EXHIBIT 99.2
FACILITATION AGREEMENT
BY AND BETWEEN
BJ CHICAGO, LLC, AS THE BUYER
AND
CHICAGO PIZZA & BREWERY, INC., AS THE TARGET,
IN FURTHERANCE OF THE
STOCK PURCHASE AGREEMENT
BY AND BETWEEN THE BUYER AND ASSI, INC., AS THE SELLER
DECEMBER 20, 2000
FACILITATION AGREEMENT
This Facilitation Agreement (the "AGREEMENT") is entered into as of
December 20, 2000, by and between BJ Chicago, LLC, a Delaware limited liability
company (the "BUYER"), and Chicago Pizza & Brewery, Inc., a California
corporation (the "TARGET"), in furtherance of the "STOCK PURCHASE AGREEMENT" by
and between the Buyer and ASSI, Inc., a Nevada corporation (the "SELLER"), of
even date herewith. The Buyer and Target are referred to collectively herein as
the "PARTIES."
RECITALS
A. A Stock Purchase Agreement by and between the Buyer and Seller dated
the same date hereof contemplates a transaction in which the Buyer will purchase
from the Seller, and the Seller will sell to the Buyer, all of the outstanding
capital stock of Target held by the Seller in return for cash as set forth in
Section 2 of the Stock Purchase Agreement; and
B. The Buyer will enter into this Stock Purchase Agreement
simultaneously with the execution of this Agreement, and the Buyer's entering
into the Stock Purchase Agreement has been made in reliance of the execution of
this Agreement.
AGREEMENT
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"AAA" has the meaning set forth in Section 11(p) below.
"AAA RULES" has the meaning set forth in Section 11(p) below.
"ACCREDITED INVESTOR" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"BUYER" has the meaning set forth in the preface above.
"CLOSING" has the meaning set forth in Section 2(a) below.
"CLOSING DATE" has the meaning set forth in Section 2(a) below.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of Target that is not already generally available to the
public.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 3 below.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7(d) below.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7(d) below.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity (or any department, agency or political
subdivision thereof).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge or other security interest.
"STOCK PURCHASE AGREEMENT" has the meaning set forth in the preface
above.
"TARGET" has the meaning set forth in the preface above.
"TARGET SHARE" means any share of the common stock, no par value per
share, of Target.
"TAX" or "TAXES" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Internal Revenue Code), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not. The terms "Tax" and "Taxes" include any
liability for any of the foregoing items as a result of being a member of any
affiliated, consolidated, combined, unitary or similar group and any liability
for payment of any amounts as a result of a Tax sharing or indemnity agreement.
"THIRD PARTY CLAIM" has the meaning set forth in Section 7(d) below.
2
2. PURCHASE AND SALE OF TARGET SHARES.
(a) THE CLOSING. The closing of the transactions contemplated by this
Agreement and the Stock Purchase Agreement (the "CLOSING") shall take place at
the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, commencing at 10:00 a.m. local time on January 18, 2001, or, if any
of the conditions set forth in Section 6(a) (other than conditions with respect
to actions the respective Parties will take at the Closing itself) has not been
satisfied, a later date selected by the Buyer, which date shall be within five
business days following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself).
(b) DELIVERIES AT THE CLOSING. At the Closing, the Target will
deliver to the Buyer the various certificates, instruments and documents
referred to in Section 6(a) below.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TARGET. The Target
represents and warrants to the Buyer that the statements contained in this
Section 3 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 3), except as set forth in the disclosure schedule delivered by the
Target to the Buyer on the date hereof (the "DISCLOSURE SCHEDULE"). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3.
(a) ORGANIZATION, QUALIFICATION AND CORPORATE POWER. Target is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. The Target is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the failure to be so
qualified would not have a material adverse effect on the business, financial
condition, operations, results of operations or future prospects of the Target.
The Target is not in default under or in violation of any provision of its
charter or bylaws. The Target has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Target, enforceable
in accordance with its terms and conditions. Target need not give any notice to,
make any filing with, or obtain any authorization, consent or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
(b) CAPITALIZATION. The entire authorized capital stock of the Target
consists of 60,000,000 Target Shares, of which 7,658,321 Target Shares are
issued and outstanding. Except as set forth at Section 3(b) of the Disclosure
Schedule, there are no outstanding or authorized warrants, options, purchase
rights, subscription rights, conversion rights, exchange rights or other
contracts or commitments that could require the Target to issue, sell or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to the Target. There are no voting
trusts, proxies or other agreements or understandings with respect to the voting
of the capital stock of the Target.
