Document:

Exhibit 10.1

 

PITTSBURGH RESTAURANT

 

ASSET PURCHASE AGREEMENT

 

by and among

 

GRANITE CITY RESTAURANT OPERATIONS, INC.

 

and

 

PITTSBURGH CR, LLC

 

and

 

RESTAURANT ENTERTAINMENT GROUP, LLC

 

and

 

ERIC SCHILDER

 

January 11, 2012

 

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (“Agreement”) is dated January 11, 2012, by and among Granite City Restaurant Operations, Inc., a Minnesota corporation (“Buyer”), Pittsburgh CR, LLC, an Ohio limited liability company (“Seller”), Restaurant Entertainment Group, LLC, an Ohio limited liability company (“REG”), and Eric Schilder, resident of Marion County, Ohio (“Owner”).

 

INTRODUCTION

 

A.            Seller (Pittsburgh CR, LLC), REG, Owner and Buyer have entered into a Master Asset Purchase Agreement dated November 4, 2011, as amended by amendments December 21, 2011, December 27, 2011 and December 30, 2011 (as amended, the “Master Agreement”), pursuant to which Seller, REG, and Owner jointly with other parties agree to sell the assets of various Cadillac Ranch restaurants located in the U.S. to Buyer.

 

B.            Seller owns and operates a Cadillac Ranch All-American Bar & Grill restaurant located at leased premises at 1060 Settlers Ridge Center Dr., Pittsburgh, Pennsylvania 15205 (the “Pittsburgh Restaurant”).

 

C.            Buyer desires to acquire, and Seller desires to sell, substantially all of the assets used in the operation of the Pittsburgh Restaurant and to operate the Pittsburgh Restaurant upon the issuance of a restaurant liquor license to Buyer by the Commonwealth of Pennsylvania Liquor Control Board.

 

AGREEMENT

 

Subject to the terms, conditions, covenants, negative covenants, exclusions and limitations set forth in this Agreement, the parties, intending to be legally bound, agree as follows:

 

1.                                       Incorporation by Reference

 

1.1           INCORPORATION BY REFERENCE TO MASTER AGREEMENT

 

Except as otherwise provided in this Agreement, the parties hereto incorporate by reference as if fully set forth herein, and adopt, the Definitions and each of the Sections of the Master Agreement including the Schedules and applicable Exhibits thereto. Capitalized terms used herein and not otherwise defined shall have the meanings assigned them in the Master Agreement.

 

1.2           APPLICABILITY TO PITTSBURGH RESTAURANT

 

For purposes of incorporation by reference to the Master Agreement, all references to Assets, Assumed Liabilities, Encumbrances, Excluded Assets, Permitted Encumbrances, and Liabilities in the Master Agreement shall refer to those Assets, Assumed Liabilities,

 

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Encumbrances, Excluded Assets, Permitted Encumbrances, and Liabilities of the Pittsburgh Restaurant and not of any other Restaurant.

 

2.                                       Sale and Transfer of Assets; Closing

 

2.1           ASSETS TO BE SOLD

 

Upon the terms and subject to the conditions set forth in this Agreement and the Master Agreement, at the Closing, but effective as of the Effective Time, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any Encumbrances other than Permitted Encumbrances, all of Seller’s right, title and interest in and to all of Seller’s Assets as described in Section 2.1 of the Master Agreement and used in the operation of the Pittsburgh Restaurant, including but not limited to the Restaurant Liquor License No. R 2108, LID No. 62432 issued by the Commonwealth of Pennsylvania Liquor Control Board on June 1, 2011 (the “Pittsburgh License”).

 

Notwithstanding the foregoing, (1) the sale of the Assets shall not be deemed to occur until the obligations contained in Sections 2.4 and 2.5 are satisfied and (2) the transfer of the Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Assets unless Buyer expressly assumes that Liability in writing pursuant to Section 2.4(a) of the Master Agreement.

 

2.2           EXCLUDED ASSETS

 

Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere in this Agreement, the Excluded Assets as described in Section 2.2 of the Master Agreement, are not part of the sale and purchase contemplated hereunder, are excluded from the Assets and shall remain the property of Seller after the Closing.

 

2.3           CONSIDERATION AND EARNEST MONEY

 

(a)           The consideration for the Assets will be (a) Nine Hundred Thousand Dollars and 00/100 Cents ($900,000.00) (the “Purchase Price”) plus (b) the value of the Inventories and petty cash purchased as set forth in Section 2.3(e) of the Master Agreement, and (c) plus or minus the Adjustment Amount described in Section 2.3(d) of the Master Agreement and (d) the assumption of the Assumed Liabilities.  Upon the execution of this Agreement, Buyer will issue a promissory note (“Promissory Note”) to Seller for the amount of the Purchase Price, subject to adjustment as described in this Section 2.3.  Such Promissory Note shall be placed into escrow with Buyer’s counsel until the Closing described in Section 2.4.  Upon the Closing described in Section 2.4, the Purchase Price, net of the Earnest Money, plus the dollar amount of the Inventories and petty cash of Seller as set forth and determined pursuant to Section 2.3(e) of the Master Agreement, will be disbursed by the Escrow Agent or Buyer’s lender, Fifth Third Bank, as set forth in the Second Amended and Restated Escrow Agreement between Buyer, Seller, REG, Owner, and the other parties named therein (the “Escrow Agreement”).

 

(b)           Buyer hereby pays to Seller the earnest money in the amount of One Hundred Eighty One Thousand Two Hundred Seventy Nine and 82/100 Dollars

 

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($181,279.82) (the “Earnest Money”), receipt of which is hereby acknowledged by Seller. The Earnest Money shall be deducted from the Purchase Price and disbursed to Seller in the amounts set forth in Subsection (d) hereof, payable to the respective creditors of Seller therein.

 

(c)           If upon the Closing, the Assets can be conveyed free of all Liabilities and Encumbrances, the balance of the Purchase Price, plus the dollar amount of Seller’s Inventories and petty cash, determined pursuant to Section 2.3(e) of the Master Agreement (“Initial Disbursement”) shall be released to Seller, minus (i) the Earnest Money; (ii) the Adjustment Amount for disbursements to creditors of Pittsburgh CR, LLC, as provided in Section 2.3(d) of the Master Agreement, (iii) the amount of Advances described in Subsection (d) below; (iv) any other amounts reasonably determined by Buyer as necessary to discharge other claims or liabilities of Seller; and (v) the sum of $165,353.93(the “Holdback Amount”), which shall be held in a separate escrow account, and disbursements therefrom shall be made pursuant to the terms of the Escrow Agreement.

 

(d)           Concurrent with the execution of this Agreement, Seller agrees that the following obligations of Seller shall be paid in full: (i) all unpaid rents and other obligations due Settlers Ridge LP, including rent for January 2012, in the approximate amount of $160,605.26; (ii) the sum of $20,674.56 plus accrued interest due to Allegheny County, Pennsylvania, for delinquent sales taxes, and; (iii) all delinquent payments due the Pennsylvania Department of Revenue for Taxes due as of the date of execution of the Pittsburgh Purchase Agreement on the sale of the Assets of the remaining Restaurants.  If the Closing does not occur because Seller cannot satisfy any term or closing condition that Seller is obligation to satisfy under the Master Agreement or hereunder, or because the Pennsylvania Liquor Control Board (the “PLCB”) does not approve Seller’s transfer of the Pittsburgh License to Buyer, and Buyer terminates this Agreement, Seller shall repay the Earnest Money to Buyer.  If there are funds available in the Operating Account (as defined in the Consulting Agreement) or the Seller otherwise has funds available to it, Seller and Buyer agree that such funds shall be used to repay the Earnest Money to Buyer and shall be paid to Buyer immediately upon Buyer’s demand.  If such funds are insufficient to fully repay the Earnest Money to Buyer, Seller and Buyer agree that the remaining portion of such Earnest Money shall be deducted from any distributions to be received by any of the Seller Entities under the terms of the Escrow Agreement and paid directly to Buyer (and that Buyer and Seller will provide joint written instructions to the Escrow Agent to effectuate such repayment); provided, however, that if the Buyer has not received full repayment of the Earnest Money by the Termination Date (as defined in the Escrow Agreement), the remaining portion of the Earnest Money that has not been repaid to Buyer shall thereupon be immediately due and payable.  Seller hereby grants Buyer a security interest in the Assets of Seller to secure repayment of the Earnest Money.

