Meritage Hospitality Group - Chapter 11 APA Summary

Private Sale / Asset Purchase Agreement Summary

Transaction Overview

• On Oct. 21, 2026, Wen Tennessee, LLC filed a motion for approval of a private sale of its business to nine Divine entities, each managed by Hiren Patel, for an $18.6 million base cash price. Wen Tennessee is the Meritage Hospitality Group debtor that operates and leases 42 Wendy's restaurants in Tennessee, Arkansas, Mississippi and Missouri. The sale would proceed with no auction, no bidding procedures and no stalking horse.
• Meritage is based in Grand Rapids, Mich., and is one of the largest Wendy's franchisees in the U.S., with about 320 restaurants across its debtor group. The debtors filed Chapter 11 in the Western District of Michigan on Sept. 17, 2026, and the U.S. Trustee appointed an official committee of unsecured creditors on Sept. 30, 2026. The motion calls the sale a key part of the debtors' restructuring strategy and a source of the liquidity needed to fund the cases.
• The deal is set out in an amended and restated APA dated Oct. 20, 2026. It brings the parties' postpetition amendments into one agreement and replaces a prepetition APA signed July 10, 2026, which was amended Sept. 4, 2026. Among its changes, the restatement:
  • Eliminates the prior agreement's post-closing earnout;
  • Replaces the seller's prior credits and repair commitments tied to facility condition with a single $531,437.50 closing credit; and
  • Confirms that the buyer's financing contingency has been satisfied and irrevocably waived.
• The proposed sale order attached to the motion has not been entered. It would approve the APA in its entirety, find the buyer a good-faith purchaser entitled to section 363(m) protection and transfer the assets free and clear, with liens attaching to the proceeds.

Purchase Price

• Amount: an $18.6 million base cash price, adjusted by:
  • Plus store-level inventory and cash on hand, estimated at $420,000 ($10,000 per restaurant) and trued up after the closing-date count;
  • Less the $531,437.50 seller closing credit;
  • Less the $500,000 earnest money deposit, credited at closing; and
  • The closing-cost, proration and franchisor-fee adjustments in APA Sections 3.8 through 3.10.
• The balance is due in cash at closing, by wire to the title company, First American Title Insurance Company, and is not subject to any financing condition. The buyer must deliver its signed financing commitment letter at signing. Any inaccuracy in its sufficient-funds representation is a buyer default and forfeits the deposit.
• The purchase price is the only consideration. The earnout under the prior agreement, including its measurement periods, thresholds and audit rights, no longer has any effect, and the proposed order confirms that no post-closing earnout will be earned.
• The buyer bears the risk of any decline in sales, revenues or cash flow occurring or reported after Sept. 4, 2026, including declines caused by the Chapter 11 case. Such a decline cannot support a price reduction, a failed closing condition or a deposit refund.
• Seller closing credit: a single $531,437.50 lump sum, with no true-up. It fully replaces every prior seller credit, cost-sharing commitment and repair or upgrade obligation tied to the business's condition, including:
  • Bearing up to 50% of the repair costs identified in the franchisor's facility evaluations for building systems not in working order and leaking roofs;
  • A $250,000 credit for the IA remodel at the Collierville, Tenn., store (Store #260); and
  • Funding, performing or crediting technology upgrades required by the franchisor or contemplated by the parties.
• In exchange, the buyer waives any further condition walkthroughs or price claims based on facility evaluations. After closing, it takes on at its sole cost all franchisor-required reimaging, remodel, facility-evaluation repair and technology upgrade obligations.
• In the proposed order, the words spelling out the seller closing credit state $531,037.50 in the findings and $531,000.50 in the decretal paragraph. The order's numerals in both places, and the APA, state $531,437.50.

