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EXHIBIT 10.8
STOCK PURCHASE AGREEMENT
by
and
among
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.;
and
the INVESTORS listed on Schedule 1;
Dated as of APRIL 28, 1997
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS....................................................................................... 1
1.1 Definitions......................................................................... 1
1.2 Accounting Terms; Financial Statements.............................................. 7
1.3 Knowledge Standard.................................................................. 8
1.4 Other Defined Terms................................................................. 8
ARTICLE 2
AUTHORIZATION OF PREFERRED STOCK;
PURCHASE AND SALE OF SECURITIES................................................................... 8
2.1 Preferred Stock..................................................................... 8
2.2 Purchase and Sale of Securities..................................................... 9
2.3 Closing............................................................................. 9
ARTICLE 3
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO PURCHASE THE PREFERRED SHARES................................................ 9
3.1 Representations and Warranties...................................................... 9
3.2 Compliance with Terms and Conditions of this Agreement.............................. 9
3.3 Delivery of Certificates Evidencing the Securities.................................. 10
3.4 Closing Certificates................................................................ 10
3.5 Secretary's Certificates............................................................ 10
3.6 Documents........................................................................... 10
3.7 Purchase Permitted by Applicable Laws............................................... 10
3.8 Opinion of Counsel.................................................................. 10
3.9 Approval of Counsel to Purchasers................................................... 10
3.10 Consents and Approvals.............................................................. 11
3.11 Certain Waivers..................................................................... 11
3.12 No Material Adverse Change.......................................................... 11
3.13 Certificate. ...................................................................... 11
3.14 No Material Judgment or Order....................................................... 11
3.15 Financial Statements................................................................ 11
3.16 Registration Rights Agreement....................................................... 12
3.17 Shareholders Agreement.............................................................. 12
3.18 Board of Directors.................................................................. 12
3.19 Concurrent Purchases................................................................ 12
ARTICLE 4
CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE.............................................. 12
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4.1 Representations and Warranties...................................................... 12
4.2 Compliance with Terms and Conditions of this Agreement.............................. 12
4.3 Issuance Permitted by Applicable Laws............................................... 12
4.4 Payment of Purchase Price........................................................... 13
4.5 No Material Judgment or Order....................................................... 13
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................... 13
5.1 Corporate Existence and Authority................................................... 13
5.2 Corporate Authorization; No Contravention........................................... 13
5.3 Governmental Authorization; Third Party Consents.................................... 13
5.4 Binding Effect...................................................................... 14
5.5 Other Agreements.................................................................... 14
5.6 Capitalization...................................................................... 14
5.7 Company Affiliates.................................................................. 15
5.8 Private Offering.................................................................... 16
5.9 Litigation.......................................................................... 16
5.10 Financial Statements................................................................ 16
5.11 Title and Condition of Assets....................................................... 16
5.12 Contractual Obligations............................................................. 17
5.13 Patents, Trademarks, Etc............................................................ 17
5.14 Tax Matters......................................................................... 18
5.15 Severance Arrangements.............................................................. 19
5.16 No Material Adverse Change.......................................................... 19
5.17 Environmental Matters............................................................... 20
5.18 Investment Company/Government Regulations. ......................................... 21
5.19 Broker's, Finder's or Similar Fees. ................................................ 21
5.20 Labor Relations and Employee Matters................................................ 21
5.21 Employee Benefits Matters........................................................... 21
5.22 Undisclosed Liabilities............................................................. 23
5.23 Solvency............................................................................ 23
5.24 Compliance with Law................................................................. 24
5.25 No Other Agreements to Sell the Assets or Capital Stock of the Company.............. 24
5.26 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇................................................................... 24
5.27 Budget.............................................................................. 24
5.28 Insurance........................................................................... 24
5.29 Disclosure.......................................................................... 25
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.................................................. 25
6.1 Existence and Authority............................................................. 25
6.2 Authorization; No Contravention..................................................... 25
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6.3 Governmental Authorization; Third Party Consent..................................... 25
6.4 Binding Effect...................................................................... 26
6.5 Purchase for Own Account............................................................ 26
6.6 Accredited Investor Status.......................................................... 26
6.7 Investment Risk..................................................................... 27
6.8 Broker's, Finder's or Similar Fees.................................................. 27
ARTICLE 7
COVENANTS OF THE COMPANY.......................................................................... 27
7.1 Further Assurances.................................................................. 27
7.2 Notification of Certain Matters..................................................... 28
7.3 Access to Information............................................................... 28
7.4 Conduct of Business................................................................. 28
ARTICLE 8
COVENANTS OF THE COMPANY WITH RESPECT
TO THE PERIOD FOLLOWING THE CLOSING............................................................... 28
8.1 Reservation of Shares............................................................... 29
8.2 Books and Records................................................................... 29
8.3 Use of Proceeds..................................................................... 29
8.4 New Lines of Business............................................................... 29
8.5 Compensation of Directors........................................................... 29
ARTICLE 9
INDEMNIFICATION................................................................................... 29
9.1 Indemnification..................................................................... 29
9.2 Notification........................................................................ 30
9.3 Registration Rights Agreement....................................................... 31
ARTICLE 10
MISCELLANEOUS..................................................................................... 31
10.1 Termination......................................................................... 31
10.2 Survival of Representations and Warranties.......................................... 32
10.3 Confidential Information............................................................ 32
10.4 Notices............................................................................. 32
10.5 Successors and Assigns.............................................................. 34
10.6 Amendment and Waiver................................................................ 34
10.7 Counterparts........................................................................ 34
10.8 Headings............................................................................ 34
10.9 Governing Law....................................................................... 34
10.10 Jurisdiction........................................................................ 34
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10.11 Severability........................................................................ 35
10.12 Rules of Construction............................................................... 35
10.13 Entire Agreement.................................................................... 35
10.14 Transaction Expenses................................................................ 35
10.15 Severability of Representations, Warranties and Covenants........................... 35
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TABLE OF EXHIBITS AND SCHEDULES
EXHIBITS
Registration Rights Agreement A
Shareholders Agreement B
Certificate of Incorporation C
Opinion of Company Counsel D
SCHEDULES
Securities Being Purchased 1
Shareholders 5.6
Company Affiliates 5.7
Environmental 5.17
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as
of the 28th day of April, 1997 by and among ▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC., a
Delaware corporation (the "Company"), and the INVESTORS listed on Schedule 1
attached hereto (the "Investors").
RECITALS:
A. WHEREAS, upon the terms and subject to the conditions set forth
in this Agreement, the Company proposes to issue and sell shares of its Series B
Preferred Stock (as defined herein) to the Investors (each being referred to
herein as a "Purchaser" and collectively referred to herein as the
"Purchasers").
B. WHEREAS, upon the terms and subject to the conditions set forth
in this Agreement, the Purchasers desire to contribute capital to the Company in
the amount of $4.35 per share in exchange for the issuance to the Purchasers of
shares of the Series B Preferred Stock of the Company as set forth herein.
C. WHEREAS, the Purchasers desire that, upon the Closing (as
defined in herein), the Purchasers will collectively own one hundred percent
(100%) of the Company's outstanding Series B Preferred Stock.
D. WHEREAS, the Company, the Purchasers and the holders of the
Company's Common Stock (as defined herein) and Series A Preferred Stock (as
defined herein) desire to set forth the objectives and agreements that will
govern their relations and responsibilities with respect to each other by
entering into concurrently with the sale and purchase of securities hereunder a
Shareholders Agreement (as defined herein).
AGREEMENTS:
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" means, with respect to any specified Person, any
Person that, directly or indirectly, controls, is controlled by, or is under
common control with, such
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specified Person, whether by contract, through one or more intermediaries, or
otherwise.
"Benefit Arrangement" means any employment, consulting, severance
or other similar contract, arrangement or policy and each plan, arrangement
(written or oral), program, agreement or commitment providing for insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, life, health, disability or accident benefits (including,
without limitation, any "voluntary employees' beneficiary association" as
defined in Section 501(c)(9) of the Code providing for the same or other
benefits) or for deferred compensation, profit-sharing bonuses, stock options,
stock appreciation rights, stock purchases or other forms of incentive
compensation or post-retirement insurance, compensation or benefits which (A) is
not a Welfare Plan, Pension Plan or Multiemployer Plan, (B) is entered into,
maintained, contributed to or required to be contributed to, as the case may be,
by the Company or an ERISA Affiliate or under which the Company or any ERISA
Affiliate may incur any liability, and (C) covers any employee or former
employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means the common stock, par value $.001 per share,
of the Company, or any other capital stock of the Company into which such stock
is reclassified or reconstituted.
"Company Affiliates" means (i) PFCCB Scottsdale, L.L.C., an
Arizona limited liability company; (ii) PFCCB Newport Beach, L.L.C., an Arizona
limited liability company; (iii) ▇.▇. ▇▇▇▇▇'▇ III, L.L.C., an Arizona limited
liability company; (iv) ▇.▇. ▇▇▇▇▇'▇ ▇▇, L.L.C., an Arizona limited liability
company; (v) PFC Building III Limited Partnership, an Arizona limited
partnership; (vi) PFCCB LouTex Joint Venture, an Arizona general partnership;
and (vii) PFCCB NUC LLC, an Arizona limited liability company.
"Condition of the Company" means the assets, business, properties,
operations, financial condition or prospects (excluding prospects arising out of
general economic or business conditions affecting the restaurant industry
generally) of the Company and the Company Affiliates taken as a whole.
"Contractual Obligation" means as to any Person, any provision of
any security issued by such Person or any provision of any agreement, lease of
real or personal property, undertaking, contract, indenture, mortgage, deed of
trust or other
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instrument to which such Person is a party or by which it or any of its property
is bound.
"Defined Benefit Plan" means a defined benefit plan within the
meaning of Section 3(35) of ERISA or Section 414(j) of the Code, whether funded
or unfunded, qualified or nonqualified (whether or not subject to ERISA or the
Code).
