and approvals required to
effectuate the transactions contemplated hereby, all of which consents,
waivers, and approvals shall be in form and substance reasonably
satisfactory to the Sellers. Purchaser shall cooperate in obtaining all
such consents and approvals.
6.4 Hart-Scott-Rodino. Any applicable filings under the Hart-Scot-
Rodino Antitrust Improvements Act of 1976 shall have been made, and all
applicable waiting periods thereunder shall have expired or terminated.
6.5 Closing Deliveries. At the Closing, Purchaser shall deliver to
Sellers:
(a) A certificate executed by an executive officer of
Purchaser, dated as of the Closing Date, in such form as Sellers may
reasonably request to the fulfillment of the conditions specified in
Sections 6.1 through 6.2 hereof;
(b) A certificate of the Secretary or an Assistant Secretary of
the Purchaser, dated as of the Closing Date, certifying in such form as
Sellers may reasonably request (i) that attached thereto is a true and
correct copy of resolutions adopted by the Board of Directors of the
Purchaser authorizing the execution, delivery and performance of this
Agreement and the Bill of Sale, the Seller Leases and other transaction
documents, and that all such resolutions are still in full force and
effect and are all the resolutions adopted in connection with the
transaction contemplated by this Agreement, and (ii) as to the incumbency
and specimen signature of each officer of Purchaser executing this
Agreement, the Bill of Sale, the Seller Leases and other transaction
documents, and any certificate required to be furnished hereby, and a
certification by another officer of Purchaser as to the incumbency and
signature f the officer signing the certificate referred to in this
Section;
(c) The Bill of Sale, duly executed by Purchaser;
(d) The Seller Leases duly executed by Purchaser;
(e) The opinion of Booth, Wade & Campbell, counsel to the
Purchaser, in substantially the form of Exhibit D hereto;
(f) The funds payable to Sellers pursuant to Section 2.4
hereof; and
(g) Any other documents Seller may reasonably request at or
prior to the Closing.
6.6 No Actions. No material litigation, action, suit,
investigation, claim or proceeding shall be pending or threatened against
or affecting the transactions contemplated hereby, which, in the
reasonable judgment of Sellers, renders it inadvisable to proceed with the
transactions contemplated hereunder.
ARTICLE VII - INDEMNIFICATION
7.1 General Indemnification Obligation of Sellers. Subject to the
limits in Section 7.4, from and after the Closing, the Sellers shall
reimburse, indemnify, and hold harmless Purchaser against and in respect
of:
(a) Any and all actual out-of-pocket damages, losses,
liabilities, costs, and expenses incurred or suffered by Purchaser
that result from, relate to, or arise out of:
(i) any and all liabilities and obligations of Sellers of
any nature whatsoever to third parties, except for the Assumed
Liabilities;
(ii) any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other proceedings
or investigations against Purchaser that relate to Sellers, or
the Business in which the event giving rise thereto occurred
prior to the Closing Date or which result from or arise out of
any action or inaction prior to the Closing Date of Sellers, or
any director, officer, employee, agent, representative,
shareholder, or independent contractor of Sellers; or
(iii) any breach of any representation or warranty made by
Sellers in this Agreement (considering for the purpose of this
subsection such representations and warranties to be made as of
the date hereof and as of the Closing Date and without regard to
the materiality of the breach except as expressly provided in
this Article VII), or any nonfulfillment of any agreement or
covenant on the part of Sellers under this Agreement; and
(b) Any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments,
actual out-of-pocket costs and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to any of
the foregoing.
7.2 General Indemnification Obligation of Purchaser. From and after
the Closing, Purchaser shall reimburse, hold harmless and indemnify
Sellers and their affiliates against and in respect of:
(a) Any and all damages, losses, liabilities, costs, and
expenses incurred or suffered Sellers that result from, relate to, or
arise out of:
(i) the Assumed Liabilities or any guarantees thereof by a
Seller or any affiliate of a Seller;
(ii) any and all actions, suites, claims, or legal,
administrative, arbitration, governmental or other proceedings
or investigations against Sellers that relate to Purchaser or
the operation of the Business by Purchaser in which the event
giving rise thereto occurred subsequent to the Closing Date or
which result from or arise out of any actio or inaction
subsequent to the Closing Date of Purchaser or any director,
officer, employee, agent, representative, or independent
contractor, of Purchaser; provided that this indemnity in no way
extends to any liability of Sellers with respect to any
obligation incurred prior to the Closing Date by Sellers not
expressly assumed by Purchaser; or
(iii) any failure of any representation or warranty made
by Purchaser in this Agreement to be true and; correct as of the
Closing Date, or any nonfulfillment of any agreement or covenant
on the part of Purchaser under this Agreement; and
(b) Any and all actions, suites, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments,
costs, and other expenses (including, without limitation, legal fees
and expenses) incident to any of the foregoing.
7.3 Payment. Subject to the limits in Section 7.4, upon the
determination by Sellers and Purchaser, or failing their mutual agreement,
by the decision of a court of competent jurisdiction, of the amount of any
liability of an indemnifying party under Sections 7.1 or 7.2 hereof, the
indemnifying party shall pay to the indemnified party within ten days
after such determination, the amount of any claim for indemnification made
hereunder. Notwithstanding any other provision of this Agreement, Sellers
shall have no liability for any claim based on the working condition of
any Assets consisting of tangible personal property under Section 3.15
unless Sellers are notified of such claim in writing within five days
following the Closing Date.
7.4 Limitations on Indemnification.
(a) Time Limitation. No claim or action shall be brought by
Purchaser against Sellers under this Article VII after January 31, 1996,
and Sellers' representations and warranties shall all expire as of such
date.
