Contribution Agreement - OSS/BG LLC, OS Sea Inc., Bonefish Grill LLC, Bonefish Grill Holdings Inc., Timothy V. Curci and Christopher L. Parker
CONTRIBUTION AGREEMENT
This Contribution Agreement is made and entered into this ___ day of
October, 2001 by and among OSS/BG, LLC, a Delaware limited liability company
("Company"), OS SEA, INC., a Florida corporation ("Outback"), BONEFISH GRILL,
LLC, a Florida limited liability company ("BGL"), BONEFISH GRILL HOLDINGS, INC.,
a Florida corporation ("BGH"), TIMOTHY V. CURCI, an individual residing in the
State of Florida ("Curci") and CHRISTOPHER L. PARKER, an individual residing in
the State of Florida ("Parker"). Curci and Parker are hereinafter individually
and collectively referred to as the "BG Principals". BGL, BGH, and the BG
Principals are hereinafter individually and collectively referred to as the "BG
Persons". All capitalized terms used but not otherwise defined in this Agreement
shall have the respective meanings ascribed to such terms in the Company
Agreement (as defined below).
RECITALS
1. Outback and BGL have formed the Company pursuant to that certain
Limited Liability Company Agreement of even date herewith ("the Company
Agreement"); and
2. Curci and Parker are the only shareholders of BGH, with Curci and
Parker each owning fifty percent (50%) of the issued and outstanding shares of
capital stock of BGH; and
3. BGH owns one hundred percent (100%) of the member interests of BGL; and
4. BGL owns (i) one hundred percent (100%) of the member interests of
Bonefish Grill of St. Petersburg, LLC, a Florida limited liability company ("St.
Pete"), and (ii) one hundred percent (100%) of the member interests of Bonefish
Grill of Safety Harbor, LLC, a Florida limited liability company ("Safety
Harbor") and (iii) fifty one percent (51%) of the member interests of Bonefish
Grill of Sarasota, LLC, a Florida limited liability company ("Sarasota"). St.
Pete, Safety Harbor and Sarasota are sometimes herein individually referred to
as a "Subsidiary" and collectively as the "Subsidiaries".
5. St. Pete, Safety Harbor and Sarasota each own and operate one "Bonefish
Grill" restaurant at the following respective locations: 5901 4th Street North,
St. Petersburg, Florida 33703; 2519 McMullen Booth Road, Clearwater, Florida
33761 and 3971 S. Tamiami Trail, Sarasota, Florida 34231 (collectively the
"Restaurants").
6. BGL desires to contribute to the Company, as its initial capital
contribution, all of its member interests in St. Pete, Safety Harbor and
Sarasota (which the parties agree have an aggregate value of Seven Million Five
Hundred Thousand Dollars ($7,500,000)), and the Company and Outback are willing
to accept such contribution, on the terms and conditions of this Agreement.
7. Outback desires to contribute to the Company, as its initial capital
contribution, the amount of Seven Million Five Hundred Thousand Dollars
($7,500,000), and the Company and BGL are willing to accept such contributions,
on the terms and conditions of this Agreement.
Now Therefore, intending to be legally bound in consideration of the
mutual premises contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
1. CAPITAL CONTRIBUTION
1.1 Contribution by BGL. In exchange for BGL's fifty percent (50%)
member interest in the Company, BGL hereby contributes, transfers, assigns and
conveys to the Company: (i) a one hundred percent (100%) member interest in St.
Pete, (ii) a one hundred percent (100%) member interest in Safety Harbor, and
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(iii) a fifty one percent (51%) member interest in Sarasota, in each case free
and clear of any liens or encumbrances (the "BGL Contributed Assets").
1.2 Contribution by Outback. In exchange for Outback's fifty
percent (50%) member interest in the Company, Outback shall contribute to the
Company the sum of Seven Million Five Hundred Thousand Dollars ($7,500,000) (the
"Outback Contributed Assets"). Outback shall contribute the Outback Contributed
Assets at such times as required by the Company Agreement.
2. POST-CLOSING ADJUSTMENT AND RELATED MATTERS
2.1 Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
2.1(a) Liability. "Liability" means any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or
unknown, asserted or unasserted, liquidated or unliquidated, secured or
unsecured, of any of the Subsidiaries.
2.1(b) Designated Liabilities. "Designated Liabilities"
means all Liabilities of the Subsidiaries associated with operating
expenses of the Subsidiaries for periods on or prior to the Closing
Date but not paid on or prior to the Closing Date, including, but not
limited to, Liabilities for rents, additional rents, taxes and other
items payable under any lease, license, permit, contract or other
agreement or arrangement relating to the Restaurants; maintenance;
Federal income taxes and any state or local income, profit, sales,
excise or franchise taxes (and any penalties or interest due on account
thereof); food and beverage (including alcoholic beverages) expenses;
employee compensation and benefits; utilities; service and paper goods;
cleaning supplies; and similar operating expense items. Designated
Liabilities shall not include liability for unredeemed gift
certificates. The amounts of such Liabilities shall, to the extent
practicable, be prorated as of the Closing Date. If the amount of any
of such items is not known on the Closing Date, the proration shall be
made as soon as such actual amount becomes known. BGL and the Company
agree to furnish each other with such documents and other records as
shall be reasonably requested in order to confirm all proration
calculations.
2.1(c) Designated Assets. "Designated Assets" means the
following assets of the Subsidiaries:
(i) All cash, cash equivalents and other immediately
available funds;
(ii) All accounts receivable;
(iii) All vendor credits, claims, deposits and prepayments
other than deposits with utilities and landlords;
(iv) All inventory (the amount of which shall be
determined by a physical inventory conducted by BGL and
Outback on a date as near as practicable to the Closing Date,
or by such other means as BGL and Outback may mutually agree).
2.2 Post-Closing Adjustment. As soon as practicable after the
Closing Date, but in no event more than forty-five (45) days thereafter, Outback
shall determine and report in writing to BGL:
2.2(a) the amount of all Designated Assets as of the Closing
Date; and
2.2(b) the amount of all Designated Liabilities as of the
Closing Date which were not paid in full prior to the Closing Date.
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Upon receipt of such report, BGL (by notice to Outback as provided
herein) shall have a period of ten (10) days in which to object in writing to
any portion or item of such report. In the event no objection is timely made,
Outback's report shall be final and binding on the parties. If timely objection
is made, the chief financial officers of Outback Steakhouse, Inc. and BGL shall
meet and attempt to agree on the items to which objection was made. If such
persons cannot agree within thirty (30) days from the date of written objection,
the items on which agreement has not been reached shall be submitted to a
mutually acceptable independent accounting firm for a resolution of such items
and whose decision shall be final and binding on the parties. If Outback and BGL
are unable to agree on the choice of an independent accounting firm, they will
select a nationally recognized firm by lot (after excluding any accounting firms
that are not independent of the parties or their respective Affiliates). If the
parties submit any unresolved items to an accounting firm as provided in this
paragraph, Outback and BGL will share responsibility for the fees and expenses
of the accounting firm as follows:
(i) if the accounting firm resolves all of the remaining
objections in favor of Outback, BGL will be responsible for
all of the fees and expenses of the accounting firm;
(ii) if the accounting firm resolves all of the remaining
objections in favor of BGL, Outback will be responsible for
all of the fees and expenses of the accounting firm; and
(iii) if the accounting firm resolves some of the remaining
objections in favor of Outback and some of the remaining
objections in favor of BGL, Outback and BGL will each be
responsible for a percentage of the fees and expenses of the
accounting firm, such percentage to be equal to the inverse of
the percentage that the dollar value of items resolved in
favor of such person bears to the total dollar value of
disputed items.
If, as finally determined, the aggregate amount described in SUBSECTION
2.2(A) above exceeds the amount of SUBSECTION 2.2(B), then the Company shall pay
such excess to BGL within ten (10) days of such final determination. If, as
finally determined, the amount described in SUBSECTION 2.2(B) exceeds the amount
of SUBSECTION 2.2(a), then BGL shall pay such excess to the Company within ten
(10) days of such final determination.