Purchase Price Allocation

• Exhibit B allocates the $18.6 million base price as follows:
  • Leasehold improvements: $2.1 million ($50,000 per store);
  • Equipment: $2.1 million ($50,000 per store), bringing tangible assets to $4.2 million;
  • Franchise and license rights: $1.89 million ($45,000 per store);
  • Non-compete: $42,000 ($1,000 per store); and
  • Goodwill: $12.468 million.
• For tax purposes, the seller closing credit is treated as a price reduction. It is allocated as the parties agree before closing or, absent agreement, pro rata.
• Exhibit C allocates the base price store by store and totals $18.6 million. It assigns negative allocations to these stores:
  • Southaven, Miss., 415 Goodman Road: negative $90,415;
  • Jackson, Tenn.: negative $140,641;
  • Covington, Tenn.: negative $229,276;
  • Memphis, 749 S. Highland: negative $113,420;
  • Memphis, 7928 Winchester Road: negative $215,515; and
  • Dexter, Mo.: negative $427,012.
• The store allocations drive several price mechanics:
  • A refund when a lease fails to assign because of the seller;
  • Price reductions for long casualty closures or material condemnations; and
  • A price increase when the buyer drops a lease for a store with a negative allocation.

Earnest Money Deposit

• Amount: $500,000 in total, credited against the price at closing, paid in two installments:
  • A $250,000 initial deposit, which became nonrefundable and was released to the seller before the petition date under the First Amendment; and
  • A $250,000 additional deposit, due by wire to First American Title Insurance Company, as escrow agent, within one business day after the Oct. 20, 2026, restatement date.
• Failure to fund the additional deposit is an immediate buyer default, with no notice or cure period.
• The buyer gets the full $500,000 back only upon:
  • A written franchisor denial of the transaction or of the franchise-agreement transfers, whether or not network optimization relief is granted;
  • A seller termination under its fiduciary out;
  • A buyer termination for the seller's uncured material default, or for the seller's breach of its private-sale or contract-assignment covenants; or
  • A buyer termination because a closing condition failed (sale order, lease assignment, case status, free-and-clear conveyance or landlord objections), or a termination by either party for a missed milestone, where the failure was not caused by the buyer's breach.
• In all other cases, the seller keeps the deposit as liquidated damages. That includes these cases:
  • The franchisor approves the deal without network optimization relief, and the buyer declines to close for that reason.
  • The buyer terminates or refuses to close outside the refund exceptions.
  • The buyer otherwise defaults.
• The proposed order approves the seller's retention of the deposit and allows deposit disbursements under the APA without a further court order.

Bid Protections and Fiduciary Out

• Break-up fee and expense reimbursement: a single combined $100,000 payment, which the motion puts at about 0.54% of the base price. It reimburses the buyer's legal, lender, diligence and franchisor application costs. It is payable only if:
  • The seller terminates under its fiduciary out;
  • The seller completes a sale of all or any material part of the business to another party, unless the APA was terminated for the buyer's default; or
  • The buyer terminates for the seller's uncured material default.
• The fee is not payable if the buyer closes. When triggered, it is due within five business days after the later of the termination or sale and any required court approval, and it is paid from the proceeds of any alternative sale. The APA makes it an allowed administrative expense under sections 503(b) and 507(a)(2), and the APA requires the sale order to so provide; the proposed order approves the APA in its entirety but contains no separate paragraph granting that status.
• The motion states that the fee is not meant to set a floor for, or draw bidders into, a competitive process, since none is proposed.
• Fiduciary out: the seller's fiduciaries are its sole member and manager, any chief restructuring officer and anyone else exercising authority for the seller in the case.
  • They are not required to take or refrain from any action they determine in good faith would be inconsistent with their fiduciary duties, after consulting outside counsel, the committee and the seller's prepetition secured lenders.
  • This covers unsolicited alternative proposals.
  • On that determination, the seller may terminate, refund the full $500,000 deposit and pay the $100,000 fee.
• The proposed order, which describes the fiduciary out as preserving the seller's ability to consider unsolicited alternative proposals before the order is entered, instead says that a seller terminating to pursue an alternative proposal must return the additional earnest money (the $250,000 second installment) along with the $100,000 fee.
• Outside the fiduciary out, while the APA is in effect, the seller may not sign a binding agreement to sell the business to a third party. It also may not solicit, initiate or knowingly encourage discussions about such a sale.

