UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 2, 2017

 

RUTH’S HOSPITALITY GROUP, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

000-51485

72-1060618

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

1030 W. Canton Avenue, Ste. 100

Winter Park, FL

 

32789

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (407) 333-7440

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


Item  1.01 . Entry into a Material Definitive Agreement

On November 2, 2017, RCSH Operations, Inc. (the “Purchaser”), a wholly-owned subsidiary of Ruth’s Hospitality Group, Inc. (the “Company”), entered into an asset purchase agreement (the “Purchase Agreement”) with Desert Island Restaurants, L.L.C., Honolulu Steak House, LLC, Maui Steak House LLC, Wailea Steak House LLC, Beachwalk Steak House, LLC, Lava Coast Steak House, LLC and Kauai Steak House, LLC (collectively, the “Sellers”) and the principal of the Sellers party thereto, pursuant to which the Purchaser has agreed to acquire substantially all of the assets of the Sellers (the “Acquisition”) for a cash purchase price of $35 million, subject to certain adjustments.  The Acquisition involves the purchase of the six existing Ruth’s Chris Steak House restaurants operating in Hawaii.

The Purchase Agreement contains representations, warranties, covenants, indemnifications and closing conditions customary for transactions of this type. Additionally, the Sellers have agreed not to engage in certain transactions or take certain actions prior to closing without the Purchaser’s prior written consent.

The Purchase Agreement is subject to customary termination provisions, and also may be terminated by the Purchaser or the Sellers if closing has not occurred on or before 120 days following the date of the Purchase Agreement.  

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.  We have included the Purchase Agreement to provide investors and stockholders with information regarding its terms, but not to provide any other factual information about the Company, the Purchaser or the Sellers.  The Purchase Agreement contains representations and warranties that the parties to the Purchase Agreement made to and solely for the benefit of each other, and the assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Purchase Agreement.  Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Purchase Agreement and are modified in important part by the underlying disclosure schedules.

Item 8.01. Other Events

On November 3, 2017, the Company issued a press release announcing the Acquisition. A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Exhibit Ind ex

 

Exhibit

Number

 

Description

10.1

 

Asset Purchase Agreement, dated November 2, 2017, by and among RCSH Operations, Inc., Desert Island Restaurants, L.L.C., Honolulu Steak House, LLC, Maui Steak House LLC, Wailea Steak House LLC, Beachwalk Steak House, LLC, Lava Coast Steak House, LLC, Kauai Steak House, LLC and the individual listed on the signature page thereto.*

    99.1

 

 

Press release, dated November 3, 2017.

 

 

 

 

*

We have omitted certain schedules and exhibits to this agreement in accordance with Item 601(b)(2) of Regulation S-K, and we will supplementally furnish a copy of any omitted schedule and/or exhibit to the Securities and Exchange Commission (the “SEC”) upon request. Filed herewith.

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

RUTH’S HOSPITALITY GROUP, INC.

 

 

 

 

Date:  November 3, 2017

 

By:

/s/ Arne G. Haak

 

 

 

Arne G. Haak

 

 

 

Executive Vice President and Chief Financial Officer

 

 

E x hib i t 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AS S ET PURCH A S E A G REEME N T B Y A N D A MO N G

RC S H O P ERA T I O N S , I N C., AS P UR C H A S ER AND

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

H O N O L U L U S TE A K H O U S E, LL C MA U I S TE A K H O USE L L C W A IL EA STE A K H O US E LL C

BEACH W A L K STEAK H O USE, L L C L A VA CO A S T STEAK H O USE, L L C

K A U A I S TE A K H O U S E, LL C, C O L L EC T I VE L Y AS S E LL ERS AND

THE P R I N C I P A L

 

 

 

 

D a ted a s of Nov e mb e r 2, 2017

 

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AR T I C L E I DEF I N I T I O N S ......................................................................................................1

 

1.1 C e rt a in D e finit i ons .........................................................................................................1

 

AR T I C L E II S A L E A N D PURCH A S E OF AS S ETS ............................................................ . 10

 

2.1 S a le a nd P u rc h a s e of the Ass e ts ...................................................................................10

 

2.2 E x c luded A ssets ...........................................................................................................11

 

2.3 Assumed L i a bi l i t ies .....................................................................................................11

 

2.4 E x c luded L iabil i t i e s .....................................................................................................12

 

2.5 Non - Assi g n a ble A ssets ............................................................................................... . 13

 

AR T I C L E I I I CO N S I DERA T I ON ........................................................................................... . 13

 

3.1 Consid e r a t i on ...............................................................................................................13

 

3.2 P u rc h a se P ri c e Adjustment s ........................................................................................ . 13

 

3.3 W i t hhold i ng .................................................................................................................14

 

3.4 P u rc h a se P ri c e Alloc a t i o n ........................................................................................... . 14

 

AR T I C L E I V C L O S I NG ...........................................................................................................14

 

4.1 Clos i ng ........................................................................................................................ . 14

 

4.2 D e l i v e r a bles .................................................................................................................14

 

AR T I C L E V REP R ESENT A T I O N S A N D W AR R A N T I ES OF THE S E L L ERS A N D

THE P R I N C I P A L .............................................................................................. . 15

 

5.1 O r g a ni z a t i on a nd Good S t a nding .................................................................................15

 

5.2 Autho r i z a t i on of A g r ee m e nt ....................................................................................... . 15

 

5.3 Confli c ts; Conse n ts of Third Pa r t i e s ............................................................................16

 

5.4 C a pi t a l iz a t i on ...............................................................................................................16

 

5.5 S ubsidia r ies ..................................................................................................................17

 

5.6 F inan c ial I n fo r matio n ...................................................................................................17

 

5.7 Undis c losed L i a bi l i t ie s .................................................................................................17

 

5.8 Abs e n c e o f C e rt a in D e v e lop m e nt s ...............................................................................17

 

5.9 T a x e s ........................................................................................................................... . 18

 

5.10 R ea l P rop e r t y ...............................................................................................................21

 

5.11 T a n g ib l e Pe rson a l P rop e r t y ; Tit l e to and Suf f ici e n c y o f A ssets ..................................22

 

5.12 I ntell e c tual P rop e r t y .....................................................................................................23

 

 

 

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5.13 Mat e ri a l C ontr ac t s ........................................................................................................25

 

5.14 Empl o y e e B e n e fits P lans ............................................................................................ . 26

 

5.15 L a b o r ........................................................................................................................... . 26

 

5.16 L e g a l P ro c e e di n g s ........................................................................................................27

 

5.17 Comp l ian c e with L a ws; P e rmits ..................................................................................27

 

5.18 Environm e ntal Matt e r s .................................................................................................27

 

5.19 S uppl i e rs a nd Custo m e r s ............................................................................................. . 29

 

5.20 F inan c ial Advisors .......................................................................................................29

 

5.21 I n v e nto r y ..................................................................................................................... . 29

 

5.22 A cc ounts R e c e ivabl e ; Ba nk A cc ounts; B ooks a nd R ec o r ds ........................................30

 

5.23 T ra nsa c t i ons W i t h Relat e d P a rties ...............................................................................30

 

5.24 Gift Ca r d s .....................................................................................................................30

 

5.25 L iquor L i c e nse s ............................................................................................................30

 

5.26 S e l l e rs’ Empl o y e e s .......................................................................................................31

 

5.27 I n fo r mation S ec u r i t y ....................................................................................................31

 

5.28 F ull Dis c losure .............................................................................................................31

 

AR T I C L E V I REP R ESENT A T I O N S A N D W AR R A N T I ES OF P UR C H AS E R ....................32

 

6.1 O r g a ni z a t i on a nd Good S t a nding .................................................................................32

 

6.2 Autho r i z a t i on of A g r ee m e nt ....................................................................................... . 32

 

6.3 Confli c ts; Conse n ts of Third Pa r t i e s ............................................................................32

 

6.4 L i t igation ..................................................................................................................... . 33

 

6.5 F inan c ial Advisors .......................................................................................................33

 

AR T I C L E V II CO V EN A NTS ....................................................................................................33

 

7.1 Condu c t of B usiness P ri o r to the Clos i ng ....................................................................33

 

7.2 A cce ss t o I n fo r mation ..................................................................................................34

 

7.3 E x c lus i vi t y ...................................................................................................................34

 

7.4 Notice of C e rt a in E v e nts ............................................................................................. . 35

 

7.5 Gov e rnm e ntal a nd Third - P a r t y Noti c e s and Cons e nt s .................................................35

 

7.6 Clos i ng E f fo r ts .............................................................................................................36

 

7.7 F u r ther Assu ra n ce s .......................................................................................................36

 

 

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7.8 Confid e nt i a l i t y .............................................................................................................36

 

7.9 P r e s e rv a t i on of R e c o r ds .............................................................................................. . 37

 

7.10 P ubl i c i t y ...................................................................................................................... . 37

 

7.11 Col l ec t i on of R ece ivabl e s ........................................................................................... . 37

 

7.12 T a x Matte r s ..................................................................................................................37

 

7.13 Empl o y ee s ....................................................................................................................38

 

7.14 Non - Assi g n a ble Contra c ts and P e rmits a nd L iquor L i c e nse s ......................................39

 

7.15 Cont i nuing E x is t e n c e of S e l l e rs ...................................................................................40

 

7.16 P os t - Clos i ng Audited F inan c ial S tat e ment s .................................................................40

 

7.17 Gift Ca r d s .....................................................................................................................40

 

7.18 R e d e mp t ion of Gi f t C a r d s ........................................................................................... . 41

 

7.19 Non - Competi t ion and Non - S ol i c i t a t i on .......................................................................41

 

7.20 R ea l P rop e r t y L e a se Not i ce s ....................................................................................... . 41

 

7.21 R e port of B ulk S a le or T r a nsf e r; T a x Cle a r a n c e C e rtifi ca tes ......................................41

 

7.22 S u r vivabil i ty .................................................................................................................41

 

AR T I C L E V I I I CO N D I T I O NS TO C L O S I N G ...........................................................................41

 

8.1 Condi t ions t o Obli g a t i ons of the P u rc h a s e r .................................................................41

 

8.2 Condi t ions t o Obli g a t i ons of the S e l l e rs ......................................................................43

 

AR T I C L E I X I N DEM N I F I CA T I ON ....................................................................................... . 44

 

9.1 S u r vival ....................................................................................................................... . 44

 

9.2 I n d e mn i fi ca t i on b y the S e l l e rs a nd the Prin c ipal ........................................................ . 44

 

9.3 I n d e mn i fi ca t i on b y P u rc h a s e r ..................................................................................... . 45

 

9.4 I n d e mn i fi ca t i on P ro c e d u r e s ........................................................................................ . 46

 

9.5 Addit i on a l I nd e mn i f i ca t i on P rovisions ........................................................................48

 

9.6 T a x T rea t m e nt of I nd e m ni t y P a y m e nt s ........................................................................49

 

9.7 E x c lus i ve R e me d y .......................................................................................................49

 

9.8 Gift Ca r d Es c row A cc o u nt .......................................................................................... . 49

 

9.9 L iabil i t y Es c row A r r a n g e men t .....................................................................................49

 

AR T I C L E X TER M I N A T I O N .................................................................................................49

 

10.1 T e rmin a t i o n ..................................................................................................................49

 

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10.2 E f f e c t o f Te rmin a t i o n ...................................................................................................50

 

AR T I C L E X I M I S C E L L A N E O U S .......................................................................................... . 50

 

11.1 E x p e nses ..................................................................................................................... . 50

 

11.2 S ubm i ss i on to J u r is d icti o n; C onse n t t o S e rvi c e of P ro c e ss .........................................50

 

11.3 Entire A g re e ment; Ame n dments a nd W a ive r s ........................................................... . 50

 

11.4 Gov e rni n g L a w ............................................................................................................51

 

11.5 Notic e s ........................................................................................................................ . 51

 

11.6 S e v e r a bi l i t y ..................................................................................................................52

 

11.7 B ind i ng E f f e c t; No T hir d - P a r t y B e n e fi c i a ri e s; As s i g nment ........................................52

 

11.8 S p ec ific Pe r f o rm a n c e ...................................................................................................52

 

11.9 Counte r p a rts .................................................................................................................53

 

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S c h e du les

 

S c h e dule 2.1 Pu rc h a s e d Ass e ts S c h e dule 2.2 E x c luded A ssets S c h e dule 5.3 R e quir e d Cons e nts S c h e dule 5.6 F inan c ial I n fo r mation S c h e dule 5.10 R ea l Prop e r t y L e a s e s S c h e dule 5.11 P e rson a l Prop e r t y L e a s e s S c h e dule 5.12 I ntell e c tual Prop e r t y S c h e dule 5.13 Mat e ri a l Contr ac ts S c h e dule 5.14 Empl o y e e B e n e fits Plans

S c h e dule 5.15 Empl o y m e nt A g r ee men t s S c h e dule 5.16 L eg a l Pro c e e di n g s S c h e dule 5.17 P e rmits

S c h e dule 5.19 Suppli e rs a nd Custom e rs

S c h e dule 5.23 T ra nsa c tions With Relat e d P a rties

S c h e dule 5.25 L iquor L i c e nses

S c h e dule 6.3 Pu rc h a s e r Cons e nts S c h e dule 7.21 B ulk S a le T a x R e port F o rm

 

Ex h i b its

 

E x hib i t A – F o r m of B i l l of S a le

E x hib i t B F o r m of A ss i g nment a nd Assump t ion Ag ree ment

E x hib i t C F o r m of Dom a in N a me A ss i g nment

E x hib i t D – W . Rand a ll S c ho c h Consul t ing A g re e ment

E x hib i t E – D e s e rt I sland R e stau ra nts M a n a g e me n t A g r ee ment

E x hib i t F – D e s e rt I slan d s R e stau ra nts, L L C No n - Competi t ion and N o n - S ol i c i t a t i on A g re e ment

E x hib i t G – W . Rand a ll S c ho c h No n - Competi t ion and N o n - S ol i c i t a t i on A g r ee ment

E x hib i t H – Gift Ca r d Es c row a nd Reimbur s e me n t A g r ee ment

E x hib i t I I nd e mn i f i ca t i on Es c row A g r ee ment

E x hib i t J – Man ag e m e nt S e rvi ce s A g r ee ment

 

43 0 6 9 8 3 -11

 


AS S ET P U R CHASE A G RE E M ENT

 

T H I S AS S ET PURCH AS E A G REEME N T ( th i s A g re e ment ), d a ted a s o f Nov e mber 2,

2017, is m a de b y a nd a m ong RC S H O p e r a t i ons, I n c ., a C a l i fo r nia c o r po r a t i on (the P u rc h a s e r ), D e s e rt I sland R e stau ra nt s , L . L . C ., a n A r i z ona l i m i t e d l i a bi l i t y c ompa n y , H o nolu l u S te a k Hous e , L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , Ma u i S t ea k House L L C, a H a w a i i l i m i t e d l i a bi l i t y c ompa n y , W a i l e a S te a k H ouse L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , B e a c hw a lk S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , L a v a Co a st S te a k Hou s e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , a nd K a u a i S te a k Hous e , LL C, a n A r i z ona l i m i ted liabil i t y c ompa n y ( e ac h, a S e l le r a nd c ol l ec t i v e l y , the “ S e l l e r s ), and the Prin c ipal (a s d e fin e d b e low).

 

W I T N E S S E T H:

 

This A g r ee ment c on t e mp l a tes a tr a ns a c t i on in which Pur c h a s e r w i l l pur c h a se a ll of S e l l e rs’ undiv i d e d r i g ht, t i t le a nd in t e r e st, of a n y k i nd a nd n a tur e , r e lati n g , d ir ec t l y o r indir ec t l y , to t he d e v e lop m e nt, ow n e rship a nd op e r a t i on of t he R e stau ra nts and t h e t r a de n a mes a ssoci a ted the re with.

 

WHERE A S, the Selle r s a r e e n g ag e d in the busin e s s of o w ning a nd op e r a ting six e x is t ing

Ruth’s Ch r is S te a k House re sta ur a nts op e r a t i ng in H a w a ii ( the B usines s ) ;

 

WHERE A S, the Prin c ipal owns a ll of the issu e d and outstanding e qui t y int e r e sts in

D e s e rt I sland R e stau ra nt s , L . L . C . ( D I R ).   D I R is t he sole a nd e x c lus i ve man a g e r o f e ac h S e l l e r a nd e a c h S e l l e r is a ma n a g e r - ma n a g e d l i m i ted liabil i t y c ompa n y ; and

 

WHERE A S, the Selle r s desi r e to sell to the Pu rc h a s e r the Pu rc h a s e d As s e ts ( a s de f ined b e low), including t h e B u siness, a nd the Pur c h a s e r d e sir e s to a c qui r e the same f rom the S e ll e rs, upon the t e rms a nd subje c t to the c onditions h e r e i n a ft e r s e t fo r th.

 

N O W , T H ERE F ORE, in conside ra t i on of the p rem i s e s and the mutual re p r e s e ntations, w a r r a nt i e s, co ve n a nts a n d a g ree m e nts he re i n a ft e r c ontain e d, the p a rties h e r e to he re b y a g ree a s follows:

AR T I C L E I DEF I N I T I O NS

 

1.1 C e rt a in D e fini t ion s .

 

( a ) F or pur p o s e s of this A g re e ment, the f ol l owing t e r ms s h a ll h a ve the me a nin g s s p ec ified in t h i s S ec t i on 1.1 :

 

A cc ounts R e ce ivabl e means all accounts re c e i vable of the Sellers.

 

A f filiat e ” means, with r espe c t t o a n y P erson, a n y other P erson that, d i re c t l y or ind i r e ct l y thro u g h o n e or more in t ermediar i es, co n trols, or is control l ed b y , or is under c om m on control with, such P erso n , and the term control” ( including the terms “con t rolled b y and

“under c om m on con t rol wi t h”) means the posses s ion, d i r e ct l y o r indirect l y , of the power to di r ect

 

1

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or ca use t h e dir ec t i on of t he man a g e m e nt and polici e s of su c h P e rson, wh e t h e r th r o u g h own e rship of vot i n g se c u rities, b y c ont r ac t or ot h e r w ise.

 

B ooks a nd R ec o r d s ” m e ans all books and r e cords of, or rela t ed to, t he B us i ness, wher e v er situated, inclu d ing books, le d g e rs, fi l es, r e ports, c e rtificates, d o c u ments, plans, oper a t i n g r e cords, da t a, manuals, price l i st s , mail i ng l i st s , email l is t s, l i sts of custo m ers, directories, sa l es and pr o mo t ional materials, purchasing mat e r ials, invent o r y r e c o rds, person n el r e cords, r e s e ar c h, d es i g n and product and/or s ervi c es develop m ent files, a c c ount i ng r e cords and all related docu m entation, i n each c ase, ir r esp e ct i ve of the media in which s uch books and r e cords are sto r ed.

 

B usiness D a y ” m e ans a n y d a y o f the y e ar on wh i ch nat i onal banki n g ins t i t ut i ons in New York, N ew Y o rk are open to t he publ i c for conduct i ng business and are not r equired or authori z ed to close (for a voidance of doubt, e x cl u ding w e ekends).

 

B usiness Emp l o y ee s h as the meani n g set f o rth in S ec t i on 5.26 (a ) below.

 

Cod e ” means t h e I nter n al R evenue Code of 198 6 , as amended, t o g et h er w i th t he rules and r e g u l at i ons promul g ated th e r e und e r.

 

Comp s ” means a n y c ar d s, vouchers, c r e di t s or o t her a r r a n g e m ents i ssued on a comp l i m enta r y b asis b y t he S el l ers to vendors and custo m ers and r edee m a b le for food or beverages at Ru t h’s C hris S teak House resta u r a n t s in Hawai i .

 

Contr ac t ” m e ans a n y w r i t ten or or a l a g r eement, c ontract, purc h ase or s ale order, l i cense, indenture, no t e, mort g a ge, g u ar antee, bo n d, lease, com m i t ment, e a sement, ri g ht of w a y , arra n gement or und e rsta n din g .

 

Environm e n t ” m e ans so i l, l and surface o r subsur f ace st r ata, sur f ace wat e rs (includ i ng nav i gable wa t ers, oc e an wa t ers, str e ams, ponds, drain a g e b asin s , and wet l ands), g roun d water, d rinking w ater supp l y , stream sedi m ents, ambient air (includ i ng the air within bui l din g s and natu r al or ma n -made struct u r e s ab o ve or b e low g roun d ), pl a nt and ani m al l ife, and a n y ot h er e nviron m ental medium or natural reso u r ce.

 

Environm e ntal L a w m eans a n y L a w, and a n y O rd e r or bind i n g a gree m e n t wi t h a n y Govern m ental B o d y r e lating to (i) pol l ut i on (or the cleanup t h er e o f) or t he gene r at i on, manufacturi n g , pr o cess i n g , prod u ct i on, use, treat m ent, t r a nsportat i on, stor a ge, handl i n g , r e c y cl i n g , r ec l amation, d i sposal, or remediat i on of a n y Ha z ardous Subs t an c e or the Rel e ase of Ha z ardous Subs t ances, o r protect i on, pre s erv a t i on or restorat i on of the En v ironment, (ii) sol i d, g a s eous or liqu i d waste gener a t i on, handl i n g , t r ea t ment, storage, disposal o r t r ansportat i on,

(iii) human h ea l t h a nd s a f e t y with r e sp e c t t o e x posur e s to and m a n a g e ment of Ha z a rdous S ubst a n ce s, or ( iv) o cc u p a t i on a l he a l t h a nd s a f e t y . The te r m “ E nviron m e ntal L a w” inclu d e s, without l i m i ta t ion, t he f ol l owing ( includi n g their i mp l a nt i ng r e g ulations a n d a n y sta t e a n a l o g s): the Comp re h e nsive Envi r onment a l R e sponse, Comp e nsation, a nd L i a bi l i t y A c t of 1980, a s a mend e d b y the Supe r f u nd Am e ndments a nd Re a uthori z a t i on A c t of 1986, 42 U . S .C. §§ 9601 e t s e q.; t he S ol i d W a ste D i s posal Ac t, as a men d e d b y the Reso u r c e Cons e rvat i on a nd Re c ov e r y A c t of 1976, a s am e n d e d b y the Ha z a rdous a nd S ol i d W a ste A mendm e nts of 1984, 42 U.S. C . §§

6901 e t seq.; the Fe d e r a l W a ter P ol l ut i on Control A c t of 1972, a s a m e nd e d b y the Cl ea n W a t e r

 

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A c t of 1977, 33 U . S .C. §§ 1251 e t seq.; the To x ic Substan ce s C ontrol A c t of 1976, a s am e n d e d,

15 U.S. C . §§ 2601 e t seq.; the Em e r g e n c y P lanni n g a nd Com m uni t y R i g h t - to - Know A c t of 1986,

42 U.S. C . §§ 11001 e t seq.; the Cle a n Air A c t of 1 966, a s am e nd e d b y the Cle a n Air A c t

Am e ndments of 1990, 42 U.S. C . §§ 7401 e t seq. a nd the Occ u p a t i on a l S a fe t y a nd H ea l t h A c t of

1970, a s am e nd e d, 29 U . S .C. §§ 651 e t seq.