2.3 Gift Certificates. The BG Persons acknowledge the sale of gift
certificates by the Subsidiaries. After the Closing Date, the Company or the
Subsidiaries shall invoice the BG Principals on a quarterly basis for the face
value of all gift certificates which were sold on or prior to the Closing Date
and which are redeemed during such quarter or for which the Company is required
to escheat. The BG Principals shall pay to the Company or the Subsidiaries,
within ten (10) days of receipt, the full amount of such invoices. The
obligations of the BG Principals for gift certificates sold on or prior to the
Closing Date shall not be subject to any limitation on their indemnification
obligations contained in SECTION 9 hereof.
3. LIABILITIES
3.1 BGL Obligations Not to be Assumed. As used in this Agreement,
the term "BGL Obligations" shall mean and include any direct or indirect
indebtedness, liability, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, liquidated or unliquidated, secured or unsecured, of
BGL. The Company is not assuming any BGL Obligations.
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4. REPRESENTATIONS AND WARRANTIES OF THE BG PERSONS
The BG Persons each represent and warrant to Company that, each of the
following is true and correct in all material respects as of the Closing Date
except to the extent identified in disclosure schedules referred to below in
this SECTION 4 and attached to this Agreement ("Disclosure Schedule").
4.1 General.
4.1(a) Organization. BGH is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida. Each of BGL and the Subsidiaries is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of Florida. The Operating Agreements of BGL and the
Subsidiaries, attached hereto as EXHIBIT 4.1(A) are true and correct
copies thereof, such documents are in full force and effect, and have
not been modified or amended in any manner.
4.1(b) Ownership.
(i) The authorized capital stock of BGH consists
of ten thousand (10,000) shares of common stock, par value
$.01, of which 200 shares are issued and outstanding. Curci
and Parker each own 100 shares of common stock of BGH. All of
the issued and outstanding shares of capital stock of BGH have
been duly authorized and validly issued and are fully paid and
non-assessable.
(ii) BGH is the owner of all of the issued and
outstanding member interests in BGL. All of the issued and
outstanding member interests in BGL have been duly authorized
and validly issued.
(iii) BGL is the owner of all of the issued and
outstanding member interests in St. Pete and Safety Harbor.
BGL is the owner of fifty one percent (51%) of the issued and
outstanding member interests in Sarasota. The remaining
forty-nine percent (49%) member interest in Sarasota is owned
by John L. Mays. All of the member interests of the
Subsidiaries have been duly authorized and validly issued.
(iv) Except for this Agreement and that certain
Shareholders Agreement dated July 1, 2001 by and among BGH,
Curci and Parker, and the Operating Agreements of BGL and the
Subsidiaries attached hereto as EXHIBIT 4.1(A): (a) no person
or entity has any right or option to purchase or acquire any
capital stock of BGH or member interest in BGL or any
Subsidiary or any interest in any assets of any Subsidiary;
(b) there are no voting trusts, shareholders agreements, or
other voting arrangements to which any BG Person is a party,
and (c) there is no outstanding subscription, contract,
convertible or exchangeable security, option, warrant, call or
other right obligating any BG Person to issue, sell, exchange
or otherwise dispose of, or to purchase, redeem or otherwise
acquire, shares of or securities convertible or exchangeable
for, capital stock of BGH or member interests in BGL or any
Subsidiary.
4.1(c) Power. BGL and each of the Subsidiaries have all
requisite power and authority to own, operate and lease its properties,
to carry on its businesses as and where such are now being conducted.
4.1(d) Qualification. BGL and each of the Subsidiaries is
duly licensed or qualified to do business as a foreign entity, and it
is in good standing, in each jurisdiction wherein the character of the
properties owned or leased by is, or the nature of its business, makes
such licensing or qualifications necessary.
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4.2 Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by BGL or BGH
pursuant hereto and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary shareholder, director, member
or manager action on the part of BGL and BGH. Other than as specifically
provided in this Agreement or disclosed in the Disclosure Schedules, no other or
further act or proceeding on the part of BGL or BGH is necessary to authorize
this Agreement or the other documents and instruments to be executed and
delivered by BGL or BGH pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by BGL and BGH pursuant hereto will constitute, valid binding agreements of BGL
and BGH, enforceable in accordance with their respective terms, except as such
may be limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
4.3 No Violation. Except as set forth on DISCLOSURE SCHEDULE ITEM
4.3, neither the execution and delivery of this Agreement or the other documents
and instruments to be executed and delivered by the BG Persons pursuant hereto,
nor the consummation by the BG Persons of the transactions contemplated hereby
and thereby (a) will violate any applicable statute, ordinance, rule or
regulation (collectively "Laws") or any applicable order, writ, injunction,
judgment, plan or decree (collectively "Orders"), (b) will require any
authorization, consent, approval, exemption or other action by or notice to any
court, arbitrator, department, commission, board, bureau, agency, authority,
instrumentally or other body, whether federal, state, municipal, foreign or
other (collectively "Government Entities"), or (c) subject to obtaining the
consents referred to in DISCLOSURE SCHEDULE ITEM 4.3, will violate or conflict
with, or constitute a default or breach (or an event which, with notice or lapse
of time, or both, would constitute a default or breach) under, or will result in
the termination of, or accelerate the performance required by, or result in the
creation of any Lien (as defined in SECTION 4.12(A)) upon any of the assets of
BGL or any of the Subsidiaries under any term or provision of the Articles of
Incorporation, By-Laws or Operating Agreement of BGL or any Subsidiary or of any
material contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which BGL or any Subsidiary is a party
or by which BGL or any Subsidiary or any of their respective assets or
properties may be bound or affected.
4.4 Financial Statements. DISCLOSURE SCHEDULE ITEM 4.4 are true
and complete copies of the financial statements of each Subsidiary consisting of
(i) unaudited balance sheets of each Subsidiary as of December 31, for the two
(2) most recent calendar years (or since creation of the entity if not in
existence for such time), and the related unaudited statements of income and
cash flows for the years then ended, and (ii) an unaudited balance sheet of each
Subsidiary as of August 31, 2001 (the "Recent Balance Sheets"), and the related
unaudited statements of income and cash flows for the eight (8) months then
ended. All of such financial statements (including all notes and schedules
contained therein or annexed thereto) are true, complete and accurate as of
their respective dates, have been prepared in accordance with the books and
records of each Subsidiary, and fairly present the assets, liabilities and
financial position, the results of operations and cash flows of each Subsidiary
as of the dates and for the years and periods indicated.
4.5 Tax Liabilities. BGL and each Subsidiary have timely filed or
caused to be filed all federal, state, county and local tax returns and reports
required to be filed by them by the Closing Date, including those with respect
to income, payroll, property, withholding, social security, unemployment,
franchise, excise and sales taxes. All such tax returns and reports were true
and correct in all material respects. BGL and the Subsidiaries have either paid
or caused to be paid in full all taxes that have become due as reflected on any
tax return or report required to be filed by them by the Closing Date and any
interest and penalties with respect thereto. The Subsidiaries have fully accrued
on their Recent Balance Sheets and established adequate reserves for all taxes
payable but not yet due; and have made cash deposits with appropriate
governmental authorities representing estimated payments of taxes, including
income taxes and employee withholding tax obligations required to be paid over
or withheld. No extension or waiver of any statute of limitations or time within
which to file any return has been granted to BGL or any Subsidiary with respect
to any tax. To the knowledge of the
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BG Principals, no unsatisfied deficiency, delinquency or default for any tax,
assessment or governmental charge has been claimed, proposed or assessed against
BGL or any Subsidiary nor has BGL or any Subsidiary received written notice of
any such deficiency, delinquency or default. The BG Principals have no reason to
believe that any Subsidiary has or may have any tax liabilities other than those
of the Subsidiaries reflected on the Recent Balance Sheets, with any notes
thereto, and the related unaudited statements of income for the eight (8) months
ended August 31, 2001, and those of the Subsidiaries arising in the ordinary
course of business since the date of the Recent Balance Sheets.
BGL shall have sole responsibility for filing or causing to be filed
all required tax returns for all Subsidiaries for all periods up to and
including the Closing Date. Outback shall assist BGL in preparing income tax
returns for the Subsidiaries and shall cooperate with BGL to the extent
necessary therefor, and BGL shall provide Outback with copies of all such
returns at least fifteen (15) days prior to filing.
4.6 Accounts Receivable. All accounts receivable of the
Subsidiaries reflected on the Recent Balance Sheets, and as incurred in the
normal course of business since the date thereof represent arm's length
transactions actually made in the ordinary course of business; to the knowledge
of the BG Principals, are collectible (net of the reserves shown on the Recent
Balance Sheet for doubtful accounts) in the ordinary course of business without
the necessity of commencing legal proceedings; are subject to no counterclaim or
setoff; and are not in dispute.