(b) Amount Limitation. Purchaser shall not be entitled to
indemnification from Sellers, and Sellers shall not be required to pay
Purchaser, under this Article VII unless the aggregate of the Sellers'
indemnification obligations to the Purchaser pursuant to this Article VII
exceeds $150,000 ("Basket Amount"); and in such event, the Purchaser shall
only be entitled to indemnification from Sellers over and above the Basket
Amount; provided, however that Sellers' aggregate liabilities under this
Article VII shall in no event exceed $1,000,000 except that, other than
the Basket Amount, there shall be no limitation on the liability of
Sellers with respect to a breach of the warranty set forth in Section 3.16
if the amount of cash flow for the Business set forth on SCHEDULE 3.16 for
the most recent thirteen-period year is overstated by more than $250,000.
(c) Tax Benefits; Insurance Proceeds; Types of Losses Not
Indemnified. All indemnification claims hereunder shall first be adjusted
to take into account any net tax benefits and insurance proceeds
receivable by the indemnified party as a result of such claim or the
underlying reasons therefor. Notwithstanding any other provision hereof,
Sellers shall not be obligated to indemnify Purchaser for losses of
profits or damages calculated based upon valuation formulas using a
multiple of revenues, earnings, cash flow or discounted present value or
the like, except that with respect to Section 3.16 hereof, Purchaser's
damages with respect to any overstatement of cash flow as shown on
SCHEDULE 3.16 for the most recent thirteen-period year shall be computed
in accordance with subsection (d) below.
(d) Calculation of Section 3.16 Damages. Sellers shall not
have any liability hereunder with respect to the representations and
warranties in Section 3.16 unless the amount of cash flow shown on
SCHEDULE 3.16 for the most recent thirteen-period year is overstated by
more than $250,000. If such cash flow for such period is overstated by
$250,000 or more, than the damages to Purchaser and Sellers' liability
hereunder shall be calculated by multiplying the difference between the
amount of cash flow shown for such period and actual cash flow for such
period (the "Overstatement Amount") by the "Damage Factor" and subtracting
the Basket Amount from such product. The Damage Factor shall equal the
number of years (with each year being deemed to begin on the Closing Date
or an anniversary thereof) in which the item which resulted in the Cash
Flow Overstatement may be reasonably expected to have a substantially
equivalent continuing negative impact on cash flow of the Business;
provided that if the number of years so determined exceeds four, the
damage factor shall be seven. If such item is not expected to have a
post-Closing effect, the Damage Factor shall be zero. Cash flow shall be
calculated consistent with Sellers' historical practices as set forth on
SCHEDULE 3.16.
7.5 Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this Article VII
with respect to claims relating to third parties shall be subject to the
following terms and conditions:
(a) Notice and Defense. The party or parties to be indemnified
(whether one or more, the "Indemnified Party") will give the party from
whom indemnification is sought (the "Indemnifying Party") prompt written
notices of any such claim, and the Indemnifying Party will undertake the
defense thereof by representatives chosen by it. Failure to give such
notice shall not affect the Indemnifying Party's duty or obligations under
this Article VII, except to the extent the Indemnifying Party is
prejudiced thereby. So long as the Indemnifying Party is defending any
such claim actively and in good faith, the Indemnified Party shall not
settle such claim. The Indemnified Party shall make available to the
Indemnified Party or its representatives, without additional cost, all
records and other materials required by them and in the possession or
under the control of the Indemnified Party, for the use of the
Indemnifying Party and its representatives in defending any such claim,
and shall in other respects give full cooperation in such defense.
(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such claim, fails to define such claim
actively and in good faith, the Indemnified Party will (upon further
notice) have the right to undertake the defense, compromise or settlement
of such claim or consent to the entry of a judgment with respect to such
claim, on behalf of and for the account and risk of the Indemnifying
Party, and the Indemnifying Party shall thereafter have no right to
challenge the Indemnified Party's defense, compromise, settlement or
consent to judgment.
7.6 Exclusivity. The rights and remedies afforded to the parties
under this Article VII shall be the sole and exclusive rights and remedies
available in the event of a breach or default under this Agreement and
shall be in lieu of any other common law or statutory rights; provided,
however, that any such rights and remedies as a party may have to seek and
obtain injunctive relief or specific performance with respect of any
breach of any covenant or failure to fulfill any agreement hereunder shall
remain available to the parties, and none of such rights or remedies shall
be affected or diminished hereby.
ARTICLE VIII - POST CLOSING MATTERS
8.1 Employee Benefits. (a) Sellers shall pay directly to each
employee of Sellers that portion of all salaries, wages, and benefits
(including the arrangements, plans and programs set forth in SCHEDULE
3.14) which has been accrued on behalf of that employee (or is
attributable to expenses properly incurred by that employee) as of the
Closing Date, and Purchaser shall assume no liability therefor. No
portion of the assets of any plan, fund, program or arrangement, written
or unwritten, heretofore sponsored or maintained by Sellers (and no amount
attributable to any such plan, fund, program or arrangement) shall be
transferred to Purchaser, and Purchaser shall not be required to continue
any such plan, fund program or arrangement after the Closing Date. The
amounts payable on account of all benefit arrangements (other than as
specified in the following subsections) shall be determined with reference
to the date of the event by reason of which such amounts become payable,
without regard to conditions subsequent, and Purchaser shall not be liable
for any claim for insurance, reimbursement or other benefits payable by
reason of any event which occurs prior to the Closing Date. All amounts
payable directly to employees, or to any fund, program, arrangement, or
plan maintained by Sellers therefor shall be paid by Sellers promptly
after the Closing Date to the extent that such payment is not inconsistent
with the terms of such fund, program, arrangement, or plan. All employees
of Sellers who are employed by Purchaser on or after the Closing Date
shall be new employees of Purchaser and any prior employment by Sellers of
such employees shall not affect entitlement to, or the amount of, salary
or other cash compensation, current or deferred, which Purchaser may make
available to its employees.