 

(e)           If Buyer shall exercise its rights to terminate this Agreement pursuant to 2.4 (c), Seller shall retain the Earnest Money in satisfaction of any obligation or liability of Buyer under this Agreement.

 

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2.4           CLOSING; TERMINATION AND OPTIONAL TERMINATION RIGHT

 

(a)           Section 2.6 of the Master Agreement is incorporated by reference herein with respect to the Closing.  Notwithstanding anything contained in the Master Agreement to the contrary, subject to Subsection (c), the Closing with respect to the Assets purchased under this Agreement shall occur within two (2) business days following the satisfaction of the following conditions:

 

(i)            Buyer’s receipt of final approval from the Pennsylvania Liquor Control Board (the “PLCB”) of Seller’s transfer of the Pittsburgh License to Buyer; and

 

(ii)           the satisfaction or waiver of all other conditions precedent set forth in Articles 7 and 8 of the Master Agreement.

 

(b)           Should the Closing fail to occur by June 1, 2012 (the “Termination Date”) by reason of the failure of the PLCB to approve Seller’s transfer of the Pittsburgh License to Buyer, (i) the Promissory Note shall be cancelled; (ii) Seller shall have no claim for payment thereunder; (iii) on the Termination Date, Buyer’s obligations under this Agreement shall terminate; and (iv) Seller shall immediately repay to Buyer the Earnest Money upon demand and in accordance with the repayment provisions set forth in Section 2.3(d) above.  Notwithstanding the foregoing, the failure of the PLCB to approve Seller’s transfer of the Pittsburgh License to Buyer is due to an act or omission Seller, Buyer reserves the right, upon written notice to Seller, to extend the term of this Agreement to complete the Contemplated Transactions or pursue any other right or remedy available to Buyer under law or equity.

 

(c)           If the Closing on the Assets of Pittsburgh does not occur due to a default or failure of Seller to satisfy any term or closing condition that Seller is obligated to satisfy as a condition to Closing, or if Seller shall breach any material covenant or obligation in the Agreement, and Buyer terminates this Agreement, Seller shall repay the Earnest Money to Buyer upon demand and in accordance with the repayment provisions set forth in Section 2.3(d) above.  Seller hereby grants to Buyer a security interest in the Assets to secure repayment of such Earnest Money.

 

(d)           Notwithstanding the foregoing, Buyer, in its discretion, may terminate this Agreement without reason (the “Buyer Termination Right”) upon written notice to Seller, whereupon Buyer’s obligations to purchase the Assets of Pittsburgh under this Agreement and the Master Agreement shall terminate without any liability to Seller, and the Purchase Price shall be deemed reduced by the Purchase Price for the Assets of Pittsburgh.  Upon such exercise of the Buyer Termination Right, Seller may retain as a termination fee, and shall not be obligated to repay, the Earnest Money.

 

(e)           In addition to the satisfaction or waiver of the conditions to Buyer’s obligations in Section 7 of the Master Agreement, the obligations of the Buyer (or any of its subsidiaries) to make any payments hereunder or under the Promissory Note are subordinate and junior to the prior payment and performance of the “Obligations” under and as defined in that certain Credit Agreement dated as of May 10, 2011 (as the same has been and hereafter may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”) by and among, inter alia, Granite City Food & Brewery Ltd., a Minnesota corporation, Fifth Third Bank, as agent (together with its successors and assigns in such capacity, “Agent”) for the persons from time to time party thereto as lenders (the “Lenders”) and certain

 

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other secured parties, to the extent and in the manner set forth in this paragraph.  No payment due or payable by the Buyer or any of its subsidiaries hereunder or under the Promissory Note shall be made or permitted or required to be made by Buyer or any of its subsidiaries or shall be accepted by Seller if, at the time of the making of such payment, the making of such payment is prohibited under the terms of the Credit Agreement. Any such payment not permitted to be paid in accordance with the previous sentence (“Deferred Payments”) shall instead accrue until the earlier of (i) such time as such payment is permitted to be paid pursuant to the terms of the Credit Agreement or (ii) the indefeasible payment in full of all “Obligations” and termination of any commitments to extend credit under the Credit Agreement.  Prior to the indefeasible payment in full of all “Obligations” and termination of any commitments to extend credit under the Credit Agreement, Seller shall not take any action, without the prior written consent of Agent, to collect, enforce payment, or exercise any remedies with respect the Deferred Payments (whether pursuant to the terms hereof or the terms of the Promissory Note or otherwise) either at law or in equity, by judicial proceedings or otherwise.  Seller shall hold in trust and not commingle with its other assets any payment received hereunder or under the Promissory Note in violation of the Credit Agreement, and shall turn over any such payment to the Buyer.

 

2.5           DELIVERABLES ON SIGNATURE AND CLOSING

 

Section 2.7 and Section 7 of the Master Agreement are incorporated by reference herein.

 

(a)           Upon the execution of this Agreement, Seller and REG, as applicable, will be further obliged to execute and deliver the following:

 

(i)            an Assignment, Assumption and Amendment of Lease, in a form approved by the parties hereto, for the Lease dated June 1, 2009, between Settlers Ridge, L.P. and Seller for the Pittsburgh Restaurant at 1060 Settlers Ridge Center Dr., Pittsburgh, Pennsylvania 15025, which shall include amendments to the Lease for the Pittsburgh Restaurant satisfactory to Buyer and its counsel;

 

(ii)           the financial statements required to be delivered pursuant to section 3.2 of this Agreement;

 

(iii)          a certificate executed by an officer of Seller, an officer of REG and Owner as to the accuracy of their representations and warranties as of the date of this Agreement in accordance with section 7.1 of the Master Agreement;

 

(iv)          a certificate of an officer of Seller, an officer of REG and Owner certifying, as complete and accurate as of the date of this Agreement, attached copies of the Governing Documents of Seller, certifying and attaching all requisite resolutions or actions of Seller’s Owner approving the execution and delivery of this Agreement and certifying to the incumbency and signatures of the officers of Seller executing this Agreement and any other document relating to the Contemplated Transactions;

 

(v)           Certificates dated as of a date not earlier than the fifth business day prior to the execution of this Agreement as to the good standing of Seller and REG executed by appropriate officials of the State of Ohio and each jurisdiction

 

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in which Seller is licensed or qualified to do business as a foreign limited liability company;

 

(vi)          the Consulting Agreement (the “Consulting Agreement”) between Buyer and Seller for the consulting services to be provided by Buyer to Seller prior to the Closing;

 

(vii)         a security agreement executed by Seller evidencing the security interest granted to Buyer in the Assets to secure the repayment of the Earnest Money;

 

(viii)        the PLCB Form 21 executed by Seller, and any other forms or documents required by the PLCB to transfer the Pittsburgh License; and

 

(ix)         evidence that Seller has directed payment of the amounts payable to the creditors of Seller set forth in Section 2.3(d) hereof.