 

Environm e ntal P e rmit s means all P ermits requi r ed under or is s ued p u rsu a nt t o a n y Env i ronmental L aw.

 

E R I S A ” means the Em p l o y e e Ret i rement I n come S ecuri t y Act of 1974, as amended, t o g eth e r wi t h the rules and re g ulations promu l g ated t h er e un d er.

 

E x p e nses ” means a n y a nd all not i ces, a c t i ons, su i ts, proceedi n g s, clai m s, demands, assessments, j u d g ments, a wards, set t le m ents, costs, cha r ges, i nte r est, penal t ies, f e es (includ i ng r easonab l e investi g at i on f ees) and e x penses, includ i ng r easonab l e at t orn e y s’ and other profess i onals’ f ees and d i sbursements.

 

F ina n c ial S tat e ment s means, as pr e pa r ed in a c cordan c e with t he inco m e tax basis of a cco u nt in g , (i) t h e unaudi t ed bala n ce sh ee ts of the Sellers as of D e c ember 31, 2016 and Decem b er 31, 2015 and t he unaudi t ed statements of income, cha n ges in m embers’ equi t y and cash flows of the Sell e rs for the fis c al y e ars ended Decem b er 31, 2016 and Decem b er 31, 2015,

and (ii) the Most Recent B ala n ce S h e et and u n au d i t ed statements of inco m e, cha n ges in m emb e rs’ equi t y and cash flows o f the Sellers for the p artial y ea r period endi n g as of t he Most Recent B ala n ce S heet D ate.

 

F I R P TA C e rtifi c a t e m eans a certifi c ate pursua n t t o Treasu r y R e g ulations S ect i on 1.1445-2(b) that no S el l er is a fore i g n p e r son within t he meaning o f Se c t i on 1445 of the Code.

 

F r a n c hise A g re e ment s means e ach o f ( i ) the F ra nchise A g r eement dated April 1,

1989, b e tw ee n Ru t h s C h ris S te a k House F r a n c hi s e , I n c . a nd S t e a k House # 4, I n c . a nd P a ul M. F lemin g ; (ii) t h e F r a n c h i se A g re e ment d a ted J u l y 29, 1998, b e tw ee n Ru t h s C h r is S te a k House F r a n c hise, I n c . a nd Maui S te a k House L L C; (iii) the F r a n c hise A g ree m e nt dat e d O c tob e r 11,

2000, b e tw ee n Ru t h s C h ris S te a k House F r a n c hi s e , I n c . a nd W a i le a S te a k House L L C; (iv) the F r a n c hise A g r ee ment d a t e d Ap r il 21, 2006, b e tw e e n Ru t h s C h r is S te a k House F r a n c hise, I n c . a nd B e ac h w a lk S te a k H o use, LL C; ( v ) the F r a n c h i se A g re e ment d a ted A p ril 21, 2006, b e tw ee n Ruth’s C h r is S te a k House F r a n c hise, I n c . a nd L a v a Co a st S te a k Hous e , LLC; a nd ( v i) the F r a n c hise A g r ee ment d a t e d M a r c h 2, 2017, b e tw e e n Ru t h s C h r is S te a k House F r a n c hise, I n c . a nd K a u a i S te a k Hous e , L L C.

 

GAA P ” m e ans g en e r a l l y a c c epted a ccount i ng p r inciples in the Uni t ed S tates of

Am e ri c a in e f f e c t f r om t i me to t i me, a ppl i e d c onsistent l y with past pr a c t i ce .

 

Gift Ca r d s ” m e ans a n y pre-paid b alan c e c a rds a n d a n y ot h er arra n gements which are sold b y the Sellers to custo m ers or to a r etailer for re s ale to custo m ers a nd r e dee m able for t h e pur c hase o f food or b ev e ra g es at a Ruth’s Chris S t eak House r e stau r ant.

 

Gift Ca r d L iabil i t y Pe rio d ” has the me a ni n g s et f orth i n S ec t i on 7.17 below.

 

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Gov e rnm e n t a l B o d y me a ns a n y g ov e rnm e nt or g ov e rnm e ntal or re g ulat o r y bo d y the r e of, o r politic a l subdiv i sion t h e r e o f , wh e t h e r fe d e r a l, s t a t e , loc a l or f o re i g n, or a n y a g e n c y , ins t rum e ntali t y o r a uthori t y t h e r e o f, or a n y c o u rt or a rbit r a tor ( pub l ic or priv a te ) .

 

H a z a rdous Subs t a n c e means a n y subs t an c e present l y l i sted, defined, d e s i g n a ted or classified as h a z ardo u s, to x ic, radioact i ve, or dangerous, or ot h erwise re g ulated, un d er a n y Environmental L aw.   Haz ardous Subs t ance includes a n y subs t an c e to whi c h e x posure is re g ulated b y a n y Gover n mental Bo d y or a n y Environmental L aw includ i n g a n y to x ic waste, pol l utant, contaminant, ha z ardous substance, to x ic substance, ha z ardous wa ste, special waste, industrial substance or petroleum or a n y deri v at i ve or b y p rodu c t t he r eof, ra don, radioact i ve material, asbesto s , or as b estos containing ma t eria l , u r e a f o rmalde h y de, foam i nsulat i on or po l y chlorina t ed biphe n y l s.

 

House A cc ount s ” m e a n s a n y ar r a n g ements b y m eans of vouc h ers, c r e di t s or trade or b arter a c counts which are e x tended b y t h e S el l ers to th i rd p a rties a nd custo m ers and r e dee m able for t h e pur c h ase of food o r b e v e rages at Ru t h’s C hris S teak H ouse r e stau r ants i n Hawaii and that do not gener a t e a c o rresp o ndi n g account r ecei v able in fa v or of Purcha s er. For the sake of clari t y , house accoun t s with an e x is t ing credit at t ributable to se r vices provided to S el l ers on trade a re consider e d a House A ccount u nder this defin i t i o n .  However, ar r a n g em e nts where vo u chers are p r e s e nted in e x change for m e a ls and upon redemp t ion t he voucher spons o r ( e . g ., the J apanese To u rism Bur e a u ) is invo i ced f o r the re d eemed vo u chers are not consid e r e d a House A c coun t .

 

I nd e mn i fi c a t i on C l a i m me a ns a n y c laim in r e spe c t of w hich p a y ment m a y be sou g ht under A r t i c le I X of this A g r ee ment.

 

I ntelle c tual P ro p e r t y m ea ns all of the f ollowi n g in a n y jurisdi c tion thro u ghout the w o r ld: ( i) a ll p a tents ( includin g , without limita t ion, utili t y p a tents, d e s i gn p a tents, industri a l d e si g ns, pl a nt pa t e nts, inv e ntors’ c ertifi ca tes a nd utili t y models), p a tent a p pli ca tions (in c luding do c k e ted p a t e nt dis c losur e s a wa iti n g f ilin g , r e issues, divisions, c ontinu a tio n s, co n tinu a tion s - in- p a rt a nd e x tensions), a nd p a tent dis c losur e s, t o g e t h e r w ith a ll re issu a n ce s, c ontinu a tions, c ontinu a tions - in - p a rt, re v isions, e x tensions, and ree x a min a tions th e r e of ( c o l le c tiv e l y , P a tents ); (ii) a ll tr a d e ma r ks, s e rvice ma r ks, tr a d e n a mes, service n a mes, br a nd n a me s , tr a de dr e ss r i g hts, lo g os, slog a ns, I nt e rn e t d omain n a mes a nd individual, c o r por a te, business and p r odu c t nam e s, to g e th e r w ith a ll tr a nslat i ons, a d a ptati o ns, d e riv a t i ons, a nd c ombin a tions th e r e o f , t o g e ther with the g oodwill a ssoc i a ted with a n y o f the f ore g oing, and a ll a ppli ca tions, registr a tions a nd

r e n e w a ls t h e r e o f (c ol le c t i v e l y , Ma r ks ); ( i i i) a ll c o p y r i g htable wo r ks, all c o p y r i g hts and a ppl i ca t i ons, r e g is t r a t i o n s and re n e w a ls t h e r e fo r , wo r ks of a uthorship and mask w o r k r i g hts ( c ol l ec t i v e l y , “ Co p y r i g h t s ); ( iv) a ll tr a d e secr e ts a nd c onfid e nt i a l bus i n e ss info r mation (in c lud i ng id e a s, r e s ea rc h a nd d e v e lop m e nt, kn o who w , f o r mu l a s, compo s i t ions, manu fac turi n g a nd p r odu c t i on p r o c e sses a nd te c hniques, t e c hnic a l dat a , d e si g ns, d r a wi n g s, spe c ific a t i ons, lis t s of p a st and p r e s e nt cust o me r s, pri c i n g a nd c ost i n f o r mation, and business a nd ma r k e t i ng p l a ns a nd p r opos a ls); (v) a ll I nte r n e t do m a in nam e s, w e b si t e s and s o c ial media ac c ounts ( including but not l i m i t e d to Face book, Twitt e r, I nst a g r a m, Tu m blr, a nd L in k e din), t o g e t h e r w i t h lo g in and p a sswo r d info r mation, a n d ri g hts i n the t e lepho n e numbe r s, tog e ther with a l l t r a nslations, a d a ptations, d e riv a t i ons, a nd c omb i n a t ions t h e r e of a nd including a ll g oodw i ll a ssoci a ted the re with; ( vi) a ll S o f tw a re ( includi n g sour c e c o d e , e x ec utable c od e , d a ta, d a tab a s e s, a nd r e la t e d

 

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do c ument a t i on) a nd T ec h nolo g y ; (vii) a ll a d v e rtis i ng a nd p romotion a l m a t e ri a ls; ( vi i i) a ll other p r opri e ta r y ri g hts; a nd (i x ) a ll c opies a nd tan g ib l e e mbod i ments of a n y of t he f o r e g oi n g in a n y fo r m or medium wh a tso e v e r.

 

I R S m ea ns the I n t e rn a l R e v e nue S e rvic e .

 

K a u a i R e sta u r a n t ” m e a n s the restau r ant l ocated at 2829 Ala Kalanikau m a k a S t.,

# F 207 - A, K ol o a , H I 96 7 56.

 

K e y B usiness Emp l o y ee s ” has the me a ni n g set f o rth in S ec t i on 5.26 (a ) be l ow.

 

Kno w le d g e o f the S e l l e r s ” means (i) the actual k n owledge of a n y S el l er or P rincipal and (ii) the kn o wledge that a n y S el l er o r P rincipal, after r e aso n a b le invest i g at i on, would have obtained in t he ordina r y conduct of i t s bus i ness.

 

L a ws m ea ns all for e i gn, f e d e r a l, st a te a nd lo c a l la w s, common l a w, st a t u tes, c od e s, ordin a n ce s, rul e s, re g ulations, re solutions a nd O r d e rs.

 

L e g a l P roc ee di n g m e ans any judi c ial, a dministr a tive or a rbit r a l a c tion, n oti ce , suit, c laim, inqui r y , inve s ti g a tion or pro cee di n g ( p ublic or p r ivat e ) b y o r befo r e a Gov e rnm e n t a l B o d y , T a x ing Autho r i t y or a rbitr a tor.

 

L i a bi l i t y m e a ns a n y debt, liabili t y or o b l i g a tion ( w h e ther di r ec t or indir e ct, a bsolute or c onti n g e nt, a cc ru e d o r una cc ru e d, kn o wn or unknown, liquid a ted or unliquidat e d, or due or to b ec ome d u e ) a n d including a ll c osts a nd e x p e nses re lating t h e r e to.

 

L i e n m e a ns a n y li e n, en c umbr a nc e , ple d g e , mo r t g ag e , d ee d o f t r ust, s ec u ri t y int e r e st, cl a im, le a s e , c harg e , option, ri g ht of fi r st r e fus a l, e a s e ment, title def e c t, se r vitud e , c ov e n a nt, tr a n s f e r r e stric t ion, en c roa c hment, re s e rv a tion, muni c ipal bond, ir r e g ula r ities of titl e , or a n y other r e striction or limitation of a n y kind.

 

Mat e ri a l Ad v e rse E f f e c t ” means such f a cts, ci r c u ms t ances, ev e nts, or cha n g es that ar e , ind i vidual l y o r in the a g g regate, mater i al l y ad v erse to t he (i) the b u siness, assets, prospe c ts, prop e rties, re s ul t s of oper a t i ons, condi t ion (financial or ot h erwi s e) or p e rforma n ce o f a n y S e l l e r, the B usiness or the P urcha s ed Assets or (i i ) the abi l i t y o f a n y S el l er to consummate a n y o f the tran s act i ons c o ntemplated b y th i s A g r e e ment, but shall not i nclu d e ( x ) a n y cha n ge aff e ct i ng econom i c or fi n ancial condi t ions gen e r a ll y or ( y ) a n y c ha n g e a f fe ct i ng the Seller s ’ indust r y as a whole, p r o v ided such cha n ge does n o t d i sproport i onate l y a ff ec t a n y S el l er.

 

Most R ece nt B a lan c e S h ee t ” m e ans the unaudi te d balance s h eet of the S e l lers as of the Most R ecent B ala n ce S heet D ate.

 

Most R ece nt B a lan c e S h ee t D a t e ” means J une 1 4, 2017.

 

O r d e r ” m e ans a n y or d e r , in j unct i on, jud g ment, decree, det e rminat i on, rul i n g , wri t , assessment or a rbitrat i on or other a w ard of a Governmental B o d y .

 

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O r dina r y Cour s e of B u s ines s me a ns the ordi n a r y a nd us u a l cou r s e of b u s iness of the Selle r s r e l a ted to the B usiness a nd c onsist e nt wi t h p a st pr ac t i ce s and a ppl i ca ble L a w.

 

P e rmit s ” means a n y ap p rov a ls, authori z at i ons, consents, l icenses, permit s , certifi c ates, waiv e rs and si m i l ar ri g hts obtained, o r required to b e obtained, from a G o v e rnmental B o d y .

 

P e rson ” m e ans a n y ind i vidual, corpor a t i on, p a rtnership, firm, joint venture, associat i on, jo i n t -stock c ompa n y , trust, un i ncorp o r a ted o r gani z at i on, Governmental B o d y or other ent i t y .

 

 

 

 

D a te.

P r e- Clos i ng T a x P e rio d me a ns a n y T a x p e riod e nding on o r b e f o re the Clos i ng

 

 

P rin c ipal ” means W . R a ndall S choch, ind i vidually and as Trust e e of the S choch

R e vo ca ble L iv i n g T r ust d a ted N ov e mb e r 19, 20 0 1.

 

P romotion a l Discount s ” means a n y incent i ves i s s ued b y S el le rs to custo m ers in connect i on with m ark e t i n g and p romotional s t r a t e g ies r esul t ing in d i scoun t s or cr e di t s that m a y be appl i ed to t he pur c h a s e of food or b eve ra g es at R uth’s Chris S teak House restau r ants i n Hawai i .

 

R e le a s e ” means a n y re l easin g , spil l i n g , leaki n g , pump i n g , pouri n g , em i t t in g , emp t y i n g , disch ar g in g , i n ject i n g , escapi n g , disposin g , dump i n g , dispersal or leachi n g of a Ha z ardous Subs t ance in t o the Environment, i nclud i ng the a b andonment or discardi n g of barrels, containers, and ot h er r e c eptacles con t ain i ng H a za rdous Subs t ances, or as o t h erwise defi n ed under Environmental L a ws.

 

R e p re s e n t a t i ve ” m e ans, with respe c t t o a n y P ers o n, a n y and all man a gers, directors, off i cers, emp l o y ee s, consul t ants, fina n cial advisors, counsel, a cc o untants, or other agents or in t ermedi a ries of such P erson.

 

R e stau ra nt s m e ans e a c h of the r e stau r ants loca t ed at (i) 500 Ala Moa n a B lvd. S t.

#6C, Honolulu, H I 968 1 3, (ii) 900 F ront St., L a h a ina, M a ui, H I 96761, ( i i i) The S hops a t W a i l ea ,

3750 W a i l e a Al a nui, W a i l ea , Ma u i, H I 96753, (iv) W a ik i ki Beac h w a lk, 226 L e w e r s S t., # L 236, Honolulu, H I 96815, (v) 6 8 - 1330 Ma u na L a ni D r i v e , S te 121, K oh a la Co a s t, H I 9674 3 , a nd ( v i) the Ka u a i R e stau r a n t .

 

S c h e dules ” m e ans the d isclosure sch e dules o f the S el l ers and the Purc h a s er, a s appl i cable, a ccompa n y i n g th i s A g reement.

 

S ec u r i t i e s A c t ” means t he S ecuri t ies Act of 193 3 , as amended, and the ru l es and re g ulations promulgated thereund e r.

 

S e l l e r Closing C e rtifi c a t e ” means a c e rtificate, d a ted as of the Clos i ng D a t e and si g ned b y a du l y authori z ed offi c er of each S el le r, that each o f t h e condi t ions s et forth i n S ec t i on

8.1( a ) a nd Se c t i on 8.1 ( b) h a ve b e e n satisfie d .

 

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S e l l e r I P m e a ns the I n t e l l ec tual P rop e r t y used b y e ac h S e l l e r, o r ne ce ssa r y f o r use, in the c ondu c t of the B usiness a s c u r re nt l y c o ndu c ted a nd a s c u r r e nt l y c ontemplat e d to be c ondu c ted.

 

S e l l e r Se c r e ta r y ’s C e rti f ic a t e ” m e ans a certifi c ate of the S ec r eta r y ( o r e qu i valent office r ) of e ach S el le r c er t if y i n g that at t ac h ed the r eto are certified copies of each S el l e r ’s Articles of O r g ani z at i on and Op e r a t i ng A gr e ement, and t r ue and comp l ete copies o f a ll resolu t ions of

each S el l e r ’s man a ger a n d members approvi n g the e x ecut i on, del i ve r y and performa n ce o f this Agreement and the other Transa c t i on D o cuments a nd the consummation of the trans a ct i ons contemplated he r e b y and there b y , a n d that all su c h r e solu t ions are in full f orce and ef f ect and a r e all the resolu t ions adopt e d in connect i on with t he transa c t i ons contempla t ed her e b y and t h er e b y , and certi f y i n g the n ames and si g nat u r e s of the o ff i cers of each S el le r a utho r i z ed to si g n th i s Agreement, the Tran s act i on Documents and the o t her do c uments to be d el i ver e d h e r e un d er a nd thereund e r.

 

S e l l e r Ta x ” means a n y Ta x , if and to t he e x tent t hat a n y S el l er is or m a y b e potential l y l i able und e r appl i cable L aw, un d er c o n tract or on a n y ot h er g r o u nds (includ i n g , but not l i m i t ed to, as a transfer e e o r suc c essor, und e r Code S ect i on 6901 or T r easu r y R e g ulation S ect i on 1.1502-6, as a re sult of a n y T ax sharing o r other a g r eement, o r b y oper a t i on of la w ) for a n y s u ch Ta x ).

 

S e l l e r Ta x R e tur n ” me a ns a n y r e turn, elect i on, d ecla r at i on, r e port, sc h ed u le, information return, doc u ment, information, op i nion, statement, or a n y a m endment to a n y of the for e g oi n g (includi n g , wi t hout l i m i t at i on, a n y con s ol i dated, comb i ned or u n i t a r y r e turn) filed or r e quired to be filed with a n y T a x ing Authori t y , if, in a n y man n er or to a n y e x tent, relating to or inclusive of e a ch S el l er o r a n y S el l er Ta x .

 

S o f tw a r e ” means a n y a n d all (i) compu t er pr o gr a ms, i nclud i ng a n y and all software i m plementatio n s of al g o rithms, models and me t hodolo g ies, whet h er in source code o r object code, (i i ) d ataba s e s and comp i lations, including a n y and all data and col l ect i ons of data, whether m a chine r eadab l e or otherwis e , (i i i) desc r ip t ions, flow-charts and o ther work prod u ct used to desi g n, plan, o r g a ni z e and develop a n y of t he for e g oi n g , s creens, user in t er f aces, r e port formats, firmw a r e , de v e l opment too l s, templates, menus, buttons and icons, and (iv) all documentat i on including user manuals and oth e r t r ain i ng docu m entation re l ated to a n y of the for e g oi n g .

 

S tr a ddle Pe r io d ” m e ans a n y T ax period b e g inn i ng b e fore t h e Clos i ng Da t e and ending after t h e Clos i ng Date.

 

S ubsidia r y means a n y P erson of which a m ajori t y of the outs t andi n g vot i ng securi t ies or other vot i n g equi t y in t e r ests are o wn e d, direct l y o r indirect l y , b y a n y S el le r or with r e spe c t t o which a n y S el l er, dir e ct l y or indi r ect l y , has the power to elect a majori t y of such P erson’s board of d i r e ct o rs or si m i l ar g o v erni n g b o d y or ot h erwise to dire c t t he business and pol i cies of such P erson.

 

T a x R e turn ” means a n y r e turn (includi n g a n y in f ormation return), r eport, statement, schedule, not i ce, form, or ot h er do c u m ent or information filed with or subm i t t ed to, or

 

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r e quir e d to be filed with or subm i t t e d to, a n y T a x ing Autho r i t y in conn e c t i on with t he d e te r m i n a t i on, a ssessme n t, colle c t i on, or p a y ment of a n y T a x or in c onn ec t i on with t he a dm i nis t r a t i on, i m plem e ntation, or e n f o r c e ment o f or c omp l ian c e with a n y L a w re l a t i ng to a n y T a x .

 

T a x e s ” means (i) all fe d er a l, s t ate, lo c al or fo r e i gn ta x es, ch a r g es, fe es, i m posts, levies or other a s s ess m e n ts, i nclud i n g , without l i m i t at i on, all net i ncome, g r oss receip t s, c api t al, sales, use, ad v alorem, v a lue added, tran s f e r, fra n c hise, profi t s, invento r y , c api t al s t ock, l i cense, withho l din g , p a y roll, e m pl o y ment, social s e curi t y , unemp l o y ment, e x cise, sever a n ce, stamp, occupat i on, prop e r t y and est i mated ta x es, customs dut i es, fees, as s ess m ents and cha r ges of a n y kind whatsoever, (ii) all in t er e st, penal t ies, fi n es, a ddi t ions t o t a x or a ddi t i o nal amounts i m posed b y a n y T a x ing Authori t y in connect i on with a n y i t em described in clause ( i ), and (iii) a n y transfe r ee l i abi l i t y in r e s pect of a n y i t ems de s cri b ed in clauses (i) and/or ( i i).

