Document:

Construction Management Agreement

Exhibit 10.3

This Construction Management Agreement has been filed to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Tennessee Valley Authority. The representations and warranties of the parties in this Construction Management Agreement were made to, and solely for the benefit of, the other parties to this Construction Management Agreement. The assertions embodied in the representations and warranties may be qualified by information included in schedules, exhibits or other materials exchanged by the parties that may modify or create exceptions to the representations and warranties. Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts at the time they were made or otherwise. 

EXECUTION VERSION
	
	
	 

Construction Management Agreement
Dated as of January 17, 2012
between
John Sevier Combined Cycle Generation LLC,
as Owner Lessor
and
Tennessee Valley Authority,
as Contractor
______________________________________
John Sevier Combined Cycle
Generation Facility
located in Hawkins County, Tennessee

	
				
	Table of Contents

	 
	 
	Page
	

	ARTICLE 1
	DEFINITIONS..................................................................................................
	2
	

	1.1
	Definitions; Rules of Interpretation..........................................................................
	2
	

	ARTICLE 2
	DESIGN AND CONSTRUCTION OF FACILITY..........................................
	2
	

	2.1
	Design and Construction of the Facility...................................................................
	2
	

	2.2
	Work to Be Performed..............................................................................................
	2
	

	2.3
	Work Progress; Substantial Completion...................................................................
	3
	

	2.4
	Suspension of the Work by Contractor.....................................................................
	4
	

	2.5
	Clean-Up and Disposal.............................................................................................
	4
	

	2.6
	Hazardous Substances..............................................................................................
	4
	

	2.7
	Protection of Property...............................................................................................
	5
	

	2.8
	Availability of Documents to Owner Lessor............................................................
	5
	

	2.9
	Labor Relations........................................................................................................
	5
	

	2.10
	Safety Precautions....................................................................................................
	5
	

	2.11
	Further Assurances...................................................................................................
	5
	

	ARTICLE 3
	STANDARD OF PERFORMANCE.................................................................
	6
	

	3.1
	Standard of Performance..........................................................................................
	6
	

	ARTICLE 4
	OWNER'S INFORMATION; ACCESS TO THE FACILITY;         INSPECTIONS.........................................................................................................
	6
	

	4.1
	Owner Lessor's Information......................................................................................
	6
	

	4.2
	Facility Site Access...................................................................................................
	7
	

	4.3
	Inspection by Contractor...........................................................................................
	7
	

	4.4
	Inspection by Owner Lessor......................................................................................
	7
	

	ARTICLE 5
	SUBSTANTIAL COMPLETION; FINAL COMPLETION.............................
	7
	

	5.1
	Substantial Completion.............................................................................................
	7
	

	5.2
	Achievement of Substantial Completion..................................................................
	8
	

	5.3
	Final Completion.......................................................................................................
	8
	

	5.4
	Achievement of Final Completion............................................................................
	9
	

	5.5
	Acceptance by Owner Lessor Not a Release of Contractor......................................
	9
	

	ARTICLE 6
	PRICE AND PAYMENT...................................................................................
	9
	

	6.1
	CMA Payment...........................................................................................................
	9
	

i

	
				
	Table of Contents
(continued)

	 
	 
	Page
	

	ARTICLE 7
	SUBCONTRACTS............................................................................................
	9
	

	7.1
	Subcontractors...........................................................................................................
	9
	

	7.2
	Payments to Subcontractors......................................................................................
	9
	

	7.3
	No Privity; No Assignment.......................................................................................
	10
	

	ARTICLE 8
	REPRESENTATIONS AND WARRANTIES...................................................
	10
	

	8.1
	Representations and Warranties of Contractor..........................................................
	10
	

	8.2
	Representations and Warranties of Owner Lessor.....................................................
	11
	

	ARTICLE 9
	LIABILITY AND DAMAGES..........................................................................
	12
	

	9.1
	CONSEQUENTIAL DAMAGES.............................................................................
	12
	

	9.2
	Further Limitation of Liability..................................................................................
	12
	

	ARTICLE 10
	WARRANTIES..................................................................................................
	12
	

	10.1
	General Warranty.......................................................................................................
	12
	

	10.2
	EXCLUSIVE WARRANTIES..................................................................................
	13
	

	ARTICLE 11
	UNCONTROLLABLE FORCES......................................................................
	13
	

	11.1
	Excused Performance................................................................................................
	13
	

	ARTICLE 12
	INDEMNIFICATION........................................................................................
	13
	

	12.1
	Claims Indemnified...................................................................................................
	13
	

	12.2
	Survival of Agreement..............................................................................................
	13
	

	ARTICLE 13
	INSURANCE.....................................................................................................
	13
	

	13.1
	Insurance Obtained by Contractor.............................................................................
	13
	

	ARTICLE 14
	TERMINATION AND DEFAULT....................................................................
	14
	

	14.1
	Termination...............................................................................................................
	14
	

	14.2
	Owner Lessor Remedies...........................................................................................
	14
	

	14.3
	Surviving Obligations...............................................................................................
	14
	

	ARTICLE 15
	CONFIDENTIAL INFORMATION..................................................................
	14
	

	15.1
	Confidentiality...........................................................................................................
	14
	

	15.2
	Public Statements......................................................................................................
	15
	

	ARTICLE 16
	DISPUTE RESOLUTION.................................................................................
	15
	

	16.1
	Resolution of Disputes..............................................................................................
	15
	

	ARTICLE 17
	TAX MATTERS................................................................................................
	15
	

ii

	
				
	Table of Contents
(continued)

	 
	 
	Page
	

	17.1
	Tax Matters................................................................................................................
	15
	

	ARTICLE 18
	MISCELLANEOUS..........................................................................................
	16
	

	18.1
	Assignment................................................................................................................
	16
	

	18.2
	Successors and Assigns.............................................................................................
	16
	

	18.3
	Collateral Assignment...............................................................................................
	16
	

	18.4
	Contractor as Owner Lessor's Agent.........................................................................
	16
	

	18.5
	Waivers......................................................................................................................
	17
	

	18.6
	CHOICE OF LAW....................................................................................................
	17
	

	18.7
	Severability................................................................................................................
	17
	

	18.8
	Notice........................................................................................................................
	17
	

	18.9
	Headings and Table of Contents................................................................................
	18
	

	18.10
	Entire Agreement......................................................................................................
	18
	

	18.11
	Amendments.............................................................................................................
	18
	

	18.12
	No Third Party Rights...............................................................................................
	18
	

	18.13
	Limited Recourse......................................................................................................
	18
	

	18.14
	Limitation of Liability...............................................................................................
	18
	

	EXHIBITS:
	 
	 

	 
	 
	 

	Exhibit A
	Description of Facility
	 

	Exhibit B
	Form of Substantial Completion Certificate
	 

	Exhibit C
	Form of Final Completion Certificate
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

iii

CONSTRUCTION MANAGEMENT AGREEMENT
This CONSTRUCTION MANAGEMENT AGREEMENT (this “Agreement”), dated as of January 17, 2012, is made by and between John Sevier Combined Cycle Generation LLC, a Delaware limited liability company, as owner lessor (the “Owner Lessor”), and Tennessee Valley Authority, a wholly owned corporate agency and instrumentality of the United States, as contractor (the “Contractor”).
W I T N E S S E T H :
WHEREAS, in connection with the construction of the Facility, the Contractor has entered into (a) the TVA Contract - Construction of John Sevier Combined Cycle Project, dated as of March 8, 2010 (the “Kiewit Construction Contract”), with Kiewit Power Constructors Co. (“Kiewit”), pursuant to which the Contractor engaged Kiewit to perform construction services relating to the Facility, and (b) the Tennessee Valley Authority Contract No. 00066777, dated as of December 14, 2007 (the “URS Construction Contract,” and, together with the Kiewit Construction Contract, the “Construction Documents”), with URS Energy & Construction, Inc., f/k/a Washington Group International, Inc. (“URS”), pursuant to which the Contractor engaged URS to provide certain design and engineering services relating to the Facility;
WHEREAS, in connection with the financing of the construction of the Facility, the Contractor, the Owner Lessor, Wells Fargo Delaware Trust Company, National Association, a national banking association, not in its individual capacity, but solely as manager under the Owner Lessor LLC Agreement (the “Lessor Manager”) and as manager under the Equity Investor LLC Agreement (the “Equity Manager”), John Sevier HoldCo LLC, a Delaware limited liability company (the “Equity Investor”), and Wilmington Trust Company, a Delaware trust company, not in its individual capacity, but solely as trustee under the Lease Indenture (the “Lease Indenture Trustee”), have entered into the Participation Agreement, dated as of January 10, 2012 (the “Participation Agreement”); 
WHEREAS, the Contractor has engaged other contractors to perform various services at the Facility (together with Kiewit and URS, the “Subcontractors”); 
WHEREAS, pursuant to the Participation Agreement, on the date hereof, the Contractor entered into the Head Lease with the Owner Lessor and leased the partially completed Facility to the Owner Lessor; 
WHEREAS, the Owner Lessor desires to engage the Contractor to complete the construction of the Facility on the terms hereof; and
WHEREAS, it is a condition to the lease of the Facility under the Participation Agreement that the parties enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

-1

ARTICLE 1
DEFINITIONS

1.1    Definitions; Rules of Interpretation.  The capitalized terms used in this Agreement, including the foregoing recitals, and not otherwise defined herein shall have the respective meanings specified in Appendix A to the Participation Agreement.  The general provisions of Appendix A to the Participation Agreement shall apply to terms used in this Agreement and specifically defined herein.

ARTICLE 2
DESIGN AND CONSTRUCTION OF FACILITY

2.1    Design and Construction of the Facility.

(a)    Subject to the terms and conditions hereof, the Contractor shall perform, or cause to be performed, all work (the “Work”) necessary to design, engineer, procure, construct, license, start-up, test, commission and complete the Facility in accordance with the requirements of this Agreement.  
(b)    The Contractor shall at no time after the date of this Agreement modify, vary, or amend in any material respect any of the features or specifications of the Facility outlined in Exhibit A without first notifying the Owner Lessor in writing and obtaining the Owner Lessor's consent in writing, which consent shall not be unreasonably withheld, provided that it shall not be unreasonable for the Owner Lessor to withhold its consent to any modification, variation or amendment which would, or would be likely to, materially adversely affect the ability of the Contractor to comply with its obligations under this Agreement.  Notwithstanding the foregoing, the Contractor shall have the right, at any time, upon notice to, but without a prior approval of, the Owner Lessor, to make changes to any portion of the Work to the extent required to be made to comply with Prudent Industry Practice, including, but not limited to, in connection with the occurrence of Uncontrollable Forces or a change in Applicable Laws. 
(c)    The Contractor agrees to provide, at its expense, all power system components on the Facility Site, including all transformation, switching and auxiliary equipment, such as synchronizing and protection and control equipment.
2.2    Work to Be Performed.  Without limiting the generality of the foregoing, the Contractor shall perform or has performed, or shall cause or has caused to be performed, all Work necessary to complete the Facility described herein or reasonably inferable from the provisions contained herein and the other Transaction Documents and to cause the Facility to be completed, including without limitation each of the following elements of the Work:

2.2.1    design for civil works, structures, mechanical systems, and electrical systems and preparation of drawings and specifications, including design standards, design reports, models and calculations, all as described in the drawings and specifications for the Work (the “Design Documents”);

-2

2.2.2    procurement of all labor, plant, materials, equipment and an initial spare parts inventory;

2.2.3     handling of material, equipment and construction equipment, including, as necessary, inspection, expediting, shipping, unloading, receiving and transportation to and storage at the Facility Site;

2.2.4    Facility Site preparation and Facility Site security, to the extent required for the completion of the Work;

2.2.5    acquisition of all rights-of-way necessary to complete the Work;

2.2.6    all relocation of utility services, demolition of existing structures as appropriate, construction and installation work, to the extent necessary to complete the Work, including subcontracting;

2.2.7    procurement of Applicable Permits in connection with the design, development, acquisition, equipping or other management of the Facility and rights of way or performance of the Work, or necessary for the operation of the Facility by the Contractor or its duly qualified and licensed designee, including construction approvals and permits for lay-down and staging area, state and federal environmental permits and building and heritage permits, and maintenance thereof to the extent necessary to complete the Work in accordance herewith;

2.2.8    arrangement, installation and payment for all temporary utilities and temporary utilities relocations and supply of all fuel, chemicals and consumables required to perform the Work, including Facility construction, start up and testing;  

2.2.9    handling of all safety and industrial relations matters; and

2.2.10    commissioning of the Facility in accordance with the performance, testing and commissioning procedures of the Contractor.

2.3    Work Progress; Substantial Completion.  

2.3.1    The Contractor agrees to use its commercially reasonable efforts to ensure that the Facility achieves Substantial Completion by the Guaranteed Outside Completion Date or as soon thereafter as commercially practicable.  If the Contractor anticipates that Substantial Completion will not be achieved by the Guaranteed Outside Completion Date, the Contractor shall promptly provide notice of such anticipated delay to the Owner Lessor, together with a corrective action plan the Contractor intends to adopt in order to achieve Substantial Completion as soon after the Guaranteed Outside Completion Date as commercially practicable.  

2.3.2    The Contractor shall develop a list of items which, in the Contractor's reasonable discretion, require completion following Substantial Completion in order to achieve Final Completion (the “Punch List”), and following Substantial Completion, shall use its commercially reasonable efforts to complete or procure completion of the items on the Punch List and to ensure that the Facility achieves Final Completion; provided that the Contractor shall have the right to expand, reduce or otherwise modify the 

-3

Punch List at any time in its reasonable discretion.

2.3.3    Notwithstanding anything in this Agreement or any other Operative Document to the contrary, the parties acknowledge and agree that any failure of the Facility to achieve Substantial Completion by the Guaranteed Outside Completion Date or achieve Final Completion by any particular date will not: (a) in and of itself constitute a default of the Contractor under this Agreement or any Operative Document; (b) permit the Owner Lessor or the Contractor to terminate this Agreement or any other Operative Document; (c) be deemed a repudiation by the Contractor of, or give rise to any remedies of the Owner Lessor based on anticipatory repudiation of, this Agreement or any other Operative Document; or (d) result in any liability of the Contractor for the payment of any liquidated damages (including any liquidated damages which may be payable to the Contractor by its subcontractors). 

2.4    Suspension of the Work by Contractor.  Upon the occurrence and during the continuance of any of the following events, the Contractor shall have the right to suspend performance of all or any portion of the Work: (a) Uncontrollable Forces; (b) change in Applicable Law that has a materially adverse impact on the performance of the Work; (c) the discovery of pre-existing Hazardous Substances on or under the Facility; (d) a request by a Governmental Entity having jurisdiction over the Facility or the Contractor to utilize one or all of the Units to meet electrical demand; or (e) circumstances under which any Subcontractor has the right to suspend the Work or any portion thereof in accordance with the Construction Documents.  The Contractor shall provide to the Owner Lessor prompt notice of any such suspension of the Work, and shall recommence performance of the Work as soon as reasonably practicable after the occurrence of any such event, to the extent consistent with Applicable Law and permitted under the Construction Documents. 

2.5    Clean-Up and Disposal.  The Contractor shall dispose of waste materials, rubbish and other debris developed, obtained or excavated in the course of performance of the Work in compliance with Applicable Law and Prudent Industry Practice.

2.6    Hazardous Substances.  The Contractor shall be fully responsible for any Hazardous Substances discovered in, on, under or emanating from, or brought onto, the Facility Site, and for the proper testing, handling, removal, transportation and disposal of such Hazardous Substances, in each case with the exception for any such Hazardous Substances introduced by the Owner Lessor or any of its Affiliates or agents (other than the Contractor or any Subcontractor).  Such Hazardous Substances shall be stored and used in accordance with the requirements of Applicable Law and the Applicable Permits.  The Contractor shall use reasonable commercial efforts to minimize the use of Hazardous Substances in the construction of the Facility and shall not utilize or cause, and shall use reasonable commercial effort to not permit any Subcontractor to utilize, such Hazardous Substances as are prohibited from being used in the United States or the State of Tennessee under Applicable Law.  The Contractor shall be responsible for all clean-up and mitigation required in connection with any spills, emissions or releases of Hazardous Substances on, at or from the Facility Site, whether before or after the date hereof, with the exception of any such Hazardous Substances introduced by the Owner Lessor or any of its Affiliates or agents (other than the Contractor or any Subcontractor).  The Contractor shall notify the Owner Lessor within forty-eight (48) hours of obtaining Actual 

-4

Knowledge of any release of a Hazardous Substance on, at or from the Facility which is required under Applicable Laws to be reported to any Governmental Entity.  

2.7    Protection of Property.  During the performance of the Work, the Contractor shall use reasonable commercial efforts to protect the Facility, the Facility Site, and any and all related materials, construction equipment and tools from damage as a result of the performance of the Work by the Contractor or its Subcontractors.  The Contractor shall be responsible for the damage or destruction of any property damaged or destroyed in the course of the performance of the Work, and the Contractor shall at its own expense rebuild, restore or replace such damaged or destroyed property to a condition at least equal to the condition of such property before such damage or destruction occurred.  The Contractor shall use reasonable commercial efforts to provide, and to ensure that each Subcontractor provides, in accordance with Prudent Industry Practice, protection from damage or loss to the Facility, the Facility Site, and any and all related materials, construction equipment and tools during the course of performance of the Work hereunder.  Where ingress and egress to and from the Facility Site require the traverse of public or private lands, the Contractor (a) shall be fully responsible for any and all damage to such other property resulting from any movement of its crews and equipment (and of all Subcontractors and each of their crews and equipment), (b) shall be fully responsible for, and exercise commercially reasonable efforts to avoid, marring such lands, and (c) shall in all material respects comply with all obligations of, and any restrictions imposed under, Applicable Law.

2.8    Availability of Documents to Owner Lessor.  Upon Owner Lessor's request, the Contractor shall make available to the Owner Lessor following reasonable notice by the Owner Lessor to the Contractor and upon such other reasonable conditions as the Contractor may require and subject to any obligation of confidentiality owed to any third party (other than an Affiliate of the Contractor): (i) the Construction Documents and all Applicable Permits (to the extent required at such time in connection with the Work); (ii) to the extent in the possession of the Contractor, any requested Design Documents, safety manuals, operation and instruction manuals, quality plans, or any other such manuals or plans that have been prepared in connection with the Work; and (iii) financial records and books of account of the Contractor pertaining to the Facility and the Work maintained in accordance with generally accepted accounting principles.  