(b) Prior to mailing W-2 forms to employees of Sellers who
become employed by Purchaser, Sellers shall update their address list for
such employees based on information to be supplied by Purchaser.
(c) Purchaser shall pay to Sellers the amount of $18,750 to be
used by Sellers to reimburse former employees of Sellers employed by
Purchaser immediately following the Closing for COBRA insurance payments
incurred by such employees.
8.2 Nonsolicitation. As of the Closing Date, Purchaser shall offer
employment to, and Sellers shall use its reasonable best efforts to assist
Purchaser in employing as new employees of Purchaser, all persons
presently exclusively engaged in the Business who are identified (by name
or by class) by Purchaser prior to the Closing Date (the "Employees").
Sellers shall terminate effective as of the Closing Date all employment
agreements they have with any of the Employees. Until the second
anniversary of the Closing Date, neither Sellers, the Shareholder, nor any
subsidiary or other entity controlled by Shareholder shall, directly or
indirectly, solicit or offer employment to or employ any Employee (i) who
is then an employee of Purchaser, or (ii) who has been employed by
Purchaser within 90 days of such solicitation, offer, or employment.
8.3 Noncompete Agreement.
(a) For a period of three years following the Closing, neither
Sellers, the Shareholder, nor any subsidiary or other entity controlled by
Shareholder shall, directly or indirectly, manage, operate, control, or
participate in the management, operation, or control of any business that
operates, manages, controls, or owns one or more competing restaurants in
the Territory, whether as an officer, director, employee, consultant,
manager, partner, shareholder, limited liability company member, sole
proprietor, trustee, or otherwise; provided that nothing herein shall
prohibit the Sellers from owning less than 5% of the outstanding stock of
any corporation subject to the reporting requirements of the Securities
Exchange Act of 1934 or from maintaining its existing lease arrangements
with Marc's Cafe & Coffee Mills restaurants and any other restaurants
owned, operated, or franchised on the date hereof by Sellers, the
Shareholder, or the subsidiaries or affiliates thereof or restaurants
owned, managed, operated or leased by hotels, resorts, or motels, owned,
operated, managed, or franchised by Sellers, the Shareholder, or the
subsidiaries or affiliates thereof. Shareholder or their affiliates
thereof. Nothing herein shall limit or restrict Sellers, the Shareholder
or their affiliates from leasing or subleasing their properties for any
purpose, including a competing restaurant.
A "competing restaurant" means (i) any casual dining restaurant with
a concept emphasis, menu, and method of operation substantially similar to
that currently employed at Applebee's Neighborhood Grill & Bar restaurants
(such as Bennigan's, Chili's, Friday's, Ruby Tuesday's, or Houlihan's) and
(ii) any restaurant operated pursuant to any development agreement,
franchise agreement, or similar agreement or arrangement with the
Franchisor. A "competing restaurant" shall not include, without
limitation, casual dining restaurants having a particular regional or
ethnic concept or predominant menu item emphasis (i.e., Italian, Tex-Mex,
seafood, ribs, barbecue and the like).
(b) the parties hereto specifically acknowledge and agree that
the remedy at law for any breach of the foregoing covenant not to compete
will be inadequate and that the Purchaser, in addition to any other relief
available to it, shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damage.
(c) If the scope of this section should ever be deemed to
exceed the limitation provided by applicable law, then the parties hereto
agree that such provisions shall be reformed to set forth the maximum
limitations permitted.
8.4 Discharge of Business Obligations. From and after the Closing
Date Sellers shall pay and discharge, in accordance with past practice but
not less than on a timely basis, all obligations and liabilities incurred
prior to the Closing Date with respect to the Business, its operations or
the Assets, except for the Assumed Liabilities. Sellers shall terminate
any agreements or understanding with non-employees as to meals or other
benefits at the Restaurants effective as of the Closing.
8.5 Financial Statements. Sellers shall cooperate with Purchaser
and allow the auditors designated by Purchaser such access, during normal
business hours upon reasonable advance notice, to information as may be
required for Purchaser to produce on a timely basis financial statements
satisfying the requirements imposed on Purchaser by Form 8-K with respect
to the transactions contemplated hereby. Sellers' personnel shall
undertake such tasks involved in producing such financial statements and
provide such assistance to the auditors as are normally performed and
provided by sellers' internal personnel during an audit. The auditors'
fees and expenses for preparing such financial statements shall be borne
by Purchaser. Sellers shall bear the costs of involvement of their
internal personnel.
8.6 Cards and Certificates. Sellers shall reimburse Purchaser for
the costs of any valid $6.50 cards" or gift certificates for Applebee's
restaurants issued by Sellers which are presented to Purchaser for
redemption following the Closing.
8.7 Confidentiality Covenant. Subject to the Closing, and as an
inducement to Sellers to execute this Agreement and complete the other
transactions contemplated hereby, in order to preserve the goodwill
associated with the Business to Sellers in the event the transactions
contemplated herein are not consummated, the Purchaser hereby covenants
and agrees as follows for a period of three years from the date hereof:
(a) Covenant of Confidentiality. The Purchaser shall not,
except as explicitly requested by seller, (i) use for any purpose; (ii)
disclose to any person; or (iii) keep or make copies of documents, tapes,
discs or programs containing, any confidential information concerning
Sellers learned in the course of Purchaser's due diligence investigation
or otherwise in the course of negotiating this Agreement or preparing for
the Closing. For purposes hereof, "confidential information" shall mean
and include, without limitation, all documents referenced in subclause
(viii) under the definition of Assets in Section 1.1 and all other
information concerning the Restaurants and Seller's costs, profits,
markets, sales, trade secrets, processes, programs and marketing methods,
but shall exclude any matters which have been or hereafter are
independently developed or disclosed by a third party or which otherwise
is or becomes part of the public domain (other than in violation of this
Section 8.7 or any other confidentiality covenant), or is required to be
disclosed by any law, or which is required to be disclosed to the
Franchiser.