 

T a x ing Autho r i t y me a ns a n y (i) nat i on, state, c oun t y , ci t y , town, vi l l a g e , dis t rict, or other jurisd i ct i on of a n y natu r e, (i i ) f ede r al, s t a t e, local, m unicipal, fo r ei g n, or ot h er g ov e rnment, (iii) g over n mental or quas i- g ov e rnmental authori t y o f a n y n ature (includi n g a n y g ov e rnmental a gen c y , b r anch, de p artment, offic i a l, or ent i t y and a n y cou r t or other tribunal), (i v ) mu l t i -nat i onal or g ani z at i on or bo d y , o r (v) bo d y e x er c is i n g , or e nt i t l ed to ex er c ise, a n y adm i nis t r a t i ve, e x ecut i ve, jud i cial, le g is l at i ve, pol i ce, r e g u l ato r y , or ta x ing authori t y or p o wer o f a n y n ature.

 

T ec hnol o g y m eans, co l lect i ve l y , all trade s e c r ets, desi g ns, f o rmulae, a l g o r i t hms, procedu r es, methods, t e c hniques, ide a s, kno w -h o w, res e ar c h and develo p ment, technical data, progr a ms, s ubrout i nes, t o ols, m aterials, specifi c at i ons, processes, invent i o n s (whether p atentable or unpatentable and whe t her or not re d uced to p r a ct i ce), a p p a r atus, cr e at i ons, improvements and other si m i l ar materials, a nd all recordi n g s, g r aphs, dr a wi n g s, rep o rts, ana l y ses, and other w o rks

of a uthorship, and oth e r t a n g ib l e e mbod i ments of the f o r e g oi n g , in a n y fo r m, wh e ther or n o t spe c ific a l l y l i sted h e r e in, and a ll re lat e d t ec hnol o gy used b y a n y S e l l e r in c onn ec t i on with, or that re late to, t he B usine s s.

 

T ra ns a c t i on Do c ument s ” means (i) th i s A g r eem e nt, (ii) the bi l l of sale wi t h r e spe c t t o the Purc h ased As s ets, i n the form attac h ed her e to as E x hib i t A ( t he “ B i l l of S a l e ”), (iii) the ass i g nment and a ssu m pt i on a g reement with respe c t t o the Assu m ed L iabil i t i es, in t he form attac h ed he r eto as Ex hib i t B (the “ Ass i g nm e nt and A ssu m pt i on A g re e men t ”), (iv) t h e domain name ass i g nmen t , in t he form attac h ed he r eto as E x hib i t C (the “ Dom a in N a me

Assi g nment ), ( v) eac h S e l l e r s income t a x withho l ding f o r m, i n the f o rm p r ovided p re vious l y to the Pur c h a s e r, ( vi) the Se l l e r Closing C e rtifi ca te, ( vi i ) the S e l l e r Se c r e t a r y ’s C e rtifi ca te, (vi ii ) the F I R P TA C e rtifi ca t e , (i x ) the W . Rand a ll S c ho c h Consul t ing A g re e ment in t he f o r m att a c h e d h e r e to as E x hib i t D , ( x ) t he D e s e rt I sland Restau r a nts M a n a g e ment A g re e ment in t he f o r m a t t ac h e d h e r e to as E x hib i t E (the D I R Ma na g e m e nt A g r ee m e nt ), ( x i) the D e s e rt I slands R e stau ra nts, L L C Non - C ompeti t ion and N o n - S ol ic i t a t i on A g r ee ment in t he f o r m atta c h e d h e r e to a s E x hib i t F , ( xii) the W . R a nd a ll S c ho c h No n - C o mpeti t ion and N o n - S ol i c i t a t i on A g r ee ment in the f o r m atta c h e d h e r e to a s E x hib i t G , ( x i ii) the G i ft Ca r d Es c row a nd Reimburs e ment Ag ree ment in t he fo r m a t ta c h e d h e r e to as E x hib i t H (the Gift C a rd E s c r o w a nd Reimburs e ment Ag ree men t ), ( x iv) the I n d e mn i fi ca t i on Es c row A g r ee ment in t he f o rm a t ta c h e d h e r e to as

E x hib i t I (the I nd e mn i f i ca t i on Es c row A g re e me n t ), ( x v) the M a n a g e m e nt S e rvi ce s A g r ee ment

 

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in t he f o r m atta c h e d h e re to as E x hib i t J (“ Mana g e ment S e rvi ce s A g r ee me nt ) ( x vi) a n y oth e r do c ument or ins t rum e nt t o be e x ec uted a nd d e l i v e r e d on or prior to t he Clos i ng in conn e c t i on

with t he tr a ns a c t i ons c o n templat e d b y th i s A g r e e ment or a n y of the other T ra nsa c t i on Do c uments, a s r ea so n a b l y r e q u e sted b y the Pu r c h a s e r, a nd ( x vi i ) a n y S c h e dule, A nn e x or E x hib i t t o a n y of

the f o r e g oi n g .

 

T r e a su r y R e g ulation s means the final or temp o r a r y re g ulations that have been promu l g ated un d er the C ode b y t h e U.S. Dep a rtment of the Tr e asu r y , and a n y su c cessor re g ulations.

 

(b) Oth e r D e finit i on a l and I n te r p re t i ve Matt e r s .  Unl e s s oth e r w ise e x p re ss l y p r ovided, f or pur p o s e s of th i s A g re e ment, the f ol l owing r u l e s of int e rp r e ta t ion sh a ll a pp l y :

 

(ii) C a lcul a t i on of Time P e rio d .   W h e n ca lcul a t i n g the p e riod of t i me b e fo r e whi c h, with i n whi c h or f ol l owi n g whi c h a n y a c t i s to be done or st e p tak e n pu r suant to

th i s A g re e ment, the d a t e that is the re fer e n c e d a te in c a lcul a t i ng s u c h p e riod sh a ll be e x c luded. I f the l a st d a y o f su c h p e ri o d is a no n - B usiness D a y , the p e riod in qu e st i on sh a ll e nd on the n e x t suc c ee di n g B usiness D a y .

 

 

 

 

dol l a rs.

(iii) Dolla r s .  A n y r e f e r e n c e in t his A g re e ment to $ shall me a n U.S.

 

 

(iv) E x hib i ts /S c h e dules .  The E x hib i ts a nd S c h e dules to this A g re e ment a re h e r e b y inc o rpo ra t e d a nd made a p a rt h e r e of a n d a re a n in te g ra l p a rt of t his A g r ee ment.  All E x hib i ts and S c h e dules a nn e x e d h e r e to or r e fer re d to he re in a r e h e r e b y inc o rpo ra ted in a nd m a de a p a rt of th i s A g r ee ment a s if s e t fo r th i n full he r e in.  A n y ca pi t a l iz e d te r ms used in a n y S c h e dule or E x hib i t but n o t o t h e r w ise d e fin e d the r e in shall be d e fin e d a s set f o r th i n th i s A g re e ment.  The spe c ific d isclosur e s s e t f o r th i n the Sch e dules sh a ll be org a ni z e d to co r r e s p ond to a s p ec ific s ec t i on r e f e r e n c e in t his Agr ee ment to which t h e qu a l if y i n g a nd c o r r e spo n din g l y numbe re d disclosure re la t e s, tog e ther with app r o p ri a te c ross re fer e n c e s wh e n disclos u re is appli ca ble to other se c t i ons of this A g r ee ment, a nd a n y disclosure set f o r th i n one s ec t i on of the S c h e dules

shall not a pp l y to, and s h a ll not be d ee med to be d isclosed f or pur p oses o f, a n y ot h e r s e c t i on of the Sch e dules w i t hout a s p ec ific cros s - r e fer e n c e to such other s e c t i on to which su c h disclosure is a lso appli ca ble.

 

(v)       G e nd e r a nd Numb er . A n y r e fer e n c e in t his Agr e e ment to g e n d e r shall in c lude a ll g e nd e rs, a nd wo r ds impa r t i n g the sin g ular numb e r on l y s h a ll include the plu ra l a nd vice v e rs a .

 

(vi) H ea di n g s .  The p rovision of a T a ble o f Contents, the div i sion of th i s A g re e ment in t o A r t i c l e s, S ec t i ons a nd other s ubdiv i sions a nd the ins e rtion of h ea din g s a re for c onv e n i e n c e o f r e f e re n c e on l y a nd sh a ll not a ff ec t or be ut i l iz e d in construing or int e rp re t i n g th i s A g re e ment.  All r e fer e n ce s in t his A g r ee ment to a n y S ec t i on a re to t h e c o r r e spo n di n g S ec t i on of th i s A g r ee me n t un l e ss o t h e r w ise sp ec if i e d.

 

(vii) H e r e in .  T h e wo r ds “ h e re i n ,” h e r e ina f t e r ,” h e r e o f ,” a nd h e r e un d e r used h e r e in r e fer to this Ag ree ment a s a w hole a nd not m e r e l y to a subdivision i n whi c h su c h wo r ds a pp e a r unless the c onte x t o t h e r w ise re quir e s.

 

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(viii)     I n c lud i n g .  T h e wo r d includin g o r a n y v a ri a t i on the re of m e a ns includin g , without l i m i tatio n a nd sh a ll not be c o nstru e d to l i m it a n y g e n e r a l s t a tem e nt t h a t i t follows to t he spe c ific o r si m i l a r items or matte r s i m medi a te l y f ol l owi n g it.

 

(i x ) Made Av a i l a ble . An it e m shall be c onsid e r e d made a v a i l a ble” to the Pur c h a s e r, to t he e x tent su c h ph ra se a pp e a rs in th i s A g re e ment, on l y if s u c h i t e m has b ee n p r ovided in w r i t ing to t he P u rc h a s e r.

 

( x ) R e fl ec ted O n o r Set F o r t h I n . An item a rising with respe c t t o a spe c ific r e p re s e ntation or w a r r a n t y s h a ll be d ee m e d to be refl ec ted o n or s e t fo r th in a b a lan c e s h ee t or f i n a n c ial stat e ments or in f o r mati o n, to t he e x tent a n y such phr a se a p p ea rs in

such r e p r e s e ntation or w a r ra n t y , if ( A ) th e re is a r e s e rv e , a c c ru a l or ot h e r s i m i l a r item und e r l y i n g a number on su c h b a lan c e she e t or f i n a n c ial st a t e ments or in f o r mation t h a t r e late to t he subj e c t matter of su c h r e p re s e nt a t i on, ( B ) such i t e m i s oth e r w ise sp e c ific a l l y set f o rth on the b a lan c e she e t or f ina n c ial stat e m e nts or info r mation or ( C) such i t e m i s r e fl ec t e d on the b a lan c e she e t or fin a n c ial st a tem e nts or i n fo r mation and is spe c ifi c a l l y set f o rth in the notes the re to.

 

( c ) The p a rties h e r e to ha v e p a rticip a ted join t l y in t he n e g ot i a t i on a nd d r a fti n g of th i s A g r ee ment a nd, in the e v e nt an a mb i g ui t y o r qu e st i on of in t e nt or int e rp re t a t i on a ris e s, th i s A g re e ment sh a ll be c onstru e d a s jo i nt l y d r a ft e d b y the p a rties h e r e to a n d no p re sumpt i on or burd e n of p ro o f sh a ll a ri s e fa vori n g or disf a vori n g a n y p a r t y b y virtue o f t h e a uthorship of a n y p r ovis i on of th i s A g r ee m e nt.

 

AR T I C L E II

 

S A L E A N D PURCH A S E OF AS S ETS

 

2.1 S a le a nd P u rc h a s e of the Ass e t s .  Upon the te r ms a nd subj ec t t o the c ondi t ions s e t fo r th i n th i s A g r ee ment, a t t he Clos i n g , the Selle r s shall s e l l , a ss i g n, tr a ns f e r, c onv e y a nd d e l i v e r to t he P u rc h a s e r, a nd the P u rc h a s e r s h a ll pur c h a s e a nd ac qui r e f rom the S e l l e rs, f r e e a nd c le a r of a ll L iens, a ll r i g ht, t i t le a nd in t e r e st of the Selle r s in and to a ll of its prop e r t ies, a ssets, c ontr a c ts a nd ri g hts, o f e v e r y kind and d e s c rip t ion and w h e r e v e r lo c a ted, r e lat e d to, u s e d in or int e nd e d for use in c onn ec t i on with t he B usiness a s c u r r e nt l y c ondu c ted or c u r re nt l y c o ntemplat e d to be c ondu c ted, oth e r t h a n the E x c luded A ssets ( a s de f i n e d b e low) ( c ol l ec t i v e l y , the “ P u rc h a s e d Ass e t s ), in c lud i n g without l i m i tation the f ol l owin g :

 

( a ) a ll f i x e d a ssets, in c lud i ng, without l i m i ta t ion, all fu r ni t u re , f i x tur e s, e quip m e nt, m ac hine r y , t o ols, v e hicl e s, of f i c e e qu i pment, supplies, c ompu t e rs, t e lephon e s and other ta n g ib l e p e rso n a l prop e r t y wh e r e v e r lo ca t e d , includin g , without l i m i t a t i on, those set f o r th on S c h e dule 2.1 ( a ) ;

 

(b) a ll invento r y , stock in t ra d e , me rc h a ndise, g oods, supplies a nd other p r odu c ts, r a w m a te r ials, wo r k in pr o g r e ss, finish e d pr o du c ts, s upp l y a nd p ac k a g i n g i t e ms, p r omo t ional mat e ri a ls a n d sim i lar i t e ms, wh e r e v e r loc a ted, in c lud i n g , without l i m i tation, those s e t fo r th on S c h e dule 2. 1 (b) ( c ol le c t i v e l y , t h e I n v e nto r y );

 

( c ) a ll P e rmit s , includin g , without l i m i ta t ion, t hose s e t fo r th on S c h e dule 5.17 ;

 

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(d)       a ll c ontr ac ts s e t f o rth on S c h e dule 2.1 ( d) (the A s sumed Con t r a c t s ) a nd a ll c usto m e r d e posits and pr e p a y ments a ss o c iat e d with a n y Assumed Cont r ac ts (the “ Custo m e r D e posit s ), in c lud i n g , without l i m i ta t ion, t hose C u sto m e r De posits s e t fo r th on S c h e dule 2.1 ( d) ;

 

( e ) a ll r i g hts und e r o r pu r su a nt t o a ll re p re s e ntations, w a r r a nt i e s, g u a r a nte e s a nd indemni t ies m a de b y a n y th i rd p a r t y re l a ted to a n y P u r c h a s e d Ass e ts;

 

(f) all real pro p er t y , leas e holds and subleaseholds in r eal prop e r t y , and easements, r i g ht s -o f -w a y and other app u rtenants t her e to;

 

(g) a ll insur a n c e pr o c e e ds, c ond e mnation pro c e e ds or r i g hts, t r a n s f e r a ble or a ss i g n a b l e c laims for in s u ra n c e p roc ee ds, a n d a n y other c laims, d e posits (including s e c u r i t y d e posits), p re p a y ments, p r e p a id ass e ts, p r e p a id e x p e nses ( to be a l l o ca ted p r o r a ta ) , p r e p a id r e v e nu e s, r e funds, ca uses of a c t i on, r i g hts of r e c o v e r y , r i g hts of s e to f f a nd r i g hts of r ec oupment (in c lud i ng a n y s u c h i t e m r e lat e d to t he p a y m e nt of T a x e s);

 

(h) a ll of the g oo d will a nd going c o n ce rn v a lue r e lating to t he B usiness or a n y of the Pur c h a s e d Ass e ts;

 

(i) a ll of the S e l l e r I P ; and

 

(j) a ll other in t a n g ib l e a nd t a n g ib l e a s s e ts, i n c lud i n g , wi t hout l i m i t a t ion, all B ooks a nd R e c o r ds, c o m puter h a rd w a r e , S o f t w a r e a nd e le c tron i c d a ta, a ll supplier info r mation, l i sts a nd c o r r e spond e n ce , a ll c usto m e r in f o r matio n , re s e r v a t i on d a ta, lists and c o r r e spon d e n ce , a ll l i ce nsee info r m a t i on, l i s t s and c o r r e spo n d e n c e , e q uip m e nt l o g s, op e r a t i ng guides a nd manu a ls,

all sales rec o rds, all re s e a r c h, stat i st i cal, product i o n, market i ng and promo t i onal m aterials, r e cords, files, rep o rts and other documents and d ata, all business post office bo x es and business telephone l i st i n g s, all re s ear c h r e sul t s and other k no w -how, and all other materials, r e cords, files and data, in wha t ever fo r m contained.

 

2.2 E x c luded A sset s .  E x ce pt a s oth e r w ise s e t fo r th i n S ec t i on 2.1 , f rom a nd a f t e r the Clos i n g , the Selle r s shall r e tain a ll of its e x is t ing r i g ht, t i t le a nd in t e r e st i n a nd to ( a ) a ll Contr ac ts that a re not Assu m e d C o ntr ac ts, (b) the c o r po r a te s ea ls, o r g a ni z a t i on a l do c uments, minu t e books, stock books, T a x R e turns, books of acc ount o r oth e r r e c o r ds r e lating to t he o r g a ni z a t i on a nd e x is t e n c e of e a c h S e l l e r as a limi t e d l i a bi l i t y c om p a n y , ( c ) a n y S e l l e r B e n e f it P lan (a s de f ined b e low) a nd the a ssets a t tr ibu t a ble th e r e t o , (d) t h e p e rson a l m e mor a bi l ia ite m s set f o r th on S c h e dule 2.2 , ( e ) a c c oun t s r ece i v a ble a s of t h e Clos i ng D a t e , a nd ( f) the T e n a nt I m p rov e ment Allow a n c e un d e r th a t c e r tain The S hops a t Kukui’ula L ea se d a ted Fe b r u a r y 22, 2017 f or the K a u a i R e stau r a nt (the K a u a i T I Allow a n c e ) ( c ol l ec t i v e l y , the E x c luded Ass e t s ).

 

2.3 Assumed L i a bi l i t ie s .  Upon the te r ms and subje c t to t he c ondi t ions s e t fo r th i n th i s Ag ree ment, a t t he Clos i n g , the Pu r c h a s e r sh a ll a s s ume a nd p a y , hono r , p e r f o r m and dis c h a r ge wh e n due ( a ) a ll e x ec uto r y obl i g a t i ons und e r the A ssu m e d Contr ac ts ( i) a ri s ing a f t e r the Clos i n g , ( ii) not re lat e d to, or a rising out of, a n y bre ac h of a n y Assumed Contr a c t o cc u r ri n g or e x is t ing p r ior to the Clos i n g , a nd ( ii i ) not re lat e d to, or a rising out of, a n y ac t or om i ss i on b y a n y S e l l e r o r a n y e v e nt, ci r c ums t a n c e or c ondi t ion wi t h r e spe c t to t he B usiness o cc u r r i n g or e x is t ing prior to the Closin g , (b) a ll obl i g a t i ons a ssu m e d b y the P u r c h a s e r un de r Se c t i on 7.1 3 , S ec t i on 7.17 a nd S ec t i on 7.18 , a nd ( c ) a ll obl i g a t i ons with r e sp e c t t o a n y a c c ru e d, but unpa i d a nd unus e d, p a id

 

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t i me o f f of a n y e mp l o y ee s o f a n y S e l l e r a s o f the Clos i ng D a te ( c ol l ec t i v e l y , the Assumed

L iabil i t i e s ”) .

 

2.4 E x c luded L iabil i t i e s .  Notwithstanding a n y th i ng to the c ontr a r y in t his A g re e ment, the Pur c h a s e r s h a ll not assume or in a n y w a y b e r e spons i ble f o r , a nd the Se l le r s shall r e main obl i g a ted to p a y , hon o r, p e r f o r m and di s c h a r g e , a l l of the L i a bi l i t ies of the Selle r s (oth e r th a n the Assumed L i a bi l i t ies) (c o l le c t i v e l y , the E x c luded L iabil i t i e s ), in c lud i n g , without l i m i ta t ion:

 

( a ) a n y L i a bi l i t ies a rising o u t of or re lati n g to e a c h Se l l e r s own e rship, use o r op e r a t i on of the B usiness a nd the Pur c h a s e d Ass e t s, in e ac h c a se prior to t h e Clos i ng a risi n g b y op e r a t i on of law un d e r a n y c om m on law o r st a tu t o r y d o c trine (oth e r th a n t he Assumed L iabil i t i e s);

 

(b) a n y L i a bi l i t ies b a s e d up o n, r e lating to, a rising un d e r or with r e s p ec t t o the E x c luded A ssets or the own e rship, op e r a t i on or u s e of a n y busin e sses o f the S e l l e rs or a n y o f their A f filiat e s, oth e r t h a n the B usiness, wh e t h e r b e fo re , a t or a ft e r the Cl o sin g ;

 

( c ) a ll p a y a bles a nd indeb t e d n e ss of the Sel l e rs;

 

(d) a n y L i a bi l i t ies dir ec t l y o r ind i r e c t l y a rising out o f or re lat e d to a n y bre ac h of Contr ac t oc c u r r i n g or e x is t ing prior to t he Clos i n g ;

 

( e ) a n y l i a bi l i t ies or obl i g a t i ons for ( i) T a x e s r e l a t i ng to t he B usiness, the P u rc h a s e d Ass e ts or t h e Assumed L i a bi l i t ies f or the Pre - Clos i ng T a x P e riod, ( i i ) Ta x e s r e lating to t he B usiness, the P u r c h a s e d Ass e ts or the Assumed L iabil i t i e s for the p o rtion of a n y S tr a ddle

P e riod e nding on a nd in c luding the Closing D a te and (iii) a n y ot h e r Ta x e s o f the S e ll e rs or a n y o f their e qui t y hold e rs or Affiliat e s, including T a x e s that a r ise a s a re sult of the sale of the B usiness or the Pur c h a s e d Ass e ts pursu a nt to this A g r ee m e nt;

 

(f) a n y L i abi l i t ies of the Sellers based upon, r e lati n g t o, or arisi n g under o r with respe c t t o (i) a n y Se l l er B e n efit P lan, (i i ) the emp l o y ment or t e rminat i on of emp l o y ment o f ( x ) a n y emp l o y e e of a n y S el l er e mp l o y e d b y the Purchas e r fol l owi n g the Closing with res p ect t o periods on or prior to t he Clos i ng and ( y ) a n y cu r rent or former emp l o y e e, c onsultan t , independent cont r actor, l eased emp l o y e e or oth e r agent who is not empl o y ed b y t h e P urcha s er following the Closing at a n y t i me, and (iii) work e rs’ compensat i on c l ai m s, unemp l o y ment insurance p r em i ums or a n y c l ai m s aris i ng un d er a n y f ede r al, s t ate or lo c al tax withho l din g , emp l o y ment, labor o r discriminat i on L aws of ( x ) a n y emp l o y e e emp l o y ed b y the Pu r chas e r following the Closing w h ich relate to e v ents occ u r ring on or p rior to t he Clos i ng and ( y ) a n y curr e nt or form e r e mp l o y ee, consultant, indepen d e nt cont r actor, l e ased em p l o y e e or other a g ent who is not emp l o y ed b y t he P urchas e r fol l owi n g the Closing which r elate t o events occ u rri n g at a n y t i me;

 

(g) a n y L i a bi l i t y b a s e d upon, a rising un d e r or with r e s p ec t t o a n y Environm e ntal L a w, in c l uding a n y L iabil i t y of the S e l l e rs in a n y w a y p e rt a i ning to or a rising f r om t he ac ts, o m is s ions or stri c t l iabil i t y o f a n y p r e d e c e ssor of the S e l l e rs;

 

(h) a n y L i a bi l i t y b a s e d upon, a rising un d e r or with r e s p ec t t o a n y matter disclosed or re qui r e d to be dis c losed in S c h e dule 5 .16 ; and

 

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(i) a n y L i a bi l i t y b a s e d upon, a rising un d e r or with r e s p ec t t o a n y w a r ra n t y g iven or sold b y the Sell e rs, r e g a rdl e ss of w h e ther a n y w a r r a n t y c laim has b ee n made to d a te.