"Employee Plans" means all Benefit Arrangements, Multiemployer
Plans, Pension Plans and Welfare Plans.
"Environmental Expenses" means any liability, loss, cost or
expense arising from any Pre-Closing Environmental Matter, including, without
limitation, costs of investigation, cleanup, removal, remedial, corrective or
response action, the costs associated with posting financial assurances for the
completion of investigation, cleanup, removal, remedial, corrective or response
actions, the preparation of any closure or other necessary or required plans or
analyses, or other reports or analyses submitted to or prepared by regulating
agencies, including the cost of health assessments, epidemiological studies and
the like, retention of engineers and other expert consultants, legal counsel,
capital improvement, operation and maintenance testing and monitoring costs,
power and utility costs and pumping taxes or fees, and administrative costs or
damages.
"Environmental Laws" means any federal, state, territorial,
provincial or local law, common law doctrine, rule, order, decree, judgment,
injunction, license, permit or regulation relating to environmental matters,
including those pertaining to land use, air, soil, surface water, ground water
(including the protection, cleanup, removal, remediation or damage thereof),
public or employee health or safety or any other environmental matter, together
with any other laws (federal, state, territorial, provincial or local) relating
to emissions, discharges, releases or threatened releases of any pollutant or
contaminant including, without limitation, medical, chemical, biological,
biohazardous or radioactive waste and materials, into ambient air, land, surface
water, groundwater, personal property or structures, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, discharge or handling of any contaminant, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Material Transportation
Act (49 U.S.C. 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.), the Clean Air Act (42 U.S.C. 1251 et seq.), the Toxic
Substances Control Act (15 U.S.C. 2601 et seq.), and the Occupational Safety
and Health Act (29 U.S.C. 651 et seq.), as such laws have been, or are,
amended, modified or supplemented heretofore or from time to time hereafter and
any analogous future federal, or present or future state or local laws, statutes
and regulations promulgated thereunder.
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"Equipment" means all of the tangible personal property owned or
leased by the Company or any Company Affiliate and used in or held for use in
the operations of the business of the Company or any Company Affiliate.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any Person that is (or at any relevant
time was) a member of a "controlled group of corporations" with or under "common
control" with the Company as defined in Section 414(b), (c), (m) or (o) of the
Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Facilities" means the buildings, plants, offices, stores,
restaurants and all other improvements on any real property (including fixtures
affixed thereto) which are owned or leased by the Company or any Company
Affiliate and used or held for use in the operation of the business of the
Company or any Company Affiliate.
"Financial Statements Date" means December 29, 1996.
"GAAP" means United States generally accepted accounting
principles, in effect from time to time, consistently applied.
"Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision or any agency thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
exercising public functions owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
"Hazardous Materials" means those substances which are regulated
by or form the basis of liability under any Environmental Laws, including,
without limitation, petroleum products, radon and asbestos.
"Indebtedness" means, as to any Person: (a) all obligations,
whether or not contingent, of such Person for borrowed money (including, without
limitation, reimbursement and all other obligations with respect to surety
bonds, letters of credit and bankers' acceptances, whether or not matured), (b)
all obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, (c) all obligations of such Person representing the balance of
deferred purchase price of property or services, except trade accounts payable
and accrued commercial or trade liabilities arising in the ordinary course of
business, (d) all interest rate and currency swaps, caps, collars and similar
agreements or hedging devices under which payments are obligated to be made by
such Person, whether periodically or upon the happening of a contingency, (e)
all indebtedness created or arising under any conditional sale or other title
retention
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agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (f) all
obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, (g) all indebtedness secured
by any Lien (other than Liens in favor of lessors under leases other than leases
included in clause (f)) on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is non-recourse to the credit of that Person, and (h) all
Indebtedness of any other Person referred to in clauses (a) through (f) above,
guaranteed, directly or indirectly, by that Person.
"Initial Issue Date" shall mean the date that shares of Series B
Preferred Stock are first issued by the Company.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or other security interest of
any kind or nature whatsoever (excluding preferred stock or equity related
preferences) including, without limitation, those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease obligation, or any financing lease
having substantially the same economic effect as any of the foregoing.
"Material Adverse Effect" means any event or condition which
individually or in the aggregate has a material adverse effect on the Condition
of the Company or on the ability of the Company to perform its obligations under
the Transaction Agreements.
"Multiemployer Plan" means any "multiemployer plan," as defined in
Section 4001(a)(3) or Section 3(37) of ERISA, (A) which the Company or any ERISA
Affiliate maintains, administers, contributes to or is required to contribute
to, or, after September 25, 1980, maintained, administered, contributed to or
was required to contribute to, or under which the Company or any ERISA Affiliate
may incur any liability and (B) which covers any employee or former employee of
the Company or any ERISA Affiliate (with respect to their relationship with such
entities).
"Outstanding Borrowings" means all Indebtedness of the Company and
the Company Affiliates for borrowed money (including without limitation,
reimbursement and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured), excluding obligations
with respect to trade payables incurred in the ordinary course of business.
"Pension Plan" means any "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (A) which the
Company or any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the five years prior to the Closing Date,
maintained, administered,
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contributed to or was required to contribute to, or under which the Company or
any ERISA Affiliate may incur any liability and (B) which covers any employee or
former employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities).
"Permitted Liens" means (i) Liens for taxes, governmental charges
or levies which (a) are not yet due and payable, or (b) are being diligently
contested in good faith by appropriate proceedings; provided, that for any such
taxes being diligently contested in good faith, the Company has set aside
adequate reserves, (ii) Liens imposed by law, such as mechanic's, materialman's,
landlord's, warehouseman's and carrier's liens, securing obligations incurred in
the ordinary course of business which are not yet overdue or which are being
diligently contested in good faith by appropriate proceeding and, with respect
to such obligations which are being contested, for which the Company has set
aside adequate reserves, and (iii) Liens which (x) in each case, secure
obligations of less than $10,000, and (y) do not, individually or in the
aggregate, interfere with the use and enjoyment of the property subject thereto.
"Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Pre-Closing Environmental Matters" means (i) the production, use,
generation, storage, treatment, recycling, disposal, discharge, release, or
other handling or disposition of any kind at any time on or prior to the Closing
Date (collectively "Handling") of any Hazardous Material, either in, on, or
under any real property or facility (including the Facilities) owned, leased or
used at any time by the Company (or a predecessor or affiliate of the Company)
including without limitation the effects of such Handling of Hazardous Materials
on resources, persons, or property within or outside the boundaries of any
facility owned, operated or otherwise used by the Company; (ii) the presence as
of the Closing Date of Hazardous Materials in, on or under any facility
(including the Facilities) owned, leased or used at any time by the Company
regardless of how the Hazardous Materials came to rest at, on or under such
facility, (iii) the failure on or prior to the Closing Date of any facility or
any operations of the Company to be in compliance with an Environmental Laws,
and (iv) any other act, omission or condition existing prior to the Closing Date
which gives rise to liability under any Environmental Laws with respect to the
Company.
"Preferred Stock" means the Series A Preferred Stock and the
Series B Preferred Stock.
"Qualified Initial Public Offering" shall mean a public offering,
underwritten by a reputable and nationally recognized underwriter, pursuant to
an effective registration statement under the Securities Act of shares of the
Common Stock, (i) the aggregate gross proceeds of which equal or exceed $
15,000,000 and (ii)
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the per share offering price to the public of which equals or exceeds $10.00;
provided, however, that the per share offering price referred to in clause (ii)
shall be adjusted to reflect the effect of any stock split or any subdivision,
reclassification, combination or like event of or with respect to outstanding
shares of Common Stock occurring after the Initial Issue Date.
"Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement in the form attached hereto as Exhibit A.
"Requirements of Law" means, as to any Person, the provisions of
the certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule, regulation,
right, privilege, qualification, license or franchise, order, judgment, or
determination, in each case, of an arbitrator or a court or other Governmental
Authority, in each case, applicable to or binding upon such Person or any of its
property (or to which such Person or any of its property is subject) or
applicable to any or all of the transactions contemplated by or referred to in
the Transaction Agreements.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
"Series A Preferred Stock" means the Series A Convertible
Preferred Stock, par value $.001 per share, of the Company, or any other capital
stock of the Company into which such stock is reclassified or reconstituted.
"Series B Preferred Stock" means the Series B Convertible
Preferred Stock, par value $.001 per share, of the Company, or any other capital
stock of the Company into which such stock is reclassified or reconstituted.
"Shareholders Agreement" means the Amended and Restated
Shareholders Agreement among the Company, the Purchasers and the holders of the
Common Stock and the Series A Preferred Stock in the form attached hereto as
Exhibit B.
"Tax" or "Taxes" shall mean all federal, state, local, foreign and
other taxes, assessments or other government charges, including, without
limitation, income, estimated income, business, occupation, franchise, property,
sales, transfer, use, employment, commercial rent or withholding taxes,
including interest, penalties and additions in connection therewith for which
the Company may be liable.
"Transaction Agreements" means collectively, this Agreement, the
Registration Rights Agreement, and the Shareholders Agreement.
"Welfare Plan" means any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, (A) which the Company or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or under
which the Company
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or any ERISA Affiliate may incur any liability and (B) which covers any employee
or former employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities).
1.2 Accounting Terms; Financial Statements. All accounting terms
used herein not expressly defined in this Agreement shall have the respective
meanings given to them in accordance with GAAP.
1.3 Knowledge Standard. When used herein, the phrase "to the
knowledge of" any Person, "to the best knowledge of" any Person or any similar
phrase shall mean, (i) with respect to any individual, the actual knowledge of
such Person (ii) with respect to any corporation (or a limited liability
company), the actual knowledge of officers and directors, or Persons acting in
similar capacities, of such corporation and the knowledge of such facts that
such persons should have in the exercise of their duties after reasonable
inquiry and (iii) with respect to a partnership, the actual knowledge of the
officers and directors of the general partner of such partnership and the
knowledge of such facts that such persons should have in the exercise of their
duties after reasonable inquiry. When used herein, the phrase "to the knowledge
of the Company," "to the best knowledge of the Company" or any similar phrase
shall mean "to the best knowledge of the Company and each Company Affiliate"
using the standards set forth in the previous sentence.