(b) Equitable Relief for Violations. Purchaser agrees that the
provisions and restrictions contained in this Section 8.7 are necessary to
protect the legitimate continuing interests of Seller in the Business in
the event the transactions contemplated herein are not consummated, and
that any violation or breach of these provisions will result in
irreparable injury to Seller for which a remedy at law would be inadequate
and that, in addition to any relief at law which may be available to
seller for such violation or breach, and regardless of any other provision
contained in this Agreement or any other agreement, Seller shall be
entitled to injunctive and other equitable relief as a court may grant
after considering the intent of this Section 8.7.
ARTICLE IX - MISCELLANEOUS
9.1 Brokers' and Finders' Fees.
(a) Sellers represent and warrant to Purchaser that all
negotiations relative to this Agreement have been carried on by it
directly without the intervention of any person who may be entitled to any
brokerage or finder's fee or other commission in respect of this Agreement
or the consummation of the transactions contemplated hereby, and Sellers
agree to indemnify and hold harmless Purchaser against any and all claims,
losses, liabilities and expenses which may be asserted against or incurred
by it as a result of any dealings, arrangements or agreements of Sellers
with any such person.
(b) Purchaser represents and warrants to sellers that all
negotiations relative to this Agreement have been carried on by Purchaser
directly without the intervention of any person who may be entitled to any
brokerage or finder's fee or other commission in respect of this Agreement
or the consummation of the transactions contemplated hereby, and Purchaser
agrees to indemnify and hold harmless Sellers against any and all claims,
losses, liabilities and expenses which bay be asserted against or incurred
by them as a result of Purchaser's dealing, arrangements or agreements
with any such person.
9.2 Sales, Transfer and Documentary Taxes and Fees, etc.
(a) Sellers shall pay all federal, state, and local sales,
documentary and other transfer taxes, if any, due as a result of the
purchase, sale or transfer of the Assets (other than such taxes resulting
from the transfer of real property, which shall be split equally between
Purchaser and the Sellers) in accordance herewith whether imposed by law
on Sellers or Purchaser and Sellers shall indemnify, reimburse and hold
harmless Purchaser in respect of the liability for payment of or failure
to pay any such taxes or the filing of or failure to file any reports
required in connection therewith.
(b) The parties shall split the filing fees required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; provided, Sellers
shall not pay more than $20,000 in connection therewith.
(c) The parties shall split the fees for obtaining the Owner's
Title Commitments, the Owner's Title Policies, the Lessee title
Commitments, and the Lessee Title Policies, and lien searches.
9.3 Expenses. Except as otherwise provided herein, such party
hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions of this Agreement, and the
consummation of the transactions contemplated hereby.
9.4 Contents of Agreement; Parties in Interest; etc. This Agreement
sets forth the entire understanding of the parties hereto with respect to
the transactions contemplated hereby. It shall not be amended or modified
except by a written instrument duly executed by each of the parties
hereto. Any and all previous agreements and understandings among the
parties regarding the subject matter hereof, whether written or oral, are
superseded by this Agreement.
9.5. Assignment and Binding Effect. This Agreement may not be
assigned prior to the Closing by any party hereto without the prior
written consent of the other party. Subject to the foregoing, all of the
terms and provisions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the successors and assigns
of Sellers and Purchaser.
9.6. Notices. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be
in writing and shall be deemed given if delivered personally or sent by
telecopy or by registered or certified mail, postage prepaid, as follows:
If to Purchaser, to:
Apple South, Inc.
Hancock at Washington
Madison, Georgia 36050
Fax No: 706-342-4057
Attention: Erich J. Booth
With a required copy to (which alone shall not constitute
notice):
Booth, Wade & Campbell
Cumberland Center II
Suite 1500, 3100 Cumberland Circle
Atlanta, Georgia 30339-5939
Fax No: 404-850-5079
Attention: Larry D. Ledbetter, Esq.
If to Sellers, to:
The Marcus Corporation
Suite 1700
250 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-4220
Fax No: 414-272-0669
Attention: Thomas F. Kissinger
And with a copy to the above address to:
Bruce J. Olson
With a required copy to (which alone shall not constitute
Notice):
Foley & Lardner
Firstar Center
777 East Wisconsin Avenue
Milwaukee, WI 53202-5367
Fax No: 414-297-4900
Attention: Steven R. Barth
or to such other address as the addressee may have specified in a notice
duly given to the sender as provided herein. Such notice, request,
demand, waiver, consent, approval or other communication will be deemed to
have been given as of the date actually delivered or telecopied with
confirmation, or if mailed, three days after deposit in the U.S. Mail
properly addressed with adequate first class postage affixed.
9.7 Wisconsin Law to Govern. This Agreement shall be governed by
and interpreted and enforced in accordance with the laws of the State of
Wisconsin, irrespective of the principal place of business, residence, or
domicile of the parties hereto, and without giving effect to otherwise
applicable principles of conflicts of law. Any and all service of process
and any other notice in any such action, suit, or proceeding shall be
effective against any party if given as provided in Section 9.6 herein.