 

(b)           In addition to Seller’s and REG’s obligations set forth in Section 2.7(a) of the Master Agreement, at the Closing under this Agreement, Seller and REG, as applicable, will be further obligated to execute and deliver the following:

 

(i)            an agreement between Seller and REG terminating the Management Agreement between Seller and REG dated June 9, 2010;

 

(ii)           a bill of sale substantially in the form of Exhibit 2.5(d) for all of the Assets that are tangible personal property and used in the operation of the Pittsburgh Restaurant;

 

(iii)          the financial statements required to be delivered pursuant to section 3.2 of this Agreement;

 

(iv)          evidence that REG and Seller have caused the following parties to cease and desist from using the Marks, Copyrights, Trade Secrets and Net Names: CR Sparks Ranch West, LLC; CR Las Vegas, LLC; Nashville Midnight Oil, LLC; Cincinnati F.S., LLC; and CR Cleveland, LLC, together with an assignment to Buyer from such parties of all of their right, title and interest, including goodwill, in and to the Marks, Copyrights, Trade Secrets and Net Names in the form reasonably acceptable in form and substance to Buyer within sixty (60) days after Closing;

 

(v)           separate noncompetition agreements substantially in the form of Exhibit 2.5(g) executed by Seller, Owner, REG, Jon H. Field and Joel A. Field;

 

(vi)          evidence of the Consents relating to the operation of the Pittsburgh Restaurant identified in Exhibit 7.3 of the Master Agreement, or the delivery of such Consents has been waived in whole or in part by Buyer;

 

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(vii)         delivery of an assignment substantially in the form of Exhibit 2.5(j) from Owner to REG of all his right, title and interest in an to any works of authorship created by him for use in or by the Pittsburgh Restaurant;

 

(viii)        if not previously delivered, a list of all licensed images on the walls, on menus or otherwise used in the Pittsburgh Restaurant and the source of the license/identity of the licensee;

 

(ix)           a certificate executed by an officer of Seller, an officer of REG and Owner as to the accuracy of their representations and warranties as of the Closing in accordance with section 7.1 of the Master Agreement as to their compliance with and performance of their covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 7.2 of the Master Agreement;

 

(x)            a certificate of an officer of Seller, an officer of REG and Owner certifying, as complete and accurate as of the Closing, attached copies of the Governing Documents of Seller, certifying and attaching all requisite resolutions or actions of Seller’s Owner approving the execution and delivery of this Agreement and the consummation of the Contemplated Transactions and certifying to the incumbency and signatures of the officers of Seller executing this Agreement and any other document relating to the Contemplated Transactions;

 

(xi)           Releases of all Encumbrances on the Assets, other than Permitted Encumbrances, including releases of any liens on the Pittsburgh License;

 

(xii)          Certificates dated as of a date not earlier than the fifth business day prior to the Closing as to the good standing of Seller and REG executed by appropriate officials of the State of Ohio and each jurisdiction in which Seller is licensed or qualified to do business as a foreign limited liability company; and

 

(xiii)         A certificate or statement from the Pennsylvania Department of Revenue of a date not more than five (5) days preceding the Closing Date setting forth that all Taxes due from Seller have been paid.

 

3.                                       Representations and Warranties of Seller, REG and Owner related to Pittsburgh Restaurant

 

Seller, Owner and REG represent and warrant, jointly and severally, to Buyer as follows:

 

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3.1           LIQUOR LICENSE REPRESENTATIONS

 

(a)           The Pittsburgh License is in good standing with the PLCB and can be used in Allegheny County, Pennsylvania.

 

(b)           The Pittsburgh License authorizes and permits the retail sale of packaged liquor, wine, and beer and the consumption on premises of liquors, wines and beer.

 

(c)           The Pittsburgh License has not been revoked or suspended, nor are there any threatened or pending revocations or suspensions by the PLCB or other Governmental Body.  There are no pending administrative charges filed against the Pittsburgh License by the PLCB and there are no citations, contracts, lawsuits, delinquent surcharges or fees pending or affecting the Pittsburgh License.  No event or circumstance exists that may constitute or result in a violation by Seller of any Legal Requirement that could impair the transferability of the Pittsburgh License and Seller is in compliance with all Legal Requirements of the PLCB or any other Governmental Body.

 

(d)           The Pittsburgh License is free and clear of all Liens and Encumbrances, except as set forth on Schedule 3.1(d).

 

(e)           There are no unpaid liquor, wine or beer vendors, and no unpaid sales or surcharge taxes, except as set forth on Schedule 3.1(e).  All required sales tax reports and surcharge reports have been, or will be submitted to the appropriate agencies by time of Closing.

 

3.2           FINANCIAL STATEMENTS

 

(a)           Attached hereto as Schedule 3.2 are the following for each of Seller and REG:  (i) an unaudited balance sheet as at June 30, 2011, and the related unaudited statement of income for the six-month period then ended, (ii) an unaudited balance sheet for the year December 31, 2010, and the related unaudited statement of income for the year then ended, (iii) an unaudited balance sheet as of September 30, 2011, and the related unaudited statement of income for the nine-month period then ended, and (iv) monthly unaudited financial statements through the Closing Date.  All of the financial statements of Seller delivered pursuant to this Section 3.2 and Section 3.4(a) of the Master Agreement are certified to by Seller’s chief financial officer and Owner, and all financial statements of REG delivered pursuant to this Section 3.2 and Section 3.4(a) of the Master Agreement are certified to by REG’s chief financial officer and Clint Field.  All of such financial statements fairly present the financial condition and the results of operations, changes in owner’s equity and cash flows of Seller and REG as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP.  The financial statements referred to in this Section 3.2 reflect the consistent application of such accounting principles throughout the periods involved, except as otherwise disclosed in such financial statements.  The unaudited financial statements have been prepared from and are in accordance with the accounting Records of Seller and REG.

 

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4.                                       Covenants of Seller Prior to Closing Related to the Pittsburgh Restaurant

 

4.1           OPERATION OF THE BUSINESS OF SELLER

 

Between the date of this Agreement and the Closing, Seller shall (and Owner shall cause Seller) to:

 

(a)           operate and remain in control of the Pittsburgh Restaurant;

 

(b)           all managers and employees for the Pittsburgh Restaurant will remain in place, subject to normal attrition;

 

(c)           cooperate with Buyer and use its Best Efforts to assist Buyer in obtaining all necessary licenses that are required to operate the Pittsburgh Restaurant; and

 

(d)           Comply with Seller’s obligations under the Consulting agreement and to pay Seller’s debts and obligations when due.

 

Seller covenants and agrees that any material breach or refusal to comply with the terms of the Consulting Agreement shall be deemed a breach of this Agreement.

 

5.                                       Owner’s Obligations and Guaranty

 

5.1           OWNER OBLIGATIONS

 

The liability of Owner hereunder shall be joint and several with Seller.  Where in this Agreement provision is made for any action to be taken or not taken by Seller, Owner jointly and severally undertakes to cause Seller to take or not take such action, as the case may be.  Without limiting the generality of the foregoing, Owner shall be jointly and severally liable with Seller for the indemnities set forth in Article 11 of the Master Agreement.

 

5.2           GUARANTY

 

(a)           Owner hereby absolutely, unconditionally and irrevocably guarantees (the “Guaranty”) full and prompt payment and performance when due of all of the obligations of Seller under this Agreement in accordance with the respective terms and conditions set forth herein (collectively, the “Obligations”).  This Guaranty is continuing and absolute, shall remain in full force and effect, and shall not be released, diminished, impaired or terminated until all of the Obligations have been indefeasibly paid, performed or otherwise satisfied, as applicable (including Buyer’s costs of collection, satisfaction or performance in connection with the enforcement of this Guaranty) finally and fully, notwithstanding, without limitation, the bankruptcy, insolvency or dissolution of Seller or the death or disability of Owner or his permitted assigns.  Owner waives any defenses to enforcement of this Guaranty.

 

(b)           This Guaranty is one of performance and payment and not of collection and Owner is liable as the primary obligor.  There are no conditions precedent to the enforcement of this Guaranty, and it shall not be necessary for Buyer, in order to enforce

 

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payment by Owner under this Guaranty, to initiate or exhaust Buyer’s remedies against Seller or any other Person liable for the payment or performance of the Obligations, or to enforce any other means of obtaining payment or performance of the Obligations.  Owner waives any rights under applicable law related to the foregoing.  Buyer shall not be required to mitigate damages or take any other action to reduce, collect, or enforce the Obligations.