1.4 Other Defined Terms. The following terms shall have the
meanings specified in the Sections set forth below:
Term Section
Actions 5.9
Audited Financial Statements 3.15
Certificate 2.1
Closing 2.3
Closing Date 2.3
Indemnified Party 9.1
Indemnifying Party 9.1
Intellectual Property 5.13
Liability (and Liabilities) 9.1
Preferred Shares 2.1
Purchase Price 2.2
Taxpayers 5.14
ARTICLE 2
AUTHORIZATION OF PREFERRED STOCK;
PURCHASE AND SALE OF SECURITIES
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2.1 Preferred Stock. The Company has authorized the issuance and
sale to the Purchasers of 1,517,131 shares of Series B Preferred Stock (the
"Preferred Shares") and has duly adopted resolutions establishing the rights,
preferences, privileges and restrictions of the Series B Preferred Stock. The
Series B Preferred Stock will have the respective rights, preferences and
privileges set forth in the Company's Certificate of Incorporation, including
the Certificate of Designations, Preferences, and Relative, Participating,
Optional and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof of Series B Convertible Preferred Stock of
▇.▇. ▇▇▇▇▇'▇ China Bistro, Inc., in the form attached hereto as Exhibit C (the
"Certificate").
2.2 Purchase and Sale of Securities. Upon the terms and subject to
the conditions herein contained, at the Closing (as defined herein) on the
Closing Date (as defined herein), the Company agrees that it will issue to each
of the Purchasers, and each Purchaser agrees that it will purchase from the
Company, the number of Preferred Shares listed next to such Purchaser's name on
Schedule 1 hereto. The aggregate purchase price of the Preferred Shares, to be
paid by the Purchasers in the amounts listed next to each Purchaser's name on
Schedule 1 hereto, shall be Six Million, Five Hundred Ninety-Nine Thousand, Five
Hundred Nineteen Dollars and Eighty-Five Cents ($6,599,519.85) (the "Purchase
Price").
2.3 Closing. The closing of the sale to and purchase by the
Purchasers of the Preferred Shares (the "Closing") shall occur at the offices of
▇▇▇▇▇ and Roca LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ at
10:00 a.m., Phoenix, Arizona time on April 30, 1997 or on such different date
and time as the Purchasers and the Company shall agree (the "Closing Date"). At
the Closing, (i) the Company shall deliver to each Purchaser certificates
evidencing the Preferred Shares being purchased by such Purchaser, free and
clear of any Liens of any nature whatsoever, other than those created by the
Certificate, registered in such Purchaser's name, and (ii) each Purchaser shall
deliver to the Company the portion of the Purchase Price listed next to such
Purchaser's name on Schedule 1 hereto, by cashier's check or wire transfer of
immediately available funds.
ARTICLE 3
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO PURCHASE THE PREFERRED SHARES
The obligation of each Purchaser to purchase the Preferred Shares,
to pay the purchase prices therefor and to perform any obligations hereunder on
the Closing Date (unless otherwise specified) shall be subject to the
satisfaction as determined by, or waiver by, such Purchaser of the following
conditions on or before the Closing Date:
3.1 Representations and Warranties. The representations and
warranties of the Company contained in Article 5 hereof shall be true and
correct at and as of the Closing Date (both before and after giving effect to
the transactions contemplated under
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this Agreement) as if made at and as of such date, except that the timely filing
and payment of Taxes as set forth in Section 5.14(a) and Section 5.14(b) shall
be true and correct at and as of the Closing Date (both before and after giving
effect to the transactions contemplated under this Agreement) as if made at and
as of such date to the extent that any failure to timely file or pay such Taxes
shall not have a Material Adverse Effect.
3.2 Compliance with Terms and Conditions of this Agreement. The
Company shall have performed and complied with all of the agreements and
conditions set forth herein that are required to be performed or complied with
by the Company on or before the Closing Date.
3.3 Delivery of Certificates Evidencing the Securities. The Company
shall contemporaneously deliver to each Purchaser the certificates evidencing
the Preferred Shares as set forth in Section 2.3.
3.4 Closing Certificates. The Company shall have delivered to each
Purchaser a certificate executed by an authorized officer of the Company
certifying that the representations and warranties of the Company contained in
the Agreement are true and correct on and as of the Closing Date, and that the
conditions set forth in this Section 3 to be satisfied by the Company have been
satisfied on and as of the Closing Date.
3.5 Secretary's Certificates. Each Purchaser shall have received a
certificate from the Company, dated as of the Closing Date and signed by the
Secretary or an Assistant Secretary of the Company, certifying that the attached
copies of the Certificate, Bylaws of the Company and resolutions of the Board of
Directors of the Company approving the Transaction Agreements and the
transactions contemplated thereby, are all true, complete and correct and remain
unamended and in full force and effect.
3.6 Documents. Each Purchaser shall have received true, complete
and correct copies of such documents and such other information as it may have
reasonably requested in connection with or relating to the sale of the Preferred
Shares and the transactions contemplated by the Transaction Agreements, or the
business of the Company, all in form and substance reasonably satisfactory to
the Purchasers prior to the Closing.
3.7 Purchase Permitted by Applicable Laws. The acquisition of and
payment for the Preferred Shares to be acquired by the Purchasers hereunder and
the consummation of the transactions contemplated by the Transaction Agreements
shall not (a) violate any Requirements of Law, (b) result in a material breach
or default (i) under any of the Contractual Obligations of the Company or (ii)
under any order, writ, judgment, injunction, decree, determination or award of
any court, arbitrator, or commission, board, bureau, agency or other
governmental instrumentality, or (c) result
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in, or require, the creation or imposition of any Lien upon or with respect to
any of the property of the Company.
3.8 Opinion of Counsel. Each Purchaser shall have received an
opinion of ▇▇▇▇▇ and ▇▇▇▇ LLP, counsel to the Company, dated as of the Closing
Date in the form attached as Exhibit D.
3.9 Approval of Counsel to Purchasers. All actions and proceedings
required to be performed on or prior to the Closing Date hereunder and all
documents required to be delivered by the Company on or prior to the Closing
Date as required by this Agreement, shall have been acceptable to counsel to
such Purchaser, in its reasonable judgment as to their form and substance.
3.10 Consents and Approvals. All consents, exemptions,
authorizations, or other actions by, or notices to, or filings with,
Governmental Authorities and other Persons in respect of all Requirements of Law
and with respect to those material Contractual Obligations of the Company,
necessary or required in connection with the execution, delivery or performance
of the Transaction Agreements (including, without limitation, the issuance of
the Preferred Shares, based solely on the Requirements of the Law and facts and
circumstances in effect as of the Closing Date, and issuance of the Common Stock
upon conversion or exercise of the Preferred Shares) by the Company, and shall
have been obtained and be in full force and effect, and the Purchasers shall
have been furnished with appropriate evidence thereof, and all waiting periods
shall have lapsed without extension or the imposition of any conditions or
restrictions.
3.11 Certain Waivers. Each holder of the shares of the capital
stock of the Company (or any other party who may possess such rights) shall have
waived any and all preemptive rights, rights of first refusal, "tag along"
rights, rights of co-sale and any similar rights with respect to the issuance of
the Preferred Shares contemplated hereby.
3.12 No Material Adverse Change. Since the Financial Statements
Date, there shall have been no Material Adverse Effect.
3.13 Certificate. The Company shall have amended and filed the
Certificate in the form of Exhibit C hereto (with such changes as agreed to by
each Purchaser).
3.14 No Material Judgment or Order. There shall not be on the
Closing Date any judgment or order of a court of competent jurisdiction or any
ruling of any Governmental Authority affecting the Company or any Company
Affiliate or any condition imposed under any Requirement of Law affecting the
Company or any Company Affiliate which, in the reasonable judgment of the
Purchasers, would (i) prohibit the purchase of the Preferred Shares or the
consummation of the other transactions contemplated hereunder, (ii) subject the
Purchasers to any penalty if the
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Preferred Shares were to be purchased hereunder, (iii) question the validity or
legality of the transactions contemplated hereby, or (iv) be reasonably expected
to materially adversely affect the value of the capital stock of the Company or
have a Material Adverse Effect.
3.15 Financial Statements. The Company shall have delivered to the
Purchasers a copy of the audited consolidated financial statements of the
Company and the Company Affiliates as of and for the year ended December 29,
1996 (the "Audited Financial Statements"), which Audited Financial Statements
shall fairly present in all material respects the financial position and the
results of operations and cash flows of the Company and the Company Affiliates
as of and for such period in conformity with GAAP.
3.16 Registration Rights Agreement. The Company, the Purchasers and
the holders of the Common Stock and Series A Preferred Stock shall
contemporaneously execute and deliver the Registration Rights Agreement in the
form attached hereto as Exhibit A.
3.17 Shareholders Agreement. The Company, the Purchasers and the
holders of the Common Stock and Series A Preferred Stock shall contemporaneously
execute and deliver a Shareholders Agreement in the form attached hereto as
Exhibit B.
3.18 Board of Directors. Immediately following the Closing, the
Board of Directors of the Company shall consist of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, J. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Yves Sisteron and
▇▇▇▇▇ ▇▇▇▇▇▇▇.
3.19 Concurrent Purchases. Each Purchaser shall concurrently
purchase its Preferred Shares.
ARTICLE 4
CONDITIONS TO THE OBLIGATION OF THE
COMPANY TO CLOSE
The obligation of the Company to issue and sell the Preferred
Shares and the other obligations of the Company hereunder, shall be subject to
the satisfaction as determined by, or waiver by, the Company of the following
conditions on or before the Closing Date:
4.1 Representations and Warranties. The representations and
warranties of the Purchasers contained in Section 6 hereof shall be true and
correct at and as of the Closing Date (both before and after giving effect to
the transactions contemplated under this Agreement) as if made at and as of such
date.