Nothing contained in this Section 9.7, or elsewhere herein, shall be
deemed to affect the right of any party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise
proceed against any other party in any jurisdiction.
9.8 Headings. All section headings contained in this Agreement are
for convenience of reference only, do not form a part of this Agreement
and shall not affect in any way the meaning or interpretation of this
Agreement.
9.9 Disclosure; Schedules. Disclosure in one Schedule hereto shall
constitute disclosure for all purposes under this Agreement and in
response to any other Schedule hereto. Disclosure of a document or
information in a Schedule hereto is not intended as a representation or
warranty of the material nature of such document or information nor does
it establish any standard of materiality upon which to judge the inclusion
or omission of other similar documents or information in that Schedule or
other Schedules.
9.10 Severability. Any provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall be ineffective to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 Public Announcements. Neither Purchaser nor Sellers shall make
any public announcement of this transaction prior t the Closing without
the prior consent of the other party (which shall not be unreasonably
without) unless such announcement is required by law or the NYSE or
Nasdaq, but then only after approval of the other party (which shall not
be unreasonably withheld). The foregoing shall not apply to disclosures
made in connection with tax return filings.
9.12 Waiver of Bulk Sales Compliance. Purchaser hereby waives
Sellers' noncompliance with the provisions of the bulk sales or bulk
transfer statutes of all states having jurisdiction over the Business or
Assets with respect to the transactions contemplated herein.
9.13 Preparation of Schedules. Except for SCHEDULE 3.16 which is
attached hereto, the Schedules referenced in this Agreement shall be
prepared by sellers and delivered to Purchaser within fourteen days of the
date hereof, except that SCHEDULE 3.4 may be delivered within 21 days of
the date hereof. Purchaser shall have seven days from the date of receipt
of newly delivered Schedules within which to review such Schedules and if
the information disclosed thereon is not acceptable to Purchaser because
such information was not known to Purchaser as of the date hereof and
otherwise would have material adverse effect on the Business, as
determined by Purchaser in its reasonable judgment, to cancel this
Agreement, whereupon no party hereto shall have any further obligation nor
any liability to any other party by reason of or under this Agreement. If
this Agreement is not cancelled, then the newly delivered Schedules shall
be initialled by officers of Purchaser and Sellers, whereupon they shall
be considered pat of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written.
SELLERS:
MARCUS RESTAURANTS, INC.
By:/S/ STEPHEN H. MARCUS
Name: Stephen H. Marcus
Title: President
B&G REALTY, INC.
By:/S/ STEPHEN H. MARCUS
Name: Stephen H. Marcus
Title: President
CAPTAINS-KENOSHA, INC.
By:/S/ DOUGLAS A. NEIS
Name: Douglas A. Neis
Title: Vice President
HASTY HOST DISTRIBUTING CORP.
By:/S/ DOUGLAS A. NEIS
Name: Douglas A. Neis
Title: Vice President
TOPS, INC.
By:/S/ STEPHEN H. MARCUS
Name: Stephen H. Marcus
Title: President
B&G LEASING, INC.
By:/S/ BRUCE J. OLSON
Name: Bruce J. Olson
Title: Vice President
The Shareholder is a party to this Agreement only for the purposes of
Sections 8.2 and 8.3 hereof.
SHAREHOLDER:
MARCUS RESTAURANTS, INC.
By:/S/ STEPHEN H. MARCUS
Name: Stephen H. Marcus
Title: President
PURCHASER:
APPLE SOUTH, INC.
By:/S/ ERICH J. BOOTH
Name: Erich J. Booth
Title: Chief Financial Officer
EXHIBIT 99.2
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this
"Amendment") is made as of this 5th day of June, 1995, by and among Marcus
Restaurants, Inc., a Wisconsin corporation, B&G Realty, Inc., a Wisconsin
corporation ("B&G"), Captains-Kenosha, Inc., a Wisconsin corporation,
Hasty Host Distributing Corp., an Illinois corporation, Tops, Inc., an
Illinois corporation, and B&G Leasing, Inc., a Wisconsin corporation
(collectively, the "Sellers"), and Apple South, Inc., a Georgia
corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, Sellers and Purchaser have entered into that certain
Asset Purchase Agreement dated as of April 12, 1995 ("Asset Purchase
Agreement"), for the purchase and sale of certain of Sellers' assets
relating to their Applebee's Neighborhood Grill and Bar franchised
restaurants and development rights; and
WHEREAS, defined terms used herein and not defined shall have
the meaning ascribed thereto in the Asset Purchase Agreement; and
WHEREAS, as contemplated by Section 2.4 of the Asset Purchase
Agreement, Sellers desire to include in the Asset Purchase Agreement a tax
deferred like-kind exchange under Section 1031 of the United States
Internal Revenue Code of 1986, as amended, of certain of the Real Property
in the Asset Purchase Agreement (the "Exchange"); and
WHEREAS, in order to include such Real Property in the Exchange,
B&G and Purchaser must enter into a separate contract of purchase and sale
for the conveyance of such Real Property; and
WHEREAS, the Purchaser and Sellers have determined to close the
transaction contemplated by the Asset Purchase Agreement and this
Amendment into an escrow on the date hereof until June 30, 1995, subject
to the terms of an Escrow Agreement and a Management Agreement each dated
as of the date hereof; and
WHEREAS, the parties hereto mutually desire to modify and amend
the Asset Purchase Agreement in accordance with its terms in order to
accommodate the Exchange, the Escrow Agreement, the Management Agreement
and for the other purposes herein contained.
NOW, THEREFORE, in consideration of the premises and the
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Real Estate Contract of Purchase and Sale. In order to
facilitate the Exchange, Purchaser and B&G Realty agree on or before
Closing to enter into that certain Real Estate Contract of Purchase and
Sale attached hereto as Exhibit A (the "Relinquished Property Contract")
with respect to the Real Property more particularly described therein (the
"Relinquished Property").
