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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR (53 WEEKS) ENDED JANUARY 3, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________ .
COMMISSION FILE NUMBER 0-28258
SHELLS SEAFOOD RESTAURANTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 65-0427966
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
16313 NORTH DALE MABRY HIGHWAY
TAMPA, FLORIDA 33618
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(813) 961-0944
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS:
COMMON STOCK, PAR VALUE $.01 PER SHARE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in Definitive Proxy or Information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the Common Stock held by non-affiliates of
the Registrant, (based upon the last sales price of the Common Stock reported
on the Nasdaq National Market on March 19, 1999 and the assumption for this
computation only that all directors and executive officers are affiliates of
the Registrant) was $10,151,440.
As of March 19, 1999, the number of shares outstanding of the Registrant's
Common Stock, $.01 par value, was 4,454,015.
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<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The section entitled "Proposal -- Election of Directors" in the Company's
Proxy Statement for the Annual Meeting of Stockholders is incorporated herein
by reference.
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation" in the Company's Proxy
Statement for the Annual Meeting of Stockholders is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Beneficial Ownership of Common Stock" in the
Company's Proxy Statement for the Annual Meeting of Stockholders is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section entitled "Executive Compensation -- Compensation Committee
Interlocks and Insider Participation" and "Certain Transactions" in the
Company's Proxy Statement for the Annual Meeting of Stockholders is
incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K
(a) Financial Statements
(1) and (2) See "Index to Financial Statements" at Item 8 of this Annual
Report on Form 10-K.
(3) Exhibits
Exhibits Nos. 10.1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7 are management
contracts, compensatory plans or arrangements.
56
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C>
3.1 Certificate of Incorporation*
Agreement and Plan of Merger, dated March 31, 1996, by and between Shells Seafood
Restaurants, Inc., a Delaware Corporation, and Shells Seafood Restaurant, Inc., a Florida
Corporation.*
3.2 By-laws.*
3.3 Specimen Common Stock Certificate.*
4.1 Form of Warrant Agreement between Shells Seafood Restaurant, Inc. and Continental Stock
Transfer & Trust Company and Paragon Capital Corporation.*
4.2 Form of Warrant Agreement between Shells Seafood Restaurants, Inc. and Paragon Capital
Corporation.*
10.1 Employment Agreement, dated September 1, 1995, between William E. Hattaway and Shells
Seafood Restaurants, Inc.*
10.2 Employment Agreement, dated September 2, 1993, between Frank C. Roehl, III and Shells
Seafood Restaurants, Inc.*
10.3 Employment Agreement, dated October 11, 1993, between John R. Ritchey and Shells
Seafood Restaurants, Inc.*
10.4 Employment Agreement, dated May 18, 1993, between Warren R. Nelson and Shells
Seafood Restaurants, Inc.*
10.5 1996 Employee Stock Option Plan.*
10.6 1995 Employee Stock Option Plan.*
10.7 1996 Stock Option Plan for Non-Employee Directors*
10.8 Agreement for Purchase and Sale of Assets, dated May 14, 1993, between Shells Seafood
Restaurants, Inc. and Shells, Inc.*
10.9 Agreement for Assignment of Servicemarks, dated August 19, 1993, between Shells Seafood
Restaurants, Inc. and Shells, Inc.*
10.10 Agreement and Plan of Merger, dated November 16, 1994, by and among Shells Seafood
Restaurants, Inc., Shells Seafood Acquisition, Inc. and Shells, Inc.*
10.11 First Amendment of Agreement and Plan of Merger, dated December 13, 1995, by and
among Shells Seafood Restaurants, Inc., Shells Seafood Acquisition, Inc. and Shells, Inc.*
10.12 Warrant Agreement, dated as of December 29, 1994, relating to warrants to purchase
230,000 shares of Common Stock, adopted by the Board of Directors of Shells Seafood
Restaurants, Inc.*
10.13 Registration Rights Agreement, effective as of December 29, 1994, by and among Frederick
R. Adler, The MicroCap Fund, Inc. and Shells Seafood Restaurants, Inc.*
10.14 Warrant Agreement, dated December 29, 1994, relating to Warrants to purchase 20,000
shares of Class A Preferred Stock, adopted by the Board of Directors of Shells Seafood
Restaurants, Inc.*
10.15 Note and Warrant Purchase Agreement among Shells Seafood Restaurants, Inc., and
Frederick R. Adler, as nominee, dated as of September 19, 1995.*
10.16 Warrant Agreement, dated as of September 19, 1995, relating to Warrants to purchase
200,000 shares of Common Stock, adopted by the Board of Directors, of Shell Seafood
Restaurants, Inc.*
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C>
10.17 Distributor Agreement, dated February 17, 1997, between U.S. Foodservice and Shells
Seafood Restaurants, Inc.*
10.18 Joint Venture Agreement, dated March 1, 1994, between Shells of Melbourne, Inc. and WLH
Investments, Inc.*
10.19 First Amendment to Joint Venture Agreement, effective as of March 31, 1995 between Shells
of Melbourne, Inc. and WLH Investments, Inc.*
10.20 Promissory Note in the initial principal amount of $400,000, dated March 8, 1994, by Shells
Seafood Restaurants, Inc. for the benefit of WLH Investments, Inc.*
10.21 Management and License Agreement, dated March 1, 1994, between Shells of Melbourne
Joint Venture and Shells Seafood Restaurants, Inc.*
10.22 Management and License Agreement dated July 29, 1993, between Shells of Carrollwood
Village, Inc. and Shells Seafood Restaurants, Inc., as amended.*
10.23 Management and License Agreement, dated July 28, 1993, between Shells of North Tampa,
Inc. and Shells Seafood Restaurants, Inc., as amended.*
10.24 Management and License Agreement, dated July 29, 1993, between Shells of Sarasota
South, Inc. and Shells Seafood Restaurants, Inc., as amended.*
10.25 Amended Option Agreement dated August 10, 1995 between Shells Seafood Restaurants,
Inc. and Shells of Carrollwood Village, Inc.*
10.26 Amended Option Agreement, dated August 11, 1995 between Shells Seafood Restaurants,
Inc. and Shells of North Tampa, Inc.*
10.27 Amended Option Agreement, dated August 16, 1995 by and between Shells Seafood
Restaurants, Inc. and Shells of Sarasota South, Inc.*
10.28 Agreement for Consulting and Management Services and Licensing of Service Marks, dated
October 4, 1989 by and between Ursula Collaud and Shells of Daytona Beach, Inc., as
amended by the Stipulation of Settlement dated December 2, 1994.*
10.29 Asset Purchase Agreement, dated September 30, 1994 between Shells of St. Petersburg
Beach, Inc. and the Bleckley Corporation.*
10.30 Assignment Agreement, dated September 30, 1994 between Shells of St. Pete Beach, Inc.
and the Bleckley Corporation.*
10.31 Promissory Note in the initial principal amount of $540,000, dated September 30, 1994 by
Shells of St. Pete Beach, Inc. for the benefit of the Bleckley Corporation.*
10.32 Continuing and Unconditional Guaranty by Shells Seafood Restaurants, Inc. for the benefit of
the Bleckley Corporation.*
10.33 Security Agreement, dated September 30, 1995 between Shells of St. Pete Beach, Inc. and
the Bleckley Corporation.*
10.34 Assignment Agreement, dated November 1, 1993 between Shells of Countryside Square,
Inc. and Clearwater Food Service, Inc.*
10.35 Promissory Note in the initial principal amount of $500,000, dated November 1, 1993 by
Shells of Countryside Square, Inc. for the benefit of Clearwater Food Service, Inc.*
10.36 Form of Directors Indemnification Agreement.*
10.37 Form of Amended and Restated Common Stock Warrant Agreement, effective as of
February 1, 1996.*
</TABLE>
58
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<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C>
10.38 Promissory Note in the principal amount of $453,000, dated September 4, 1996 by Shells
Seafood Restaurants, Inc. for the benefit of Huntington National Bank of Florida.**
10.39 Line of Credit for $2,000,000 dated July 18, 1996 by Shells Seafood Restaurants, Inc. for the
benefit of First Union National Bank of Florida.**
10.40 Agreement for the purchase and sale of leases, leasehold improvements, restaurant assets,
assigned contracts and restaurant licenses by Shells Seafood Restaurants, Inc. for the
benefit of Islands Florida LP**
10.41 Equipment lease agreement between Captec and Shells Seafood Restaurants, Inc. **
10.42 Loan agreement, dated January 15, 1998, between Shells Seafood Restaurants, Inc. and
Manufacturers Bank of Florida, in the initial principal amount of $850,000.**
10.43 Loan agreement, dated February 3, 1998, between Shells Seafood Restaurants, Inc. and
Manufacturers Bank of Florida, in the initial principal amount of $1,000,000.**
10.44 Purchase and Sale agreement, dated October 22, 1997, between Shells Seafood
Restaurants, Inc. and Vicorp Restaurants, Inc.***
10.45 First amendment to the Purchase and Sale agreement, dated October 22, 1997, between
Shells Seafood Restaurants, Inc. and Vicorp Restaurants, Inc.