3
(c) NONCONTRAVENTION. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated by the Stock
Purchase Agreement, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge or other restriction
of any government, governmental agency or court to which the Target is subject
or any provision of the charter or bylaws of the Target or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which the Target is a party or by which the Target is bound
or to which any of the Target's assets is subject (or result in the imposition
of any Security Interest upon any of such assets). Except for filings which may
be required under local or state laws with respect to liquor licensing and
gaming licensing, and which the Company is currently preparing, the Target does
not need to give any notice to, make any filing with, or obtain any
authorization, consent or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.
(d) REPORTS FILED UNDER THE SECURITIES EXCHANGE ACT OF 1934. Target
has timely filed all reports required to be filed by Target under the Securities
Exchange Act. All such reports filed by Target in the preceding twelve (12)
months contain all statements required to be stated therein in accordance with
the Exchange Act and do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(e) FULL DISCLOSURE. The representations and warranties contained in
this Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. The Target and the Buyer will use their reasonable best
efforts to take all action and to do all things necessary, proper or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement and the Stock Purchase Agreement.
(b) NOTICES AND CONSENTS. The Target will give any notices to third
parties and will use its reasonable best efforts to obtain any third party
consents that the Buyer reasonably requests. The Target will give any notices
to, make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(c) above.
(c) OPERATION OF BUSINESS. The Target will not engage in any
practice, take any action or enter into any transaction outside the Ordinary
Course of Business. Without limiting the generality of the foregoing, the Target
will not declare, set aside or pay any dividend or make any distribution with
respect to its capital stock or redeem, purchase or otherwise acquire any of its
capital stock.
4
(d) PRESERVATION OF BUSINESS. The Target will keep its business and
properties substantially intact, including its present operations, physical
facilities, working conditions and relationships with lessors, licensors,
suppliers, customers and employees.
(e) FULL ACCESS. The Target will permit representatives of the Buyer
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Target, to all premises,
properties, personnel, books, records (including Tax records), contracts and
documents of or pertaining to the Target.
(f) NOTICE OF DEVELOPMENTS. The Target will give prompt written
notice to the Buyer of any material adverse development affecting its financial
condition, results of operations, properties, business or prospects.
(g) EXCLUSIVITY. The Target will not cause or permit an employee,
officer, stockholder, or other affiliate or agent to (i) solicit, initiate or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any
substantial portion of the assets of, the Target (including any acquisition
structured as a merger, consolidation or share exchange) or (ii) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing. The Target will notify
the Buyer immediately if any Person makes any proposal, offer, inquiry or
contact with respect to any of the foregoing.
(h) WAIVER OF RIGHT OF FIRST REFUSAL. Target shall, and hereby does,
waive any right of first refusal, right of first offer, right of first
negotiation or any other restriction running in its favor that may be applicable
to the Target Shares to be sold pursuant to the Stock Purchase Agreement insofar
as the purchase and sale of such Target Shares is completed in accordance with
the terms of the Stock Purchase Agreement.
5. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing:
(a) GENERAL. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 7 below).
(b) CONFIDENTIALITY. The Buyer will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement and deliver promptly to Target or
destroy, at the request and option of the Target, all tangible embodiments (and
all copies) of the Confidential Information which are in its possession. In the
event that the Buyer is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, the Buyer will notify the Target promptly of the request or
requirement so that the Target may seek an appropriate protective order or waive
5
compliance with the provisions of this Section 5(b). The foregoing provisions
shall not apply to any Confidential Information which is generally available to
the public immediately prior to the time of disclosure.
(c) REGISTRATION STATEMENT FOR RESALE OF THE TARGET SHARES.