 

2.5 Non - Assi g n a ble A sset s . Notwithstanding a n y th i n g in t his A g re e ment to t he c ontr a r y , to t he e x tent t h a t t he a ss i g n m e nt of a n y Assumed Contr a c t or the tr a nsf e r o f a n y p r op e r t y or a s s e t (in c lud i ng but not l i m i ted to a n y P e rmit) re quir e s the c on s e nt of a n y other P e rson, or shall be subj e c t t o a n y opt i on b y a n y o t h e r Pe r son b y virtue o f a r e qu e st f o r p e rmission t o a ss i g n or t r a nsf e r, o r b y r e a son of or pursu a nt t o a n y tr a ns f e r to t he P u rc h a s e r, this Ag ree ment s h a ll not constitu t e a n a g ree m e nt t o a ss i g n a n y s u c h Assumed Contr a c t, prop e r t y o r a sset or a n y c l a im or r i g h t or a n y b e n e fit a r is i ng t h e r e und e r or r e sul t ing th e r e f r om i f a n y s u c h a t t e mp t e d a ss i g n m e nt w o uld constitu t e a d e f a ult the re und e r or in a n y w a y a dv e rs e l y a f fe c t t he

ri g hts of the Pu r c h a s e r th e r e und e r. I f c onse n t t o the a ss i g n m e nt or tr a ns f e r of a n y such Assumed Contr ac t, prop e r t y or a s s e t is not obtain e d, or if a n a t t e mp t e d a ss i g n m e nt t h e r e of would be ine f fe c t i ve or w ould a f f e c t t he r i g hts of t h e P u rc h a s e r th e r e und e r, th e n, a t t he P u rc h a s e r s

r e qu e st, t he S e l l e rs sh a ll c oop e r a t e with t he P u rc h a s e r in a n y r ea so n a ble a rr a ng e ment d e s i g n e d to p r ovide to the Pur c h a s e r the b e n e fits under s u c h A ssu m e d Contr ac ts, prop e r t i e s and a ssets, including without l i m i tat i on, e n f o r c e ment f or t h e a cc ount of the P u rc h a s e r o f a n y a nd a ll r i g hts

of the Selle r s a g a inst the other p a r t y the r e to a r is i n g out of the br e a c h or c a n ce l l a t i on the re of b y such p a r t y or oth e r w ise; p r ovided that su c h c oo p e r a t i on b y the Sell e rs sh a ll not c a use the S e l l e rs to v i olate a n y t e rms of s u c h Assumed Contr a c t; p r ovided , fu r the r , that the P u rc h a s e r sh a ll

assu m e all of the pos t -Clos i ng l i abi l i t ies of the Sellers under such Assumed Contracts (other than E x cluded L iabil i t i es) to the e x tent to which the P urchas e r r e ceives the pos t - Clos i ng benefits thereof.

 

AR T I C L E I I I

 

CO N S I DERA T I ON

 

3.1 Consid e r a t i o n .   P u rc h a s e r a g re e s to p a y to t he S e l l e rs a t t he Clos i ng t h e a ggre g a te sum of T hir t y - F ive Mill i on Dolla r s ($35,000,000 . 00), subj ec t t o the a djus t ments d e s c rib e d in S ec t i on 3.2 (the P u rc h a se P ri c e ), p a y a b l e b y tr a n sf e r of i m medi a te l y a v a i l a ble f unds. The P u rc h a se P ri c e includ e s One Mil l ion Thr e e Hun d r e d Thous a nd Doll a rs ( $ 1,300,000.00 ) , e x c lud i ng the Ka u a i T I A l l ow a n ce , in de v e lop m e n t and c onstru c t i on e x p e ndi t u re s incu r r e d a nd p a id b y the Sell e rs p r ior t o C l osing f or the K a u a i R e stau ra nt.

 

3.2 P u rc h a se P ri c e Adjustment s .  On the Clos i ng D a t e :

 

( a ) The P u rc h a s e r a nd the S e l l e rs sh a ll d e te r m i ne the a mount of p e t t y ca sh, if a n y , in t he S e l le rs’ a cc o u nts, and the P u rc h a se P r i c e shall be in c r e a s e d b y s u c h a moun t s.

 

(b) The P u rc h a se P r i c e shall be d ec r ea s e d b y the a g g r e g a te a mount p a y a ble to S e l l e rs’ e mp l o y e e s r e lat i ng to a ll a cc r u e d, but unpaid a nd unus e d, p a id t i m e off of S e l le rs’ e mp l o y e e s as of the Clo s ing D a t e .

 

( c ) The P u rc h a s e r a nd the S e l l e rs sh a ll mu t u a l l y d e te r m i ne the v a lue of the I n v e nto r y a s of t h e Clos i ng D a te ( the Clos i ng D a te I n v e nto r y V a lu e ), b a s e d on the re s ul t s of a n invento r y c ount of the Business a s of the d a te i m medi a te l y p rior to t he Clos i ng D a t e , a nd the

 

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P u rc h a se P ri c e shall be i n c r e a s e d b y a n a mount e qu a l t o 50% of the Clos i ng D a te I nv e nt o r y

V a lue.

 

3.3 W i t hhold i n g .  Notwiths t a nding a n y th i n g to t he c o n tr a r y h e r e in, t he P u rc h a s e r

shall be e nt i t l e d to dedu c t and w i t hhold a n y T a x e s r e quir e d to be d e du c ted a nd withheld f rom the P u rc h a se P ri c e b y a ppl ic a ble L a w.   T o t h e e x tent that a moun t s a r e so d e d u c ted a nd withheld b y the Pur c h a s e r, such a mo u nts s h a ll be tr ea t e d f o r a ll pur p oses of th i s A g re e ment a s ha v i n g b ee n p a id t o the Selle r s.

 

3.4 P u rc h a se P ri c e Alloc a t i on .  The S e l l e rs a nd the P u rc h a s e r h e r e b y a g r e e t h a t t he P u rc h a se P ri c e (a nd a n y other i t e ms r e quir e d for T a x pur p oses) shall be a l loc a ted f or p u rpos e s of T a x e s, among e ac h of t h e S e l l e rs a nd f u rth e r a m o ng the Pu r c h a s e d As s e ts (includin g , but not l i m i ted to ( i) I nv e nto r y o f sto c k in t r a d e , ( i i ) fu r ni t u r e a nd fi x tur e s, (ii i ) m a c hine r y a nd e quip m e nt, (iv) l a nd a nd bui l din g s, (v) c o v e n a nts not t o c ompet e , ( vi) g oo d will a nd other in t a n g ib l e a s s e ts, and ( vi i ) oth e r a ssets) in acc o rdan c e with t he r ules of Se c t ion 1060 of the Code a nd the T re a su r y R e g ula t ions promul g a ted th e r e u n d e r a nd a n y si m i l a r p rovision of stat e , loc a l or fo re i g n la w .  T h e P u rc h a s e r sh a ll re tain G rant Th o rnton LL P to pr e p a re t h e a l l o ca t i on (the P u rc h a se P r i c e Alloc a t i o n ), a nd su c h a l l o ca t i on b y G r a nt Thornton L L P shall be f inal a nd bind i ng on the Selle r s a n d P u rc h a s e r.   T h e P u rc h a s e r a nd S e l l e rs s h a ll (a ) coop e r a te in the filing

of a n y f o r ms (i n c l u ding F o r m 8594 under Se c t i on 1060 of the Code) with r e spe c t t o the Pur c h a se P ri c e Alloc a t i on, including a n y a mendm e nts t o s u c h fo r ms r e qu i r e d pu r s u a nt t o th i s A g r e e m e nt with r e spe c t t o a n y a djus t ments to the Pur c h a se P r i c e a nd ( b ) f i l e a ll f e d e r a l, state a nd loc a l Tax R e turns a nd r e la t e d tax do c uments c onsistent with su c h a l l o ca t i ons, a s the s a me m a y be a djus t e d pursu a nt t o the t e rms of S ec t i on 3.2 or a n y other p r ovis i ons of this A g re e ment, a nd not t a ke a n y posit i on ( w h e ther in aud i ts, Tax R e turns or othe r w ise) inconsis t e nt wi t h su c h a l l o ca t i on unless othe r wise r e q uir e d b y a p pl i ca ble l a w.   N otwi t hst a nding a n y th i n g in t his Agr ee ment to t he c ontr a r y , ( i ) no a mendm e nt t o the Pur c h a se P ri c e Alloc a t i on sh a ll be e f f ec t ive w i t hout t he a ppro va l and c onse n t of P u rc has e r a nd S e l l e rs, a n d (ii) the S e l l e rs a nd the P u rc h a s e r h e r e b y

agree t h at $5,550,000 of the Purchase P ri c e shall be al l ocated to D I R.

 

AR T I C L E I V

 

C L O S I NG

 

4.1 Clos i n g .  On the te r ms a n d subj ec t t o the c ondi t ions s e t fo r th i n th i s A g r ee m e nt, the c los i ng of t h e sale a n d p u r c h a se o f the P u rc h a s e d Ass e ts provided f o r in S ec t i on 2.1 h e r e of a nd the a ssu m pt i on of the A ssu m e d L iabil i t i e s provid e d for in S ec t i on 2.3 h e r e of (the Clos i ng ) shall t a ke pla c e r e mo t e l y via the e x c h a n g e of e le c t ronic c opies of d o c umen t s, a nd sh a ll be d ee med to h a v e tak e n pl a c e si m ul t a n e ous l y with t he satisf ac t i on of the c o n di t ions t o C l o sing set fo r th i n A r t i c le V I I I . T h e d a te on w hich t h e Clos i ng is t o o cc u r is h e r e in r e f e r r e d to as the Clos i ng D a te .”

 

4.2 D e l i v e r a bles .   On or pri o r to the Clos i n g :

 

 

( a )

the S e l l e rs sh a ll d e l i v e r t o the Pur c h a s e r: (ii)the B ooks a nd R e c o r ds,

 

 

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(iii) the Requi re d Cons e nts ( a s de f ined b e lo w ), a nd

 

(iv) e viden ce , s a t i sf ac to r y to t he P u rc h a s e r, of the r e p a y m e nt of a ll of eac h S e l l e r ’s e x is t ing indebt e dn e ss se c u re d b y L i e ns on a n y o f the P u rc h a s e d A ssets a nd the r e le a s e or t e rmin a t i on of a ll such L i e ns.

 

 

(b)

eac h S e l l e r a nd the Prin c i p a l shall e x ec ute a nd d e l i v e r to the P u rc h a s e r: (ii) eac h of t h e T ra n s ac t i on Do c uments to whi c h it is a p a r t y ,

 

(iii) such other ins t rum e nts of c onv e y a n c e a s the Pu r c h a s e r m a y r e a sona b l y r e qu e st i n or d e r to e f f ec t t he s a le, tr a n s f e r, c on v e y a n c e a nd a ss i g nment to t he P u rc h a s e r o f v a l i d own er ship of the P u rc h a s e d A s s e ts;

 

( c ) the Pur c h a s e r s h a ll e x ec u te a nd d e l i v e r to the S e l le rs eac h o f the

T ra nsa c t i on D o c uments to whi c h it is a p a r t y ; a nd

 

(d) the P u rc h a s e r s h a ll d e l i v e r to the S e l l e rs the P u r c h a se P ri ce .

AR T I C L E V REP R ESENT A T I O N S A N D W AR R A N T I ES

OF THE S E L L ERS A N D T H E P R I N C I P A L

 

The S e l l e rs a nd the Prin c ipal h e r e b y jo i nt l y a nd s e v e r a l l y r e p r e s e nt a nd w a r r a nt t o the

Pu rc h a s e r a s follows:

 

5.1 O r g a ni z a t i on a nd Go o d S tandin g .  E a c h S e l l e r is d u l y o r g a ni z e d, v a l i d l y e x is t ing a nd in g ood st a ndi n g un d e r the L a ws of the state o f its fo r mation and h a s a l l r e quis i te po we r a nd a uthori t y to own, l e a se a nd op e r a te its p r op e rties a nd a ssets a nd ca r r y on i t s bus i n e ss.  E ac h S e l l e r is du l y qu a l i fi e d o r a uthori z e d to do bus i n e ss and is in g ood st a ndi n g und e r the L a ws of eac h jurisd i c t i on in whi c h it owns, le a s e s or op e rates its pro pe rties a nd a ss e ts and eac h oth e r jurisd i c t i on in which the c ondu c t of its bus i n e ss or the o w n e rship of i t s pr o p e rties a nd a s s e ts r e quir e s such q u a l i fi ca t i o n or a uthori z a t i on.  E ac h S e l l e r h a s made a v a i l a ble to t he P u rc h a s e r a true a nd c omp l e te c o p y o f the a rticl e s o f o r g a ni z a t ion of the S e l l e r, a s c u r r e nt l y in e f f ec t, ce rtifi e d a s of a r e c e nt d a te b y t h e Se c r e t a r y of St a te of the state of its fo r m a t i on, a nd a true a nd c omp l e te c o p y of the o p e r a t i ng a g re e ment of the S e l l e r, a s c u r re nt l y in e f fe c t.

 

5.2 Autho r i z a t i on of A g r ee m e n t .  E ac h S e l l e r a nd the P rin c ipal h a ve a ll r e quis i te pow e r a nd a uthori t y to e x ec u t e a nd d e l i v e r this A g r ee ment a nd e a c h other T ra nsa c t i on D o c ument (to w hich a n y of th e m i s a p a r t y ) in c on n ec t i on w i th t he c onsummation of the tr a ns a c t i ons c ontemplat e d b y th i s Ag r ee ment, to pe r fo r m t h e ir r e spe c t i ve obl i g a t i ons h e r e und e r a nd

the re und e r a nd to cons u m m a te the tr a nsa c t i ons c ontemplat e d h e r e b y a nd t h e r e b y .  T h e e x ec ut i on a nd d e l i v e r y of this A g re e ment a nd the oth e r T ra n s ac t i on Do c uments, the p e r f o r ma n c e o f e a c h S e l l e r s and the Prin c ipa l ’s obli g a t i ons h e r e und e r a nd the re un d e r a nd t h e c onsummati o n of the tr a nsa c t i ons c ontemplat e d h e r e b y a nd t h e r e b y h a v e b ee n du l y a nd v a l i d l y a uthori z e d b y a ll r e quis i te ac t i on on the p a rt of the Selle r s and the P rin c ipal.  This Ag r e e me n t has b ee n du l y a nd v a l i d l y e x ec uted a nd d e l i v e r e d b y e ac h S e l le r a nd eac h P rin c ipal, a nd ( a ss u m i ng the due

 

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a uthori z a t i on, e x ec ut i on a nd d e l i v e r y b y the other p a rties h e r e to a nd t h e r e t o) c onsti t utes the l e g a l, v a l i d a nd bind i ng obl i g a t ion of the S e l l e rs a nd the P rin c ipal, e n f o r c ea ble a g a inst the Selle r s and the Prin c ipal in a cc o rd a n c e with t h e ir r e spe c t i ve t e rms, subj ec t t o a ppl i ca b l e b a nkru p t c y , inso l v e n c y , r e o r g a ni z a t i on, mor a torium a nd sim i lar L a ws a f f e c t i ng c r e di t o r s’ r i g hts and r e medi e s g e n e r a l l y , a nd sub j ec t, as to en f o r c ea bi l i t y , to g e n e r a l prin c ip l e s o f e qui t y , including prin c i ples of c om m e r c ial r ea sona b l e n e ss, g ood f a i t h a nd f a ir d e a l i ng ( re g a rdl e ss of w h e ther e n f o r c e m e nt i s sou g ht i n a pr o cee di n g a t l a w or in equi t y ) .

 

5.3 Confli c ts; Conse n ts of Third Pa r t i e s .

 

( a ) E x ce pt as s e t fo r th on S c h e dule 5.3 ( a ) (the R e quir e d Cons e nt s ), no n e of the e x ec ut i on or d e l i v e r y b y the Selle r s o r the P ri n c ipal of th i s Ag ree m e nt or a n y of the oth e r T ra nsa c t i on D o c uments, the c onsummation of a n y of the tr a ns a c t i ons c ont e mp l a ted h e r e b y o r the re b y , or c omp l ian c e b y the Selle r s o r a n y P rin c ipal wi t h a n y of t h e pro v i sions h e r e of or the re of d o e s or w i l l con f l ict with, or re sult in a n y vio l a t i on o f , or c onsti t ute a br e a c h of o r a

d e f a ult ( with or without not i c e or l a pse o f tim e , o r both) und e r, or r e sult in t he loss of a n y b e n e fit und e r, or p e rmit t he ac ce le ra t i on of a n y obl i g a t i on und e r, or g ive rise to a r i g ht of t e rmin a t i on, mod i fi ca t i on or ca n ce l l a t ion unde r , or r e sult in t he c r e a t i on of a n y L ien, u p on a n y o f the P u rc h a s e d Ass e ts un d e r, a n y p rovision of ( i) the a rticl e s of o r g a ni z a t i on or op e r a t i n g a g r ee ment of eac h S e l le r or si m i l a r o r g a ni z a t i on a l docum e nts of the Princip a l ( a s ap p l ic a ble ) ; (ii) a n y mat e ri a l Contr ac t or P er m i t t o whi c h the B usiness, the S e l l e rs or a n y P rin c ipal is a p a r t y or b y whi c h the Selle r s, a n y Pr incip a l or a n y of the P u rc h a s e d Ass e ts i s bound; ( i i i) a n y O r d e r of a n y Gov e rnm e ntal B o d y a pp l ic a ble to the B usi n e ss, t he S e l l e rs or a n y P rin c i p a l or b y whi c h the S e l l e rs, a n y P rin c ipal or a n y o f the P u rc h a s e d As s e ts i s bound; or ( iv) a n y a ppl i ca ble L a w.

 

(b) E x ce pt for the Requi re d Consents, no c onse n t, w a ive r , a ppro v a l, Or d e r, P e rmit or a uthori z a t i on o f , or dec l a r a t i on, re g is t r a t ion or f i l ing with, or notifi ca t i on to, a n y P e rson or Gov e rn m e ntal B o d y is r e qui r e d on the p a rt of the Selle r s or a n y P rin c ipal in c onn ec t i on with t he e x e c ut i on, d e l i v e r y o r p e r fo r man c e of this A g r ee ment or a n y of the oth e r T ra nsa c t i on D o c uments, the c omp l ian c e b y the S e l l e rs a nd the Prin c ipal w i th a n y of t h e p r ovis i ons h e r e of or t h e r e o f , or the c onsummation of a n y of the t r a nsa c t i o n s co n templat e d h e r e b y or t h e r e b y.

 

5.4 C a pi t a l iz a t i o n .

 

( a ) The S c ho c h Revo c a ble Living T r ust dat e d No v e m b e r 19, 2001 is the dir ec t own e r of a ll of the is s u e d a nd outstanding e qui t y in t e r e sts in D I R.

 

(b) E x ce pt as s e t fo r th i n th i s Ag ree ment: (i) no p e rs o n h a s a n y r i g ht t o pur c h a se a n y c a pi t a l s t o c k, memb e rship in t e r e st, c a pi t a l i nte re st, pro f i t s in t e r e st, e c onom i c in t e r e st, vot i ng r i g hts, or own e rship of the Selle r s or a n y of the is s u e d a nd outs t a nding e qui t y in t e r e sts in t he S e l l e rs ( t h e I nt e r e st s ); ( i i ) oth e r t h a n the I nte r e st s , the r e a r e no out s tanding sha re s of ca pi t a l s t o c k, m e mbe r ship i nte re st s , c a pi t a l i nte re st s , pro f i t s in t e rest s , ec onom i c

in t e r e st s , vot i ng r i g hts or other own e rship in t e r e s t s in the S e l l e rs, a nd no opt i ons, w a r ra nts, r i g hts, ca l l s or c om m i t ments with r e spe c t t h e r e to; a nd (i i i ) th e re a re no c ontr a c ts, a r ra n g e m e nts, c om m i t ments or re strictions re lating to t he t r a nsf e r, s a le or pu r c h a se of a n y of the I nte r e st s ,

e x cept for restrictions on transfer sta t ed in t he ope r at i ng a gree m ent of e a ch S el l er a nd D I R .

 

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5.5 S ubsidia r ie s .  The S e l l e rs h a ve not had, a nd c u r r e n t l y do not hav e , a n y S ubsidia r ies a nd, other t h a n D I R, whi c h is a m a n a g e r in other c om p a nies, d o not cont r ol, d i r e c t l y or ind i r e c t l y , or ha v e a n y dir ec t or indire c t equi t y p a rticip a t i on or si m i l a r int e r e st i n a n y other P e rson.

