STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT is made to be effective as of
November 17, 1998, by and between TROLLEY BARN BREWERY, INC., a Tennessee
corporation ("Trolley"), TBB ACQUISITION GROUP, INC. ("TBAG"), TBB HOLDING
COMPANY, INC. ("TBB Holding") and ROCK BOTTOM RESTAURANTS, INC., a Delaware
corporation ("Rock Bottom").
BACKGROUND
On June 4, 1996, Trolley, TBAG and TBB Holding (collectively, the
"Trolley Companies") established a business relationship with Rock Bottom and
entered into a Stock Purchase Agreement in which Rock Bottom purchased all of
the outstanding shares of TBAG. As of the date of this Agreement, Rock Bottom
owns all of the issued and outstanding shares of common stock of TBAG (the
"Shares").
The Trolley Companies have also entered into various agreements with
Rock Bottom relating to the Shares and the development and operation of
restaurants and brew pubs under certain licensed trademarks and service marks
owned by Rock Bottom. These agreements include the following (collectively
referred to as the "Existing Agreements"):
(a) Stock Purchase Agreement dated June 4, 1996, between Rock
Bottom, TBAG, Trolley, and TBB Holding ("Stock Purchase
Agreement").
(b) Shareholder Agreement, dated June 28, 1996, between Trolley,
Rock Bottom, TBAG and TBB Holding.
(c) Escrow Agreement dated June 28, 1996, between Trolley, Rock
Bottom, TBAG and TBB Holding ("Escrow Agreement").
(d) Option Agreement dated July 1, 1996 between Trolley, Rock
Bottom, TBAG and TBB Holding granting to Rock Bottom and TBAG
the option to purchase stock of TBB Holding.
(e) License and Development Agreement dated July 1, 1996 between
Rock Bottom and Trolley.
(f) Operations Agreement dated July 1, 1996 between Rock Bottom
and Trolley.
(g) Assignment of Inventions and Non-Disclosure Agreement dated
July 1, 1996 and executed by Xxx X. Xxxxxx, Trolley and Rock
Bottom.
(h) Non-Competition, Assignment of Inventions and Non-Disclosure
Agreement dated July 1, 1996 and executed by Xxxxxx X. Xxxxxx,
Trolley and Rock Bottom.
Trolley and Rock Bottom have agreed to end their business
relationship. As a consequence, Trolley has agreed to purchase and Rock Bottom
has agreed to sell, all of the Shares to Trolley. The parties hereto have also
agreed to terminate all of the Existing Agreements. The parties will enter into
a new licensing agreement which grants to Trolley the right to continue using
the "Rock Bottom" trademarks and service marks at the Atlanta, Georgia and
Charlotte, North Carolina locations and the "Sing Sing" trademark and service
marks at the Chattanooga, Tennessee location.
AGREEMENT
NOW THEREFORE, it is agreed by the parties as follows:
1. STOCK TRANSFER. Subject to the terms and conditions of this
Agreement, Trolley agrees to purchase, and Rock Bottom agrees to sell to
Trolley, the Shares owned by Rock Bottom.
2. PURCHASE PRICE. The purchase price for the Shares will be Seven
Million Dollars ($7,000,000) payable to Rock Bottom in cash at Closing.
3. CLOSING. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of Baker, Donelson, Bearman &
Xxxxxxxx, P.C., 1800 Republic Centre, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000 on November 17, 1998 or such other date as the parties
mutually agree upon ("Closing Date"). Failure to consummate the purchase and
sale provided for in this Agreement on the date and time and at the place
determined pursuant to this Section 3 will not result in the termination of this
Agreement and will not relieve any party of any obligation under this Agreement.
4. TERMINATION OF EXISTING AGREEMENTS. Effective as of the Closing
Date, the Existing Agreements shall terminate in accordance with the terms and
conditions of a termination agreement which shall be entered into by all
necessary parties (the "Termination Agreement").
5. RELEASE OF ESCROWED SHARES. Immediately upon the termination of
the Escrow Agreement, the 45,208 shares of Rock Bottom stock currently held in
escrow by Mountain View Title, LLC as Escrow Agent under the terms of the Escrow
Agreement as security for the indemnity provisions contained in the Stock
Purchase Agreement, dated June 4, 1996, shall be released to the record holders
thereof.
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6. RELEASE OF GUARANTIES. Effective as of the Closing Date, Rock
Bottom will be released from all existing Guaranties in which Rock Bottom
guarantees the repayment of Trolley's indebtedness to NationsBank of Tennessee,
N.A. (the "Guaranties").
7. LICENSE AGREEMENT. The parties shall enter into a license
agreement, to be effective as of the Closing Date, for the continued right to
use the trade name of "Rock Bottom" and certain other related trade marks in the
operation of the restaurants and brew pubs owned by Trolley in Atlanta, Georgia
and Charlotte, North Carolina (the "License Agreement"). Trolley's right to use
such trademarks and service marks shall be subject to and be governed by the
terms and conditions of the License Agreement.