Key Dates

• Sale Motion and Assumption and Assignment Notice Filed: Oct. 21, 2026
• Additional Earnest Money Due: one business day after the Oct. 20, 2026, restatement date
• Adequate Assurance Information Deadline: Oct. 23, 2026
• Assumption, Cure and Adequate Assurance Objection Deadline: at least 14 days after service of the assumption and assignment notice, which was served with the motion
• Buyer Contract Designation and Lease Confirmation Deadline: two business days before the sale hearing
• Sale Hearing: November 2026 (the date is blank in the proposed order)
• Sale Order Milestone: Nov. 13, 2026. It extends automatically, to no later than Nov. 23, 2026, if the hearing is scheduled, continued or adjourned or the court has not ruled, unless the delay is due to the buyer's breach.
• Closing: within five business days after the conditions are satisfied or waived, and no later than the Nov. 24, 2026, outside date
• Post-Closing Audit and True-Up: a closing-date audit within three business days, with net payments within five business days; a true-up within 30 days, with unresolved disputes sent to a nationally recognized accounting firm
• Any other extension of the milestone or outside date requires a written agreement of both parties. It also requires the consent of the seller's secured lenders where a cash collateral or DIP order calls for it. Time is of the essence, and no cure period extends either date.
• Either party may terminate if a date is missed, unless its own breach was the principal cause.
• The proposed order recites a Nov. 23, 2026, closing deadline, while the APA and the motion set the outside date at Nov. 24, 2026.

Marketing Process and Private Sale

• The Divine proposal was chosen as the highest or otherwise best of three proposals from a marketing process the seller ran with its broker, Auspex Capital, LLC, starting in mid-2025. According to the motion, which relies on the declaration of Christopher Kelleher, Auspex contacted 29 potential buyers (18 existing Wendy's franchisees, 10 multi-unit franchisees of other quick-service brands and one restaurant management and investment group), 14 of which signed NDAs and, starting around November 2025, received a confidential information memorandum. Four stayed engaged and received updated financials for fiscal 2025 and the third and sixth accounting periods of 2026, and three ultimately submitted letters of intent or other proposals.
• That choice followed negotiations on price, structure, financing and certainty of closing, and the original APA with the buyer is dated July 10, 2026, before the Sept. 17 petition date.
• The sale would proceed as a private sale under Bankruptcy Rule 6004(f)(1). The seller argues against further marketing on these grounds:
  • The restaurants are a wasting asset, exposed to employee attrition, vendor and landlord uncertainty and delays in capital and reimaging work.
  • The cash price has no financing condition and no earnout.
  • More marketing would add cost, delay the proceeds and risk losing the buyer under the APA's milestones.
• The APA gives no release of estate claims against insiders, leaves Chapter 5 avoidance actions with the estate and does not allocate proceeds among creditors.
• In the APA, the buyer represents that it is not an insider of the seller and has made no agreement with any other potential purchaser to control the sale price; the proposed order would find that it is neither an insider nor an affiliate of the seller or any other debtor. The motion discloses the buyer's engagement of Surmount in connection with the existing leases, as well as the buyer's committed financing.