10.46 Second amendment to the Purchase and Sale agreement, dated October 22, 1997, between
Shells Seafood Restaurants, Inc. and Vicorp Restaurants, Inc.
10.47 Asset Purchase and Sale agreement between Shells Seafood Restaurants, Inc. and Chi-
Chi's, Inc. dated March 12, 1998
10.48 First amendment to the Asset Purchase and Sale agreement between Shells Seafood
Restaurants, Inc. and Chi-Chi's, Inc.
10.49 Second amendment to the Asset Purchase and Sale agreement between Shells Seafood
Restaurants, Inc. and Chi-Chi's, Inc.***
10.50 Third amendment to the Asset Purchase and Sale agreement between Shells Seafood
Restaurants, Inc. and Chi-Chi's, Inc.***
10.51 Promissory Note, dated July 1, 1998, between Shells Seafood Restaurants, Inc. and
Manufacturers Bank of Florida, in the initial principal amount of $915,000.***
11 Computation of Per Share Earnings.
21 Subsidiaries of the Registrant.*
27 Financial Data Schedule.
</TABLE>
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* Previously filed with the Securities and Exchange Commission as Exhibits to,
and incorporated herein by reference from the Company's Registration
Statement on Form S-1 (File No. 333-1600).
** Previously filed with the Securities and Exchange Commission as Exhibits to,
and incorporated herein by reference from the Company's Form 10-K.
*** Filed herewith Amendment No. 1.
(b) Reports on Form 8-K
None.
(c) Exhibits
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SHELLS SEAFOOD RESTAURANTS, INC.
BY: /s/ WILLIAM E. HATTAWAY
--------------------------------------------
William E. Hattaway
President
Dated: March 19, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report had been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE DATE
------------------ ----- ----
<S> <C> <C>
/s/ WILLIAM E. HATTAWAY President and Director March 19, 1999
- ---------------------------------
William E. Hattaway
/s/ WARREN R. NELSON Vice President of Finance, March 19, 1999
- --------------------------------- Chief Financial Officer,
Warren R. Nelson Treasurer and Secretary
/s/ FREDERICK R. ADLER Chairman of the Board March 19, 1999
- ---------------------------------
Frederick R. Adler
/s/ PHILIP R. CHAPMAN Director March 19, 1999
- ---------------------------------
Philip R. Chapman
/s/ CHRISTOPHER D. ILLICK Director March 19, 1999
- ---------------------------------
Christopher D. Illick
/s/ RICHARD A. MANDELL Director March 19, 1999
- ---------------------------------
Richard A. Mandell
/s/ KAMAL MUSTAFA Director March 19, 1999
- ---------------------------------
Kamal Mustafa
/s/ JAY S. NICKSE Director March 19, 1999
- ---------------------------------
Jay S. Nickse
/s/ EDWIN F. RUSSO Director March 19, 1999
- ---------------------------------
Edwin F. Russo
</TABLE>
60
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.44 Purchase and Sale agreement, dated October 22, 1997, between Shells Seafood
Restaurants, Inc. and Vicorp Restaurants, Inc.
10.48 First amendment to the Asset Purchase and Sale agreement between Shells Seafood
Restaurants, Inc. and Chi-Chi's, Inc.
10.49 Second amendment to the Asset Purchase and Sale agreement between Shells Seafood
Restaurants, Inc. and Chi-Chi's, Inc.
10.50 Third amendment to the Asset Purchase and Sale agreement between Shells Seafood
Restaurants, Inc. and Chi-Chi's, Inc.
10.51 Promissory Note, dated July 1, 1998, between Shells Seafood Restaurants, Inc. and
Manufacturers Bank of Florida, in the initial principal amount of $915,000.
</TABLE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "CONTRACT") is made by and between VICORP
RESTAURANTS, INC., a Colorado corporation ("SELLER") and SHELLS SEAFOOD
RESTAURANTS, INC., a Delaware corporation ("BUYER"). In consideration of the
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
hereby agree as follows:
ARTICLE I
PROPERTY
1.1 PROPERTY TO BE CONVEYED. Subject to terms and provisions of this
Contract, Seller agrees to sell and convey to Buyer, and Buyer agrees to
purchase from Seller, all the following described property (collectively, the
"PROPERTY"), subject to the Permitted Exceptions (as defined in Section 3.4 of
this Contract):
(a) That certain tract of land (the "LAND") located at 3802 East 82nd
Street, Indianapolis, Indiana, described on EXHIBIT "A" attached hereto, the
Land to be conveyed pursuant to a general warranty deed (the "DEED");
(b) Any and all buildings and improvements (collectively, the
"IMPROVEMENTS") upon the Land (such Land, Building and Improvements together
being known as the "PREMISES");
(c) All of Seller's interest in titles, interests, privileges, licenses
and easements and other rights appurtenant to the Land;
(d) All furniture, fixtures, equipment, or other personal property set
forth on EXHIBIT "B" attached hereto (collectively, the "FF&E").
ARTICLE 2
PRICE
2.1 PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for the
property shall be One Million Two Hundred Thousand Dollars ($1,200,000.00)
2.2 DEPOSIT.
(a) Within three (3) business days after the Effective Date, Buyer
shall deliver to Lawyers Title Insurance Corporation, 140 East Washington
Street, Indianapolis, Indiana 46204-3689 ("ESCROW AGENT"), an earnest money
deposit (collectively, together with all interest accrued thereon, the
"DEPOSIT") in the amount of Ten Thousand Dollars ($10,000.00). If the
transaction contemplated hereunder is consummated, the Deposit shall be credited
to the Purchase Price payable by Buyer.
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(b) The Deposit shall be deposited with a national banking institution
in an interest-bearing escrow account with interest payable at the regular rate
payable by the bank on such deposits. The interest shall become a part of the
Deposit and shall be paid to the party entitled to the Deposit. The party
entitled to the Deposit shall pay any income tax due on the interest. The
parties hereto shall furnish Escrow Agent with their respective tax
identification numbers.
2.3 BALANCE AT CLOSING. Subject to pro-rations and/or credits provided for
in this Contract, Buyer shall pay to Seller the Purchase Price, less the Deposit
credited thereto by wire transfer at Closing (as hereinafter defined).
ARTICLE 3
TITLE, SURVEY AND SITE AUDIT
3.1 TITLE INSURANCE. Not later than thirty (30) days after the Effective
Date, Seller, at its sole expense, shall cause Lawyers Title Insurance
Corporation ("TITLE COMPANY") to provide to Buyer a current standard form title
insurance commitment (the "TITLE COMMITMENT"), and showing, as the policy
amount, the Purchase Price. Seller shall cause the Title Company to furnish to
Buyer true and legible copies of all documents and instruments referred to as
exceptions to title in the Title Commitment at such time as the Title Commitment
is delivered.
3.2 SURVEY. Not later than thirty (30) days after the Effective Date,
Seller, at Seller's cost, shall provide to Buyer a current, correct, certified
ALTA survey (the "SURVEY") of the Land prepared by a registered surveyor
("SURVEYOR"), which shall: (a) be certified to Seller, Buyer and Title Company;
(b) include a description of the Land; (c) certify as to the acreage of the
Land; (d) depict the boundaries of the Land and the locations and dimensions of
all Improvements; and (e) show (labeled with recording information), to the
extent they can be located, all recorded easements or other restrictions or
encumbrances affecting the Land or listed in the Title Commitment. The Survey
must be satisfactory to the Title Company so as to permit it to delete any
standard survey exception contained in the Title Commitment and Title Policy.
3.3 REVIEW OF TITLE AND SURVEY MATTERS. Buyer shall have sixty (60) days
after the Effective Date to review the Title Commitment, the Survey, and all
attendant documents and materials and shall notify Seller of any objections
Buyer has to any matters shown or referred to therein. If Buyer fails to notify
Seller in writing of its objection to the Title Commitment or the Survey, within
said sixty (60) day period, Buyer shall be deemed to have waived its right to
object thereto and same shall be deemed a "PERMITTED EXCEPTION"; provided,
however, in no event shall any lien, lease, encumbrance, exception, easement,
restriction, defect or other matter which does not appear on the Title
Commitment or the Survey or arises after the effective date thereof, be deemed a
Permitted Exception unless consented to by Buyer. Seller shall have the right to
cure any matter shown by the Title Commitment and the Survey to which Buyer
timely objects within thirty (30) days after Buyer provides written notice of
such
2
<PAGE>
objections or such longer period as may be granted by Buyer in its sole
discretion. If Seller is unable or unwilling to cure any such objections to the
Title Commitment or the Survey within the allotted thirty (30) day time period,
Buyer may, at its option, (i) waive the objection(s), in which case all such
objections shall be deemed Permitted Exceptions, and proceed to close the
transaction contemplated hereunder or (ii) terminate this Contract by written
notice to Seller within three (3) days after the expiration of the allotted
thirty (30) day time period as set forth above and thereupon, have returned to
it by Escrow Agent the Deposit, and thereafter, neither party shall have any
further rights or obligations hereunder.