(i) SHELF REGISTRATION STATEMENT. As promptly as practicable but
in no event later than five days following the filing of its Annual Report on
Form 10-K with respect to the year ending December 31, 2000, the Target will
prepare and file with the Securities and Exchange Commission (the "SEC") a shelf
registration statement under the Securities Act of 1933 (as amended and together
with the rules and regulations promulgated thereunder, the "SECURITIES ACT")
registering all of the Target Shares held by the Buyer upon the completion of
the transactions contemplated by the Stock Purchase Agreement for resale to the
public by the Buyer, pursuant to such registration statement and the prospectus
included therein (the "REGISTRATION STATEMENT"), free and clear of any
restrictions under the Securities Act except for prospectus delivery
requirements. The Target shall use all reasonable efforts to cause such
Registration Statement to become effective as promptly as practicable thereafter
and, subject to Section 5(c)(ii) below, to remain effective until such time as
the Buyer may freely sell the Target Shares held by it without registration and
without regard to volume or manner of sale. The Buyer shall furnish such
information regarding the distribution of the Target Shares and such other
information relating to the Buyer and its ownership of securities of the Target
as the Target may from time to time reasonably request. The Buyer agrees to
promptly furnish additional information required to be disclosed in order to
make the information previously furnished to the Target by the Buyer not
materially misleading. The Buyer agrees to furnish all such information and to
cooperate with and provide assistance to the Target, as the Target may
reasonably request, in connection with any registration and sale of the Target
Shares.
(ii) TARGET OBLIGATIONS. From time to time during the period
commencing upon the effectiveness of the Registration Statement and ending upon
the earlier of (x) such time as the Buyer may freely sell the Target Shares held
by it without registration and without regard to volume or manner of sale, or
(y) such time as the Buyer shall have advised the Target in writing that it has
completed its resale of the Target Shares held by it (the "RESALE PERIOD"), the
Target shall do the following:
(A) Prepare and deliver to the Buyer as many copies of the
Prospectus (as hereafter defined) as the Buyer may reasonably request;
(B) Use its reasonable efforts to comply with all requirements
imposed upon it by the Securities Act, by the Securities Exchange Act, and by
the undertakings in the Registration Statement so far as is necessary to permit
the continuance of resales of Target Shares by the Buyer to the public, free and
clear of any restrictions under the Securities Act except for prospectus
delivery requirements. If, at any time during the Resale Period, an event shall
occur which makes it necessary to amend or supplement the Registration Statement
or the Prospectus to comply with law or with the rules and regulations of the
SEC, the Target shall promptly notify the Buyer of the proposed amendment or
supplement and promptly prepare and furnish to the Buyer such number of copies
of an amended or supplemented Registration Statement or Prospectus that
6
complies with law and with such rules and regulations as the Buyer may
reasonably request. The Buyer shall suspend its sales of Target Shares pending
the preparation and delivery of such amendment or supplement and until such time
as each such amendment or amendments to the Registration Statement have been
declared effective by the SEC. The Target authorizes the Buyer, and any brokers
or dealers effecting sales of the Target Shares for the account of the Buyer, to
use the Prospectus, as from time to time amended or supplemented, in connection
with the sale of the Target Shares in accordance with applicable provisions of
the Securities Act and state securities laws. For purposes of this Agreement,
the term "PROSPECTUS" means the final prospectus relating to the Target Shares
most recently included in the Registration Statement or filed by the Target
pursuant to Rule 424 of the Securities Act and any amendments or supplements
thereto filed by the Target pursuant to Rule 424 of the Securities Act and shall
include all documents or information incorporated in any such prospectus by
reference;
(C) Promptly advise the Buyer (1) when any post-effective
amendment of the Registration Statement is filed with the SEC and when any
post-effective amendment becomes effective; (2) of any request made by the SEC
for any amendment of or supplement to the Registration Statement or the
Prospectus or for additional information relating thereto; (3) of any suspension
or threatened suspension of the use of any Prospectus in any state; and (4) of
any proceedings commenced or threatened to be commenced by the SEC or any state
securities commission which would result in the issuance of any stop order or
other order or suspension of use. The Target agrees to use its reasonable
efforts to prevent or promptly remove any stop order or other order preventing
or suspending the use of the Prospectus during the Resale Period and to comply
with any such request by the SEC to amend or supplement the Prospectus;
(D) Take such action as shall be necessary to qualify and
maintain the qualification of the Target Shares covered by such registration
under such state securities or "blue sky" laws for offers and sales to the
public during the Resale Period as the Buyer shall reasonably request; PROVIDED,
HOWEVER, that the Target shall not be obligated to qualify as a foreign
corporation to do business under the laws of or become subject to taxation in,
any jurisdiction in which it shall not be then qualified, or to file any general
consent to service of process; and
(E) Cause the Target Shares to be registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and continually quoted or listed,
subject to notice of issuance, on The Nasdaq National Market or a national
securities exchange, if such exchange is the principal market on which the
Target Shares are traded, and not subject to any restriction or suspension from
trading on the Nasdaq National Market or such national securities exchange;
PROVIDED, HOWEVER, that the Target may deregister the Target Common Stock
registered pursuant to Section 12(b) or 12(g) of the Exchange Act if such
deregistration is in connection with a merger, dissolution or other transaction
in which the stockholders of the Target receive prior to such deregistration
either cash or securities that are listed on The Nasdaq National Market or a
national securities exchange or some combination of cash and such securities;
PROVIDED, FURTHER, that the Target may delist the Target Shares from trading on
The Nasdaq National Market or national securities exchange if the Target is
concurrently listing such stock on the New York Stock Exchange or the American
Stock Exchange.
