STOCK PURCHASE AGREEMENT
by and among
SELLER
SANTA XXXXXXX RESTAURANT GROUP, INC.,
a Delaware corporation
BUYER
LBW INVESTMENTS CORP.,
an Arizona limited liability company
and
COMPANY
JB'S FAMILY RESTAURANTS, INC.,
a Delaware corporation
DATED AS OF SEPTEMBER 19, 2000
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), is made and entered
into as of September 19, 2000, by and among SANTA XXXXXXX RESTAURANT GROUP,
INC., a Delaware corporation ("Seller"), JB'S FAMILY RESTAURANTS, INC., a
Delaware corporation, (the "Company"), and LBW INVESTMENTS CORP., an Arizona
limited liability company ("Buyer").
R E C I T A L S:
A. Seller owns all of the issued and outstanding shares of capital
stock of the Company.
B. Seller desires to sell and transfer to Buyer, and Buyer desires to
purchase from Seller, all of the issued and outstanding shares of capital
stock of the Company, as more specifically provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
Section 1.1. SPECIFIC DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth or referenced below:
"AFFILIATE," as applied to any Person, means any other Person
directly or indirectly controlling, controlled by or under common control
with such Person.
"AGREEMENT" shall mean this Agreement and all Schedules hereto.
"BUSINESS" shall mean the business of the Company and the
Subsidiaries.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or
a day on which banks in the city of Los Angeles are authorized or obligated
by law or executive order to close.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"ENVIRONMENTAL LAW" means any law, regulation, code, license, permit,
order, judgment, decree or injunction of the United States, any State or
political subdivision thereof (including any court thereof and any
Governmental Entity) relating primarily to the protection of the environment
(including air, water, soil and natural resources) or the use, storage,
handling, release or disposal of any hazardous or toxic substance as in
effect on the date hereof.
"GAAP" shall mean United States generally accepted accounting
principles.
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"GOVERNMENTAL ENTITY" shall mean any governmental or regulatory
authority, agency, commission, body or other governmental entity of the
United States of America or any State or political subdivision thereof.
"HAZARDOUS SUBSTANCE" means any substance listed, defined, designated
or classified as hazardous, toxic or radioactive under any applicable
Environmental Law, including petroleum and any derivative or by-products
thereof.
"INTELLECTUAL PROPERTY" shall mean trademarks, service marks, brand
names, certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in the United States of, and applications in the United States
to register, the foregoing, including any extension, modification or renewal
of any such registration or application; inventions, discoveries and ideas,
whether patentable or not in the United States; patents, applications for
patents (including, without limitation, divisions, continuations,
continuations in-part and renewal applications), and any renewals, extensions
or reissues thereof, in the United States; non-public information, trade
secrets and confidential information and rights in the United States to limit
the use or disclosure thereof by any Person; writings and other works,
whether copyrightable or not in the United States; registrations or
applications for registration of copyrights in the United States, and any
renewals or extensions thereof; any similar intellectual property or
proprietary rights; and any claims or causes of action arising out of or
related to any infringement or misappropriation of any of the foregoing.
"IRS" shall mean the Internal Revenue Service.
"KNOWLEDGE," with respect to any Person, shall mean the actual
knowledge of such Person, arising after due inquiry of such Person, or such
Person's senior executive officers, as applicable, but without the conduct by
such Person of any independent investigation with respect to the facts or
matters specified.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, financial condition, properties, operations or results of
operations of the Company and its Subsidiaries, taken as a whole.
"PERSON" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization
or Governmental Entity.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TAX LAW" means a statute, regulation or administrative rule enacted
or promulgated for the determination, imposition, assessment or collection of
any Taxes.
"TAX RETURNS" shall mean all federal, state, local or foreign tax
returns, tax reports, and declarations of estimated tax, including without
limitation consolidated federal income tax returns of Seller's Group.
"TAXES" shall mean all federal, state, local or foreign income,
windfall or excess profits, sales or use, or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
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Section 1.2. OTHER TERMS. Other terms may be defined elsewhere in the
text of this Agreement and, unless otherwise indicated, shall have such
meaning indicated throughout this Agreement.
Section 1.3. OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereof," "herein," and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States
Dollars.
ARTICLE II
PURCHASE AND SALE OF SHARES
Section 2.1. PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and
Seller agrees to sell to Buyer, all of the issued and outstanding shares of
capital stock of the Company (the "Shares") for an aggregate purchase price
of $11,000,00, subject to adjustment as provided in Section 2.3 herein, (the
"Purchase Price") which shall be paid to Seller as provided for herein.
Section 2.2. CLOSING; DELIVERY AND PAYMENT.
(a) The delivery of the Shares and payment therefor (the
"Closing") shall take place at the offices of Xxxxxxxxx Xxxxx Xxxxxxx &
Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
at 10:00 A.M. local time, on October 16, 2000, or at such other time and
place as the parties hereto may mutually agree. The date on which the Closing
occurs is called the "Closing Date."
(b) At the Closing:
(i) Seller shall deliver to Buyer certificates
representing the Shares, duly endorsed and in form for transfer to
Buyer; and
(ii) Buyer shall pay to Seller the Purchase Price as
follows:
A. CASH PORTION. A portion of the Purchase Price
shall be paid to Seller by wire transfer, to an
account designated by Seller not less than two (2)
Business Days prior to the Closing, of immediately
available funds equivalent to $8,000,000 (the "Cash
Portion") less the amount of the Deposit paid by
Buyer pursuant to Section 6.1.
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B. PROMISSORY NOTE. The remaining balance of the
Purchase Price, $3,000,000, shall be paid to the
Seller in the form of a secured promissory note
(the "Note") in the form attached hereto as
EXHIBIT A. The Note shall be secured by the Shares
purchased hereto, 100% of the Membership Interest
of Buyer, as well as all outstanding capital stock
and/or Membership Interest of any subsidiary of
Buyer, and shall bear interest at a rate of eight
percent (8%) per annum. No payment shall be due
prior to the earlier of twelve (12) months or the
presentation of Buyer's audited financial statement
to Textron Financial Corporation ("Textron") by
Buyer in accordance with its loan agreement with
Textron (the "Loan Agreement") and then only to the
extent the fixed charge coverage ratio, as defined
in the Loan Agreement, does not exceed 1.25:1 when
accounting for payments to Seller. The Note shall
be subordinate to the loans of Textron to Buyer
and Seller shall not be able to call the Note
without first retiring Buyer's notes to Textron.
Section 2.3. PURCHASE PRICE ADJUSTMENT. If the Company has completed
the sale of Galaxy Diner #609 (located in Murray, Utah) prior to the Closing
Date, the Purchase Price and the Cash Portion shall be reduced by the
proceeds received by the Company from such transaction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER
Subject to the disclosures and exceptions set forth in the disclosure
schedules delivered by the Company and Seller on or prior to the Closing Date
(the "Seller's Disclosure Schedules"), the Company and Seller represent and
warrant to Buyer as of the date hereof and as of the Closing Date (except
that representations and warranties that are made as of a specific date need
be true only as of such date) that, except as known by Xxxx Xxxxxxxxx:
Section 3.1. ORGANIZATION AND AUTHORITY OF SELLER. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, has all requisite corporate or similar power
and authority, and has taken all corporate action necessary in order, to
execute, deliver and perform its obligations under this Agreement. This
Agreement is a legal, valid and binding obligation of Seller, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles. The execution, delivery and performance of this Agreement
by Seller do not, and the consummation by the Seller of the transactions
contemplated hereby will not, constitute or result in (A) a breach or
violation of, or a default under, the certificate of incorporation or by-laws
of the Seller, (B) a breach or violation of, or a default under, the
acceleration of any obligations or the creation of a lien, pledge, security
interest or other encumbrance on the assets of Seller (with or without
notice, lapse of time or both) pursuant to, any agreement, lease, contract,
note, mortgage, indenture, arrangement or other obligation ("Contracts")
binding upon the Seller, (C) to the Knowledge of Seller, assuming compliance
with the matters referred to in Sections 3.11 and 4.4, a violation of any
law, rule, regulation, judgment, injunction, order, decree or other
restriction of any court or Governmental Entity ("Law") or any governmental
or non-governmental permit or license to which Seller is subject or (D) any
change in the rights or obligations of any party under any of the Contracts,
except, in the case of clause (B), (C)
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or (D) above, for any breach, violation, default, acceleration, creation or
change that, individually or in the aggregate, is not reasonably likely to
prevent, materially delay or materially impair the ability of the Seller to
consummate the transactions contemplated by this Agreement.