ARTICLE 4
CONTINGENCIES
4.1 INSPECTION PERIOD. For and in consideration of Ten Dollars ($10.00)
(the "INDEPENDENT CONSIDERATION") which is part of the Deposit and other good
and valuable consideration, the sufficiency of which is hereby acknowledged:
(a) Buyer shall have the right to investigate all aspects of the
Property, to assist Buyer in Buyer's investigation of the Property, Seller
shall, within five (5) business days after the Effective Date, furnish to Buyer
(by mail or overnight courier), copies of the following items with respect to
the Property in Seller's possession: (a) Seller's prior title insurance policy;
(b) Seller's prior survey(s); (c) ad valorem real property tax bills for two (2)
years; (d) any existing plans and specifications for the Improvements; (e) all
development plans, "DRI's," zoning or the land use information or documentation;
(f) site plans; and (g) engineering reports, hazardous waste assessments,
environmental reports, soil tests, substrata studies, geotechnical reports, or
any other similar reports. All of the foregoing items to be furnished by Seller
shall collectively be referred to as the "PROPERTY DOCUMENTS".
(b) Except as provided in Article 3, Buyer shall have seventy-five (75)
days (the "INSPECTION PERIOD") from the Effective Date to investigate the
Property.
(c) During the Inspection Period, Buyer and Buyer's agents (including,
without limitation, contractors, inspectors, and engineers) shall have the right
to enter the Property to perform inspections and tests, provided reasonable
notice is given to Seller and reasonable precautions are taken to protect the
Property. Seller agrees to cooperate in connection with the foregoing and agrees
that Buyer and Buyer's agents shall be provided promptly, upon request, such
access as shall be reasonably necessary to examine the Property.
(d) If for any reason whatsoever, during the Inspection Period, Buyer
elects not to proceed with the transaction contemplated herein, Buyer may
declare this Contract terminated by notifying Seller and Escrow Agent of such
election and Escrow Agent shall return the Deposit to Buyer, and both Seller and
Buyer will be relieved of any further obligation hereunder. Failure to so notify
Seller and Escrow Agent within said time period shall be deemed a waiver by
Buyer of any right to terminate this Contract under this Section.
3
<PAGE>
(e) Buyer shall restore any damage caused by its investigation and
Buyer shall indemnify and hold Seller harmless from all claims, and from any
loss, costs, or expenses incurred by Seller and which relate to or are caused by
Buyer or its agents in conjunction with its inspection of the Premises or any
harm caused to third parties.
4.2 PERMITS AND APPROVALS. Within thirty (30) days after the Effective
Date, Buyer shall apply for and proceed with due diligence to obtain the
permit(s) (including, without limitation, building and utility permits,
operating permits and alcoholic beverage licenses) and approval(s)
(collectively, the "PERMITS AND APPROVALS") required to remodel the Improvements
and to operate a full-service restaurant at the Premises, and Seller shall
cooperate with Buyer in doing so. Buyer shall provide notice ("PERMIT NOTICE")
to Seller of its receipt of such Permits and Approvals within ten (10) business
days of Buyer's receipt of all such Permits and Approvals. In the event Buyer
fails to obtain such required Permits and Approvals or to waive such contingency
on or prior to the expiration of the Inspection Period, Seller shall have
returned to Buyer by Escrow Agent the Deposit, and thereafter, neither party
shall have any other rights or obligations hereunder, except as set forth under
Section 4.1(e) which shall survive the termination of this Contract; provided,
however, that Buyer shall have diligently pursued such Permits and Approvals
during the Inspection Period.
4.3 FINANCING. Within twenty (20)days after the Effective Date, Buyer shall
apply for and proceed with due diligence to obtain financing for Buyer's
purchase contemplated herein in the amount of seventy-five percent (75%) of the
aggregate of the Purchase Price and Buyer's estimated cost of Buyer's planned
improvements on the Land and upon terms and conditions, including, without
limitation, market rates, acceptable to Buyer in Buyer's sole discretion. Buyer
shall provide notice to Seller of its receipt of a commitment for such financing
within ten (10) business days of Buyer's receipt thereof. If Buyer fails to
obtain such financing during the Inspection Period, Buyer may declare this
Contract terminated by notifying Seller and Escrow Agent of such election, and
Escrow Agent shall return the Deposit to Buyer immediately thereafter, and both
Buyer and Seller will be relieved of any further obligation hereunder. Failure
to so notify Seller within the Inspection Period shall be deemed waiver by Buyer
of any right to terminate this Contract under this Section.
4.4 BOARD APPROVAL. As soon as practicable after the Effective Date, Buyer
shall pursue approval by its Board of this Contract and the purchase
contemplated herein. If Buyer fails to obtain such approval prior to the
expiration of the Inspection Period, Buyer may declare this Contract terminated
by notifying Seller and Escrow Agent of such election, and Escrow Agent shall
return the Deposit to Buyer immediately thereafter, and both Buyer and Seller
will be relieved of any further obligation hereunder. Failure to so notify
Seller and Escrow Agent within said time period shall be deemed a waiver by
Buyer of any right to terminate this contract under this section.
4
<PAGE>
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents-
and warrants that as of the Effective Date and the Closing Date:
(a) Seller has granted no persons or entities the right to occupy or
use the Premises other than Seller;
(b) Seller owns the Premises in fee simple, and Seller has the full
authority to execute, deliver, and perform this Contract and to convey title to
the Property to Buyer on the Closing Date.
(c) Seller has received no written notice of any: (i) violations of
law, municipal ordinances, or current zoning existing at the Premises; and
(ii) changes of or to building, fire, water, use, health, environmental or other
statutes, ordinances, regulations, orders, or requirements, whether federal,
state, county, municipal, or otherwise, which are pending or have been proposed
which directly or indirectly affect the Premises.
(d) Seller has received no written notice of any eminent domain or
condemnation proceeding currently pending against the Premises or any part
thereof or any threat of any such proceeding.
5.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants as of the Effective Date and the Closing Date:
Buyer is a corporation duly authorized, existing and in good standing
under the laws of Delaware. Except as stated in this Purchase and Sale
Agreement, the execution and delivery of this Agreement and the consummation of
this transaction by Buyer have been duly authorized, and no further corporate
authorization is necessary on the part of Buyer.
ARTICLE 6
CLOSING
6.1 TIME AND PLACE OF CLOSING. The closing (the "CLOSING") contemplated by
this Contract shall take place at the Title Company's offices in Indianapolis,
Indiana. The Closing shall occur on a date (the "CLOSING DATE") within fifteen
(15) days after the expiration of the Inspection Period.
6.2 SELLER'S OBLIGATIONS AT CLOSING. At Closing, Seller shall do or deliver
the following:
(a) execute and deliver to the agent for the Title Company, for
recording, and delivery to Buyer, the Deed conveying to Buyer the Land subject
only to the Permitted Exceptions;
5
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(b) execute and deliver to Buyer a bill of sale in form and substance
reasonably acceptable to Buyer transferring all of the FF&E to Buyer;
(c) such evidence of authority and capacity of Seller and its
representatives to consummate the transaction contemplated hereunder and other
documentation and affidavits as the Title Company may reasonably require
including, without limitation, a Certificate of Non Foreign Status as required
by Section 1445 of the Internal Revenue Code of 1986, as amended (the "CODE"),
if necessary, a 1099-S report as required by Section 6045 of the Code, and an
Owner's Closing Affidavit;
(d) an endorsement to or "mark-up" of the Title Commitment updating the
effective date to the Closing Date, deleting the "gap" (risk for matters
appearing of record between the effective date and the recording of the deed);
(e) possession of the Property;
(f) execute such other reasonable documents as may be required to be
executed and/or provided to complete the transaction contemplated hereunder.
6.3 BUYER'S OBLIGATIONS AT CLOSING. At Closing, Buyer shall do the
following:
(a) deliver to the agent for the Title Company, for the disbursement to
Seller, the portion of the Purchase Price payable at Closing by wire transfer;
and
(b) execute and/or provide such other reasonable documents as may be
required to be executed and/or provided to complete the transaction contemplated
hereunder.