2.9    Labor Relations.  The Contractor shall be responsible for all labor relations matters with respect to the Contractor's and any Subcontractor's personnel relating to the Work and shall at all times use commercially reasonable efforts to maintain harmony among personnel employed in connection with the Work.  The Contractor shall at all times exercise commercially reasonable efforts to avoid work stoppages, slowdowns, disputes and strikes.

2.10    Safety Precautions.  The Contractor shall comply, and shall exercise commercially reasonable efforts to ensure that each Subcontractor complies, with the safety procedures and requirements set forth in the Construction Documents and the Contractor's standard safety procedures, including, but not limited to, the safety procedures set forth in the then-current applicable safety manual and procedures.

2.11    Further Assurances.  The Contractor shall execute and deliver all further instruments and documents, and take all further action that, in each case, may be reasonably necessary to enable the Contractor 

-5

to perform the Work and achieve Substantial Completion, or cause the Work to be performed and Substantial Completion achieved, or to otherwise effectuate the purposes or intent of this Agreement.  

ARTICLE 3
STANDARD OF PERFORMANCE

3.1    Standard of Performance.  With respect to the Contractor's performance of the Work, subject to the terms and conditions of this Agreement, the Contractor shall comply with, and shall cause the Work and the Facility and all Components thereof to comply with, Prudent Industry Practice, Applicable Law, all Applicable Permits, all applicable codes and standards,  the requirements of all relevant insurance policies and the requirements of this Agreement, and shall use the degree of care, skill and diligence that would be expected to be exercised by a prudent, skilled and experienced contractor engaged in the same types of undertakings as the construction of the Facility under the same or similar circumstances and conditions as those applying to the design, development and construction of the Facility.

ARTICLE 4
OWNER'S INFORMATION; ACCESS TO THE FACILITY; INSPECTIONS

4.1    Owner Lessor's Information.  

4.1.1    Commencing on the date of this Agreement and continuing until the date on which Substantial Completion is achieved, the Contractor shall provide to the Owner Lessor each monthly progress report received by the Contractor from Kiewit pursuant to the Kiewit Construction Contract with respect to the progress of the Work and the status of efforts made to achieve Substantial Completion.  The Contractor shall not agree to any material change to the monthly progress reporting requirements under the Kiewit Construction Contract that would extend the time to furnish reports or reduce the amount of information to be provided without the consent and approval of the Owner Lessor.  The Contractor shall provide such reports to the Owner Lessor promptly following receipt by the Contractor from Kiewit.  To the extent that Kiewit fails to provide any such report when required under the Kiewit Construction Contract, the Contractor shall use reasonable commercial efforts to cause Kiewit to deliver such report as promptly as possible.  At the Owner Lessor's request, the Contractor shall provide an opportunity during usual business hours for the Owner Lessor (and its authorized representatives), to meet with appropriate personnel of the Contractor to discuss and assess the contents of any such progress report.  Following the date of Substantial Completion, the Contractor shall provide to the Owner Lessor any progress reports received by it from Kiewit promptly following receipt of any such reports. 

4.1.2    In addition to the reports it is required to provide pursuant to Section 4.1.1, the Contractor shall also provide the Owner Lessor with prompt notice of any material incident, event or concern that may occur or arise during the course of the development, construction or commissioning of the Facility that could reasonably be expected to prevent the Contractor from achieving Substantial Completion by the Guaranteed Outside Completion Date, or, if Substantial Completion has not occurred by the Guaranteed Outside 

-6

Completion Date, by the date most recently projected by the Contractor as the date on which Substantial Completion will occur (the “Expected Completion Date”).

4.2    Facility Site Access.  The Contractor, pursuant to the reservation in favor of the Contractor (as Ground Lessor) in Section 4.3 of the Ground Lease, and as owner of the land adjacent to the Facility Site, shall be responsible for ensuring that the Contractor and the Subcontractors, and each of their agents and employees, have unlimited rights of ingress and egress to and from the Facility Site in connection with the performance of the Work.

4.3    Inspection by Contractor.  The Contractor shall perform all inspection, expediting, quality surveillance and traffic services that are required for performance of the Work on a timely basis.  The Contractor shall perform a detailed inspection of all Work in progress at intervals appropriate to the stage of construction of the Facility Site, as is necessary to ensure that such Work is proceeding in accordance with this Agreement and the Construction Documents and to protect the Owner Lessor against defects and deficiencies in such Work.  Contractor's responsibilities under this Section 4.3 shall include inspection of all materials and equipment both on and off the Facility Site that comprise or will comprise the Facility or that are to be used in connection with the performance of the Work hereunder.  The Contractor shall notify the Owner Lessor of any significant deficiencies revealed through such inspections which could reasonably be expected to delay the achievement of Substantial Completion beyond the Guaranteed Outside Completion Date, or, if applicable, the Expected Completion Date, and of the measures proposed by the Contractor to remedy such deficiencies.

4.4    Inspection by Owner Lessor.  The Owner Lessor (and its authorized representatives) shall have the right to inspect the Work and the Facility Site, and to monitor any material performance tests of the Facility, subject to any conditions on any inspection or monitoring the Contractor or any Subcontractor reasonably determines is necessary or appropriate for safety or security reasons.  The Contractor shall use reasonable commercial efforts to provide the Owner Lessor (and its authorized representatives) with advance notice of the scheduled date, time, location and purpose of any material performance tests, if practicable, but failure to do so shall not constitute a default giving rise to any remedies as a result thereof and the Contractor shall have no obligation to provide such Person notice of any acceleration, delay or rescheduling of any such material performance test.  All such inspections shall be conducted in a manner that does not unreasonably interfere with the progress of the Work.  No inspection performed, witnessed, or failed to be performed or witnessed by the Owner Lessor (or any of its authorized representatives), or any recommendation or lack of recommendation from the Owner Lessor (or any of its authorized representatives) in connection therewith, shall constitute a waiver of any of Contractor's obligations hereunder.  The Contractor shall have no obligation to reimburse the Owner Lessor or its Affiliates (or any authorized representative of the Owner Lessor or its Affiliates) in connection with the exercise of any of their rights under this Section 4.4 unless a Lease Event of Default has occurred and is continuing.

ARTICLE 5
SUBSTANTIAL COMPLETION; FINAL COMPLETION

5.1    Substantial Completion.  “Substantial Completion” shall be achieved if and only if with respect to the Facility:

    

-7

(a)    the Facility and all Work required to be performed under this Agreement on or prior to Substantial Completion have been completed in all material respects excepting Punch List items that do not materially and adversely affect the ability of the Facility to operate in accordance with Prudent Industry Practice;

(b)    the Facility has commenced commercial operations in combined cycle mode with an aggregate net output the Contractor determines to be commercially reasonable for an electric generation facility with the structure and components of the Facility, in light of, and taking into account, the Construction Documents and the results of any performance tests conducted thereunder;

(c)    interconnection and synchronization of the Facility with the electrical grid has been achieved;

(d)    the Contractor has obtained all Applicable Permits for the operation of the Facility by the Contractor under the Facility Lease;

(e)    the Facility is performing in accordance with all Applicable Permits (including air permit emissions limitations);

(f)    the Contractor has developed the Punch List; and 

(g)    the Contractor has received from each Subcontractor all documentation deemed necessary by the Contractor for the safe and reliable operation of the Facility and such documentation is in all respects satisfactory to the Contractor (in its sole discretion).

5.2    Achievement of Substantial Completion.  No later than five (5) Business Days after the date on which the Contractor determines, in its reasonable discretion, that Substantial Completion has been achieved, the Contractor shall deliver to the Owner Lessor an executed Substantial Completion Certificate, a form of which is attached hereto as Exhibit B (the “Substantial Completion Certificate”).  For purposes of this Agreement, the date of achievement of Substantial Completion shall be the date on which the Contractor delivers to the Owner Lessor the Substantial Completion Certificate.

5.3    Final Completion.  Following the achievement of Substantial Completion, Contractor shall use its commercially reasonable efforts to ensure that the Facility achieves Final Completion in a timely manner.  “Final Completion” shall be achieved hereunder if and only if, with respect to the Facility:

(a)    Substantial Completion has been achieved;

(b)    All items on the Punch List have been completed to the Contractor's satisfaction;

(c)    The Contractor has (i) prepared final drawings, specifications and other documentation that represents the physical placement of all Facility components and systems as installed or constructed at completion or (ii) obtained any such documents that have been prepared on behalf of the Contractor;

-8

(d)    The Contractor has received all quality assurance documentation with respect to commissioning and testing of the Facility, to the extent deemed necessary by the Contractor for the safe and reliable operation of the Facility; and

(e)    The Contractor has delivered to the Owner Lessor any customary releases of mechanic's liens received by the Contractor from each applicable Subcontractor.

5.4    Achievement of Final Completion.  No later than five (5) Business Days after the date on which the Contractor determines, in its reasonable discretion, that it has achieved Final Completion, the Contractor shall deliver to the Owner Lessor an executed Final Completion Certificate, substantially in the form attached hereto as Exhibit C (the “Final Completion Certificate”).  For purposes of this Agreement, the date of achievement of Final Completion shall be the date on which the Contractor delivers to the Owner Lessor the Final Completion Certificate.

5.5    Acceptance by Owner Lessor Not a Release of Contractor.  No issuance of any Substantial Completion Certificate or Final Completion Certificate shall constitute a waiver or relinquishment by the Owner Lessor of any of its rights under this Agreement, nor exonerate or relieve the Contractor from any obligation, warranty or liability under this Agreement, except to the extent expressly provided herein.

ARTICLE 6
PRICE AND PAYMENT

6.1    CMA Payment.  As full consideration to the Contractor for the timely, full and complete
 performance of the Work and all costs incurred in connection therewith, the Owner Lessor shall pay, and Contractor shall accept, the sum of $188,044,698 (the “CMA Payment”), to be paid in full in immediately available funds on the Closing Date.  The parties acknowledge and agree that the CMA Payment shall not be subject to adjustment for any reason, including for (i) any Facility construction costs or schedule overruns or savings, which shall in any and all cases remain the responsibility of, or accrue to the benefit of, the Contractor, as applicable, or (ii) consequences of any Uncontrollable Forces or change in Applicable Law. 

ARTICLE 7
SUBCONTRACTS

7.1    Subcontractors.  The Contractor may subcontract the Work, in whole or in part, to any Person without further approval by the Owner Lessor, and the Owner Lessor acknowledges that the Contractor has, prior to the date of this Agreement, engaged Subcontractors to perform the Work.  Notwithstanding any agreement with any Subcontractor, the Contractor shall be solely responsible for the Work and shall not be entitled to relief if any portion of the Work is incomplete or delayed due to any disagreement between or among Subcontractors or between any Subcontractor and the Contractor.

7.2    Payments to Subcontractors.  The Contractor shall be solely responsible for paying each Subcontractor and any other Person to whom any amount is due from the Contractor in connection with the performance of the Work, and shall fully indemnify, save harmless and defend the Owner Lessor, the Trust Company, the Lessor Manager, the Lease Indenture Trustee 

-9

and Wilmington Trust, and their respective Affiliates, successors, assigns, agents, directors, officers or employees (the “Owner Lessor Indemnified Parties”), from and against any and all Claims of any Subcontractor imposed on or asserted against any Owner Lessor Indemnified Party for any amount due from the Contractor in connection with the performance of the Work.  The foregoing indemnity is in addition to the Contractor's indemnity obligations set forth in Section 12.1 and the Operative Documents, and is for the exclusive benefit of the Owner Lessor Indemnified Parties and in no event shall inure to the benefit of any other Person or diminish or otherwise relieve the Contractor from its indemnity obligations set forth in Section 12.1 or the Operative Documents.

7.3     No Privity; No Assignment.  The Owner Lessor shall not be deemed by virtue of this Agreement to have any contractual obligation to or relationship with any Subcontractor.  The parties acknowledge and agree that (i) none of the Construction Documents have been or are being assigned to the Owner Lessor pursuant to this Agreement or any other Transaction Document, and (ii) as between the Contractor and the Owner Lessor, the Contractor shall have the right, in its sole discretion, to amend, modify or terminate, or waive any requirement under, any Construction Document; provided that no such amendment, modification, termination or waiver shall materially adversely affect the ability of the Contractor to comply with its obligations under this Agreement. 

ARTICLE 8
REPRESENTATIONS AND WARRANTIES

8.1    Representations and Warranties of Contractor.  The Contractor represents and warrants to the Owner Lessor that:

8.1.1      Legal Status.  The Contractor is an instrumentality and agency of the Government duly created and validly existing under the provisions of the TVA Act and has full power and authority to enter into and perform its obligations under this Agreement.

8.1.2    Due Authorization; Enforceability; Etc.  This Agreement has been duly authorized, executed and delivered by all necessary corporate action by the Contractor, and, assuming the due authorization, execution and delivery by the Owner Lessor, this Agreement constitutes the legal, valid and binding obligations of the Contractor, enforceable against it in accordance with its terms, except as the same may be limited by fraudulent transfer, moratorium or other laws of general applicability relating to or affecting the rights of creditors and by general principles of equity.

8.1.3    Non-Contravention.  The execution, delivery and performance by the Contractor of this Agreement, the consummation by the Contractor of the transaction contemplated hereby, and compliance by the Contractor with the terms and provisions hereof, do not and will not (i) contravene the TVA Act or any other Applicable Law binding the Contractor or its property, or (ii) constitute a default by the Contractor under, or result in the creation of any Lien on the property of the Contractor (other than as contemplated by or permitted pursuant to any Transaction Document) under, or require any approval or consent of, or notice to, any holder of any indebtedness of the Contractor under the Bond Resolution, the Subordinated Resolution or any other similar bond resolution governing the issuance of 

-10

indebtedness of TVA (whether senior or subordinated) or any other material contract, agreement or instrument to which the Contractor is a party or by which the Contractor or any of its property is bound.

8.1.4    Litigation.  There is no pending or, to the Actual Knowledge of the Contractor, threatened, action, suit, investigation or proceeding against the Contractor before any Governmental Entity questioning the validity of this Agreement.

8.1.5    Patents, Licenses; Franchises.  The Contractor owns or possesses all the patents, trademarks, service marks, trade names, copyrights, licenses, franchises, permits and rights with respect to the foregoing necessary to perform the Work without conflict with the rights of others, except where noncompliance will not have a Material Adverse Effect or involve a material risk of (i) foreclosure, sale, forfeiture or loss of, or imposition of a material Lien on, the Facility or the Facility Site, (ii) the impairment of its ability to perform the Work or other services hereunder or (iii) any criminal or material civil liability being incurred by the Lessor Owner, the Equity Investor, the Equity Note Purchasers, the Lessor Manager, the Equity Manager or the Lease Indenture Trustee.

8.1.6    Compliance with Laws.  The Contractor is in compliance with Applicable Law relating to the construction of the Facility, except where noncompliance will not have a Material Adverse Effect or involve a material risk of (i) foreclosure, sale, forfeiture or loss of, or imposition of a material Lien on, the Facility or the Facility Site, (ii) the impairment of its ability to perform the Work or other services hereunder or (iii) any criminal or material civil liability being incurred by the Owner Lessor, the Equity Investor, the Equity Note Purchasers, the Lessor Manager, the Equity Manager, the Lease Indenture Trustee or the Noteholders.

8.2    Representations and Warranties of Owner Lessor.  The Owner Lessor represents and warrants to Contractor that:

8.2.1    Due Organization.  The Owner Lessor is duly organized, validly existing and in good standing under the laws of the State of Delaware and has the power and authority to execute and deliver, and to perform its obligations under, this Agreement.

8.2.2    Due Authorization; Enforceability; Etc.  This Agreement has been duly authorized, executed and delivered by the Owner Lessor, and assuming the due authorization, execution and delivery of this Agreement by the Contractor, this Agreement constitutes the legal, valid and binding obligation of the Owner Lessor, enforceable against the Owner Lessor in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity.

8.2.3    Non-Contravention.  The execution and delivery by the Owner Lessor of this Agreement, the consummation by the Owner Lessor of the transactions contemplated hereby and the compliance by the Owner Lessor with the terms and provisions hereof, do not and will not contravene any Applicable Law of the United States of America or the State of Delaware, or the Owner Lessor LLC Agreement or the Owner Lessor's other organizational documents or contravene the provisions of, or 

-11

constitute a default by the Owner Lessor under, any indenture, mortgage or other material contract, agreement or instrument to which the Owner Lessor is a party or by which the Owner Lessor or its property is bound, or result in the creation of any Owner Lessor's Lien upon the Lessor Estate.

8.2.4    Litigation.  There is no pending or, to the Actual Knowledge of the Owner Lessor, threatened action, suit, investigation or proceeding against the Owner Lessor before any Governmental Entity. 

8.2.5    Compliance With Laws.  The Owner Lessor has complied with Applicable Law such that the Owner Lessor is not subject to any fines, penalties, injunctive relief or criminal liabilities which in the aggregate have materially affected or are reasonably likely to have a Material Adverse Effect or impair the Owner Lessor's ability to perform its obligations hereunder.

ARTICLE 9
LIABILITY AND DAMAGES

9.1    CONSEQUENTIAL DAMAGES.  NEITHER THE OWNER LESSOR NOR THE CONTRACTOR NOR ANY CONTRACTORS OR AGENTS OF EITHER PROVIDING EQUIPMENT, MATERIALS OR SERVICES FOR THE PERFORMANCE OF THE WORK SHALL BE LIABLE TO THE OTHER OR ANY OF ITS CONTRACTORS OR AGENTS FOR CONSEQUENTIAL LOSSES OR DAMAGES, INCLUDING LOSS OF USE OR LOSS OF PROFIT, AND THE OWNER LESSOR AND THE CONTRACTOR EACH HEREBY RELEASES THE OTHER AND ITS CONTRACTORS AND AGENTS FROM ANY SUCH LIABILITY.  THE FOREGOING EXCLUSION SHALL NOT BE CONSTRUED TO LIMIT RECOVERY UNDER ANY INDEMNITY IN ARTICLE 12 IN RESPECT OF THIRD PARTY CLAIMS FOR DAMAGE TO OR DESTRUCTION OF PROPERTY OF, OR DEATH OF OR BODILY INJURY TO, ANY PERSON.