4.7 Inventory. All inventory of the Subsidiaries reflected on the
Recent Balance Sheets consisted of a quality and quantity usable and saleable in
the ordinary course of business, had a commercial value at least equal to the
value shown on the Recent Balance Sheets and was valued at cost. All inventory
purchased since the date of the Recent Balance Sheet consisted of a quality and
quantity usable and saleable in the ordinary course of business. All current
inventory of the Subsidiaries is located on the premises of the Restaurants and
is in an amount typically held at the Restaurants in the ordinary course of
business.
4.8 Absence of Certain Changes. Except as and to the extent set
forth in DISCLOSURE SCHEDULE ITEM 4.8, since the date of the Recent Balance
Sheets there has not been:
4.8(a) No Adverse Change. Any material adverse change in the
financial condition, assets, Liabilities, business, prospects or
operations of any Subsidiary;
4.8(b) No Damage. Any material loss, damage or destruction,
whether covered by insurance or not, affecting any Subsidiary's
business or properties;
4.8(c) No Increase in Compensation. Other than in the
ordinary course of business, any increase in the compensation, salaries
or wages payable or to become payable to any employee of any Subsidiary
(including, without limitation, any increase or change pursuant to any
bonus, pension, profit sharing, retirement or other plan or
commitment), or any bonus or other employee benefit granted, made or
accrued;
4.8(d) No Labor Disputes. Any labor dispute or disturbance,
other than routine individual grievances which are not material to the
business, financial condition or results of operations of any
Subsidiary;
4.8(e) No Commitments. Any material commitment or
transaction by any Subsidiary (including, without limitation, any
borrowing or capital expenditure) other than in the ordinary course of
business;
4.8(f) No Disposition of Property. Any sale, lease or other
transfer or disposition of any properties or assets of any Subsidiary,
except in the ordinary course of business;
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4.8(g) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by any Subsidiary;
4.8(h) No Liens. Any Lien made on any of the properties or
assets of any Subsidiary other than liens for taxes not yet due and
payable;
4.8(i) No Amendment of Contracts. Any entering into,
amendment or termination by any Subsidiary of any contract, or any
waiver of material rights thereunder, other than in the ordinary course
of business;
4.8(j) No Unusual Events. Any other event or condition not
in the ordinary course of business of any Subsidiary.
4.9 Absence of Undisclosed Liabilities. Except as and to the
extent disclosed on the Recent Balance Sheets, or in the DISCLOSURE SCHEDULE
ITEM 4.9, the Subsidiaries do not have any Liabilities other than liabilities
and obligations incurred since the date of the Recent Balance Sheets in the
ordinary course of business and none of which has or will have a material
adverse effect on the business, financial condition or results of operations of
any Subsidiary. Except as and to the extent described in the Recent Balance
Sheets or in DISCLOSURE SCHEDULE ITEM 4.9, the BG Principals have no knowledge
of any basis for the assertion against any Subsidiary of any Liability and to
the knowledge of the BG Principals, there are no circumstances, conditions,
happenings, events or arrangements, contractual or otherwise, which may give
rise to Liabilities, except for liabilities and obligations incurred in the
ordinary course of business.
4.10 No Litigation. Except as set forth in DISCLOSURE SCHEDULE ITEM
4.10, there is no action, suit, proceeding, arbitration, investigation or
inquiry, whether civil, criminal or administrative ("Litigation") pending or, to
the knowledge of the BG Principals, threatened against any BG Person, which
involves BGL, the Subsidiaries, or the operation of the Restaurants, nor does
any BG Principals know, or have grounds to know, of any basis for any such
Litigation. DISCLOSURE SCHEDULE ITEM 4.10 also identifies all Litigation to
which any of BGL or any Subsidiary or their managers or members (in such
capacity) have been parties since their respective formations. Except as set
forth in DISCLOSURE SCHEDULE ITEM 4.10, none of BGL or any Subsidiary nor their
respective business or assets is subject to any Order of any Governmental Entity
that would have a material adverse effect on BGL or any Subsidiary.
4.11 Compliance With Laws and Orders.
4.11(a) Compliance. Except as set forth in DISCLOSURE
SCHEDULE ITEM 4.11(A), to the knowledge of the BG Principals, each of
the Subsidiaries is in material compliance with all applicable Laws and
Orders, including, without limitation, those applicable to
discrimination in employment, occupational safety and health, trade
practices, competition and pricing, product warranties, zoning,
building and sanitation, employment, retirement and labor relations and
product advertising. Except as set forth in DISCLOSURE SCHEDULE ITEM
4.11(A), none of the Subsidiaries has received notice of any violation
or alleged violation of, and is subject to no Liability for past or
continuing violation of, any Laws or Orders. All reports and returns
required to be filed by each Subsidiary with any Government Entity have
been filed, and were accurate and complete when filed. Without limiting
the generality of the foregoing:
(i) Each of the Subsidiaries has made all
required payments to its unemployment compensation reserve
accounts with the appropriate governmental departments of the
states where it is required to maintain such accounts, and
each of such accounts has a positive balance.
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(ii) The Subsidiaries have delivered to Company
copies of all reports during the last six months required
under all applicable health and safety laws and regulations.
The deficiencies, if any, noted on such reports have been
corrected.
4.11(b) Licenses and Permits. Except as set forth on
DISCLOSURE SCHEDULE ITEM 4.11(B), the Subsidiaries will have on the
Closing Date, all licenses, permits, approvals, authorizations and
consents of all Government Entities and all certification organizations
required for the conduct of the business and operation of the
Restaurants. Except as disclosed on DISCLOSURE SCHEDULE ITEM 4.11(B),
all such licenses, permits, approvals, authorizations and consents as
described in DISCLOSURE SCHEDULE ITEM 4.11(B), are in full force and
effect. Except as set forth in DISCLOSURE SCHEDULE ITEM 4.11(B), the
Subsidiaries (including its operations, properties and assets) are and
have been in material compliance with all such permits and licenses,
approvals, authorizations and consents.
4.12 Title to and Condition of Properties.
4.12(a) Title. BGL has good and valid title to the BGL
Contributed Assets and the Subsidiaries have good and valid title to
all of their respective assets, free and clear of all mortgages, liens
(statutory or otherwise), security interests, claims, pledges, options,
conditional sales contracts, charges or encumbrances of any nature
whatsoever (collectively, "Liens") except those described in DISCLOSURE
SCHEDULE ITEM 4.12(A) and other than liens for taxes not yet due and
payable and the interests of the lessors under the Real Property Leases
and the Personal Property Leases. Except as described on DISCLOSURE
SCHEDULE ITEM 4.12(A), none of the BGL Contributed Assets or assets of
the Subsidiaries are subject to any restrictions with respect to the
transferability thereof. BGL has complete and unrestricted power and
right to sell, assign, convey and deliver the BGL Contributed Assets to
Company as contemplated hereby. On the Closing Date, Company will
receive good and valid title to all the BGL Contributed Assets, free
and clear of all Liens of any nature whatsoever.
4.12(b) Condition. All material tangible assets (real and
personal) of each Subsidiary are in good operating condition and repair
(ordinary wear and tear excepted), free from any defects (except such
minor defects that do not interfere with the use thereof in the conduct
of the normal operations of the Subsidiaries), have been maintained
consistent with the standards generally followed in the industry and
are sufficient to carry on the business of the Subsidiaries as
conducted by the Subsidiaries during the preceding twelve (12) months.
To the knowledge of the BG Principals, all buildings and other
structures constituting the Restaurants' premises are in good condition
and repair (ordinary wear and tear excepted) and have no structural
defects or defects affecting the plumbing, electrical, sewerage, or
heating, ventilating or air conditioning systems.
4.12(c) Real Property. The following sets forth an accurate
and complete list of all leases of real property (the "Real Property
Leases") with respect to the real property leased in connection with
the operation of the Restaurants (the "Leased Real Property"):
(i) The Lease Agreement dated September 22,
1999, between Richard E. Martin, as Landlord, and Timothy
Curci and Christopher Parker, d/b/a Bonefish Grill of St.