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4.2 Compliance with Terms and Conditions of this Agreement. The
Purchasers shall have performed and complied with all of the agreements and
conditions set forth herein that are required to be performed or complied with
by the Purchasers on or before the Closing Date.
4.3 Issuance Permitted by Applicable Laws. The issuance of the
Preferred Shares by the Company hereunder, acquisition of the Preferred Shares
by the Purchaser hereunder and the consummation of the transactions contemplated
by the Transaction Agreements shall not (a) violate any Requirements of Law, or
(b) result in a breach or default (i) under any of the Contractual Obligations
of the Purchasers, or (ii) under any order, writ, judgment, injunction, decree,
determination or award of any court, arbitrator, or commission, board, bureau,
agency or other governmental instrumentality, or (c) require any consents,
approvals, exemptions, authorizations, registrations, declarations or filings by
the Purchasers.
4.4 Payment of Purchase Price. The Purchasers shall tender to the
Company the Purchase Price in the manner set forth in Section 2.2 in the
respective amounts specified on Schedule 1 hereto.
4.5 No Material Judgment or Order. There shall not be on the
Closing Date any judgment or order of a court of competent jurisdiction or any
ruling of any Governmental Authority or any condition imposed under any
Requirements of Law which, in the reasonable judgment of the Company would (i)
prohibit the sale of the Preferred Shares or the consummation of the other
transactions contemplated hereunder, (ii) subject the Company to any penalty if
the Preferred Shares were to be sold hereunder, or (iii) question the validity
or legality of the transactions contemplated hereby.
ARTICLE 5
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers as of
the date hereof as follows:
5.1 Corporate Existence and Authority. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, (b) has all requisite corporate power and authority to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently, or is currently proposed to be
engaged, (c) is duly qualified as a foreign corporation, licensed and in good
standing in each jurisdiction where the failure to do so would have a Material
Adverse Effect, and (d) has the corporate power and authority to execute,
deliver and perform its obligations under each Transaction Agreement to which it
is or will be a party.
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5.2 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company of each of the Transaction Agreements
and the consummation of the transactions contemplated thereby, including without
limitation, the issuance of the Preferred Shares (a) has been duly authorized by
all necessary corporate action, including, if required, stockholder action, (b)
does not and will not conflict with or contravene the terms of the Certificate
or the By-Laws of the Company, or any amendment thereof; and (c) does not and
will not violate, conflict with or result in any material breach or
contravention of (i) any Contractual Obligation of the Company or any Company
Affiliate, or (ii) any Requirements of Law applicable to the Company or any
Company Affiliate.
5.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person in respect of any
applicable Requirements of Law, and no lapse of a waiting period under any
applicable Requirements of Law, is necessary or required in connection with the
execution, delivery or performance (including, without limitation, the issuance
of the Preferred Shares and the issuance of the Common Stock upon the conversion
of the Preferred Shares) by the Company or the enforcement against the Company
of the Transaction Agreements, or the transactions contemplated thereby.
5.4 Binding Effect. The Transaction Agreements have been duly
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability.
5.5 Other Agreements. Neither the Company nor the Company
Affiliates have previously entered into any agreements which are currently in
effect or to which the Company or the Company Affiliates is currently bound,
granting any registration or other material rights to any Person, the provision
or performance of which would render the provision or performance (including,
without limitation, the issuance of the Preferred Shares and the issuance of the
Common Stock upon the conversion of the Preferred Shares) of the material rights
to be granted to the Purchasers by the Company in the Transaction Agreements
impracticable.
5.6 Capitalization.
(a) Immediately prior to the Closing, the authorized capital stock
of the Company will consist solely of (i) 20,000,000 shares of Common Stock and
(ii) 10,000,000 shares of Preferred Stock (7,700,000 shares of Series A
Preferred Stock and 2,300,000 shares of Series B Preferred Stock). Immediately
following the Closing (i) 5,000,000 shares of Common Stock will be issued and
outstanding; (ii) 11,383,358
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shares of Common Stock will be reserved for issuance upon (a) the exercise of
options to purchase such shares, (b) the conversion of Preferred Stock and (c)
the conversion of Series A Preferred Stock issued upon the exercise of certain
warrants issued to ▇▇▇▇▇▇▇▇▇▇ Securities; (iii) 6,871,401 shares of Preferred
Stock will be issued and outstanding (of which 5,354,270 shares will be shares
of Series A Preferred Stock and 1,517,131 shares will be shares of Series B
Preferred Stock); (iv) 124,380 shares of Series A Preferred Stock will be
reserved for issuance upon exercise of certain warrants issued to ▇▇▇▇▇▇▇▇▇▇
Securities; (v) (a) 2,189,905 shares of Series A Preferred Stock will be
reserved for issuance as "payment-in-kind" dividends of Series A Preferred Stock
and (b) 467,155 shares of Series B Preferred Stock will be reserved for issuance
as "payment-in-kind" dividends of Series B Preferred Stock; and (vi) options to
purchase 1,730,517 shares of Common Stock will be outstanding. A total of
13,726,298 fully diluted shares of Common Stock will be outstanding immediately
following the Closing, assuming the conversion of all outstanding shares of
Preferred Stock and the exercise of all outstanding options and warrants. All
outstanding shares of capital stock of the Company are, and the shares of Series
B Preferred Stock (when issued, sold and delivered against payment therefor),
the shares of Preferred Stock issuable as "payment-in-kind" shares in respect of
Preferred Stock (when declared and paid), and the shares of Common Stock
issuable upon conversion of the Preferred Stock (when issued upon conversion)
will be, duly authorized and validly issued, fully paid, nonassessable and free
and clear of any Liens, preferential rights, priorities, claims, options,
charges or other encumbrances or restrictions, other than those created by the
Certificate and the Shareholders Agreement.
(b) Schedule 5.6 sets forth the name of each holder of the issued
and outstanding capital stock of the Company, the number of shares of such
capital stock held of record by each such holder, the name of each Person
holding any options, warrants or other rights to purchase any capital stock of
the Company, the number, class and series of shares of capital stock subject to
each such option, warrant or right and the exercise price of each such option,
warrant or right. Except as set forth on Schedule 5.6, and except for the
Preferred Stock, there are no outstanding securities convertible into or
exchangeable for capital stock of the Company or options, warrants or other
rights to purchase or subscribe to capital stock of the Company or contracts,
commitments, agreements, understandings or arrangements of any kind to which the
Company or any such holder of capital stock is a party relating to the issuance
of any capital stock of the Company, any such convertible or exchangeable
securities or any such options, warrants or rights.
(c) Except as set forth on Schedule 5.6 and in the Transaction
Agreements, no Person has any preemptive rights, rights of first refusal, "tag
along" rights, rights of co-sale or any similar rights with respect to the
issuance of the Preferred Shares contemplated hereby.
5.7 Company Affiliates. Schedule 5.7 sets forth a complete and
accurate list of all of the Company Affiliates and all entities that own or
operate a ▇.▇. ▇▇▇▇▇'▇
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China Bistro together with the Company's ownership interest therein. Each
Company Affiliate that is a corporation or a limited liability company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the corporate or requisite power and
authority to own its properties and conduct its business. Each Company Affiliate
that is a partnership is an existing partnership under the laws of the
jurisdiction of its formation and has full partnership power and authority to
own its properties and conduct its business. Each Company Affiliate is qualified
and licensed to transact business in each jurisdiction where the failure to do
so would have a Material Adverse Effect. All of the outstanding shares of
capital stock of the Company Affiliates that are corporations have been duly
authorized and validly issued and are fully paid and nonassessable. All of the
outstanding shares of capital stock of, or other ownership interests in, each of
the Company Affiliates are owned by the Company free and clear of any Liens,
claims, options, charges or other encumbrances, except as expressly provided in
the organizational documents of the Company Affiliates. No Company Affiliate has
outstanding options, warrants, subscriptions, calls, rights, convertible
securities or other agreements or commitments obligating the Company Affiliate
to issue, transfer or sell any securities of the Company Affiliate.
5.8 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Preferred Shares. No registration of the Preferred
Shares pursuant to the provisions of the Securities Act or any state securities
or "blue sky" laws will be required by the offer, sale or issuance of the
Preferred Shares pursuant to this Agreement.
5.9 Litigation. There is no complaint, action, order, writ,
injunction, judgment or decree outstanding, or claim, suit, litigation,
proceeding, labor dispute, arbitral action or investigation (collectively,
"Actions") pending or, to the knowledge of the Company, threatened against,
relating to or affecting (i) the assets of the Company or the Company Affiliates
or (ii) the transactions required to be performed under this Agreement or by the
Transaction Agreements. Neither the Company nor any of the Company Affiliates is
in default with respect to any judgment, order, writ, injunction or decree of
any court or governmental agency, and there are no unsatisfied judgments against
the Company or any Company Affiliate. There is not a reasonable likelihood of an
adverse determination of any pending Action that would, individually or in the
aggregate, have a Material Adverse Effect.
5.10 Financial Statements. The Audited Financial Statements have
been prepared in accordance with GAAP and fairly present in all material
respects the consolidated financial position of the Company and the Company
Affiliates as of the date thereof and the results of operations and cash flows
of the Company and the Company Affiliates for the period set forth therein.
5.11 Title and Condition of Assets.
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(a) The Company and each Company Affiliate has good title to all
of the personal property reflected on the balance sheet included in the Audited
Financial Statements or acquired by the Company or any of the Company Affiliates
since the date thereof, and all real and personal property reflected on such
balance sheet or acquired by the Company or the Company Affiliates since the
date thereof is free and clear of any Liens or defects of title, other than
Permitted Liens. The Company and each Company Affiliate has a valid and
enforceable leasehold interest in all real property leased by it pursuant to the
terms of the respective lease agreements (assuming that each respective landlord
has good and marketable title to all real property that is subject to such
leases and except as enforceability may be limited by applicable bankruptcy laws
or rights of creditors generally).