9.2    Further Limitation of Liability.  The limitations of liability and the exclusions of consequential damages set forth in this Agreement (including this Article 9) shall apply irrespective of whether a party hereto or any Affiliate thereof, or any partner, shareholder, officer, director or employee of a party hereto or an Affiliate thereof, asserts a theory of liability in contract, tort, negligence, misrepresentation (including negligent misrepresentation), strict liability or any other theory of liability.

ARTICLE 10
WARRANTIES

10.1    General Warranty.  The Contractor warrants to the Owner Lessor that throughout the period commencing with Substantial Completion and, if later, the installation of any property or the performance of any service constituting part of the Work, and ending one (1) day prior to the first anniversary of Substantial Completion or such later date: all Work furnished pursuant to this Agreement (a) shall comply with the requirements of this Agreement; (b) will be free from latent and patent defects in construction; and (c) will be suitable and adequate for its intended purpose as reasonably inferable from the terms of this Agreement.  During such period, the Contractor shall, at its expense, re-perform, remove, repair, 

-12

replace, and/or reinstall as necessary all Work, or portions thereof, which fail to comply with any or all of the aforementioned warranties.    

10.2    EXCLUSIVE WARRANTIES.  THERE ARE NO WARRANTIES OF THE CONTRACTOR TO THE OWNER LESSOR HEREUNDER, EXPRESS OR IMPLIED, OTHER THAN AS SET FORTH IN THIS ARTICLE 10.  ALL IMPLIED WARRANTIES (INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) ARE HEREBY DISCLAIMED.

ARTICLE 11
UNCONTROLLABLE FORCES

11.1    Excused Performance.  Notwithstanding any other provisions of this Agreement, any obligation of either party under this Agreement shall be excused (expect with respect to the Contractor's payment obligations hereunder) to the extent that such party's inability to perform is caused by Uncontrollable Forces.  Each party hereto shall use reasonable efforts to cure, minimize, mitigate or remedy the effects of Uncontrollable Forces.  In order to cure, minimize, mitigate or remedy the effects of Uncontrollable Forces, the Contractor may, among other things, suspend performance of the Work in accordance with Section 2.4.  The rights or the performance by the Contractor of its obligations under this Agreement shall resume upon the cessation of the Uncontrollable Forces.

ARTICLE 12
INDEMNIFICATION

12.1    Claims Indemnified.  The Contractor shall fully indemnify, save harmless and defend the Owner Lessor Indemnified Parties from and against any and all Claims imposed on, incurred or suffered by or asserted against any Owner Lessor Indemnified Party in any way relating to or resulting from or arising out of or attributable to (a) the Work (including the design, procurement, construction, installation, start-up or testing of the Facility), including Claims for any damage to or destruction of property of, or death of or bodily injury to, any Person (whether such Person is an Owner Lessor Indemnified Party, the Contractor or any Subcontractor, or is a Person unaffiliated with the Facility or the performance of the Work), or (b) Contractor's fault, breach of this Agreement, tortious act, negligence, or strict liability in the performance of the Contractor's obligations hereunder.  The Contractor's indemnity under this Section 12.1 is for the exclusive benefit of the Owner Lessor Indemnified Parties and in no event shall inure to the benefit of any other Person, and is in addition to the obligations of the Contractor under any Operative Document (including Sections 9.1 and 9.2 of the Participation Agreement).

12.2    Survival of Agreement.  This Article 12 shall survive the termination or expiration of this Agreement.
ARTICLE 13
INSURANCE

13.1    Insurance Obtained by Contractor.  The Contractor shall, or shall cause its Subcontractors to, maintain in full force and effect, at the Contractor's or such Subcontractors' expense, as applicable, the 

-13

insurance coverages required to be maintained under the Construction Documents.

ARTICLE 14
TERMINATION AND DEFAULT

14.1    Termination.  Unless terminated by the mutual written agreement of the parties hereto, this Agreement shall terminate on the earlier of (a) the date of termination of the Facility Lease pursuant to the terms thereof, and (b) the date that is two (2) years following the date on which Final Completion is achieved.

14.2    Owner Lessor Remedies.  Upon the occurrence of any default by the Contractor of its obligations hereunder, and at any time thereafter so long as the same shall be continuing, the Owner Lessor may, at its option, declare the Contractor to be in default by written notice to the Contractor; and at any time thereafter, so long as the Contractor shall not have remedied all outstanding defaults hereunder, the Owner Lessor may proceed by appropriate court action or actions, either at law or in equity, as its sole and exclusive remedy for any default hereunder, to specifically enforce performance by the Contractor of its obligations hereunder of the applicable covenants and terms of this Agreement or to recover damages for breach thereof, at the Contractor's sole cost and expense.  For the avoidance of doubt, any remedies for a default by the Contractor of its obligations hereunder shall not include: (i) termination of this Agreement or any other Transaction Document, or (ii) removal of the Contractor from the performance of its obligations hereunder.

14.3    Surviving Obligations.  Termination of this Agreement (a) shall not relieve either party hereto of its obligations with respect to the confidentiality of the other party's information as set forth in Article 15, (b) shall not relieve either party hereto of any obligation hereunder which expressly survives termination hereof, and (c) shall not relieve Contractor of its indemnification obligations under Article 12 hereof or warranty obligations under Section 10.1 hereof.  This Section 14.3 shall survive the termination or expiration of this Agreement.

ARTICLE 15
CONFIDENTIAL INFORMATION

15.1    Confidentiality.  Except as set forth in this Section 15.1, and, with respect to any Confidential Information contained in, or delivered in connection with, any Construction Documents, subject in all respects to the confidentiality provisions of the applicable Construction Documents, each of the parties hereto shall hold in confidence any Confidential Information for a period ending five (5) years after the earlier of (a) the achievement of Final Completion, or (b) termination of this Agreement; provided, however, that nothing in this Section 15.1 shall prevent any of the parties hereto from disclosing Confidential Information (i) to its, or to its Affiliate's, directors, officers, employees, agents and professional consultants or advisors, including legal counsel and independent auditors, (ii) in connection with any assignment of this Agreement, provided that any potential assignee is subject to confidentiality provisions substantially similar to those set forth herein, (iii) to any Person to whom such disclosure is reasonably required in connection with the exercise of any remedy hereunder or to protect the interests of the disclosing Person thereunder, (iv) to any Federal or state regulatory authority having jurisdiction over 

-14

any disclosing Person, or any Affiliate of such Person, (v) to any other Person to whom disclosure is necessary (A) to comply with any law, rule, regulation or order applicable to the disclosing Person, (B) to comply with any subpoena or other legal or administrative process or informal investigative order applicable to the disclosing Person or (C) in connection with any litigation to which the disclosing Person or any Affiliate of such Person is a party or (vi) to the Equity Investor or to any Equity Note Purchaser; provided further that in the case of any disclosure made pursuant to clause (v) of this Section 15.1, (x) such disclosing Person shall have used its reasonable best efforts to give the other party hereto prior written notice of any disclosure to be made, unless such notice is prohibited by law or court order and (y) such disclosing Person shall not oppose the other party's seeking an appropriate protective order with respect to any Confidential Information to be so disclosed.

15.2    Public Statements.  The Owner Lessor and its respective Affiliates, successors, assigns, agents, directors, officers or employees shall not make any press announcements or public statement about the Facility or any of the transactions contemplated herein, nor shall any such Person make any statement that could reasonably be expected to be used by any third party for such purposes without the prior written consent of the Contractor, such consent not to be unreasonably withheld, conditioned or delayed. 

ARTICLE 16
DISPUTE RESOLUTION

16.1    Resolution of Disputes.  In the event a dispute arises between the Owner Lessor and the Contractor regarding the application or interpretation of this Agreement, the Owner Lessor and the Contractor shall exercise commercially reasonable efforts to reach a reasonable and equitable resolution of the matter.  If the Owner Lessor and the Contractor are unable to resolve the matter within thirty (30) days, either party hereto may refer the matter by written notice to the senior officers of the parties hereto.  If the Owner Lessor and the Contractor cannot resolve the matter, the parties hereto shall exercise commercially reasonable efforts to agree upon an appropriate method of non-judicial dispute resolution, including mediation, mini-trial, or arbitration.  In any event, neither party hereto shall seek judicial resolution of any dispute until thirty (30) days after the matter has been referred in writing to the senior officers of the parties hereto.  In the event of a dispute each of the parties hereto shall, subject to any confidentiality obligations owed to any third party unrelated to any of the parties hereto, make available to the other such data and information as may reasonably be requested.  The pendency of this dispute resolution mechanism shall not in and of itself relieve either party hereto of its duty to perform under this Agreement.

ARTICLE 17
TAX MATTERS

17.1    Tax Matters.  The Owner Lessor shall reasonably cooperate with the Contractor at the Contractor's sole cost and expense to minimize the Contractor's obligation to pay Taxes (if any) in connection with the Work, including by cooperating with the preparation and overall coordination of the making of tax exemption applications and in preparation of tax agency inquiries and presentations to the extent exemptions in the Owner Lessor's name are available, provided that the Owner Lessor shall not be required to take any 

-15

action or refrain from any action that would involve (a) a material risk of foreclosure, sale, forfeiture or loss of, or the imposition of any material Lien (other than a Permitted Lien) on the Owner Lessor's interest in the Facility Site, the Facility, the Ground Interest or any portion or Component thereof or any interest therein or (b) a risk of the imposition of criminal penalties as a result of such action.

ARTICLE 18
MISCELLANEOUS  

18.1    Assignment.  The Owner Lessor has assigned its right, title and interest in this Agreement to the Lease Indenture Trustee.  The Contractor shall not have the right to assign all or part of its right, title, and interest in this Agreement, and shall not be released from its obligations under this Agreement, without the consent of the Owner Lessor, which consent shall not be unreasonably withheld, delayed or conditioned.

18.2    Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of, and shall be enforceable by, the parties hereto and their respective successors and assigns as permitted by and in accordance with the terms hereof.  Except as expressly provided herein, no party hereto may assign its interests herein without the consent of the other parties hereto.

18.3    Collateral Assignment.  The parties acknowledge that the Owner Lessor's rights in and to the Facility, the Facility Site and this Agreement have been assigned to, and are subject to the Lien of, the Lease Indenture Trustee as security for the performance of the Owner Lessor's obligations under the Lease Indenture.  The Contractor hereby consents to such assignment and to the creation of such Lien and acknowledges receipt of copies of the Lease Indenture, it being understood that such consent shall not affect any requirement or the absence of any requirement for any consent of the Contractor under any other circumstances.  Unless and until the Contractor shall have received written notice from the Lease Indenture Trustee that the Lien of the Lease Indenture has been fully terminated, the Lease Indenture Trustee shall have the right to exercise the rights of the Owner Lessor under this Agreement to the extent set forth in and subject in each case to the exceptions set forth in the Lease Indenture.  Notwithstanding anything to the contrary contained herein, the rights of the Lease Indenture Trustee, as the assignee of the Owner Lessor's interests, in and to the Facility, the Facility Site or this Agreement shall be subject in all respects to the appointment made under Section 4.1(b) of the Facility Lease, as described below.

18.4    Contractor as Owner Lessor's Agent.  The parties acknowledge that, pursuant to Section 4.1(b) of the Facility Lease, the Owner Lessor has irrevocably appointed and constituted the Contractor its agent and attorney-in-fact, coupled with an interest, to assert and enforce, from time to time and so long as the Owner Lessor (or the Lease Indenture Trustee) has not exercised remedies pursuant to Section 18.2 of the Facility Lease, in the name and for the account of the Owner Lessor and the Contractor, as their interests may appear, but in all cases at the sole cost and expense of the Contractor, whatever claims and rights the Owner Lessor may have in respect of the Facility or any Component thereof, against any manufacturer, vendor or contractor, or under any express or implied warranties relating to the Facility or any Component thereof (including any such claim or right that the Owner Lessor may have against the 

-16

Contractor under this Agreement); provided, however, that such appointment may be revoked in accordance with Section 4.1(b) of the Facility Lease.

18.5    Waivers.  No failure to exercise, and no delay in exercising, any right, power or remedy under this Agreement shall impair any right, power or remedy which any party hereto may have, nor shall such failure or delay be construed to be a waiver of any such rights, powers or remedies, or an acquiescence in any breach or default under this Agreement, nor shall any waiver of any breach or default be deemed a waiver of any default or breach subsequently occurring under this Agreement.

18.6    CHOICE OF LAW.  THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES OTHER THAN AS PROVIDED IN SECTION 5-1401 OF THE NY GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT THAT U.S. FEDERAL LAW SHALL APPLY.

18.7    Severability.  If any provision in this Agreement shall be invalid, illegal or unenforceable under Applicable Law of any jurisdiction, the validity, legality and enforceability thereof in any other jurisdiction, and of the remaining provisions hereof in any jurisdiction, shall not be affected or impaired thereby.

18.8    Notice.  Unless otherwise expressly specified or permitted by this Agreement, all communications and notices provided for herein shall be in writing or by a telecommunications or electronic device capable of creating a written record, and any such notice shall become effective (a) upon personal delivery thereof, including by overnight mail or courier service, (b) in the case of notice by United States mail, certified or registered, postage prepaid, return receipt requested, upon receipt thereof, or (c) in the case of notice by such a telecommunications or electronic device, upon transmission thereof, provided such transmission is promptly confirmed by either of the methods set forth in clauses (a) or (b) above, in each case addressed to the applicable party hereto at its address set forth below, or at such other address as such party may from time to time designate by written notice to the other party hereto:

If to the Owner Lessor:
John Sevier Combined Cycle Generation LLC
c/o Wells Fargo Delaware Trust Company
Corporate Trust Services
919 Market Street, Suite 1600
Wilmington, DE 19801
Telephone No.:  (302) 575-2015
Facsimile No.:  (302) 575-2006
E-mail: scott.a.huff@wellsfargo.com
Attention:  Corporate Trust Administration

If to the Contractor:

-17

Tennessee Valley Authority
400 West Summit Hill Drive
Knoxville, Tennessee  37902
Telephone No.:  (865) 632-3366
Facsimile No.:  (865) 632-6597
E-mail:  leasenotices@tva.gov
Attention:  Treasurer

18.9    Headings and Table of Contents.  The headings of the Articles and Sections of this Agreement and the Table of Contents are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.

18.10    Entire Agreement.  This Agreement contains the entire agreement between the Owner Lessor and the Contractor with respect to the Work and the subject matter hereof, and supersedes any and all prior and contemporaneous written and oral agreements, proposals, negotiations, specifications, understandings and representations pertaining to the Work.

18.11    Amendments.  No amendments or modifications hereof shall be valid unless evidenced by a written agreement executed by both parties hereto.

18.12    No Third Party Rights.  This Agreement and all rights hereunder are intended for the sole benefit of the Owner Lessor (and permitted successors and assigns thereof), the Contractor and the Owner Lessor Indemnified Parties (to the extent provided in Article 12), and shall not imply or create any rights on the part of, or obligations to, any other Person or any other rights on the part of, or other obligations to, any Owner Lessor Indemnified Party beyond the rights and obligations expressly set forth in such provision.

18.13    Limited Recourse.  The Owner Lessor and the Contractor acknowledge that the Owner Lessor has entered into this Agreement entirely on its own behalf, and in no manner on behalf of any parent, subsidiary or affiliate company of the Owner Lessor or any equity holder in or joint venturers of the Owner Lessor or any affiliates of any of them, and that the Contractor shall have no recourse against any parent, subsidiary or affiliate company of the Owner Lessor or any equity holder in or joint venturers of the Owner Lessor or any parent, subsidiary or affiliate company thereof (other than the Owner Lessor), or any partners, shareholders or other equity owners, joint venturers, officers, directors, successors or assigns of any such Person for any reason.

18.14    Limitation of Liability.  It is expressly understood and agreed by the parties hereto that (a)  this Agreement is executed and delivered by the Trust Company, not individually or personally but solely as manager of the Owner Lessor under the Owner Lessor LLC Agreement, in the exercise of the powers and authority conferred and vested in it pursuant thereto, (b) each of the representations, undertakings and agreements herein made on the part of the Owner Lessor is made and intended not as personal representations, undertakings and agreements by the Trust Company, but is made and intended for the purpose for binding only the Owner Lessor, (c) nothing herein contained shall be construed as creating any liability on the Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto or by 

-18

any Person claiming by, through or under the parties hereto and (d) under no circumstances shall the Trust Company, be personally liable for the payment of any indebtedness or expenses of the Owner Lessor or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Owner Lessor under this Agreement.

[Signature page follows.]

    

-19

IN WITNESS WHEREOF, the Owner Lessor and the Contractor, intending to be legally bound, have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized on the dates below their respective signatures, but effective as of the date first set forth above.
	