Section 3.2. ORGANIZATION, AUTHORITY AND QUALIFICATION OF THE
COMPANY. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has all requisite
corporate or similar power and authority, and has taken all corporate action
necessary in order, to execute, deliver and perform its obligations under
this Agreement. This Agreement is a legal, valid and binding obligation of
the Company, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles. The execution, delivery and performance of this
Agreement by the Company do not, and the consummation by the Company of the
transactions contemplated hereby will not, constitute or result in (A) a
breach or violation of, or a default under, the certificate of incorporation
or by-laws of the Company, (B) a breach or violation of, or a default under,
the acceleration of any obligations or the creation of a lien, pledge,
security interest or other encumbrance on the assets of the Company (with or
without notice, lapse of time or both) pursuant to, any Contracts binding
upon the Company, (C) to the Knowledge of the Company, assuming compliance
with the matters referred to in Sections 3.11 and 4.4, a violation of any Law
or governmental or non-governmental permit or license to which the Company is
subject or (D) any change in the rights or obligations of any party under any
of the Contracts, except, in the case of clause (B), (C) or (D) above, for
any breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to cause a
Material Adverse Effect or to prevent, materially delay or materially impair
the ability of the Company to consummate the transactions contemplated by
this Agreement.
Section 3.3. CAPITALIZATION OF THE COMPANY. The authorized capital
stock of the Company consists of 1,000 shares of common stock, $.001 par
value (the "Common Stock"), all of which are issued and outstanding. The
Common Stock constitute, and on consummation of the sale and transfer of the
Shares to Buyer shall constitute, one hundred percent (100%) of the issued
and outstanding shares of capital stock of the Company. The Common Stock have
been duly authorized and validly issued, are fully paid and nonassessable and
are owned by Seller free and clear of any lien, pledge, security interest,
claim or other encumbrances (collectively, "Encumbrances"), other than such
Encumbrances which were incurred by Buyer or caused to be incurred by the
Company or any Subsidiary by Buyer as a result of the transactions
contemplated by this Agreement. There are no preemptive or other outstanding
rights, options, warrants, conversion rights, stock appreciation rights,
redemption rights, agreements, arrangements or commitments to issue or sell
any shares of capital stock or other securities of the Company or any of its
Subsidiaries or any securities or obligations convertible or exchangeable
into or exercisable for, or giving any Person a right to subscribe for or
acquire, any securities of the Company or any of its Subsidiaries, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. The Company does not have outstanding any bonds, debentures,
notes or other obligations (or securities which are convertible into or
exercisable for securities) having the right to vote with the stockholders of
the Company on any matter.
Section 3.4. SUBSIDIARIES OF THE COMPANY. Schedule 3.4 hereto lists
the name of each Person (other than natural persons) of which the Company
owns, beneficially and of record, securities representing fifty percent (50%)
or more of the aggregate voting power (each, a "Subsidiary," and,
collectively the "Subsidiaries"), together with the jurisdiction of its
organization and the record and beneficial holder of the shares of such
Subsidiary. All shares of capital stock of
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each Subsidiary owned by the Company or a Subsidiary, as the case may be, are
free and clear of all Encumbrances, other than such Encumbrances which were
incurred by Buyer or caused to be incurred by the Company or any Subsidiary
by Buyer as a result of the transactions contemplated by this Agreement, and
all such capital stock is duly authorized, validly issued, fully paid and
nonassessable. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, has the power and authority to own or lease its assets and to
carry on its business substantially as it is now being conducted, and is duly
qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the ownership or operation of its properties and
assets or the conduct of its business requires such qualification, except
where the failure to be so qualified would not be reasonably likely to have a
Material Adverse Effect. The Company does not own, directly or indirectly, an
equity or other ownership interest in any Person other than the Subsidiaries.
Section 3.5. FINANCIAL STATEMENTS. Attached hereto as Schedule 3.5 is
a copy of the balance sheets and related statements of operations,
stockholders equity and cash flows of the Company as of and for the fiscal
years ended December 31, 1998 and December 31, 1999 (referred to herein
collectively, with the notes thereto, as the "Financial Statements"). The
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis (except as may be noted therein), and present fairly, in all
material respects, the financial position of the Company, and the statements
of operations, stockholder's equity and cash flows, respectively, of the
Company for each of the fiscal years ended December 31, 1998 and 1999. Except
as disclosed in the Financial Statements and except for liabilities incurred
in the ordinary course of business by the Company after December 31, 1999,
none of the Company or the Subsidiaries have incurred any liability
(contingent or otherwise) that would be required by GAAP to be reflected on a
balance sheet of the Company or described in the notes thereto.
Section 3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as provided
in this Agreement or as set forth in Schedule 3.6, since December 31, 1999
the Company and the Subsidiaries have conducted their businesses only in, and
have not engaged in any material transaction other than according to, the
ordinary and usual course of such businesses consistent with past practice
and there has not been (i) any change in the financial condition, properties,
business or results of operations of the Company and the Subsidiaries, except
those changes that, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect; (ii) any material damage,
destruction or other casualty loss with respect to any material asset or
property owned, leased or otherwise used by the Company or any of the
Subsidiaries not covered by insurance; (iii) any declaration, setting aside
or payment of any dividend or other distribution in respect of the capital
stock of the Company, except for dividends or other distributions on its
capital stock disclosed in a Schedule hereto; (iv) any change by the Company
in accounting principles, practices or methods; (v) any labor dispute, other
than routine matters which have not had a Material Adverse Effect; or (vi)
except for increases or amendments in the ordinary and usual course of
business consistent with past practice or as required by law, any material
increase in the compensation payable or to become payable by the Company or
any Subsidiary to any of their directors, officers or employees or any
increase in the benefits under, or adoption or amendment of, any bonus,
insurance, pension or other employee benefit plan, payment or arrangement,
for or with any such directors, officers or employees.
Section 3.7. TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES,
ETC.
(a) Schedule 3.7(a)(i) hereto lists all leases and subleases
of real property entered into by the Company or its Subsidiaries at the
locations described thereon as of the date hereof other
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than those leases and subleases that are not material, individually or in the
aggregate, to the Company and the Subsidiaries considered as a whole or will
not be retained by the Company (the "Leased Real Property"). Schedule
3.7(a)(ii) hereto lists all properties owned by the Company or its
Subsidiaries as of the date hereof other than those properties that are not
material, individually or in the aggregate, to the Company and the
Subsidiaries considered as a whole and those properties that will not be
retained by the Company (the "Owned Real Property"). Except as set forth on
Schedule 3.7(a)(iii) hereto, each of the Company and the Subsidiaries has
good and, in the case of the Owned Real Property, marketable title to, or a
valid and binding leasehold interest in, all of the Leased Real Property and
Owned Real Property free and clear of any Encumbrances, except for: (i) any
Encumbrances reflected in the Financial Statements; (ii) any Encumbrances
incurred or created since December 31, 1999 in the ordinary and usual course
of business consistent with past practice and which, alone or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect;
(iii) any Encumbrances which, alone or in the aggregate, would not have a
Material Adverse Effect; (iv) any Encumbrances for taxes, assessments and
other governmental charges not yet due and payable or due but not delinquent
or being contested in good faith by appropriate proceedings; (v) any
mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like
liens and encumbrances imposed by operation of law arising in the ordinary
and usual course of business consistent with past practice or being contested
in good faith by appropriate proceedings; and (vi) easements, rights of way
or other similar matters of title to real property that do not materially
effect the title to, or the use of, such real property (the "Permitted
Encumbrances").
(b) Neither the Company nor any Subsidiary is in default under
any leases under which the Company or any such Subsidiary is the lessee of
real or personal property, except defaults which, alone or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect.
Section 3.8. LITIGATION. Except as set forth in Schedule 3.8 hereto,
there are no claims, actions, suits, proceedings or investigations pending
or, to the Knowledge of the Seller and the Company, threatened against the
Company or any Subsidiary at law, in equity or otherwise, in, before, or by,
any court or Governmental Entity or authority which, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
Neither the Company, the Subsidiaries or their respective assets or
properties is subject to any order, writ, judgment, injunction, decree or
award that would be reasonably likely to have a Material Adverse Effect.
Section 3.9. COMPLIANCE WITH LAW. Except as set forth in Schedule
3.9, the Company is not being conducted in violation of any applicable Law,
and all governmental approvals, permits and licenses required to conduct its
business have been obtained, except for any noncompliance which, alone or in
the aggregate, do not and would not be reasonably likely to have a Material
Adverse Effect; it being understood that nothing in this representation is
intended to address any compliance issue that is (x) related to any
Environmental Law or (y) the subject of any other representation or warranty
set forth herein.
Section 3.10. CONTRACTS.