 

6.                                       General Provisions

 

6.1           NOTICES

 

All notices, Consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when: (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, facsimile numbers or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties).  Any notice by means which affords the sender evidence of delivery, attempted delivery, or rejected delivery will be deemed to have been given and received at the date and time of receipt, attempted delivery, or rejected delivery; provided, however, any notice by fax or email must have evidence of delivery.

 

	
To Seller, Owner and REG:
    
	
c/o: Restaurant Entertainment Group
    
	
Address: 6728 Hyland Croy Rd
    
	
Dublin, OH 43016
    
	
Attention: Clinton R. Field
    
	
Fax no.: 614-760-9793
    
	
E-mail address:clint.field37@gmail.com
    
	
 
    
	
with a copy to: Kephart & Fisher
    
	
Attention: David Fisher
    
	
207 N Fourth St.
    
	
Columbus, Ohio 43215
    
	
Fax no.: 614-469-1887
    
	
E-mail address:   davidfisher@kephartfisher.com
    
	
 
    
	
Buyer: Granite City Restaurant   Operations, Inc.
    
	
Attention: Robert J. Doran, Chief Executive   Officer
    
	
5402 Parkdale Drive, Suite 101
    
	
Minneapolis, MN 55416
    
	
Fax no.: (952) 215-0671
    
	
E-mail address: rjdoran@gmail.com
    

 

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with a copy to: Briggs and Morgan, P.A.
    
	
Attention: Avron Gordon
    
	
2200 IDS Center
    
	
80 S 8th Street
    
	
Minneapolis, MN 55402
    
	
Fax no.: (612) 977-8650
    
	
E-mail address: agordon@briggs.com
    

 

6.2           JURISDICTION; SERVICE OF PROCESS

 

Any Proceeding arising out of or relating to this Agreement or the transaction contemplated by this Agreement may be brought in the courts of the State of Minnesota, County of Hennepin, or, if it has or can acquire jurisdiction, in the United States District Court for the District of Minnesota, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement or the transaction contemplated by this Agreement in any other court.  The parties agree that either or both of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and bargained agreement between the parties irrevocably to waive any objections to venue or to convenience of forum.  Process in any Proceeding referred to in the first sentence of this section may be served on any party anywhere in the world.

 

6.3           SUPPLEMENT TO MASTER AGREEMENT AND MODIFICATION

 

This Agreement supplements the Master Agreement and in no way limits the Master Agreement.  This Agreement may not be amended, supplemented, or otherwise modified except by a written agreement executed by the party to be charged with the amendment.

 

6.4           GOVERNING LAW

 

This Agreement will be governed by and construed under the laws of the State of Minnesota without regard to conflicts-of-laws principles that would require the application of any other law.

 

6.5           EXECUTION OF AGREEMENT

 

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.  The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes.  Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.

 

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6.6           REPRESENTATIVE OF SELLER AND REG

 

(a)           Seller and REG hereby constitute and appoint Clinton R. Field as their representative (“Selling Parties Representative”) and their true and lawful attorney in fact, with full power and authority in each of their names and to act on behalf of each of them with respect to the provisions set forth in Section 13.16(a) of the Master Agreement as incorporated by reference to this Agreement.

 

(b)           This appointment and grant of power and authority is coupled with an interest and is in consideration of the mutual covenants made herein and is irrevocable and shall not be terminated by any act of either of Seller or REG or by operation of law, whether by the occurrence of any other event.  Each of Seller and REG hereby consents to the taking of any and all actions and the making of any decisions required or permitted to be taken or made by the Selling Parties Representative pursuant to this Section 6.6.  Each of Seller and REG agree that the Selling Parties Representative shall have no obligation or liability to any Person for any action or omission taken or omitted by the Selling Parties Representative in good faith hereunder.

 

(c)           Buyer and Escrow Agent shall be entitled to rely upon any document or other paper delivered by the Selling Parties Representative as (i) genuine and correct and (ii) having been duly signed or sent by the Selling Parties Representative, and neither Buyer nor Escrow Agent shall be liable to either of Seller, REG or Owner for any action taken or omitted to be taken by Buyer or Escrow Agent in such reliance.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
Buyer:
    	
Owner:
    
	
GRANITE CITY RESTAURANT
    	
 
    
	
OPERATIONS, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ James G. Gilbertson
    	
 
    	
/s/ Eric Schilder
    
	
Name: James G. Gilbertson
    	
Eric Schilder
    
	
Its: Chief Financial Officer
    	
 
    
	
 
    	
 
    
	
 
    	
Seller:
    
	
 
    	
PITTSBURGH CR, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric Schilder
    
	
 
    	
Eric Schilder, Sole Member and Owner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Clinton R. Field
    
	
 
    	
Clinton R. Field, Manager
    
	
 
    	
 
    
	
 
    	
RESTAURANT ENTERTAINMENT GROUP, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Clinton R. Field
    
	
 
    	
Clinton R. Field, Sole Member, Manager and Owner
    
					

 

ACCEPTANCE AND AGREEMENT OF SELLING PARTIES REPRESENTATIVE

 

The undersigned, being the Selling Parties Representative designated in Section 6.6 of the foregoing Asset Purchase Agreement, agrees to serve as the Selling Parties Representative and to be bound by the terms of such Asset Purchase Agreement pertaining thereto.

 

	
Dated: January 11, 2011
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Clinton R. Field
    
	
 
    	
Clinton R. Field
    

 

[Signature Page to Pittsburgh Asset Purchase Agreement]

 

 

Exhibit 2.5(d)

 

BILL OF SALE

 

THIS BILL OF SALE (“Bill of Sale”) made effective as of 12:01 a.m. on                                 , 2012 (the “Effective Time”), by Pittsburgh CR, LLC, an Ohio limited liability company (“Seller”), in favor of Granite City Restaurant Operations, Inc., a Minnesota corporation (“Buyer”), and is delivered pursuant and subject to, the terms of, that certain Asset Purchase Agreement, dated as of January     ,2012 (the “Purchase Agreement”), by and among Buyer, Seller, Restaurant Entertainment Group, LLC, and Eric Schilder.  All capitalized terms used but not otherwise defined in this Bill of Sale shall have the respective meanings given to them in the Purchase Agreement

 

1.                                       Sale and Transfer of Assets. For good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, and as contemplated by Section 2.1 of the Purchase Agreement, Seller hereby sells, transfers, assigns, conveys, grants and delivers to Buyer, all of Seller’s right, title and interest in and to all of the Assets, including without limitation the Restaurant Liquor License No. R 2108 issued by the Pennsylvania Liquor Control Board on June 1, 2011, and the Assets set forth in Annex 1 attached hereto.

 

2.                                       Further Actions. Seller covenants and agrees to warrant and defend the sale, transfer, assignment, conveyance, grant and delivery of the Assets hereby made against all persons whomsoever, to take all steps reasonably necessary to establish the record of Buyer’s title to the Assets and, at the request of Buyer, to execute and deliver further instruments of transfer and assignment and take such other action as Buyer may reasonably request to more effectively transfer and assign to and vest in Buyer each of the Assets, all at the sole cost and expense of Seller.

 

3.                                       Power of Attorney. Without limiting Section 2 hereof, Seller hereby constitutes and appoints Buyer the true and lawful agent and attorney in fact of Seller, with full power of substitution and resubstitution, in whole or in part, in the name and stead of Seller but on behalf and for the benefit of Buyer and its successors and assigns, from time to time:

 

(a)                                  to demand, receive and collect any and all of the Assets and to give receipts and releases for and with respect to the same, or any part thereof;

 

(b)                                 to institute and prosecute, in the name of Seller or otherwise, any and all proceedings at law, in equity or otherwise, that Buyer or its successors and assigns may deem proper in order to collect or reduce to possession any of the Assets and in order to collect or enforce any claim or right of any kind hereby assigned or transferred, or intended so to be; and

 

(c)                                  to do all things legally permissible, required or reasonably deemed by Buyer to be required to recover and collect the Assets and to use Seller’s name in such manner as Buyer may reasonably deem necessary for the collection and recovery of same,

 

Seller hereby declaring that the foregoing powers are coupled with an interest and are and shall be irrevocable by Seller.