	
	JOHN SEVIER COMBINED CYCLE GENERATION LLC

	By:  Wells Fargo Delaware Trust Company, National Association, not in its individual capacity, but solely as Lessor Manager under the Owner Lessor LLC Agreement

	 

	By:      /s/ Scott A. Huff                                 

	Name:  Scott A. Huff

	Title:  Vice President

	Date:  January 17, 2012

	 

	TENNESSEE VALLEY AUTHORITY

	 

	By:      /s/ John M. Hoskins                            

	Name:  John M. Hoskins

	Title:  Senior Vice President and Treasurer

	Date:  January 17, 2012

(Construction Management Agreement)

EXHIBIT A
to
Construction
Management Agreement
Description of Facility

The Facility consists of the Units, Common Facilities, and any other equipment, material or property, other than real property, associated with the Units and Common Facilities (but not associated with the Global Common Facilities), all of which are located on, under, or over the Facility Site, which Facility Site is the real property located in Hawkins County, Tennessee and is described in greater detail in Exhibit 1 to the Ground Lease.
The Facility will have a three over one combined cycle configuation consisting of three (3) Units and one (1) Toshiba nominally rated 400 megawatt steam turbine generator (the “STG”).  Each Unit consists of a General Electric 7FA.04 combustion turbine generator (“CTG”), the related Nooter/Eriksen heat recovery steam generator (“HRSG”) with supplementary duct firing and any ancillary equipment related thereto, except for any Component exclusively constituting Common Facilities.
The Facility will be capable of operating in both simple cycle operation and combined cycle operation.  The CTG's primary fuel supply will be natural gas and its secondary fuel supply will be No. 2. Fuel oil.  The HRSG's supplemental duct firing will utilize natural gas only.
The CTGs are sometimes referred to as CT1, CT2 and CT3. The serial numbers for each CTG-HRSG pair are as follows:
	
			
	TVA Tag Number
	CTG Serial Number
	HRSG Serial Number

	 
	 
	 

	Unit 1
	298973
	083200-1

	Unit 2
	298974
	083200-2

	Unit 3
	298975
	083200-3

The Components for each Unit includes the following:
Mark VIe Gas Turbine Control System
Inlet Filter System
Exhaust System
Exhaust Diverter Damper
Guillotine Isolation Damper to HRSG 
Evaporative Cooling System
Cooling Water Module
Water Injection Skid

EXH. A-1

Fuel Gas Filter/Separator
CO2 Fire Protection System
Control Cab/(PEECC)
LCI Starting System/Transformer
EX2100 Generator Excitation System 
Generator Auxiliary Compartment
Main Step-up Transformer
Fuel Oil Heating System
Fuel Oil Forwarding System
Fuel Gas Module
Lube Oil Mist Eliminator
Atomizing Air/HP Fuel Oil Pump Skid
Emissions Monitoring Systems on CT exhaust, SCR inlet and HRSG exhaust
Feed Water System
Steam System
CO Catalyst
SCR Catalyst
Duct Burners

The Common Facilities are equipment and facilities that are used for the operation of the Units at the Facility, but are not Global Common Facilities.  These shared facilities support the Units.  The Common Facilities are as follows:
Steam Turbine Generator
Condensate System 
Circulating Water System 
Closed Cooling Water System  
Fuel Oil Storage System
Compressed Air System 
Chemical Feed System  
Steam Water Sampling System 
Nitrogen, Hydrogen, & CO2 Gas Systems
Fuel Gas Dew Point Heating System 
Fuel Gas Pressure Regulation System
Plant Water Supply System  
Auxiliary Steam System
Ammonia Supply System
Oil-Water Separation and Discharge System
Fire Loop System
Potable Water System
Eye Wash System
Storm Water Drains
Process Water
Compressor Wash System

EXH. A-2

EXHIBIT B
to
Construction
Management Agreement
Form of 
Substantial Completion Certificate

__________, 20__

SUBSTANTIAL COMPLETION CERTIFICATE
JOHN SEVIER COMBINED CYCLE FACILITY

Reference is made to the Construction Management Agreement, dated as of January 17, 2012 (the “Agreement”), by and between John Sevier Combined Cycle Generation LLC, a Delaware limited liability company (“Owner Lessor”), and Tennessee Valley Authority, a wholly owned corporate agency and instrumentality of the United States (“Contractor”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

Pursuant to Sections 5.1 and 5.2 of the Agreement, Contractor hereby certifies that Substantial Completion of the Facility occurred on __________, 20__.

IN WITNESS WHEREOF, the Contractor has caused this Substantial Completion Certificate to be executed and delivered by its duly authorized representative as of the date first set forth above.

	
	
	TENNESSEE VALLEY AUTHORITY

	 

	By:      ___________________________________________

	Name:

	Title:

EXH. B-1

EXHIBIT C
to
Construction
Management Agreement
Form of
Final Completion Certificate

__________, 20__

FINAL COMPLETION CERTIFICATE
JOHN SEVIER COMBINED CYCLE FACILITY

Reference is made to the Construction Management Agreement, dated as of January 17, 2012 (the “Agreement”), by and between John Sevier Combined Cycle Generation LLC, a Delaware limited liability company (“Owner Lessor”), and Tennessee Valley Authority, a wholly owned corporate agency and instrumentality of the United States (“Contractor”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

Pursuant to Sections 5.3 and 5.4 of the Agreement, Contractor hereby certifies that Final Completion of the Facility occurred on __________, 20__.

IN WITNESS WHEREOF, the Contractor has caused this Final Completion Certificate to be executed and delivered by its duly authorized representative as of the date first set forth above.

	
	
	TENNESSEE VALLEY AUTHORITY

	 

	By:      ___________________________________________

	Name:

	Title:

EXH. C-1ex10-1.htm

Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (“Agreement”) is entered into on this 23rd day of February, 2011, by and between Amici Enterprises, LLC, a Texas limited liability company (“Enterprises”), Madison GA Acquisitions, LLC, a Georgia limited liability company (“MAC”), Covington Acquisitions, LLC, a
Georgia limited liability company (“CAC”), Amici Franchising, LLC, a Texas limited liability company (“AFLLC”), and Amici Restaurants, Inc., a Georgia corporation (“ARI”),  Amici Pizza Co., Inc., a Georgia corporation (“APC”), and Amici Franchising, LLC, a Georgia limited liability company
(“Franchising”).

 

For purposes of this Agreement: (i) Enterprises, MAC, CAC, and AFLLC may be referred to interchangeably or collectively as “Buyer”; (ii) ARI, APC, and Franchising may be referred to collectively as “Sellers”; (iii) Buyer and Sellers may be referred to
individually as a “Party”, and  (iv) Buyer and Sellers may be referred to collectively as the “Parties.”

 

RECITALS

 

WHEREAS, ARI owns and operates a full service, family-style Italian restaurant offering a variety of pizzas, pastas, wings, salads, and sandwiches, located at 113 South Main Street, Madison, Georgia (the “Madison Restaurant”);

 

WHEREAS, APC owns and operates a full service, family-style Italian restaurant offering a variety of pizzas, pastas, wings, salads, and sandwiches, located at 1116 College, Covington, Georgia (the “Covington Restaurant”);

 

WHEREAS, Franchising owns certain assets related to the operation and franchising of AMICI ITALIAN CAFÉ restaurants (the “Franchise Operations”);

 

WHEREAS, ARI desires to sell assets used in connection with the operation of the Madison Restaurant, APC desires to sell assets used in connection with the operation of the Covington Restaurant, and Franchising desires to sell assets used in connection with the Franchise Operations, and Buyer desires to purchase such assets, all in accordance with the terms and conditions of this Agreement;

 

WHEREAS, contemporaneous with closing the transactions contemplated by this Agreement, Sellers’ affiliate, AFG Partners, LLC (“AFG Partners”), is contributing to Enterprises, in exchange for an equity interest in Enterprises, all tangible and intangible property used in connection with the Franchise Operations pursuant to a Contribution Agreement between AFG Partners and Enterprises (the “Contribution Agreement”) and,
contemporaneous with such contribution, AFG Partners is entering into the Amici Enterprises, LLC Operating Agreement (the “Amici Enterprises Operating Agreement”);

 

NOW THEREFORE, in consideration of the mutual premises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

	
I.  

	
SALE AND PURCHASE OF ASSETS

 

1.1 Sale of Assets of Madison Restaurant. With respect to the Madison Restaurant, the term “Assets” means and includes the following Assets, more specifically described in Schedule 1.1:

 

	
(a)  

	
Sellers’ interest in all leasehold improvements and fixtures of the Madison Restaurant;

 

	
(b)  

	
All furniture, equipment, computer hardware and software, and signage used in connection with the Madison Restaurant business and/or located at the Madison Restaurant premises;

 

  

  

  

	
(c)  

	
All smallwares, and inventory and supplies on-hand at the Madison Restaurant premises at Closing (defined below);

 

	
(d)  

	
Sellers’ interest in the Madison Restaurant real estate lease, including security deposit;

 

	
(e)  

	
Sellers’ interest in any liquor license or other permit(s) required for the sale of alcoholic beverages at the Madison Restaurant;

 

	
(f)  

	
All books and records of Sellers relating to the Madison Restaurant (including vendor documentation);

 

	
(g)  

	
Permits and licenses applicable to the operation of the Madison Restaurant (to the extent that they are assignable);

 

	
(h)  

	
Prepaid expenses; and

 

	
(i)  

	
Sellers’ interest in the telephone number(s) used in connection with the Madison Restaurant.

 

1.2 Sale of Assets of Covington Restaurant.  With respect to the Covington Restaurant, the term “Assets” means and includes the following Assets, more specifically described in Schedule 1.1:

 

	
(a)  

	
Sellers’ interest in all leasehold improvements and fixtures of the Covington Restaurant;

 

	
(b)  

	
All furniture, equipment, and computer hardware and software used in connection with the Covington Restaurant business and/or located at the Covington Restaurant premises;

 

	
(c)  

	
All smallwares, and inventory and supplies on-hand at the Covington Restaurant premises at Closing;

 

	
(d)  

	
Sellers’  interest in any liquor license or other permit(s) required for the sale of alcoholic beverages at the Covington Restaurant;

 

	
(e)  

	
All books and records of Sellers relating to the Covington Restaurant (including vendor documentation);

 

	
(f)  

	
Permits and licenses applicable to the operation of the Covington Restaurant (to the extent that they are assignable);

 

	
(g)  

	
Prepaid expenses; and

 

	
(h)  

	
Sellers’ interest in the telephone number(s) used in connection with the Covington Restaurant.

 

1.3 Sale of Assets of Franchise Operations.  With respect to Franchise Operations, the term “Assets” means and includes the Franchising’s interest, if any, in the following Assets:

 

	
(a)  

	
Franchising’s interest in any and all rights and registrations relating to all trademarks relating to the AMICI ITALIAN CAFÉ system;

 

	
(b)  

	
Franchising’s interest in any and all copyrights and copyrighted works relating to the AMICI ITALIAN CAFÉ system including, without limitation, web site design and content, menu and menu board design and content, and operations and training manuals design and content;

 

	
(c)  

	
Franchising’s interest in any and all trade secrets relating to the AMICI ITALIAN CAFÉ system, including recipes and preparation techniques; and

 

  

  

  

	
(d)  

	
Franchising’s interest in any and all other intangible property rights relating to the AMICI ITALIAN CAFÉ system.

 

1.4 Assets Not Included in Sale. The sale contemplated under this Agreement does not include cash on hand, accounts receivable, utility deposits, prepayment of all taxes or fees, including but not limited to personal property taxes (but not including federal income taxes).  The sale contemplated under this Agreement also does not include any assets used in connection with the operation of an AMICI ITALIAN CAFÉ Restaurant located at 116 N.
Broad Street, Monroe, Georgia 30655 (the “Monroe Restaurant”), which will continue to operate after Closing pursuant to a license on terms to be negotiated between the owner of the Monroe Restaurant and Amici Enterprises.

 

1.5 Prorations.  If Closing occurs in the middle of a billing period, all water charges, sewer, rents and other charges under the Madison real property lease, real property taxes, personal property taxes, utility charges and similar assessments and fees arising out of or related to the operation of the Madison Restaurant, Covington Restaurant, or Franchise Operation in the ordinary course shall be prorated between Sellers and Buyer as of the
Closing date (“Prorated Expenses”).  Sellers and Buyer shall, subsequent to Closing, cooperate with respect to the calculation of the Prorated Expenses and make any required payments to each other.

 

II.           ENCUMBERED ASSETS

 

2.1           Sale and Purchase of Assets.  Subject to the terms and conditions of this Agreement, Sellers agree to sell to Buyer at Closing, and Buyer agrees to purchase from Sellers at Closing, all of Sellers’ right, title, and interest in and to the Assets pursuant to the terms and conditions of this Agreement.

 

2.2.            Encumbrances and Permitted Encumbrances of Assets.  Except as shown on Schedule 2.1., and/or as described in Section 4.3., Sellers shall convey to Buyer title to the Assets at Closing free and clear of any liabilities, levies, claims, charges, taxes, assessments, mortgages, security interests, liens, lis pendens, pledges, conditional sales agreements, title retention contracts, leases, subleases, rights of first refusal, options to
purchase, restrictions or other encumbrances or agreements.

 

III.           PURCHASE PRICE FOR ASSETS

 

3.1           Purchase Price.  In consideration of the sale and transfer as provided in Section 1 herein, Buyer agrees to pay the total purchase of $864,293.00 (“Purchase Price”), allocated to the Sellers as follows:

 

	
(a)  

	
$185,954.00 for the Assets relating to operation of the Madison Restaurant (“Madison Purchase Price”);

 

	
(b)  

	
$338,376.00 for the Assets relating to operation of the Covington Restaurant (“Covington Purchase Price”); and

 

	
(c)  

	
$339,963.00 for the Assets relating to the Franchising Operations (“Franchising Purchase Price”).

 

3.2           Payment of Purchase Price.

 

	
(a)  

	
The Madison Purchase Price shall be payable as follows: delivery of a promissory note in the principal amount of $185,954.00, in the form and containing the terms set forth in Exhibit D-1 (the “Madison Note”).

 

	
(b)  

	
The Covington Purchase Price shall be payable as follows: delivery of a promissory note in the principal amount of $338,376.00, in the form and containing the terms set forth in Exhibit E-1 (the “Covington Note”).

 

  

  

  

	
(c)  

	
The Franchising Purchase Price shall be payable as follows: $103,715.00 in good and immediate funds on or before March 7, 2011 (which Buyer may extend, at its option, for a period not to exceed 15 calendar days), and delivery of a promissory note in the principal amount of $236,248.00, in the form and containing the terms set forth in Exhibit F-1 (the “Franchising Note”); provided that all amounts due Magnolia State Bank (in the approximate amount of $30,000) shall be paid from the settlement proceeds at
Closing.

 

3.3.           Allocation of Purchase Price.  The Purchase Price shall be allocated for all purposes in the manner set forth in Schedule 3.3.

 

3.4.           Adjustment to Purchase Price for Inventory. A complete physical inventory of the Madison Restaurant and Covington Restaurant ("Inventory") shall be conducted by Sellers and Buyer immediately following the Closing or such other time as mutually agreed by Sellers and Buyer.  The Inventory shall be valued at Sellers’ cost including applicable freight costs
("Inventory Value").  If Inventory Value at the Madison Restaurant and Covington Restaurant combined is less than $10,000, then the Purchase Price shall be decreased by an amount equal to the amount that the combined Inventory Value is less than $10,000. The reduction in the Purchase Price shall be applied against the cash due at Closing. If Inventory Value at the Madison Restaurant and Covington Restaurant exceeds $10,000 (the “Excess Amount”), and if Buyer elects to purchase the Excess Amount, then the Purchase Price shall be increased by an amount equal to the Excess Amount. The increase in the Purchase Price shall be paid in cash within 30 days after
Closing.

 

	
IV.

	
ASSUMPTION OF REAL ESTATE LEASES AND MATERIAL CONTRACTS AND OTHER LIABILITIES

 

4.1.           Real Property Lease.

 

4.1.1.           Sellers warrant to Buyer that ARI is the Lessee or Tenant, in good standing, under an oral or implied lease for the Madison Restaurant and that APC is the Lessee or Tenant, in good standing, under the written lease for the Covington Restaurant.  A copy of the Covington lease agreement (the “Covington Lease”) is attached hereto and made part hereof as Schedule 4.1.  The Covington Lease grants APC the sole and exclusive use and possession of the location
upon which the Covington Restaurant is located.  Sellers hereby agree to sublease to CAC their rights under the Covington Lease according to the Sublease attached as Exhibit B-2.  Sellers represent to Buyer that the Sublease has been approved by the Covington Lease landlord, without any personal guaranty required on the part of Buyer.

 

4.1.2.           To the extent that the Landlord conditions its consent to the assignment of the Madison lease or sublease of the Covington lease on delivery or reaffirmation of a personal guaranty by Michael Torino, Christian Torino, and/or APC, Michael Torino, Christian Torino, and/or APC shall deliver or reaffirm (as applicable) such personal guaranty. No extension of a personal guaranty shall be made, however, unless (a) required by the landlord, (b) guaranteed also by a principal of MAC or CAC, as
applicable, and (c) such guaranty does not extend beyond expiration of Michael Torino’s or Christian Torino’s employment agreement, as applicable.

 

4.2.           Franchise Agreements. Sellers warrant to Buyer that Franchising is the Franchisor, in good standing, under the Franchise Agreements described in Schedule 4.2.  A copy of the Franchise Agreement for each franchised restaurant is attached hereto and made part hereof as Schedule 4.2. Sellers hereby agree to transfer and assign their entire interests in the Franchise Agreements including all
rights and benefits as franchisor thereunder to Buyer according to the Assignment and Assumption of Franchise Agreements attached as Exhibit C-2.

 

  

  

  

4.3.           No Assumption of Liabilities Except for the Franchise Agreements as set forth in Assignment and Assumption of Franchise Agreements and assignment of Seller’s interest under the oral or implied lease for the Madison Restaurant, Buyer assumes no liabilities, debts, or other obligations of any Seller.  Specifically, but without limiting the generality of the foregoing, Buyer assumes no liability for real estate taxes, ad valorem taxes, sales taxes, or other taxes, payroll obligations, debts, or liabilities of any Seller, whether absolute or
contingent, accrued or unaccrued, asserted or unasserted, or otherwise. Sellers agree to satisfy and discharge as the same shall become due all obligations and liabilities of the Sellers not specifically assumed by the Buyer hereunder, and to indemnify Buyer from and against all such obligation and liabilities.  Buyer also specifically assumes no liability for amounts due (estimated to be approximately $9,500) to Bank of Madison by ARI or amounts due (estimated to be approximately $118,000) to Bank of Madison by APC.  Sellers shall timely pay and discharge all liabilities as and when due.

 

V.           CLOSING

 

5.1           Closing. The consummation of the transactions contemplated by and described in this Agreement (the “Closing”) shall take place on or before March 1, 2011 (the “Closing Date”).  Any party may extend the Closing date for a period not to exceed thirty (30) days.  If Closing does not occur by April 1, 2011, this Agreement will be null and void.

 

5.2           Obligations of Sellers at Closing. At the Closing, and unless otherwise waived in writing by the Buyer:

 

	
(a)  

	
Sellers shall deliver to Buyer a fully executed, general bill of sale for all of the Assets in the forms attached as Exhibit A-1, Exhibit B-2, and Exhibit C-1.

