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,
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2000, by and between BJ Chicago, LLC, a Delaware limited liability company (the
'Buyer"),and Chicago Pizza & Brewery, Inc., a California corporation (the
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"Tet"), in furtherance of the "Stock Purchase Agreement"by and between the Buyer
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and ASSI, Inc., a Nevada corporation (the "Seller"),of even date herewith. The
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Buyer and Target are referred to collectively herein as the '?arties."
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.
"AAX' has the meaning set forth in Section 11 (p) below.
"AAA Rules"has the meaning set forth in Section I I (p) below.
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"AccreditedInvestor" has the meaning set forth in Regulation D promulgated under
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the Securities Act.
"Adverse Consequences"means all actions, suits, proceedings, hearings,
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investigations, charges ' complaints, claims, demands, injunctions, judgments,
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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.
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"Closing' has the meaning set forth in Section 2(a) below.
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'Closing Date"has the meaning set forth in Section 2(a) below.
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"Confidential Information'means any information concerning the businesses and
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affairs of Target that is not already generally available to the public.
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"DisclosureSchedule" has the meaning set forth in Section 3 below.
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"Indemnified Party'has the meaning set forth in Section 7(d) below.
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"Indemnifymg Party'has the meaning set forth in Section 7(d) below.
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"Liability' means any liability (whether known or unknown, whether asserted or
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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
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with past custom and practice (including with respect to quantity and
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frequency).
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'Tail
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"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.
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"Securities Exchange Act'means the Securities Exchange Act of 1934, as amended.
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"Security Interest'means any mortgage, pledge, lien, encurnbrance, charge or
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other security interest.
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"Stock Purchase Agreement"has the meaning set forth in the preface above.
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"Target'has the meaning set forth in the preface above.
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"Target Share"means any share of the common stock, no par value per share, of
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Target.
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"Taxor 'Taxes" means any federal, state, local, or foreign income, gross
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receipts, license, payroll, employment, excise, severance, stamp, occupation,
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premium, windfall profits, environmental (including taxes under Section 59A of
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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.
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2. PURCHASE AND SALE OF TARGET SHARES.
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(a) The Closing.The closing of the transactions contemplated by this Agreement
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and the Stock Purchase Agreement (the 'Closing') shall take place at the offices
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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 ID 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 ▇▇▇▇▇▇▇.▇▇ the Closing, the Target will deliver to the
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Buyer the various certificates, instruments and documents referred to in Section
6(a) below.
3. REPRESENTATIONS AND WARRANTIES CONCERNINI! THE TARGET.The Target represents
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and wan-ants 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 "DisclosureSchedule"). The Disclosure Schedule
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will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 3.
(a) Organization, Qualification and Corporate ▇▇▇▇▇.▇▇▇▇▇▇ is a corporation duly
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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
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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 sirnilar
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.
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(c) Noncontravention.Neither the execution and delivery of this Agreement, nor
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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
gaining 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 of1934. Target has timely
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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
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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
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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 andConsents. The Target will give any notices to third parties and
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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 ofBusiness. The Target will not engage in any practice, take any
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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.
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(d) Preservation of Business.The Target will keep its business and properties
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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
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access at all reasonable times, and in a manner so as not to interfere with the
non-nal business operations of the Target, to all premises, properties,
personnel, books, records (including Tax records), contracts and documents of or
pertaining to the Target.
Notice of Developments.The Target will give prompt written notice to the Buyer
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of any material adverse development affecting its financial condition, results
of operations, properties, business or prospects.
(9) Exclusivity.The Target will not cause or permit an employee, officer,
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stockholder, or other affiliate or agerit to (i) solicit, initiate or encourage
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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, famish any infon-nation 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 ▇▇▇▇▇▇▇.▇▇▇▇▇▇ shall, and hereby does, waive
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any fight 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
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period following the Closing:
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(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 firrther 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
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Confidential Information, refrain from using any of the Confidential Information
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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
infon-nation 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
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requirement so that the Target may seek an appropriate protective order or waive
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.
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(i) Shelf Registration ▇▇▇▇▇▇▇▇▇.▇▇ promptly as practicable but in no event
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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
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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
▇▇▇▇▇▇-ate 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
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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 mariner 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
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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 nurnber of copies
of an
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NSD DOCS\194.8 [W97]
amended or supplemented Registration Statement or Prospectus that 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
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most recently included in the Registration Statementor filed by the Target
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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; provide, however,that the
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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; provide, howeverthat the Target may
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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; provide, furtherer, that the Target may delist the
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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.
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Indemnification of the Buyer. The Target shall indemnify, defend and hold
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harmless the Buyer against and in respect of any losses, claims, damages or
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liabilities, joint or several (including legal or other fees and expenses
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reasonably incurred by it in connection with investigating or defending any such
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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 my of its representatives for use *in such
Registration Statement; provide, however,this indemnity agreement shall not more
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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
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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) ContributionIf for any reason the indemnification provided for in the
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preceding Sections 5(c)(iii) or 5(c)(iv) is unavailable to an indemnified party
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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 IndemnificationThe procedure for indemnification under
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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.
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(B) Control of Claim andSettlement. With respect to any Claim as to which a
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person is entitled to indemnification hereunder, the indemnifying party shall
have the 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
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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 disbusements of counsel retained by the Buyer and
transfer taxes, if any.
(ix) Compliance.The Buyer will observe and comply with the Securities Act, the
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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
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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
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December 20, 2000, Target shall use its best efforts to deliver to Buyer the
following:
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requested by Buyer;
(i) evidence of Target's receipt of any third party consents reasonably
(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);
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 ClosingDate. On the Closing Date, Target shall
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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).
I I
7. REMEDIES FOR BREACHES OF THIS AGREEMENT.
----------------------------------------
(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 B. 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 wid-iin such
survival period, then Target agrees to indemnify the Buyer fi-orn 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 ▇▇▇▇▇▇.▇▇ 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.
-----------------------------------
If any third party shall notify any Party (the 'Indemnified P') with respect to
--------------
any matter (a 'Third PartyClaim") which may give rise to a claim for
-------------
indemnification against any other Party (the "IndemnifyingPart V) under this
-------------
Section 7, then the Indemnified Party shall promptly notify each Indemnifying
Party thereof in writing; provide, 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.
(A) 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
12
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.
(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:
the Buyer and the Target may terminate this Agreement by mutual written consent
at any time prior to the Closing; or
(A) 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 TerminationIf 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.
13
9. MISCELLANEOUS
(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 antiouncement relating to the
subject matter of this Agreement prior to the Closing without the prior written
approval of the Buyer and the Target; provide, howthat 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.
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 oml, 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; provide, howeverthat 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.
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:
-----------------
Chicago Pizza & Brewery, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14
Attention: President Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
---------------
▇▇▇▇▇▇ ▇ ▇▇▇▇▇, Esq. Jeffer, Mangels, ▇▇▇▇▇▇ & Mannaro, LLP 2121 Avenue of the
Stars, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
15
------
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) GoverningLaw. 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 ▇▇▇▇▇▇▇.▇▇ 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 lights arising by virtue
of any prior or subsequent such occurrence.
0) 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.
16
(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.
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 "including7 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.
(in) Incorporation of Exhibits, Annexes andSchedules. 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 Patties 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 cat 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 Rule") 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 finish 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 finish 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
17
such briefing or hearing. The 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; providehowever 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 b 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]
[GRAPHIC OMITED]
[GRAPHIC OMITED]
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:
Name: ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: President
"TARGET"
CHICAGO PIZZA & BREWERY, INC., a California corporation
By: Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Title:
19
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 my 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
result in the breach of or a default under my 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