7
(iii) INDEMNIFICATION OF THE BUYER. The Target shall indemnify,
defend and hold harmless the Buyer against and in respect of any losses, claims,
damages or liabilities, joint or several (including legal or other fees and
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, damage or liability) to which the Buyer may become subject
under the Securities Act or otherwise insofar as such losses, claims, damages or
liabilities (or actions with respect thereto) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except to the extent
that any such untrue statement or omission is based upon written information
supplied by the Buyer or by any of its representatives for use in such
Registration Statement; PROVIDED, HOWEVER, this indemnity agreement shall not
inure to the benefit of the Buyer on account of any loss, claim, damage,
liability or action arising from the sale of the Target Shares to any person if
the Buyer fails to send or give a copy of the Prospectus (as amended or
supplemented) to such person.
(iv) INDEMNIFICATION OF THE TARGET. The Buyer shall indemnify,
defend and hold harmless the Target, its officers and its directors and any
controlling persons of the Target against and in respect of any losses, claims,
damages or liabilities, joint or several (including legal or other fees and
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage or liability) to which the Target or any
such persons may become subject under the Securities Act or otherwise insofar as
such losses, claims, damages or liabilities (or actions with respect thereto)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only in each case to the extent that any such untrue statement
or omission is based upon written information supplied by the Buyer or its
representatives for use in such Registration Statement.
(v) CONTRIBUTION. If for any reason the indemnification provided
for in the preceding Sections 5(c)(iii) or 5(c)(iv) is unavailable to an
indemnified party as contemplated by such clauses, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations.
(vi) PROCEDURE FOR INDEMNIFICATION. The procedure for
indemnification under this Section 5(c) shall be as follows:
(A) NOTICE. The indemnified party shall promptly give notice to
the indemnifying party of any pending or threatened claim giving rise to
indemnification under Sections 5(c)(iii) or (iv) (a "CLAIM"), specifying the
factual basis for the Claim and the approximate amount thereof.
(B) CONTROL OF CLAIM AND SETTLEMENT. With respect to any Claim
as to which a person is entitled to indemnification hereunder, the indemnifying
party shall have the
8
right at its own expense to participate in or assume control of the defense of
the Claim, and the indemnified party shall cooperate fully with the indemnifying
party, subject to reimbursement for actual out-of-pocket expenses incurred by
the indemnified party as the result of a request by the indemnifying party. If
the indemnifying party elects to assume control of the defense of any Claim, the
indemnified party shall have the right to participate in the defense of the
Claim at its own expense. If the indemnifying party does not elect to assume
control or otherwise participate in the defense of any Claim, it shall be bound
by the results obtained by the indemnified party with respect to the Claim. No
indemnifying party shall be liable for any settlement effected without its
written consent, not to be unreasonably withheld or delayed.
(vii) SURVIVAL. Notwithstanding any other provision of this
Agreement, the indemnification and contribution obligations of the parties
hereunder shall survive indefinitely.
(viii) EXPENSES. The Target shall pay all expenses incident to the
registration of the Target Shares under this Section 5(c), including without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, and the fees and disbursements of counsel for the Target and
its independent public accountants. With respect to sales of Target Shares, the
Buyer shall pay all underwriting discounts and commissions and fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Target Shares to be sold by
the Buyer, the fees and disbursements of counsel retained by the Buyer and
transfer taxes, if any.