Petersburg, as Tenant;
(ii) The Lease Agreement dated December 29, 2000,
between 4141, Inc., a Florida corporation, as Landlord, and
Bonefish Grill of Sarasota, LLC, a Florida limited liability
company, as Tenant, and Timothy Curci, Christopher Parker and
John Mays, as Guarantors; and
(iii) Shopping Center Lease dated April 5, 2001,
between Prime Muben Partners, Ltd., a Florida limited
partnership, as Landlord, and Bonefish Grill of Safety Harbor,
LLC, a Florida limited liability company, as Tenant.
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The parties acknowledge that the BG Principals are the tenant
under the Lease Agreement referenced in (i) above. The parties shall
use their best efforts to obtain the landlord's consent to an
assignment of the rights and obligations of the BG Principals under
said lease to St. Pete.
The Leased Real Property is the only real property presently
used or occupied by the Subsidiaries. There are now in full force and
effect duly issued certificates of occupancy permitting the Leased Real
Property and improvements located thereon to be legally used and
occupied as the same are now constituted. All of the Leased Real
Property has rights of access to dedicated public highways, as provided
in and subject to the Real Property Leases. To the knowledge of the BG
Principals, no fact or condition exists which would prohibit or
adversely affect the ordinary rights of access to and from the Leased
Real Property from and to the existing highways and roads and there is
no pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. Except as set forth in
DISCLOSURE SCHEDULE ITEM 4.12(C) to the BG Principals' knowledge, no
public improvements have been commenced or are planned which in either
case may result in special assessments against or otherwise materially
adversely affect the Leased Real Property. To the BG Principals'
knowledge, no portion of any of the Leased Real Property has been used
as a landfill or for storage or landfill of hazardous or toxic
materials. The BG Principals do not have notice or knowledge of any (i)
Order requiring repair, alteration, or correction of any existing
condition affecting the Leased Real Property or the systems or
improvements thereon, (ii) condition or defect which could give rise to
an order of the sort referred to in "(i)" above, or (iii) underground
storage tanks, or any structural, mechanical, or other defects of
material significance affecting the Leased Real Property or the systems
or improvements thereon (including, but not limited to, inadequacy for
normal use of mechanical systems or disposal or water systems at or
serving the Leased Real Property).
4.13 Insurance. Set forth in DISCLOSURE SCHEDULE ITEM 4.13 is a
complete and accurate list of all policies of fire, liability, product
liability, workers compensation, health and other forms of insurance presently
in effect with respect to the business and properties of the Subsidiaries, true
and correct copies of which have heretofore been made available to Outback for
its inspection. No notice of cancellation or termination has been received with
respect to any such policy, and the BG Principals have no knowledge of any act
or omission of BGL or any Subsidiary that could result in cancellation of any
such policy prior to the Closing Date.
4.14 Contracts and Commitments.
4.14(a) Real Property Leases. Except for the Real Property
Leases, the Subsidiaries have no leases of real property. The Real
Property Leases are in full force and effect, to the knowledge of the
BG Principals, no Subsidiary is in default of any term, covenant or
obligation under any of the Real Property Leases, and no condition
exists which, with the passage of time or giving of notice, would
constitute a default under any term, covenant or obligation of any
Subsidiary under the Real Property Leases.
4.14(b) Personal Property Leases. Except as set forth in
DISCLOSURE SCHEDULE ITEM 4.14(B), the Subsidiaries have no leases of
personal property ("Personal Property Leases") requiring total
consideration or other expenditure in excess of one thousand dollars
($1,000) or requiring performance over a period of more than twelve
(12) months from the Closing Date.
4.14(c) Purchase Commitments. The Subsidiaries have no
purchase commitments for inventory items or supplies that, together
with amounts on hand, constitute in excess of two (2) months normal
usage, or which are at an excessive price.
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4.14(d) Collective Bargaining Agreements. None of BGL or any
Subsidiary is a party to any collective bargaining agreement with any
unions, guilds, shop committees or other collective bargaining groups.
4.14(e) Loan Agreements. Except as set forth in DISCLOSURE
SCHEDULE ITEM 4.14(E), no Subsidiary is obligated under any loan
agreement, promissory note, letter of credit, or other evidence of
indebtedness as a signatory, guarantor or otherwise.
4.14(f) Guarantees. Except as disclosed on DISCLOSURE
SCHEDULE ITEM 4.14(F), no Subsidiary has guaranteed the payment or
performance of any person, firm or corporation, agreed to indemnify any
person or act as a surety, or otherwise agreed to be contingently or
secondarily liable for the obligations of any person.
4.14(g) Burdensome or Restrictive Agreements. No Subsidiary
is a party to or bound by any agreement, deed, lease or other
instrument which is so burdensome as to materially and adversely affect
or impair the operation of the Restaurants. Without limiting the
generality of the foregoing, none of BGL or any Subsidiary is a party
to or bound by any agreement requiring it to assign any interest in any
trade secret or proprietary information, or prohibiting or restricting
it from competing in any business or geographical area or soliciting
customers or otherwise restricting it from carrying on its business
anywhere in the world.
4.14(h) Other Material Contracts. Except as set forth in
DISCLOSURE SCHEDULE ITEM 4.14(H) none of the Subsidiaries have a lease,
license, contract or commitment of any nature involving consideration
or other expenditure in excess of one thousand dollars ($1,000), or
involving performance over a period of more than twelve (12) months
from the Closing Date, or which is otherwise individually material to
the operation of any Restaurant.
4.14(i) No Default. To the knowledge of the BG Principals, no
Subsidiary is in default under any lease, contract or commitment, nor
has any event or omission occurred which through the passage of time or
the giving of notice, or both, would constitute a default thereunder or
cause the acceleration of any of its obligations or result in the
creation of any Lien on any of the assets owned, used or occupied by
it. To the knowledge of the BG Principals, no third party is in default
under any lease, contract or commitment to which any of the BG
Principals, BGL or any Subsidiary is a party, nor has any event or
omission occurred which, through the passage of time or the giving of
notice, or both, would constitute a default thereunder or give rise to
an automatic termination, or the right of discretionary termination,
thereof.
4.14(j) Management Agreement. Effective as of the Closing
Date, BGH, St. Pete and Safety Harbor shall terminate that certain
Management Agreement dated July 1, 2001 by and among BGH, St. Pete and
Safety Harbor, and BGH shall release St. Pete and Safety Harbor from
any obligation under said Management Agreement as of the Closing Date,
except for unpaid fees for periods on or prior to the Closing Date.
4.15 Labor Matters. Except as set forth in DISCLOSURE SCHEDULE ITEM
4.15, none of the Subsidiaries has experienced any labor disputes, union
organization attempts or any work stoppage due to labor disagreements in
connection with its business; (a) each Subsidiary is in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and is not engaged in any unfair
labor practice; (b) there is no unfair labor practice charge or complaint
against any Subsidiary pending or threatened; (c) there is no labor strike,
dispute, request for representation, slowdown or stoppage actually pending or
threatened against or affecting any Subsidiary; (d) no question concerning
representation has been raised or is threatened respecting the employees of any
Subsidiary; (e) no grievance which might have a material adverse effect on any
Subsidiary, nor any arbitration proceeding arising out of or
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under collective bargaining agreements, is pending and no such claim therefor
exists; and (f) there are no administrative charges or court complaints against
any Subsidiary concerning alleged employment discrimination or other employment
related matters pending or threatened before the U.S. Equal Employment
Opportunity Commission or any Government Entity.
4.16 Employee Benefit Plans.
BGL and the Subsidiaries provided and/or identified on DISCLOSURE
SCHEDULE ITEM 4.16 each "employee benefit plan," as defined in Section 3(3) of
ERISA which (i) is subject to any provision of ERISA and (ii) is or was at any
time during the last 5 years maintained, administered or contributed to by any
BGL or any Subsidiary or any affiliate (as defined in Section 407(d)(7) of
ERISA) and covers any employee or former employee of any BGL or any Subsidiary
or any affiliate or under which any BGL or any Subsidiary or any affiliate has
any liability. Such plans are referred to collectively herein as the "Employee
Plans." None of the Employee Plans would, individually or collectively,
constitute an "employee pension benefit plan" as defined in Section 3(2) of
ERISA, including, without limitation, a "multiemployer plan," as defined in
Section 3(37) of ERISA, or a "defined benefit plan," as defined in Section 3(35)
and subject to Title IV of ERISA, and no Employee Plan is maintained in
connection with any trust described in Section 501(c)(9) of the Code
Each Employee Plan has been maintained in compliance with its terms and
the requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to, ERISA and the Code, which are
applicable to such Plan. No assets of any BGL or any Subsidiary are or could be
subject, directly or indirectly, to any liability or lien by reason of any
action or inaction taken with respect to any Employee Plan maintained by BGL or
any Subsidiary.