Parties

• Seller: Wen Tennessee, LLC, whose sole member and manager is debtor MHG Food Service Inc. Gary A. Rose is the seller's president and chief operating officer.
• Buyer: Divine Infinity Operations LLC, Divine Pinnacle Operations LLC, Divine Anchor MGMT LLC, Divine Summit Operations LLC, Divine Galaxy Operations LLC, Divine Synergy Ventures LLC, Divine Crown MGMT LLC, Divine Elite MGMT LLC and Divine Horizon Holdings LLC. They are jointly and severally liable, each is managed by Hiren Patel, and together they are an unrelated third party with no insider relationship to the debtors.
• Buyer history: under the First Amendment, Divine Infinity and Divine Pinnacle assigned their interests to the other buyer entities, each of which became a buyer jointly and severally. Both remain parties to the restated APA, but Exhibit A designates no restaurant to either.
• Store designations: Exhibit A assigns each restaurant and its contracts to one buyer entity:
  • Arkansas stores: Divine Anchor MGMT;
  • Mississippi stores: Divine Summit Operations;
  • Missouri stores: Divine Galaxy Operations; and
  • Tennessee stores: split among Divine Synergy Ventures, Divine Crown MGMT, Divine Elite MGMT and Divine Horizon Holdings.
• Franchisor: Quality Is Our Recipe, LLC, a subsidiary of The Wendy's Company
• Broker: Auspex Capital, LLC, for the seller. Its commission, under a separate agreement, is paid at closing only if the court approves its retention and compensation. The buyer represents that it dealt with no broker.
• Non-compete signatories: Gary A. Rose and Robert E. Schermer, Jr. sign only to acknowledge the non-compete and have no personal liability.
• Debtors' counsel: McDonald Hopkins LLC. Prepetition secured agent: City National Bank, as agent under the debtors' prepetition secured credit facility.

Assets Being Sold

• Purchased assets: all of the seller's right, title and interest in the 42-restaurant business, including:
  • Leasehold interests under the existing leases;
  • The franchise agreements and any other designated contracts;
  • Trade fixtures, such as grills, fryers, walk-in freezers and point-of-sale equipment;
  • Food and beverage inventory; and
  • Personal property: transferable permits and licenses, telephone numbers, furniture and equipment, point-of-sale hardware and software, small wares, uniforms and signage (but not poles or sign fixtures).
• Excluded assets:
  • The real property: land, buildings and fixtures other than trade fixtures;
  • General intangibles, accounts and receivables, deposits and bank accounts, and insurance policies;
  • Off-site books and records;
  • Tax refunds and rebates earned before the effective time (rebates paid for future sales are credited to the buyer);
  • The seller's names and trademarks, which the buyer receives no license to use;
  • All actions, claims, instruments and notes, including Chapter 5 avoidance actions;
  • Principal-office furniture and equipment not needed to run the restaurants; and
  • Any contract not on the assigned contracts schedule, which the seller may reject at its own cost.
• The assets are sold "as is, where is" and "with all faults." The seller's limited representations do not survive closing; one of them is that it holds leasehold interests allowing operation of a Wendy's restaurant. The seller disclaims any representation about hazardous materials, the condition of roofs, building systems or equipment, and compliance with facility evaluations or franchisor brand standards.
• The seller hands over exclusive possession at the effective time, 12:01 a.m. Eastern Time on the day after closing.
• The proposed order treats transferable permits and licenses as transferred at closing, subject to non-bankruptcy transfer requirements. To the extent section 525 allows, it bars governmental units from revoking them because of the case or the sale.

Assumed and Excluded Liabilities

• Assumed liabilities: only obligations under the assigned contracts that first arise at or after the effective time.
• Excluded liabilities: everything else. That includes liabilities from operations before the effective time, all cure costs, payables from before the effective time, the seller's taxes, employee wages, benefits and claims, pending or threatened litigation, and liabilities arising in the Chapter 11 cases. Prepetition payables are to be handled only in the Chapter 11 case.
• The seller gives no indemnification of any kind. The buyer's only protection against excluded liabilities is the sale order's free-and-clear and no-successor-liability provisions.
• The proposed order extends those provisions to employment, benefit plan, WARN Act, environmental and tax claims. It also waives bulk sales laws and permanently enjoins pursuit of excluded claims against the buyer entities.