 

 

4.                                       Terms of the Purchase Agreement. The terms of the Purchase Agreement, including but not limited to Seller’s representations, warranties, covenants, agreements and indemnities relating to the Assets in the Master Asset Purchase Agreement dated November 4, 2011, by and among Buyer, Seller and the other parties named therein, as amended (the “MAPA”), are incorporated herein by this reference. Seller acknowledges and agrees that the representations, warranties, covenants, agreements and indemnities contained in the Purchase Agreement and the MAPA shall not be superseded hereby but shall survive and remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

 

5.                                       Governing Law.  This Bill of Sale will be governed by and construed and interpreted under the laws of the State of Minnesota, without regard to conflicts of laws principles that would require the application of any other law.

 

IN WITNESS WHEREOF, Seller has executed this Bill of Sale to be effective as of the Effective Time.

 

	
 
    	
Pittsburgh CR, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   Eric Schilder
    
	
 
    	
Its:   Sole Member and Owner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   Clinton R. Field
    
	
 
    	
Its:   Manager
    

 

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ANNEX 1

 

See attached

 

 

Exhibit 2.5(g)

 

NONCOMPETITION, NONDISCLOSURE,
 AND NONINTERFERENCE AGREEMENT

 

This Noncompetition, Nondisclosure, and Noninterference Agreement (this “Agreement”) is made as of                   , 20   , by and among Granite City Restaurant Operations, Inc., a Minnesota corporation (“Buyer”), and Pittsburgh CR, LLC (“Seller”).

 

RECITALS

 

A.                                   Buyer has entered into a Master Asset Purchase Agreement dated November 4, 2011, as amended by amendments dated December 21, 2011, December 27, 2011 and December 30, 2011 (the “Master Purchase Agreement”), relating to the purchase of substantially all of the Assets and the goodwill of seven (7) restaurants (the “Restaurants”) operated by the Seller Entities described in the Master Purchaser Agreement under the service mark, CADILLAC RANCH ALL-AMERICAN BAR & GRILL, or variants thereof.  Section 2.7(a)(viii) of the Master Purchase Agreement requires that noncompetition agreements be executed and delivered by Seller, each Seller Entity, each Owner, Jon H. Field, and Joel A. Field at the Closing.

 

B.                                     Seller operates the Restaurant located at 1060 Settlers Ridge Center Dr., Pittsburgh, Pennsylvania 15205 (the “Pittsburgh Restaurant”).

 

C.                                     Buyer has entered into an Asset Purchase Agreement (the “Purchase Agreement”) relating to the purchase of substantially all of the Assets and goodwill of the Pittsburgh Restaurant.

 

AGREEMENT

 

The parties, in consideration of Buyer’s agreement to purchase the Assets of the Pittsburgh Restaurant and the consideration received by Seller under the Purchase Agreement, agree as follows:

 

1.                                      DEFINITIONS

 

“Confidential Information” is defined in Section 2.

 

Capitalized terms not expressly defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement and the Master Purchase Agreement.

 

2.                                      ACKNOWLEDGMENTS BY SELLER

 

Seller acknowledges that Seller has had access to and has become familiar with the following, any and all of which constitute confidential information of Seller (collectively the “Confidential Information”): (a) any and all trade secrets concerning the business and affairs of Seller, methods, recipes and ingredient lists, menus, techniques, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, market studies, business plans, computer software and programs (including object code and source code), database technologies, systems, devices, know-how, discoveries, and concepts of Seller and any other information, however documented,

 

 

of Seller that is a trade secret within the meaning of the Uniform Trade Secrets Act or under other applicable law; (b) any and all information concerning the business of the Restaurants (which includes without limitation historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, contractors, agents, suppliers and potential suppliers, personnel training and techniques and materials, purchasing methods and techniques and manuals); and (c) any and all notes, analyses, compilations, studies, summaries and other material prepared by or for Seller containing or based, in whole or in part, upon any information included in the foregoing.

 

Seller acknowledges that (a) Buyer has required that Seller make the covenants set forth in Sections 3 and 4 of this Agreement as a condition to Buyer’s purchase of the Assets of the Pittsburgh Restaurant; (b) the provisions of Sections 3 and 4 of this Agreement are reasonable and necessary to protect and preserve Buyer’s interests in and right to the use and operation of the Assets of the Pittsburgh Restaurant from and after Closing of the purchase of the Assets of the Pittsburgh Restaurant; and (c) Buyer would be irreparably damaged if Seller were to breach the covenants set forth in Sections 3 and 4 of this Agreement.

 

3.                                      CONFIDENTIAL INFORMATION

 

Seller acknowledges and agrees that the protection of the Confidential Information is necessary to protect and preserve the value of the Assets. Therefore, Seller hereby agrees not to disclose to any unauthorized Persons or use for its own account or for the benefit of any third party any Confidential Information relating to the Pittsburgh Restaurant, whether or not such information is embodied in writing or other physical form or is retained in the memory Seller’s members, managers, officers, employees or agents, without Buyer’s written consent, unless and to the extent that such Confidential Information is or becomes generally known to and available for use by the public other than as a result of Seller’s fault or the fault of any other Person bound by a duty of confidentiality to Buyer, Seller or REG.  Seller agrees to deliver to Buyer at the time of execution of this Agreement, and at any other time Buyer may request, all documents, memoranda, notes, plans, records, reports and other documentation, models, components, devices or computer software, whether embodied in a disk or in other form (and all copies of all of the foregoing), that contain Confidential Information relating to the Pittsburgh Restaurant and any other Confidential Information relating to the Pittsburgh Restaurant that Seller may then possess or have under its control.

 

4.                                      NONCOMPETITION AND NONINTERFERENCE

 

As an inducement to Buyer to enter into the Purchase Agreement and as additional consideration for the consideration to be paid to Seller under the Purchase Agreement, Seller agrees that:

 

(a)                                  For a period of twenty-four (24) months after the Closing of the purchase of the Assets of the Pittsburgh Restaurant:

 

(i)                                     Seller will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control or participate in the ownership,

 

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management, operation, financing or control of, be employed by, associated with or in any manner connected with, or render services or advice or other aid to, or guarantee any obligation of, any Person engaged in or planning to become engaged in the operation of a restaurant business whose products or activities compete in whole or in part with the business in which the Assets were used prior to the Closing or may be used thereafter, within a ten (10) mile radius of the Pittsburgh Restaurant location (the “Noncompetition Area”).  Notwithstanding the foregoing, if Seller shall operate a Competing Restaurant Business at the time of Seller’s execution of this Agreement, Seller shall notify Buyer, and Seller shall cause such Competing Restaurant Business to be materially differentiated from the style of the Cadillac Ranch restaurants currently operated by Seller and Owners.  Seller agrees that this covenant is reasonable with respect to its duration, geographical area and scope.

 

(ii)           Seller agrees not to, directly or indirectly, (A) induce or attempt to induce any employee of Seller who becomes an employee of Buyer in connection with the purchase of the Assets to leave the employ of Buyer; (B) in any way interfere with the relationship between Buyer and any such employee of Buyer; or (C) employ or otherwise engage as an employee, independent contractor or otherwise any such employee of Buyer.