2. Purchase Price. The "Purchase Price" in Section 2.3 of the
Asset Purchase Agreement shall be reduced by TWO MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($2,500,000.00), which is the purchase price
of the Relinquished Property under the Relinquished Property Contract and
which amount Purchaser is hereby paying on the date hereof in accordance
with the terms thereof.
3. "Transferred Real Property." The term "Transferred Real
Property" on Page 6 of the Asset Purchase Agreement shall be deemed to
exclude the Relinquished Property to allow the separate but simultaneous
conveyance thereof contemplated in the Relinquished Property Contract, but
shall include such Relinquished Property for all other purposes under the
Asset Purchase Agreement, including, without limitation, Sellers'
representations and warranties with respect to the Relinquished Property
contained in the Asset Purchase Agreement.
4. Indemnity Against Conditional Franchisor's Consent.
Sections 5.5 and 6.3 of the Asset Purchase Agreement provide that the
consent of Franchisor (including the consent to the assignment of the
Franchise Agreements, the sale of the Restaurants and the form of the
Seller Leases, together with the waiver by Franchisor of any applicable
right of first refusal under the Franchise Agreements relating to the
transfer of the Assets, all of which are collectively referred to in this
Amendment as the "Franchisor's Consent") is a necessary condition to the
consummation of the transactions contemplated by the Asset Purchase
Agreement. By letter dated May 26, 1995, Franchisor provided Sellers with
Franchisor's Consent, subject however to the condition that Purchaser
enter into certain additional agreements with Franchisor. Since
satisfaction of this condition of Franchisor is outside of the control of
Sellers and, based on Purchaser's representation and warranty hereby made
to Sellers that Purchaser will satisfy such condition, Sellers are willing
to close the transactions contemplated by the Asset Purchase Agreement and
waive Section 6.3(i) and (ii) of the Asset Purchase Agreement; provided,
however, that Purchaser hereby agrees to indemnify, reimburse and hold
harmless Sellers against any and all claims, liabilities, obligations,
losses, costs and expenses (including reasonable legal fees and
disbursements) resulting from or related to Franchisor in any way
withdrawing or amending Franchisor's Consent, imposing additional
conditions on the transactions contemplated by the Asset Purchase
Agreement or otherwise claiming that such transactions or that Sellers are
in violation of the Franchise Agreements. In accordance with the above,
Purchaser hereby waives Section 5.5(i) and (ii) of the Asset Purchase
Agreement.
5. Waiver of Outstanding Consents. Purchaser recognizes and
agrees that Sellers have complied with their obligations under the Asset
Purchase Agreement to use their best efforts to obtain the Consents;
however, despite these efforts, as of this date the Consents (including
estoppel certificates) listed on the attached exhibit have not been
obtained and remain outstanding (collectively, "Outstanding Consents").
Purchaser hereby waives the Sellers' inability to obtain the Outstanding
Consents and Section 5.5(iii) and (iv) of the Asset Purchase Agreement
with respect thereto and Purchaser hereby agrees to indemnify, reimburse
and hold harmless Sellers against any and all claims, liabilities,
obligations, losses, costs and expenses (including reasonable attorneys
fees and disbursements) resulting from or related to the inability to
obtain such Outstanding Consents and any breaches or alleged breaches of
the underlying contracts and agreements resulting therefrom (exclusive of
any "profit recapture" claim of the landlord of the Mayfair property to
the extent such claim is being made exclusive of the absence of a consent
to the assignment of the Mayfair lease); provided, however, that Sellers
agree that they will continue to use their commercially reasonable best
efforts (consisting solely of continuing reasonable periodic telephonic
and written requests) to obtain such Outstanding Consents and without the
necessity of Sellers to incur any significant additional out-of-pocket
costs or expenses, threaten or initiate legal proceedings of any kind,
agree to modify or amend terms or conditions of any existing arrangements
in a manner adverse to Sellers or otherwise adversely affect Sellers'
ongoing business relationships in connection with trying to obtain the
Outstanding Consents. In accordance with the above, Sellers waive
Section 6.3(iii) and (iv) of the Asset Purchase Agreement with respect to
the Outstanding Consents. The Outstanding Consents, together with the
conditional nature of the Franchisor's Consent, shall be deemed under the
Asset Purchase Agreement to constitute Permitted Encumbrances and shall be
deemed to be included on Schedule 3.4 thereto and excepted from
Section 3.11 thereof.
6. Consent to Add Additional Ground Leases; Real Estate
Purchase Contracts. This Amendment hereby evidences Purchaser's written
consent to include in the definition of the term "Ground Leases" under
Section 1.1 of the Asset Purchase Agreement the ground leases of the sites
for potential future Applebee's Neighborhood Grill and Bar restaurants
located in Kenosha and Bradley and to include in the definitions of the
terms "Development Parcels" and "Transferred Real Property" under Section
1.1 of the Asset Purchase Agreement the Real Property subject to the real
estate purchase contracts for potential future Applebee's Neighborhood
Grill and Bar restaurants located in Oshkosh, DeKalb and Elgin and, in
connection with all of the foregoing, Purchaser hereby consents to
including within the definition of the term "Contracts" under Section 1.1
of the Asset Purchase Agreement all of the contracts and agreements
relating thereto which have been entered into by Sellers, copies of which
have been provided to Purchaser. Notwithstanding representations and
warranties which could be implied to the contrary which are set forth in
the Asset Purchase Agreement, the Sellers hereby make no representations
or warranties to Purchaser with respect to the foregoing Real Properties,
which are being transferred to Purchaser "AS IS, WHERE IS." Sellers will
cooperate and use their commercially reasonable best efforts to assist the
Purchaser in requesting extensions of up to 90 days of the "due diligence"
periods currently allowed under the ground leases for Kenosha and Bradley.