Assumption and Assignment; Cure Costs

• The assigned contracts are the existing restaurant leases and the franchise agreements. As of the restatement date, the buyer had designated no other contracts. It does not have to assume the seller's Gridpoint, Paradox or Integrated Cash Logistics contracts unless it designates them.
• Cure costs: the seller pays them at closing out of the purchase price, through the title company's closing statement. The buyer has no liability for cure costs.
  • If an objection is unresolved, the title company escrows the amount the counterparty claims, or any lower amount the court fixes, and closing is not delayed.
  • Schedule 1 lists the seller's good-faith estimates, which the assumption and assignment notice may revise.
  • It proposes a cure for each existing lease, many at $0.
  • It proposes a cure for each franchise agreement, ranging from $16,429.64 at Dexter, Mo., to $154,788.02 at Grenada, Miss.
• Other costs the seller pays:
  • At closing, on top of cure costs, unpaid estimated royalty, Wendy's National Advertising Program and other franchise fees from the petition date through closing;
  • Landlord consent, legal and processing fees; and
  • Lease recording fees.
• Other costs the buyer pays, at its sole cost:
  • Any security deposit, letter of credit, prepaid rent, guaranty or other credit support a landlord requires;
  • Franchisor transfer fees and any franchisor fees for network optimization relief, term extensions or new franchise agreements;
  • Sales and transfer taxes, plus title, survey and diligence costs;
  • Fees of any broker or consultant it engaged for the existing leases, including Surmount; and
  • Any landlord payment or concession for lease amendments, extensions or rent changes it requests.
• Designation rights: until two business days before the sale hearing, the buyer may change the schedule.
  • It may remove contracts, including existing leases (together with the franchise agreement for that restaurant) if the franchisor approves in writing. It may not otherwise remove franchise agreements.
  • It may add contracts that have not been rejected and relate primarily to the business.
  • Removals do not reduce the price. If the buyer drops a lease for a store with a negative Exhibit C allocation, the price rises by that amount.
  • By the same deadline, the buyer must deliver a lease confirmation notice. Any lease left off it is treated as removed.
• Objections: counterparties have at least 14 days after service of the assumption and assignment notice to object. A counterparty that does not object is deemed to consent and is barred from claiming additional cure amounts or pre-closing defaults.
• The proposed order would also:
  • Make anti-assignment, consent, right-of-first-refusal, recapture and ipso facto provisions unenforceable;
  • Bar assignment fees and rent acceleration under section 365(f)(3);
  • Release the estate from liability after assignment under section 365(k); and
  • Bind landlords on matters an estoppel certificate would otherwise cover.
• Deferred assignments: if a third-party consent not excused by the sale order is still needed at closing, that contract is not assigned at closing, and the deferral does not reduce the price unless the parties agree otherwise in writing.
  • The parties keep seeking consent for up to 60 days, but not past the section 365(d)(4) deadline or a plan effective date.
  • Meanwhile, the buyer runs the restaurant under a management agreement on terms agreed at least five days before the scheduled closing, keeping all revenues and bearing all operating costs; the seller must file notice of any such agreement with the court.
  • If a lease is still unassigned after 60 days, the parties must agree either to extend the management agreement or to stop trying.
  • If they stop and the failure was the buyer's fault, the price is not reduced. If the failure was caused by the seller, the buyer gets back that store's Exhibit C allocation.
• Adequate assurance: by Oct. 23, 2026, the buyer must deliver its adequate assurance information, including evidence of its financial wherewithal and of its principals' experience running quick-service and Wendy's restaurants. It must then establish adequate assurance at the sale hearing.
  • Its financing commitment, bank statements and proof of liquidity are shared with requesting counterparties only on a confidential basis.
  • They are filed with the court under seal only if the court requires it.
  • If the court, based on a determination about the buyer, refuses to approve the assumption and assignment of any scheduled lease or franchise agreement, either party may terminate. The full deposit then goes to the seller, overriding the refund exceptions.
• Before closing or termination, the seller must not let any lease be deemed rejected under section 365(d)(4), and it will seek an extension if needed.
• The buyer must seek release of any lease guaranty given by the seller or an affiliate. If a guaranty is not released, the buyer indemnifies against guaranty liability arising after the effective time.