 

(iii)          Seller agrees not to, directly or indirectly, cause, induce or attempt to cause or induce any supplier, licensee, licensor, franchisee, consultant, Person or other business relation of Buyer to cease doing business with Buyer, or in any way interfere with its relationship with Buyer;

 

(b)                                 In the event of a breach by Seller of any covenant set forth in Subsection 4(a) of this Agreement, the term of such covenant will be extended by the period of the duration of such breach;

 

(c)                                  Seller will not, at any time during or after the twenty-four month period, disparage Buyer, the Assets, the business formerly conducted by Seller, the business conducted by Buyer using the Assets or any shareholder, director, officer, employee or agent of Buyer;

 

(d)                                 Buyer will not, at any time during or after the twenty-four month period, disparage Seller, the Assets, the business formerly conducted by Seller, or any member, manager, officer, employee or agent of Seller;

 

(e)                                  Seller will, for a period of twenty-four months after the Closing of the purchase of the Assets of the Pittsburgh Restaurant, within ten days after accepting any employment, consulting engagement, engagement as an

 

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independent contractor, partnership or other association, advise Buyer of the identity of the new employer, client, partner or other Person with whom Seller has become associated. Buyer may serve notice upon each such Person that Seller is bound by this Agreement and furnish each such Person with a copy of this Agreement or relevant portions thereof;

 

(f)                                    Seller may establish restaurants outside of the Noncompetition Area that have a casual dining environment and trade dress similar to the Restaurants so long as such restaurants do not have signage, trademarks or names that are the same or similar to the Restaurants;

 

(g)                                 The continued ownership and operation of the Steelhouse restaurant by Jon H. Field, who is a Related Person to the owner of certain Seller Entities, in Pittsburgh, Pennsylvania, shall not be deemed to be a Competing Restaurant Business for purposes of this Agreement, and shall be excluded from the noncompetition provisions set forth in Section 4(a) above, so long as such restaurant continues to be operated under the name “Steelhouse” or any other name that does not include the words “Cadillac,” “Ranch” or any variations thereof;

 

(h)                                 Seller’s ownership or operation of any Nightclub shall not be deemed to be a Competing Restaurant Business for purposes of this Agreement, and shall be excluded from the noncompetition provisions set forth in Section 4(a) above, so long as the Nightclub is not located within a 10 mile radius of the Indianapolis, Indiana metropolitan area.  For purposes of this Agreement, the term “Nightclub” shall be defined as any establishment that (A) generates at least 80% of its gross revenues from the sale of beer, wine and alcohol, (B) provides music and space for dancing, and (C) requires its customers to pay a cover charge; and

 

(i)                                     Seller can continue to own and operate any restaurants that use the Marks or Trade Dress of the Restaurants until such time as Buyer has closed on the purchase of the Assets of at least five of the Restaurants, provided that within 60 days after the closing of the purchase of such five or more Restaurants, the undersigned will cause the name of any restaurants it owns or operates to be changed to include names and marks that do not include the words “Cadillac,” “Ranch” or any variations thereof.

 

5.                                      REMEDIES

 

If Seller breaches the covenants set forth in Sections 3 or 4 of this Agreement, Buyer will be entitled to the following remedies:

 

(a)                                  Damages from Seller, as the case may be;

 

(b)                                 To offset against any and all amounts owing to Seller under the Purchase Agreement and any and all amounts that Buyer claims under Subsection 5(a) of this Agreement; and

 

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(c)                                  In addition to its right to damages and any other rights it may have, to obtain injunctive or other equitable relief to restrain any breach or threatened breach or otherwise to specifically enforce the provisions of Sections 3 and 4 of this Agreement, it being agreed that money damages alone would be inadequate to compensate Buyer and would be an inadequate remedy for such breach.

 

(d)                                 The rights and remedies of the parties to this Agreement are cumulative and not alternative.

 

6.                                      SUCCESSORS AND ASSIGNS

 

This Agreement will be binding upon Buyer and Seller and will inure to the benefit of Buyer and its affiliates, successors and assigns.

 

7.                                      WAIVER

 

The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged, in whole or in part, by a waiver or renunciation of the claim or right except in writing; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party, or of the right of the party giving such notice or demand to require the other party, to take further action without notice or demand as provided in this Agreement.

 

8.                                      GOVERNING LAW

 

This Agreement will be governed by the laws applied by courts of the State of Minnesota to contracts entered into within that state by parties residing within that state and having no connection to any other state.

 

9.                                      JURISDICTION; SERVICE OF PROCESS

 

Any action or proceeding seeking to enforce any provision of, or based upon any right arising out of, this Agreement may be brought against any of the parties in the courts of the State of Minnesota, County of Hennepin or, if it has or can acquire jurisdiction, in the United States District Court for the District of Minnesota, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

 

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10.                               SEVERABILITY

 

Whenever possible, each provision and term of this Agreement will be interpreted in a manner to be effective and valid, but if any provision or term of this Agreement is held to be prohibited or invalid, then such provision or term will be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provision or term or the remaining provisions or terms of this Agreement. If any of the covenants set forth in Section 4 of this Agreement are held to be unreasonable, arbitrary or against public policy, such covenants will be considered divisible with respect to scope, time and geographic area, and in such lesser scope, time and geographic area, will be effective, binding and enforceable against Seller to the greatest extent permissible.

 

11.                               COUNTERPARTS

 

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

12.                               SECTION HEADINGS, CONSTRUCTION

 

The headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement unless otherwise specified. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “Including” does not limit the preceding words or terms.

 

13.                               NOTICES

 

All notices, consents, waivers and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt); (b) sent by facsimile (with written confirmation of receipt), provided that a copy is also promptly mailed by registered mail, return receipt requested; or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

 

To Seller:

c/o: Restaurant Entertainment Group

Address: 6728 Hyland Croy Rd

Dublin, OH 43016

Attention:  Clint Field

Fax no.: 614-760-9793

E-mail address: clint.field37@gmail.com

 

with a copy to: Kephart Fisher LLC

Attention: David Fisher

207 N Fourth St.

Columbus, Ohio 43215

 

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Fax no.: 614-469-1887

E-mail address: davidfisher@kephartfisher.com

 

Buyer: Granite City Restaurant Operations, Inc.

Attention: Robert J. Doran, Chief Executive Officer

5402 Parkdale Drive, Suite 101

Minneapolis, MN 55416

Fax no.: (952) 215-0671

E-mail address: rjdoran@gmail.com

 

with a copy to: Briggs and Morgan, P.A.

Attention: Avron Gordon

2200 IDS Center

80 S 8th Street

Minneapolis, MN 55402

Fax no.: (612) 977-8560

E-mail address: agordon@briggs.com

 

14.                               ENTIRE AGREEMENT

 

This Agreement, the Purchase Agreement and the Master Purchase Agreement constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior written and oral agreements and understandings between the parties with respect to the subject matter of this Agreement. This Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

	
BUYER:   
    	
 
    	
SELLER:  
    
	
Granite City Restaurant   Operations, Inc.
    	
 
    	
Pittsburgh CR, LLC 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By: 
    	
 
    
	
Name: 
    	
 
    	
 
    	
 
    	
Eric Schilder, Sole Member and Owner 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
 
    	
Clinton R. Field, Manager
    

 

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Exhibit 2.5(J)

 

Assignment of Intellectual Property
 (“Owners”)

 

This Assignment is made this 4th day of November, 2011 by Eric Schilder and Clinton R. Field (each, an “Assignor” and collectively, the “Assignors”) in favor of Restaurant Entertainment Group, LLC (“REG”).

 

RECITALS

 

Concurrently with the execution and delivery of this Agreement, Assignors and Assignee have entered into a Master Asset Purchase Agreement dated November     , 2011 (the “Purchase Agreement”) among Granite City Restaurant Operations, Inc. (“Buyer”), REG, Assignors,  and Seller.  All capitalized terms used and not otherwise defined in this Assignment have the meanings given them in the Purchase Agreement.

 

Pursuant to the terms of the Purchase Agreement, Buyer has agreed to purchase substantially all of the Assets and the goodwill of seven (7) restaurants (the “Restaurants”) operated by Seller under the service mark CADILLAC RANCH ALL-AMERICAN BAR & GRILL, or variants thereof.