 

5.6 F inan c ial I n fo r matio n .   T he S e l l e rs h a ve p rovid e d the F inan c i a l S tat e ments to the P u rc h a s e r.   T h e F i n a n c ial S tat e ments ( a ) c omp l y a s to fo r m i n a ll mat e ri a l r e spe c ts with a ppl i ca ble t a x b a sis acc o unt i ng re qui r e ments, (b) a re c o r r e c t and c omp l e t e in all m a t e ri a l r e sp e c ts a nd ( c ) f a ir l y p r e s e nt t he fin a n c ial posit i on of the S e l l e rs a s of the d a t e s th e r e of a nd t h e re sul t s of i t s op e r a t i ons a nd ca sh f l ows f or the p e riod indi c a ted, c onsistent with the books a nd r e c o rds of

the Selle r s, e x ce pt t h a t t he F ina n c ial S t a tem e nts a r e subj ec t t o no r mal a nd r ec u r ri n g y e a r -e nd a djus t ments, in c lud i ng t a x d e p rec iation,  which w i ll not be m a te r ia l , e x ce pt t he tax d e p rec iation, in amount or e f f e c t and d o not i n c lude f ootno t e s.   S ince the b e g inn i ng o f the p e riod c o v e r e d b y the F in a n c i a l S tat e ments, th e re h a s b ee n no c h a n ge in a n y a c c ount i ng p rin c ip l e s, prin c ip l e s, methods or p rac t ic e s of t he S e l l e rs.   N o a udit f irm h a s ev e r d ec l i n e d or ind i ca ted its inabil i t y to is s ue a n opin i on with r e spe c t t o a n y f ina n c ial st a t e ments of the S e l l e rs.

 

5.7 Undis c losed L i a bi l i t ie s .  The S e l l e rs do not h a ve a n y L iabil i t i e s of a n y kind or n a ture that a re or m a y h a ve a L ien on a n y o f the P u rc h a s e d Ass e ts or m a y o the r wise h a v e a Mat e ri a l Adv e rse E f f e c t , e x ce pt for L i a bi l i t ies ( i) s e t fo r th i n the F ina n c ial S tat e ments a nd (ii) incu r r e d in t he O rdin a r y Course of B usiness a ft e r the Most R ece nt B a lan c e S h ee t D a te th a t, bo t h ind i vidual l y a nd in t he a g g re g a te, involve a moun t s of l e ss t h a n $10,000.

 

5.8 Abs e n c e o f C e rt a in D e v e lop m e nt s .   S ince J a nu a r y 1, 2017, the Selle r s h a ve c ondu c ted the B usiness o n l y in t he O rdin a r y Cou r se of B usiness a nd the r e h a s not b ee n a n y :

 

( a ) to t he Kno w le d g e of the S e l l e rs, e v e nt, c h a n g e , o c c u r r e n c e or c ir c ums t a n c e that, ind i vidual l y or in the a g g reg a t e , h a s ha d , or w ould r ea s o n a b l y b e e x p ec ted to h a v e , a Ma t e ri a l Ad v e rse E f f e c t;

 

(b) is s u a n c e or s a l e of a n y m e mbe r ship i nte re sts or o t h e r s ec u rities of the S e l l e rs or a n y opt i ons, w a r ra nts or ot h e r r i g hts t o ac quire a n y such memb e rship in t e r e sts or oth e r s ec u r i t ies (e x ce pt purs u a nt t o the c onv e rsion or e x e r c ise of opt i ons, w a r r a nts or other c on v e rtible s ec u r i t ies outs t a nding on the d a te h e r e o f );

 

( c ) c r e a t i on, inc u r re n ce , a ss u mp t ion or g u a r a ntee o f a n y indebt e d n e ss i n c onn ec t i on with t he B us i n e ss o t h e r th a n the A ss u med Contr a c ts and Re a l P rop e r t y L ea s e s;

 

(d) ac qui s i t ion, s a le, l ea s e , l i ce nse o r disposit i on of a n y a s s e ts or p r op e r t y , other than pu rc h a s e s and s a les of a ssets in the O rdin a r y Course of B usiness;

 

( e ) i m posit i on of a n y L i e n o n a n y o f the P u rc h a s e d A ssets;

 

(f) disch a r g e or s at i sfact i on of a n y L ien or p a y m ent o f a n y L iabil i t y oth e r than in the Ordina r y Co u rse of B usiness or as oth e rwise requi r ed b y th i s A greement;

 

(g) a mendm e nt of its a r t i c les of o r g a ni z a t i on or op e r a t i ng a g r ee ment in a mann e r th a t could h a v e a n a dv e rse e f f ec t on t he t r a nsa c t i ons c ontemplat e d b y th i s Ag re e ment;

 

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(h) e nt r y in t o, a m e ndment or te r m i n a t i on of a n y a c t i on or om i ss i on that would c onsti t ute a vio l a t i on of or d e f a ult und e r, or w a iver of a n y r i g hts und e r, a n y of the Pur c h a s e d Ass e ts;

 

(i)       e nt r y in t o, a dopt i on, mo d ific a t i on or te r m i n a t i on o f a n y S e l l e r B e n e f it P lan or a n y e mp l o y m e nt, sev e r a n ce , r e tention or oth e r Contr ac t, or (e x ce pt f o r n o r mal inc r e a s e s in t he O r dina r y Course o f B us i n e ss for e mp l o y e e s who a re not A f filiat e s) in c r ea s e s in t he

compensat i on or fri n ge b enefits of, or ma t erial m o dificat i on of the emp l o y ment terms of, a n y curr e nt or form e r e mp l o y ee, off i cer, ma n a g e r, ind e pendent d i r e ct o r or cons u l t ant of the B usiness, or p a y m ent of a n y bonus or other be n efit to a n y c u rrent or f o rmer emp l o y ee , officer, m an a g e r, independent d i rector or c onsultant of the B usiness (e x cept for e x is t ing p a y ment obl i g at i ons outs t anding as of the d ate her e o f ) or hiri n g of a n y new offi c ers or ( e x cept i n the Ordina r y Cour s e of B usiness) a n y new emp l o y e es;

 

(j) c h a n g e in a n y a c c ount i ng methods, prin c ip l e s or p r a c t i ce s, e x ce pt insof a r a s m a y b e r e quir e d b y a g e n e r a l l y a ppl ic a ble c h a n g e in G A A P (a l t ho u g h S e l l e rs do not f ol l ow G A AP a cc ount i n g ), o r a n y n e w e l e c t i ons, or c h a n g e s to a n y c u r r e nt el e c t i ons, with r e spe c t t o T a x e s that a f fe c t t he P u r c h a s e d Ass e ts;

 

(k) a n y uninsu r e d d a m a g e , d e stru c t i on, loss or ca sual t y to a n y p rop e r t y or a ssets of the B usiness or the Selle r s;

 

(l) to t he Kno w le d g e of the S e l l e rs, o cc u r r e n c e of a d a ta b r e ac h or c ompromise of a n y S e l le r s info r mation s ec u ri t y s y s tems; or

 

(m) e nt r y in t o a n y Cont r ac t t o do a n y o f the f or e g oi n g, or a n y ac t i on or om i ss i on that would r e sult in a n y of the fo r e g oi n g .

 

5.9 T a x e s .

 

( a ) E ac h S e l l e r h a s:

 

(i) du l y a nd t i me l y f i l e d, or ca used to be filed, in a cc o r d a n c e with a ppl i ca ble L a w a ll S e l l e r T a x R e turns re quir e d to be f i l e d b y or w i t h r e s p e c t t o su c h S e l l e r, e ac h of whi c h is t ru e , c o r r e c t a nd c omp l e te, e x ce pt t h a t e ac h S e l l e r h a s not re p o rt e d on i t s H a w a ii G e n e r a l E x c ise/Use T a x R e turns (F o r m G - 45) the v a lue of man a g e ment s e r vic e s provid e d b y D I R a nd D I R h a s not f i le d H a w a ii G e n e r a l E x c is e /Use T a x R e turns ( F o r m G - 45) r e porting t h e man a g e ment f ee s r ece i v e d f r om t he S e l l e rs f or s u c h man a g e ment s e rvi ce s,

 

(ii) du l y a nd t i me l y p a id i n f ul l , or c a used to be p a id i n full, all S e l l e r

T a x e s due a nd p a y a b l e w i t h r e spe c t t o su c h S e l l e r on or prior to t he Clos i ng D a te, a nd

 

(iii) with r e spe c t t o su c h S e l le r, p r op e r l y a c c ru e d on i t s books and r e c o r ds a pro v is i on f o r t h e p a y ment of a ll S e l l e r T a x e s that a r e du e , a re c la i med to be du e , or m a y or will b ec ome due with r e spe c t t o a n y P r e - Clos i ng P e riod or the po r t i on e nding on the Clo s ing D a te of a n y S tr a ddle Pe r io d , e x ce pt t h a t e ac h S e l l e r h a s not r e port e d on i t s H a w a ii G e n e r a l E x c ise/Use T a x R e turns (F o r m G - 45) the v a lue of man a g e ment s e r vic e s provid e d b y

 

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D I R a nd D I R h a s not f i le d H a w a ii G e n e r a l E x c is e /Use T a x R e turns (F o r m G - 45) r e porting t h e man a g e ment f ee s r ece i v e d f r om t he S e l l e rs f or s u c h man a g e ment s e rvi ce s .

 

(b) No e x tension of ti m e to file a S e l l e r Ta x R e turn, w hich Seller T a x R e turn h a s not since b ee n filed in a cc o r d a n c e with appli c a ble L a w, h a s be e n filed. Th e re is no po w e r o f a t t o r n e y in e f f ec t wi t h re spe c t or re l a t i ng to a n y S e l l e r Ta x or S e l l e r Ta x R e turn, e x ce pt t o the e x tent rea sona b l y re qui r e d to s ec u r e tax c le a r a n c e ce rtifi c a tes.

 

( c ) No Seller T a x R e turn h a s ev e r be e n fil e d, a nd no S e l l e r Ta x h a s ever b e e n d e te r m i n e d, on a c onsolidat e d, c omb i n e d, uni t a r y or other si m i l a r b a sis ( in c lud i n g , but not l i m i ted to, a c onsolidat e d f e d e r a l i n c ome Ta x re tu r n ) .  Th e re is no ac tual or potential theo r y o r c ir c ums t a n c e ( includi n g , but not l i m i ted to, a s a t r a nsf e r e e or s u cce ss o r, u n d e r C ode S ec t i on

6901 or T rea s u r y R e g ul a t i on S ec t i on 1.150 2 - 6, a s r e sult of a T a x sha r i n g a g ree ment or ot h e r c ontr ac t or b y o p e r a t i on of la w ) un d e r w hich su c h S e l l e r is or m a y b e l i a ble f or a n y T a x d e te r m i n e d, in whole or i n p a rt, b y t a king in t o a c c ount a n y in c o m e , sal e , a s s e t of or a n y a c t i vi t y c ondu c ted b y a n y ot h e r Pe r son.

 

(d)       E ac h S e l l e r h a s compli e d in all r e spe c ts with all a p pl i ca ble L a w r e lati n g to the d e posit, colle c t i on, w i t hhold i n g , p a y m e nt or re m i t t a n c e of a n y T a x ( includin g , but not l i m i ted to, C ode S ec t ion 3402).

 

( e ) Th e re is no l i e n for a n y T a x upon a n y a sset o r p r o p e r t y o f e ac h S e l l e r

( e x ce pt for a n y statuto r y l i e n for a n y T a x not y e t d u e ).

 

(f) No L e g al P roceedi n g is pendin g , o r to t he Knowl e d g e o f e a ch S el l er, threatened o r proposed w i t h r e gard to a n y S el l er T ax or Sel l er Tax Return. To the Knowle d g e o f each S el l er, no event or c ircums t ance r esul t s in any s i g nificant risk t hat a n y such L e g al P ro c eedi n g will occ u r.

 

(g) The statute of limi t a t i ons r e lating to a n y S e l l e r T a x or a n y S e l l e r Ta x R e turn h a s ne v e r b e e n m o difi e d, e x tend e d or wa i v e d, nor to t he Kno w le d ge of e ac h S e l le r, h a s a n y r e qu e st b ee n ma d e in w r i t ing f o r a n y such m o difi ca t i on, e x tension or wa ive r .

 

(h)       A n y a ssessment, d e f i c ie n c y , a djus t ment or other s i m i lar i t e m r e lating to a n y S e l le r Ta x or S e l l e r T a x R e t u r n h a s be e n r e p o r ted to a ll T a x ing Auth o rities in a cc o r d a n c e with applic a ble L a w.

 

(i) No ju r isd i c t i on wh e re no S e l l e r Ta x R e turn h a s b e e n fil e d or n o S e l l e r T a x h a s be e n p a id h a s made o r, to t he Kno w le d g e o f e a c h S e l l e r, thr e a ten e d to make a c l a im f or the p a y m e nt of a n y S e l l e r Ta x or the f i l ing of a n y S e l l e r Ta x R e turn.

 

(j) E ac h S e l l e r is not a p a r t y to a n y a g re e ment with an y T a x ing Autho r i t y

(in c lud i n g , but not l i m i ted to, a n y c los i ng a g r e e ment with i n the m ea ning o f Code S ec t i on 7121

or a n y a n a l o g ous p rovision o f a ppl i ca ble L a w ) . No p r ivate letter o r oth e r ruling or d e te r m i n a t i on f r om a n y T a x ing Autho r it y re l a t i ng to a n y S e l le r T a x or S e l l e r Ta x R e turn h a s ev e r b ee n r e qu e sted or re ce ived.

 

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(k) E ac h S e l l e r is not and h a s ne ve r be e n a b e n e fi c i a r y or oth e r w ise p a rticip a ted in a n y r e por t a ble t ra ns a c t i on with i n the m ea ni n g of T r ea su r y R e g u l a t i on S ec t i on

1.6011 - 4 ( b ) ( 1 ).

 

(l) None of the P u rc h a s e d A ssets or the Assumed L i a bi l i t ies is a c ontr ac t, a g ree m e nt or other a r r a n g e m e nt t h a t (i) re sul t s or c ould r e sult in a n y a mo u nt t h a t i s not d e du c t i ble und e r Code S ec t i on 162, Code S ec t i on 280G, Code S ec t i on 404 or a n y si m i l a r p r ovis i on of a ppl i ca ble L a w, or ( i i ) is or c ould be c ome subj ec t t o Code S ec t ion 409A or a n y si m i l a r p r ovis i on of a ppl i ca ble L a w.

 

(m)     None of the P u rc h a s e d A ssets is “t a x -e x e mpt bo n d - fin a n c e d pr o p e r t y or ta x -e x e mpt use p rop e r t y ,” with i n the m ea ni n g of Code S ec t i on 168 ( h) or a n y si m i l a r p r ovis i on of a ppl i ca ble L a w.

 

(n) None of the P u rc h a s e d A ssets is (i) re quir e d to be tr ea ted a s b e i n g own e d b y a n y ot h e r Pe r son pur s u a nt t o a n y p rovision of a ppl i ca ble L a w ( includi n g , but not l i m i ted to, the s a f e h a rb o r” l e a sing p r ovis i ons of Code S ec t i on 168 ( f ) ( 8 ), a s in e f f e c t p r ior to the re p e a l of those s a fe h a rbo r le a s i ng pro v is i ons), ( i i ) subj e c t t o Code S ec t i on 168 ( g ) (1 ) ( A ), or ( i i i) s ubj e c t to a disqu a l i fi e d le a s e b a c k or lon g- t e rm l ea s e a g re e ment a s de f i n e d in C ode S ec t i on 467.

 

(o) No Seller is a p a r t y to a n y jo i nt ventu re , p a rtn e rs h ip or other a g r ee ment, c ontr ac t or a r r a n g e ment ( wh e ther w ritten or or a l) whi c h c ould be t r e a ted a s a p a rtn e r ship for f e d e r a l i n c ome t a x pur p oses, oth e r th a n a p a rtn e r s hip t h a t i s whol l y - own e d, dir ec t l y o r indir ec t l y , b y such S e l le r.

 

(p) No Seller ( i) h a s, a nd h a s e v e r h a d, a p e rm a n e nt e s tablishment in a n y c ount r y o uts i de the U ni te d S tat e s and is, and h a s b ee n, subj e c t t o T a x in a ju r isd i c t i on outside the United S t a tes, ( i i ) h a s en t e r e d in t o a g a in r e c o g ni t i on a g ree m e nt pursu a nt t o T rea su r y R e gulation S ec t i on 1.367 (a ) - 8, a nd ( i i i) h a s tr a nsf e r r e d a n in t a n g ib l e t h e tr a ns f e r of w hich w ould be subje c t to t he r ules of Code S ec t i on 367 ( d ) .

 

(q) No Seller is or h a s b e e n a p a ss i ve f o re i g n investm e nt comp a n y with i n the me a ning o f Code S ec t i on 1297.  No Seller owns, d ir ec t l y o r indir ec t l y , a n y e qui t y in t e r e st i n a n y P e rson th a t i s or h a s ever b ee n a p a ss i ve f o r e i g n i n v e st m e nt comp a n y with i n the m ea ni n g of Code S ec t i on 1297.

 

(r) No Subsid i a r y or a n y ot h er Person in which a n y S el l er owns, direct l y o r ind i r e ct l y , a n y equi t y in t er e st has a n y i t em o f in c ome which could constitu t e subpart F inco m e with i n the meaning of C o de S ect i on 952 for the p e riod com m enci n g on the first d a y of a n y S traddle Period and end i ng at t he close of busine s s on the Clos i ng Date.

 

(s) No Subsid i a r y or a n y ot h e r Pe r son in whi c h a n y S e l l e r o w ns, dire c t l y o r ind i r e c t l y , a n y e qui t y in t e r e st ho l ds ass e ts t h a t c o nst i tu t e U.S. p r op e r t y wi t hin t he me a ning o f Code S ec t i on 956.

 

(t) No Seller h a s b e e n c lass i fi e d a s oth e r th a n a p a rtn e rship or a dis r e g a r d e d e nt i t y f or U.S. f e d e r a l i n c ome t a x pur p oses a t all t i m e s s i n c e i t s fo r mation.

 

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(u) No Seller is a f o r e i g n p e rson” with i n the m ea ni n g of C o de S ec t i on 1445.

 

5.10 R ea l P rop e r t y .

 

( a ) The S e l l e rs do not own a n y r ea l pro p e r t y . S c h e d u le 5.10 (a ) c ontains a true a nd c o r r ec t de s c ription of a ll le a s e s, l i ce n s e s, pe r m i ts, s uble a s e s, and o cc u p a n c y a g r ee ments or a r ra n g e ments, tog e ther w i t h a n y a m e ndments th e r e to e f f ec t i ve a s o f imm e diat e l y pri o r to the Clos i ng ( the R e a l P roper t y L e a s e s ), w i t h r e s p ec t to all r ea l prop e r t y u s e d, o cc upied or h e ld for use in c onn ec t i on with t he B usiness (t h e L e a s e d R ea l P rop e r t y ). No Pe r son h a s assi g n e d, tr a nsf e r r e d, c on v e y e d, m o r t g a g e d, d e e d e d in t rust or e n c umb e r e d i t s in t e r e s t und e r a n y R ea l P rop e r t y L ea s e , or suble a s e d a ll or a n y p a rt of the spa c e d e m i s e d t h e r e b y , o r g ra nted a n y r i g ht t o the poss e ss i on, us e , o cc u p a n c y or e nj o y ment o f a n y L e a s e d R e a l P rop e r t y . No option has b ee n e x e r c ised und e r a n y of s u c h Re a l P rop e r t y L e a s e s, e x ce pt op t ions whose e x e r c ise h a s be e n e viden ce d b y a w r i t ten d o c ument, a tru e , c omp l e te a nd a cc u r a te c o p y o f w hich h a s be e n

d e l i v e r e d to t he P u rc h a s e r w i t h the c o r r e sponding R ea l P rop e r t y L e a s e .  N o ne of the S e l l e rs no r , to t he Kno w le d g e of the S e l l e rs, a n y of the oth e r p a rties to a n y of the R e a l P rop e r t y L ea s e s is in d e f a ult und e r a n y of the R ea l P rop e r t y L e a s e s, a n d no a mount due und e r a n y of the R ea l P rop e r t y L e a s e s r e mains unp a id, n o c ontrov e r s y , c laim, d i spute or dis a g re e ment e x is t s bet wee n a n y o f the p a rties to a n y of the R e a l P rop e r t y L ea s e s, and no e v e nt has o c c u r r e d whi c h with t he p a ss a g e of t i me or g iv i n g of n o t i ce , or both, would constitu t e a d e f a ult und e r a n y of t h e R ea l P rop e r t y L e a s e s.

 

(b) The L ea s e d Re a l P roperty c onsti t utes a ll of the l a nd, bui l din g s, s t ru c tur e s, i m p r ov e ments, fi x t u r e s and other in t e r e sts a nd r i ghts i n r e a l prop e r t y that a re used or o cc upied b y the Selle r s in conn ec t i on with t he B usiness.  The L ea s e d R e a l P rop e r t y h a s ac c e ss t o publ i c r o a ds a nd to all u t i l i t ies n ece ssa r y f or the o p e r a t i on of the B usiness a s n o w c on d u c ted a nd p r opo s e d to be c ondu c ted.  T h e r e is no p e nding o r, to the K n o wl e dge of the S e l le rs, th r ea ten e d c ond e mnation of a n y p a rt of t h e L e a s e d R ea l P rop e r t y b y a n y G o v e rnm e ntal B o d y .  The S e l l e rs h a ve not r e ce i v e d a n y not i c e f r om a n y ut i l i t y c ompa n y or m u n icip a l i t y of a n y fa c t or c ondi t ion which

could result in t he discontinuat i on of pr e sent l y av a i l able or otherwise n ece s sa r y se w er, wa t er, electric, gas telephone o r other ut i l i t i es or services for the L e ased Real P ro p er t y . All pub l ic ut i l i t i es required for the o per a t i on of the L e ased R eal P rop e r t y and n e c essa r y f o r the cond u ct of the B usiness a re ins t al l ed and oper a t i n g , and all ins t al l at i on and connect i on cha r g es, to t he Knowle d g e of t h e S el l er s , are paid i n full.  E f f e ct i ve as of im m ediate l y pri o r to the Clos i n g , the S el l ers are in sole posse s sion of the L eased R e al P rop e r t y .

 

( c ) To the Kno w le d g e o f the S e l l e rs, th e re a re no e n c r o ac hments upon a n y of the p a rc e ls comprising t h e L ea s e d Re a l P rop e r t y ( other than su c h e n c roa c h ments a s would not a dv e rs e l y a f f ec t th e usa b i l i t y o f the L e a s e d R e a l P rop e r t y ) a nd no p o rtion of a n y i m p r o v e ment e n c roa c h e s upon a n y pr o p e r t y not i n c lu d e d with i n the L ea s e d R e a l P rop e r t y or upon t h e a r e a of a n y ea s e m e nt a f f ec t i n g t he L ea s e d Re a l P rop e r t y .