Franchisor Matters

• Approval: the buyer must use commercially reasonable efforts to obtain the franchisor's approval and the transfer of the franchise agreements.
  • Two items are mutual closing conditions: the franchisor's waiver of any right of first refusal, and its final written approval for the buyer to operate the business.
  • The buyer may terminate with a full deposit refund within five business days after a written franchisor denial, and before the sale order milestone.
  • None of the following counts as a denial: franchisor delay or silence, exercise of a right of first refusal, or an offer of a shorter franchise term.
• Network optimization relief: the buyer plans to ask the franchisor for changes that may include dropping breakfast service at specified restaurants.
  • The buyer and the franchisor negotiate the relief directly.
  • The relief does not affect the price and is not a closing condition.
  • If the franchisor approves the deal but refuses the relief and the buyer declines to close for that reason, the buyer forfeits its deposit.
• Termination notice: the franchisor delivered a termination notice on Sept. 16, 2026, one day before the petition date. In a paragraph headed franchisor litigation, the proposed order:
  • Reserves all rights of the debtors and the franchisor as to the notice's validity and effect, except to the extent resolved in connection with the sale; and
  • Bars the franchisor from asserting that the franchise agreements for these restaurants are not valid and enforceable.

Closing Conditions

• Mutual conditions:
  • The franchisor's waiver of any right of first refusal and its final written approval;
  • Entry of the sale order by the milestone, without later vacatur, reversal or stay;
  • No pending or threatened proceeding that would materially prevent performance;
  • The other party's representations being accurate in all material respects; and
  • Performance of covenants, subject to cure.
• Conditions for the buyer only:
  • Franchisor approval of the assumption and assignment of the franchise agreements, or new franchise agreements that do not delay closing or change the price;
  • No change to the sale order that is materially adverse to the buyer, unless it consents;
  • Assumption and assignment of every existing lease needed to run a restaurant, other than deferred-assignment and buyer-removed leases;
  • No dismissal, conversion to Chapter 7, or appointment of a trustee or of an examiner with expanded powers that prevents completion of the sale;
  • Conveyance free and clear of all liens and excluded liabilities; and
  • Landlords under no more than 20% of the existing leases successfully objecting to assignment, other than on adequate assurance grounds.
• Conditions for the seller only include payment of the additional earnest money. Delivery of SNDAs is not a closing condition.
• The sale order must take effect immediately upon entry. Unless there is a stay pending appeal, an appeal does not excuse either party from closing, and the parties intend to rely on section 363(m).

Termination and Remedies

• Seller remedy: if the buyer defaults, the seller may terminate and keep the $500,000 deposit as liquidated damages. That is its sole and exclusive remedy, apart from the buyer's surviving indemnification and confidentiality obligations.
• Buyer remedy: if the seller materially defaults before closing and does not cure, the buyer may terminate, get back the $500,000 deposit and receive the $100,000 fee. That is its sole and exclusive remedy.
• After closing, the seller is liable only for its payment obligations (cure costs, prorations, the inventory and cash true-up and royalty payments), the non-compete and obligations the APA expressly says continue after closing.
• Cure period: seven days after written notice, extended while the breaching party diligently works on a cure. A breach still uncured 30 days after notice triggers the remedies above. No cure period extends the milestone or the outside date.
• Each party may also terminate if its own closing conditions fail, and either may terminate for a missed milestone or outside date. In each case the deposit follows the refund and forfeiture rules.
• If closing does not occur, no contract is deemed assumed, assigned or rejected under the sale order.