(ix) COMPLIANCE. The Buyer will observe and comply with the
Securities Act, the Exchange Act and the general rules and regulations
thereunder, as now in effect and as from time to time amended and including
those hereafter enacted or promulgated, in connection with any offer, sale,
pledge, transfer or other disposition of the Target Shares or any part thereof.
(d) FINANCING. In consideration of Target's entering into this
Agreement, Buyer hereby agrees, subject to the completion of the transactions
contemplated by the Stock Purchase Agreement, that it will obtain for Target, on
or before February 14, 2001, up to $4.8 million of new financing from a
commercial lender on commercially reasonable terms to replace Target's existing
funded debt. In addition, subject to project pre-commitment approval by Buyer
which will not be unreasonably withheld, Buyer will arrange up to an additional
$1.2 million of financing for future development projects of Target. Such
financing will be at commercially reasonable rates and may be secured by assets
of Target or its subsidiaries.
6. DELIVERIES.
(a) DELIVERIES BY TARGET ON OR BEFORE DECEMBER 20, 2000. On or prior
to December 20, 2000, Target shall use its best efforts to deliver to Buyer the
following:
(i) evidence of Target's receipt of any third party consents
reasonably requested by Buyer;
9
(ii) a certificate of the co-chief executive officers of Target
dated as December 20, 2000 to the effect that (A) the representations and
warranties set forth in Section 3 above are true and correct in all material
respects at and as of such date; (B) the Target has performed and complied with
all of its covenants hereunder to be performed on or prior to such date in all
material respects; and (C) no action, suit or proceeding is pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling or charge would (1)
prevent consummation of any of the transactions contemplated by this Agreement
or the Stock Purchase Agreement, (2) cause any of the transactions contemplated
by this Agreement or the Stock Purchase Agreement to be rescinded following
consummation, (3) affect adversely the right of the Buyer to own the Target
Shares or (4) adversely affect the right of the Target to own its assets and to
operate its businesses (and no such injunction, judgment, order, decree, ruling
or charge shall be in effect);
(iii) an opinion in form and substance as set forth in EXHIBIT A
attached hereto, addressed to the Buyer, and dated as of the Closing Date;
(iv) an opinion from Target's accountants in form and substance
reasonably acceptable to the Buyer to the effect that the transactions
contemplated by this Agreement and the Stock Purchase Agreement will not be
taxable to Target and will not trigger any loss of Target's tax assets;
(v) evidence of Target having terminated any rights of first
refusal running in favor of Target relating to any of the Target Shares held by
Seller; and
(vi) letters of resignation from the Board of Directors of Target,
effective as of the Closing Date, from ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
(b) DELIVERIES BY TARGET ON THE CLOSING DATE. On the Closing Date,
Target shall deliver to the Buyer a certificate of the chief executive officer
and the chief financial officer of Target dated as of the Closing Date to the
effect that (A) the representations and warranties set forth in Section 3 above
are true and correct in all material respects at and as of the Closing Date; (B)
the Target has performed and complied with all of its covenants hereunder to be
performed on or prior to the Closing Date in all material respects; and (C) no
action, suit or proceeding is pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state, local or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling or charge would (1) prevent consummation of any
of the transactions contemplated by this Agreement or the Stock Purchase
Agreement, (2) cause any of the transactions contemplated by this Agreement or
the Stock Purchase Agreement to be rescinded following consummation, (3) affect
adversely the right of the Buyer to own the Target Shares or (4) adversely
affect the right of the Target to own its assets and to operate its businesses
(and no such injunction, judgment, order, decree, ruling or charge shall be in
effect).
7. REMEDIES FOR BREACHES OF THIS AGREEMENT.
10
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Unless otherwise set
forth below, the representations and warranties of the Target contained in
Section 3 shall survive the Closing hereunder (even if the Buyer knew or had
reason to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect for a period of two years
following the Closing thereafter (subject to any applicable statutes of
limitations).
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER. In the event
the Target breaches (or in the event any third party alleges facts that, if
true, would mean Target has breached) any of its representations, warranties and
covenants contained herein, and, if there is an applicable survival period
pursuant to Section 7(a) above, provided that the Buyer makes a written claim
for indemnification against Target pursuant to Section 10(h) below within such
survival period, then Target agrees to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer through and after the
date of the claim for indemnification (including any Adverse Consequences the
Buyer may suffer after the end of any applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by the breach (or
the alleged breach).