 

	
(b)  

	
Each Seller shall deliver to Buyer a resolution duly adopted by each of Seller’s shareholders and directors authorizing the sale of all or substantially all of the Seller’s assets and authorizing the transaction contemplated by this Agreement;

 

	
(c)  

	
Each Seller shall deliver to Buyer a certificate of existence and good standing from the Secretary of the State of Georgia, dated the most recent practical date prior to Closing;

 

	
(d)  

	
APC shall deliver to Buyer a fully signed Sublease for the Covington Restaurant location in the form attached as Exhibit B-2;

 

	
(e)  

	
ARI and APC shall deliver to Buyer all documents necessary to effect a transfer of the liquor license for the Madison Restaurant and Covington Restaurant locations;

 

	
(f)  

	
Franchising shall deliver to Buyer a fully executed Assignment and Assumption of Franchise Agreements in the form attached as Exhibit C-2; and

 

	
(g)  

	
Sellers shall deliver to Buyer such other instruments and documents as Buyer reasonably deems necessary to effect the transactions contemplated by this Agreement.

 

5.3           Obligations of Buyer at Closing.  At Closing and unless otherwise waived in writing by Seller, Buyer shall deliver to Seller:

 

	
(a)  

	
Promissory Notes in the forms of Exhibit D-1, Exhibit E-1, and Exhibit F-1;

 

  

  

  

	
(b)  

	
Security Agreements in the forms of Exhibit D-2 and Exhibit E-2;

 

	
(c)  

	
Sublease for the Covington Restaurant location in the form attached as Exhibit B-2;

 

	
(d)  

	
All documents necessary to effect a transfer of the liquor license for the Madison Restaurant and Covington Restaurant locations;

 

	
(e)  

	
A fully executed Assignment and Assumption of Franchise Agreements in the form attached as Exhibit C-2; and

 

	
(f)  

	
Such other instruments and documents as Sellers reasonably deem necessary to effect the transactions contemplated by this Agreement.

 

5.4           Pre-Closing Conditions.  Notwithstanding anything to the contrary herein, it is a condition precedent to Closing that AFG Partners, LLC and anyone else with an interest in any intellectual property relating to the operation or franchising of AMICI ITALIAN CAFÉ Restaurants (including the mark AMICI ITALIAN CAFÉ and Registration No. 3408018, the content and design of the web site presently located at www.amici-cafe.com, the
domain name www.amici-cafe.com, and all recipes, including all wing sauce recipes) has contributed such interests to Amici Enterprises, LLC according to the terms of the Contribution Agreement, so that Amici Enterprises, LLC owns all right, title and interest in and to such intellectual property.

 

VI.           REPRESENTATIONS AND WARRANTIES OF SELLER

 

Sellers make the following representations and warranties to Buyer:

 

6.1           Access By Buyer; Representation of 2010 EBITDA and Franchise Receipts.  Sellers have provided Buyer access to, review of and/or copies of all documents, contracts, financial audits, records, data, and reports, requested by the Buyer, relating to and used in connection with the businesses to be acquired under this Agreement.  Sellers further represent to Buyer that, for tax year 2010, Earnings Before Interest, Taxes, and Depreciation (calculated on a cash basis)
(“EBITDA”) for ARI, exclusive of general administrative expenses, was $77,170.00; and EBITDA for APC, exclusive of general administrative expenses, was $140,424.00. Sellers further represent to Buyer that, for tax year 2010, Franchising collected from its franchisees $141,082.00 in royalty fees.  Buyer shall have the right, at its option and expense, to audit and inspect all financial records of Sellers for tax year 2010 to determine the accuracy of these representations. If the results of such audit or inspection reveal that EBITDA for ARI or APC, or franchise royalty revenue collected by Franchising, was less than the represented amounts, Buyer shall have the right to reduce the total Purchase Price by an amount equal to the total discrepancy multiplied by 3.5.
Such amount shall be deducted from the principal balance initially due under the Madison Note, the Covington Note, and/or the Franchising Note, in such proportions as Buyer deems advisable, and all payments made under the adjusted Promissory Notes shall be re-applied to principal and interest consistent with such adjustment.

 

6.2           Organizational Capacity.  ARI and APC are corporations duly organized, validly existing and in good standing under the laws of the State of Georgia, and there is no other jurisdiction in which the ownership, use or leasing of ARI’s or APC’s assets or properties, or the conduct or nature of their businesses, makes licensing, qualification, or admission in another state necessary to Buyer as of the date of Closing.  Franchising is a limited liability company organized, validly existing
and in good standing under the laws of the State of Georgia, and there is no other jurisdiction in which the ownership, use or leasing of Franchising’s assets or properties, or the conduct or nature of its business, makes licensing, qualification or admission in another state necessary to Buyer as of the date of Closing.

 

6.3           Corporate Powers, Consents, Absence of Conflicts with Other Agreements, Etc. The execution, delivery and performance of this Agreement by Sellers, and all other agreements referenced in or ancillary hereto and relating to the transactions contemplated by this Agreement to which any Seller is a party, and the consummation of the transactions contemplated herein by such Seller:

 

(a)           will be duly and validly authorized, executed and delivered on behalf of the respective Seller;

 

  

  

  

(b)           are within the respective Seller’s corporate powers, are not in contravention of law or of the terms of its articles or certificate of incorporation and bylaws;

 

(c)           do not require any approval or consent of, or filing with, any governmental agency or authority bearing on the validity of this Agreement;

 

(d)           do not conflict, result in any breach or contravention of, or permit the acceleration of the maturity of any of the respective Seller’s liabilities, and do not create or permit the creation of any encumbrance on or affecting any of the Assets;

 

(e)           do not violate any statute, law, rule or regulation of any governmental authority to which the respective Seller or the Assets may be subject, which in each case  would not have a material adverse effect on the business of any Seller taken as a whole (a “Material Adverse Effect”);

 

(f)           do not violate any judgment, consent decrees or injunctions to which the respective Seller may be subject; and

 

(g)           do not conflict with or result in a breach or violation of any agreement to which the respective Seller is a party or is bound.

 

This Agreement, and all agreements hereunder to which any Seller becomes a party, are valid and legally binding obligations of the respective Seller, enforceable against the respective Seller in accordance with the respective terms hereof or thereof, except as enforceability against the respective Seller may be restricted, limited or delayed by applicable bankruptcy or other laws affecting creditor’s rights generally and except as enforceability may be subject to general principles of equity.

 

6.4           Limited Disclaimer of Warranties. The physical condition of the Assets will be sold by Sellers and purchased by Buyer in their present condition at Closing. Seller makes no warranties not expressly stated herein. ALL OTHER WARRANTIES—EXPRESS OR IMPLIED—ARE HEREBY WAIVED. 

 

6.5           Employees and Employee Relations.

 

(a)           Schedule 6.5, attached hereto, sets forth a complete list as of the date hereof; of the names, positions, current annual salaries or wage rates, and bonus and other compensation arrangements of all full-time and part-time employees of the Sellers.

 

(b)           There is no pending or, to Seller’s knowledge, any threatened employee lawsuit against the Seller.  (“Knowledge”, “to the knowledge of”, “known” or words or phrases of like import used in this Agreement mean the actual knowledge of the individual or entity making the representation after
having made reasonable inquiry or the knowledge of awareness that a prudent person in such individual’s position should have after making a reasonable inquiry.)

 

(c)           To each Seller’s knowledge, each Seller is in compliance in all material respects with all federal and state laws respecting employment and employment practices, terms and conditions of employment, and wages and hours. To each Seller’s knowledge, no Seller is engaged in any unfair labor practices. To Sellers’ knowledge, there are no pending or threatened EEOC, wage and hour, unemployment compensation, worker’s compensation or similar claims against any Seller or against the Madison Restaurant or the Covington Restaurant.

 

  

  

  

(d)           All persons employed by ARI, APC, or Franchising at the Closing Date were at-will employees with no stated term of employment remaining beyond the Closing Date.

 

6.6           Taxes. As used herein, the term “Tax” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, customs duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, stamp, sales, use, transfer, registration, value added, alternative or add-on minimum, transactions privilege tax, estimated, tax, assessment, charge, levy or fee of any kind whatsoever, including any interest or penalties thereon and additions thereof; which are due or alleged to be due to any taxing authority, whether disputed or not; “Tax Return” means any federal, state or local return, declaration, report, claim for refund, information return or statement, including any schedule or attachment thereof and amendments relating to Taxes; and “Affiliated Group” means any affiliated group
within the meaning of IRS Code Sec. 1504 or any similar group defined under a similar provision of state, local or foreign law.

 

	
  

	
(a)

	
Each Seller has filed all Tax Returns required to be filed and all such Tax Returns are correct and complete in all material respects; each Seller has duly paid all Taxes; no Seller is currently the beneficiary of any extension of time within which to file any Tax Return; no claim has ever been made by a taxing authority in a jurisdiction where any Seller does not file Tax Returns that it is or may be subject to Tax by that jurisdiction; and there are no encumbrances on any of the Assets of any Seller that arose in connection with any failure (or alleged failure) to pay any Tax;

 

	
  

	
(b)

	
Each Seller has withheld proper and accurate amounts from its employees’ compensation in full and complete compliance with all withholding and similar provisions of the IRS Code and any and all other applicable laws, and has withheld and paid, or caused to be withheld and paid, all Taxes on monies paid by the Seller to independent contractors, creditors, stockholders, partners and other Person for which withholding or payment is required by law;

 

	
  

	
(c)

	
No taxing authority intends to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax liability of any Seller either claimed or raised by any authority in writing, or as to which any Seller has notice or knowledge based upon personal contact with any agent of such authority; Sellers have provided to Buyer access to all requested Tax information.

 

	
  

	
(d)

	
There is not currently in effect any waiver of a statute of limitations in respect of Taxes by any Seller or any agreement to extend the time with respect to a Tax assessment or deficiency.

 

6.7           Litigation or Proceedings. There is no litigation, arbitration, or other proceedings with respect to the Madison Restaurant, the Covington Restaurant, the Franchise Operations, or any business or operations of any Seller. No Seller is in default in any material respect under any judgment of any court, arbitration tribunal or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality wherever located. There are no claims, actions, suits, proceedings or
investigations pending, or to Seller’s knowledge, threatened against or affecting any Seller or in connection with any Seller’s business, at law or in equity, before or by any court, arbitration tribunal, federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality wherever located.

 

  

  

  

6.8           Hazardous Materials.   There are no Assets in violation of any federal, state or local law, ordinance of regulation relating to Hazardous Materials (defined as any toxic, dangerous, or other regulated waste, substance or product, chemical or pollutants of any kind and other waste material, substance, chemical, pollutant, or contaminant the presence or emission of which is prohibited by or may give rise to liability under any laws ordinance, statutes, codes, rules, regulations, orders or decrees under
federal, state or local law).  To Seller’s knowledge there is and has been no presence of Hazardous Materials at, on or under the Restaurant that currently requires remediation. No Seller has any notice of any formal or informal assertion by any governmental or regulatory agency or other person that any Seller or any predecessor business, operator, land owner, or occupant of the Madison Restaurant or the Covington Restaurant may be a potentially responsible party in connection with any Hazardous Material treatment, storage or disposal at either restaurant or in connection with the operation of either restaurant prior to Closing.  No Seller has any knowledge of any pending or threatened claims or any reasonable basis for damages by any person or any governmental or regulatory authority against any Seller under any environmental law in connection with either
restaurant or the operation of either restaurant prior to Closing. No Seller has any knowledge of any pending or threatened claims or any reasonable basis for damages by any person or any governmental or regulatory authority against any Seller under any environmental law in connection with either restaurant or the operation of either restaurant prior to Closing.  No claim, lien or other encumbrance has been or is imposed on any of the Assets or either restaurant under any environmental laws.  Each Seller has obtained all permits, licenses, registrations, identification numbers, and other approvals and authorization, and has made all reports and notifications required under any environmental laws in connection with the Assets and the restaurants.

 

6.9.           Licenses.  Except for the oral trademark licenses between Franchising and ARI and APC, the oral trademark license governing the operation of the Monroe Restaurant, and the written Franchise Agreements between Franchising and its franchisees, no third party presently has been granted any right or license to use the mark AMICI ITALIAN CAFÉ or any derivative thereof.  The Parties acknowledge and agree that AFG Partners own a recipe for
wing sauce (which recipe will be contributed to Enterprises under the Contribution Agreement) and may in the future desire to manufacture and distribute the wing sauce under the AMICI brand.  In such event, Buyer agrees to grant to AFG Partners a perpetual, royalty-free license to use the AMICI trademark in connection with the wing sauce upon such terms mutually agreed to by the parties. Such license agreement may, at Buyer’s election, include a restriction against distribution of the wing sauce to restaurants.

 

VII.           REPRESENTATIONS AND WARRANTIES OF THE BUYER

 

Buyer represents and warrants to Seller the following:

 

7.1           Corporate Capacity. Enterprises and AFLLC are and will be at Closing duly organized and validly existing in good standing under the laws of the State of Texas.  Enterprises and AFLLC have the requisite power and authority to enter into this Agreement, perform its obligations hereunder and to conduct its businesses as now being conducted.

 

7.2           Corporate Powers, Consents, Absence of Conflicts With Other Agreements. Etc. The execution, delivery and performance of this Agreement by Buyer and all other agreements referenced in or ancillary hereof to which Buyer is a party and the consummation of the transactions contemplated herein by Buyer:

 

	
  

	
(a)

	
will be duly and validly authorized, executed and delivered on behalf of Buyer;

 

	
  

	
(b)

	
are within Buyer’s corporate powers, are not in contravention of law or of the terms of its articles or certificate of incorporation and bylaws;

 

	
  

	
(c)

	
do not require any approval or consent of, or filing with, any governmental agency or authority bearing on the validity of this Agreement.

 

  

  

  

	
  

	
(d)

	
do not violate any statute, law, rule or regulation of any governmental authority to which Buyer may be subject and which may have an effect on the business contemplated under this Agreement subsequent to Closing;

 

	
  

	
(e)

	
do not violate any judgment, consent decrees or injunctions to which Buyer may be subject, which would have a Material Adverse Effect on Buyer.

 

7.3           Binding Effect. This Agreement and all other agreements to which Buyer becomes a party hereunder are valid and legally binding obligations of Buyer, enforceable against Buyer in accordance with the respective terms hereof and thereof; except as enforceability against Buyer may be restricted, limited or delayed by applicable bankruptcy or other laws affecting creditors’ rights generally and except as enforceability may be subject to general principles of equity.

 

VIII.           COVENANTS AND GUARANTY OF SELLERS

 

8.1           Board of Director’s Approvals.  As of the Closing Date, each Seller’s Board of Directors shall have authorized this Agreement and the transaction contemplated herein and therein and each Seller’s Secretary or Assistant Secretary shall have delivered to Buyer, within such time frame, a certified copy of the resolution of its Board of Directors to such effect.

 

8.2           Adverse Actions After Closing.  No Seller shall take, or fail to take, any action after Closing that would render Seller unable to perform its post-Closing obligations, including Buyer’s lease obligations, under this Agreement.

 

8.3           Further Acts and Assurances. At any time and from time to time at and after the Closing, upon request of Buyer, each Seller shall, without cost to Seller, do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such further acts, deeds, assignments, transfers, conveyances, powers of attorney, confirmations and assurances as Buyer may reasonably request to carry out the provisions of this Agreement.

 

8.4           Covenant Not to Compete.  For a period of two (2) years from the Closing date, Sellers and their principals, Michael Torino and Christian Torino, and their affiliate, AFG Partners, LLC, shall not directly or indirectly own any legal or beneficial interest in, manage, operate or provide consulting services for any restaurant offering pizza or wings as a menu item within the State of Georgia.  For purposes of construing and enforcing this
provision, the parties stipulate that the Madison Restaurant and Covington Restaurant draw a significant portion of their respective customer bases from areas exceeding a two (2) mile radius from the restaurant location. For a period of two (2) years from the Closing date, Sellers and their principals, Michael Torino and Christian Torino, and their affiliate, AFG Partners, LLC, shall not directly or indirectly own any legal or beneficial interest in, manage, operate or provide consulting services for any company that franchises the operation of any type of business with headquarters or company-owned or franchised locations in the State of Georgia.  This two (2) year period will be tolled during any period of noncompliance.

 

8.5.           Guaranty of Financial Performance. Sellers represent to Buyer that franchise royalty fees payable and actually collected by Buyer under the four Franchise Agreements being assigned hereunder will equal or exceed $120,000 during calendar year 2011 (pro-rated as of the Closing date) and $120,000 during calendar year 2012.  If franchise royalty fees payable and actually collected by Buyer during calendar year 2011 or 2012 are less than these amounts (regardless of the reason for the deficiency including if
the deficiency resulted from a restaurant closure or relocation), Sellers shall be liable to Buyer in an amount equal to the actual deficiency multiplied by 3.5. The obligations of Sellers under this paragraph are joint and several.  Buyer has the right to set-off the aggregate amount of such liability against payments due under the Madison Note, the Covington Note, and the Franchising Note (see Section 3.3.), in such proportions as Buyer determines appropriate, in its sole discretion.  Such set-off amount will be applied to reduce the initial Principal Balance due under the applicable note, and past and future payments of principal and interest will be adjusted accordingly.

 

  

  

  

IX.           COVENANTS OF BUYER

 

9.1.           Adverse Actions After Closing. Buyer shall not take, or fail to take, any action after the Closing that would render Buyer unable to perform its post-Closing obligations under this Agreement.

 

9.2.           Further Acts and Assurances. At any time and from time to time at and after the Closing, upon request of Seller, Buyer shall, without cost to Buyer, do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such further acts, deeds, assignments, transfers, conveyances, powers of attorney, confirmations and assurances as Sellers may reasonably request to carry out the provisions of this Agreement.

 

 X.           ADDITIONAL AGREEMENTS

 

10.1           Post-Closing Maintenance of and Access to Information. Seller and Buyer acknowledge that after Closing each party may need access to information or documents in the control or possession of the other Party for the purposes of concluding the transactions herein contemplated.  Accordingly, each Party shall keep, preserve and maintain in the ordinary course of business, and as required by law and relevant insurance carriers, all books, records
(including student records), documents and other information in the possession or control of such Party and relevant to the foregoing purposes at least until the expiration of any applicable statute of limitations or extensions thereof. Each Party shall cooperate fully with, and make available for inspection and copying by, the other Party, its employees, agents, counsel and accountants or governmental agencies, upon written request and at the expense of the requesting Party, such books, records documents and other information to the extent reasonably necessary to facilitate the foregoing purposes.