(a) Schedule 3.10(a) lists the following Contracts to which
the Company or any Subsidiary is a party on the date hereof:
(i) any agreement the performance of which is expected
to involve consideration in excess of $50,000 per annum;
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(ii) any agreement which restricts or contains
limitations on the ability of any of the Company or its Subsidiaries
to freely conduct business in the United States;
(iii) any collective bargaining agreement;
(iv) any agreement with the Seller or its Affiliates
(other than the Company and the Subsidiaries);
(v) any employment agreement; and
(vi) any agreement which relates to indebtedness owed
by the Company or any Subsidiary having a principal amount of $50,000
or more, or the guarantee thereof.
(b) Schedule 3.10(b) lists each franchisee of the Company and the
number of restaurants for which the Company has granted such franchisee
franchises, and such Schedule is true and complete as of the date hereof.
(c) Seller has made available to Buyer a correct and complete
copy of each Contract listed in Schedule 3.10(a), together with any and all
amendments or modifications thereto. Subject to such exceptions that,
individually or in the aggregate, would not have a Material Adverse Effect,
each such Contract is valid, binding, enforceable, and in full force and
effect, neither the Company nor its Subsidiaries is in breach or default
under any such Contract and no event has occurred which, with notice or lapse
of time or both, would constitute a breach or default, or permit termination,
modification, or acceleration, under such Contract.
Section 3.11. CONSENTS AND APPROVALS. Other than the filings and/or
notices (A) set forth in Schedule 3.11, or (B) in connection with any Leased
Real Property, no notices, reports or other filings are required to be made
by Seller, the Company or any of the Subsidiaries with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained
by Seller, the Company or any Subsidiary from, any Person, in connection with
the execution and delivery of this Agreement by Seller and the Company and
the consummation by Seller and the Company of the transactions contemplated
hereby, except those that the failure to make or obtain are not, individually
or in the aggregate, reasonably likely to have a Material Adverse Effect or
prevent, materially delay or materially impair the ability of Seller to
consummate the transactions contemplated by this Agreement.
Section 3.12. TAX MATTERS. Except as set forth in Schedule 3.12, (i)
all material Tax Returns that are required to be filed by or with respect to
the Company and the Subsidiaries, have been duly filed, or, where not so
filed, are covered under an extension that has been obtained therefor, (ii)
to the Seller's Knowledge, all such Tax Returns are true, complete and
correct in all material respects, (iii) to the Seller's Knowledge, all Taxes
due and payable by the Company and the Subsidiaries have been paid in full,
(iv) no waivers of statutes of limitation have been given by or requested
with respect to any Taxes of the Company or the Subsidiaries, (v) to the
Seller's Knowledge, there is no claim or assessment threatened by any taxing
authority against Seller, the Company or the Subsidiaries, (vi) to the
Seller's Knowledge, each of the Company and its Subsidiaries has withheld and
timely paid to the appropriate taxing authority the required amounts in
compliance with all tax withholding provisions of applicable federal, state,
local and foreign Laws (including, without limitation, income, xxxxxxx'x
compensation, social security and employment tax withholding).
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Section 3.13. INTELLECTUAL PROPERTY.
(a) Schedule 3.13(a) sets forth a list and brief description
(including where applicable the country of registration) of (i) all patents,
patent applications, registered trademarks, trademark applications,
registered copyrights and copyright applications that are owned by the
Company or the Subsidiaries and used in the Business (ii) all agreements
under which the Company or the Subsidiaries are licensed or otherwise
permitted to use patents, trademarks and copyrights which are material to the
Business.
(b) To the Knowledge of the Seller, except as set forth in
Schedule 3.13(b), no Person is challenging, infringing or otherwise violating
the Intellectual Property of the Company, except in each case for challenges,
infringements or violations, which alone or in the aggregate, would not be
reasonably likely to materially adversely affect the Company's ability to
conduct the Business substantially as heretofore conducted.
Section 3.14. LABOR MATTERS. Except as set forth in Schedule 3.14,
neither the Company nor any Subsidiary is a party to any material collective
bargaining agreement respecting its employees, nor is there pending, or to
the Knowledge of the Company threatened, any strike, walkout or other work
stoppage or any union organizing effort by or respecting the employees.
Section 3.15. EMPLOYEE BENEFITS.
(a) Schedule 3.15(a) hereto contains a list of each employee
benefit, stock purchase, stock option, severance, change-in-control, fringe
benefit, bonus, incentive and deferred compensation plan, agreement, program,
policy or other arrangement for current or former employees of the Company or
the Subsidiaries which is maintained, sponsored or contributed to by the
Company or the Subsidiaries. All such plans, agreements, programs, policies
and arrangements shall be collectively referred to as the "Company Plans."
(b) With respect to each Company Plan, the Company has
delivered or made available to Buyer a complete copy (or, to the extent no
such copy exists, a summary description) thereof and, to the extent
applicable: (i) any related trust agreement or other funding instrument; (ii)
the most recent determination letter; (iii) any summary plan description; and
(iv) for the most recent plan year; (v) the Form 5500 and attached schedules;
(vi) audited financial statements; and (vii) actuarial valuation reports.
(c) All Company Plans are in substantial compliance with all
applicable laws, including the Code and the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). The Company has received a
favorable determination letter from the IRS with respect to the qualified
status of each Company Plan which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA (a "Pension Plan") and which is
intended to be qualified under Section 401(a) of the Code and the Company is
not aware of any circumstances which are reasonably likely to cause the
revocation of such letter. There is no material pending or, to the Knowledge
of the Seller, threatened action, suit or claim relating to the Company Plans.
(d) Except as set forth on Schedule 3.15(d), the consummation
of the transactions contemplated by this Agreement will not (x) entitle any
of the employees of the Company or any of the Subsidiaries to severance pay;
or (y) accelerate or provide any other rights or credits under, or increase
the amount payable or trigger any other obligation pursuant to, any of the
Company Plans.
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Section 3.16. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule
3.16, or as would not be reasonably likely to have a Material Adverse Effect,
the Company and each of the Subsidiaries (i) is to Seller's Knowledge in
substantial compliance with applicable Environmental Laws; (ii) has not
received any written notices from any Governmental Entity alleging the
violation of any applicable Environmental Law and, to the Knowledge of
Seller, no such allegations have been raised by any Person; (iii) is not the
subject of any court order, administrative order or decree arising under any
Environmental Law; and (iv) to Seller's Knowledge, has not generated, stored,
used, emitted, discharged or disposed of any Hazardous Substance except as
permitted under applicable Environmental Laws.
Section 3.17. INSURANCE. Schedule 3.17 hereto lists all insurance
policies maintained by or on behalf of the Company or any of the Subsidiaries.
Section 3.18. BROKERS AND FINDERS. Neither the Seller, the Company
nor its Subsidiaries has employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this
Agreement who would be entitled to a broker's, finder's or similar fee or
commission in connection therewith or upon the consummation thereof, or if
the Closing does not occur. Seller shall indemnify, hold harmless and defend
Buyer for any commissions, finder's and other fees and expenses of any such
persons retained or purportedly retained by Seller, the Company or its
Subsidiaries.
Section 3.19. NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article III, neither Seller,
the Company, any Subsidiary nor any other Person makes any other express or
implied representation or warranty on behalf of Seller, the Company or any
Subsidiary.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Subject to the disclosures and exceptions set forth in the disclosure
schedules delivered by Buyer on or prior to the Closing Date (the "Buyer's
Disclosure Schedules"), Buyer represents and warrants to Seller as of the
date hereof and as of the Closing Date (except that representations and
warranties that are made as of a specific date need be true only as of such
date) as follows:
Section 4.1. ORGANIZATION AND AUTHORITY OF BUYER. Buyer is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Arizona, has all requisite company or similar power
and authority, and has taken all company action necessary in order, to
execute, deliver and perform its obligations under this Agreement. This
Agreement is a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor's rights and to general
equity principles. The execution, delivery and performance of this Agreement
by Buyer do not, and the consummation by Buyer of the transactions
contemplated hereby will not, constitute or result in (A) a breach or
violation of, or a default under, the articles of formation or operating
agreement of Buyer, (B) a breach or violation of, or a default under, the
acceleration of any obligations or the creation of a lien, pledge, security
interest or other encumbrance on the assets of Buyer (with or without notice,
lapse of time or both) pursuant to, any Contracts binding upon Buyer, (C) to
the Knowledge of Buyer, assuming compliance with the matters referred to in
Sections 3.11 and 4.4, violate any Law or governmental or
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non-governmental permit or license to which Buyer is subject or (D) any
change in the rights or obligations of any party under any of the Contracts
to which Buyer is party, except, in the case of clause (B), (C) or (D) above,
for any breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to materially
delay or materially impair the ability of Buyer to consummate the
transactions contemplated by this Agreement.