(b) The Facilities and Equipment are in good operating condition
and repair (except for ordinary wear and tear and any defect the cost of
repairing which would not be material), are sufficient for the operation of the
business of the Company and each Company Affiliate and are in conformity in all
material respects with applicable laws, ordinances, orders, regulations and
other requirements (including applicable zoning, environmental, motor vehicle
safety standards, occupational safety and health laws and regulations) relating
thereto, except where such failure to conform would not have a Material Adverse
Effect. The Company and each Company Affiliate enjoy peaceful and undisturbed
possession of all Facilities owned or leased by the Company or such Company
Affiliate, and, to the best knowledge of the Company, such Facilities are not
subject to any encroachments, building or use restrictions, exceptions,
reservations or limitations which in any material respect interfere with or
impair the present and continued use thereof in the usual and normal conduct of
the business of the Company or each Company Affiliate. There are no pending or,
to the best knowledge of the Company, threatened, condemnation proceedings
relating to any of the Facilities. The Facilities and the Equipment are insured
and are, to the best of the Company's knowledge, structurally sound with no
material defects.
(c) All assets are valued on the books of the Company or the
Company Affiliate at or below actual cost less appropriate depreciation charges.
Neither the Company nor any Company Affiliate has depreciated any of the Assets
for tax purposes in any manner inconsistent with the Code or the rules,
regulations, or guidelines of the Internal Revenue Service.
5.12 Contractual Obligations. Neither the Company nor any of the
Company Affiliates is in default or breach under or with respect to any
Contractual Obligation to which it is a party (and to the best knowledge of the
Company and such Company Affiliates no other party to any such Contractual
Obligation is in default or breach thereunder), except any such default which,
individually or together with all such defaults, would not have a Material
Adverse Effect.
5.13 Patents, Trademarks, Etc. As of the Closing, the Company owns
or is licensed or otherwise has the right to use all patents, trademarks,
service marks, trade
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names, copyrights, licenses, franchises and other intellectual property rights
that are material to the operation of the businesses of the Company (the
"Intellectual Property"). To the best knowledge of the Company, no product,
process, method, substance or other material presently sold by or employed by
the Company, or which the Company contemplates selling or employing, infringes
upon the patents, trademarks, service marks, trade names, copyrights, licenses
or other intellectual property rights that are owned by others. No litigation is
pending and no claim has been made against the Company or any Company Affiliate
or, to the best knowledge of the Company, is threatened, contesting the right of
the Company or any Company Affiliate to sell or use any product, process,
method, substance or other material presently sold by or employed by the Company
or any Company Affiliate. To the best knowledge of the Company, no patent,
invention, devise, principal or any statute, law, rule, regulation, standard or
code is pending or proposed, which would have a material adverse effect on the
Condition of the Company. The Company has not licensed any Intellectual Property
to any Person other than the Company Affiliates and no Person other than the
Company Affiliates has the right to license or use any Intellectual Property to
identify, or in connection with the operation of, its business.
5.14 Tax Matters.
(a) Filing of Tax Returns. Each of the Company and the Company
Affiliates (each such entity hereinafter a "Taxpayer" or collectively the
"Taxpayers") have timely filed with the appropriate taxing authorities all
returns (including without limitation information returns and other material
information) in respect of Taxes required to be filed through the date hereof
and will timely file any such returns required to be filed on or prior to the
Closing Date. The returns and other information filed (or to be filed) are
complete and accurate in all material respects.
(b) Payment of Taxes. All Taxes of each of the Taxpayers in
respect of periods beginning before the Closing Date have been timely paid, or
will be timely paid prior to the Closing Date, to the extent due and payable
prior to the Closing Date, and no Taxpayer has any material liability for Taxes
in excess of the amounts so paid. All Taxes that each Taxpayer has been required
to collect or withhold have been duly collected or withheld and, to the extent
required when due, have been or will be (prior to the Closing Date) duly paid to
the proper taxing authority.
(c) Audits Investigations or Claims. The federal income tax
returns of each of the Taxpayers have not been examined by the Internal Revenue
Service, and no material deficiencies for Taxes of any of the Taxpayers have
been claimed, proposed or assessed by any taxing or other governmental authority
against any of the Taxpayers which have not been reserved for in the Audited
Financial Statements. There are no pending or, to the best knowledge of the
Taxpayers, threatened audits, investigations or claims for or relating to any
material additional liability to any of them in respect of Taxes, and there are
no matters under discussion with any governmental authorities with respect to
Taxes that in the reasonable judgment of any of the Taxpayers, or its or their
counsel, is likely to result in a material additional liability to any of them
for
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Taxes. None of the Taxpayers' federal, state and local returns for Taxes are
currently under audit by the relevant taxing authorities and the results of any
prior audit are fairly presented in the Audited Financial Statements. None of
the Taxpayers have been notified that any taxing authority intends to audit a
return for any period. No extension of a statute of limitations relating to
Taxes is in effect with respect to any of the Taxpayers.
(d) Lien. There are no liens for Taxes (other than for current
Taxes not yet due and payable) on any assets of any Taxpayer.
(e) Partnership Status. Each of the Company Affiliates which
purports to be a limited liability company or a partnership is properly treated
as a partnership for federal income tax purposes and not as an association or
publicly traded partnership taxable as a corporation, and has been properly so
treated since the time of its organization.
(f) Tax Elections; Tax Sharing Arrangements.
(i) None of the Taxpayers have made an election, and none of
them are required, to treat any asset as owned by another person or as
tax-exempt bond financed property or tax-exempt use property within the meaning
of section 168 of the Code or under any comparable state or local income tax or
other tax provision.
(ii) None of the Taxpayers are a party to or bound by any
binding tax sharing, tax indemnity or tax allocation agreement or other similar
arrangement with any other party.
(iii) None of the Taxpayers have filed a consent pursuant to
the collapsible corporation provisions of Section 341(f) of the Code (or any
corresponding provision of state or local law) or agreed to have Section
341(f)(2) of the Code (or any corresponding provision of state or local law)
apply to any disposition of any asset owned by it.
(g) Affiliated Group. None of the Taxpayers have ever been a
member of an affiliated group of corporations, within the meaning of Section
1504 of the Code.
(h) Section 481(a). None of the Taxpayers have agreed to make, or
are required to make, any adjustment under Section 481(a) of the Code by reason
of a change in accounting method or otherwise.
(i) Excess Parachute Payments. None of the Taxpayers are a party
to any agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code.
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(j) No Joint Venture. Other than the Company Affiliates which are
partnerships or limited liability companies, none of the Taxpayers is a party to
any joint venture, partnership, or other arrangement or contract which could be
treated as a partnership for federal income tax purposes.
5.15 Severance Arrangements. Except pursuant to the employment
agreements between the Company and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇, neither the Company nor any Company Affiliate has entered into any
severance or similar arrangement in respect of any present or former employee
that will result in any obligation (absolute or contingent) of the Company or
any Company Affiliate to make any payment to any present or former employee
following termination of employment.
5.16 No Material Adverse Change. To the best knowledge of the
Company, since the Financial Statements Date, there has not been any Material
Adverse Effect, nor to the best knowledge of the Company is any such Material
Adverse Effect threatened.
5.17 Environmental Matters.
(a) Except as set forth on Schedule 5.17, the property, assets and
operations of the Company and each Company Affiliate are and have been in
compliance in all material respects with all applicable Environmental Laws;
there are no Hazardous Materials stored or otherwise located in, on or under any
of the property or assets of the Company and each Company Affiliate, including
the groundwater; and, to the best knowledge of the Company, there have been no
releases or threatened releases of Hazardous Materials in, on or under any
property adjoining any of the property or assets of the Company and each Company
Affiliate. Neither the Company nor any Company Affiliate has stored or caused to
be stored any Hazardous Materials on or under any of the property or assets of
the Company, including the groundwater, other than in compliance with
Environmental Laws; and the Company has not generated, released or discharged
any Hazardous Materials other than in compliance with Environmental Laws.
(b) None of the property, assets or operations of the Company or
any Company Affiliate is the subject of any federal, state or local
investigation evaluating whether (i) any remedial action is needed to respond to
a release or threatened release of any Hazardous Materials into the environment
or (ii) any release or threatened release of any Hazardous Materials into the
environment is in contravention of any Environmental Law.
(c) There are no pending, or, to the best knowledge of the
Company, threatened lawsuits or proceedings against the Company or any Company
Affiliate, with respect to violations of an Environmental Law or in connection
with the presence of or exposure to any Hazardous Materials in the environment
or any release or
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threatened release of any Hazardous Materials into the environment, and neither
the Company nor any Company Affiliate is or was the owner or operator of any
property which (i) pursuant to any Environmental Law has been placed on any list
of Hazardous Materials disposal sites, including without limitation, the
"National Priorities List" or "CERCLIS List," (ii) has or, to the best knowledge
of the Company, had any subsurface storage tanks located thereon; or (iii) to
the knowledge of the Company, has ever been used as or for a waste disposal
facility, a mine, a gasoline service station or a petroleum products storage
facility.
(d) Neither the Company nor any Company Affiliate has any present
or contingent liability in connection which the presence either on or off the
property or assets of the Company or any Company Affiliate of any Hazardous
Materials in the environment or any release or threatened release of any
Hazardous Materials into the environment, except for any such liability that
would not have a material adverse effect on the Condition of the Company.
5.18 Investment Company/Government Regulations. Immediately
following the Closing, after giving effect to the transactions contemplated by
the Transaction Agreements, neither the Company nor any Person controlling,
controlled by or under common control with the Company will be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
The Company is not subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the Federal Power Act, or any federal or state
statute or regulation limiting its ability to incur Indebtedness.
5.19 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
with the transactions contemplated hereby based on any agreement, arrangement or
understanding with the Company or any officer, director, shareholder, or
Affiliate of the Company, or any action taken by any such person except for the
fee payable to ▇▇▇▇▇▇▇▇▇▇ Securities in the amount of $100,000 pursuant to the
engagement letter dated September 10, 1995, as evidenced by the invoice dated
April 24, 1997.