 

Assignors own all the issued and outstanding equity interests of certain Seller Entities described in the Purchase Agreement and have been engaged in the design, development, operation and management of one or more of the Restaurants.  In that capacity, Assignors have created artwork and other works of authorship, logos, and Trade Dress and other materials used in the operation of one or more of the Restaurants (the “Intellectual Property”).

 

It is a condition to Buyer’s execution, delivery and performance of the Purchase Agreement that Assignors execute this Assignment.

 

ASSIGNMENT

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby assigns to REG all of his right, title and interest, if any, in and to the Intellectual Property, including any and all copyrights.

 

Each Assignor represents and warrants that he has the right to enter into this Assignment and that this Assignment does not and will not violate any contract to which he is party.  Each Assignor agrees to execute such instruments as REG, its successors and assigns, including Buyer, may reasonably request in order more effectively to assign Assignor’s interest in the Intellectual Property.

 

	
/s/ Eric Schilder
    	
 
    	
/s/ Clinton R. Field
    
	
Eric Schilder
    	
 
    	
Clinton R. Field
    
	
 
    	
 
    	
 
    
	
Accepted this      day   of November, 2011
    	
 
    	
 
    
	
Restaurant Entertainment Group, LLC
    	
 
    	
 
    
	
By
    	
/s/ Clinton R. Field
    	
 
    	
 
    
	
Its
    	
Member
    	
 
    	
 
    

 

 

Schedules to this Agreement have been omitted pursuant to Item 601(b)(2) of Reg S-K and are listed as follows:

 

Schedule 3.1(d)  Liens and encumbrances on Pittsburgh license

Schedule 3.1(e)  Unpaid vendors and taxes

Schedule 3.2  Financial statementsExhibit 10.8

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

This THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of January 10, 2012, (this “Amendment”) is by and among Granite City Food & Brewery Ltd., a Minnesota corporation (the “Borrower”), the various institutions party to the Credit Agreement described below as Lenders, and Fifth Third Bank, an Ohio banking corporation, as Administrative Agent.

 

WITNESSETH:

 

WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered into that certain Credit Agreement dated as of May 10, 2011 (as the same has been and hereafter may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”; capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Credit Agreement);

 

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders amend the Credit Agreement in certain respects, in each case in accordance with the terms and subject to the conditions herein set forth; and

 

WHEREAS, the Administrative Agent and the Lenders party hereto agree to accommodate such request of the Borrower, on the terms and subject to the conditions herein set forth.

 

NOW, THEREFORE, in consideration of the foregoing, the covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.               Amendments to Credit Agreement. Subject to the satisfaction of the conditions set forth herein, the Loan Documents are hereby amended as follows:

 

(a)           Section 1.1 of the Credit Agreement is hereby amended by adding the following defined term in the correct alphabetical order:

 

“Pittsburgh Promissory Note” means that certain $900,000 Promissory Note issued by Granite City Restaurant Operations, Inc., a Minnesota corporation, on the date hereof to Pittsburgh CR, LLC, an Ohio limited liability company.

 

(b)           The definitions of “Exempt Account” and “Total Funded Debt” appearing in Section 1.1 of the Credit Agreement are hereby deleted in their entireties and the following language is hereby substituted therefor:

 

“Exempt Account” means any (i) local petty cash deposit accounts in which there is not maintained at any point in time funds on deposit greater than $100,000 in the aggregate for all such accounts, (ii) any payroll accounts maintained by Borrower and its Subsidiaries into which there is deposited no funds other than those intended solely to cover the current amount of their payroll obligation and (iii) that certain deposit account number

 

 

maintained by Granite City Restaurant Operations, Inc. at Fifth Third Bank for the benefit of Pittsburgh CR, LLC, to the extent the funds in such deposit account are owned by Pittsburgh CR, LLC.

 

“Total Funded Debt” means, at any time the same is to be determined, an amount equal to (x) the aggregate of all Indebtedness of the Borrower and its Subsidiaries at such time determined on a consolidated basis in accordance with GAAP (including, in any event, all Senior Indebtedness), less (y) the aggregate amount of Netting Cash at such time, less (z) if any, the outstanding principal balance of the Pittsburgh Promissory Note.

 

(c)           Section 6.11(k) of the Credit Agreement is hereby deleted in its entirety and the following language is hereby substituted therefor:

 

(k)       (x) so long as the Borrower would be in compliance on a pro forma basis with Sections 6.20(a), (b) and (c) hereof (calculated as of the date of, and after giving effect to, the incurrence of such Indebtedness), Indebtedness incurred by the Borrower or its Subsidiaries in a Permitted Strategic Acquisition or any disposition under agreements providing for the adjustment of the purchase price or similar adjustment, and (y) to the extent such obligations and liabilities are subordinated to the Obligations of Borrower hereunder in a manner reasonably satisfactory to Administrative Agent, Indebtedness outstanding under the Pittsburgh Promissory Note;

 

Section 2.               Conditions to Effectiveness of this Amendment.  Notwithstanding anything to the contrary set forth herein, this Amendment shall become effective upon satisfaction in a manner reasonably satisfactory to the Administrative Agent of each of the following conditions:

 

(a)           the delivery to the Administrative Agent of a counterpart of this Amendment executed by Borrower, the Administrative Agent and the Lenders;

 

(b)           the accuracy of the representations and warranties contained in Section 3 hereof;

 

(c)           receipt by the Administrative Agent of a copy of the acknowledgment attached hereto duly executed and delivered by each Subsidiary of the Borrower signatory thereto; and

 

(d)           no Default or Event of Default shall have occurred and be continuing.

 

Section 3.               Representations and Warranties.

 

To induce the Administrative Agent and the Lenders to enter into this Amendment, the Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, as of the date hereof:

 

(a)           each of the representations and warranties made by such Person

 

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contained in the Loan Documents are true and correct in all material respects as of such date (except to the extent any such representations or warranties are already qualified by materiality, in which event they shall be true and correct in all respects, and except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct in all material respects (except to the extent any such representations or warranties are already qualified by materiality, in which event they shall be true and correct in all respects) as of such date));

 

(b)           the Borrower has full right and authority to enter to execute, deliver and perform its obligations under this Amendment and the Credit Agreement, as amended hereby;

 

(c)           the execution, delivery and performance by the Borrower of this Amendment and the Credit Agreement, as amended hereby, have been duly authorized by all necessary action by the Borrower;

 

(d)           the execution, delivery and performance by such Person of this Amendment and the Credit Agreement, as amended hereby, and the consummation of the transactions contemplated by this Amendment and the Credit Agreement, as amended hereby, do not and will not (i) contravene or constitute a default under (i) any provision of law or any judgment, injunction, order or decree binding upon the Borrower or any Subsidiary, if any, in each case where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (x) any provision of the organizational documents (e.g., charter, articles of incorporation, by-laws, articles of association, operating agreement, partnership agreement or other similar document) of the Borrower or any Subsidiary, (y) contravene or constitute a default under any covenant, indenture or agreement of or affecting the Borrower or any Subsidiary or any of its Property, in each case, where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (iii) result in the creation or imposition of any Lien on any Property of the Borrower or any Subsidiary other than the Liens granted in favor of the Administrative Agent pursuant to the Collateral Documents;

 

(e)           this Amendment and the Credit Agreement, as amended hereby, each constitute, the legal, valid and binding obligation of the Borrower, enforceable against such Person in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability; and

 

(f)            no Default or Event of Default presently exists.

 

Section 4.               Reference and Effect on the Credit Documents.

 

(a)           On and after the date hereof, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement,” shall mean and be a reference to the Credit Agreement, as amended or otherwise modified hereby.

 

(b)           The Credit Agreement and each of the other Loan Documents, as specifically amended or otherwise modified by this Amendment, are and shall continue to be in

 

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full force and effect and are hereby in all respects ratified, confirmed and reaffirmed.

 

(c)           The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender, any L/C Issuer or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.  The Credit Agreement and the other Loan Documents are in full force and effect and are hereby in all respects ratified and confirmed.