Section 4.2. BROKERS AND FINDERS. Buyer has not employed any broker,
finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement who would be entitled to a broker's, finder's
or similar fee or commission in connection therewith or upon the consummation
thereof, or if the Closing does not occur. Buyer shall indemnify, hold
harmless and defend Seller for any commissions, finder's and other fees and
expenses of any such persons retained or purportedly retained by Buyer.
Section 4.3. SECURITIES ACT. Buyer represents that with respect to
the Shares it shall receive hereunder:
(a) It is acquiring the Shares for its own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the
meaning of the Securities Act;
It understands that the Shares have not been registered under the Securities
Act by reason of a specific exemption therefrom, that they must be held by it
indefinitely, and that it must, therefore, bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is
registered under the 1933 Act or is exempt from such registration;
(b) It acknowledges that it is able to fend for itself, can
bear the economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Shares;
(c) It understands that the Shares it is purchasing are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Seller in a transaction not
involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act, only in certain limited circumstances; and
(d) It was not formed for the specific purpose of acquiring
the Shares offered hereunder.
Section 4.4. CONSENTS AND APPROVALS. Other than the filings and/or
notices set forth in Schedule 4.4, no notices, reports or other filings are
required to be made by Buyer with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Buyer from,
any Person, in connection with the execution and delivery of this Agreement
by Buyer and the consummation by Buyer of the transactions contemplated
hereby, except those that the failure to make or obtain are not, individually
or in the aggregate, reasonably likely to prevent, materially delay or
materially impair the ability of Buyer to consummate the transactions
contemplated by this Agreement.
Section 4.5. BUYER'S INVESTIGATION. Buyer is, in conjunction with
Buyer's advisors, an informed and sophisticated purchaser and is experienced
in the evaluation and purchase of companies
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such as the Company. Buyer has undertaken such investigation as it has deemed
necessary to enable it to make an informed and intelligent decision with
respect to this Agreement, and Buyer acknowledges that the Seller and the
Company have allowed Buyer such access as has been reasonably requested by
Buyer to the personnel, properties, premises and records of the Company and
Seller for this purpose. To the extent expressly permitted hereafter under
this Agreement, Buyer will undertake such further investigation as it deems
necessary. Buyer acknowledges that in entering this Agreement, in acquiring
the Shares and in consummating the other transactions contemplated herein,
Buyer has relied solely upon its own investigation and analysis and, to the
extent expressly permitted by this Agreement, the representations and
warranties contained in this Agreement, and that neither the Seller nor the
Company (nor any of their respective agents, officers, directors, employees,
Affiliates or representatives) has made any representation or warranty as to
the Seller, the Company, the Shares, this Agreement or the Business except as
expressly set forth in this Agreement, and Buyer agrees, to the fullest
extent permitted by Law, that, except as expressly provided for herein or
pursuant to the express provisions hereof, neither the Seller nor the Company
(nor any of their respective agents, officers, directors, employees,
Affiliates or representatives) shall have any liability to Buyer (or any of
its agents, officers, directors, employees, Affiliates or representatives) on
any basis based upon any information made available or statements made to
Buyer (or any of its agents, officers, directors, employees, Affiliates or
representatives).
Section 4.6. NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article IV, neither Buyer
nor any other Person makes any other express or implied representation or
warranty on behalf of Buyer.
ARTICLE V
TAX MATTERS
Section 5.1. SECTION 338(h)(10) ELECTIONS. Seller and Buyer agree in
connection with the transactions contemplated by this Agreement a Section
338(h)(10) election in accordance with the Code (and any corresponding
elections under state, local and foreign tax law where applicable) (the
"Section 338(h)(10) Elections") with respect to the purchase and sale of the
Shares and with respect to the deemed purchase and sale of the assets of the
Company shall be made pursuant to the following provisions:
(a) ELECTION. Seller and Buyer shall make a joint election
under Section 338(h)(10) of the Code with respect to the purchase of the
Shares and under any similar provisions of state law. Seller represents that
its sale of the Shares is eligible for, and Buyer represents that it is
qualified to make, such election. Seller and Buyer agree to prepare and file
IRS Form 8023, required schedules thereto, and any similar state forms in a
timely fashion in accordance with the rules under Section 338 of the Code or
under a similar provision of state law, as the case may be. If any changes
are required in these forms subsequent to their filing, the parties will
promptly agree on such changes. Seller, Buyer and the Company shall report,
for federal income tax purposes (and for state, local and foreign income tax
purposes where permitted by applicable law), the transaction under this
Agreement consistent with the Section 338(h)(10) Elections; and neither the
Seller, the Company or Buyer will take a position under the Code contrary
thereto unless required to do so by applicable Tax Laws pursuant to a
determination as defined in Section 1313(a) of the Code. Except for the
purchase of the Shares and Section 338(h)(10) Elections contemplated by this
Agreement, Buyer shall not cause or permit the Company to engage, on the
Closing Date, in any transaction outside the ordinary
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course of business that could affect the federal taxable income or loss of
the Company included in Seller's federal consolidated income Tax Return.
(b) ALLOCATION OF PURCHASE PRICE. Seller and Buyer will cause
their respective accountants to negotiate in good faith, on their behalf, and
agree to a purchase price and an allocation of that price among the assets of
the Company that are deemed to have been acquired pursuant to the Section
338(h)(10) Elections. Buyer and Seller shall use the asset values determined
from such allocation for purposes of all reports and returns with respect to
Taxes, including IRS Form 8594 or any equivalent statement.
Section 5.2. LIABILITY FOR TAXES AND RELATED MATTERS.
(a) SELLER'S INDEMNIFICATION OF BUYER. Seller shall be liable
for and indemnify Buyer for all Taxes imposed on the Company and its
Subsidiaries, or for which the Company or its Subsidiaries may otherwise be
liable, for any taxable year or period that ends on or before the Closing
Date and, with respect to any taxable year or period beginning before and
ending after the Closing Date, the portion of such taxable year ending on and
including the Closing Date. Seller shall also indemnify, defend and hold
harmless Buyer from all costs and expenses incurred by Buyer (including
reasonable attorneys' fees and expenses) in connection with any liability to,
or claim by, any taxing authority, for Taxes for which Seller is required to
indemnify Buyer under this Article V. Seller shall be entitled to any refund
of Taxes of the Company and its Subsidiaries received for such periods.
Seller agrees that it shall be responsible for all Taxes associated with the
Section 338(h)(10) Elections.
(b) BUYER'S INDEMNIFICATION OF SELLER. Buyer shall be liable
for and indemnify Seller for the Taxes of the Company and its Subsidiaries
for any taxable year or period that begins after the Closing Date and, with
respect to any taxable year or period beginning before and ending after the
Closing Date, the portion of such taxable year beginning after the Closing
Date. Buyer shall also indemnify, defend and hold harmless Seller from all
costs and expenses incurred by Seller (including reasonable attorneys' fees
and expenses) in connection with any liability to, or claim by, any taxing
authority, for Taxes for which Buyer is required to indemnify Seller under
this Article V. Buyer shall be entitled to any refund of Taxes of the Company
and its Subsidiaries received for such periods.
(c) TAXES FOR SHORT TAXABLE YEAR. For purposes of paragraphs
(a) and (b), whenever it is necessary to determine the liability for Taxes of
the Company for a portion of a taxable year or period that begins before and
ends after the Closing Date, the determination of the Taxes of the Company
for the portion of the year or period ending on, and the portion of the year
or period beginning after, the Closing Date shall be determined by assuming
that the Company had a taxable year or period which ended at the close of the
Closing Date, except that exemptions, allowances or deductions that are
calculated on an annual basis, such as the deduction for depreciation, shall
be apportioned on a time basis. Seller shall remit to Buyer or the
appropriate taxing authority all sales or similar Taxes incurred by the
Company up through the Closing Date.
(d) PROPERTY TAXES. The liability of Seller shall be for all
property taxes attributable to the period ending on the Closing Date, or
November 15, 2000, whichever is later, with the obligation of Seller not to
exceed Two Hundred Twenty Five Thousand Dollars ($225,000.00).
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(e) TAX RETURNS. Seller shall file or cause to be filed when
due all Tax Returns that are required to be filed by or with respect to the
Company for taxable years or periods ending on or before the Closing Date and
shall pay any Taxes due in respect of such Tax Returns, and Buyer shall file
or cause to be filed when due all Tax Returns that are required to be filed
by or with respect to the Company for taxable years or periods ending after
the Closing Date and shall remit any Taxes due in respect of such Tax Returns.