Employees

• Subject to diligence, the buyer must offer employment on substantially comparable terms to all of the seller's employees in the business.
  • It must tell the seller, at least seven days before closing, of anyone it will not hire.
  • It must hire enough employees to avoid triggering WARN Act notice requirements.
  • The motion says the buyer plans to keep operating the restaurants as a going concern, preserving hundreds of jobs.
• The seller terminates its employees in the business at the effective time and pays their accrued wages and paid time off, subject to court order. Liabilities from their employment with the seller are excluded liabilities.
• Before closing, the seller may not raise hourly wages beyond what the law requires without first consulting the buyer, other than scheduled ordinary-course changes.
• The buyer may not hold discussions with the seller's employees or vendors without the seller's prior written approval.
• The proposed order provides that the buyer is not a joint, co-, single or successor employer.

Distribution of Sale Proceeds

• The proposed order directs the seller and the title company to pay the following at closing out of the purchase price:
  • Cure costs, other than disputed amounts held in escrow;
  • The franchisor's fees from the petition date through closing;
  • The broker's commission, only if the court approves its retention and compensation; and
  • The seller's prorations and closing costs.
• All remaining proceeds go to the seller, to be held and used only as allowed by the court's second interim cash collateral order (Docket No. 256).
  • The liens of City National Bank, as agent under the debtors' prepetition secured credit facility, and any adequate protection liens attach to the proceeds with the same validity, extent and priority as before.
  • This is subject to the rights of the debtors, the committee and other parties in interest under that order.
• The motion's term summary and the APA also list amounts needed to release liens among the closing disbursements. The proposed order's distribution paragraph does not include them.

Other Terms

• Non-compete: for two years after closing, the seller may not own, operate, finance or advise a quick-service hamburger restaurant within 25 miles of any of the restaurants. The covenant excludes current operations of the seller and its affiliates and anything the franchisor requires. The proposed order approves it as binding on the seller.
• Casualty: the seller bears the risk of casualty until the effective time.
  • If damage will not be repaired before closing, the buyer still closes, and the seller assigns it the insurance proceeds and pays any unpaid deductible and any repair costs above the proceeds.
  • If a restaurant is expected to stay closed for at least 90 days after closing, the parties must enter into a mutually acceptable amendment reducing the price based on that store's Exhibit C allocation, and the buyer closes on that store as soon as reasonably practicable after it reopens.
• Condemnation: the seller's assignable interest in any award passes to the buyer with no price reduction. If the taking is expected to materially impair the restaurant's use as a quick-service restaurant with a drive-through and adequate parking, the buyer may terminate as to that store, and the parties must enter into a mutually acceptable amendment reducing the price based on its Exhibit C allocation and treating the award and the store's assets as excluded assets.
• Transition: after closing, the seller keeps running its firewall system for up to 90 days and its Xenial system for up to 30 days, with the buyer paying the seller's reasonable costs. The seller may also re-enter the restaurants after closing to remove existing cameras.
• Buyer indemnification: the buyer indemnifies the seller for:
  • Breaches of the buyer's representations and covenants;
  • Operations after the effective time, including under any management agreement;
  • Contract obligations arising after the effective time; and
  • Claims by the buyer's own employees.
• The buyer's representations survive for 12 months, except that its organization and authority representation survives indefinitely.
• Interim covenants: until closing, the seller must:
  • Run the business substantially as it did during the prior year;
  • Keep the assets in their current operating condition and maintain existing insurance;
  • Not further encumber the business; and
  • Not modify any lease or assigned contract without the buyer's consent.
• Diligence: the prior agreement's due diligence period has expired, and the buyer acknowledges receiving the facility evaluations, operating reports and 2023 through 2025 financial statements plus interim 2026 periods. Store visits require the seller's consent, except that, no sooner than three weeks before the scheduled closing and only after the franchisor approves the buyer's transfer application, the buyer may enter the restaurants on 72 hours' written notice for closing preparation and transition.
• Sale order protections: the proposed order would:
  • Find that no collusion occurred under section 363(n);
  • Make lien releases self-executing;
  • Bind any later-appointed trustee and survive plan confirmation, conversion or dismissal;
  • Control over the APA if the two conflict; and
  • Require court approval for any APA amendment that is material and adverse to the estate.