6.4 CLOSING COSTS.
(a) At Closing, Seller shall pay, or provide proof of payment, of the
following costs and expenses:
(i) the transfer of taxes or documentary stamps required on the
Deed;
(ii) the premium payable for the standard form Title Policy; and
(iii) the cost of the Survey.
(b) Buyer shall pay, or provide proof of payment, of the recording fees
in connection with the Deed, any endorsements to the standard form Title Policy,
and any costs associated with the elimination of the "gap" referred to in
paragraph 6.2(d).
6.5 PRORATIONS. City, state, and county ad valorem taxes for the calendar
year of Closing shall be prorated between Buyer and Seller at Closing based on
the ad valorem tax bill
6
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for the Property (without discount), for such year; if these taxes are not known
at the time of Closing, the proration shall be based upon the prior year's
taxes and shall be prorated between Seller and Buyer as of midnight of the day
immediately preceding the Closing Date; prorations favoring Buyer shall reduce
the cash payable by Buyer at the Closing, and prorations favoring Seller shall
increase the cash payable by Buyer at the Closing.
6.6 SPECIAL ASSESSMENT LIENS. Certified, confirmed, and ratified special
assessment liens as of the Closing Date are to be paid by Seller. Pending liens
as of the Closing Date shall be assumed by Buyer. If the improvement has been
substantially completed as of the Execution Date, such pending lien shall be
considered as certified, confirmed, or ratified; and Seller shall, at Closing,
be charged an amount equal to the last estimate of assessment for the
improvement by the public body.
6.7 FURTHER ASSURANCE. In addition to the obligations required to be
performed hereunder by Seller and Buyer at Closing, Seller and Buyer each agree
that they will, both prior to and after Closing, perform such other acts and
will execute such other reasonable documents as the other may reasonably request
in order to effectuate the consummation of the transaction contemplated herein
in accordance with normal practices and to vest title to the Premises in Buyer.
ARTICLE 7
RISK OF LOSS
7.1 RISK OF LOSS BY CASUALTY. The risk of loss or damage to the Premises by
fire or other casualty prior to the Closing shall be on Seller. If such loss or
damage does occur prior to Closing, Seller shall promptly notify Buyer.
Thereafter, Buyer may, within fifteen (15) days after receipt of such notice, at
Buyer's option, notify Seller of termination of the Contract in which case
Escrow Agent shall return the Deposit to Buyer and this Contract shall
thereafter be null and void. If Buyer does not so terminate this Contract, Buyer
shall be entitled to receive all insurance proceeds resulting therefrom (not
exceeding, however, the total purchase price) which are payable (less any
amounts Seller may have paid in repairing or restoring the Property), and Seller
shall at Closing pay to Buyer any "deductible" amounts under the policy.
7.2 RISK OF LOSS BY CONDEMNATION. The risk of condemnation of the Property
prior to the Closing shall be on Seller. If such condemnation does occur prior
to Closing, Seller shall promptly notify Buyer; Buyer may, within fifteen (15)
days after receipt of such notice, at Buyer's option, notify Seller of
termination of this Contract, in which case the Escrow Agent shall return the
Deposit to Buyer; and this Contract shall thereafter be null and void. If Buyer
does not so terminate this Contract, Buyer shall be entitled to receive all
condemnation proceeds (not exceeding, however, the Purchase Price) resulting
therefrom.
7
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ARTICLE 5
DEFAULTS
8.1 DEFAULT BY SELLER. If Seller fails to perform any of Seller's
obligations hereunder, Buyer shall have the right to either: (a) declare this
Contract terminated and receive the return of the Deposit; or (b) sue for
damages, specific performance, or both.
8.2 DEFAULT BY BUYER. If Buyer fails to perform Buyer's obligations
hereunder, Seller may elect to either (a) treat this contract as terminated and
receive the Deposit as Seller's sole exclusive remedy; or (b) Seller may elect
to treat this contract as being in fUll force and effect and Seller shall have
the right to specific performance.
ARTICLE 9
ESCROW AGENT'S RESPONSIBILITIES
9.1 HOW DEPOSIT HELD. Escrow Agent, by its joinder in this Contract, agrees
to hold the Deposit, when received and to disburse the same only in accordance
with the terms and conditions of this Contract. When Closing occurs, Escrow
Agent shall deliver the Deposit to the title agent handling the disbursement of
the closing funds. In the event either party requests Escrow Agent to disburse
the Deposit to that party, Escrow Agent shall be entitled to refuse to do so
unless the other party agrees to the disbursement in writing. In the absence of
written agreement of both Buyer and Seller as to the disbursement of the
Deposit, Escrow Agent may continue to hold such funds until the parties agree to
disbursement thereof or until a judgment of a court of competent jurisdiction
determines the rights of the parties to the Deposit. If Escrow Agent is in doubt
as to its duties or liabilities under the provisions of the Contract, Escrow
Agent may interplead the funds into the Court of general jurisdiction of the
County where the Property is located, whereupon after notifying all parties
concerned with such action, all liability on part of Escrow Agent shall
terminate. Escrow Agent shall not be liable to either party for breach of its
duties hereunder except in the case of gross negligence or willful malfeasance
by Escrow Agent.
9.2 INDEMNITY OF ESCROW AGENT. Buyer and Seller hereby each agree, jointly
and severally, to indemnify and hold Escrow Agent harmless against any and all
losses, claims, damages, liabilities, and expenses, including without
limitation, costs of reasonable legal fees incurred by Escrow Agent in
connection with any litigation arising from this Contract, except for matters
arising out of the gross negligence or willful malfeasance of Escrow Agent.
ARTICLE 10
MISCELLANEOUS
10.1 ASSIGNMENT. Buyer may not assign Buyer's rights under this Contract
without Seller's consent. Seller may not assign or otherwise transfer its rights
under this Contract nor its title to the Property without Buyer's consent.
8
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10.2 NOTICES. Any notice which either party may or is required to give
hereunder shall be given in writing to the other party, each at the address set
forth below, or as such other address as may be designated in writing by the
parties from time to time by (i) certified or registered mail, return receipt
requested, postage prepaid; (ii) overnight delivery, delivery fees prepaid; or
(iii) facsimile with a hard copy to follow via first-class mail, postage
prepaid. Rejection or their refusal to accept, or the inability to deliver
because of a changed address of which no notice was give shall be deemed to be
receipt of the notice as of the date of such rejection, refusal, or inability to
deliver:
To Buyer: 16313 North Dale Mabry Highway
Suite 100
Tampa, Florida 33618
Attn: Mr. Dan Parz
Telephone: 813/961-0944
Telecopy: 813/961-6865
With a copy to: Fowler, White, Gillen, Boggs, Villareal &
Banker, P.A.
501 East Kennedy Boulevard, Suite 1700
Tampa, Florida 33602
Attn: Jeffrey C. Shannon, Esq.
Telephone: 813/228-7411
Telecopy: 813/229-8313
To Seller: VICORP Restaurants, Inc.
Attn: Kenneth H. Card
400 W. 48th Avenue
Denver, Colorado 80216
Telephone: 303/296-2121
Telecopy: 303/642-2668
Stanley Ereckson, Jr.: VICORP Restaurants, Inc.
Attn: Stanley Ereckson, Jr.
400 W. 48th Avenue
Denver, Colorado 80216
Telephone: 303/296-2278
Telecopy: 303/672-2668
To Escrow Agent: Lawyers Title Insurance Corporation
140 East Washington Street
Indianapolis, Indiana 46204-3689
Telephone: 317/633-2933
Telecopy: 317/633-6276
10.3 ENTIRE AGREEMENT. This Contract constitutes the entire understanding
among the parties with respect to the transaction contemplated herein, and all
prior or
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contemporaneous agreements and representations, oral or written, are merged into
this Contract. No provision of this Contract may be waived or modified except by
writing signed by the party against which the enforcement of such waiver or
modification is sought, and then only to the extent set forth in the writing.
10.4 APPLICABLE LAW. This Contract shall be governed by the laws of the
State of Indiana. Both parties hereto agree to submit to the jurisdiction of the
courts of the State of Indiana.
10.5 ATTORNEYS' FEES AND COSTS. In the event of any litigation arising out
of this Contract, the prevailing party shall be entitled to recover its costs
and reasonable attorneys' fees.
10.6 BROKERS. Seller and Buyer warrant each to the other that they have not
dealt with any real estate broker or salesperson with regard to the transaction
other than Joann M. Serdar of B.A. Carter Company and Bryan Chandler of Olympia
Partners, Ltd. (collectively, "BROKERS"). Seller shall be responsible for paying
Brokers pursuant to a separate agreement between them. Buyer agrees to indemnify
and hold Seller harmless from any commission claimed by any other broker or
third party arising by virtue of this transaction as the result of Buyer's acts.
Seller agrees to indemnify and hold Buyer harmless from any commission claimed
by any other broker or third party arising by virtue of this transaction as the
result of Seller's acts.