BGL and the Subsidiaries have no liability in respect of
post-retirement health and medical benefits for retired employees of BGL or any
Subsidiary or any affiliate, determined using assumptions that are reasonable in
the aggregate, over the fair market value of any fund, reserve or other assets
segregated for the purpose of satisfying such liability (including for such
purposes any fund established pursuant to Section 401(h) of the Code). BGL and
the Subsidiaries have reserved their right to amend or terminate any Employee
Plan or other benefit arrangement providing health or medical benefits in
respect of any active employee of BGL or any Subsidiary under the terms of any
such plan and descriptions thereof given to employees. With respect to any
Employee Plans which are "group health plans" under Section 4980B of the Code
and Section 607(l) of ERISA, there has been timely compliance in all material
respects with all requirements imposed thereunder, and under Parts 6 and 7 of
Title I of ERISA generally, so that BGL and each Subsidiary and any affiliate
have no (and will not incur any) loss, assessment, tax penalty or other sanction
with respect to any such plan.
There has been no amendment to, written interpretation or announcement
(whether or not written) by BGL or any Subsidiary or any affiliate relating to,
or change in employee participation or coverage under, any Employee Plan which
would increase the expense of maintaining such Employee Plan above the level of
the expense incurred in respect thereof for the fiscal year ended immediately
prior to the Closing Date.
4.17 Employment Compensation. DISCLOSURE SCHEDULE ITEM 4.17
contains a true and correct list of all employees to whom any Subsidiary is
paying compensation, including bonuses and incentives, at an annual rate in
excess of Twenty Five Thousand Dollars ($25,000) for services rendered or
otherwise; and in the case of salaried employees such list identifies the
current annual rate of compensation for each employee and in the case of hourly
or commission employees identifies certain reasonable ranges of rates and the
number of employees falling within each such range.
No action on the part of BGL or any Subsidiary prior to the Closing
Date, the contribution by BGL to the Company of the Contributed Assets pursuant
to this Agreement, the transactions contemplated hereby, shall directly or
indirectly result in any Liability (i) for severance payments or termination
benefits or (ii) by virtue of any state, federal or local law.
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4.18 Major Suppliers. DISCLOSURE SCHEDULE ITEM 4.18 contains a list
of the five (5) largest restaurant product suppliers (other than alcoholic
beverages) to the Restaurants for the last twelve (12) months (determined on the
aggregate basis of the total dollar amount of purchases) showing the total
dollar amount of purchases from each such supplier during the last twelve
months. The BG Principals do not have any knowledge or information of any facts
indicating, nor any other reason to believe, that any of the suppliers listed on
DISCLOSURE SCHEDULE ITEM 4.18 will refuse to be suppliers to the business of the
Restaurants after the Closing Date or will refuse to supply the business with
substantially the same quantity and quality of goods as supplied prior to the
Closing Date.
4.19 Assets Necessary to Business. The assets of the Subsidiaries
include all property and assets (except for intellectual property assets that
will be provided to the Subsidiaries under license from Outback), tangible and
intangible, and all leases, licenses and other agreements, which were used by
the Subsidiaries in the operation of the Restaurants as currently operated and
as operated immediately prior to the Closing Date.
4.20 No Brokers or Finders. No BG Person nor any of their
respective managers, officers, employees, members or agents have retained,
employed or used any broker or finder in connection with the transaction
provided for herein or in connection with the negotiation thereof which will
give rise to any Liability on the part of any of Outback, the Company or any
Subsidiary.
4.21 Termination of AmSouth Loan. The BG Persons represent and
warrant that no amounts are outstanding and covenant that no amounts will be
borrowed under that certain Master Note for Business and Commercial Loan dated
July 18, 2001 in the maximum principal amount of One Million Dollars
($1,000,000) (the AmSouth Loan") between AmSouth Bank, as lender, BGH, as
borrower, and St. Pete and Safety Harbor, as guarantors. The BG Persons further
covenant and agree that the AmSouth Loan will be terminated and cancelled in its
entirety within five (5) business days from the Closing Date.
4.22 Disclosure. No representation or warranty by any BG Person in
this Agreement, nor any statement, certificate, schedule, document or exhibit
hereto furnished or to be furnished by or on behalf of any BG Person pursuant to
this Agreement or in connection with the transactions contemplated hereby,
contains or shall contain (when considered in light of the entirety of all
information provided by BGL to the Company or Outback) any misstatement of
material fact or omits any material fact necessary to make the statements
contained therein not misleading. The BG Persons shall not be deemed to have
made to the Company or Outback any representation or warranty other than those
expressly set forth in SECTIONS 4.1 through 4.21 above. Without limiting the
generality of the forgoing, and notwithstanding any otherwise express
representation or warranty set forth in SECTIONS 4.1 through 4.21 above, the BG
Persons make no representation or warranty to either the Company or Outback with
respect to any projections, estimates, or budgets of the future revenues,
expenses, or expenditures, or future results of operations or prospects of the
business of the Subsidiaries heretofore delivered by BGL.
5. REPRESENTATIONS AND WARRANTIES OF OUTBACK
Outback hereby represents and warrants to the Company that each of the
following is true in all material respects as of the Closing Date.
5.1 General.
5.1(a) Organization. Outback is corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida.
5.1(b) Power. Outback has all requisite power and authority
to own, operate and lease its properties and to carry on its businesses
as and where such are now being conducted.
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5.1(c) Qualification. Outback is duly licensed or qualified
to do business as a foreign entity, and it is in good standing, in each
jurisdiction where the character of the properties owned or leased by
it, or the nature of its business, makes such licensing or
qualifications necessary.
5.2 Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by Outback
pursuant hereto and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Outback. Other than as specifically provided in this Agreement, no other or
further act or proceeding on the part of Outback is necessary to authorize this
Agreement or the other documents and instruments to be executed and delivered by
Outback pursuant hereto or the consummation of the transactions contemplated
hereby and thereby. This Agreement constitutes, and when executed and delivered,
the other documents and instruments to be executed and delivered by Outback
pursuant hereto will constitute, valid binding agreements of Outback,
enforceable in accordance with their respective terms.
5.3 No Violation. Neither the execution and delivery of this
Agreement or the other documents and instruments to be executed and delivered by
the Outback pursuant hereto, nor the consummation by Outback of the transactions
contemplated hereby and thereby (a) will violate any applicable Law or Order,
(b) will require any authorization, consent, approval, exemption or other action
by or notice to any Government Entity, or (c) will violate or conflict with, or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or will result in the termination of, or
accelerate the performance required by, or result in the creation of any Lien
upon any of the assets of Outback under, any term or provision of the Articles
of Incorporation or Bylaws of Outback or of any material contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which Outback is a party or by which Outback or any of its assets or properties
may be bound or affected.
5.4 No Brokers or Finders. Neither Outback nor any of its
directors, officers, employees or agents has retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof which will give rise to any Liability on
the part of either the Company or BGL.
6. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
Each and every obligation of Company to be performed on the Closing
Date shall be subject to the satisfaction prior to or on the Closing Date of
each of the following conditions:
6.1 Representations and Warranties True on the Closing Date. Each
of the representations and warranties made by the BG Persons and Outback in this
Agreement, and the statements contained in the Disclosure Schedule or in any
instrument, list, certificate or writing delivered by BGL or Outback pursuant to
this Agreement, shall be true and correct in all material respects at and as of
the Closing Date, except for any changes permitted by the terms of this
Agreement or consented to in writing by the Company.
6.2 Compliance With Agreement. Each of BGL and Outback shall have
performed and complied with all of its agreements and obligations under this
Agreement which are to be performed or complied with by it prior to or on the
Closing Date.
6.3 Absence of Litigation. No Litigation shall have been commenced
or threatened, and no material investigation by any Government Entity shall have
been commenced, against the Company, BGL or Outback or any of their respective
Affiliates, officers, directors or managers, with respect to the transactions
contemplated hereby.