 

(d)           Except as expressly set forth herein, nothing contained in this Amendment and no action by, or inaction on the part of, any Lender, any L/C Issuer or the Administrative Agent shall, or shall be deemed to, directly or indirectly constitute a consent to or waiver of any past, present or future violation of any provisions of the Credit Agreement or any other Loan Document.

 

(e)           This Amendment is a Loan Document.

 

Section 5.               GOVERNING LAW AND JURISDICTION.

 

(a)           GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.

 

(b)           SUBMISSION TO JURISDICTION.  Each party hereto hereby submits to the nonexclusive jurisdiction of the United States District Court for the Northern District of Illinois and of any State of Illinois court located in the City of Chicago for purposes of all legal proceedings arising out of or relating to this Amendment or the transactions contemplated hereby.  Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.  THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

Section 6.               Miscellaneous.

 

(a)           No Waiver, Etc.  Except as otherwise expressly set forth herein, nothing in this Amendment is intended or shall be deemed or construed to extend to or affect in any way any of the Obligations or any of the rights and remedies of the Administrative Agent, any Lender or any L/C Issuer arising under the Credit Agreement, any of the other Loan Documents or applicable law. The failure of the Administrative Agent, any Lender or any L/C Issuer at any time or times hereafter to require strict performance by any Borrower, any of its Subsidiaries or any other Person obligated under any Loan Document of any of the respective provisions, warranties, terms and conditions contained herein or therein shall not waive, affect or diminish any right of such Person at any time or times thereafter to demand strict performance thereof; and no rights of the Administrative Agent, any Lender or any L/C Issuer

 

4

 

hereunder shall be deemed to have been waived by any act or knowledge of such Person, or any of its agents, attorneys, officers or employees, unless such waiver is contained in an instrument in writing signed by an authorized officer of such Person and specifying such waiver.  Except as otherwise expressly set forth herein, no waiver by the Administrative Agent, any Lender or any L/C Issuer of any of its rights or remedies shall operate as a waiver of any other of its rights or remedies or any of its rights or remedies on a future occasion at any time and from time to time.  All terms and provisions of the Credit Agreement and each of the other Loan Documents remain in full force and effect, except to the extent expressly modified by this Amendment.

 

(b)           Execution in Counterparts.  This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Any party hereto may execute and deliver a counterpart of this Amendment by delivering by facsimile transmission or electronic mail in portable document format a signature page of this Amendment signed by such party, and such signature shall be treated in all respects as having the same effect as an original signature.

 

(c)           Severability.  The invalidity, illegality or unenforceability of any provision in or obligation under this Amendment in any jurisdiction shall not affect or impair the validity, legality or enforceability of the remaining provisions or obligations under this Amendment or of such provision or obligation in any other jurisdiction.

 

(d)           No Third Party Beneficiaries.  This Amendment shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns.  No Person other than the parties hereto, their respective successors and assigns and any other Lender shall have rights hereunder or be entitled to rely on this Amendment, and all third-party beneficiary rights are hereby expressly disclaimed.

 

(e)           Section Titles.  The section and subsection titles contained in this Amendment are included for convenience only, shall be without substantive meaning or content of any kind whatsoever, and are not a part of the agreement between the Administrative Agent, the Lenders and the L/C Issuers, on the one hand, and the Borrower and Holdings on the other hand.  Any reference in this Amendment to any “Section” refers, unless the context otherwise indicates, to a section of this Amendment.

 

- Remainder of page intentionally blank -

 

5

 

IN WITNESS WHEREOF,  the parties hereto have executed and delivered this Amendment as of the day and year first above written.

 

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
GRANITE   CITY FOOD & BREWERY LTD., a Minnesota corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   James G. Gilbertson
    
	
 
    	
Name:
    	
James   G. Gilbertson
    
	
 
    	
Title:
    	
Chief   Financial Officer
    

 

Third Amendment to Credit Agreement

 

 

IN WITNESS WHEREOF,  the parties hereto have executed and delivered this Amendment as of the day and year first above written.

 

	
 
    	
AGENT AND LENDERS:
    
	
 
    	
 
    
	
 
    	
FIFTH   THIRD BANK, an Ohio banking corporation, as Administrative   Agent and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Aaron Markos
    
	
 
    	
Name:
    	
Aaron   Markos
    
	
 
    	
Title:
    	
Vice   President
    

 

Third Amendment to Credit Agreement

 

 

ACKNOWLEDGMENT

 

Reference is hereby made to the foregoing Third Amendment to Credit Agreement dated as of January 10, 2012 (the “Amendment”) by and among Granite City Food & Brewery Ltd., a Minnesota corporation (the  “Borrower”), the various institutions from time to time party to the Credit Agreement described therein as Lenders which are also party thereto, and Fifth Third Bank, an Ohio banking corporation, as Administrative Agent. Capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Credit Agreement referred to in the Amendment.

 

Each of the undersigned hereby (a) acknowledges receipt of a copy of the Amendment, and (b) agrees the Security Agreement remains in full in force and effect with respect to such Person and that the terms and provisions of the Amendment do not modify or otherwise affect in any way any of such Person’s obligations and liabilities under the Security Agreement or any of the other Loan Documents, all of which obligations and liabilities are hereby ratified, confirmed and reaffirmed.

 

- Remainder of page intentionally blank -

 

Third Amendment to Credit Agreement

 

 

IN WITNESS WHEREOF,  the parties hereto have executed and delivered this Amendment as of the day and year first above written.

 

 

	
GRANITE   CITY OF INDIANA, INC., an Indiana corporation,   as a Guarantor
    	
 
    	
GRANITE   CITY RESTAURANT OPERATIONS, INC., a Minnesota corporation,   as a Guarantor
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Monica A. Underwood
    	
 
    	
By:
    	
/s/   James G. Gilbertson
    
	
Name:
    	
Monica   A. Underwood
    	
 
    	
Name:
    	
James   G. Gilbertson
    
	
Title:
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
GRANITE   CITY — ARKANSAS, INC., an Arkansas corporation,   as a Guarantor
    	
 
    	
GRANITE   CITY — PEORIA, INC., an Illinois corporation,   as a Guarantor
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Monica A. Underwood
    	
 
    	
By:
    	
/s/   Monica A. Underwood
    
	
Name:
    	
Monica   A. Underwood
    	
 
    	
Name:
    	
Monica   A. Underwood
    
	
Title:
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
GRANITE   CITY — ORLAND PARK, INC., an Illinois corporation,   as a Guarantor
    	
 
    	
GRANITE   CITY OF KANSAS LTD., a Kansas corporation, as a Guarantor
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Monica A. Underwood
    	
 
    	
By:
    	
/s/   James G. Gilbertson
    
	
Name:
    	
Monica   A. Underwood
    	
 
    	
Name:
    	
James   G. Gilbertson
    
	
Title:
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Officer
    

 

Third Amendment to Credit Agreement

 

 

	
GRANITE   CITY — CREVE COEUR, INC., a Missouri corporation,   as a Guarantor
    	
 
    	
GRANITE   CITY OF OHIO, INC., an Ohio corporation, as a Guarantor
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Monica A. Underwood
    	
 
    	
By:
    	
/s/   Monica A. Underwood
    
	
Name:
    	
Monica   A. Underwood
    	
 
    	
Name:
    	
Monica   A. Underwood
    
	
Title:
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
GRANITE   CITY — ROCKFORD, INC., an Illinois corporation,   as a Guarantor
    	
 
    	
GRANITE   CITY OF MARYLAND, INC., a Minnesota corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Monica A. Underwood
    	
 
    	
By:
    	
/s/   James G. Gilbertson
    
	
Name:
    	
Monica   A. Underwood
    	
 
    	
Name:
    	
James   G. Gilbertson
    
	
Title:
    	
Chief   Financial Officer
    	
 
    	
Title:
    	
Chief   Financial Office
    

 

Third Amendment to Credit Agreement

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