5.20 Labor Relations and Employee Matters. Neither the Company nor
any Company Affiliate is engaged in any unfair labor practice. There is (i) no
unfair labor practice complaint pending or, to the best knowledge of the
Company, threatened against the Company or any Company Affiliate before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is so pending or, to
the best knowledge of the Company, threatened against the Company or any Company
Affiliate, (ii) no strike, labor dispute, slowdown or stoppage pending or, to
the best knowledge of the Company, threatened against the Company or any Company
Affiliate, and (iii) no union representation question existing with respect to
the employees of the Company or any Company Affiliate and, to the knowledge of
the Company, no union organizing activities are
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taking place. The Company is not a party to any collective bargaining agreement
or covenant not to compete.
5.21 Employee Benefits Matters.
(a) Pension Plans and Multiemployer Plans. Neither the Company nor
any ERISA Affiliate sponsors, maintains, contributes to, is required to
contribute to or otherwise has a liability or potential liability with respect
to, or has at any time sponsored, maintained, contributed to, or been required
to contribute to, a Pension Plan or a Multiemployer Plan.
(b) Welfare Plans.
(i) Each Welfare Plan which covers or has covered employees
or former employees of the Company or a Company Affiliate (with respect to their
relationship with such entities) has been maintained in material compliance with
its terms and, both as to form and operation, with the requirements prescribed
by any and all statutes, orders, rules and regulations which are applicable to
such Welfare Plan, including but not limited to ERISA and the Code.
(ii) None of the Company, any ERISA Affiliate or any Welfare
Plan has any present or future obligation to make any payment to or with respect
to any present or former employee of the Company or any ERISA Affiliate pursuant
to any retiree medical benefit plan, or other retiree Welfare Plan, and no
condition exists which would prevent the Company from amending or terminating
any such benefit plan or Welfare Plan.
(iii) Each Welfare Plan which covers or has covered employees
or former employees of the Company or a Company Affiliate and which is a "group
health plan," as defined in Section 607(1) of ERISA, has been operated in
material compliance with the provisions of Part 6 of Title I, Subtitle B of
ERISA and Sections 162K and 4980B of the Code at all times.
(c) Benefit Arrangements. Each Benefit Arrangement which covers or
has covered employees or former employees of the Company or a Company Affiliate
(with respect to their relationship with such entities) has been maintained in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations which are applicable to such Benefit
Arrangement, including but not limited to the Code.
(d) Unrelated Business Taxable Income. No Employee Plan (or trust
or other funding vehicle pursuant thereto) is subject to any tax under Code
Section 511.
(e) Deductibility of Payments. There is no contract, agreement,
plan or arrangement covering any employee or former employee of the Company or a
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Company Affiliate (with respect to their relationship with such entities) that,
individually or collectively, provides for the payment by the Company of any
amount (i) that is not deductible under Section 162(a)(1) or 404 of the Code or
(ii) for which the deduction by Company would be disallowed under Section 162(m)
of the Code.
(f) Fiduciary Duties and Prohibited Transactions. Neither the
Company nor any plan fiduciary of any Welfare Plan which covers or has covered
employees or former employees of the Company or any ERISA Affiliate, has engaged
in any transaction in violation of Sections 404 or 406 of ERISA or any
"prohibited transaction," as defined in Section 4975(c)(1) of the Code, for
which no exemption exists under Section 408 of ERISA or Section 4975(c)(2) or
(d) of the Code.
(g) Validity and Enforceability. Each Welfare Plan, related trust
agreement or other funding instrument and Benefit Arrangement which covers or
has covered employees or former employees of the Company or a Company Affiliate
(with respect to their relationship with such entities) is legally valid and
binding and in full force and effect.
(h) Litigation. There is no action, order, writ, injunction,
judgment or decree outstanding or claim, suit, proceeding, arbitral action,
governmental audit or investigation relating to or seeking benefits under any
Employee Plan that is pending, or, to the best knowledge of the Company,
threatened against the Company, any ERISA Affiliate or any Employee Plan other
than a domestic relations order or a qualified domestic relations order.
(i) No Amendments. Neither the Company nor any ERISA Affiliate has
any announced plan or legally binding commitment to create any additional
Employee Plans which are intended to cover employees or former employees of the
Company or a Company Affiliate (with respect to their relationship with such
entities) or to amend or modify any existing Employee Plan which covers or has
covered employees or former employees of the Company or a Company Affiliate
(with respect to their relationship with such entities).
(j) No Other Material Liability. No event has occurred in
connection with which the Company or any ERISA Affiliate or any Employee Plan,
directly or indirectly, could be subject to any material liability (i) under any
statute, regulation or governmental order relating to any Employee Plans or (ii)
pursuant to any obligation of the Company or any Company Affiliate to indemnify
any person against liability incurred under, any such statute, regulation or
order as they relate to the Employee Plans. The Company has performed all of its
obligations under all Employee Plans including, without limitation, the full
payment when due of all amounts required to be made as contributions to any
Employee Plan or otherwise and there is no unfunded liability for vested or
non-vested benefits under any funded Employee Plan.
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(k) No Acceleration or Creation of Rights. Neither the execution
and delivery of this Agreement or other related agreements by the Company nor
the consummation of the transactions contemplated hereby or the related
transactions will result in the acceleration or creation of any rights of any
person to benefits under any Employee Plan.
5.22 Undisclosed Liabilities. Neither the Company nor any Company
Affiliate have any liabilities or obligations (absolute, accrued, contingent or
otherwise) to the best knowledge of the Company except (i) liabilities that are
reflected and reserved against on the balance sheet included in the Audited
Financial Statements (including the notes thereto), or (ii) liabilities incurred
in the ordinary course of business and consistent with the past practice of the
Company.
5.23 Solvency. Neither the Company nor any Company Affiliate has
(i) made a general assignment for the benefit of its creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of any involuntary
petition in bankruptcy by its creditors, (iii) suffered the appointment of a
receiver to take possession of all or substantially all of its assets or
properties, (iv) suffered the attachment or other judicial seizure of all or
substantially all of its assets or (v) admitted in writing its inability to pay
its debts as they come due. After giving effect to the transactions contemplated
by the Transaction Agreements, the Company will not (i) have liabilities which
exceed the stated value of its assets, or (ii) be left with unreasonably small
capital with which to engage in its respective business for the foreseeable
future, or (iii) have incurred debts beyond its ability to pay such debts as
they mature.
5.24 Compliance with Law. To the best knowledge of the Company, the
Company and the Company Affiliates and the conduct of their businesses is in
compliance with all applicable laws, statutes, ordinances and regulations,
whether federal, state or local, except where the failure to comply would not
have a Material Adverse Effect. Neither the Company nor any Company Affiliate
has received any written notice to the effect that, or to the knowledge of the
Company, it is not in compliance with any of such statutes, regulations, orders,
ordinances or other laws where the failure to comply would have a material
adverse effect on the Condition of the Company or, to the best knowledge of the
Company has no reason to anticipate that any presently existing circumstances
are likely to result in violations of any such regulations which would, in any
one case or in the aggregate, have a Material Adverse Effect.
5.25 No Other Agreements to Sell the Assets or Capital Stock of the
Company. Neither the Company nor any Company Affiliate has any legal obligation,
absolute or contingent, other than the obligations of the Company and each
Company Affiliate under the Transaction Agreements, to any person or firm to (i)
sell or license the assets other than in the ordinary course of business
consistent with past practices, (ii) sell any capital stock of the Company
(other than as set forth in Section 5.6) or
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effect any merger, consolidation or other reorganization of the Company or (iii)
enter into any agreement with respect to any of the foregoing.
5.26 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. The Person (as that term is defined in 16
C.F.R. 801.1(a)(1)) of which the Company is a part does not have total assets
or annual net sales of $100,000,000 or more, as measured under the applicable
rules and regulations interpreting the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR Act").
5.27 Budget. The Company's budget for the fiscal year ending
December 31, 1997 represents the Company's management's good faith estimate of
the future financial and operating performance of the Company (for the period
set forth therein), based upon the best currently available information. As of
the Closing Date, no event shall have occurred that would result in a material
adverse change in such budget or the assumptions underlying such budget.
5.28 Insurance. The Company maintains fire, theft, casualty,
liability and such other insurance policies as are customary and adequate for
the Company's business.
5.29 Disclosure.
(a) Agreement and Other Documents. This Agreement does not, and
the documents and certificates executed by the Company or otherwise furnished by
the Company to the Purchasers at the Closing will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
(b) Material Adverse Effects. There is no fact known to the
Company, which the Company has not disclosed to the Purchasers in writing, which
materially adversely affects, or insofar as the Company can reasonably foresee,
will have a Material Adverse Effect.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, hereby represents and
warrants to the Company as of the date hereof as follows:
6.1 Existence and Authority. Such Purchaser (a) is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (b) has all requisite power and authority to own
its assets and operate its business, and (c) has all requisite power and
authority to execute, deliver and perform
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its obligations under each of the Transaction Agreements to which it is or will
be a party.
6.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of the Transaction Agreements to which it is a
party and the consummation of the transactions contemplated thereby, including,
without limitation, the acquisition of the Preferred Shares: (a) is within such
Purchaser's power and authority and has been duly authorized by all necessary
action on the part of such Purchaser; (b) does not conflict with or contravene
the terms of such Purchaser's organizational documents or any amendment thereof;
and (c) will not violate, conflict with or result in any material breach or
contravention of (i) any Contractual Obligation of such Purchaser, or (ii) the
Requirements of Law or any order or decree applicable to such Purchaser.
6.3 Governmental Authorization; Third Party Consent. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person in respect of any
Requirements of Law, and no lapse of a waiting period under any Requirements of
Law, is necessary or required in connection with the execution, delivery or
performance by such Purchaser (including, without limitation, the acquisition of
the Preferred Shares and issuance of Common Stock upon the conversion or
exercise of the Preferred Shares) or enforcement against such Purchaser of this
Agreement or the other Transaction Agreements to which it is a party, or the
transactions contemplated thereby.