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6.4 Consents and Approvals. All approvals, consents and waivers
that are required to effect the transactions contemplated hereby shall have been
received, and copies thereof shall have been delivered to the Company on or
prior to the Closing Date.
6.5 Estoppel Certificates. BGH shall obtain and deliver to Company
an estoppel certificate or status letter, dated within thirty (30) days of the
Closing Date, from the landlord under the Real Property Leases, which estoppel
certificate or status letter will certify (i) the lease is valid and in full
force and effect; (ii) the amounts payable under the lease and the date to which
the same have been paid; (iii) whether there are, to the knowledge of said
landlord, any defaults thereunder, and, if so, specifying the nature thereof;
and (iv) that the transactions contemplated by this Agreement will not
constitute a default under the lease and that the landlord consents to the
assignment of the lease to Company.
6.6 Delivery of Closing Documents. BGL and Outback shall have
delivered all of the closing documents required to be delivered by them pursuant
to this Agreement
7. CONDITIONS PRECEDENT TO BGL'S OBLIGATIONS
Each and every obligation of BGL to be performed on the Closing Date
shall be subject to the satisfaction prior to or on the Closing Date of the
following conditions:
7.1 Representations and Warranties True on the Closing Date. Each
of the representations and warranties made by the Company and Outback in this
Agreement shall be true and correct in all material respects as of the Closing
Date.
7.2 Compliance With Agreement. Each of the Company and Outback
shall have in all material respects performed and complied with all of its
agreements and obligations under this Agreement which are to be performed or
complied with prior to or on the Closing Date.
7.3 Absence of Litigation. No Litigation shall have been commenced
or threatened, and no material investigation by any Government Entity shall have
been commenced, against the Company, BGL or Outback or any of their respective
Affiliates, officers, managers or directors, with respect to the transactions
contemplated hereby.
7.4 Consents and Approvals. All approvals, consents and waivers
that are required to effect transactions contemplated hereby shall have been
received, and copies thereof shall have been delivered to BGL on or prior to the
Closing Date.
7.5 Lease of Henderson Property. The Company, as lessee, and an
Affiliate of Outback, as lessor, shall have executed a lease for the land and
building located at 3665 Henderson Blvd., Tampa, Florida for use as a Bonefish
Grill restaurant. The term of the lease shall be for a term of not less than ten
(10) years, shall require the Company to pay all taxes, insurance, maintenance
and other operating costs generally paid by a tenant, and shall provide for a
monthly base rent equal to the greater of Four Thousand One Hundred Sixty Seven
Dollars ($4,167.00) or three percent (3%) of gross sales. If necessary for
zoning purposes, such lease may be in the form of a sublease with an Affiliate
of Outback as sub-lessor and the Company as sub-lessee.
8. CONDITIONS PRECEDENT TO OUTBACK'S OBLIGATIONS
Each and every obligation of Outback to be performed on the Closing
Date shall be subject to the satisfaction prior to or on the Closing Date of the
following conditions:
8.1 Representations and Warranties True on the Closing Date. Each
of the representations and warranties made by the Company and the BG Principals
in this Agreement shall be true and correct in all material respects as of the
Closing Date.
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8.2 Compliance With Agreement. Each of the Company and BGL shall
have in all material respects performed and complied with all of its agreements
and obligations under this Agreement which are to be performed or complied with
prior to or on the Closing Date.
8.3 Absence of Litigation. No Litigation shall have been commenced
or threatened, and no material investigation by any Government Entity shall have
been commenced, against the Company, BGL or Outback or any of their respective
Affiliates, officers, directors or managers with respect to the transactions
contemplated hereby.
8.4 Consents and Approvals. All approvals, consents and waivers
that are required to effect the transactions contemplated hereby shall have been
received, and copies thereof shall have been delivered to Outback on or prior to
the Closing Date.
9. INDEMNIFICATION
9.1 By the BG Persons. Subject to the terms and conditions of this
SECTION 9, each of the BG Persons, jointly and severally, hereby agree to
indemnify, defend and hold harmless the Company and each Subsidiary and their
such of their respective members, managers and Affiliates who is not a BG Person
or Affiliate of a BG Person (hereinafter "Company's Indemnitees"), from and
against any loss, liability, claim, damage, obligation or expense (including
reasonable legal fees and expenses) (collectively "Losses") asserted against,
suffered by, imposed upon, or incurred by Company's Indemnitees, the BGL
Contributed Assets or the business and assets of any Subsidiary, directly or
indirectly, by reason of, arising out of or resulting from (a) the inaccuracy or
breach of any representation or warranty of any BG Person contained in or made
pursuant to this Agreement; (b) the breach of any covenant of any BG Person
contained in this Agreement; or (c) any Claim against any Subsidiary, the BGL
Contributed Assets or the business or assets of the Subsidiaries which arises
out of or relates to any event first occurring on or prior to the Closing Date;
provided, however, that the BG Persons shall not have any liability for the
indemnification of the Company Indemnitees pursuant to this SECTION 9.1 unless
the aggregate of all Losses for which the Company Indemnitees would, but for
this provision, be liable exceeds on a cumulative basis the sum of Twenty Five
Thousand Dollars ($25,000); and provided, further, however, that the BG Person's
liability under this SECTION 9.1 shall in no event exceed Seven Million Five
Hundred Thousand Dollars (U.S.$7,500,000) in the aggregate. As used in this
SECTION 9, the term "Claim" shall include (i) all Liabilities other than
Designated Liabilities or liability for gift certificates to the extent paid
pursuant to SECTIONS 2.2 or 2.3 hereof; (ii) all losses, damages, judgments,
awards, settlements approved by BGL (such approval shall not be unreasonably
withheld or delayed), costs and expenses (including, without limitation,
interest (including prejudgment interest in any litigated matter), penalties,
court costs and reasonable attorneys' fees and expenses); and (iii) all demands,
claims, suits, actions, costs of investigation, causes of action, proceedings
and assessments, whether or not ultimately determined to be valid; The term
Claim shall not include amounts properly accrued or accruable for periods after
the Closing Date under contracts or agreements disclosed in the Disclosure
Schedule. Further, the BG Persons shall have no liability under this SECTION 9.1
with respect to any Claim to the extent such Claim arises as the result of any
action taken or omitted to be taken by the Company (or its Management Committee)
following the Closing. In no event shall the BG Persons be obligated to
indemnify the Company or any other person with respect to any matter to the
extent that such matter was reflected in the adjustment calculation contemplated
by SECTION 2. The Company and Outback hereby acknowledge that should the Closing
occur, their sole and exclusive remedy against the BG Persons with respect to
any and all claims relating, directly or indirectly to this Agreement or the
transactions contemplated hereby, shall be pursuant to this SECTION 9.1.
9.2 By Outback. Subject to the terms, conditions and limitations
of this SECTION 9, Outback hereby agrees to indemnify, defend and hold harmless
the Company's Indemnitees and the BG Persons from and against any losses
suffered or incurred by the Company's Indemnitees or the BG Persons, directly or
indirectly,
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by reason of, arising out of or resulting from (a) the inaccuracy or breach of
any representation or warranty of Outback contained in or made pursuant to this
Agreement; or (b) the breach of any covenant of Outback; provided, however, that
Outback's liability under this Section 8.2 shall in no event exceed Seven
Million Five Hundred Thousand Dollars (U.S.$7,500,000) in the aggregate. The
Company and the BG Persons hereby acknowledge that should the Closing occur,
their sole and exclusive remedy against Outback with respect to any and all
claims relating, directly or indirectly to this Agreement and the transactions
contemplated hereby, shall be pursuant to this Section 9.2.
9.3 By the Company. Subject to the terms and conditions of this
SECTION 9, the Company hereby agrees to indemnify, defend and hold harmless BGL
and Outback and their respective controlling persons, affiliates, directors,
officers and employees from and against all Claims asserted against, resulting
to, imposed upon or incurred by any such person, directly or indirectly, by
reason of or resulting from (a) the inaccuracy or breach of any representation
or warranty of Company contained in or made pursuant to this Agreement; or (b)
the breach of any covenant of Company contained in this Agreement; or (c) any
Claim against any BG Person which relates to the BGL Contributed Assets or the
Restaurants which arises out of or relates to events first occurring after the
Closing Date.
9.4 Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this SECTION 9 with
respect to Claims relating to third parties shall be subject to the following
terms and conditions:
9.4(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") written notice 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 SECTION 9, 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 Indemnifying Party or its representatives
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 reasonable cooperation in such
defense.