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE TARGET. In the
event the Buyer breaches (or in the event any third party alleges facts that, if
true, would mean the Buyer has breached) any of its covenants contained herein,
then the Buyer agrees to indemnify Target from and against the entirety of any
Adverse Consequences the Target may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the Target may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach).
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the "INDEMNIFIED
PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which may give rise
to a claim for indemnification against any other Party (the "INDEMNIFYING
PARTY") under this Section 7, then the Indemnified Party shall promptly notify
each Indemnifying Party thereof in writing; PROVIDED, HOWEVER, that no delay on
the part of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, and (C) the Indemnifying
Party conducts the defense of the Third Party Claim actively and diligently.
11
(iii) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with Section 7(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (B) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (such consent not to be withheld unreasonably) and (C) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (such consent not to be withheld unreasonably
and such consent not to be withheld at all if the judgment or settlement
contains a full release reasonably satisfactory to the Indemnified Party).
(iv) In the event any of the conditions in Section 7(d)(ii) above
is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses) and (C) the Indemnifying Party will
remain responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section 7.
8. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Buyer and the Target may terminate
this Agreement as provided below:
(i) the Buyer and the Target may terminate this Agreement by
mutual written consent at any time prior to the Closing; or
(ii) either the Buyer or the Target may terminate this Agreement
by giving written notice to the other at any time prior to the Closing if the
Closing shall not have occurred on or before January 18, 2001.
(b) EFFECT OF TERMINATION. If the either of the Parties terminates
this Agreement pursuant to Section 8(a) above, all rights and obligations of
the Parties hereunder shall terminate without any Liability of any Party to
any other Party (except for any Liability of any Party then in breach). In
addition, in the event of termination of this Agreement pursuant to Section
8(a) above, (i) each Party will redeliver all documents, work papers and
other material of any other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the Party
furnishing the same and (ii) the provisions of Section 5(b) will continue in
full force and effect.
9. MISCELLANEOUS.
12
(a) CONFIDENTIALITY OF AGREEMENT, PRESS RELEASES AND PUBLIC
ANNOUNCEMENTS. Except as set forth below, the Parties shall, and shall cause
their officers, employees and representatives to, treat and hold as confidential
the existence and terms of this Agreement at all times prior to the Closing
Date. Specifically, no Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the Buyer and the Target;
PROVIDED, HOWEVER, that any Party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities to make such disclosure (in which case
the disclosing Party will use its reasonable best efforts to advise the other
Parties prior to making the disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests or obligations hereunder without the prior
written approval of the Buyer and the Target; PROVIDED, HOWEVER, that the Buyer
may (i) assign any or all of its rights and interests hereunder to one or more
of its Affiliates and (ii) designate one or more of its Affiliates to perform
its obligations hereunder (in any or all of which cases the Buyer nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below:
IF TO THE TARGET:
13
Chicago Pizza & Brewery, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Jeffer, Mangels, ▇▇▇▇▇▇ & Marmaro, LLP
2121 Avenue of the Stars, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14
IF TO THE BUYER:
BJ Chicago, LLC
c/o The Jacmar Companies, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Del Pozzo
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service or ordinary mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the address
to which notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other Parties notice in the manner herein set
forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of California without giving
effect to any choice or conflict of law provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Target. No waiver by any Party of any default, misrepresentation
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any applicable jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other applicable jurisdiction.
15
(k) EXPENSES. Each Party will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder and any applicable common law, unless the
context requires otherwise. The word "including" shall mean including without
limitation. The Parties intend that each representation, warranty and covenant
contained herein shall have independent significance. If any Party has breached
any representation, warranty or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating to
the same subject matter (regardless of the relative levels of specificity) which
the Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty or covenant.
(m) INCORPORATION OF EXHIBITS, ANNEXES AND SCHEDULES. The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with, their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter in addition to any other remedy to
which they may be entitled, at law or in equity.