10.7 HEADINGS. Article, section and paragraph headings are for convenience
only and shall not control or affect the meaning of the paragraph.
10.8 BINDING EFFECT. This Contract shall be binding upon and shall inure to
the benefit of the parties hereto and their heirs, personal representatives,
successors, and assigns (subject, however, to the restrictions set forth above
on assignment).
10.9 INTERPRETATION. Whenever the context hereof shall so require, the
singular shall include the plural, the male gender shall include the female
gender and neuter, and vice versa.
10.10 SEVERABILITY. If any provision of this Contract is invalid or
unenforceable, such invalidity or unenforceability shall not affect any of the
provisions hereof.
10.11 TIME OF ESSENCE. Time is of the essence. Should any period of time
specified herein end on a Saturday, Sunday, or legal holiday, the period of time
shall automatically be extended to 5:00 p.m. of the next full business day.
10.12 EFFECTIVE DATE. The effective date (the "EFFECTIVE DATE") of this
Contract shall be the date on which the last of Seller and Buyer shall sign the
same.
10.13 FINAL DATE FOR EXECUTION. This Contract shall be null and void if not
executed by Seller on or before ten (10) business days after the date executed
by Buyer.
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IN W1TNESS WHEREOF, the parties hereto have executed this Contract.
Signed, sealed, and delivered in
the presence of:
VICORP RESTAURANTS, INC.
a Colorado corporation
/s/ STANLEY ERECKSON
- --------------------
By: /s/ CHARLES R. FREDERICKSON
----------------------------------
/s/ KENNETH CARD Name: Charles R. Frederickson
- ------------------- ---------------------------------
Title: Chairman
--------------------------------
(CORPORATE SEAL)
Executed on: OCTOBER 22, 1997
---------------
"SELLER"
SHELLS SEAFOOD RESTAURANTS, INC.
a Delaware corporation
/s/ TRACY DELATORE
- -------------------
By: /s/ W.E. HATTAWAY
----------------------------------
/s/ PATTY MEW Name: W.E. Hattaway
- ------------------- --------------------------------
Title: President
-------------------------------
(CORPORATE SEAL)
Executed on: OCTOBER 17, 1997
----------
"BUYER"
11
EXHIBIT 10.48
FIRST AMENDMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AND SALE OF AGREEMENT AND ESCROW
INSTRUCTIONS ("Amendment") is made as of this 9th day of June, 1998, by and
between CHI-CHI's, INC., a Delaware corporation , formerly known as Chi-Chi's
USA, Inc. ("Seller") and SHELLS SEAFOOD RESTAURANTS, INC., a Delaware
corporation ("Buyer").
RECITALS
A. Buyer and Seller are parties to that certain Asset Purchase and Sale of
Agreement and Escrow Instructions dated March 12, 1998, ("Original Agreement"),
involving the purchase and/or lease of certain real property and personal
property located in the State of Illinois and most particularly described in the
Original Agreement in connection with Seller's transfer of the operation of
certain restaurants to Buyer.
B. The Original Agreement, as amended by this Amendment, shall hereinafter
be referred to as the "Agreement."
C. All capitalized terms not otherwise defined in this Amendment shall have
the same meaning as in the Original Agreement.
D. Buyer and Seller hereby mutually desire to amend the terms of the
Original Agreement as more particularly provided herein.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings set forth herein, Buyer and Seller hereby agree as follows:
1. TERMINATION OF AGREEMENT WITH RESPECT TO THE DEEARFIELD PROPERTY.
Pursuant to Buyer's Notice dated May 28, 1998, Buyer has disapproved the
Deerfield property and has terminated the Original Agreement with respect to the
Deerfield Property. Buyer and Seller acknowledge that pursuant to Section 3.1 of
the Original Agreement, the Purchase Price shall be reduced by One Million
Dollars ($1,000,000.00), the amount allocated to the Deerfield Property in
Schedule 3.4A to the Original Agreement to the sum of Two Million One Hundred
Thousands Dollars ($2,100,000.00). In accordance with Article 6 of the Original
Agreement, the Agreement shall continue in full force and effect for all other
Fee Properties and Premises.
2. CLOSING SCHEDULE.. Section 2.2 of the Original Agreement shall be
amended such that the number of Restaurants being transferred at a time and the
specified order is as follows:
First Closing: Bloomington Property, Oakbrook Terrace Premises, and
Carpentersville Premises
Second Closing: Streamwood Premises
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Third Closing: Woodridge Premises and Springfield Property.
3. CREDIT TO PURCHASE PRICE FOR BLOOMINGTON PROPERTY AND SPRINGFIELD
PROPERTY. Buyer has objected to the physical condition of the Bloomington
Property and Springfield Property pursuant to Buyer's Notice dated May 28, 1998.
In consideration of Buyer's acceptance of the Bloomington property and
Springfield Property in their current conditions, an amount equal to Twelve
Thousand Five Hundred Dollars ($12,500.00) shall be credited by Seller to the
Purchase Price allocated to each of the Bloomington Property and the Springfield
Property in Schedule 3.4B and Scheule 3.4C, respectively for an aggregate credit
of Twenty-Five Thousand Dollars ($25,000.00). Such credit shall be given at the
time and in the event the Closing for such Fee Property occurs in accordance
with the terms of the Agreement. Buyer and Seller acknowledge that the "AS-IS"
provisions contained in Section 8.3 of the Original Agreement continue in full
force and effect and that Buyer shall accept such Properties despite the
objections raised in Buyer's Notice dated May 28, 1998.
4. WOODRIDGE PREMISES CONTINGENCY. The Woodridge Premises contingency and
related Woodridge Lease Approval Date contained in Section 7.3 of the Original
Agreement shall be extended to August 10, 1998.
5. FULL FORCE AND EFFECT. Except as specifically set forth in this
Amendment, the Original Agreement remains unmodified and in full force and
effect.
6. COUNTERPARTS. This Amendment may be executed in counterparts which, when
taken together, shall constitute one executed document as though all signatures
appeared on one copy.
IN WITNESS WHEREOF, THIS FIRST AMENDMENT TO ASSET PURCHASE AND SALE OF
AGREEMENT AND ESCROW INSTRUCTIONS was executed as of the date first above
written.
CHI-CHI's INC. SHELLS SEAFOOD RESTAURANTS,
A Delaware corporation INC., a Delaware corporation
By: /s/ MICHAEL MALANGA By: /s/ WE HATTAWAY
------------------------------ -------------------------
Its: Vice President Its: President
-------------------------- -----------------------
-2-
EXHIBIT 10.49
SECOND AMENDMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AND SALE AGREEMENT AND ESCROW
INSTRUCTIONS ("Amendment") is made as of this 24th day of July, 1998, by and
between CHI-CHI's INC., a Delaware corporation, formerly known as Chi-Chi's USA,
Inc. ("Seller") and SHELLS SEAFOOD RESTAURANTS, INC., a Delaware corporation
("Buyer").
RECITALS
A. Buyer and Seller are parties to that certain Asset Purchase and Sale
Agreement and Escrow Instructions dated march 12, 1998, as amended by that
certain First Amendment dated June 9, 1998 (together, "Original Agreement"),
involving the purchase and/or sublease of certain real property and personal
property located in the State of Illinois and more particularly described in the
Original Agreement in connection with Seller's transfer of the operation of
certain restaurants to Buyer.
B. All capitalized terms not otherwise defined in this Amendment shall have
the same meaning as in the Original Agreement.
C. Buyer and Seller hereby mutually desire to amend the terms of the
Original Agreement as more particularly provided herein.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings set forth herein, Buyer and Seller hereby agree as follows:
1. STREAMWOOD PREMISES. The Original Agreement provides for Seller to
sublease the Streamwood Premises to Buyer. The Original Agreement is hereby
amended such that Seller shall assign and Buyer shall assume, rather than
sublease, Seller's leasehold interest in the Streamwood Premises and the
Streamwood Lease. Buyer and Seller agree to enter into a separate Assignment and
Assumption of Lease ("Assignment") in a form agreeable to all parties and to
deposit four (4) fully executed originals of the Assignment in recordable form
with Escrow Holder on or before the business day preceding the date of Closing
for the Streamwood Premises. The condition contained in Sections 7.1(g) and
7.2(c) for the delivery of an executed original landlord Consent to the Sublease
of the Streamwood Premises is hereby deleted. Seller shall use its reasonable
commercial efforts to obtain a Landlord Consent to the assignment in a form
reasonably acceptable to all parties ("Consent to Assignment") and upon
receiving such Consent to Assignment, it shall deposit four (4) fully executed
originals of the Consent to Assignment with Escrow Holder on or before the
business day preceding the date of Closing for the Streamwood premises. The
delivery into Escrow of the Consent to Assignment shall be a condition to
Buyer's and Seller's obligations to Close the transaction with respect to the
Streamwood Premises under the
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<PAGE>
Original Agreement, as amended by this Amendment. All other terms contained
in the Original Agreement applicable to the sublease of the Streamwood Premises
shall apply with full force and effect to the assignment of the Streamwood
Premises, unless any term by its nature is inapplicable to a leasehold
assignment.