 

(d)       To the Kno w le d g e o f the S e l l e r s , the L ea s e d Re a l P rop e r t y a nd fi x tur e s a nd i m p r ov e ments th e r e o n a re in g ood op e r a t i n g c ondi t ion wi t hout stru c tu r a l de f e c ts, ordina r y w ea r a nd te a r e x ce pted. All m ec h a nic a l a n d other bui l ding s y stems l o c a ted on the L ea s e d R e a l P rop e r t y a re (i) in g ood o p e r a t i n g c ondi t ion, and n o c ondi t ion e x is t s r e quir i ng mat e ri a l r e p a irs, a l t e r a t i ons or c o r r e c t i ons, a nd (ii) suit a ble, su f fi c i e nt and a ppro p ri a t e in all r e spe c ts for t h e ir

 

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c u r r e nt a nd c ontemplat e d uses, o r dina r y w ea r a nd te a r e x ce pted.   N o n e of t he i m p r ov e ments lo ca ted on the L e a s e d R e a l P rop e r t y or us e s b e ing made of the L e a s e d R e a l P rop e r t y c onsti t ute a leg a l non -c onf o rming u s e or oth e r w ise re qui r e a n y sp e c ial disp e nsation, v a ri a n c e o r sp ec ial p e rmit und e r a n y L a w.

 

( e ) To the Kno w le d g e o f the S e l l e rs, the L ea s e d R ea l P rop e r t y is not sub j ec t to z onin g , use or bui l ding c o d e re str i c t i ons th a t would prohibit, and no state of f a c ts e x is t s with r e spe c t t o the L e a s e d R e a l P rop e r t y that would p re v e nt, t he c ont i nu e d le a si n g or u s e of su c h L e a s e d R e a l P rop e r t y in t he B usine s s as n o w c on d u c ted or pro p o s e d to be c ondu c ted.   W i t hout l i m i t i ng the f o r e g oi n g , to t he Kno w le d g e o f the Se l l e r s , the r e is no p e ndi n g or pro p osed L e g a l P ro c ee di n g to ch a n ge or r e d e fi n e the z oning c lass i fi ca t i on of a ll or a n y p o r t ion of a n y of the L e a s e d R e a l P rop e r t y .

 

(f) None of the R e al P rop e r t y L e ases ha v e b e en mod i fied, amended o r supplemented, e x cept as spe c ified in S c h e dule 5. 1 0 (a ) .

 

(g) The landlo r ds und e r t h e R ea l P rop e r t y L e a s e s ha v e n e i t h e r g iven n o r r e ce i v e d a n y w ritten noti c e of def a ul t , whi c h d e fault r e mains un c u re d.

 

5.11 T a n g ib l e Pe rson a l P rop e r t y ; Tit l e to and Suf f ici e n c y o f A sset s .

 

( a ) S c h e dule 5.11 s e ts fo r th a ll le a s e s of p e rson a l pr o p e r t y to whi c h the S e l l e rs a re a p a r t y a nd us e d or he ld for use in c on n ec t i on with t he B usiness ( P e rson a l P roper t y L e a s e s ) a nd a ll p e rson a l pro pe r t y own e d b y t h e S e l l e rs h a vi n g a book v a lue in e x ce ss of $5,000. T r u e , c omp l e te a nd a c c u r a te c opies of t h e P e rson a l P rop e r t y L ea s e s, or if a n y P e rso n a l P rop e r t y L e a s e s a re not i n w r i t i n g , tru e , c omp l e te a nd a c c u r a te d e s c riptions t h e r e o f , h a ve b e e n d e l i v e r e d

to t he P u rc h a s e r.   E ac h o f su c h P e rson a l P roper t y L e a s e s is in full f o r c e a n d e f f e c t and is v a l i d, bind i ng a nd e n fo r c ea ble i n acc o r d a n c e with i ts t e rms, subj ec t t o a ppl i ca ble b a nkru p t c y , inso l v e n c y , r e o r g a ni z a t i on, mor a torium a n d sim i lar L a ws a f f e c t i ng c r e di t o r s’ r i g hts and r e medi e s g e n e r a l l y , a nd sub j ec t, as to en f o r c ea bi l i t y , to g e n e r a l prin c ip l e s o f e qui t y , including prin c ip l e s of c om m e r c ial r ea sona b l e n e ss, g ood f a i t h a nd f a ir d e a l i n g . The S e l le rs h a ve n ot r e ce ived a n y w r i t ten not i c e of a n y d e f a ult or a n y e v e nt t h a t wi t h not i c e or l a pse o f tim e , or both, would c onsti t ute a d e f a ul t , b y a n y S e l l e r un d e r a n y o f the P e rson a l P rop e r t y L e a s e s.

 

(b) The S e l l e rs h a ve g ood, v a l i d a nd ma r k e tab l e t i t l e to all of the P u rc h a s e d Ass e ts, i n c lu d in g , witho u t l i m i t a t i on, a ll a ssets r e l a ted to, us e d in, or int e n d e d for use in, the c ondu c t of the B usiness or re fl e c ted in the F inan c ial S tat e ments a nd a ll a ssets pur c h a s e d b y the S e l l e rs sin c e the Most Re ce nt B a lan c e S h ee t D a t e ( e x ce pt for a ssets r e fl e c t e d in t he F inan c ial S tat e ments or ac quir e d s i n c e the Most R ece nt B a l a n c e S h e e t D a te th a t h a v e b ee n sold or othe r wise dispos e d of in the O rdin a r y Cour s e of Business), f ree a nd c l ea r o f a ll L i e ns.  All tan g ib l e p e rson a l pro p e r t y ow n e d b y the Selle r s or sub j ec t t o P e rson a l P rop e r t y L ea s e s is in g ood op e r a t i n g c ondi t ion and r e p a ir, o r din a r y w e a r a nd te a r e x ce pted, a nd is sui t a ble a nd a d e qu a te for the us e s for whi c h it is i ntend e d or is b e i n g use d . The P u rc h a s e d Ass e ts (i) include a ll ta n g ib l e a nd in t a n g ib l e assets, pr o p e rties a nd r i g hts n e ce ss a r y to co n du c t t he B usine s s following the Clos i ng D a te in the s a me mann e r a s it is cu r r e nt l y c ondu c ted, a nd a s it is cu r r e nt l y c ontemplat e d to be c ondu c ted, a nd (ii) c onsti t ute a ll of the tan g i ble a nd in t a n g ib l e a ssets, p rop e rties a nd ri g hts of the Selle r s oth e r th a n t he E x c luded A ssets.  N e i ther a n y P rin c ipal nor a n y of i t s A f filiat e s

 

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owns a n y a sset or p rop e r t y r e lat e d to, used in or i ntend e d for u s e in c onn e c t i on with the B usiness; p r ovided , how e v e r , that, for the a voida n c e of d o u bt, t o the e x tent a n y P rin c ipal or a n y of its A f filiat e s do e s own a n y s u c h a sset or pro p e r t y , th e n su c h a sset or pro p e r t y i s included in t he P u rc h a s e d Ass e ts a nd the re p re s e ntations a nd w a r r a nt i e s in t his A r t i c le V that a pp l y to ( x ) the S e l l e rs sh a ll a lso be d e e med to a pp l y to e ac h P r i n c ipal a nd i t s A f filiat e s with r e spe c t t o su c h

asset or prop e r t y or ( y ) t h e P urchased Assets s hall also be deemed to app l y t o such asset or proper t y .

 

5.12 I ntell e c tual P rop e r t y .

 

( a ) S c h e dule 5.12(a) identifi e s all I ntelle c tual P roperty (oth e r th a n wid e l y a v a i l a ble, c om me r c ial o f f - the - shelf th i r d - p a r t y S o ftw a re l ic e nsed to the Se l le r s on a non- e x c lus i ve b a si s ) lic e nsed to the Selle r s (the L i c e n s e d I ntelle c tual P roper t y ).   T o the K nowl e d ge of S e l l e rs, e a c h S e l l e r is in full c omp l ian c e with a l l t e rms a nd c ondi t ions of a n y Cont r ac t, l ic e nse or sub - l i ce nse w i t h r e sp e c t t o a n y L i ce nsed I ntell e c tual P rop e r t y a nd no S e l ler is i n br e ac h o r d e f a ult of a n y Cont r ac t, l ic e nse o r su b - l ic e nse in r e spe c t of a n y L i ce n s e d I n telle c tual P rop e r t y whi c h c ould r e sult in t he te r m i n a t i on of a n y such Contr ac t, l ic e nse o r su b - l i ce nse. W i t h r e spe c t

to e ac h i t e m of L i c e nsed I ntell e c tual P rop e r t y , the l i ce nse, a g r ee ment or p e r m i ss i on c ov e ring such L i ce nsed I ntelle c tu a l P ro p e r t y ( e a c h, a L i c e nse A g re e men t ) is a nd, following the c onsummation of the c o n templat e d tr a nsa c t i on wi l l be, l e g a l, valid, b i nding a nd e n f o r c e a ble b y the Selle r s or the P u rc h a s e r, a s ap p l ic a ble, a g a inst a ll other p a rties th e r e to, a nd in full f o rc e a nd ef fe c t on i d e nt i ca l t e rms following the c onsumma t ion of the c ontemplat e d t r a nsa c t i ons, p r ovided the lic e nsors in ea c h su c h L i c e nse A g r ee ment c omp l y with t he te r ms and c o ndi t ions of the L i c e nse A g r ee ment.

 

(b) No Seller h a s a n y P a tents or a ppl i ca t i ons th e refo r e , o r p e ndi n g a ppl i ca t i ons for re g is t r a t i on of Ma r ks, or re g is t e red Co p y r i g hts or a ppl ic a t i ons for r e g is t r a t i on of Co p y r i g hts. S c h e dule 5 . 12(b) identifi e s all I ntell e c tual P rop e r t y own e d b y the Selle r s (the O w n e d I ntelle c tual P ro p e r t y ), includi n g a l l : (i) r e g is te r e d a nd u n re g is t e re d M a rks (e x c lud i ng I nt e rn e t do m a in na m e s); (iii) un r e g is t e r e d Co p y r i ghts; ( iv) r e g is t e r e d I n t e r n e t do m a in nam e s; (v) tr a de n a mes; a nd ( v i) so c ial media p a g e s.   W i t hout l i m i t ing the g e n e r a l i t y o f the f o r e g oi n g , a ll a ss i g nments f rom P e rso n s ne c e ss a r y or a p p rop r ia t e to vest own e rship in t he S e l l e rs of a n y O w n e d I ntell e c tual P roper t y h a v e b e e n obtain e d a nd r e c o r d e d.  To the Kn o wl e dge of the S e l le rs, a ll of the other r i g hts wi t hin t he S e l l e r I P a re v a l i d a nd subs i st i n g .  No Sell e r is su b je c t t o a n y

O r d e r th a t r e stricts or i m p a irs the use of a n y O w n e d I ntelle c tual P ro p e r t y a s cu r r e nt l y used in t he

Business.

 

( c ) The O w n e d I ntelle c tual P rop e r t y a nd the L i c e ns e d I ntell e c tual P rop e r t y include a ll I ntelle c tual Pr op e r t y u s e d in t he B usi n e ss and th e r e a re no oth e r i t e ms of I ntell e c tual P rop e r t y t h a t a r e u s e d in the B usiness.  N e i t h e r the e x ec ut i on, d e l i v e r y or p e r f o r ma n c e o f this Ag ree ment o r a n y of the other T ra n s ac t i on Do c u m e nts nor the c onsummation of a n y of the tr a nsa c t i ons c ontemplat e d h e r e b y or t h e r e b y will re sult in t he re le a s e , di s c losure or d e l i v e r y of a n y O w n e d I ntelle c tual P rop e r t y or L i c e nsed I n t e l l ec tual P rop e r t y , b y or to a n y e s c r o w a g e nt o r other P e rson, or in t he g r a nt, assi g nment or t r a ns f e r to a n y other Pe rson of a n y l ic e nse o r ot h e r ri g ht t o a n y O wn e d I ntel l ec tual P rop e r t y or L i ce n s e d I ntelle c tual P ro p e r t y , or in t he te r m i n a t i on or mod i fi ca t i on of ( or right to te r m i n a te or mod if y ) a n y O w n e d I ntelle c t u a l P rop e r t y o r L ic e n s e d I ntell e c tual P rop e r t y .

 

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(d) S c h e dule 5.12 ( d) identif i e s e a c h Cont r ac t pursu a n t t o whi c h a n y Pe rson h a s be e n g r a nted a n y l ice nse b y a n y S e l l e r un d e r, or othe r wise h a s r e ce ived or a c qui r e d f r om, a n y S e l le r a n y r i g ht ( w h e ther or n o t cu r r e nt l y e x e r c isabl e ) or in te r e st i n, in c lud i ng the r i g ht t o use, a n y O w n e d I ntelle c t u a l Pr op e r t y , including t h rou g h no n -a ss e rtion, sett l e ment or si m i l a r a g ree m e nts or othe r wise. S ubje c t t o the f o r e g oi n g Contr ac ts, t he S e l l e rs o wn a ll r i g ht, t i t le a nd in t e r e st i n a nd to t he O w n e d I ntelle c tual P ro p e r t y , a nd h a ve the ri g ht t o use the L i c e nsed I nt e l le c tual P rop e r t y (subj ec t, i n eac h ca s e , to a n y a ppl i ca ble lic e n s e to t he S e l l e rs c ov e ri n g such L i c e nsed I ntell e c tual P r o p e r t y ) , f r e e a nd c l e a r of a ll L iens.  The S e l le rs h a v e the sole a nd e x c lus i ve r i g ht t o bring a c t i ons for inf r i n g e ment o r un a uthori z e d use o f a ll of the O wn e d I ntell e c tual P rop e r t y .

 

( e ) The S e l l e rs h a ve t a k e n c om m e r c ial l y r e a so n a ble s teps to m a in t a in t he c onfid e nt i a l i t y o f th e ir c o n f idential or pro p ri e t a r y i n f o r mation.

 

(f) No cur r ent or for m er m e mber, stockholder, o f fic e r, c onsultant, man a g e r, emp l o y e e or v e nd o r of t h e S el l ers has a n y o wner s hip clai m , ownership r i ght (whether or not curr e nt l y e x er c i s able) or ownership in t er e st i n or t o a n y Owned I ntellectual P rop e r t y .

 

(g) The S e l l e rs h a ve t a k e n c om m e r c ial l y r e a so n a ble s teps to prot ec t t he O w n e d I ntell e c tual P roper t y .  T h e S e l l e rs h a v e not r ece i v e d a n y opin i on of c ouns e l ( w h e t h e r in t e rn a l or e x te r n a l, writ t e n or o r a l) r e lati n g to t he p a tent a bi l i t y , inf r i n g e m e nt, valid i t y o r e n f o r c ea bi l i t y o f a n y O w n e d I ntelle c tual P ro p e r t y . To the K nowl e d g e o f the S e l le r s, duri n g the p a st five ( 5) y e a rs, no P e rson h a s inf r i n g e d, m i s a p p r opri a ted or oth e r w ise v io l a ted, a nd no P e rson is c u r r e nt l y inf r i n g i n g , m i s a ppro p ri a t i n g or othe r wise vio l a t i n g , a n y O w n e d I ntell e c tual P rop e r t y o r r i g hts of the S e l l e rs in a n y L i ce nsed I ntelle c tual P rop e r t y .

 

(h) To the Kno w le d g e o f the S e l l e rs, the S e l l e rs h a ve not i n f rin g e d, m i s a ppro p ri a ted or oth e r wise vio l a ted, or is cu r re nt l y inf r i n g i n g , m i s a ppr o p r iating or ot h e r w ise vio l a t i n g , a n y I ntell e c tu a l P rop e r t y ri g ht of a n y o t h e r Pe r son; no L e g a l P ro c ee di n g a l le g i n g a n y such inf r i n g e ment, m i s a p p r opri a t i on or vio l a t i on is p e nding or, to the Kn o wl e dge of the S e l le rs, thr ea ten e d a g a inst the S e l l e rs; a nd the use of the O w n e d I ntell e c tual P roper t y a nd o f the L i c e nsed I ntell e c tual P rop e r t y , if u s e d in t he B usiness in a c c o r d a n c e with t he te r ms of the a ppl i ca ble l i ce nses a nd in t he man n e r c u r r e nt l y use d , will n o t i n f rin g e , m i s a p p rop r iate or violate a n y ( x )

L a w e x is t ing prior to t he Clos i ng or ( y ) r i g ht of a n y P e rson.

 

(i) No L e g a l P roc ee di n g is pending o r , to t he Kno w l e d g e o f the S e l l e rs, thr ea ten e d a g a inst the S e l l e rs ( i) b a s e d upon, c h a l l e n g i n g or se e ki n g to de n y or r e strict the use b y the Selle r s of a n y of t h e O w n e d I ntell e c tual P roper t y or L i ce nsed I ntelle c t u a l P rop e r t y or c h a l l e n g i n g the v a l i di t y , e n f o r c ea b i l i t y o r e f f e c t i v e n e ss t h e r e of ; (ii) a l le g i n g that the Selle r s h a ve inf r inged, mis a ppro p ri a t e d or o the r wise vio l a ted, o r is c u r r e nt l y inf r i n g i n g , m i s a ppro p ri a t i ng o r othe r wise vio l a t i n g , a n y Int e l l ec tual P rop e r t y r i g ht of a n y other Pe rson; or ( i i i) a l l e g i n g that a n y of the lic e nses listed on S c h e dule 5.12 ( a ) c o n flicts with t he te r ms of a n y th ir d - p a r t y l i ce nse o r

a n y ot h er agree m ent.  The S el l ers have not r e c eiv e d a n y wri t ten co r r e spon d ence or opin i on r e lating to po t ent i al i n f rin g e m ent, m isappropriat i on or v io l at i on (i) b y the S el l ers of a n y I ntell e ctual P rop e r t y o f a n y P erson o r (i i ) b y a n y P erson of a n y of the O w ned I ntellectual P rop e r t y o r the L i c ensed I ntell e ctual P rop e r t y .

 

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(j) F or the a voidan c e o f do u bt, t he f o r e g oi n g re p r e s e ntations a nd w a r r a nt i e s a pp l y with r e spe c t t o the United S t a tes a nd e a c h f o r e i g n j u risdiction i n whi c h the B usiness is c ondu c ted in a n y man n e r or in w hich the Selle r s o r a n y l i ce ns e e the r e of us e s, or holds f or use, a n y S e l le r I P .

 

5.13 Mat e ri a l C ontr ac t s .

 

( a )       S c h e dule 5.13 ( a ) s e ts fo r t h a tru e , c o r r e c t and c o m plete l i st of a ll Contr ac ts to which eac h S e l le r is a p a r t y o r b y whi c h eac h S e l l e r, or a n y o f its ass e ts or p r op e rties, is bound that ( i) involve p a y ments or r e c e ip t s b y eac h S e l le r in a n y y ea r in e x ce ss of $25,000, ( i i )

evidence o r re l ate to ind e btedness (includ i n g , without l i m i tation, g uar a ntee s ) or L i ens, (ii i ) invo l ve the dispos i t i on of a n y s i g nifi c ant portion of the assets or business of a n y S el le r (other than sales of prod u cts i n the Ordina r y Cour s e of Business) or the a cquis i t i on of the assets of business of a n y other P e r son (other than pu r chases of invento r y or c ompon e nts i n the Ordina r y Course of B usiness, (iv) invo l ve a n y cu r r e nt or f o r mer offi c er, ma n a g er, o r member of a n y S el le r or an A f filiate there o f, ( v ) e viden c e or r elate to a n y emp l o y ment, a gen c y , d is t ribution, dealer or sales relationship, (vi) c o ntain an obl i g at i on of c o nfidentiali t y with res p ect to i nformation furnished b y a n y S el l er t o a th i rd par t y or r e c eiv e d b y a n y S el le r from a th i rd p a r t y , w e re not entered in t o in t he Ordi n a r y Course of B usiness a nd are c u rrent l y in e ff e ct, (vii) a re not term i nable wi t hout pena lt y b y less than 30 d a y s n ot i ce (other than as a r e s ult of a br e a ch or a bankrupt c y e v ent), (vi i i) l i m i t or restrict a n y S el le r from e n g a g i n g in, or t h e conduct of, the B usiness in a n y mann e r, (i x ) a re for the s ale, pur c hase, l i cense, t r ansf e r or develop m ent of a n y S el l er’s products or I ntellectual P rop e r t y ( e x clud i ng Contr a cts for the pu r c h ase and sa l e of a n y S el l er’s products ent e r e d in t o in t he Ordina r y Cou r se of B usines s ), ( x ) c ont a in a n y p r ovis i ons r e quiri n g a n y S el l er to i n demn if y a n y other p ar t y ( e x clud i ng indemni t ies contained in C ontracts for the purc h ase o r sale o f products ent e r e d in t o in t he Ordina r y Cour s e of B usiness), ( x i) are

with a n y Go v e rnm e ntal B o d y , ( x i i ) c onsti t ute a l i ce nse, su b - l ic e nse, spon s o r ship, ma r k e t i n g , jo i nt ventu re , p a rtn e rship or sim i lar Contr ac t, ( x i i i ) involve a n y pow e rs of a t t o r n e y with r e spe c t to t he B usiness or a n y P u r c h a s e d Ass e t, or ( x iv) a r e othe r wise ma t e ri a l t o a n y S e l l e r o r the B usiness ( c ol le c t i v e l y , t h e Mat e ri a l C ontr ac t s ).

 

(b) E ac h M a t e ri a l C ontr ac t i s a v a l i d, bind i ng a nd e n f o rcea b l e obl i g a t i on of

the S e l l e rs p a r t y t h e r e to a nd, to the Kno w l e d g e o f the S e l l e rs, of the other p a r t y or p a rties th e r e to, e x ce pt as e n f o r cea bi l i t y m a y b e l i m i ted b y a ppl ic a ble b a nkru p t c y , insolv e n c y , r e o r g a ni z a t i on, mor a torium or oth e r sim i lar L a ws a f f e c t i ng c r e di t o r s’ r i g hts gen e r a l l y a nd g e n e r a l p rin c ip l e s of e qui t y ( re g a rdl e ss of w h e ther c onsid e r e d in a p r o c ee di n g a t l a w or in e qui t y ), a nd e a c h M a t e ri a l Contr ac t i s in full f o rc e a nd e f f e c t.   C omp l e te a nd c o r re c t copi e s of e a c h M a te r ial Contr ac t (in c lud i ng a ll mod i fi ca t i o ns, am e ndments a nd su p plem e nts t h e r e to and w a i v e rs th e r e un d e r) h a ve b ee n made a v a i l a ble to t h e P u rc h a s e r.