8. RELEASE AGREEMENT. The parties shall enter into a mutual release
whereby each party thereto generally releases the others from all liabilities
which any party may have and specifically releases the others from all
liabilities related to the trade secrets shared during the joint venture between
Trolley and Rock Bottom (the "Mutual Release").
9. REMOVAL OF RESTRICTIVE LEGENDS. Rock Bottom shall remove the
restrictive legends on all shares of Rock Bottom stock held in escrow (as
referenced in Section 5) and held of record by TBB Holding shareholders;
provided, however, that those shares of Rock Bottom held by shareholders who are
currently "affiliates" within the meaning of Rule 144 of the Securities Act of
1933 shall retain the restrictive legend in accordance with Rule 144(k) until 90
days after the date on which such shareholders cease to be "affiliates", at
which time, Rock Bottom shall remove such restrictive legends.
10. CLOSING OBLIGATIONS AND DELIVERIES. At the Closing:
(a) Rock Bottom will deliver to Trolley:
i. certificates representing the Shares duly
endorsed for transfer to Trolley;
ii. TBAG minute books, stock records, bank account
records, and applicable tax filings, if any;
iii. resignation letters from Rock Bottom appointed
directors of Trolley and its affiliates;
iv. except as referenced in Section 9 above, share
certificates for shares of Rock Bottom stock held
in escrow (as referenced in Section 5) which have
had all restrictive legends removed; and
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v. a fully executed License Agreement, Mutual
Release and Termination Agreement.
(b) Trolley will deliver to Rock Bottom:
(i) purchase price by wire transfer or cashier's
check;
(ii) evidence of termination of the Guaranties; and
(iii) a fully executed License Agreement, Mutual
Release and Termination Agreement.
11. REPRESENTATIONS AND WARRANTIES OF ROCK BOTTOM. Rock Bottom
represents and warrants to the Trolley Companies, as of the date hereof and the
Closing Date, as follows:
(a) ORGANIZATION AND GOOD STANDING. Rock Bottom is a
corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation. Rock Bottom has full power and
authority to carry on the business in which it is engaged and to own and use the
properties owned and used by it.
(b) AUTHORITY; NO CONFLICT. This Agreement constitutes the
legal, valid, and binding obligation of Rock Bottom, enforceable against Rock
Bottom in accordance with its terms. Rock Bottom has the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and to perform its obligations under this Agreement and no approval of
any person or entity is necessary in connection with the sale of the Shares by
Rock Bottom.
(c) CAPITALIZATION. The Shares consist of 750 shares of common
stock of TBAG which constitute all of the issued and outstanding common stock of
TBAG. Rock Bottom is and will be on the Closing Date the record and beneficial
owner and holder of the Shares, free and clear (upon the effectiveness of the
Termination Agreement) of all liens and encumbrances, restrictions on transfer,
taxes, security interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. Rock Bottom is not a party to any
options, warrants, purchase rights, or other contracts or commitments that could
require it to sell, transfer, or otherwise dispose of any capital stock of TBAG
(other than this Agreement or Existing Agreements). There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to TBAG. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
TBAG (other than the Existing Agreements). There are no classes of stock other
than the common stock.
(d) EXECUTION OF THIS AGREEMENT AND TRANSFER OF SHARES. This
Agreement has been duly executed and delivered by Rock Bottom. The delivery of
the stock certificates at Closing duly endorsed for transfer by Rock Bottom to
Trolley accompanied by payment of the
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purchase price for the Shares by Trolley to Rock Bottom will give Trolley full
legal title to the Shares, free and clear of all liens, encumbrances, charges,
equities, adverse claims or restrictions whatsoever.
(e) NO CLAIMS AGAINST TBAG. Rock Bottom does not have any
knowledge of any claims of any type or kind against TBAG, either asserted or
unasserted.
(f) DISCLOSURE. Rock Bottom does not have any knowledge of any
claims, potential claims or other liabilities, absolute or contingent, or any
litigation, proceeding, judgment, order or decree pending or threatened against
TBAG to which TBAG is a party, by any person, firm, corporation or association,
or before any public body or agency or authority.
(g) TITLE TO ASSETS. TBAG is the record and beneficial owner
of 750 shares of common stock of Trolley, free and clear (upon the
effectiveness of the Termination Agreement) of all liens and encumbrances,
restrictions on transfer, taxes, security interests, options, warrants, purchase
rights, contracts, commitments, equities, claims and demands. TBAG neither holds
nor owns any other assets.
(h) NON-CONTRAVENTION. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby,
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 either Rock Bottom or any of its
subsidiaries or TBAG, is subject or any provision of the certificate of
incorporation or bylaws of Rock Bottom or any of its subsidiaries or TBAG, 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 Rock Bottom or any of its
subsidiaries or TBAG is a party or by which any of them is bound or to which any
of their assets is subject (other than the Existing Agreements).