If requested by Purchaser, Sellers will provide its commercially
reasonable best efforts and will cooperate with Purchaser to assist it in
terminating the ground leases for Kenosha and/or Bradley and/or the real
estate purchase contracts for Oshkosh, DeKalb and/or Elgin, provided that
all such costs and expenses and liabilities associated therewith shall be
Purchaser's responsibility. Tinley Park is not accepted by Purchaser as
part of the Transferred Real Property.
7. Outstanding Liens. Sellers and Purchaser hereby agree to
delete from Schedule 3.4 to the Asset Purchase Agreement the liens
represented by the following UCC financing and continuation statements:
Filing Jurisdiction File Number
Wisconsin 819639
Wisconsin 1142561
Wisconsin 821568
Wisconsin 847879
Wisconsin 1168786
Wisconsin 1021685
Wisconsin 1377553
and Sellers hereby confirm that the liens evidenced by such foregoing
statements shall no longer be deemed Permitted Encumbrances under the
Asset Purchase Agreement, so that Sellers shall be responsible to
indemnify, reimburse and hold harmless Purchaser against any and all
claims, liabilities, obligations, losses, costs and expenses (including
reasonable attorney fees and disbursements) resulting from or relating to
such liens (as well as from any claims resulting from B&G Realty, Inc. not
being qualified as a foreign corporation in Illinois). Sellers agree to
use reasonable efforts to amend any of the foregoing financing statements
upon Purchaser's request if such liens adversely affect the Assets.
Purchaser hereby waives Section 5.8 with respect to the foregoing liens.
8. Waiver of Title Objections. Purchaser hereby waives all
objections to title and survey matters and the like previously submitted
to Sellers under Section 5.6 of the Asset Purchase Agreement which
continue to appear as exceptions to the Title Commitments or continue to
be listed in the Schedules to the Asset Purchase Agreement as of the date
hereof, and Purchaser hereby accepts such easements, restrictions,
covenants and other encumbrances listed thereon or which have become of
public record since the date thereof (excluding any consensual liens
initiated or agreed to by Sellers or any judgments against Sellers).
Purchaser hereby elects to close the transactions contemplated by the
Asset Purchase Agreement in accordance with Section 5.6(i) on page 18 of
the Asset Purchase Agreement.
9. Additional Post-Closing Adjustments. As part of the post-
closing adjustments allowed under Section 2.6 of the Asset Purchase
Agreement, Purchaser will reimburse Sellers for reasonable Project
Development Costs (generally consistent with the types of Project
Development Costs provided at the deemed Closing, but not including any
additional real estate commissions) incurred prior to Closing and for
Purchaser's one-half portion of the fees incurred for obtaining the
various title commitments, title policies, surveys and lien searches, but
which costs and fees were not submitted to Purchaser as part of the
determination of the Purchase Price or other fees payable at Closing as a
result of such costs or fees not being readily ascertainable to Sellers at
such time.
10. Southridge Subdivision. Purchaser and Sellers hereby
consent to the subdivision of the Southridge property in order to divide
the property between the portion relating to the Camelot Music Store
located thereon and the Restaurant located thereon, in accordance with the
terms of the application for land split submitted to and approved by the
local city planning commission on May 30, 1995. As a result of the
subdivision, the portion of such Real Property constituting the Camelot
Music Store premises shall not be considered a part of the Transferred
Real Property under the Asset Purchase Agreement.
11. Reimbursement of Certain Legal Fees. In consideration of
Sellers agreeing to enter into the Escrow Agreement and Management
Agreement, Purchaser hereby agrees to reimburse Sellers, as part of the
post-closing adjustments allowed under Section 2.6 of the Asset Purchase
Agreement, for their additional legal fees relating thereto, which shall
not exceed $10,000. To the extent Purchaser requests Foley & Lardner to
assist in effecting any mutually agreed upon assignments under the Asset
Purchase Agreement (i.e., including to DR Holdings L.P.), Purchaser will
pay the reasonable fees and disbursements of such firm associated
therewith.
12. Amendment to Indemnity for Release of Employee Records.
Purchaser and Sellers entered into a letter agreement dated as of May 31,
1995 pursuant to which Sellers agreed to release to Purchaser certain
specified employee records of Sellers, provided that Purchaser indemnified
Sellers for any claims which may result therefrom. Purchaser now desires
to have full access to all records and information of any kind relating to
the employees of Sellers employed in their Applebee's division and Sellers
are hereby allowing such access, subject to the conditions set forth in
the following sentence. In consideration of Sellers' concern over release
of this confidential information for the benefit of Purchaser, Purchaser
hereby agrees to reimburse, indemnify and hold harmless Sellers against
and in respect of any and all actual out-of-pocket damages, losses,
liabilities, costs and expenses incurred or suffered by Sellers that
result from, relate to or arise out of the provision to Purchaser of
employee records and information of any kind relating to such employees
and any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, actual out-of-pocket costs
and other expenses (including, without limitation, reasonable legal fees
and expenses), incident to any of the foregoing.
13. Effective Closing Date. Except with respect to the transfer
of title to and ownership of the Assets (except the Relinquished Property)
to Purchaser and the payment to Sellers of the Purchase Price, or as
otherwise expressly set forth in the Management Agreement and Escrow
Agreement, the Closing under the Asset Purchase Agreement shall be deemed
to take effect for all other purposes effective as of 11:59 p.m. on the
date hereof.