2. WOODRIDGE PREMISES. The Original Agreement provides for Seller to
sublease the Woodridge Premises to Buyer. The Original Agreement is hereby
amended such that Buyer may negotiate and enter into a separate lease directly
between Buyer and the Woodridge Landlord ("New Woodridge Lease") on terms
satisfactory to Buyer in its sole discretion. Seller agrees to simultaneously
negotiate with the Woodridge Landlord to terminate the Woodridge Lease and
release Seller of all liability under the Woodridge Lease as of the date the
Woodridge Lease is terminated on terms satisfactory to a Seller in its sole
discretion (the "Termination Agreement"). Seller's agreement to terminate the
Woodridge Lease is expressly conditioned on (a) Buyer and the Woodridge Landlord
entering into the New Woodridge Lease on or before September 30, 1998, (b)
Seller and the Woodridge Landlord entering into the Termination Agreement on or
before September 30, 1998, for the termination of the Woodridge Lease and; and
(c) Buyer's delivery to Escrow Holder of three (3) executed original counterpart
Assignment of Contracts for the Woodridge Premises. Buyer's agreement to enter
into the New Woodridge Lease is expressly conditioned on Seller's delivery to
Escrow Holder on one (1) executed original Bill of Sale conveying the Personal
Property with respect to the Woodridge Premises and three (3) executed original
counterpart Assignment of Contracts for the Woodridge Premises. Buyer agrees to
notify Seller in writing immediately upon execution of the New Woodridge Lease
("Buyer Woodridge Notice") and Seller agrees to notify Buyer in writing
immediately upon execution of the Termination Agreement ("Seller Woodridge
Notice"). The date of Closing for the Woodridge Premises shall be five (5) days
following the later of (a) Seller's receipt of the Buyer Woodridge Notice; and
(b) Buyer's receipt of the Seller Woodridge Notice. In the event all conditions
in this paragraph are not satisfied in their entirety, the Original Agreement,
as amended by this Amendment, shall terminate as to the Woodridge Premises only,
without any adjustment to the Purchase Price due to the fact no part of the
Purchase price has been allocated to the Woodridge premises.
3. CARPENTERSVILLE PREMISES. Buyer and Seller acknowledge that, except for
the Landlord Consent, all conditions to Buyer's and Seller's obligations with
respect to the Carpentersville Premises have been satisfied. The Closing for the
Carpentersville Premises shall occur within five (5) days following the delivery
of the fully executed Landlord Consent to Escrow Holder, provided that the date
of Closing for the Carpentersville Premises shall occur no later then November
30, 1998.
4. CLOSING SCHEDULE. The Closing Schedule contained in Section 2.2 and
Schedule 2.2 shall be modified such that Seller may remove the Carpentersville
premises from the First Closing and move
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<PAGE>
the Streamwood premises to the First Closing. The delivery to Escrow Holder of
documentation and approvals for all properties which are not the subject of the
First Closing is not a condition to the First Closing. Buyer and Seller shall be
required to deposit with Escrow Holder only the documents as pertain to the
properties subject to each Closing. Notwithstanding anything to the contrary
contained in the Original Agreement, as amended by this Amendment, including,
without limitation, Section 2.2, following the First Closing, Buyer and Seller
agree that there is no obligation to transfer more than one (1) Restaurant at a
time and that each Closing shall occur upon the satisfaction, deemed
satisfaction, or written waiver of the conditions for the particular Fee
Property or Premises which is the subject of that Closing.
5. OUTSIDE CLOSING DATE. The Outside Closing Date as defined in Section
2.2 of the Original Agreement shall be extended to July 31, 1998.
6. DEPOSIT. Buyer and Seller acknowledge that Seller has deposited the sum
of One Hundred and Fifty Thousand Dollars ($150,000.00) with Escrow Holder and
that Fifty Thousand Dollars ($50,000.00) of the Deposit shall be applied to the
Purchase Price payable in connection with the First Closing pursuant to the
terms of Section 3.2 of the Original Agreement. Section 3.2 of the Original
Agreement is hereby amended such that the second Fifty Thousands Dollars
($50,000.00) of the Deposit shall be applied to the Purchase Price payable in
connection with the Closing of the Oakbrook Terrace Premises.
7. DELIVERY OF FUNDS. Section 3.3 of the Original Agreement is hereby
amended such that Seller must deliver all required funds to Escrow Holder at
least one (1) business day prior to the Closing Date for each respective Fee
Property and/or Premises.
8. LICENSE. Buyer and Seller acknowledge that each of the Restaurants shall
cease to operate upon the date of Closing for each individual Fee Property
and/or Premises. Following the Closing of each individual Fee Property and/or
Premises, Buyer hereby grants to Seller, its agents and employees a license to
enter such Fee Property and/or Premises for the sole purpose of removing
Seller's personal property not transferred to Buyer pursuant to the terms of the
Original Agreement, as amended by this Amendment. With respect to each
individual Fee Property and/or Premises, the limited license granted herein
shall continue for forty-eight (48) hours following the date of Closing for that
particular Fee Property and/or Premises. Further, as a condition to any such
entry, Seller shall (i) remove its personal property in a diligent, expeditious
and safe manner; (iii) comply with all applicable laws and governmental
regulations; (iv) keep the Fee Property and/or Premises free and clear of all
materialmen's liens, liens pending and other liens arising out of the Seller or
its agents entry; and (iv) maintain or assure maintenance of workers'
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compensation insurance (or state approved self-insurance) on all persons
entering the Fee Property and/or the Premises in the amounts required by the
State of Illinois. Seller hereby agrees to indemnify, and hold Buyer free and
harmless from and against any and all losses, damages (whether general, punitive
or otherwise), liabilities, claims, causes of action (whether legal, equitable
or administrative), judgments, court costs and legal or other expenses
(including attorneys' fees and costs incurred in the defense thereof) which
Buyer may suffer or incur as a consequence of Seller's exercise of the license
granted pursuant to this paragraph or any act or omission by Seller or other
person or entity acting by or under Seller (except Buyer and its agents) with
respect to the Fee Property and/or Premises, excepting to the extent such claims
arise out of the negligence or misconduct of Buyer. Seller's duty to indemnify
Buyer pursuant to this paragraph shall survive the Close of Escrow.
9. FULL FORCE AND EFFECT. Except as specifically set forth in this
Amendment, the Original Agreement remains unmodified and in full force and
effect.
10. COUNTERPARTS. This Amendment may be executed in counterparts which,
when taken together, shall constitute one executed document as though all
signatures appeared on one copy.
IN WITNESS WHEREOF, THIS SECOND AMENDMENT TO ASSET PURCHASE AND SALE OF
AGREEMENT AND ESCROW INSTRUCTIONS was executed as of the date first above
written.
CHI CHI's INC., SHELLS SEAFGOD RESTAURANTS,
A Delaware corporation INC., a Delaware corporation
By: /s/ MICHAEL MALANGA By: /s/ WILLIAM E. HATTAWAY
---------------------------------- --------------------------
Its: Vice President Its: President
----------------------------- --------------------------
-4-
EXHIBIT 10.50
THIRD AMENDMENT
THIS THIRD AMENDMENT TO ASSET PURCHASE AND SALE AGREEMENT AND ESCROW
INSTRUCTIONS ("Amendment") is made as of this 30th day of September, 1998, by
and between CHI-CHI's, INC., a Delaware corporation, formerly known as Chi-Chi's
USA, Inc. ("Seller") and SHELLS SEAFOOD RESTAURANTS, INC., a Delaware
corporation ("Buyer").
RECITALS
A. Buyer and Seller are parties to that certain Asset Purchase and Sale
Agreement and Escrow Instructions dated March 12, 1998, as amended by that
certain First Amendment dated June 9, 1998, and that certain Second Amendment
("Second Amendment") dated July 24, 1998, (collectively, "Original Agreement"),
involving the purchase and/or sublease of certain real property and personal
property located in the State of Illinois and more particularly described in the
Original Agreement in connection with Seller's transfer of the operation of
certain restaurants to Buyer.
B. All capitalized terms not otherwise defined in this Amendment shall have
the same meaning as in the Original Agreement.