(i) REPRESENTATIONS AND WARRANTIES TO BE TRUE AT CLOSING. All
representations and warranties of Rock Bottom shall be true and correct at the
time of Closing as though such representations and warranties were made at such
time.
12. REPRESENTATIONS AND WARRANTIES OF TROLLEY. Trolley represents
and warrants to Rock Bottom, as of the date hereof and the Closing Date, as
follows:
(a) ORGANIZATION AND GOOD STANDING. Trolley is a corporation
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation. Trolley has full power and authority to carry on
the business in which it is engaged and to own and use the properties owned and
used by it.
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(b) AUTHORITY; NO CONFLICT. This Agreement constitutes the
legal, valid, and binding obligation of Trolley, enforceable against Trolley in
accordance with its terms. Trolley has the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement and to
perform its obligations under this Agreement and no approval of any person or
entity is necessary in connection with the purchase of the Shares by Trolley.
This Agreement has been duly executed and delivered by Trolley.
(c) NON-CONTRAVENTION. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby,
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 Trolley is subject or any provision of
the charter or bylaws of Trolley, 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 Trolley is a party or by which it is bound or to which its assets is
subject.
(d) REPRESENTATIONS AND WARRANTIES TO BE TRUE AT CLOSING. All
representations and warranties of Trolley shall be true and correct at the time
of Closing as though such representations and warranties were made at such time.
13. CONFIDENTIALITY. Both parties acknowledge that the existence and
contents of this Agreement and all negotiations relating to the proposed
transactions are confidential and as such, each party agrees to discuss the
confidential information only with its accountants, lawyers, and business
personnel. Further, except as otherwise required by law, the parties agree that
they will not make, prior to the Closing Date, any disclosures about the
existence or contents of this Agreement or the negotiations relating to the
proposed transactions or cause to be publicized in any manner whatsoever by way
of interviews, responses to questions or inquiries, press releases or otherwise
any aspect or proposed aspect of this transaction without prior notice to and
approval of the other parties.
14. NOTICE. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if (i) personally delivered or delivered
by facsimile, (ii) mailed by certified or registered United States mail, return
receipt requested, or (iii) sent by recognized air express courier for next
business day delivery, addressed as follows:
If to Rock Bottom:
Rock Bottom Restaurants, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxx
Telephone: (000) 000-0000
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With a copy to:
Xxxxxxxx, Xxxxx & Xxxxxxx, P.C.
0000 00xx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
If to Trolley:
Trolley Barn Brewery, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: Mr. H. Xxxxx Xxxxx
Telephone: (000) 000-0000
With a copy to:
Baker, Donelson, Bearman & Xxxxxxxx, P.C.
1800 Republic Centre
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: X. Xxxxxx Durham, Jr., Esq.
Telephone: (000) 000-0000
(or to such other address as any party shall specify by written notice so
given), and shall be deemed to have been delivered as of the date so personally
delivered or delivered by facsimile two calendar days after mailed, or one day
after the date delivered to the air express courier.
15. ATTORNEYS' FEES AND COSTS. In the event of any arbitration or
litigation being filed or instituted between two or more of the parties
concerning this Agreement, the Prevailing Party will be entitled to receive from
the other party or parties its attorneys' fees, experts' fees, costs and
expenses, whether or not such controversy, claim or action is prosecuted to
judgment or other form of relief. The "Prevailing Party" is that party which is
awarded judgment or other legal and equitable relief as a result of trial or
arbitration, or who receives or is entitled to receive a payment of money from
the other party in settlement of claims asserted by such party. If both parties
receive a judgment or other award or relief, the court or the arbiter shall
determine which party is the prevailing party, taking into consideration the
merits of the claims asserted by each party, the relative values of the
judgments or other forms of relief received by each party, and the relative
equities between the parties.
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16. GOVERNING LAW. The validity, interpretation and performance of
this Agreement shall be governed by and construed in accordance with the laws of
the State of Tennessee, without regard to its choice of law principles. The
parties hereto hereby submit to jurisdiction and venue in the state and federal
courts of the State of Tennessee in any legal action relating to this Agreement.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the parties with respect to the subject
matter hereof and any amendment to this Agreement must be in writing and fully
executed by the parties hereto.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first above written.
TROLLEY BARN BREWERY, INC.
By: /S/ H. XXXXX XXXXX
---------------------------------------
Title: PRES.
------------------------------------
TBB HOLDING COMPANY, INC.
By: /S/ H. XXXXX XXXXX
---------------------------------------
Title: PRES.
------------------------------------
TBB ACQUISITION GROUP, INC.
By: /S/ XXXXXXX XXXXX
---------------------------------------
Title: EXEC. VICE PRESIDENT
------------------------------------
ROCK BOTTOM RESTAURANTS, INC.
By: /S/ XXXXXXX XXXXX
---------------------------------------
Title: EXEC. VICE PRESIDENT
------------------------------------
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