6.4 Binding Effect. This Agreement has been duly executed and
delivered by such Purchaser, and this Agreement constitutes the legal, valid and
binding obligation of such Purchaser, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
6.5 Purchase for Own Account. The Preferred Shares and the Common
Stock to be issued upon conversion of the Preferred Shares, are being or will be
acquired by such Purchaser for its own account and with no intention of
distributing or reselling such securities or any part thereof in any transaction
that would be in violation of the securities laws of the United States of
America, or any state, without prejudice, however, to the rights of such
Purchaser at all times to sell or otherwise dispose of all or any part of the
Preferred Shares or the shares of Common Stock issuable upon conversion of the
Preferred Shares under an effective registration statement under the Securities
Act, or under an exemption from such registration available under the Securities
Act, and subject, nevertheless, to the disposition of such Purchaser's property
being at all times within its control. Such Purchaser agrees not to dispose of
any of the Preferred Shares or the shares of Common Stock issuable upon
conversion of the Preferred Shares, unless it does so only in compliance with
the Securities Act and applicable state securities laws, as then in effect. Such
Purchaser agrees to the
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imprinting, so long as required by law, of a legend on certificates representing
all of the Preferred Shares or the shares of Common Stock to be issued upon
conversion of the Preferred Shares to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH LAWS. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN AN AMENDED AND
RESTATED SHAREHOLDERS AGREEMENT DATED AS OF MAY 1, 1997. A COPY OF SUCH
AGREEMENT MAY BE OBTAINED FROM THE COMPANY UPON REQUEST."
6.6 Accredited Investor Status. Such Purchaser is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D, promulgated
under the Securities Act. Each Purchaser shall provide such information with
respect to its status as an "accredited investor" that the Company shall have
reasonably requested prior to the Closing Date.
6.7 Investment Risk. Each Purchaser has the ability to bear the
economic risks of the Purchaser's prospective investment and the Purchaser is
able, without materially impairing its financial condition, to hold the
Preferred Stock for an indefinite period of time and to suffer complete loss on
its investment. Each Purchaser understands and has fully considered for purposes
of this investment the risks of this investment and understands that: (i) this
investment is suitable only for an investor who is able to bear the economic
consequences of losing his or its entire investment; (ii) the Preferred Shares
represent an extremely speculative investment which involves a high degree of
risk of loss; (iii) there are substantial restrictions on the transferability of
the Preferred Shares and, accordingly, it may not be possible for the Purchaser
to liquidate his or its investment in the Preferred Shares; and (iv) there have
been no representations as to the possible future value, if any, of the
Preferred Shares. Each Purchaser acknowledges that it has been provided the
opportunity to ask questions and receive answers from duly authorized officers
or other representatives of the Company concerning the Company. Each Purchaser
acknowledges that its acquisition of the Preferred Shares hereunder may involve
tax consequences to such Purchaser and that the Company has not provided such
Purchaser with tax advice.
Each Purchaser understands and acknowledges that the sale of
the Preferred Shares pursuant to this Agreement will not be registered under the
Securities Act on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration pursuant to Section
4(2) of the Securities Act, and that the
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Company's reliance upon such exemption is predicated in part upon the
Purchaser's representations set forth in this Agreement.
6.8 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with the Purchasers.
ARTICLE 7
COVENANTS OF THE COMPANY
From the date hereof until the Closing Date, the Company hereby
covenants and agrees with the Purchasers as follows:
7.1 Further Assurances. Upon the terms and subject to the
conditions contained herein, each of the parties hereto agrees, both before and
after the Closing, (i) to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement, (ii) to execute any documents, instruments or conveyances of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (iii) to cooperate with each other in
connection with the foregoing, including using their reasonable respective best
efforts (A) to obtain all necessary waivers, consents and approvals from other
parties that may be required; (B) to obtain all necessary permits as are
required to be obtained under any federal, state, local or foreign law or
regulations, and (C) to fulfill all conditions to this Agreement.
7.2 Notification of Certain Matters. From the date hereof
through the Closing, the Company shall give prompt notice upon obtaining
knowledge thereof to Purchaser of (a) the occurrence, or failure to occur, of
any event which occurrence or failure would be likely to cause any
representation or warranty contained in this Agreement or in any exhibit or
schedule hereto to be untrue or inaccurate in any material respect and (b) any
material failure of the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement or any exhibit or schedule hereto.
7.3 Access to Information. From the date hereof through the
Closing, the Company shall, and shall cause its officers, directors, employees
and agents to, afford the Purchasers (or its representatives) access at all
times to the Company's records for the purpose of inspecting the same, and
subject to prior written request, to the officers, employees, agents, attorneys,
accountants, properties, and contracts of the Company, and shall furnish
Purchasers all financial, operating and other data and information as the
Purchasers or their representatives, may reasonably request.
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7.4 Conduct of Business. From the date hereof through the
Closing, the Company shall, except as contemplated by this Agreement, or as
consented to by Purchaser in writing which consent will not be unreasonably
withheld, operate the Company in the ordinary course of business and in
accordance with past practice and will not take any action inconsistent with
this Agreement or with the consummation of the Closing. The Company agrees that
neither it, nor anyone acting on its behalf, will offer or sell the Preferred
Shares or any other security in a manner that would require the issuance and
sale of the Preferred Shares to be registered or qualified pursuant to the
provisions of the Securities Act or any state securities or "blue sky" laws.
ARTICLE 8
COVENANTS OF THE COMPANY WITH RESPECT
TO THE PERIOD FOLLOWING THE CLOSING
Until (a) all shares of Preferred Stock are no longer outstanding
due to conversion, redemption or otherwise, and (b) the Company has paid to the
Purchasers all other amounts due to them under the Transaction Agreements or the
Certificate, the Company hereby covenants and agrees with the Purchasers as
follows:
8.1 Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issue or delivery upon conversion of the Preferred Shares as provided
in the Certificate, the maximum number of shares of Common Stock that may be
issuable or deliverable upon such conversion, as well as the number of shares of
Common Stock that may be issuable or deliverable upon conversion of the Series B
Preferred Stock issued to the Purchasers as dividends. Such shares of Common
Stock shall, when issued or delivered in accordance with the provisions of the
Certificate, be duly authorized, validly issued and fully paid and
non-assessable. The Company shall issue such Common Stock in accordance with the
provisions of the Certificate and shall otherwise comply with the terms thereof.
8.2 Books and Records. The Company shall, and shall cause each
of the Company Affiliates, together with any newly formed subsidiaries of the
Company, to, keep proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and business
of the Company and each of such Company Affiliates or subsidiaries in accordance
with GAAP, to the extent GAAP is applicable. The Company shall provide the
Purchasers with reasonable access to all such books and records during regular
business hours and allow the Purchasers to make copies and abstracts thereof.
8.3 Use of Proceeds. The Company shall use the proceeds of the
sale of Preferred Shares hereunder only (a) as working capital for the Company,
(b) for
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expansion of the Company, and (c) for the payment of fees and expenses in
connection with the Transaction Agreements.
8.4 New Lines of Business. The Company shall not without the
prior written consent of holders of a majority in interest of the Preferred
Shares, engage in any business other than the preparation and distribution of
Chinese food products or any line of business that is related thereto.
8.5 Compensation of Directors. Each member of the Board of
Directors shall be reimbursed by the Company for all out-of-pocket expenses,
including, without limitation, travel expenses, incurred by such director in
connection with the performance of such director's duties.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification. In addition to all other sums due
hereunder or provided for in this Agreement and all other remedies that may be
otherwise available, the Company (the "Indemnifying Party") agrees to indemnify
and hold harmless each Purchaser and its Affiliates and its respective officers,
directors, agents, employees, partners and assigns (each, an "Indemnified
Party") to the fullest extent permitted by law from and against any and all (i)
Environmental Expenses and (ii) tax liabilities, losses, costs, claims, damages,
expenses (including reasonable fees, disbursements and other charges of counsel)
and other liabilities (collectively, "Liabilities") based upon, relating to or
arising out of any breach of any representation or warranty, covenant or
agreement of such Indemnifying Party in this Agreement or any legal,
administrative or other actions (including actions brought by any of the
Purchasers or any Indemnifying Party or any equity holders of the Company or
derivative actions brought by any Person claiming through or in the Company's
name), proceedings or investigations (whether formal or informal), or written
threats thereof, based upon, relating to or arising out of (A) the status of the
Purchasers as shareholders of the Company and the existence or exercise of the
rights and powers of the Purchasers (including without limitation, any claim
against any Indemnified Party relating to Environmental Matters), (B) violations
of applicable securities laws by the Company in connection with the offering of
the Preferred Shares, or (C) third party claims that the Preferred Shares
hereunder violate preexisting understandings or arrangements with the Company;
provided, however, that no Indemnifying Party shall be liable under this Section
9.1 to an Indemnified Party: (a) for any amount paid in settlement of claims
without such Indemnifying Party's consent (which consent shall not be
unreasonably withheld), (b) to the extent that it is finally judicially
determined that such Liabilities resulted solely from the willful misconduct or
gross negligence of such Indemnified Party, or (c) to the extent that it is
finally judicially determined that such Liabilities resulted solely from the
material breach by such Indemnified Party of any representation, warranty,
covenant or other agreement of such Indemnified Party contained in this
Agreement; provided, further, that if and to the
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extent that such indemnification is unenforceable for any reason, the
Indemnifying Party shall make the maximum contribution to the payment and
satisfaction of such indemnified liability which shall be permissible under
applicable laws. In connection with the obligation of the Indemnifying Party to
indemnify for expenses as set forth above, the Indemnifying Party further agrees
to reimburse each Indemnified Party for all such expenses (including reasonable
fees, disbursements and other charges of counsel) as they are incurred by such
Indemnified Party.