 

XI.           INDEMNIFICATION AND OTHER RELIEF

 

11.1           Indemnification by Sellers.  Subject to and only to the extent provided in this Section 11.1, from and after the Closing, Sellers shall indemnify, defend and hold harmless Buyer after the Closing from and against any claims, demands, suits, judgments, and losses made against, incurred, or suffered by Buyer directly or indirectly, for the period prior to the Closing and/or as a result of or
arising from:

 

	
  

	
(a)

	
the breach of any representation or warranty of Sellers contained herein; or

 

	
  

	
(b)

	
the nonfulfillment of any covenant, agreement or other obligation of Sellers set forth in this Agreement or any agreement, instrument, certificate or other document signed by the Parties and delivered or to be delivered pursuant to this Agreement; or

 

	
  

	
(c)

	
any act or omission relating to the offer or sale of any franchise by Franchising, or claims arising out of or related to Franchising’s performance or alleged failure to perform under any Franchise Agreement, including claims subject to indemnification under the Assignment and Assumption of Franchise Agreements,

 

The obligations of Sellers under this paragraph are joint and several.

 

11.2           Indemnification by Buyer.   Subject to and only to the extent provided in this Section 11.2, from and after the Closing, Buyer shall indemnify, defend and hold harmless Seller, after the Closing, from and against any claims, demands, suits, judgments, and losses made against, incurred, or suffered by Seller directly or indirectly, for the period following the Closing and/or as a result of or arising from:

 

	
  

	
(a)

	
the breach of any representation or warranty of Buyer contained herein; or

 

  

  

  

	
  

	
(b)

	
the nonfulfillment of any covenant, agreement or other obligation of Buyer set forth in this Agreement or any agreement, instrument, certificate or other document signed by the Parties and delivered or to be delivered pursuant to this Agreement.

 

11.3           Survival of Representations and Warranties; Indemnity Period.  Notwithstanding any right of Buyer (whether or not exercised) to investigate the affairs of Sellers, or any right of any Party (whether or not exercised) to investigate the accuracy of the representations and warranties of the other Party contained in this Agreement, Sellers have, on the one hand, and Buyer has, on the other hand, the right to rely fully upon the representations, warranties,
covenants and agreements of the other contained in this Agreement. The representations and warranties respectively made by Sellers, on the one hand, and Buyer, on the other hand, in this Agreement or in any certificate respectively delivered by Sellers or Buyer will survive the Closing for twenty-four (24) months after the Closing.

 

11.4           Claims for Indemnification. Whenever any claim shall arise for indemnification hereunder the party seeking indemnification (the “Indemnified Party”), shall promptly notify the party from whom indemnification is sought (the “Indemnifying
Party”) of the claim and, when unknown, the facts constituting the basis for such claim. In the event of any such claim for indemnification hereunder resulting from or in connection with any claim or legal proceedings by a third-party, the notice to the Indemnifying Party shall specify, if known, the amount or an estimate of the amount of the liability arising therefrom. The Indemnified Party shall not settle or compromise any claim by a third party for which it is entitled to indemnification hereunder without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, unless suit shall have been instituted against it.  No party may agree to equitable relief against the other party without such other party’s written consent, given in its sole discretion.

 

11.5           Defense by Indemnifying Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a person who is not a party to this Agreement, the Indemnifying Party at its sole cost and expense may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal proceeding if it acknowledges to the Indemnified Party in writing its obligations to indemnify the
Indemnified Party with respect to all elements of such claim. The Indemnified Party shall be entitled to participate in (but not control) the defense of any such action, with its counsel and at its own expense. If the Indemnifying Party does not assume the defense of any such claim or litigation resulting therefrom within 30 days after the date notice of such claim is made, (a) the Indemnified Party may defend against such claim or litigation, in such manner as it may deem appropriate, including, but not limited to, settling such claim or litigation, after giving notice of the same to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate, and (b) the Indemnifying Party shall be entitled to participate in (but not control) the defense of such action, with its counsel at its own expense. If the Indemnifying Party thereafter seeks to question the manner in
which the Indemnified Party defended such third party claim or the amount or nature of any such settlement, the Indemnifying Party shall have the burden to prove by a preponderance of the evidence that the Indemnified Party did not defend or settle such third party claim in a reasonably prudent manner.

 

11.6           Payment of Indemnification Obligation. All indemnification by the Buyer or the Sellers hereunder shall be effected by payment of cash or delivery of a cashier’s or certified check in the amount of the indemnification liability. With respect to indemnification claims against Sellers (or any of them), Buyer, at its option, shall have the right to offset the amount of such liability against payments due under the Madison Note, the Covington Note, and/or the Franchising Note, as Buyer elects in its sole
discretion.

 

  

  

  

XII.           GENERAL PROVISIONS

 

12.1           Schedules. The Schedules and Exhibits attached to this Agreement are incorporated by reference herein.

 

12.2           Time of Essence. Time is of the essence in the performance of this Agreement. This Section may not be waived except in a writing signed by the Parties expressly referring hereof.

 

12.3           Consents. Approvals and Discretion. Except as herein expressly provided to the contrary, whenever this Agreement requires any consent or approval to be given by any party or any party must or may exercise discretion, such consent or approval shall not be unreasonably withheld or delayed and such discretion shall be reasonably exercised.

 

12.4           Expenses; Legal Fees and Costs. Except as otherwise expressly set forth in this Agreement, all expenses of the preparation of this Agreement and of the purchase of the Assets, including counsel fees, accounting fees, brokerage or finder fees and commissions, investment advisor’s fees and disbursements, shall be paid or accrued by the party incurring such expense, whether or not such transactions are consummated.

 

12.5           Choice of Law, Jurisdiction, and Forum Selection. This Agreement (including its Schedules and Exhibits, except as otherwise expressly provided therein) and the parties relationship created hereby is governed by Texas law, without regard to conflicts of laws principles.  This Agreement shall be performed in Dallas County, Texas and shall be governed by and construed in accordance with the laws of the State of Texas and the County of Dallas, Texas. Any dispute arising out of this Agreement
(including any Schedule or Exhibit to this Agreement, except as otherwise expressly provided therein), the Contribution Agreement, or Amici Enterprises Operating Agreement, shall be brought and prosecuted exclusively in a state or federal court situated in Dallas County, Texas. The Parties irrevocably consent to the personal jurisdiction of these courts, and waive all questions of personal and subject matter jurisdiction or venue for the purpose of carrying out this provision. Notwithstanding the foregoing, Buyer may bring an action for injunctive relief to enforce the noncompete provisions contained in Section 8.4. in any court of competent jurisdiction.

 

12.6           Benefit/Assignment.  Subject to provisions herein to the contrary, this Agreement shall inure to the benefit of and be binding upon the Parties and their respective legal representatives, successors and assigns; provided that no party may assign this Agreement or any part hereof; or delegate any duty or obligation to be performed hereunder, to another Person without the prior written
consent of the other party.

 

12.7           No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of Buyer and its designees and Seller and its respective successors or assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person.

 

12.8           No Waiver. The waiver by either party of a breach or violation by another party of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver of any subsequent breach or violation of the same, or a breach or violation of any other provision hereof. All remedies, either under this Agreement, or by law or otherwise afforded, will be cumulative and not alternative.

 

12.9           Notices. Any notice, demand or communication required, permitted or desired to be given hereunder shall be deemed effectively given when personally delivered, when received by facsimile or other electronic means, when confirmed as delivered by courier, or the date of receipt as confirmed by the United States Postal Service, in any event addressed as follows:

 

  

  

  

Sellers:                 Amici Restaurants, Inc.

520 East Ave.

Madison, Georgia 30650

Attention: Michael Torino

with a copy to:       Eric Krasle, Esquire

425 N. Lumpkin St #210

Athens, Georgia 30601

 

Buyer:                   Great American Food Chain, Inc.

2808 Cole Avenue

Dallas, Texas 75204

Attention: Ed Sigmond, President

 

with copy to:         Cheryl L. Mullin

Mullin Law, PC

2425 N. Central Expressway, Suite 200

Richardson, Texas 75080

 

or to such other address or number, or to the attention of such other Person, as any party may designate, at any time, in writing in conformity with these notice provisions.

 

12.10           Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of Buyer or Sellers under this Agreement will not be materially and adversely affected thereby, such provision will be fully severable, this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as is possible.

 

12.11           Gender and Number. Whenever the context of this Agreement requires, the gender of all words herein shall include the masculine, feminine and neuter, and the number of all words herein shall include the singular and plural.

 

12.12           Entire Agreement/Amendment. This Agreement and its Schedules and Exhibits supersedes all previous agreements, negotiations, representations or contracts and constitutes the entire agreement of whatsoever kind or nature existing between or among the Parties representing the within subject matter and no Party shall be entitled to benefits other than those specified herein. As between or among the Parties, no oral statement or prior written material not
specifically incorporated herein shall be of any force and effect. The Parties specifically acknowledge that in entering into and executing this Agreement, the Parties rely solely upon the representations and agreements contained in this Agreement and no others. All prior representations or agreements, whether written or verbal, not expressly incorporated herein are superseded unless and until made in writing and signed by the Parties. The representations and warranties set forth in this Agreement shall survive the Closing and remain in full force and effect, and shall survive the execution and delivery of this Agreement. This Agreement may be executed in two or more counterparts, each and all of which shall be deemed an original and all of which together shall constitute but one and the same instrument. This Agreement may not be amended or otherwise modified except in a writing duly
executed by the Parties.

 

12.13           Drafting.   No provision of this Agreement shall be interpreted for or against any party hereof on the basis that such party was the draftsman of such provision, both parties having participated equally in the drafting hereof; and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

 

  

  

  

12.14           Transfer and Sales Tax. Buyer agrees to pay and shall indemnify Seller in respect of, and hold Seller harmless against, all sales, use, value added, goods and services, transfer or similar taxes, if any, arising out of the transactions contemplated by this Agreement, as well as any interest or penalties owing in connection therewith.

 

12.15.           Joint and Several Obligations of Sellers.  The obligations of Sellers under this Agreement are joint and several.

 

XIII.           SIGNATURES OF PARTIES; EXECUTION DATE

 

IN WITNESS HEREOF, the Parties hereto have caused this Agreement to be executed in multiple originals by their authorized officers, all as of the date and year first written above.

 

SELLERS:

 

AMICI RESTAURANTS, INC.

a Georgia corporation

 

By: /s/ Mike Torino          

Name: Mike Torino                    

Title: CEO        

AMICI PIZZA CO., INC.

a Georgia corporation

By: /s/ Mike Torino          

Name: Mike Torino                    

Title: CEO    

 

AMICI FRANCHISING, LLC

a Georgia limited liability company

       

By: /s/ Mike Torino          

Name: Mike Torino                    

Title: CEO    

BUYER:

 

AMICI ENTERPRISES, LLC

a Texas limited liability company

By: /s/ Edward Sigmond           

Name: Edward Sigmond                  

Title: CEO          

  

  

  

AMICI FRANCHISING, LLC

a Texas limited liability company

 

By: /s/ Edward Sigmond           

Name: Edward Sigmond                  

Title: CEO      

MADISON GA ACQUISITIONS, LLC

a Georgia limited liability company

 

By: /s/ Mike Torino          

Name: Mike Torino                    

Title: CEO    

COVINGTON ACQUISITIONS, LLC

a Georgia limited liability company

            

By: /s/ Mike Torino          

Name: Mike Torino                    

Title: CEO   

 

The undersigned principals and affiliates of Sellers hereby agree to be personally bound by and to comply with the Covenant Not to Compete as set forth in paragraph 8.4. of this Agreement. The undersigned further bind themselves to the choice of law, jurisdiction, and forum selection provisions contained in Section 12.5., and irrevocably consent to the personal jurisdiction of the state and federal courts situated in Dallas County, Texas, and waive all questions of personal and subject matter jurisdiction or venue for the purpose of carrying out this provision. The undersigned further acknowledge and agree that, notwithstanding the
foregoing, Buyer may bring an action for injunctive relief to enforce the noncompete provisions contained in Section 8.5. in any court of competent jurisdiction. The undersigned further consent to and agree to be bound by the choice of law, jurisdiction, and forum selection provisions as described in Section 12.5. of this Agreement.

/s/ Mike Torino

Michael Torino, Individually

/s/ Christian Torino

Christian Torino, Individually

AFG Partners, LLC

 

By: /s/ Michael Torino                                                              

Michael Torino, President

  

  

  

Schedule 1.1 – Assets

	
ASSET SCHEDULE

	  	  	
MADISON

	  	  	  
	  	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  
	
#

	
Location

	
Description

	
QTY

	
U/M

	
Make

	
Model #

	
Serial #

	
Asset Tag No.

	
Date of Acqui.

	
1

	  	
Water Heater

	
2

	
ea.

	
whirlpool

	  	  	  	  
	
2

	  	
Signs

	
2

	
ea.

	  	  	  	  	  
	
3

	
k

	
Hand Sinks 20'x20"

	
4

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
4

	
k

	
Ice Maker

	
1

	
ea.

	
manitow

	
ser.600

	  	  	  
	
5

	  	
Satelitte Receiver

	
2

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
6

	
rtc

	
6 eye oven/stove

	
1

	
ea.

	
Imperial

	  	  	  	  
	
7

	
k

	
Grill – Flattop

	
1

	
ea.

	
Anvil

	
FTA 9022

	
1153

	  	  
	
8

	
o

	
POS System: Includes, 1 Server, 3 terminals,3  printers, software

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
9

	
rtc

	
slide top beer cooler

	
1

	
ea.

	
TRUE

	  	  	  	  
	
10

	
D

	
Radio Receiver

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
11

	
K

	
Custom  Bar

	
1

	
ea.

	  	  	  	  	  
	
12

	
K

	
Tea Urns

	
3

	
ea.

	
n/a

	
8799

	
101802

	  	  
	
13

	
K

	
Wine Glasses

	
36

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
14

	
K

	
BeerCooler

	
1

	
ea.

	
TRUE

	
n/a

	
n/a

	  	  
	
15

	
K

	
Coffee Maker

	
1

	
ea.

	
n/a

	
CWT – 15

	
1575

	  	  
	
16

	
K

	
Coffeer Mugs

	
22

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
17

	
K

	
Coke Glasses

	
75

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
18

	
rtc

	
stand-up freezer

	
1

	
ea.

	  	  	  	  	  
	
19

	
rtc

	
PA System

	
1

	
ea.

	  	  	  	  	  
	
20

	
D

	
Fire Extingusher

	
2

	
ea.

	
n/a

	
n/a

	
SM998437

	  	  
	
21

	
D

	
 Bar Stools

	
14

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
22

	
k

	
2 door food fridge

	
1

	
ea.

	
TRUE

	  	  	  	  
	
23

	
D

	
CD Player

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
24

	
B

	
Coke Guns

	
2

	
ea.

	
n/a

	
n/a

	
n/a

	  	  

 

  

  

  

	
25

	
B

	
CO2 Compressor

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
26

	
K

	
SS Prep Table – 2'X2'

	
2

	
ea.

	  	  	  	  	  
	
27

	
K

	
4 door veggie fridge

	
1

	
ea.

	
mccall

	  	  	  	  
	
28

	
rtc

	
Televisions

	
1

	
ea.

	
sony

	  	  	  	  
	
29

	
D

	
Televisions HD

	
1

	
ea.

	
sony

	
n/a

	
n/a

	  	  
	
30

	
D

	
TV Mounts

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
31

	
D

	
Tables – 2 tops

	
10

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
32

	
D

	
Tables – 4 tops

	
12

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
33

	
D

	
Tables- 6 top

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
34

	
D

	
Tables- round

	
3

	
ea.

	  	  	  	  	  
	
35

	
D

	
Dining Room Chairs

	
45

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
36

	
D

	
Ceiling Fans

	
4

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
37

	
D

	
Booths

	
6

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
38

	
D

	
Speakers

	
4

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
39

	
D

	
Hanging Lights

	
7

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
40

	
F

	
Awning

	
1

	
ea.

	  	  	  	  	  
	
41

	
rtc

	
metal back chairs

	
36

	
ea.

	  	  	  	  	  
	
42

	
F

	
Chairs – Patio

	
12

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
43

	
F

	
Tables – Patio

	
3

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
44

	
K

	
Appetizer Plates

	
78

	
ea.

	
Crestware

	  	  	  	  
	
45

	
K

	
Pizza Pans – 16”

	
15

	
ea.

	  	  	  	  	  
	
46

	
K

	
Pizza Pans – 14”

	
27

	
ea.

	  	  	  	  	  
	
47

	
K

	
Pizza Pans – 10”

	
40

	
ea.

	  	  	  	  	  
	
48

	
K

	
Pizza Screens – 14”

	
20

	
ea.

	  	  	  	  	  
	
49

	
K

	
Pizza Screens – 10”

	
25

	
ea.

	  	  	  	  	  
	
48

	
K

	
Pizza Screens – 16”

	
15

	
ea.

	  	  	  	  	  
	
49

	
K

	
Mixing Bowl – Lg

	
3

	
ea.

	  	  	  	  	  
	
50

	
K

	
Mary Warmer – 3 Comp.

	
1

	
ea.

	
Nemco

	
6055A 19A

	
M02

	  	  
	
51

	
K

	
Industrial Can Opener

	
1

	
ea.

	
Edlund

	  	  	  	  
	
52

	
K

	
assorted kitchen utensils

	  	  	  	  	  	  	  
	
53

	
K

	
Pans – 1/3 Metal

	
5

	
ea.

	
Cambro

	  	  	  	  

 

  

  

  

	
54

	
K

	
Mixing Bowl – Sm

	
5

	
ea.

	  	  	  	  	  
	
55

	
K

	
SS Prep Table – 6'

	
1

	
ea.

	  	  	  	  	  
	
56

	
K

	
SS Prep Table – 5'

	
2

	
ea.

	  	  	  	  	  
	
57

	
K

	
WOOD  Prep Table – 5'

	
1

	
ea.

	
Sani Safe

	
Std 2

	
20000542

	  	  
	
58

	
K

	
Boiling Pot – Lg

	
3

	
ea.

	  	  	  	  	  
	
59

	
K

	
Timer (Electronic)

	
1

	
ea.