C. Buyer and Seller hereby mutually desire to amend the terms of the
Original Agreement as more partcularly provided herein.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
undertakings set forth herein, Buyer and Seller hereby agree as follows:
1. WOODRIDGE PREMISES. Buyer expressly acknowledges that it has reached
an agreement with the Woodridge Landlord as to the final form of the New
Woodridge Lease, the Memorandum of Lease evidencing the New Woodridge Lease, and
the side letter agreement between the Woodridge Landlord and Buyer concerning
Buyer's commencement of operations at the Woodridge Premises by March 1, 1999
(collectively, the "New Woodridge Lease Documents"), and that such form has been
executed by Buyer and will be concurrently delivered directly to the Woodridge
landlord. Seller expressly acknowledge that it has reached an agreement with the
Woodridge Landlord as to the final form of the Termination Agreement and that
such form has been executed by Seller and will be concurrently delivered
directly to the Woodridge Landlord.
The Original Agreement is hereby amended such that the date for delivery to
Escrow Holder of the fully executed New Woodridge Lease Documents and the fully
executed Woodridge Lease Termination, respectively, shall be extended to on or
before October 9, 1998. Escrow Holder is hereby instructed to Close the
transaction with
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respect to the Woodridge Premises immediately upon its receipt of the
following documents:
(a) Three (3) original counterpart Assignment of Contracts executed by
Buyer for the Woodridge Premises;
(b) Three (3) original counterpart Assignment of Contracts executed by
Seller for the Woodridge Premises;
(c) One (1) original Bill of Sale conveying the Personal Property with
respect to the Woodridge Premises executed by Seller;
(d) A copy of the fully executed Termination Agreement (Buyer and
Seller expressly agree that Escrow Holder's receipt of a copy of
the fully executed signature page of the Termination Agreement by
facsimile transmittal with a hard copy of the entire document to
follow shall be sufficient to allow Escrow Holder to Close); and
(e) A copy of a fully executed original of each of the New Woodridge
Lease Documents (Buyer and Seller expressly agree that Escrow
Holder's receipt of a copy of the fully executed signature page of
each of the New Woodridge Lease Documents by facsimile transmittal
with a hard copy of the entire document to follow shall be
sufficient to allow Escrow Holder to Close).
Paragraph two (2) of the Second Amendment shall remain in full force and
effect, provided that in the event of any conflict between this Amendment and
paragraph two (2) of the Second Amendment, this Amendment shall control.
2. LICENSE. Buyer and Seller agree that the license granted by Buyer to
Seller in the Second Amendment shall apply with full force and effect with
respect to the Woodridge Premises, provided that the term of the license shall
continue through October 13, 1998, regardless of the actual date of the Closing
of the Woodridge Premises.
3. FULL FORCE AND EFFECT. Except as specifically set forth in this
Amendment, the Original Agreement remains unmodified and in full force and
effect.
4. COUNTERPARTS. This Amendment may be executed in counterparts which, when
taken together, shall constitute one executed document as though all signatures
appeared on one copy.
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<PAGE>
IN WITNESS WHEREOF, THIS THIRD AMENDMENT TO ASSET PURCHASE AND SALE OF AGREEMENT
AND ESCROW INSTRUCTIONS was executed as of the date first above written.
CHI-CHI's INC., SHELLS SEAFOOD RESTAURANTS,
a Delaware corporation INC., a Delaware corporation
By: /s/ MICHAEL MALANGA By: /s/ WILLIAM E. HATTAWAY
- ----------------------------------- ---------------------------------
Its: Vice President Its: President
-------------------------- -------------------------
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EXHIBIT 10.51
PROMISSORY NOTE
$915,000.00 Effective as of July 1, 1998
Tampa, Florida
1. PROMISE TO PAY. SHELLS SEAFOOD RESTAURANTS, INC., a Delaware corporation
("Maker"), whose address is 16313 North Dale Mabry Highway, Suite 100, Tampa
Florida 33618, for value received, promises to pay to the order of MANUFACTURERS
BANK OF FLORIDA ("Bank"), at 4144 North Armenia Avenue, Post Office Box 4040,
Tampa, Florida 33677, or at such other place as the holder of this Promissory
Note (the "Note") designates in writing to Maker, the principal amount of Nine
Hundred Fifteen Thousand and No/100ths Dollars ($915,000.00), together with
interest as required under this Note.
2. INTEREST RATE. Maker shall pay interest on the outstanding principal
amount of this Note as a floating rate which is equal to the WALL STREET JOURNAL
Prime Rate (as defined herein) minus one-half percent (.5%) per annum (the
"Interest Rate"). The term "WALL STREET JOURNAL Prime Rate," as used herein,
shall mean the rate of interest per annum as reported from time to time by THE
WALL STREET JOURNAL as its prime rate of interest (or such successor index as
may hereafter be selected by Bank in its reasonable discretion), and shall not
necessarily mean or imply that such prime rate of interest is the lowest or most
favorable rate of interest then available from the Bank to specific borrowers.
Notwithstanding the foregoing, Maker shall have the right, at any time
during the term of this Note, to adjust the Interest Rate to a fixed rate by
giving written notice thereof to Maker at least thirty (30) days prior to any
monthly payment date. In the event Maker shall deliver written notice to Bank of
its intention to adjust the Interest Rate to a fixed rate as describe above,
then the "Interest Rate" under this Note shall be adjusted, upon the applicable
monthly payment date, to a fixed rate which is equal to The Wall Street Journal
Prime Rate in effect at the time of Maker's delivery of written notice of its
election to adjust the rate to a fixed rate as described above, and said fixed
rate shall remain in effect for a period of twelve (12) months from and after
said monthly payment date. At the end of said twelve-month period, unless Maker
shall deliver written notice to Bank of its intent to again fix the Interest
Rate as described above, the "Interest Rate" payable hereunder shall be
readjusted and shall once again be the floating rate of interest described above
(provided that Maker shall continue to have the right to adjust the Interest
Rate to a fixed rate as described above).
3. PAYMENTS.
(a) Commencing on the first day of August, 1998, and continuing on the
first day of each and every month thereafter, through and including July 1,
1999, Maker shall make a
<PAGE>
payment of principal in the amount of $2,800.00, together with
interest in an amount equal to the outstanding interest under this
Note accruing at the Interest Rate.
(b) Commencing on the first day of August, 1999, and continuing on the
first day of each and every month thereafter, through and including July 1,
2000, Maker shall make a payment of principal in the amount of $3,200.00,
together with interest in an amount equal to the outstanding interest under
this Note accruing at the Interest Rate.
(c) Commencing on the first day of August, 2000, and continuing on the
first day of each and every month thereafter, through and including June 1,
2001, Maker shall make a payment of principal in the amount of $3,400.00,
together with interest in an amount equal to the outstanding interest under
this Note accruing at the Interest Rate.
(d) A final payment of all outstanding principal and unpaid accrued
interest shall be due and payable in full on July 1, 2001.
4. APPLICATION AND FORM OF PAYMENTS. Payments will be applied first to
accrued interest and then to principal, and all interest on this Note will be
computed on the basis of the actual number of days elapsed over a 360-day year.
Payments of interest and principal must be made in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts. Payments received after 2:00 p.m. will be
treated as being received on the next banking day.
5. PREPAYMENT, LATE FEE INTEREST ON DEFAULT, AND MAXIMUM INTEREST. Maker
may prepay all or any portion of this Note without premium or penalty. Maker
shall give Bank one day's prior written notice of any prepayment. Partial
prepayments will be applied against required principal installments in the
inverse order of their maturities. Therefore, partial prepayments will not
affect the due date of any required installments under this Note until this Note
is paid in full. Maker agrees to pay a late fee equal to five percent (5%) of
any payment due hereunder that is not paid within five (5) days of the date the
payment is due. Interest on all amounts not paid when due after maturity,
acceleration, or otherwise, will accrue and will be payable at the rate which is
five percent (5%) above the Interest Rate, but in no event higher than the
maximum rate of interest allowed by applicable law.
6. SECURITY. This Note is secured, inter alia, by a Mortgage and
Security Agreement of even date herewith from Maker to Bank and all other loan
documents executed therewith (collectively, the "Security Documents") and by any
and all collateral presently and hereafter held by Bank from Maker and given or
agreed to be given to Bank by Maker, plus any and all collateral presently or
hereafter held by Bank given or agreed to be given by any third party or parties
for the benefit of Maker hereof.