9.4(b) Failure to Defend. If the Indemnifying Party, within
a reasonable time after notice of any such Claim, fails to defend 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.
9.4(c) Indemnified Party's Rights. Anything in this SECTION
9 to the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other
money payments, the Indemnified Party shall have the right to defend,
compromise or settle such Claim, and (ii) the Indemnifying Party shall
not, without the written consent of the Indemnified Party, settle or
compromise any Claim or consent to the entry of any judgment which does
not include as an unconditional term thereof the giving by the claimant
or the plaintiff to the Indemnified Party of a release from all
Liability in respect of such Claim.
9.5 Payment. The Indemnifying Party shall promptly pay the
Indemnified Party any amount due under this SECTION 9, which payment may be
accomplished in whole or in part, at the option of the Indemnified Party, by the
Indemnified Party setting off any amount owed to the Indemnifying Party by the
Indemnified Party. To the extent set-off is made by an Indemnified Party in
satisfaction or partial satisfaction of an
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indemnity obligation under this SECTION 9 that is disputed by the Indemnifying
Party, upon a subsequent determination by final judgment not subject to appeal
that all or a portion of such indemnity obligation was not owed to the
Indemnified Party, the Indemnified Party shall pay the Indemnifying Party the
amount which was set off and not owed together with interest from the date of
set-off until the date of such payment at an annual rate equal to the average
annual rate in effect as of the date of the set-off, on those three maturities
of United States Treasury obligations having a remaining life, as of such date,
closest to the period from the date of the set-off to the date of such judgment.
Upon judgment, determination, settlement or compromise of any third party Claim,
the Indemnifying Party shall pay promptly on behalf of the Indemnified Party,
and/or to the Indemnified Party in reimbursement of any amount theretofore
required to be paid by it, the amount so determined by judgment, determination,
settlement or compromise and all other Claims of the Indemnified Party with
respect thereto, unless in the case of a judgment an appeal is made from the
judgment. If the Indemnifying Party desires to appeal from an adverse judgment,
then the Indemnifying Party shall post and pay the cost of the security or bond
to stay execution of the judgment pending appeal. Upon the payment in full by
the Indemnifying Party of such amounts, the Indemnifying Party shall succeed to
the rights of such Indemnified Party, to the extent not waived in settlement,
against the third party who made such third party Claim.
9.6 No Waiver. The closing of the transactions contemplated by
this Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of condition
constituting the basis of the Claim at or before the Closing, and regardless of
whether such breach, violation or failure is deemed to be "material".
9.7. Survival of Indemnification. The indemnification obligations
of the parties contained in this SECTION 9 shall survive the date of this
Agreement and the Closing Date for all Claims brought or demands for
indemnification made prior to the expiration of: (a) eighteen (18) months from
the Closing Date with respect to (i) any inaccuracy or breach or any
representation or warranty contained in or made pursuant to this Agreement
except that the indemnification obligations relating to the representations and
warranties regarding tax obligations shall survive until thirty (30) days after
the expiration of the applicable statute of limitations for such tax obligations
or (ii) breach of any covenant contained in this Agreement and to be performed
on or prior to the Closing, or (b) two (2) years from the Closing Date for all
other Claims.
9.8. Determination of Losses. In determining an Indemnifying
Party's obligations under this Section 9 appropriate adjustment shall be made
for any insurance coverage paid to or on behalf of the Indemnified Party. An
Indemnifying Party shall not be liable to an Indemnified Party for any special,
consequential or similar damages with respect to any Loss subject to
indemnification under this Section 9, provided, however, that this sentence
shall not limit the amount payable by an Indemnifying Party to an Indemnified
Party for reimbursement of amounts paid or payable to a third party.
10. CLOSING
10.1 Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place ten (10) days after the
satisfaction of all conditions precedent required by this Agreement or upon such
other date as the parties agree (the "Closing Date").
10.2 Place of Closing. The Closing shall take place at Company's
corporate office or at such other place as the parties hereto shall agree upon.
10.3 Documents to be Delivered by BGL. On the Closing Date, BGL
shall deliver to Company the following documents, in each case duly executed or
otherwise in proper form:
10.3(a) Assignment of Member Interest. Assignments of Member
Interest and such other instruments of assignment, transfer, conveyance
and endorsement as will be sufficient in the opinion of
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the Company and its counsel to transfer, assign, convey and deliver to
the Company the BGL Contributed Assets as contemplated hereby.
10.3(b) Compliance Certificate. A certificate signed by the
BG Principals and BGH that each of the representations and warranties
made by the BG Persons in this Agreement is true and correct in all
material respects on and as of the Closing Date (except for any changes
permitted by the terms of this Agreement or consented to in writing by
Company), and that BGL have performed and complied with all of its
obligations under this Agreement which are to be performed or complied
with on or prior to the Closing Date.
10.3(c) Certified Resolutions. A certified copy of the
resolutions of the managers and members of BGL authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
10.3(d) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered
to the Company pursuant to the terms hereof.
10.3(e) Estoppel Certificate. The Estoppel Certificates
described in SECTION 6.5 hereof.
10.3(f) Other Documents. All other documents, instruments or
writings required to be delivered to the Company on or prior to the
Closing Date pursuant to this Agreement and such other certificates of
authority and documents as the Company may reasonably request.
10.4 Documents to be Delivered by Outback. On the Closing Date,
Outback shall deliver to the Company the following documents, in each case duly
executed or otherwise in proper form:
10.4(a) Compliance Certificate. A certificate signed by an
appropriate officer of Outback that each of the representations and
warranties made by Outback in this Agreement is true and correct in all
material respects on and as of the Closing Date (except for any changes
permitted by the terms of this Agreement or consented to in writing by
the Company and BGL), and that Outback has performed and complied with
all of its obligations under this Agreement which are to be performed
or complied with on or prior to the Closing Date.
10.4(b) Certified Resolutions. A certified copy of the
resolutions of the directors and shareholders of Outback authorizing
and approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
10.4(c) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered
to the Company pursuant to the terms hereof.
10.4(d) Other Documents. All other documents, instruments or
writings required to be delivered to the Company on or prior to the
Closing Date pursuant to this Agreement and such other certificates of
authority and documents as the Company may reasonably request.
10.5 Documents to be Delivered by the Company. At the Closing, the
Company shall deliver to BGH the following documents, in each case duly executed
or otherwise in proper form:
10.5(a) Compliance Certificate. A certificate signed by the
chief executive officer of the Company that the representations and
warranties made by the Company in this Agreement are true and correct
on and as of the Closing Date (except for any changes permitted by the
terms of this Agreement or consented to in writing by BGL), and that
the Company has performed and complied with all of the
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Company's obligations under this Agreement which are to be performed or
complied with on or prior to the Closing Date.
10.5(b) Certified Resolutions. A certified copy of the
resolutions of the Management Committee of the Company authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
10.5(c) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered
to BGL and Outback by the Company pursuant to the terms hereof.
10.5(d) Other Documents. All other documents, instruments or
writings required to be delivered to BGL or Outback on or prior to the
Closing Date pursuant to this Agreement and such other certificates of
authority and documents as BGL or Outback may reasonably request.
11. TERMINATION
11.1 Right of Termination Without Breach.
11.1(a) Mutual Agreement. This Agreement may be terminated
without further liability of any party at any time prior to the closing
by mutual written agreement of the Company, BGL and Outback.
11.1(b) By Any Party. This Agreement may be terminated
without further liability of any party if the Closing Date of the
transaction contemplated in SECTION 1.1 shall not have occurred on or
before December 31, 2001, provided the terminating party has not,
through breach of a representation, warranty or covenant, prevented
such closing from occurring on or before such date.
11.2 Termination for Breach.
11.2(a) Termination by the Company. This Agreement may be
terminated by the Company if (i) there has been a material violation or
breach by any BG Person or Outback of any of the agreements,
representations or warranties contained in this Agreement which has not
been waived in writing by the Company, or (ii) there has been a failure
of satisfaction of a condition to the obligations of the Company which
has not been so waived.
11.2(b) Termination by BGL. BGL may terminate this Agreement
if (i) there has been a material violation or breach by the Company or
Outback of any of the agreements, representations or warranties
contained in this Agreement which has not been waived in writing by
BGL, or (ii) there has been a failure of satisfaction of a condition to
the obligations of BGL which has not been so waived.