 

( c ) No Seller nor a n y oth e r p a r t y t h e r e to i s in bre ac h o f or d e f a ult und e r a n y te r m of a n y Mat e r i a l C ontr ac t and no e v e nt has o c c u r r e d that with no t ice o r lapse of tim e , o r both, would c onsti t ute a br e ac h of o r a d e f a ult b y a n y S e l l e r or a n y ot h e r par t y u nd e r a n y Ma t e ri a l Contr ac t.  Th e r e a r e no mat e ri a l d i sput e s pe n di n g or, to the Kno w le d g e o f the S e l l e rs, th r e a ten e d und e r a n y Assumed Con t r a c t.

 

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(d) No Seller h a s r ece ived w ritten noti c e of t e rmin a t i on, c a n c e l l a t i on or no n - r e n e w a l t h a t i s cu r r e nt l y i n e f f e c t wi t h r e sp e c t t o a n y Mat e ri a l C ontr ac t a n d , to t he Kno w le d g e of the Selle r s, no oth e r party to a M a t e ri a l C ontr a c t p l a ns to te r m i n a te, ca n ce l or n o t r e n e w a n y such Mat e ri a l C ontr ac t.

 

5.14 Empl o y e e B e n e fits P lans.

 

( a ) S c h e dule 5.14 ( a ) l i sts ea c h Empl o y e e B e n e fit P lan” (a s d e fin e d in S ec t i on 3 ( 3) of E R I S A) a nd a n y ot h e r e mp l o y e e plan, p r o g r a m, po l i c y , p r a c t i ce s, pro ce d u r e , a r ra n g e ment or a g r e e me n t m a in t a ined, c ontribut e d to or re quir e d to be c ont r ibu t e d to b y the S e l l e rs (e a c h, a S e l le r B e n e fit P la n ).   E ac h S e l le r B e n e fit P lan h a s b e e n a dm i nis t e r e d in acc o r d a n c e with i ts t e rms.  The B e n e fit P lans a r e , a nd h a ve b ee n op e r a ted, i n c omp l ian c e with the a ppl i ca ble p r ovis i ons of E R I S A, the Co d e a nd other a ppl i ca ble L a w s.

 

(b) S e l l e r h a s no obl i g a t i on to cont r ibu t e , maintain or sponsor a n y “e mp l o y e e p e nsion plans” (a s d e fin e d in S ec t i on 3 ( 3) of E R I S A ) . All cont r ibu t ions, p re m i ums and b e n e fit p a y m e nts to or in conn e c t i on with t he S e l l e r B e n e fit P lans that a re re qui r e d to have b ee n m a de a s of the d a te h e r e of in acc o rd a n c e with t he te r ms of the Seller B e n e fit P lans h a ve b e e n t i me l y

made or h a v e b ee n r e f l e c ted in the F inan c i a l S tat e ments. No Seller B e n e fit P lan is sub j ec t t o Tit l e I V o f E R I S A. No Seller B e n e fit P lan p r ovi d e s for pos t - r e t i r e ment m e dic a l, l ife insur a n c e or other b e n e fits promis e d, pr o vided or othe r wise due now or in t he f utu r e to cu r r e nt, f o rm e r o r r e t i r e d e mp l o y e e s oth e r t h a n a s r e qui r e d b y S ec t i o n 4980 B ( f ) of the Code.

 

( c ) No a mount re quir e d to b e p a id or p a y a ble to or w i th r e spe c t t o a n y e mp l o y e e or oth e r s e rvi c e pro v ider of t h e S e l l e rs i n c onn ec t i on with t he tr a nsa c t i ons c ontemplat e d h e r e b y ( e i t h e r sol e l y a s a r e sult the r e of or a s a re sult of s u c h tr a nsa c t i ons in c onjunction wi t h a n y ot h e r e v e n t ) w i l l be a n e x ce ss pa r a c hute p a y men t with i n the m ea ning of S ec t i on 280G of the Code.

 

5.15 L a b o r .

 

( a ) (i) To the Kno w le d ge of S e l l e rs, eac h S e l le r is in compl i a n ce , in all mat e ri a l r e s p ec ts, with a l l applic a ble L a ws re g a rd i ng e mp l o y ment a nd e mp l o y ment p r ac t i ce s, includin g , without l i m i ta t ion, all applic a ble L a ws r e g a rdi n g te r ms and c ond i t i ons of e mp l o y ment, h ea l t h a nd s a f e t y , w a g e s and hou r s, child l a bor, i m m i g r a t i on, e mp l o y m e nt disc r i m ination, equ a l e mp l o y ment opportuni t y , a f f irmative ac t i on, plant c losur e s and l a y o f f s, wo r k e rs’ c ompen s a t i on, labor re lations, disabili t y ri g hts or b e n e fits, empl o y e e le a v e is s u e s, wo r k e r c lassifi ca t i on, a nd un e mp l o y ment insu ra n c e , ( i i ) since J a nu a r y 1, 20 1 4, no S e l l e r h a s re ce ived w r i t ten notice of the in t e nt of a n y Gov e rn m e n tal B o d y re spons i ble f o r t he e n f o r ce ment of a n y s u c h L a ws to c ond u c t

an investi g at i on with r espe c t t o or re l at i ng to a n y such L aws, or w ritten notice that such investi g at i on is in progr e ss, and (i i i) no S el l er is a par t y to, o r otherwise b o und b y , a n y Ord e r r e lating to emp l o y e es or emp l o y ment p r act i ces.

 

(b) No Seller is a p a r t y to or bound b y a n y c ol l ec t i ve b a r g a in i n g a g r ee ment or si m i l a r ag r ee ment with an y labor o r g a ni z a t i on or is ne g ot i a t i n g a n y s u c h a g ree ment.   T h e re a re no (i) p e ndi n g unf a ir l a b or pr a c t ic e or oth e r l a bor or e mp l o y ment c h a r g e s, c omp l a in t s, g ri e v a n c e s, a r bi tr a t i on p r o cee di n g s or oth e r L e g a l P ro c ee di n g s a g a inst a n y S e l l e r nor, to the

 

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Kno w le d g e of t h e S e l l e r s , is a n y such c h ar g e , c o m plaint, g ri e v a n c e , p roc e e ding or oth e r L e g a l P ro c ee di n g thr e a ten e d, (ii) labor strikes, dispu t e s, s l owdo w ns, wo r k stopp a g e s o r lo c kouts that h a ve o c c u r r e d with i n the p a st t h re e ( 3 ) y e a rs or th a t a r e p e ndi n g or, to the K nowl e dge of the S e l l e rs, th rea te n e d a g a in s t a n y S e l l e r, a nd (iii) to t he Kno w le d g e o f the S e l l e rs, a t t e mp t s b y a n y e mp l o y e e s of a n y S e l le r to un i oni z e or c ol l ec t i v e l y b a r g a in wi t h a n y S e l l e r. No Seller h a s e ng a g e d in a n y u n f a ir la b or pr a c t ic e .

 

( c ) All comp e nsation, in c lud i ng w a g e s, commiss i ons a nd bonus e s p a y a b l e to a n y e mp l o y e e s of t h e S e l l e rs f or s e rvi ce s p e r f o r m e d on or prior to t he d a t e h e r e of h a ve b ee n p a id in full, will be p a id i n full b y the d a y o f the e mp l o y ee ’s s e p a r a t i on, or a re i n c luded in a c c ru e d l i a bi l i t ies to be re tain e d by S e l l e r s, a nd the r e a r e n o outs t a nding a g r ee ment s , und e rst a ndi n g s or c om m i t ments of a n y S e l l e r w i t h r e sp e c t t o a n y c o mpens a t i on, c om m is s io n s or bonus e s. To the Kno w le d g e of ea c h S e l l e r, su c h S e l l e r h a s withh e l d a ll a moun t s r e quir e d b y law or a g r ee ment to be withheld f rom the wa g e s o r s a la r i e s of e mp l o y ee s and such S e l le r is not l iable f or a n y a r r ea rs of a n y tax or p e n a l t ies f o r fa i l u r e to comp l y with t he f o r e g oi n g . All empl o y ee s cl a ss i fi e d a s e x e mpt und e r the Fa ir L a bor St a nd a rds Ac t a nd st a te a nd lo c a l w a g e a nd h our l a ws or ind i vi d u a ls p r ovid i ng s e rvi ce s as in d e p e nd e nt cont r ac tors o r consultants a re pro p e r l y c l a ss i fi e d in all

mat e ri a l r e s p ec ts a r e pr o p e r l y c lassifi e d in all m a t e ri a l r e s p ec ts.

 

(d) E x ce pt as disclosed in S c h e dule 5.15 , the S e l l e rs a re not pa r t y to a n y w r i t ten or other e mp l o y ment, labor or c ompen s a t i on a g r ee ments with a n y e mp l o y e e s.

 

5.16 L e g a l P ro c e e di n g s .  E x ce pt as disclosed in S c h e dule 5.16 , (a ) th e re a re no L e g a l P ro c ee di n g s pe n di n g or, t o the K nowl e d g e o f the S e l l e rs, th rea t e n e d a g a inst the B usiness, a n y S e l l e r or a n y o f the P u rc h a s e d Ass e ts, nor a re a n y of the f o r e g oi n g subj e c t to a n y O rd e r; (b) the r e a re no L e g a l P ro c e e di n g s p e nding o r, to the K no w ledge of the S e l l e rs, th r e a ten e d that a r e r e a sona b l y l i k e l y to pro h ib i t or lim i t the a bi l i t y o f a n y S e l le r to e nter in t o t h is A g r ee ment or a n y of the oth e r T r a nsa c t i on Do c uments, to c onsummate a n y of the t r a ns a c t i ons c ontemplat e d h e r e b y or the re b y or to p e r f o rm a n y o f its ob l i g a t i ons h e r e und e r or t h e r e un d e r; a n d ( c ) th e r e a re no jud g ments, ord e rs or d e c r ee s outstanding a g a inst a n y S e l l e r o r a n y of its pr o p e rties or a ssets.

 

5.17 Comp l ian c e with L a ws; P e rmit s .

 

( a )       E ac h S e l l e r is in compl ia n ce , in all m a te r ial r e sp e c ts, with all L a ws a ppl i ca ble to a n y of t h e P u rc h a s e d Ass e ts, t he B us i n e ss and its op e r a t i ons. No Seller h a s r e ce i v e d w r i t ten not i c e o f the vio l a t i on of a n y su c h L a ws.

 

(b) S c h e dule 5.17 s e ts fo r th a tru e , c o r r e c t and c omp l e te list of a ll P e rmits h e ld b y eac h S e l le r.   E ac h S e l l e r h a s all P e rmits that a re r e quir e d for the o p e r a t i on of the B usiness a s c u r re nt l y c o n du c ted a nd a s c u r r e nt l y c ontemplat e d to be c ond u c ted.   A ll P e rmits a re v a l i d, bind i ng a nd in full fo rc e a nd e f fe c t.  No S e l l e r is in de fa ult or violati o n ( a nd no e ve nt has o cc u r r e d whi c h, with no t ice or the lap s e of tim e , o r both, w ould constitu t e a d e f a ult or violation) of a n y te r m, condit i on or p r ovis i on of a n y such P e r m i t.

 

5.18 Environm e ntal Matt e rs.

 

( a ) (i) The op e r a t i ons of e a c h S e l l e r a r e in compl i a n c e w i t h a nd h a ve c omp l ied w i t h a ll a ppl i c a ble E nvironme n tal L a ws.

 

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(ii) E ac h S e l l e r h a s obt a ined a nd is in compl i a n c e wi t h a ll P e rmits ( e ac h o f w hich is lis t e d o n S c h e dule 5.17 ) a nd Asb e stos Ma n a g e ment P la n s r e quir e d b y Environm e ntal L a ws, a n d n ece ss a r y f or t h e c u r rent ope ra t i on or use o f t h e B usiness a nd the P u rc h a s e d Ass e ts, a nd f o r a n y P e rmits that m a y e x pire prior to C los i n g , e a c h S e l l e r h a s filed a n y r e n e w a l applic a t i ons r e q uir e d b y Environm e ntal L a ws to e nsure t h e P e rmits will re main in full fo rc e a nd e f fe c t up un t il a nd a f te r Closin g .

 

(b) Th e re h a s be e n no R e l ea s e of Ha z a rdous M a te r ials b y a n y S e l le r a t a n y loc a t i on a nd the r e a re no e nvironme n tal c ondi t ions or c ir c ums t a n c e s, inclu d in g , without l i m i tation, t he pr e s e n c e o r R e le a se o f a n y H a z a rd o us S ubst a n ce , on a n y L ea s e d Re a l P r op e r t y , or a n y p rop e r t y to which a n y H a z a rdous Subs t a n ce s or w a ste g e n e r a t e d b y o p e r a t i ons or use o f a n y of i t s ass e ts b y a n y S e l l e r w a s tr a nsport e d o r dispos e d of, (i) r e lating to, a ri s ing out of, or r e sul t ing f rom fa i l u r e b y a n y S e l le r to comp l y with, a n y a ppl i ca ble E nv i r o nment a l L a w or Environm e ntal P e rmit, or f rom a R e le a s e or th r ea t e n e d Rele a s e of a n y H a z a rdous Subs t a n c e in t o the E nvironme n t or ( i i ) w hich re quire c le a nup o r r e medi a t i on b y a n y S e l l e r pursu a nt t o a n y Environm e ntal L a w ( c ol l ec t i v e l y , Environm e ntal Condi t ion s ).

 

( c ) To the K nowl e d g e o f the S e l l e rs, no S e l l e r nor a n y of the i r p re d ece ss o rs h a s desi g n e d, manu f ac tu r e d, sold, ma r k e ted, inst a l led or dis t ribut e d pr o du c t s or oth e r items c ontaining a sbestos, ur e a f o r mald e h y de o r po l y c h l o r inat e d biphe n y ls ( P C B s ).

 

(d)     No S e l l e r h a s a n y L i a bi l i t y und e r a n y Envir o nment a l L a w, nor is it r e spons i ble for or h a s it a ssu m e d a n y L iabil i t y of a n y ot h e r Pe rson un d e r a n y Environm e ntal L a w, wh e th e r b y Contr a c t , R ea l P rop e r t y L e a s e , s e t t lem e nt or other w r i t ten a nd l e g a l l y bind i ng a r ra n g e ment b e tw ee n or a mo n g a n y S e l l e r a nd a n y other P e rson, or b y op e r a t i on of L a w or othe r wise.   No v a l i d a nd subs i st i ng L i e n ar is i ng und e r or pursu a nt to a n y a ppl ic a ble Environm e ntal L a w e x is t s a g a inst a n y S e l le r or a n y o f the L e a s e d R ea l P r o p e r t y , the B usiness o r P u rc h a s e d Ass e ts.

 

( e ) No Seller h a s r ece ived a n y w ritten info r mation r e q u e st or other c om m unic a t i on f r om a G ov e rnm e ntal B o d y a nd t h e re a re no L e g a l P roc ee d i n g s pe n di n g or, to the Kno w le d g e o f the S e l l e rs, th rea te n e d, a g a inst a n y S e l l e r o r its pr e d e ce s s o r s r e lati n g to a n y vio l a t i on, or a l l e g e d vio l a t i on o f , or L i a bi l i t y un d e r, a n y Environm e n t a l L a w or re lati n g in a n y w a y to a n y Environm e n t a l L a w, Ha za rdous Subs t a n c e or a n y Envir o nmen t a l P e rmit or oth e r a uthori z a t i on of a n y Go v e rnm e ntal B o d y re qui r e d und e r a n y Environm e n t a l L a w, i n c lud i n g ,

without l i m i ta t ion, (i) a ny a nd a ll c laims b y Gov e rnm e ntal B odies for e n f o r c e ment, invest i g a t i on, c le a nup, r e moval, re spo n s e , c o r r ec t i v e , r e med i a l, mon i torin g , or o ther ac t i ons, d a m a g e s, fin e s o r p e n a l t ies pu r suant to a n y a ppl i ca ble E nvironme n t a l L a w, a nd (ii) a n y a nd a l l cl a i m s b y a n y o n e

or more P e rsons s e e king d a m a g e s, co n tribution, i n d e mn i fi ca t i on, c ost r e c o v e r y , c ompen s a t i on, in j un c t i ve or oth e r re l ie f r e sul t ing f rom a R e le a s e of a n y H a z a rdous Subs ta n c e or arising f r om a l l e g e d in j u r y or th r e a t of in j u r y to he a l t h, s a f e t y , p r op e r t y , n a tu r a l r e sou r c e s or the Environm e nt ( c ol l ec t i v e l y , “ Environ m e ntal Claim s ).

 

(f) To the Knowle d g e o f Sellers, there h as not been a n y und er g round or abov e g round sto r a g e ta n k or other und er g round s t or a g e r e c eptacle o r rela t e d pip i n g , or a n y i m poundment or other disposal area, in each ca s e containing a n y Ha z ardo u s S ubstance located on, at, or under a n y L ea s ed Real P rop e r t y and no asbestos or P C B s have b een used or dispo s ed

 

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o f , or ha ve b ee n lo c a ted a t, on, or und e r a n y such p r op e r t y , e x ce pt i n c om p l i a n c e with

Environm e ntal L a ws.

 

(g) E ac h S e l l e r h a s provid e d to t he P u rc h a s e r a nd i t s a uthori z e d r e p re s e ntatives true a nd c omp l e te c o pies of a ll r e c o r ds a n d fil e s, P e rmit s , O rd e rs, e nviron m e ntal a udi t s, r e ports, Contr ac ts a nd other mat e ri a l envi r onment a l docum e nts, s tud i e s, an a l y si s , tests a nd mon i toring in t he p o ssession or c ontrol of su c h S e l l e r c on c e rni n g the e x i s ten c e of a n y H a z a rdous S ubst a n c e or a n y ot h e r e nviron m e ntal c on ce rn a t a n y L e a s e d R ea l P rop e r t y or r e lating to t he B usiness o r Pur c h a s e d Ass e ts or c o n ce rni n g c omp l ian c e b y such S e l l e r with, or L iabil i t y un d e r, a n y Environm e ntal L a w.

 

(h) N e i t h e r the e x ec ut i on a n d d e l i v e r y of this A g re e ment nor the c onsummation of the tr a nsa c t i ons c ontemplat e d h e r e b y will re qui r e a n y n o t i fi ca t i on, re g is t r a t i on, r e porti n g , f i l in g , invest i g a t i on or re medi a t i on un d e r a n y Environm e n t a l L a w .

 

5.19 S uppl i e rs a nd Custo m e r s .  E x ce pt as s e t fo r th on S c h e dule 5.19 , no supplier that acc ounted for more t h a n five p e r ce nt (5 % ) of the a nnu a l pur c h a s e s of a n y S e l l e r in the a g g reg a te since J a nu a r y 1, 2015, no c usto m e r th a t a c c ounted for more than five p e r ce n t (5 % ) of the a nnu a l s a les of a n y S e l l e r in the a ggre g a t e since J a nu a r y 1, 2015, a nd no other su p pl i e r or c usto m e r mat e ri a l t o the B usiness or a n y S e l l e r ( includi n g , but not l i m i ted to, a n y s u ppl i e r w ho is a sole a v a i l a ble sou r c e of supp l y of a n y pro d u c t o r s e rv i ce ), h a s t e rmin a ted or th r ea ten e d to te rmin a te i t s r e lati o nship with a n y S e l l e r, nor h a s it duri n g the p re c e di n g tw e lve (12) mon t hs d ec r e a s e d or d e l a y e d mat e ri a l l y o r th r ea ten e d to d ec r ea se o r del a y ma t e ri a l l y , i t s se r vic e s or suppli e s to a n y S e l l e r or i t s usage of the s e rvi ce s or p rodu c ts of a n y S e l l e r, a nd to t he Kn o wl e dge of the S e l le rs, the r e is no state of f ac ts o r e v e nts whi c h c ould r ea s on a b l y b e e x p ec ted to f o r m t he b a sis f or such a d ec r ea s e or d e l a y . To the Kno w le d g e o f the S e l l e rs, the c onsum m a t i on of the t ra nsa c t i ons c ontemplat e d b y the T ra nsa c t i on Do c uments will not adv e rs e l y a f f e c t t he b usiness r e lationship h e r e tofo r e maintain e d b y a n y S e l le r w i t h a n y of i t s supp l ie r s or c usto m e rs. No Seller is r e quir e d to provide a n y bonding o r a n y other fi n a n c ial s e c u ri t y a r ra n g e ments in c o n n ec t i on with a n y tr a nsa c t i ons with a n y c u s to m e rs or supplie r s.

 

5.20 F inan c ial Advisors . No P e rson h a s a c t e d, dir ec t l y or indir ec t l y , a s a b rok e r , f inder or f inan c ial a dvisor f or a n y S e l l e r in c on n ec t i on w i t h the t ra nsa c t i ons c ont e mp l a ted b y th i s Ag ree ment a nd no P e rs o n is entit l e d to a n y f e e or c om m is s ion or like p a y m e nt f r om t he

Pu rc h a s e r in r e spe c t th e r e o f .

 

5.21 I n v e nto r y .  All I nv e nto r y , wh e ther or n o t r e fl e c ted in t he F inan c ial S tat e m e nts, c onsists of a qu a l i t y a nd qu a nt i t y usable a nd s a la b le in the O rdin a r y Course of B usiness, e x ce pt for obsol e te, d a m a g e d, d e f e c t i ve o r slo w - mov i n g i t e ms t h a t have b ee n w ritten o f f or w ritten

down to fa ir m a r k e t val u e or f or whi c h a d e qu a te r e s e rv e s h a ve b e e n e stabl i shed. All I n v e nto r y is own e d b y the Selle r s f r e e a nd c le a r of a ll L iens, a n d no I n v e nto r y is held on a c onsignment b a si s . The qu a nt i t i e s of e a c h i te m of I n v e nto r y ( w h e ther r a w m a t e ri a ls, wor k - in - p ro c e ss or finished g oods) a re not e x ce ss i v e , but a r e r ea sona b le in the pr e s e nt ci r c u m stan ce s o f the Selle r s.  All I n v e nto r y is (i) of m e r c h a ntable qu a l i t y , ( i i ) suit a ble f or sale un d e r e x is t ing qu a l i t y c ontrol stand a rds a nd (iii) is in c omp l ian c e with all appli c a ble r e g ulations a nd st a n d a rds of a n y Gov e rnm e ntal B o d y , a nd a ll b e v e rage inve n to r y h a s be e n sto re d pro p e r l y .

 

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5.22 A cc ounts R e c e ivabl e ; Ba nk A cc ounts; B ooks a nd R ec o r d s .