7. DEFAULT AND REMEDIES. The occurrence of any of the following events
constitutes a "Default" (in the following provisions, the term "Guarantor"
refers jointly and severally to any person
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<PAGE>
or entity that previously has guaranteed or either currently or in the future
guarantees the repayment of this Note):
(a) The nonpayment, within five (5) days after delivery of a written
notice to Maker that it is due and payable, of any interest or principal
under this Note, that certain Promissory Note dated as of January 15, 1998,
in the original principal amount of $850,000.00, made by Maker to the order
of Bank (the "Equipment Note"), that certain Promissory Note dated as of
February 12, 1998, in the original principal amount of $1,000,000.00, made
by Maker to the order of Bank (the "Indiana Note") or any other liability,
obligation, or indebtedness owing from Maker to Bank, whether at maturity,
by acceleration, or otherwise (provided however, that Bank shall have no
obligation to provide written notice of the nonpayment of any principal or
interest under this Note more than twice during any calendar year, and
thereafter Bank shall have no further obligation to provide any such notice
during the remainder of the applicable calendar year and nonpayment when
due of any such sums shall be a default hereunder);
(b) A material breach by Maker of any material representation,
warranty, or covenant contained in this Note, that certain Loan Agreement
dated as of January 15, 1998, as amended (the "Loan Agreement"), by and
between Maker and Bank, or a material breach by Maker or Guarantor of any
other material agreement between Maker or Guarantor and Bank, where said
breach shall continue for a period of thirty (30) days after delivery of
written notice thereof to Maker;
(c) The occurrence of a default under either of the Security Documents
or under any other agreement given by Maker or Guarantor to Bank as
security for the indebtedness evidenced hereby (subject to applicable grace
and cure periods contained therein, if any).
Upon the occurrence of a Default and at any time thereafter during the
continuance of a Default, Bank, at its option and as often as it desires, may
declare all liabilities, obligations, and indebtedness due Bank, including this
Note, the Equipment Note or the Indiana Note, to be immediately due and payable
without demand, notice, or presentment, and may exercise any other remedy
available to it under the Security Documents, the Loan Agreement or any other
agreement given by Maker or Guarantor to Bank, and any other remedy available to
it at law or in equity.
8. PAYMENT OF COSTS. Maker shall pay all costs incurred by the holder of
this Note in enforcing or collecting this Note and enforcing each agreement
executed in connection with this Note (including the Security Documents, the
Loan Agreement or any other agreement under which real or personal property is
pledged as security for this Note), including without limitation all reasonable
attorneys' fees, costs, and expenses incurred in all matters of interpretation,
enforcement, and collection, before, during, and after demand, suit, proceeding,
trial, appeal, and post-judgment collection efforts as well as all costs and
fees incurred by the holder of this Note in connection with any bankruptcy,
reorganization, or similar proceeding (including efforts to obtain relief from
any stay)
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<PAGE>
if Maker or any other person or entity liable for the indebtedness represented
by this Note becomes involved in any bankruptcy, reorganization, or similar
proceedings.
9. WAIVER AND CONSENTS. Maker and every other person liable at any time for
payment of this Note waives presentment, protest, notice of protest, and notice
of dishonor. Maker expressly consents to all extensions and renewals of this
Note (as a whole or in part) and all delays in time or payment or other
performance under this Note that the holder of this Note grants at any time and
from time to time, without limitation and without any notice to or further
consent of Maker. Maker agrees that its obligations under this Note are
independent of the obligation of any other maker, guarantor or other person or
entity that now or later is obligated to pay this Note. Maker also agrees the
Bank may release any security for or any other obligor of this Note or waive,
extend, alter, amend, or modify this Note or otherwise take any action that
varies the risk of Maker without releasing or discharging Maker from Maker's
obligation to repay this Note.
10. VENUE. Maker and Bank further agree that venue for each action, suit or
other legal proceeding arising under or relating to this Note or any agreement
securing or related to this Note shall be the County Court or Circuit Court
located in Hillsborough County, Florida, or the Federal District Court for the
Middle District of Florida, Hillsborough County, Florida, and Maker and Bank
hereby waive any right to sue in any other county in Florida, or any other
state, unless it shall be lawfully required that any such action, suit or other
legal proceeding have venue elsewhere.
11. MAXIMUM INTEREST. In no event whatsoever shall the amount paid, or
agree to be paid, to the holder for the use, forebearance, or retention, of the
money to be loaned hereunder ("Interest") exceed the maximum amount permissible
under applicable law. If the performance or fulfillment of any provision hereof
or of the Loan Agreement, the Mortgage, or any other agreement between the
holder and the undersigned shall result in Interest exceeding the limit for
interest prescribed by law, then the amount of the Interest shall be reduced to
the maximum rate that may lawfully be charged or collected by the holder. If,
from any circumstances whatsoever, the holder should receive as Interest an
amount that would exceed the highest lawful rate, the amount that would be
excessive Interest shall be applied to the reduction of the principal balance
owning hereunder or; at the option of the holder, be paid over to the
undersigned and not to the payment of interest.
12. WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, MAKER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY AGREES THAT NEITHER MAKER NOR ANY ASSIGNEE,
SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF MAKER SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE ARISING
FROM OR BASED UPON THIS NOTE, THE SECURITY DOCUMENTS, THE LOAN AGREEMENT, OR ANY
OTHER LOAN DOCUMENT EVIDENCING, SECURING, OR RELATING TO THE INDEBTEDNESS
EVIDENCED BY THIS NOTE OR TO THE DEALINGS OR RELATIONSHIP BETWEEN OR AMONG THE
PARTIES HERETO. NEITHER MAKER NOR BANK WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH
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<PAGE>
ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT OR CAN NOT BE WAIVED. THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO, AND
THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTION. NEITHER MAKER NOR BANK HAS IN
ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF
THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR BANK TO ENTER INTO THIS TRANSACTION.
13. MODIFICATION. This Note may not be modified or terminated orally, but
only by agreement or discharge in writing and signed by Bank. Any forbearance of
Bank in exercising any right or remedy hereunder, under the Security Documents,
the Loan Agreement or under any other loan document relating to this transaction
shall not be a waiver of or preclude the exercise of any right or remedy.
Acceptance by Bank of payment of any sum payable hereunder after the due date of
such payment shall not be a waiver of Bank's right to either require prompt
payment when due of all other sums payable hereunder or to declare a default for
the failure to make prompt payment in the future.
14. SUCCESSORS AND ASSIGNS. Whenever Bank is referred to in this Note, such
reference shall be deemed to include the successors and assigns of Bank,
including, without limitation, any subsequent assignee or holder of this Note,
and all covenants, provisions, and all agreements by or on behalf of Maker and
any endorsers, guarantors, and sureties hereof which are contained herein shall
insure to the benefit of the successors and assigns of Bank.
15. CORRECTIVE DOCUMENTATION. For and in consideration of the funding or
renewal of the indebtedness evidenced hereby, Maker further agrees to cooperate
with Bank and to reexecute any and all documentation relating to the loan
evidenced by this Note which is deemed necessary or desirable in Bank's
reasonable discretion, in order to correct or adjust any clerical errors or
omissions contained in any document executed in connection with the loan
evidenced by this Note.
16. SEVERABILITY. Any provision of this Note, or any paragraph, sentence,
clause, phrase or word, or the application thereof, in any circumstance, is
adjudicated to be invalid, the validty of the remainder of this Note shall be
construed as if such invalid part were never included herein.
17. MISCELLANEOUS. The headings preceding the text of the sections of this
Note have been inserted solely for convenience of reference and do not limit or
affect the meaning, interpretation, or effect of this Note or the sections. The
validity, construction, interpretation, and enforceability of this Note are
governed by the laws of the State of Florida, excluding its laws relating to the
resolution of conflicts of laws of different jurisdictions. Each required
notice, consent, or approval, if any, under this Note will be valid only if it
is given in writing (or sent by telecopy and promptly confirmed in writing) and
addressed by the sender to the recipient's address that is listed in this Note
or to such other addresses as either party may designate by written notice to
the other party. A validly given notice, consent, or approval will be effective
(i) on receipt of hand delivery to the recipient, (ii) seven (7) days after
having been deposited in the United States mail, certified or registered, return
receipt requested sufficient postage affixed or prepaid, or (iii) one (1)
business day after it is deposited with
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<PAGE>
an expedited, overnight courier service (such as by way of example but not
limitation, U.S. Express Mail, Federal Express of Purolator). These notice
provisions apply only if a notice is required by the Note. They do not apply if
no notice is required by this Note. This Note is not assignable by Maker.
IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered
as of the date first above written.
SHELLS SEAFOOD RESTAURANTS, INC.,
a Delaware corporation
By: /s/ WARREN R. NELSON
------------------------
Warren R. Nelson
Vice President
(Corporate Seal)
STATE OF GEORGIA
COUNTY OF GLYNN
The foregoing instrument was acknowledged before me this 30th day of June,
1998, by Warren R. Nelson, as Vice President of SHELLS SEAFOOD RESTAURANTS, INC.
a Delaware corporation, on behalf of the corporation, in Brunswick,
Glynn County, Georgia, He is personally known to me or has produced
______________ as identification.
/s/ HAZEL D. WOOLDRIDGE
----------------------------
Notary Public
Hazel D. Wooldridge
---------------------------
(Print, Type or Stamp Name)
My Commission Expires: 1/2/99
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