(f) CONTEST PROVISIONS. Buyer shall promptly notify Seller in
writing upon receipt by Buyer, any of its affiliates or the Company of notice
of any pending or threatened federal, state, local or foreign income or
franchise tax audits or assessments which may materially affect the tax
liabilities of the Company or its Subsidiaries for which Seller would be
required to indemnify Buyer pursuant to Section 5.2(a), provided that failure
to comply with this provision shall not affect Buyer's right to
indemnification hereunder. Seller shall have the sole right to represent the
Company's and its Subsidiaries interests in any tax audit or administrative
or court proceeding relating to taxable periods ending on or before the
Closing Date, and to employ counsel of its choice at its expense.
Notwithstanding the foregoing, Seller shall not be entitled to settle, either
administratively or after the commencement of litigation, any claim for Taxes
which would adversely affect the liability for Taxes of Buyer or the Company
or its Subsidiaries for any period after the Closing Date to any extent
(including, but not limited to, the imposition of income tax deficiencies,
the reduction of asset basis or cost adjustments, the lengthening of any
amortization or depreciation periods, the denial of amortization or
depreciation deductions, or the reduction of loss or credit carryforwards)
without the prior written consent of Buyer. Such consent shall not be
unreasonably withheld, and shall not be necessary to the extent that Seller
has indemnified Buyer against the effects of any such settlement.
Seller shall be entitled to participate at its expense in the
defense of any claim for Taxes for a year or period ending after the Closing
Date which may be the subject of indemnification by Seller pursuant to
Section 5.2(a) and, with the written consent of Buyer, and at its sole
expense, may assume the entire defense of such tax claim. Neither Buyer, the
Company nor any of its Subsidiaries may agree to settle any tax claim for the
portion of the year or period ending on the Closing Date which may be the
subject of indemnification by Seller under Section 5.2(a) without the prior
written consent of Seller, which consent shall not be unreasonably withheld.
Section 5.3. TRANSFER TAXES. All transfer taxes which may be imposed
or assessed as a result of Buyer's acquisition of the Shares shall be borne
by Buyer.
Section 5.4. INFORMATION TO BE PROVIDED BY BUYER. With respect to the
taxable period in 2000 prior to the Closing Date, Buyer shall promptly cause
the Company to prepare and provide to Seller a package of tax information
materials (the "Tax Package"), which shall be completed in accordance with
past practice of the Company including past practice as to providing the
information, schedules and work papers and as to the method of computation of
separate taxable income or other relevant measure of income. Buyer shall
cause the Tax Package for the portion of the taxable period ending on the
Closing Date to be delivered to Seller within one hundred twenty (120) days
after the Closing Date.
Section 5.5. ASSISTANCE AND COOPERATION. After the Closing Date, each
of Seller and Buyer shall:
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(a) assist (and cause their respective affiliates to assist)
the other party in preparing any Tax Returns or reports which such other
party is responsible for preparing and filing in accordance with this Article
V;
(b) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the Company
and its Subsidiaries;
(c) make available to the other and to any taxing authority as
reasonably requested all information, records, and documents relating to
Taxes of the Company and its Subsidiaries;
(d) provide timely notice to the other in writing of any
pending or threatened tax audits or assessments of the Company and its
Subsidiaries for taxable periods for which the other may have a liability
under this Article V, PROVIDED, that failure to comply with this provision
shall not affect the other party's rights to indemnification hereunder; and
(e) furnish the other with copies of all correspondence
received from any taxing authority in connection with any tax audit or
information request with respect to any such taxable period.
Section 5.6. SURVIVAL OF OBLIGATIONS. The obligations of the parties
set forth in this Article V shall be unconditional and absolute and shall
remain in effect without limitation as to time.
ARTICLE VI
CERTAIN COVENANTS AND AGREEMENTS OF SELLER AND BUYER
Section 6.1. DEPOSIT. Buyer has made a deposit to Seller in the
amount of $50,000 (the "Deposit") which shall be credited to the Cash Portion
of the Purchase Price. The Deposit shall be non-refundable, and shall be kept
by Seller regardless of whether the transactions contemplated by this
Agreement are consummated; PROVIDED, HOWEVER, that the Deposit shall be
refundable if the transactions contemplated by this Agreement are not
consummated as a result of any breach of the covenants or obligations of
Company or Seller contained herein.
Section 6.2. TRANSFER OF COMPANY EXECUTIVE RETIREMENT PLAN. Seller
and the Company shall cause the transfer prior to Closing of the JB's
Supplemental Executive Retirement Plan (the "Plan") to Seller. At such time
as Buyer has paid off its $2.5 million loan to Textron, the liability for the
Plan shall be automatically assumed by Buyer and the principal amount of the
Note shall be reduced by the amount of such liability.
Section 6.3. ACCESS AND INFORMATION.
(a) Buyer acknowledges that Xxxx Xxxxxxxxx has been running
the Company's business heretofore and has had, and continues to have, full
access to substantially all information regarding the Company and its
Business. Hereafter, Seller shall permit Buyer and its representatives after
the date of execution of this Agreement to have reasonable access, during
regular business hours and upon reasonable advance notice, to the real
property owned or leased by the Company and the Subsidiaries and to the
officers of the Company and its Subsidiaries, and shall furnish, or cause to
be furnished, to Buyer any financial and operating data and other information
that is available with
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respect to the business and properties of the Company as Buyer shall from
time to time reasonably request, PROVIDED that the foregoing shall not
require Seller to permit any inspection, or to disclose any information, that
in its reasonable judgment would result in the disclosure of any trade
secrets of third parties or violate any of Seller's, the Company's or any of
the Subsidiaries' obligations with respect to confidentiality if Seller shall
have used reasonable best efforts to obtain the consent of such third party
to such inspection or disclosure.
(b) In the event of the termination of this Agreement pursuant
to Section 8.1, Buyer, at its own expense, shall promptly deliver (without
retaining any copies thereof) to Seller, or (at Seller's option) confirm in
writing to Seller that it has destroyed, all information furnished to Buyer
or its representatives by Seller, the Company, the Subsidiaries or any of
their respective agents, employees or representatives as a result hereof or
in connection herewith, whether so obtained before or after the execution
hereof, and all analyses, compilations, forecasts, studies or other documents
prepared by Buyer or its representatives which contain or reflect any such
information. Buyer shall at all times prior to the Closing Date, and in the
event of termination of this Agreement, cause any information so obtained to
be kept confidential and will not use, or permit the use of, such information
in its business or in any other manner or for any other purpose except as
contemplated hereby.
Section 6.4. REGISTRATIONS, FILINGS AND CONSENTS. Seller and Buyer
will cooperate and use their respective best efforts to fulfill the
conditions precedent to the other party's obligations hereunder, including
but not limited to, securing as promptly as practicable all consents,
approvals, waivers and authorizations required, necessary or desirable in
connection with the transactions contemplated hereby. Buyer and Seller will
promptly file documentary materials required by each of the items listed in
Schedules 3.11 and 4.4 and promptly file any additional information requested
as soon as practicable after receipt of request thereof. Buyer and Seller
shall use their respective best efforts to promptly take, or cause to be
taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
as soon as practicable.
Section 6.5. CONDUCT OF BUSINESS. Prior to the Closing, and except as
otherwise expressly provided for by this Agreement or consented to or
approved by Buyer in writing, Seller covenants and agrees that the Company
and the Subsidiaries shall, and Seller shall cause the Company and its
Subsidiaries to, operate their business only in the ordinary and usual course
consistent with past practice. In furtherance of this covenant, as of the
Closing Date, the Company and Seller shall cause (a) all cash of the Company
to be distributed to the Seller, such that on the Closing Date the Company
shall have no cash and (b) all accounts payable of the Company to be paid
down by the Company or the Seller to an aging of the lesser of twenty eight
(28) days past the invoice date or existing vendor terms. Furthermore, the
Company and Seller agree that they will maintain on deposit with Zion's Bank
a certificate of deposit sufficient to secure the Company's letter of credit
with the Bank.
Section 6.6. RETENTION OF BOOKS AND RECORDS. Buyer shall cause the
Company and the Subsidiaries to retain, until all applicable tax statutes of
limitations (including periods of waiver) have expired, all books, records
and other documents pertaining to the Company and the Subsidiaries in
existence on the Closing Date that are required to be retained under current
retention policies and to make the same available after the Closing Date for
inspection and copying by Seller or its agents at Seller's expense, during
regular business hours and upon reasonable request and upon reasonable
advance notice. After the expiration of such period, no such books and
records shall be destroyed by
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Buyer without first advising the tax director of Seller in writing detailing
the contents thereof and giving Seller at least 120 days to obtain possession
thereof. Seller agrees that such records will be kept strictly confidential
and used only for tax purposes.