The Company shall be liable for losses pursuant to this Section
9.1 only to the extent that the aggregate amount of such losses exceed $100,000
(the "Basket Amount"), whereupon the Company shall be liable for all such losses
in excess of the Basket Amount.
Notwithstanding any other provision of this Agreement, the Basket
Amount shall not apply to Liabilities (collectively, the "Exceptional
Liabilities") incurred by the Purchasers based upon, relating to or arising out
of (i) any breach of the representations and warranties in Section 5.14 of the
this Agreement; (ii) the Company's ownership of the assets it purports to own
after giving effect to the transactions contemplated by this Agreement; and
(iii) the organization and corporate or other governance of the Company
Affiliates prior to the Closing.
9.2 Notification. Each Indemnified Party under this Article 9
will, promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought from any Indemnifying Party under this
Article 9, notify the Indemnifying Party in writing of the commencement thereof.
The omission of any Indemnified Party to so notify the Indemnifying Party of any
such action shall not relieve the Indemnifying Party from any liability which it
may have to such Indemnified Party under this Article 9 except to the extent
that such failure to notify results in a loss of a material defense of such
Indemnified Party in actual prejudice due to such action. In case any such
action, claim or other proceeding shall be brought against any Indemnified Party
and such Indemnified Party shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to such
Indemnified Party in its reasonable judgment; provided, however, that any
Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense. Notwithstanding the foregoing, in any action, claim
or proceeding in which both the Indemnifying Party, on the one hand, and an
Indemnified Party, on the other hand, is, or is reasonably likely to become, a
party, such Indemnified Party shall have the right to employ separate counsel at
the Indemnifying Party's expense and to control its own defense of such action,
claim or proceeding if, in the reasonable opinion of counsel to such Indemnified
Party, a conflict or potential conflict exists between the Indemnifying Party,
on the one hand, and such Indemnified Party, on the other hand, that would make
such separate representation advisable. The Indemnifying Party agrees that it
will not, without the prior written consent of the Purchasers (such consent not
to be unreasonably withheld),
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settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding relating to the matters contemplated
hereby (if any Indemnified Party is a party thereto or has been actually
threatened to be made a party thereto) unless such settlement, compromise or
consent includes an unconditional release of the Purchasers and each other
Indemnified Party from all liability arising or that may arise out of such
claim, action or proceeding. The rights accorded to Indemnified Parties
hereunder shall be in addition to any rights that any Indemnified Party may have
at common law, by separate agreement or otherwise.
9.3 Registration Rights Agreement. Notwithstanding anything to
the contrary in this Article 9, the indemnification and contribution provisions
of the Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder.
ARTICLE 10
MISCELLANEOUS
10.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date by the mutual written consent of the Purchasers and
the Company. In the event of a termination, no party hereto (or any of its
directors or officers or shareholders, partner, members or Affiliates) shall
have any liability or further obligation to any other party hereto or directors
or officers in respect thereof, other than as provided under Section 10.3,
except that nothing herein will relieve any party from liability for any breach
of this Agreement.
10.2 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the Closing Date of
this Agreement for a period of two (2) years from the date hereof except the
representations and warranties in (i) Sections 5.11(a) and 5.17 shall survive
until the statute of limitations period has expired for such representations and
warranties and (ii) Section 5.14 shall survive until thirty days after the
expiration of the statute of limitations period has expired for such
representations and warranties.
10.3 Confidential Information. The Company and the Purchasers
shall each maintain as confidential any non-public, confidential and proprietary
information (collectively, "Confidential Information") provided by one to the
other regarding the matters contained in the Transaction Agreements or with
respect to the other. The Company and Purchasers and each of their partners,
officers, directors, members, employees, agents and representative
(collectively, "Representatives") will not disclose, use or otherwise
appropriate the Confidential Information in any way detrimental to the other
party, and the Confidential Information will be kept confidential by each party;
provided, however, that any Confidential Information may be disclosed by
Purchasers to their partners and shareholders and to prospective investors who
require such information for the purpose of evaluating the transactions
contemplated by the
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Transaction Agreements. If no transaction is effected pursuant to the terms of
the Transaction Agreements, the Company and Purchasers shall each promptly
deliver to the other party any Confidential Information of such other party,
without retaining any copy thereof.
10.4 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, courier
service or personal delivery:
(a) if to Purchasers:
▇▇▇▇▇▇▇▇▇ Partners Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇
Oak Investment Partners
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Trinity Ventures, Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Global Retail Partners, L.P.
221 Avenue of the Stars
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Yves Sisteron
▇▇▇▇▇▇▇ National Life Insurance Company
c/o PPM America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Private Finance Group
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
33
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(b) if to the Company:
▇.▇. ▇▇▇▇▇'▇ China Bistro, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; when mailed, five
business days after being deposited in the mail, postage prepaid.
10.5 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto. This Agreement may not be assigned by any Purchaser subsequent
to the Closing without the written consent of the Company. The Company may not
assign any of its rights under this Agreement without the written consent of
each of the Purchasers.
10.6 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the
Purchasers in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or the Purchasers at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by the Company and all holders of the Preferred Shares or by the
party or parties to be bound hereby, and (ii) only in the specific instance and
for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand
34
41
on any party in any case shall entitle any party hereto to any other or further
notice or demand in similar or other circumstances.
10.7 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
10.8 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of law of such state.
10.10 Jurisdiction. Each party to this Agreement hereby
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
shall be brought in the courts of the State of New York or of the United States
of America for the District of New York and hereby expressly submits to the
personal jurisdiction and venue of such courts for the purposes thereof and
expressly waives any claim of improper venue and any claim that such courts are
an inconvenient forum. Each party hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth in Section 10.2, such service to
become effective 10 days after such mailing.
10.11 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provision or provisions held invalid, illegal or unenforceable shall
substantially impair the remaining provisions hereof.
10.12 Rules of Construction. Unless the context otherwise
requires, "or" is not exclusive, and references to sections or subsections refer
to sections or subsections of this Agreement.
10.13 Entire Agreement. This Agreement, together with the
exhibits and schedules hereto and the other Transaction Agreements, is intended
by the parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth herein or therein. This Agreement, together with the exhibits
and schedules hereto and the other Transaction
35
42
Agreements, supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
10.14 Transaction Expenses. Each party will pay its own expenses
incurred in connection with the transactions contemplated by this Agreement,
regardless whether the transactions contemplated hereby are consummated.
10.15 Severability of Representations, Warranties and Covenants.
Each Purchaser shall be liable to the Company solely for its own breach or
violation, if any, of any representation, warranty or covenant made or to be
complied with by such Purchaser. The Company shall not be liable to the
Purchasers for the breach or violation, if any, of any representation, warranty
or covenant made or to be complied with by any Purchaser, but the Company shall
be liable to the Purchasers solely for its breach or violation, if any, of any
representation, warranty, or covenant made or to be complied with by the
Company.
36
43
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
By:
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
37
44
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇▇▇▇▇-PFC, L.L.C.
By: ▇▇▇▇▇▇▇▇▇ PARTNERS
CORPORATION its
Managing Member
By:
---------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
38
45
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇▇▇▇▇-PFC PARTNERS II, L.L.C.
By: ▇▇▇▇▇▇▇▇▇ PARTNERS CORPORATION
its Managing Member
By:
---------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
39
46
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
OAK INVESTMENT PARTNERS VI,
LIMITED PARTNERSHIP
By:
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Member of
Oak Associates VI, LLC,
the General Partner of Oak
Investment Partners VI,
Limited Partnership
Oak Investment Partners
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
OAK VI AFFILIATES FUND, LIMITED
PARTNERSHIP
By:
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Managing Member of Oak VI
Affiliates, LLC, the General
Partner of Oak VI Affiliates
Fund, Limited Partnership
Oak Investment Partners
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
40
47
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
TRINITY VENTURES V, L.P.
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
General Partner
Trinity Ventures
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
TRINITY VENTURES V SIDE-BY-SIDE
FUND, L.P.
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
General Partner
Trinity Ventures
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
41
48
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
ARABELLA S.A.
By:
---------------------------------
Name:
Title:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
ALBA, LTD.
By:
---------------------------------
Name:
Title:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
42
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▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
YVES SISTERON
---------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
43
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▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, JOINTLY
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
44
51
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
45
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▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
c/▇ ▇▇▇▇▇▇▇▇▇▇ Securities
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ AND ▇▇▇▇ ▇.
▇▇▇▇▇▇, JTWROS
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
▇/▇ ▇▇▇▇▇▇ Investments
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
46
53
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
47
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▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
48
55
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, TRUSTEES OF THE
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ FAMILY TRUST U/D/T
DATED JULY 9, 1996
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
---------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
49
56
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇/▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
50
57
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
GLOBAL RETAIL PARTNERS, L.P.
By: GLOBAL RETAIL PARTNERS, INC.,
its General Partner
By:
---------------------------------
Name:
Title:
Global Retail Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Global Retail Partners, L.P.
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
51
58
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
DLJ DIVERSIFIED PARTNERS, L.P.
By: DLJ DIVERSIFIED PARTNERS, INC.,
its General Partner
By:
---------------------------------
Name:
Title:
DLJ Diversified Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
DLJ Diversified Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
52
59
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
GRP PARTNERS, L.P.
By: GLOBAL RETAIL PARTNERS, INC.,
its General Partner
By:
---------------------------------
Name:
Title:
GRP Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
GRP Partners, L.P.
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
53
60
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
GLOBAL RETAIL PARTNERS FUNDING, INC.
By:
---------------------------------
Name:
Title:
Global Retail Partners Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Global Retail Partners Funding, Inc.
2121 Avenue of the Stars
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
54
61
▇.▇. ▇▇▇▇▇'▇ CHINA BISTRO, INC.
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement or caused this Agreement to be executed and delivered by their
authorized representatives as of the date first above written.
DLJ FIRST ESC L.L.C.
By: DLJ LBO PLANS MANAGEMENT CORPORATION,
its Manager
By:
--------------------------------------
Name:
Title:
DLJ First ESC L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
DLJ First ESC L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
55