11.2(c) Termination by Outback. Outback may terminate this
Agreement if (i) there has been a material violation or breach by the
BGL of any of the agreements, representations or warranties contained
in this Agreement which has not been waived in writing by Outback, or
(ii) there has been a failure of satisfaction of a condition to the
obligations of Outback which has not been so waived.
11.2(d) Effect of Termination. Termination of this Agreement
pursuant to this SECTION 11.2 shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other
party which has violated, breached or failed to satisfy any of the
representations, warranties, covenants, agreements, conditions or other
provisions of this Agreement prior to termination hereof.
12. MISCELLANEOUS
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12.1 Disclosure Schedules. The representations and warranties of
the BG Persons set forth in this Agreement are made and given subject to the
disclosures contained in the Disclosure Schedule. The BG Persons shall not be or
be deemed to be in breach of any such representations and warranties (and no
claim shall lie in respect thereof) in respect of any such matter so disclosed
in the Disclosure Schedule. Where brief particulars only of a matter are set out
or referred to in the Disclosure Schedule, or a reference is made to a
particular part only of a disclosed document, full particulars of the matter and
the full contents of the document are deemed to be disclosed. The specific
disclosures set forth in the Disclosure Schedule have been organized by BGL to
correspond to section references in this Agreement to which the disclosure may
be most likely to relate, but such disclosure shall apply to and shall be deemed
to be disclosed for the purposes of this Agreement generally, and shall be
deemed to be exceptions to or modifications or qualifications of all of the
representations and warranties contained herein to the extent applicable. The
Company shall be deemed to be aware of and there are deemed to have been
disclosed to the Company as if herein set forth (a) all matters fairly disclosed
or referred to or contained in this Agreement and in all documents specifically
referred to therein; (b) the contents of and all matters referred to in the
documents specifically listed in the Disclosure Schedule; and (c) all matters
contained in the financial statements referred to in SECTION 3.4. In the event
that there is any inconsistency between this Agreement and matters disclosed in
the Disclosure Schedule, information contained in the Disclosure Schedule shall
prevail and shall be deemed to be the relevant disclosure.
12.2 Further Assurance. From time to time, upon request and without
further consideration, the parties will execute and deliver such documents and
take such other action as may be reasonably requested in order to consummate
more effectively the transactions contemplated hereby, including, but not
limited to, vesting in Company good, valid and marketable title to the business
and assets being transferred hereunder.
12.3 Disclosures and Announcements. Both the timing and the content
of all disclosure to third parties and public announcements concerning the
transactions provided for in this Agreement by the Company, BGL or Outback shall
be subject to the approval of the others in all essential respects, except that
approval shall not be required as to any statements and other information which
Outback may submit to the Securities and Exchange Commission, NYSE or the
stockholders of Outback or Outback's Affiliates, or be required to make pursuant
to any rule or regulation of the Securities and Exchange Commission or NYSE, or
otherwise required by law.
12.4 Assignment; Parties in Interest.
12.4(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the
other parties.
12.4(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person any
right or remedy under or by reason of this Agreement.
12.5 Governing Law. The validity, interpretation, and performance
of this Agreement shall be governed by the laws of the State of Florida without
giving effect to the principles of comity or conflicts of laws thereof.
12.6 Consent to Personal Jurisdiction and Venue; Waiver of Jury
Trial; Attorney's Fees. BGL, Outback and the BG Principals hereby consent to
personal jurisdiction and venue, for any action arising out of a breach or
threatened breach of this Agreement or out of the relationship established by
this Agreement, exclusively in the United States District Court for the Middle
District of Florida, Tampa Division, or in the Circuit Court in and for
Hillsborough County, Florida. BGL, Outback and the BG Principals hereby agree
that any action brought by such person or entity, alone or in combination with
others, whether arising out of this Agreement or otherwise, shall be brought
exclusively in the United States District Court for the Middle
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District of Florida, Tampa Division, or in the Circuit Court in and for
Hillsborough County, Florida. BGL, Outback and the BG Principals hereby agree
that any controversy that may arise of this Agreement would involve complicated
and difficult factual and legal issues and that, as a result, any action shall
be determined by a judge and not a jury. In the event of any legal proceeding
arising, directly or indirectly, from this Agreement, the prevailing party in
such legal proceedings shall be entitled to attorney's fees and costs from the
non-prevailing party.
12.7 Amendment and Modification. The Company, Outback and the BG
Persons may amend, modify and supplement this Agreement in such manner as may be
agreed upon by them in writing.
12.8 Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a) personally
delivered; or (b) sent to the parties at their respective addresses indicated
herein by registered or certified U.S. mail, return receipt requested and
postage prepaid, or by private overnight mail courier service. The respective
addresses to be used for all such notices, demands or requests are as follows:
(a) If to the Company or Outback, to:
OS Sea, Inc.
2202 North Westshore Boulevard, 5th Floor
Tampa, Florida 33607
Attention: Robert D. Basham, President
(with a copy to)
Joseph J. Kadow, Vice President and General Counsel
Outback Steakhouse, Inc.
2202 North Westshore Boulevard, 5th Floor
Tampa, Florida 33607
or to such other person or address as the Company or Outback shall furnish to
BGL in writing.
(b) If to BGL, to:
Bonefish Grill, LLC
c/o Timothy V. Curci
2946 Hadleigh Court
Clearwater, Florida 33621
(with a copy to)
Fowler, White, Boggs, Banker, P.A.
501 East Kennedy Boulevard
Suite 1700
Tampa, Florida 33602
Attention: R. Alan Higbee, Esquire
or to such other person or address as BGL shall furnish to the Company and
Outback in writing.
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If personally delivered, such communication shall be deemed delivered
upon actual receipt; if sent by overnight courier pursuant to this paragraph,
such communication shall be deemed delivered upon receipt; and if sent by U.S.
mail pursuant to this paragraph, such communication shall be deemed delivered as
of the date of delivery indicated on the receipt issued by the relevant postal
service, or, if the addressee fails or refuses to accept delivery, as of the
date of such failure or refusal. Any party to this Agreement may change its
address for the purposes of this Agreement by giving notice thereof in
accordance with this Section. Notices sent by facsimile or other electronic
means shall not constitute notice under this Agreement.
12.9 Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:
12.9(a) Expenses to be Shared Equally by BGL and Outback. BGL
and Outback shall equally share the cost of the following:
(i) Taxes Arising from Transaction. Any taxes
applicable to, imposed upon or arising out of the transfer of
the Contributed Assets to the Company and the other
transactions contemplated by this Agreement, including but not
limited to any transfer, use, gross receipts or documentary
stamp taxes
(ii) Other Expenses. Except as otherwise provided
herein, all other costs and expenses of third parties engaged
jointly by the parties hereto in connection with the
consummation of the transactions contemplated hereby, normally
shared by BGL and Outback in similar transactions.
12.9(b) Other. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its
counsel, accountants, and other agents in connection with the
transactions contemplated hereby.
12.9(c) Costs of Litigation. The parties agree that the
prevailing party in any action brought with respect to or to enforce
any right or remedy under this Agreement shall be entitled to recover
from the other party or parties all reasonable costs and expenses of
any nature whatsoever incurred by the prevailing party in connection
with such action, including without limitation reasonable attorneys'
fees and prejudgment interest.
12.10 Entire Agreement. This instrument and the agreements referred
to herein embody the entire agreement between the parties hereto with respect to
the transactions contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set forth or
provided for herein.
12.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.12 Section Headings; Construction. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
"OUTBACK"
OS SEA, INC.,
a Florida corporation
By: /s/ John W. Cooper
-------------------------------------
John W. Cooper, President
"BGL"
BONEFISH GRILL, LLC, a Florida limited
liability company
By: BONEFISH GRILL HOLDINGS, INC.,
a Florida corporation
its member-manager
By: /s/ Timothy V. Curci
-------------------------------------
Timothy V. Curci, President
"BGH"
BONEFISH GRILL HOLDINGS, INC.,
a Florida corporation
By: /s/ Timothy V. Curci
-------------------------------------
Timothy V. Curci, President
"BG PRINCIPALS"
/s/ Timothy V. Curci
----------------------------------------
TIMOTHY V. CURCI
/s/ Christopher L. Parker
----------------------------------------
CHRISTOPHER L. PARKER
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