Section 6.7. CLOSING DATE FINANCIAL STATEMENTS. For a period of one
year from and after the Closing Date, to the extent reasonably necessary for
Seller or its Affiliates to prepare consolidated financial statements or any
governmental permits, licenses or required filings and to comply with
reporting obligations in respect thereof, upon written request of Seller, the
Company and the Subsidiaries will provide, and Buyer shall use its best
efforts to cause the Company and the Subsidiaries to provide, to Seller and
its accountants within twenty (20) business days of such request with such
computer support, access to employees and Buyer's accountants and financial
information of the Company or the Subsidiaries as of the Closing Date as
Seller may reasonably request in the format customarily required by Seller or
its Affiliates of subsidiaries and, upon Seller's request, it will be
accompanied by supplemental financial schedules customarily required by
Seller or its Affiliates of subsidiaries in support of such financial
information. Seller agrees that such records will be kept strictly
confidential and used only for tax purposes.
Section 6.8. FURTHER ASSURANCES. At any time after the Closing Date,
Seller and Buyer shall, and Buyer shall cause the Company or any Subsidiary
to, promptly execute, acknowledge and deliver any other assurances or
documents reasonably requested by Buyer or Seller, as the case may be, and
necessary for Buyer or Seller, as the case may be, to satisfy its obligations
hereunder or obtain the benefits contemplated hereby.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver by Buyer in writing on or prior to the
Closing Date of each of the following conditions:
(a) Seller shall have delivered to Buyer certificates
representing the Shares, together with stock assignments separate from
certificate duly executed in blank by Seller, as provided for by Section
2.2(b)(i) above;
(b) the Company shall have delivered to Buyer a certificate of
the Secretary of the Company, dated as of the Closing Date, certifying a copy
of the resolutions of the board of directors of the Company authorizing the
execution and performance of this Agreement and all documents related
thereto, and that such resolutions were duly adopted and are in full force
and effect;
(c) Seller shall have delivered to Buyer a certificate of the
Secretary of Seller, dated as of the Closing Date, certifying a copy of the
resolutions of the board of directors of Seller authorizing the execution and
performance of this Agreement and all documents related thereto, and that
such resolutions were duly adopted and are in full force and effect;
(d) each of the representations and warranties of the Company
contained in this Agreement shall be true in all material respects when made
and as of the Closing Date, in each case with the same effect as though such
representations and warranties had been made on and as of the
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Closing Date (except that representations and warranties that are made as of
a specific date need be true in all material respects only as of such date);
each of the covenants and agreements of the Company to be performed on or
prior to the Closing Date shall have been duly performed in all material
respects; and Buyer shall have received at the Closing certificates to the
foregoing effect, dated as of the Closing Date and executed on behalf of the
Company by its President or any of its Vice Presidents and its Secretary or
any of its Assistant Secretaries;
(e) each of the representations and warranties of Seller
contained in this Agreement shall be true in all material respects when made
and as of the Closing Date, in each case with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except that representations and warranties that are made as of a specific
date need be true in all material respects only as of such date); each of the
covenants and agreements of Seller to be performed on or prior to the Closing
Date shall have been duly performed in all material respects; and Buyer shall
have received at the Closing certificates to the foregoing effect, dated as
of the Closing Date and executed on behalf of Seller by its President or any
of its Vice Presidents and its Secretary or any of its Assistant Secretaries;
(f) Seller shall have delivered to Buyer resignations of all
directors of the Company and its Subsidiaries and all officers of the Company
and its Subsidiaries who are not also employees of the Company or a
Subsidiary;
(g) Buyer shall have received such other documents and
instruments as Buyer or Buyer's counsel reasonably may request to better
evidence or effectuate the transactions contemplated hereby;
(h) No court or governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, or non-appealable judgment, decree, injunction or
other order which is in effect on the Closing Date and prohibits the
consummation of the Closing; and
(i) The Seller's Disclosure Schedules shall have been
delivered to Buyer and all disclosures set forth therein shall be acceptable
to Buyer.
Section 7.2. CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver in writing by Seller on or prior to the
Closing Date of each of the following conditions:
(a) Buyer shall have delivered the Cash Portion of the
Purchase Price to Seller in the manner set forth in Section 2.2(b)(ii)(A)
above;
(b) Buyer shall have delivered the executed Note to Seller,
along with the executed Pledge Agreements referenced therein. The Note and
Pledge Agreements shall all be in a form acceptable to the Seller in its sole
discretion;
(c) Buyer shall have delivered to Seller a certificate of the
Secretary of the Buyer, dated as of the Closing Date, certifying a copy of
the resolutions of the board of directors of the Buyer authorizing the
execution and performance of this Agreement and all documents related
thereto, and that such resolutions were duly adopted and are in full force
and effect;
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(d) Each of the representations and warranties of Buyer
contained in this Agreement shall be true in all material respects when made
and as of the Closing Date, in each case with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except that representations and warranties that are made as of a specific
date need be true in all material respects only as of such date); each of the
covenants and agreements of Buyer to be performed on or prior to the Closing
Date shall have been duly performed in all material respects; and Seller
shall have received at the Closing certificates to the foregoing effect,
dated as of the Closing Date and executed on behalf of Buyer by its President
or any of its Vice Presidents and its Secretary or any of its Assistant
Secretaries.
(e) the board of directors of Seller shall have approved the
transactions contemplated by this Agreement and shall have received a
fairness opinion regarding the transactions contemplated by this Agreement;
(f) Seller shall have received evidence in form and substance
reasonably satisfactory to Seller, that any guaranties or letters of credit
(or similar obligations) made by Seller in favor of the Company or the
Subsidiaries, shall, effective upon the Closing, be terminated and that
Seller shall be discharged from all liabilities, restrictions and obligations
with respect thereto;
(g) Seller shall have received such other documents and
instruments as Seller or Seller's counsel reasonably may request to better
evidence or effectuate the transactions contemplated hereby; and
(h) No court or governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, or non-appealable judgment, decree, injunction or
other order which is in effect on the Closing Date and prohibits the
consummation of the Closing.
ARTICLE VIII
TERMINATION
Section 8.1. TERMINATION. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual agreement of Seller and Buyer; or
(b) by either Buyer or Seller, by giving written notice of
such termination to the other party, if such other party shall breach any of
its material obligations or agreements under this Agreement and such breach
shall be incapable of cure or has not been cured within thirty (30) days
following the giving of written notice of such breach to the breaching party;
or
(c) by either Buyer or Seller, by giving written notice of
such termination to the other party, if there shall be in effect any law or
regulation that prohibits the consummation of the Closing or if consummation
of the Closing would violate any non-appealable final order, decree or
judgment of any court or governmental body having competent jurisdiction; or
(d) by either Seller or Buyer, by giving written notice of
such termination to the other party, if the Closing shall not have occurred
on or prior to November 15, 2000.
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Section 8.2. EFFECT OF TERMINATION. In the event of the termination
of this Agreement in accordance with Section 8.1 hereof, this Agreement shall
thereafter become void and have no effect, and no party hereto shall have any
liability to the other party hereto or their respective Affiliates,
directors, officers or employees, except for the obligations of the parties
hereto contained in this Section 8.2, Article IX and Sections 11.2, 11.3 and
11.11 hereof, and except that nothing herein will relieve any party from
liability for any breach of this Agreement prior to such termination.
ARTICLE IX
CONFIDENTIALITY
Section 9.1. AGREEMENT. Each party acknowledges that it may have
access to various items of proprietary and confidential information of the
other in the course of investigations and negotiations prior to Closing. Each
party agrees that any such information received from the other party shall be
kept confidential and shall not be used for any purpose other than to
facilitate the consummation of the transactions contemplated herein.
Confidential and proprietary information shall include any business or other
information which is delivered by one party to the other, unless such
information (i) is already public knowledge, (ii) becomes public knowledge
through no fault, action or inaction of the receiving party or (iii) was
known by the receiving party, or any of its directors, officers, employees,
representatives, agents or advisors, as applicable, prior to the disclosure
of such information by the disclosing party to the receiving party. No party
hereto, nor its respective officers, directors, employees, accountants,
attorneys, or agents, as applicable, shall intentionally disclose the
existence or nature of, or any of the terms and conditions relating to, the
transactions referred to herein, to any third person without the written
consent of all other parties.
Section 9.2. SURVIVAL OF OBLIGATIONS. The obligations of the parties
set forth in this Article IX shall be unconditional and absolute and shall
remain in effect without limitation as to time.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
Section 10.1. LIMITED SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS; INDEMNIFICATION BASKET; KNOWLEDGE OF BREACH.
(a) Notwithstanding any otherwise applicable statute of
limitations, the representations and warranties included or provided for
herein shall survive the Closing until eighteen (18) months after the Closing
Date; provided, however, that (i) any representation or warranty contained in
Sections 3.12, 3.18 and 4.2 shall survive the Closing until the expiration of
the applicable statute of limitations (including any waivers or extensions
thereof) with respect to such matters and (iii) the representations and
warranties contained in Sections 3.1, 3.2, 3.3 and 4.1 shall survive the
Closing indefinitely. The covenants and other agreements contained in this
Agreement to be performed on or after Closing shall survive the Closing until
the date or dates specified therein or the expiration of the applicable
statute of limitations (including any waivers or extensions thereof) with
respect to such matters, whichever is later.
