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