(o) ARBITRATION. Any dispute arising out of this Agreement, or its
performance or breach, shall be resolved by binding arbitration in Los Angeles,
California under the Commercial Arbitration Rules (the "AAA RULES") of the
American Arbitration Association (the "AAA"). This arbitration provision is
expressly made pursuant to and shall be governed by the Federal Arbitration Act,
9 U.S.C. Sections 1-14. The Parties agree that pursuant to Section 9 of the
Federal Arbitration Act, a judgment of a United States District Court of
competent jurisdiction shall be entered upon the award made pursuant to the
arbitration. A single arbitrator, who shall have the authority to allocate the
costs of any arbitration initiated under this paragraph, shall be selected
according to the AAA Rules within ten (10) days of the submission to the AAA of
the response to the statement of claim or the date on which any such response is
due, whichever is earlier. The arbitrator shall be required to furnish to the
parties to the arbitration a preliminary statement of the arbitrator's decision
that includes the legal rationale for the arbitrator's conclusion and the
calculations pertinent to any damage award being made by the arbitrator. The
arbitrator shall then furnish each of the parties to the arbitration the
opportunity to comment upon and/or contest the arbitrator's preliminary
statement of decision either, in the discretion of the arbitrator, through
briefs or at a hearing. The arbitrator shall render a final decision following
any such briefing or hearing. The
16
arbitrator shall conduct the arbitration in accordance with the Federal Rules of
Evidence. The arbitrator shall decide the amount and extent of pre-hearing
discovery which is appropriate. The arbitrator shall have the power to enter any
award of monetary and/or injunctive relief (including the power to issue
permanent injunctive relief and also the power to reconsider any prior request
for immediate injunctive relief by any Party and any order as to immediate
injunctive relief previously granted or denied by a court in response to a
request therefor by any Party), including the power to render an award as
provided in Rule 43 of the AAA Rules; PROVIDED, HOWEVER THAT THE ARBITRATOR
SHALL NOT HAVE THE POWER TO AWARD CONSEQUENTIAL, INDIRECT, PUNITIVE OR EXEMPLARY
DAMAGES UNDER ANY CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE
AVAILABLE UNDER APPLICABLE LAW, THE PARTIES HEREBY WAIVE THEIR RIGHTS, IF ANY,
TO RECOVER ANY SUCH DAMAGES, WHETHER IN ARBITRATION OR LITIGATION. The
arbitrator shall have the power to award the prevailing party its costs and
reasonable attorney's fees; PROVIDED, HOWEVER, that the arbitrator shall not
award attorneys' fees to a prevailing party if the prevailing party received a
settlement offer unless the arbitrator's award to the prevailing party is
greater than such settlement offer without taking into account attorneys' fees
in the case of the settlement offer or the arbitrator's award. In addition to
the above courts, the arbitration award may be enforced in any court having
jurisdiction over the Parties and the subject matter of the arbitration.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
"BUYER"
BJ CHICAGO, LLC, a Delaware limited liability company
By: THE JACMAR COMPANIES
Its: Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: President
"TARGET"
CHICAGO PIZZA & BREWERY, INC.,
a California corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title:
18
EXHIBIT A
FORM OF OPINION OF COUNSEL TO TARGET
The Buyer shall have received from counsel to the Target an opinion,
addressed to the Buyer and dated as of the Closing Date, in form and substance
as set forth below:
(a) Target has been duly incorporated and is validly existing and in
good standing under the laws of the State of California with corporate power and
authority to enter into the Facilitation Agreement and to perform its
obligations thereunder.
(b) The execution, delivery and performance of the Facilitation
Agreement have been duly authorized by all necessary corporate action of the
Target, and the Facilitation Agreement has been duly executed and delivered by
the Target.
(c) The Facilitation Agreement constitutes a legally valid and
binding obligation of the Target, enforceable against the Target in accordance
with its terms.
(d) The execution and delivery of the Facilitation Agreement by
Target and Buyer and the execution and delivery of the Stock Purchase Agreement
by and between Buyer and Seller, and the consummation of the transactions
contemplated thereby, do not:
(i) violate the provisions of the Certificate of
Incorporation or Bylaws of Target, or any judgment,
order or decree of any court or arbitrator, known to
us, to which Target is a party or is subject;
(ii) require any consents, approvals, authorizations,
registrations, declarations or filings by the Target
under any statute, rule or regulation applicable to
the Target; or
(iii) result in the breach of or a default under any lease
or other agreement of Target identified to us as
material to Target by officers of Target.
(e) To the best of our knowledge, there are no actions, suits,
proceedings or investigations pending against the Target before any court,
governmental agency or arbitrator.
A-1
DISCLOSURE SCHEDULE
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
CONCERNING TARGET
[BEGINS ON THE FOLLOWING PAGE]