(b) Except with respect to the payment of the Purchase Price
and the representations, warranties, covenants and agreements contained in
Sections 3.18 and 4.2 and Article V hereof, in no event shall Buyer be liable
to Seller or Seller be liable to Buyer, as the case
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may be, for any breach of the representations, warranties, covenants and
agreements included or provided for herein or in any schedule or certificate
or other document delivered pursuant to this Agreement, unless and until all
Losses (as hereinafter defined) for which damages are recoverable hereunder
by Buyer or Seller, as the case may be, exceed $150,000 (the "Deductible"),
in which case Buyer or Seller, as the case may be, shall be entitled to
damages in an amount up to $3,000,000 in the aggregate; PROVIDED, HOWEVER,
that Buyer or Seller, as the case may be, shall be liable only for the amount
by which all such recoverable damages exceed the Deductible.
(c) No party hereto shall be deemed to have breached any
representation, warranty, covenant or agreement if (i) such party shall have
notified the other parties hereto in writing, on or prior to the Closing
Date, of the breach of, or inaccuracy in, or of any facts or circumstances
constituting or resulting in the breach of or inaccuracy in, such
representation, warranty, covenant or agreement, specifically referring to
the provisions of this Agreement so breached or rendered inaccurate, and (ii)
such other parties have permitted the Closing to occur and, for purposes of
this Agreement, are thereby deemed to have waived such breach or inaccuracy;
PROVIDED, HOWEVER, that a disclosure pursuant to this Section 10.1(c) shall
not prejudice the rights of the parties pursuant to Article VII hereof not to
consummate the transactions contemplated by this Agreement or to recover
damages incurred as a result of such breach or inaccuracy if a party elects
not to consummate such transactions.
Section 10.2. INDEMNIFICATION BY BUYER.
(a) For the period commencing on the Closing Date and ending,
as the case may be, upon the expiration of the periods specified in Section
10.1(a) hereof, Buyer shall, subject to the limitations set forth in Sections
10.1(a) and 10.1(b) hereof, indemnify, defend and hold harmless Seller and
its Affiliates, and their respective directors, officers, employees,
shareholders, attorneys, accountants and agents ("Seller Indemnified
Parties") against and in respect of all losses, damages, liabilities, costs
and expenses (including reasonable attorneys' fees and expenses incurred in
investigating, preparing or defending any claims covered hereby)
(collectively, "Losses") sustained or incurred, or otherwise arising in
connection with (i) any breaches of Buyer's representations, warranties,
covenants and agreements set forth in this Agreement (other than
representations, warranties, covenants and agreements set forth in Article V,
as to which the indemnification provisions set forth in Article V shall
govern) and (ii) any operations or activities of the Company of any kind
after the Closing Date.
(b) Any payments pursuant to this Section 10.2 or Article V
shall be treated as an adjustment to the Purchase Price for all Tax purposes.
Section 10.3. INDEMNIFICATION BY SELLER.
(a) For the period commencing on the Closing Date and ending,
as the case may be, upon the expiration of the periods specified in Section
10.1(a) hereof, Seller shall, subject to the limitations set forth in
Sections 10.1(a) and 10.1(b) hereof, indemnify, defend and hold harmless
Buyer and its Affiliates, and their respective directors, officers,
employees, shareholders, attorneys, accountants and agents ("Buyer
Indemnified Parties") against and in respect of all Losses sustained or
incurred, or otherwise arising in connection with any breaches of Seller's or
the Company's representations, warranties, covenants and agreements set forth
in this Agreement (other than representations, warranties, covenants and
agreements set forth in Article V, as to which the indemnification provisions
set forth in Article V shall govern).
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(b) Any payments pursuant to this Section 10.3 or Article V
shall be treated as an adjustment to the Purchase Price for all Tax purposes.
Section 10.4. INDEMNIFICATION AS SOLE REMEDY. The indemnity provided
herein, and in Article V hereof as it relates to this Agreement and the
transactions contemplated by this Agreement, shall be the sole and exclusive
remedy of the parties hereto, their Affiliates, successors and assigns with
respect to any and all claims for losses, damages, liabilities, costs and
expenses sustained or incurred arising out of this Agreement and the
transactions contemplated by this Agreement, except for the right of the
parties hereto to seek specific performance of the obligations set forth in
Articles II and IX and Section 6.4 of this Agreement.
Section 10.5. METHOD OF ASSERTING CLAIMS, ETC. All claims for
indemnification by the Indemnified Parties hereunder shall be asserted and
resolved as set forth in this Section 10.5 except for claims pursuant to
Article V hereof (as to which the provisions of Article V shall be
applicable). In the event that any written claim or demand for which Buyer or
Seller, as the case may be (the "Indemnifying Party") would be liable to any
Indemnified Party hereunder is asserted against or sought to be collected
from any Indemnified Party by a third party, such Indemnified Party shall
promptly, but in no event more than fifteen (15) days following such
Indemnified Party's receipt of such claim or demand, notify the Indemnifying
Party of such claim or demand and the amount or the estimated amount thereof
to the extent then feasible (which estimate shall not in any manner prejudice
the right of the Indemnified Party to indemnification to the fullest extent
provided hereunder) (the "Third Party Claim Notice") and in the event that an
Indemnified Party shall assert a claim for indemnity under this Article X,
not including a third party claim, the Indemnified Party shall notify the
Indemnifying Party promptly following its discovery of the facts or
circumstances giving rise thereto (together, with a Third Party Claim Notice,
a "Claim Notice"); provided, that no such notice need be provided to an
Indemnifying Party if the Deductible has not been exceeded and will not be
exceeded by such claim or demand; and provided, further, that the failure to
notify on the part of the Indemnified Party in the manner set forth herein
shall not foreclose any rights otherwise available to such Indemnified Party
hereunder, except to the extent that the Indemnifying Party is prejudiced by
such failure to notify. The Indemnifying Party shall have thirty (30) days
from the personal delivery or mailing of the Third Party Claim Notice (except
that such a period shall be decreased to a time ten (10) days before a
scheduled appearance date in a litigated matter) (the "Notice Period") to
notify the Indemnified Party (i) whether or not the Indemnifying Party
disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such claim or demand and (ii) whether or not it
desires to defend the Indemnified Party against such claim or demand, which
it shall not be entitled to do until the Deductible is exceeded. All costs
and expenses incurred by the Indemnifying Party in defending such claim or
demand shall be a liability of, and shall be paid by, the Indemnifying Party;
provided, however, that the amount of such expenses shall be a liability of
the Indemnifying Party hereunder, subject to the limitations set forth in
Section 10.1 hereof. In the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand, which it shall not be
entitled to do until the Deductible is exceeded and except as hereinafter
provided, the Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings and by counsel reasonably
acceptable to the Indemnified Party. If any Indemnified Party desires to
participate in, but not control, any such defense or settlement it may do so
at its sole cost and expense. The Indemnified Party shall not settle a claim
or demand without the consent of the Indemnifying Party. The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party,
settle, compromise or offer to settle or compromise any such claim or demand
on a basis which would result in the imposition of a consent order,
injunction or decree which would
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restrict the future activity or conduct of, or which would otherwise have a
material adverse effect on, the Indemnified Party or any subsidiary or
Affiliate thereof. If the Indemnifying Party elects not to defend the
Indemnified Party against such claim or demand, whether by not giving the
Indemnified Party timely notice as provided above or otherwise, then the
amount of any such claim or demand, or, if the same be contested by the
Indemnified Party, then that portion of any such claim or demand as to which
such defense is unsuccessful (and all reasonable costs and expenses
pertaining to such defense) shall be the liability of the Indemnifying Party
hereunder, subject to the limitations set forth in Section 10.1 hereof. To
the extent the Indemnifying Party shall control or participate in the defense
or settlement of any third party claim or demand, the Indemnified Party will
give to the Indemnifying Party and its counsel reasonable access to all
business records and other documents relevant to such defense or settlement,
and shall permit them to consult with the employees and counsel of the
Indemnified Party. The Indemnified Party shall use its best efforts in the
defense of all such claims, and in connection therewith shall be entitled to
reimbursement by the Indemnifying Party of expenses directly related to
efforts undertaken at the specific request of the Indemnifying Party.