	
Cooper

	  	  	  	  
	
60

	
K

	
box freezers

	
3

	
ea.

	
whirlpool

	  	  	  	  
	
61

	
K

	
Refrigerator – Upright

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
62

	
K

	
Pizza Screens – 18”

	
10

	
ea.

	  	  	  	  	  
	
63

	
K

	
3 comp sink

	
1

	  	  	  	  	  	  
	
64

	
rtc

	
Small Cooler

	
1

	
ea.

	
TRUE

	  	  	  	  
	
65

	
K

	
Sheet Pans

	
5

	
ea.

	  	  	  	  	  
	
66

	
K

	
Salad Bowls

	
25

	
ea.

	  	  	  	  	  
	
67

	
K

	
Fryer

	
1

	
ea.

	
Imperial

	  	  	  	  
	
68

	
K

	
Dough Trays

	
22

	
ea.

	  	  	  	  	  
	
69

	
K

	
Hobart  Mixer

	
1

	
ea.

	
Hobart

	
p-660

	
1684951

	  	  
	
70

	
K

	
Hotel Pan - 1⁄2 – Plastic

	
2

	
ea.

	
Cambro

	  	  	  	  
	
71

	
K

	
Hotel Pan - 1⁄2 – Metal

	
2

	
ea.

	  	  	  	  	  
	
72

	
K

	
2 eye stock burner

	
1

	
ea.

	  	  	  	  	  
	
73

	
K

	
Collander

	
2

	
ea.

	  	  	  	  	  
	
74

	
K

	
Burner – 4 Eye

	
1

	
ea.

	
Royal

	
RHP 36-6

	
239904

	  	  
	
75

	
K

	
Brick Oven

	
2

	
ea.

	
Blodget

	
6000.00

	  	  	  
	
76

	
K

	
Dishwashing Machine

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
77

	
K

	
Line freezer

	
1

	
ea.

	
Frigidaire

	  	  	  	  
	
78

	
K

	
Dinner Plates

	
80

	
ea.

	
Homer

	  	  	  	  
	
79

	
K

	
Hotel Pan -full– Metal

	
2

	
ea.

	  	  	  	  	  
	
82

	
K

	
Ice  Bin

	
1

	
ea.

	
Scottsman

	
BH900E

	
711849-09Z

	  	  
	
83

	
O

	
Dunnage racks

	
6

	
ea.

	  	  	  	  	  
	
84

	
K

	
1/6th pan lids

	
40

	
ea.

	
Cambro

	  	  	  	  
	
85

	
K

	
DELI Slicer

	
1

	
ea.

	
berkel

	
827-E

	
29238

	  	  
	
86

	
K

	
Scale – 32 oz.

	
1

	
ea.

	
Pelouze

	
832 RD

	
n/a

	  	  

 

  

  

  

	
87

	
K

	
Cutting Board – Small

	
2

	
ea.

	  	  	  	  	  
	
88

	
K

	
Salad spinner

	
1

	
ea.

	  	  	  	  	  
	
89

	
K

	
Cutting Board – Large

	
2

	
ea.

	  	  	  	  	  
	
90

	
K

	
neon signs

	
4

	
ea.

	  	  	  	  	  
	
91

	
K

	
A.C. units

	
2

	
ea.

	  	  	  	  	  
	
92

	
K

	
phone systems

	
4

	
ea.

	
uniden

	  	  	  	  
	
93

	
K

	
Sandwich Prep Table 72”

	
1

	
ea.

	
TRUE

	  	  	  	  
	
94

	
K

	
SS. Equipmetn table

	
1

	
ea.

	  	  	  	  	  
	
95

	
K

	
high chairs

	
4

	
ea.

	  	  	  	  	  
	
96

	
K

	
Can Rack

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
97

	
K

	
1 door table fridge

	
1

	
ea.

	  	  	  	  	  
	
98

	
K

	
Warmer – 7 qt.

	
1

	
ea.

	
Vollrath

	
HS – 7

	  	  	  
	
99

	
rtc

	
4 comp. sink

	
1

	
ea.

	  	  	  	  	  
	
100

	
K

	
Pasta Pot

	
1

	
ea.

	  	  	  	  	  
	
101

	
K

	
Pizza Peels

	
3

	
ea.

	  	  	  	  	  
	
102

	
K

	
Hotel Pan – Deep Plastic

	
1

	
ea.

	
Cambro

	  	  	  	  
	
103

	
K

	
Hotel Pan – Shallow

	
1

	
ea.

	
Cambro

	  	  	  	  
	
104

	
K

	
Pans – 1/6 Plastic

	
60

	
ea.

	
Cambro

	  	  	  	  
	
105

	
K

	
Hand blender

	
1

	
ea.

	
GE

	  	  	  	  
	
106

	
K

	
Pizza prep table 96"

	
1

	
ea.

	
TRUE

	  	  	  	  
	
107

	
K

	
Pizza Spatula's

	
25

	
ea.

	  	  	  	  	  
	
108

	
K

	
Scale – 25 lb.

	
1

	
ea.

	
Pelouze

	
YG425R

	  	  	  
	
109

	
K

	
Metro Shelves

	
12

	
ea.

	  	  	  	  	  
	
110

	
K

	
Microwave – 1200 W

	
1

	
ea.

	
Sharp

	  	  	  	  
	
111

	
K

	
Scale  - 2 lb.

	
1

	
ea.

	
Crestwx

	  	  	  	  

 

  

  

  

	
112

	
K

	
Saute Pans

	
12

	
ea.

	  	  	  	  	  
	
113

	
K

	
Plastic Shelves – White

	
6

	
ea.

	  	  	  	  	  
	
114

	
rtc

	
Refrigerator

	
1

	
ea.

	
Frigidaire

	
FFU14C3W7

	
W840969433

	  	  
	
115

	
rtc

	
salamander broiler

	
1

	
ea.

	
Imperial

	  	  	  	  
	
116

	
K

	
Containers – 4 qt.

	
10

	
ea.

	
Cambro

	  	  	  	  
	
117

	
K

	
Pans – 1/6 Metal

	
25

	
ea.

	  	  	  	  	  
	
118

	
K

	
Containers – 2 qt.

	
12

	
ea.

	
Cambro

	  	  	  	  
	
119

	
K

	
Pans – 1/3 Plastic

	
6

	
ea.

	  	  	  	  	  
	
120

	
O

	
Printer

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
121

	
O

	
Fax machine

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
122

	
O

	
File Cabinet

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  	  
	
123

	
O

	
office desk

	
1

	
ea.

	  	  	  	  	  
	
124

	
O

	
Security camera system

	
1

	
ea.

	  	  	  	  	  

 

 

 

 

 

 

 

  

  

  

	
ASSET SCHEDULE

	  	  	
COV

	  	  	  
	  	  	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  
	
#

	
Location

	
Description

	
QTY

	
U/M

	
Make

	
Model #

	
Serial #

	
Asset Tag No.

	
1

	
B

	
Water Heater

	
1

	
ea.

	
n/a

	
EIEZ5US

	
04081893..

	  
	
2

	
B

	
Back Bar Stools

	
6

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
3

	
B

	
Hand Sink

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
4

	
B

	
Red Wine Glasses

	
21

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
5

	
B

	
Satelitte Receiver

	
2

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
6

	
B

	
Keg Cooler – 3 tap

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
7

	
B

	
Keg Cooler – 5 tap

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
8

	
B

	
POS System: Includes, 1 Server, 3 terminals,3  printers, software

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
9

	
B

	
Wione Chiller

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
10

	
B

	
XM Radio

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
11

	
B

	
Custom Front Bar

	
1

	
ea.

	  	  	  	  
	
12

	
B

	
Tea Urns

	
3

	
ea.

	
n/a

	
8799

	
101802

	  
	
13

	
B

	
White Wine Glasses

	
36

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
14

	
B

	
BeerCooler

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
15

	
B

	
Coffee Maker

	
1

	
ea.

	
n/a

	
CWT – 15

	
1575

	  
	
16

	
B

	
Coffeer Mugs

	
22

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
17

	
B

	
Coke Glasses

	
115

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
18

	
B

	
BeerCooler

	
1

	
ea.

	
n/a

	
44779V

	
n/a

	  
	
19

	
B

	
Carafes

	
4

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
20

	
B

	
Fire Extingusher

	
1

	
ea.

	
n/a

	
n/a

	
SM998437

	  
	
21

	
B

	
Front Bar Stools

	
14

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
22

	
B

	
Glass boards

	
2

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
23

	
B

	
CD Player

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
24

	
B

	
Coke Guns

	
2

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
25

	
B

	
Wine Chillers

	
3

	
ea.

	
n/a

	
n/a

	
n/a

	  

 

  

  

  

	
26

	
B

	
CokeCompressor

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
27

	
BB

	
CO2 Compressor

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
28

	
BB

	
Fire Extingusher

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
29

	
D

	
Televisions

	
3

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
30

	
D

	
Train

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
31

	
D

	
TV Mounts

	
3

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
32

	
D

	
Tables – 2 tops

	
12

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
33

	
D

	
Tables – 4 tops

	
8

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
34

	
D

	
Hand Sink

	
1

	
ea.

	
n/a

	
n/a

	
CS4265092

	  
	
35

	
D

	
Dining Room Chairs

	
55

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
36

	
D

	
Ceiling Fans

	
6

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
37

	
D

	
Booths

	
4

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
38

	
D

	
Speakers

	
6

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
39

	
D

	
Hanging Lights

	
14

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
40

	
F

	
Awning

	
1

	
ea.

	  	  	  	  
	
41

	
F

	
Iron Railing

	
1

	
ea.

	  	  	  	  
	
42

	
F

	
Chairs – Patio

	
8

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
43

	
F

	
Tables – Patio

	
4

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
44

	
K

	
Appetizer Plates

	
78

	
ea.

	
Crestware

	  	  	  
	
45

	
K

	
Pizza Pans – 16”

	
15

	
ea.

	  	  	  	  
	
46

	
K

	
Pizza Pans – 14”

	
27

	
ea.

	  	  	  	  
	
47

	
K

	
Pizza Pans – 10”

	
40

	
ea.

	  	  	  	  
	
48

	
K

	
Pizza Screens – 14”

	
20

	
ea.

	  	  	  	  
	
49

	
K

	
Pizza Screens – 10”

	
25

	
ea.

	  	  	  	  
	
48

	
K

	
Pizza Pans – 18”

	
3

	
ea.

	  	  	  	  
	
49

	
K

	
Mixing Bowl – Lg

	
3

	
ea.

	  	  	  	  
	
50

	
K

	
Mary Warmer – 3 Comp.

	
1

	
ea.

	
Nemco

	
6055A 19A

	
M02

	  
	
51

	
K

	
Industrial Can Opener

	
1

	
ea.

	
Edlund

	  	  	  
	
52

	
K

	
Pasta Pot

	
1

	
ea.

	  	  	  	  
	
53

	
K

	
Pans – 1/3 Metal

	
5

	
ea.

	
Cambro

	  	  	  
	
54

	
K

	
Mixing Bowl – Sm

	
5

	
ea.

	  	  	  	  

 

  

  

  

	
55

	
K

	
SS Prep Table – 6'

	
1

	
ea.

	  	  	  	  
	
56

	
K

	
SS Prep Table – 5'

	
1

	
ea.

	  	  	  	  
	
57

	
K

	
SS Prep Table – 5'

	
2

	
ea.

	
Sani Safe

	
Std 2

	
20000542

	  
	
58

	
K

	
Boiling Pot – Lg

	
2

	
ea.

	  	  	  	  
	
59

	
K

	
Timer (Electronic)

	
1

	
ea.

	
Cooper

	  	  	  
	
60

	
K

	
SS Prep Table – 8'

	
2

	
ea.

	
Load King

	
PT 3072-3

	
1357026

	  
	
61

	
K

	
Refrigerator – Upright

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
62

	
K

	
Pizza Screens – 18”

	
10

	
ea.

	  	  	  	  
	
63

	
K

	
Pizza Screens – 16”

	
15

	
ea.

	  	  	  	  
	
64

	
K

	
Small Cooler

	
1

	
ea.

	
Beverage-Aire

	  	  	  
	
65

	
K

	
Sheet Pans

	
5

	
ea.

	  	  	  	  
	
66

	
K

	
Salad Bowls

	
50

	
ea.

	  	  	  	  
	
67

	
K

	
Fryer – Large

	
1

	
ea.

	
Frymaster

	
MJCFSD

	
0006HA0068

	  
	
68

	
K

	
Dough Trays

	
22

	
ea.

	  	  	  	  
	
69

	
K

	
Dough Mixer

	
1

	
ea.

	
Hobart

	
L-800

	
1684951

	  
	
70

	
K

	
Hotel Pan - 1⁄2 – Plastic

	
2

	
ea.

	
Cambro

	  	  	  
	
71

	
K

	
Hotel Pan - 1⁄2 – Metal

	
2

	
ea.

	  	  	  	  
	
72

	
K

	
Fryer – Small

	
1

	
ea.

	
Dean

	
SR42GNS

	
0402MA0860

	  
	
73

	
K

	
Collander

	
2

	
ea.

	  	  	  	  
	
74

	
K

	
Burner – 6 Eye

	
1

	
ea.

	
Royal

	
RHP 36-6

	
239904

	  
	
75

	
K

	
Brick Oven

	
4

	
ea.

	
Blodget

	  	  	  
	
76

	
K

	
Dishwashing Machine

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
77

	
K

	
Cooler – dessert

	
1

	
ea.

	
Everage Aire

	  	  	  
	
78

	
K

	
Dinner Plates

	
80

	
ea.

	
Homer

	  	  	  
	
79

	
K

	
Hotel Pan – Metal

	
2

	
ea.

	  	  	  	  
	
82

	
K

	
Ice Collector Box

	
1

	
ea.

	
Scottsman

	
BH900E

	
711849-09Z

	  
	
83

	
K

	
Spoons – Wooden

	
5

	
ea.

	  	  	  	  
	
84

	
K

	
Square Tops

	
40

	
ea.

	
Cambro

	  	  	  
	
85

	
K

	
Meat Slicer

	
1

	
ea.

	
Anvil

	
SLR 7312

	
3702

	  
	
86

	
K

	
Scale – 32 oz.

	
1

	
ea.

	
Pelouze

	
832 RD

	
n/a

	  
	
87

	
K

	
Cutting Board – Small

	
1

	
ea.

	  	  	  	  

 

  

  

  

	
88

	
K

	
Sign

	
1

	
ea.

	  	  	  	  
	
89

	
K

	
Cutting Board – Large

	
2

	
ea.

	  	  	  	  
	
90

	
K

	
Spatula's – Plastic

	
5

	
ea.

	
Crestware

	  	  	  
	
91

	
K

	
Meat Mallet

	
2

	
ea.

	  	  	  	  
	
92

	
K

	
Whisks – Small

	
3

	
ea.

	  	  	  	  
	
93

	
K

	
Sandwich Prep Table 72”

	
1

	
ea.

	  	  	  	  
	
94

	
K

	
Equipmetn Stand

	
1

	
ea.

	  	  	  	  
	
95

	
K

	
Ice Maker

	
1

	
ea.

	
Scottsman

	
CME506A

	
757029-11E

	  
	
96

	
K

	
Can Rack

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
97

	
K

	
Walk-In Cooler Freezer

	
1

	
ea.

	  	  	  	  
	
98

	
K

	
Warmer – 7 qt.

	
1

	
ea.

	
Vollrath

	
HS – 7

	  	  
	
99

	
K

	
Whisks – Large

	
1

	
ea.

	  	  	  	  
	
100

	
K

	
Pasta Pot

	
1

	
ea.

	  	  	  	  
	
101

	
K

	
Pizza Peels

	
2

	
ea.

	  	  	  	  
	
102

	
K

	
Hotel Pan – Deep Plastic

	
1

	
ea.

	
Cambro

	  	  	  
	
103

	
K

	
Hotel Pan – Shallow

	
1

	
ea.

	
Cambro

	  	  	  
	
104

	
K

	
Pans – 1/6 Plastic

	
60

	
ea.

	
Cambro

	  	  	  
	
105

	
K

	
Hand blender

	
1

	
ea.

	
GE

	  	  	  
	
106

	
K

	
Grill – Flattop

	
1

	
ea.

	
Anvil

	
FTA 9022

	
1153

	  
	
107

	
K

	
Pizza Spatula's

	
25

	
ea.

	  	  	  	  
	
108

	
K

	
Scale – 25 lb.

	
1

	
ea.

	
Pelouze

	
YG425R

	
120000000243

	  
	
109

	
K

	
Metro Shelves

	
12

	
ea.

	  	  	  	  
	
110

	
K

	
Microwave – 1200 W

	
1

	
ea.

	
Sharp

	  	  	  
	
111

	
K

	
Scale  - 2 lb.

	
1

	
ea.

	
Crestwx

	  	  	  
	
112

	
K

	
Saute Pans

	
12

	
ea.

	  	  	  	  
	
113

	
K

	
Plastic Shelves – White

	
6

	
ea.

	  	  	  	  
	
114

	
K

	
Refrigerator

	
1

	
ea.

	
Frigidaire

	
FFU14C3W7

	
W840969433

	  
	
115

	
K

	
Hot Water Heater

	
2

	
ea.

	  	  	  	  
	
116

	
K

	
Containers – 4 qt.

	
10

	
ea.

	
Cambro

	  	  	  
	
117

	
K

	
Pans – 1/6 Metal

	
25

	
ea.

	  	  	  	  

 

  

  

  

	
118

	
K

	
Containers – 2 qt.

	
12

	
ea.

	
Cambro

	  	  	  
	
119

	
K

	
Pans – 1/3 Plastic

	
6

	
ea.

	  	  	  	  
	
120

	
O

	
Printer

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
121

	
O

	
Fax machine

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
122

	
O

	
File Cabinet

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
123

	
O

	
Security Camera System

	
1

	
ea.

	
lease

	
n/a

	
n/a

	  
	
124

	
O

	
Host Stand

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
125

	
O

	
Produce Sink

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
126

	
O

	
3 Compartment sink

	
1

	
ea.

	
n/a

	
n/a

	
n/a

	  
	
127

	
K

	  	  	  	  	  	  	  
	
128

	
K

	  	  	  	  	  	  	  
	
129

	
K

	  	  	  	  	  	  	  
	
130

	
K

	  	  	  	  	  	  	  
	
131

	
K

	  	  	  	  	  	  	  
	
132

	
K

	  	  	  	  	  	  	  
	
133

	
K

	  	  	  	  	
TOTAL

	  	  

 

 

 

 

 

  

  

  

Schedule 2.1 – Encumbrances

 

Bank of Madison #XXXXXXXXX:   Balance: $9267.49 (interest rate: 8.75%), secured by assets of Madison Restaurant.