14. Leased Automobiles. Sellers hereby agree to sublease to
Purchaser for a period of three months from the date hereof the four
automobiles ("Automobiles") currently used by Messrs. West, Tholen, Whaley
and Wolff ("Employees") in connection with their employment
responsibilities pursuant to a Master Lease Agreement with Selig Executive
Leasing Co., Inc. ("Lease"). Purchaser agrees to be responsible for the
Automobiles during such period and to maintain, at its sole expense,
standard motor vehicle liability insurance for the Automobiles and the use
thereof in the same amount and pursuant to the same terms as contained in
Paragraph 9 of the Lease. Purchaser agrees to pre-pay to Sellers $4,355
at Closing for the lease payments of the Automobiles for the three-month
term. Purchaser agrees to reimburse, indemnify and hold harmless Sellers,
their affiliates, employees, officers and directors, against any and all
damages, losses, liabilities, costs and expenses incurred or suffered by
Sellers that result from, relate to, or arise out of any and all actions,
suits, demands, fines, judgments, claims or legal, administrative,
arbitration, governmental or other proceeding or investigation in
connection with (i) Sellers' obligations under the Lease (other than the
payment of the lease payments thereunder, which shall remain Sellers'
responsibility) for such three-month period; or (ii) Employees' (or
others') use or operation of the Automobiles (including, without
limitation, any accidents, damages or injuries resulting therefrom) during
such period. At the end of such period, the Automobiles will be returned
to Sellers in good condition, reasonable wear and tear excepted, and
otherwise in compliance with the Lease. The Lease shall be deemed to be
excluded from Schedule 1.1(B) and shall not be deemed to constitute an
Assigned Agreement under the Asset Purchase Agreement.
15. Reservation of Certain Mequon Rights. Nothing in this
Amendment or in the Asset Purchase Agreement (or closing documents) shall
be deemed to limit or prohibit Sellers from pursuing their claims for
reimbursement of previously incurred fees and costs (to the extent such
fees and costs are not reimbursed to Sellers by Purchaser as part of the
Project Development Costs, but which shall not effect Sellers sole rights
to pursue such claims) and damages against the City of Mequon relating to
Sellers' proposed development of an Applebee's Neighborhood Grill and Bar
and other proposals in such city or from pursuing their rights to develop
a movie-theatre facility and other proposals in such city and, in each
case above, Purchaser shall provide reasonable cooperation to Sellers upon
their request to facilitate such actions.
16. Reimbursement of Certain Employee Fees. To the extent
Cornelius Reilly and Kathy Hellrood continue, while in the employ of
Sellers, to work on matters relating to the Business from and after this
date at the request or direction of Purchaser, Purchaser shall reimburse
Sellers promptly upon their request for the effective cost of such time at
a rate of $47.30 and $16.75 per hour for Mr. Reilly and Ms. Hellrood,
respectively. Subject to the terms and conditions of their current
employment, Sellers agree to retain in their employ Mr. Reilly and Ms.
Hellrood until the later to occur of the initial opening date of the
Restaurants currently under construction at Kenosha, Bradley, Wausau and
Crestwood, and shall allow them to act as the construction project
managers at such sites under the direction of Purchaser. Nothing herein
shall be deemed to constitute a contract of employment of Mr. Reilly or
Ms. Hellrood or prevent Sellers from terminating the employment by Sellers
of Mr. Reilly and Ms. Hellrood pursuant to the terms of their existing
employment relationship with Sellers.
17. Amendment. This Amendment supersedes any conflicting terms
and provisions in the Asset Purchase Agreement, and this Amendment shall
amend as appropriate Articles V and VI. This Amendment complies with
Section 9.4 of the Asset Purchase Agreement and, except as expressly
amended hereby, the Asset Purchase Agreement shall and hereby does remain
in full force and effect in accordance with its terms.
18. Assignment. Sellers understand that Purchaser may desire
to partially assign the right to receive the conveyance of certain
Transferred Real Property under the Asset Purchase Agreement to
Purchaser's third party designee, DR Holdings, L.P., a Georgia limited
partnership ("DR"). Sellers' consent shall be required for such
assignment which consent may be conditioned on (i) DR assuming all
obligations of Purchaser under the Asset Purchase Agreement; (ii)
Purchaser shall remain fully and primarily liable for its obligations
under the Asset Purchase Agreement; and (iii) the assignment shall be
effective pursuant to documentation reasonably required by Sellers.
19. Public Announcement. For purposes of Section 9.11 of the
Asset Purchase Agreement the "Closing" shall be deemed to occur at 3:00
P.M. CDST on June 30, 1995.
20. Copies of Construction Files. Sellers shall provide copies
of its files relating to the construction of the Development Parcels to
Purchaser upon its request and at Purchaser's cost.
21. No Assumption of Kronos Agreement. Purchaser does not
assume, and Sellers do not assign, the Maintenance Agreement between
Kronos Incorporated and The Marcus Corporation dated March 30, 1995 and
such contract shall not be deemed an Assigned Agreement under the Asset
Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Asset Purchase Agreement to be executed by their duly
authorized officers and delivered as of the day and year first above
written.
PURCHASER: SELLERS:
APPLE SOUTH, INC. MARCUS RESTAURANTS, INC.
B&G REALTY, INC.
CAPTAINS-KENOSHA, INC.
By:/s/ Ben A. Waites HASTY HOST DISTRIBUTING CORP.
Title: Assistant Secretary TOPS, INC.
B&G LEASING, INC.
By:/s/ Thomas F. Kissinger
Thomas F. Kissinger
Secretary for each of the
above corporations and as
Assistant Secretary to
B&G Leasing, Inc.