ARTICLE XI
MISCELLANEOUS
Section 11.1. AMENDMENT AND WAIVER. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Seller and Buyer, or in
the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
Section 11.2. EXPENSES. Except as otherwise expressly provided in
this Agreement, whether or not the transactions contemplated by this
Agreement are consummated, the parties shall bear their own respective
expenses (including, but not limited to, all compensation and expenses of
counsel, financial advisors, consultants, actuaries and independent
accountants) incurred in connection with this Agreement and the transactions
contemplated hereby.
Section 11.3. PUBLIC DISCLOSURE. Each of the parties to this
Agreement hereby agrees with the other parties hereto that, except as may be
required to comply with the requirements of applicable law or the rules and
regulations of each stock exchange upon which the securities of one of the
parties or its Affiliates is listed, no press release or similar public
announcement or communication will be made or caused to be made concerning
the execution or performance of this Agreement unless specifically approved
in advance by all parties hereto; provided, however, that to the extent that
either party to this Agreement is required by law or the rules and
regulations of any stock exchange upon which the securities of one of the
parties or its Affiliates is listed to make such a public disclosure, such
public disclosure shall only be made after prior consultation with the other
party to this Agreement.
Section 11.4. ASSIGNMENT. No party to this Agreement may assign any
of its rights or obligations under this Agreement without the prior written
consent of the other party hereto; PROVIDED, HOWEVER, that Seller shall have
the right to assign any of its rights under this Agreement to any of its
Affiliates, so long as Seller remains liable for such Affiliate's obligations
hereunder.
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Section 11.5. ENTIRE AGREEMENT. This Agreement (including all Annexes
and Schedules hereto) contains the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters,
including, but not limited to, that certain Letter of Intent dated September
28, 1999 by and among Buyer and Seller.
Section 11.6. FULFILLMENT OF OBLIGATIONS. Any obligation of any party
to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
Section 11.7. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other
than Buyer, Seller, or their successors or permitted assigns, any rights or
remedies under or by reason of this Agreement.
Section 11.8. SCHEDULES. The inclusion of any matter in any schedule
to this Agreement shall be deemed to be an inclusion for all purposes of this
Agreement, including each representation and warranty to which it may relate,
but inclusion therein shall expressly not be deemed to constitute an
admission by Seller, or otherwise imply, that any such matter is material or
creates a measure for materiality for the purposes of this Agreement.
Section 11.9. COUNTERPARTS. This Agreement and any amendments hereto
may be executed in one or more counterparts, each of which shall be deemed to
be an original by the parties executing such counterpart, but all of which
shall be considered one and the same instrument.
Section 11.10.SECTION HEADINGS. The section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
Section 11.11.NOTICES. All notices hereunder shall be deemed given if
in writing and delivered personally or sent by facsimile or by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other addresses as shall be specified by like notice):
(a) if to Seller or, prior to Closing, the Company, to:
Santa Xxxxxxx Restaurant Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: 000-000-0000
WITH A COPY TO:
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention:# C. Xxxxx Xxxxxxx
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Facsimile: 000-000-0000
(b) if to Buyer or, after the Closing, the Company, to:
JB's Family Restaurants, Inc.
0000 X. 00xx Xxxxxx, Xxxxx X
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
WITH A COPY TO:
Xxxxxx Xxxxxx, Esq.
Xxxxxx & Silver
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Any notice given by mail shall be effective when received.
Section 11.12. ATTORNEYS' FEES. In the event that any party to this
Agreement institutes any legal proceeding to enforce any of the provisions of
this Agreement, then the prevailing party in such proceeding shall be
entitled to collect and receive its reasonable attorneys' fees and costs,
through and including all appeals, and the other party shall pay for same.
Section 11.13. GOVERNING LAW; ARBITRATION; VENUE AND JURISDICTION.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California without reference to the choice of law
principles thereof. The parties hereto agree that any dispute arising out of
or relating to this Agreement or the breach, termination or the validity
hereof, shall be settled by binding arbitration in accordance with the rules
of the American Arbitration Association ("AAA") by a neutral arbitrator who
shall be a former superior court or appellate court judge or justice with
experience in resolving business disputes. The arbitration shall be governed
by the California Code of Civil Procedure Section 1280 ET SEQ. and the
parties intend this procedure to be specifically enforceable in accordance
with such provisions. Judgment upon the award rendered by the arbitrator may
be entered by any court having jurisdiction thereof. The parties agree that
the judgment or decision of the arbitrator shall be final and binding. The
parties agree that the venue for the arbitration shall be in the County of
Maricopa, Arizona. The arbitrator shall be required to follow the applicable
law as set forth in the governing law section of this Agreement. The
arbitrator shall award reasonable attorneys' fees and costs of arbitration to
the prevailing party in such arbitration. The parties hereto consent to the
personal jurisdiction of any court in the County of Maricopa, Arizona for the
enforcement of this agreement to arbitrate and any award granted pursuant to
said arbitration or settlement of any dispute related hereto.
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Section 11.14. SEVERABILITY. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof to any
person or entity or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to
carry out, so far as may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other persons, entities or
circumstances shall not be affected by such invalidity or unenforceability.
[Signatures on following page.]
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IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of
the parties hereto as of the date first written above.
LBW INVESTMENTS CORP.,
an Arizona limited liability company
By:
------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer &
President
JB'S RESTAURANTS, INC.,
a Delaware corporation
By:
------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer &
President
SANTA XXXXXXX RESTAURANT GROUP, INC.,
a Delaware corporation
By:
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Chief Financial Officer
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FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
This First Amendment to Stock Purchase Agreement (this "Amendment")
is made and entered into as of November 10, 2000, by and among Santa Xxxxxxx
Restaurant Group, Inc., a Delaware corporation ("Seller"), JB's Family
Restaurants, Inc., a Delaware corporation (the "Company"), and LBW
Investments, L.L.C., an Arizona limited liability company ("Buyer").
RECITALS
A. Seller, Company and Buyer are parties to that certain Stock Purchase
Agreement dated as of September 19, 2000, (the "Stock Purchase Agreement")
pursuant to which Seller intends to sell and transfer to Buyer, and Buyer
desires to purchase from Seller, all of the issued and outstanding shares of
capital stock of the Company.
B. The parties now desire to amend certain terms in the Stock Purchase
Agreement as described herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and subject to and on the terms and conditions herein set
forth, the parties hereto agree that the Stock Purchase Agreement shall be
amended as follows:
1. LBW Investments, L.L.C. is inadvertently identified and referred to in the
Stock Purchase Agreement as "LBW Investment Corp." The parties hereby agree
that all references to such entity throughout the Stock Purchase Agreement
and any related agreements, exhibits or schedules shall be LBW Investments,
L.L.C..
2. The second sentence of Section 2.2(b)(ii)(B) PROMISSORY NOTE of the Stock
Purchase Agreement shall be deleted and replaced with the following text:
The Note shall be secured by the shares purchased hereto, 100%
of the Membership Interest of Buyer, all outstanding capital
stock and/or Membership Interest of any subsidiary of Buyer, as
well as all of the assets of the Company and shall bear interest
at the rate of eight per cent (8%) per annum.
3. The last sentence of Section 5.2(c) of the Stock Purchase Agreement shall
be deleted in its entirety and replaced with the following sentence:
Notwithstanding anything else to the contrary contained in this
Section 5.2, Seller shall not be liable for any sales taxes
which may have been incurred prior to the Closing Date.
4. Section 6.2. shall be deleted in its entirety, and replaced with the
following language:
Section 6.2. REIMBURSEMENT FOR COMPANY EXECUTIVE RETIREMENT
PLAN. Seller shall reimburse the Company for amounts the Company
must pay to satisfy its obligations under the JB's Supplemental
Executive Retirement Plan (the "Plan") in accordance with and
subject to the terms of the Reimbursement Agreement between
Seller and Company (the "Reimbursement Agreement") in the form
attached hereto as Exhibit B.
5. Section 6.8 FURTHER ASSURANCES of the Stock Purchase Agreement shall be
amended by adding the following phrase to the end of the last sentence:
... including but not limited to, with respect to the Buyer and
Company, separate Trust Deeds for each fee property, mortgage
liens for each leased property, assignments of leasehold
interests and subordination and non-disturbance agreements for
each leasehold interest or such other documents as may be
necessary to perfect the security of interest of Seller in the
assets of the Buyer and the Company.
All other terms and conditions of the Stock Purchase Agreement not amended
herein shall remain in full force and effect.
SANTA XXXXXXX RESTAURANT GROUP, INC.
By:_________________________________________
Xxx Xxxxxxx
Chief Financial Officer
LBW INVESTMENTS, L.L.C.
By__________________________________________
Xxxx Xxxxxxxxx
Chief Executive Officer & President
JB's FAMILY RESTAURANTS, INC.
By__________________________________________
Xxxx Xxxxxxxxx
Chief Executive Officer
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