 

Bank of Madison #XXXXXXXXX: Balance: $95,481.60. 19 (interest rate: 8.75%), secured by assets of Covington Restaurant.  Monthly payments of $2,726 with balloon payment due on July 31, 2012.

 

Magnolia State Bank, approximately $30,000 principal due, secured by pledge or assignment of Amici Franchising franchise agreements.  To be paid off with settlement funds at Closing.

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Schedule 3.3. – Allocation of Purchase Price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Schedule 4.1. – Real Property Leases

Lease dated June 24, 2003, by and between RDF Properties, Inc., as Landlord, and Amici Pizza Co., Inc., as tenant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Schedule 4.2. – Franchise Agreements

Franchise Agreement dated April 25, 2007, between Amici Franchising, LLC as franchisor and A.K. Gulati, as franchisee

 

Franchise Agreement dated February 11, 2008, between Amici Franchising, LLC as franchisor and Romano Lakes Country Foods, LLC, as franchisee

 

Franchise Agreement dated December 30, 2008, between Amici Franchising, LLC as franchisor and Joiner & Ewing, LLC as franchisee

 

Franchise Agreement dated June 15, 2010, between Amici Franchising, LLC as franchisor and Bearphat, LLC as franchisee

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Schedule 6.5.- Employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT A

TRANSFER DOCUMENTS

 

MADISON RESTAURANT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Exhibit A-1

 

BILL OF SALE – MADISON RESTAURANT

 

For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Amici Restaurants, Inc., a Georgia corporation (“SELLER”) hereby sells, transfers, and conveys to Madison GA Acquisitions, LLC, a Georgia limited liability company (“BUYER”), all of SELLER’s rights, title, and interest and to the following personal property:

 

All of the assets described in a certain Asset Purchase Agreement entered into between SELLER and BUYER related to the operation of an AMICI ITALIAN CAFÉ located at 113 S. Main Street, Madison, Georgia (“Madison Restaurant”) and, more specifically, the following:

 

	
(a)  

	
Sellers’ interest in all leasehold improvements and fixtures;

 

	
(b)  

	
All furniture, equipment, computer hardware and software, and signage used in connection with the Madison Restaurant business and/or located at the Madison Restaurant;

 

	
(c)  

	
All smallwares, and inventory and supplies on-hand at the Madison Restaurant premises at Closing (defined below);

 

	
(d)  

	
Sellers’ interest in the Madison Restaurant real estate lease, including security deposit;

 

	
(e)  

	
Sellers’ interest in any liquor license or other permit(s) required for the sale of alcoholic beverages at the Madison Restaurant location;

 

	
(f)  

	
All books and records of Sellers relating to the Madison Restaurant (including vendor documentation);

 

	
(g)  

	
Permits and licenses applicable to the operation of the Madison Restaurant (to the extent that they are assignable);

 

	
(h)  

	
Prepaid expenses; and

 

	
(i)  

	
Sellers’ interest in the telephone number(s) used in connection with the Madison Restaurant.

 

SELLER warrants that SELLER is the sole owner of the Assets being conveyed and that it has full rights and authority to sell them.

 

SELLER warrants that the Assets are being conveyed free and clear of all liens and encumbrances, and further warrants that SELLER shall fully defend, protect, and indemnify BUYER from any claims against the Assets.

 

IN WITNESS WHEREOF, this Bill of Sale is executed and delivered on this 23rd day of February, 2011.

 

SELLER:

 

AMICI RESTAURANTS, INC.

A Georgia corporation

 

By:  /s/ Michael Torino         

Name:  Michael Torino 

Title: COO                  

  

  

  

EXHIBIT B

TRANSFER DOCUMENTS

 

COVINGTON RESTAURANT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Exhibit B-1

 

BILL OF SALE – COVINGTON RESTAURANT

 

For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Amici Pizza Co., Inc., a Georgia corporation (“SELLER”) hereby sells, transfers, and conveys to Madison GA Acquisitions, LLC, a Georgia limited liability company (“BUYER”), all of SELLER’s rights, title, and interest and to the following personal property:

 

All of the assets described in a certain Asset Purchase Agreement entered into between SELLER and BUYER related to the operation of an AMICI ITALIAN CAFÉ located at 1116 College, Covington, Georgia (“Covington Restaurant”) and, more specifically, the following:

 

	
(a)  

	
Sellers’ interest in all leasehold improvements and fixtures;

 

	
(b)  

	
All furniture, equipment, computer hardware and software, and signage used in connection with the Covington Restaurant business and/or located at the Covington Restaurant;

 

	
(c)  

	
All smallwares, and inventory and supplies on-hand at the Covington Restaurant premises at Closing;

 

	
(d)  

	
Sellers’ interest in any liquor license or other permit(s) required for the sale of alcoholic beverages at the Covington Restaurant location;

 

	
(e)  

	
All books and records of Sellers relating to the Covington Restaurant (including vendor documentation);

 

	
(f)  

	
Permits and licenses applicable to the operation of the Covington Restaurant (to the extent that they are assignable);

 

	
(g)  

	
Prepaid expenses; and

 

	
(h)  

	
Sellers’ interest in the telephone number used in connection with the Covington Restaurant.

 

SELLER warrants that SELLER is the sole owner of the Assets being conveyed and that it has full rights and authority to sell them.

 

SELLER warrants that the Assets are being conveyed free and clear of all liens and encumbrances, and further warrants that SELLER shall fully defend, protect, and indemnify BUYER from any claims against the Assets.

 

IN WITNESS WHEREOF, this Bill of Sale is executed and delivered on this 23rd day of February, 2011.

 

SELLER:

 

AMICI PIZZA CO., INC.

A Georgia corporation

 

By:  /s/ Michael Torino         

Name:  Michael Torino 

Title: COO       

  

  

  

Exhibit B-2

 

SUBLEASE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT C

TRANSFER DOCUMENTS

 

FRANCHISE OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

Exhibit C-1

 

BILL OF SALE – FRANCHISE OPERATIONS

 

For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Amici Franchising, LLC, a Georgia limited liability company (“SELLER”) hereby sells, transfers, and conveys to Amici Franchising, LLC, a Texas limited liability company (“BUYER”), all of SELLER’s rights, title, and interest and to the following personal property:

 

All of the assets described in a certain Asset Purchase Agreement entered into between SELLER and BUYER related to franchising the operation of the AMICI ITALIAN CAFÉ concept and, more specifically, the following:

 

	
(a)  

	
SELLER’s interest (if any) in any and all rights and registrations relating to all trademarks relating to the AMICI ITALIAN CAFÉ system;

 

	
(b)  

	
SELLLER’s interest (if any) in any and all copyrights and copyrighted works relating to the AMICI ITALIAN CAFÉ system including, without limitation, web site design and content, menu and menu board design and content, and operations and training manuals design and content;

 

	
(c)  

	
SELLER’s interest (if any) in any and all trade secrets relating to the AMICI ITALIAN CAFÉ system including recipes and preparation techniques;

 

	
(d)  

	
SELLER’s interest in any and all other intangible property rights relating to the AMICI ITALIAN CAFÉ system; and

 

SELLER warrants that SELLER or AFG Partners, LLC is the sole owner of the foregoing Assets and that that no other person has any ownership right in the Assets.

 

SELLER warrants that the Assets are being conveyed free and clear of all liens and encumbrances, and further warrants that SELLER shall fully defend, protect, and indemnify BUYER from any claims against the Assets.

 

IN WITNESS WHEREOF, this Bill of Sale is executed and delivered on this 23rd day of February, 2011.

 

SELLER:

 

AMICI FRANCHISING, LLC

a Georgia limited liability company

 

By:  /s/ Michael Torino         

Name:  Michael Torino 

Title: COO   

  

  

  

Exhibit C-2

ASSIGNMENT AND ASSUMPTION OF FRANCHISE AGREEMENTS

THIS ASSIGNMENT AND ASSUMPTION OF FRANCHISE AGREEMENTS (“Assignment”) is entered into by and between Amici Franchising, LLC, a Georgia limited liability company (“Assignor”) and Amici Franchising, LLC, a Texas limited liability company (“Assignee”).

 

WHEREAS, Assignor franchises the operation of full service, family style Italian restaurants offering a variety of pizzas, pastas, wings, salads, and sandwiches (“AMICI ITALIAN CAFÉ Restaurants);

 

WHEREAS, Assignor has granted four franchises, the terms and conditions of which are memorialized in four written franchise agreements described on Schedule A (the “Franchise Agreements”);

 

WHEREAS, Assignor desires to assign to Assignee certain of its rights under the Franchise Agreements and to delegate certain of its obligations under the Franchise Agreement, and Assignee desires to accept such rights and assume such obligations, all as set forth in this Assignment.

 

NOW, THEREFORE, in consideration of the mutual premises set forth in this Assignment and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.           Assignment of Rights. Assignor hereby assigns to Assignee, and Assignee hereby accepts, all of Assignor’s rights under the Franchise Agreements that accrue on or after the date of this Assignment.

 

2.           Assumption of Obligations.  Assignee hereby delegates to Assignee, and Assignee hereby assumes, all of Assignors obligations under the Franchise Agreements that accrue on or after the date of this Assignment.

 

3.           Timely Discharge of Obligations; Indemnification.  The parties expressly acknowledge and agree that Assignee is not assuming any liability for obligations accruing prior to the date of this Assignment.  Specifically, but without limiting the generality of the foregoing, and notwithstanding anything to the contrary contained in this Assignment, Assignee assumes no liability for any claims or obligations (whether sounding in contract or tort, whether disclosed or undisclosed), arising out of
or related to the Franchise Agreements, that have accrued prior to the date of this Assignment, or any claims or obligations, arising out of or related to the Franchise Agreements, that are based on actions or omissions occurring prior to the date of this Assignment (each a “Claim”).  Assignor shall timely discharge all obligations not being assumed, and shall indemnify Assignor for all liability and damages (including the amount of any settlement) arising out of or related to such Claim.

 

4.           Right to Offset.  Assignor and Assignee are parties to a certain promissory note relating to the transfer and assignment of the Franchise Agreements.  If Assignee sustains any liability or damage as a result of any Claim subject to indemnification, Assignee may, at its option and in its discretion and for purposes of exercising its right of indemnification under paragraph 3, above, offset against payments due under the promissory note the amount of the liability or damages. The rights under
this paragraph are cumulative and not in lieu of any other rights or remedies available under applicable law.

 

5.           Choice of Law, Jurisdiction, and Forum Selection. This Agreement and the parties relationship created hereby is governed by Texas law, without regard to conflicts of laws principles. This Agreement shall be performed in Dallas County, Texas and shall be governed by and construed in accordance with the laws of the State of Texas and the County of Dallas, Texas. Any dispute arising out of this Agreement shall be brought and prosecuted exclusively in a state or federal court situated in Dallas County, Texas.
The parties irrevocably consent to the personal jurisdiction of these courts, and waive all questions of personal and subject matter jurisdiction or venue for the purpose of carrying out this provision.

 

  

  

  

6.           Miscellaneous.  This Agreement may be modified or amended only by a writing signed by both Assignor and Assignee.  This Agreement may be executed in a number of identical counterparts, and if so executed, each of such counterparts shall be deemed an original for all purposes, and all such counterparts shall, collectively, constitute one agreement.

 

7.           Default; Assignor’s Right to Rescind.  The foregoing transaction is part of an integrated transaction involving the acquisition of assets used in connection with an AMICI’S ITALIAN CAFÉ restaurant located at 113 S. Main Street, Madison, Georgia 30650 and an AMICI’S ITALIAN CAFÉ restaurant located at 1116 College, Covington, Georgia 30014, and assets used in connection with franchising the operation of AMICI’S ITALIAN CAFÉ restaurants.  In connection with such acquisitions, affiliates of Debtor are entering
into financing documents referred to herein as the “Madison Financing Documents,” the “Covington Financing Documents,” and the “Franchising Financing Documents.”  In the event of a default under the Madison Financing Documents, the Covington Financing Documents, or the Franchising Financing Documents that results in a foreclosure of assets, the assignment represented by this Agreement shall be deemed rescinded, null and void; provided that, in the event of such
rescission, all of the covenants and indemnification obligations contained in this Agreement will remain in full effect.

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Assignment on and to be effective as of the 23rd day of February, 2011.

 

ASSIGNOR:

 

AMICI FRANCHISING, LLC

a Georgia limited liability company

By: /s/ Michael Torino

Michael Torino, President

ASSIGNEE:

 

AMICI FRANCHISING, LLC

a Texas limited liability company

By: /s/ Edward Sigmond                                                             

Ed Sigmond, President

  

  

  

Schedule A

Franchise Agreements

Franchise Agreement dated April 25, 2007, between Amici Franchising, LLC as franchisor and A.K. Gulati, as franchisee

 

Franchise Agreement dated February 11, 2008, between Amici Franchising, LLC as franchisor and Romano Lakes Country Foods, LLC, as franchisee

 

Franchise Agreement dated December 30, 2008, between Amici Franchising, LLC as franchisor and Joiner & Ewing, LLC as franchisee

 

Franchise Agreement dated June 15, 2010, between Amici Franchising, LLC as franchisor and Bearphat, LLC as franchisee

 

 

 

 

 

 

 

 

 

 

  

  

  

FIRST AMENDMENT TO

ASSET PURCHASE AGREEMENT

 

This First Amendment to Asset Purchase Agreement (“Amendment”) is entered into on this 23rd day of February, 2011, by and between Amici Enterprises, LLC, a Texas limited liability company (“Enterprises”), Madison GA Acquisitions, LLC, a Georgia limited liability company (“MAC”), Covington
Acquisitions, LLC, a Georgia limited liability company (“CAC”), Amici Franchising, LLC, a Texas limited liability company (“AFLLC”), and Amici Restaurants, Inc., a Georgia corporation (“ARI”),  Amici Pizza Co., Inc., a Georgia corporation (“APC”), and Amici Franchising, LLC, a Georgia limited liability company
(“Franchising”).

 

For purposes of this Agreement: (i) Enterprises, MAC, CAC, and AFLLC may be referred to interchangeably or collectively as “Buyer”; (ii) ARI, APC, and Franchising may be referred to collectively as “Sellers”; (iii) Buyer and Sellers may be referred to
individually as a “Party”, and  (iv) Buyer and Sellers may be referred to collectively as the “Parties.”

 

Capitalized terms have the meaning ascribed to them in the Asset Purchase Agreement unless otherwise defined in this Amendment.

 

RECITALS

 

WHEREAS, contemporaneously with the execution of this Amendment, the Parties are entering into an Asset Purchase Agreement, and exchanging the following closing documents: (1) Bill of Sale for the purchase of Assets relating to the Madison Restaurant; (2) Bill of Sale for the purchase of Assets relating to the Covington Restaurant and a Sublease for the Covington Restaurant premises; and (3) Bill of Sale for the purchase of Assets
relating to Franchise Operations and an Assignment and Assumption of Franchise Agreements.

 

WHEREAS, in connection with the transaction contemplated by the Asset Purchase Agreement, the parties are entering into the following financing agreements: (1) Promissory Note and Security Agreement related to acquisition of the Madison Restaurant, (2) Promissory Note and Security Agreement related to the acquisition of the Covington Restaurant, and (3) Promissory Note related to the acquisition of the Franchise Operations
(collectively, the “Financing Documents”).

 

WHEREAS, the Financing Documents contain various cross default provisions, and the Madison Note and Covington Note are secured by assets relating to operation of the Madison Restaurant, the Covington Restaurant, and Franchise Operations.

 

WHEREAS, it is the parties’ intent that the transaction contemplated under the Asset Purchase Agreement be considered a single transaction, and that a default under any of the Financing Documents be considered a default of all of the Financing Documents.

 

WHEREAS, it is further the parties’ intent that, in the event that the non-breaching party declares a default under any of the Financing Documents, the breaching party shall have the right to rescind the entire transaction and all constituent agreements under applicable rules of rescission and the terms of this Amendment.

 

NOW THEREFORE, in consideration of the mutual premises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

	
II.  

	
CROSS DEFAULT; RESCISSION

 

The Parties acknowledge and agree that the Asset Purchase Agreement and all Exhibits thereto and closing documents executed thereunder shall be considered a single, integrated agreement for purposes of default and termination. Notwithstanding anything to the contrary contained in any of the agreements, a default under any of the Financing Documents is considered a default under all of the Financing Documents.

 

  

  

  

The parties further acknowledge and agree that, in the event that any Seller declares a default under any of the Financing Documents, Buyer shall have the right to rescind the entire transaction and all constituent agreements by delivering written notice of rescission to the other party. In the event of such rescission, the rescinding party shall be liable to the non-rescinding party for restitution damages, but will have no liability for reliance damages. Subject to this limitation, the right to rescission shall be cumulative.

 

IN WITNESS HEREOF, the Parties hereto have caused this Amendment to be executed in multiple originals by their authorized officers, all as of the date and year first written above

 

SELLERS:

 

AMICI RESTAURANTS, INC.

a Georgia corporation

By:      

Name:                

Title:       

AMICI PIZZA CO., INC.

a Georgia corporation

 

By:       

Name:                

Title:      

 

AMICI FRANCHISING, LLC

a Georgia limited liability company

 

By:          

Name:                 

Title:            

  

  

  

BUYER:

 

AMICI ENTERPRISES, LLC

a Texas limited liability company

By:         

Name:               

Title:         

AMICI FRANCHISING, LLC

a Texas limited liability company

 

By:        

Name:              

Title:   

 

MADISON GA ACQUISITIONS, LLC

a Georgia limited liability company

 

By:        

Name:                  

Title: 

COVINGTON ACQUISITIONS, LLC

a Georgia limited liability company

 

By:        

Name:           

Title:

JOINDER PARTIES:

Michael Torino, Individually

Christian Torino, Individually

AFG Partners, LLC

By:                                                                

Michael Torino, President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00198-of-00352.parquet"}]]