 

( a ) The A cc ounts R e ce ivab l e shown in the F ina n c ial S tat e ments provid e d b y the Selle r s pursu a nt t o Se c t i on 5.6 (in c lud i ng a n a c c ounts re c e ivable a g i n g s c h e dule f o r the B usiness dat e d a s of the Most R ece nt Ba l a n c e S h ee t D a t e ), or the r e a ft e r a c quir e d b y i t , ( i) h a ve a ris e n or w i l l a r ise f r om t he sale of g oods or s e rvi c e s in bona f ide t ra n s ac t i o ns in the O rdin a r y Course of B usiness to Pe rsons not A f filiat e d with t he S e l l e rs, ( i i ) c onsti t ute on l y v a l i d, undisputed c laims of the S e l l e rs not subj ec t t o c laims of s e t - o f f or ot h e r de f e nses or c ounte rc laims other t h a n norm a l c a sh dis c ounts ac c ru e d in t he O rdin a r y C o u r se of B usiness, a nd (iii) subj ec t t o a re s e rve f or b a d d e bts s hown on th e Most R ece nt B a lan c e S h ee t or, w i t h r e s p ec t to A cc ounts R ece i v a ble a rising a f t e r the Most R e c e nt Ba la n c e S h e e t D a te, on the acc ount i n g r e c o r ds o f the B usiness, a re c ol le c t i ble in f ull with i n six t y (60) d a y s a ft e r bi l l i n g .  The S e l l e rs h a ve not r e ce ived a n y w r i t ten notice f rom a n a cc o unt debtor stating that a n y A cc ount R e c e ivable is s ubje c t t o a n y c ontest, cl a im or s e toff b y such a cc ount debto r .

 

(b) The books of a cc ount a n d other B ooks a nd Re c o r ds of the S e l l e rs, a ll of whi c h h a ve b ee n ma d e a v a i l a ble to the P u r c h a s e r p r ior to the Clos i ng D a te, a re c omp l e t e a nd acc u r a te a nd h a ve b ee n maintain e d in a cc o rd a n c e with sound busin e ss pr ac t i c e a nd a ppl i ca ble r e quir e ments of L a w, e x c e pt as noted the r e i n .  To the K nowl e d g e o f the S e l l e rs, the books of acc ount and ot h e r B ooks a nd Re c o r ds of t h e S e l l e r s do not c ontain a n y m a te r ial m i ss t a tem e nts, a nd the r e a re no i n c iden t s of f r a ud that c ould c a u s e or re sult in a n y such m a te r ial m i ss t a tem e nts.

 

5.23 T ra nsa c t i ons W i t h Relat e d P a rtie s .  E x ce pt as s e t f o r th on S c h e dule 5.23 , n e i t h e r a n y c u r r e nt or f o r m e r m e mber of a n y S e l l e r (in c l u din g , but not l i m i ted to, a n y P rin c ipal), n o r a n y A f filiate of su c h Pe rson, is cu r r e nt l y a p a r t y to a n y tr a n s ac t i on with t he B u siness or the S e l l e rs, includin g , without l i m i ta t ion, a n y Contr a c t providing f o r the e mp l o y ment o f , f u r nish i ng of s e rvi ce s b y , r e ntal of a s s e ts fr o m or to, or oth e r wise r e quiri n g p a y ments to, a n y s u c h P e rson. None of the P u rc h a s e d A ssets in c lude a n y Contr a c t wi t h, or obl i g a t i on to p r ovide a n y b e n e fit to, a n y P rin c i p a l or a n y of h i s A f filiat e s.

 

5.24 Gift Ca r ds .  All Gift C a r ds h a ve b ee n is s u e d a nd sold without a n e x pir a t i o n d a te. Oth e r th a n the G ift Ca rds, Co m ps, House A cc oun t s and P romotion a l Discount s , the Selle r s ha v e no l i a bi l i t y in r e spe c t of a n y g ift ca rds, c oupons, discounts or si m i l a r lia b i l i t ies w i t h r e spe c t t o the B usiness or the P u r c h a s e d Ass e ts.

 

5.25 L iquor L i c e nses .   S c h e d u le 5.25 s e ts fo r th a c omp l e te list a s of the d a te o f this Ag ree ment o f a ll l i quor l i ce nses ( includi n g , with o ut l i m i t a t i on, b ee r a nd wine l i ce nses) h e ld or us e d b y eac h S e l l e r, in c l uding the Pe r son in who s e n a me such l ic e nse is issued, d a te of is s u a n c e a nd r e n e w a l date ( c ol l ec t ive l y , the L iqu o r L ic e n s e s ). E a c h of the S e l le rs is in c omp l ian c e in all mat e ri a l r e s p ec ts with all applic a ble stat e , mun i c i p a l and other g ov e rnm e nt a l l a ws, r e g ulations a nd r u les w i t h r e s p ec t t o the s a le of l i quor a nd a ll a lcoholic b e v e ra g e s a nd h a s the r i g ht t o sell l i quor a t r e tail for c onsumpt i on with i n eac h of the re stau r a nt l o ca t i ons of s u c h S e l l e r, subj ec t t o a nd in a cc o rd a n c e with a l l applic a ble p r ovis i ons of the L iquor L i ce nses. T o the K nowl e d g e o f

the Selle r s, s i n c e J a nu a r y 1, 2017, ( i) th e re h a ve b ee n no L e g a l P ro c e e dings bro u g ht or thr ea ten e d to b e bro u g ht b y or b e fo r e a Go v e rnm e ntal B o d y in r e sp e c t of a n y such L iqu o r L i c e nse or the ac t i vi t ies of such S e l l e r in c onn e c t i on with a n y s u c h L iqu o r L i c e nse ( o r in c onn ec t i on with a n y oth e r liquor lic e nse p r e viously h e ld or used b y such Se l l e r ) , ( i i ) no su c h

 

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L iquor L i c e nse is subj ec t to a n y d u e but unpaid t a x obl i g a t i on ow e d to a G ov e rnm e ntal B o d y , the outst a nding n a tu r e of whi c h would p r e c lude t r a nsf e r of s u c h L iqu o r L ic e nse f rom a n y of t h e S e l l e rs to the Pur c h a s e r, a nd (iii) no su c h L iquor L i c e nse ha s b ee n th r ea t e n e d b y a Gov e rnm e ntal B o d y to be r e vok e d, l i m i ted or not r e n e w e d.

 

5.26 S e l l ers’ Empl o y e e s .

 

( a ) The S e l l e rs h a ve p rovid e d to t he P u rc h a s e r a l i st of a ll of the e mp l o y e e s of the Selle r s empl o y e d a s o f the d a te h e r e of in c onn e c t i on with t he B usiness (b y t y pe o r c lassifi ca t i on) a nd t h e ir r e spe c t i ve r a tes of c omp e nsation (in c lud i ng the p or t i ons th e r e of a t t ribut a ble to bonus e s or other e x tr a o r dina r y c ompens a t i on), be n e fits and l e n g th of e mp l o y m e nt, a lso as of the d a te h e r e o f . S e l l e rs’ e mp l o y e e s iden t ified on su c h l i st as hou r ly e mp l o y e e s or no n - man a g e ment e mp l o y e e s a re r e fer re d to h e r e in a s the B usi n e ss Empl o y e e s a nd S e l l e rs’ e mp l o y e e s identifi e d on such l i st as man a g e ment e mp l o y e e s a r e r e f e r r e d to h e r e in as the K e y B usiness Emp l o y e e s ”.

 

(b) To the Kno w le d g e o f Selle r s, no K e y B usiness E mp l o y e e h a s a n y plans or h a s notified S e l l e rs th a t such e m pl o y e e in t e nds to te r m i n a te e mp l o y m e nt w i t h a n y S e l l e r. E x ce pt a s dis c losed to the P u rc h a s e rs, no K e y B usiness E mp l o y ee s h a ve ind i ca t e d that th e y in t e nd to r e t i re with i n the n e x t five y e a rs.

 

( c ) S e l l e rs will pro v ide to P u rc h a s e r a c ce ss t o c omp l e t e c opies of all

emp l o y e e fi l es includi n g but not l i m i ted to B usiness Emp l o y ee and K e y B u siness Emp l o y ee files maintained in electronic or other for m at as main ta ined b y S el l ers.  Pu r cha s er shall keep all information i n the fi l es c onfident i al and use it only f o r human r e sour c e pu r poses.

 

5.27 I n fo r mation S ec u r i t y .

 

( a ) To the Kno w le d g e o f the S e l l e rs, the B usiness h a s not su f f e r e d a secu r i t y b reac h with r e sp e c t t o a n y p r o p ri e ta r y d a ta or t r a d e se c r e ts i n the l a st t w e n t y - f our ( 2 4 ) months.

 

(b) The S e l l e rs, in re sp e c t of the B usi n e ss, (i) h a ve a n info r mal p r iva c y pol i c y re g a rdi n g the c ol l ec t i on a nd use of in f o r mation t h a t i d e nt i fi e s, or c ould r e a sona b l y b e used to identi f y , a n y n a tur a l p e r s ons (in c lud i ng n a m e s, a d d re sses, tel e pho n e numbe r s, em a il a dd r e sses, soci a l se c u r i t y numbe r s, a nd/or a c c ount i n f o r mat i on) ( P e rso n a l I n f o r m a t i o n ) a nd (ii) to t he Kno w le d g e of S e l le rs, a r e in compl i a n ce , a nd h a v e c omp l ied, w i t h the p r i v a c y pol i c ies

appl i cable to the B usin e ss, all appl i cable L aws re g a rding i n formation pri v a c y and s e curi t y and the col l ect i on, use, disp o sal, d i sclosure, mainten a nce and t r ansm i ss i on of P ersonal I nfor m at i on in connect i on with t he B us i ness and, to the e x tent appl i cable, the P a y ment C a rd I ndust r y Data S ecuri t y S tand a rd ( P C I DS S ).  No claim or act i o n is pending or th r eate n e d in w riting a g ainst a n y S el l er relati n g to i ts u s e of Personal I nf o rmat i on in t he conduct of the B usi n ess.  Nei t her the e x ecut i on, del i ve r y o r performan c e of this A g r e e ment or a n y Tran s act i on Document nor the consummation of a n y of the transa c t i ons contemp l ated he r e b y will result in a n y vio l at i on of (i) a n y p riva c y pol i cies app l icable to the B usi n ess or (ii) a n y a g r eement of a n y S el l er wi t h r e spe c t t o the col l ect i on, use, disp o sal, d i sclosure, mainten a nce, and t r ansm i ss i on of P ersonal I nfor m at i on.

 

5.28 F ull Dis c los u re .  No r e p r e s e ntation or w a r ra n t y b y a n y S e l le r in this A g r e e ment, a nd no do c ument f u r nis h e d or to be f u r nished to the P u rc h a s e r pu r suant to th i s A g re e ment, or in

 

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c onn ec t i on h e r e with or w i t h the t ra nsa c t i ons c ont e mp l a ted h e r e b y , to t he K nowl e dge of the S e l l e rs, c ontain or will c ontain a n y untr u e or mis l ea di n g stat e ment of mat e ri a l f ac t or omits or will om i t a n y m a te r ial fa c t ne ce s s a r y to m a ke the stat e ments c ontain e d h er e in or the re in, i n l i g ht of the c ir c ums t a n ce s un d e r w hich m a d e , not m is l ea din g .

 

AR T I C L E V I

REP R ESENT A T I O N S A N D W AR R A N T I ES OF P UR C H A S ER The P u rc h a s e r h e r e b y re p re s e nts and w a r r a nts t o the Selle r s as f ol l ows:

 

6.1 O r g a ni z a t i on a nd Good S t a nding .  The P u r c h a s e r i s a c o r po r a t i on du l y inco r por a ted, v a l i d l y e x i s t i ng a nd in g ood st a ndi n g und e r the L a ws of t he S tate of De l a w a re a nd h a s all r e quis i te c o r p o r a t e pow e r a nd a uthori t y to own, l ea se a n d op e r a te its p r op e rties a nd a ssets a nd ca r r y on i t s bus i n e ss.

 

6.2 Autho r i z a t i on of A g r ee m e n t .  The P u rc h a s e r h a s a ll re quis i te c o r por a t e p o w e r a nd a uthori t y to e x ec ute a n d d e l i v e r this Ag ree m e nt a nd eac h oth e r T r a n s ac t i o n Do c ument to which

it is a p a r t y in con n ec t i on with t he c onsummation of the tr a ns a c t i ons c ont e mp l a ted b y th i s Ag ree ment, to p e r f o r m i t s obli g a t i ons h e r e un d e r a nd the re und e r a nd to co n sum m a te the tr a nsa c t i ons c o ntemplat e d h e r e b y a nd t h e r e b y .   T he e x ec ut i on a nd d e l i v e r y b y the Pu r c h a s e r of th i s A g re e ment a nd a n y other T ra n s ac t i on Do c u m e nt t o whi c h it is a p a r t y , the p e r f o r m a n c e o f the Pur c h a s e r ’s obligations h e r e und e r a nd th e r e u n d e r a nd the c onsummation of t h e tr a ns a c t i ons c ontemplat e d h e r e b y a nd the re b y h a v e b ee n du l y a uthori z e d b y a ll r e quis i te c o r po r a te a c t i on on the p a rt of the Pur c h a s e r. This A g r ee ment h a s b e e n du l y a nd v a l i d l y e x ec u t e d a nd d e l i v e r e d b y the Pur c h a s e r, a nd ( a ssu m ing the due a uthori z a t i on, e x ec ut i on a nd d e l i v e r y b y the oth e r p a rties h e r e to and th e r e to) c onsti t utes the l e g a l, valid and bind i ng obl i g a t i on of the P u rc h a s e r, e n f o r c ea ble a g a inst it in a cc o r d a n c e with i ts t e rms, subj ec t t o a ppl i ca ble b a nkru p t c y , inso l v e n c y , r e o r g a ni z a t i on, mor a t o ri u m and simi l a r L a ws a f f e c t i ng c r e di t o r s’ r i g hts and r e medi e s g e n e r a l l y , a nd subj ec t, as to en f o rc e a bi l i t y , to gen e r a l prin c i p les of e qui t y , i n c lud i ng p rin c ip l e s of c om m e r c ial r ea sona b l e n e ss, g ood f a i t h a nd f a ir d e a l i ng ( re g a rdl e ss of w h e ther e n f o r c e m e nt is sou g ht i n a pr o cee di n g a t l a w or in equi t y ) .

 

6.3 Confli c ts; Conse n ts of Third Pa r t i e s .

 

( a ) E x ce pt as s e t fo r th on S c h e dule 6.3 , none of the e x ec ut i on or d e l i v e r y b y the Pur c h a s e r of th i s A g r ee ment or a n y ot h e r T r a n s ac t i on Do c ument to wh i c h it is a p a r t y , the c onsummation of a n y of the t ra nsa c t i ons c ontemp l a ted h e r e b y or th e r e b y , o r c omp l ian c e b y the P u rc h a s e r with a n y of the pro v is i ons h e r e of or t h e r e of do e s or will c onfli c t wi t h, or r e sult in a n y vio l a t i on o f , or c onsti t ute a b r e a c h o f or a d e f a ult ( with or w i t hout no t i c e or lapse of t i me, or both) und e r, or g ive rise to a r i g ht of t e rmin a t i on, mod i fi ca t i on or ca n ce l l a t i on u n d e r, or r e sult in t he c r e a t i on of a n y L ien, up o n a n y o f the pro p e rties or a ssets of the P u rc h a s e r u nd e r, a n y pro v is i on

of ( i) the c e rtifi ca t e of i n c o r por a t i on, b y la w s o r oth e r o r g a ni z a t i on a l docu m e nts of the Pur c h a s e r; (ii) a n y Contr ac t or P e rmit t o whi c h the Pur c h a s e r is a p a r t y or b y whi c h the P u rc h a s e r o r a n y of i t s prop e rties or a ssets is bound; (iii) a n y O rd e r o f a n y Gov e rn m e ntal B o d y a ppl i ca ble to the P u rc h a s e r o r b y whi c h t h e P u rc h a s e r or a n y o f its prop e rties or a ssets is bound; or ( iv) a n y a ppl i ca ble L a w.

 

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(b) E x ce pt as s e t fo r th on S c h e dule 6.3 , no c onse n t, w a ive r , a p p rov a l, Or d e r, P e rmit or a uthori z a t i on o f , or dec l a r a t i on, re g is t r a t i o n or f i l ing with, or not i fi ca t i on to, a n y P e rson or Gov e rn m e ntal B o d y is r e qui r e d on the p a rt of the Pur c h a s e r in c o nn ec t i on with t he e x ec ut i on, d e l i v e r y o r per f o r man c e of this A g r e e ment or a n y other T r a ns a c t i on Do c ument to whi c h it is a p a r t y , the c o mp l i a n c e b y the Pur c h a s e r w i t h a n y of the p rovisions h e r e of o r th e r e o f , or the c onsummation of a n y of the t r a ns a c t i ons c o ntemplat e d h e r e b y o r th e r e b y .

 

6.4 L i t igatio n .  Th e r e a r e no L e g a l P ro c e e di n g s pe n d i ng or, to the kn o wl e d g e o f the P u rc h a s e r, th r ea te n e d th a t a r e r ea sona b l y l i k e l y to p r ohib i t or lim i t t he a bi l i t y of the Pu r c h a s e r to e nter in t o th i s A g r ee ment or a n y other T r a ns a c t i on Do c ument to which it i s a p a r t y , to c onsummate a n y of the t r a nsa c t i ons c ontemplat e d h e r e b y or t h e r e b y o r to p e r f o r m a n y o f its obl i g a t i ons h e r e und e r o r the re und e r.

 

6.5 F inan c ial Advisors . No P e rson h a s a c t e d, dir ec t l y or indir ec t l y , a s a b rok e r , f inder or f inan c ial a dvisor f or t h e P u rc h a s e r in c onn e c t i on with t he tr a nsa c t i ons c o ntemplat e d b y th i s Ag ree ment. No Pe r son i s entitled to a n y fe e or c o m m is s ion or like p a y m e n t f r om t he S e l l e rs in r e spe c t t h e r e o f .

 

AR T I C L E V II

 

CO V EN A NTS

 

7.1 Condu c t of B usiness P ri o r to the Clos i ng .   F rom t h e d a te h e r e of unt i l t he Clos i n g , e x ce pt as othe r wise p r ov i d e d in t his A g r ee ment or c onse n ted to in w r i t ing b y the Pu r c h a s e r , the S e l l e rs sh a ll ( x ) c ondu c t t he B usiness in the O rdin a r y Course of B usiness, a nd ( y ) use r ea sona b l e b e st e f fo r ts t o maintain a nd p re s e r v e in t ac t t h e ir re spe c t i ve c u r r e nt B usiness org a ni z a t i on, op e r a t i ons a nd f r a n c hise a nd to pr e s e r v e the r i g ht s , f r a n c h ise, g o odwill a nd r e lationships of its e mp l o y e e s, custome r s, l e nd e rs, suppli e rs, r e g u l a tors a nd othe r s ha v i n g r e la t ionships with t he B usiness.   W i t hout l i m i t i ng the f o re g oi n g , f rom the d a te h e r e of unt i l t he Clos i ng D a t e , e a c h S e l l e r sh a l l :

 

( a ) p re s e r v e a nd ma i ntain a ll P e rmits re quir e d for t h e c ondu c t of the B usiness a s cu r r e nt l y c ondu c ted o r the o w n e rship a nd u s e o f the P u rc h a s e d Ass e ts;

 

(b) p a y t h e d e bts, Ta x e s and other obl i g a t i ons of the Business wh e n du e ;

 

( c ) maintain the p r op e rties a nd a ssets in c luded in the P u r c h a s e d Ass e ts i n the s a me c ondi t ion as th e y w e re on the d a te of th i s A g ree ment, subj e c t t o or d ina r y w e a r a nd t ea r;

 

(d) not pe r m i t a n y subl e a s e s or le a se a mendm e nts t o the R ea l P rop e r t y L e a s e s, without P u rc h a s e r s pri o r c onse n t, which c on s e nt wi l l not be unr e a sona b l y withheld or d e l a y e d;

 

( e ) c ont i nue in full f o rc e a nd e f f e c t wi t hout m odifi ca t i on a ll insur a n c e pol i c ies, e x ce pt as re qui r e d b y a ppl i ca ble L a w;

 

(f) d ef e nd and p rotect t he p r operties and as s ets i ncluded in the Purchased

Ass e ts fr o m i n f ri n g e ment or usu r pat i on;

 

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(g) p e r f o r m all of its obligations und e r a ll Assumed C ontr ac ts;

 

(h) maintain the B ooks a nd R ec o r ds in a c c o r d a n c e w i t h p a st pr ac t i ce ;

 

(i) c omp l y in all m a te r i a l r e s p ec ts with all L a ws a ppl i ca ble to the c ond u c t of the B usiness or the o wn e rship a nd use of the P u rc h a s e d Ass e ts; a nd

 

(j) not t a ke or p e rmit a n y a c t i on that would ca use a n y of the c h a n g e s, ev e nts or c ondi t ions d e s c rib e d i n S ec t i on 5.8 to oc c u r .

 

7.2 A cce ss t o I n fo r matio n .   F rom the d a te h e r e of unt i l the Closin g , e a c h S e l l e r s h a ll ( a ) permit R e p re s e ntativ e s of the P u rc h a s e r to h a v e a c ce ss t o a ll pr e m i s e s, p r op e rties, B ooks a nd R ec o r ds, C ontr ac ts, o t h e r rec o r ds a nd do c uments, a nd p e rsonn e l, r e lati n g to t he B usiness, (b) fu r nish t he P u rc h a s e r a nd i t s R e p re s e ntatives with such f inan c ial, o p e r a t i n g a nd other d a ta a nd info r mation r e lat e d to t he B usiness a s the Pu rc h a s e r or a n y of its R e p r e s e nt a t i v e s m a y r ea sona b l y r e qu e st, a nd ( c ) instru c t R e p re s e ntatives of e a c h S e l l e r to c oop e r a te w i t h the Pur c h a s e r in its investi g a t i on of the B us i n e ss.

 

7.3 E x c lus i vi t y .

 

( a ) F rom the d a te h e r e of unt i l t he Clos i ng ( the “ E x c lus i vi t y Pe rio d ), no S e l l e r or P rin c ipal sh a ll ( i) a uthori z e , dir ec t or p e r m i t a n y of its or th e ir r e s p ec t i ve R e p re s e ntatives or A f fil i a tes to t a ke a n y ac t i on to d i r e c t l y o r indir ec t l y solicit, i ni t iat e , se e k, e n c ourag e , f a c i l i t a te, a p p rov e , e ndor s e , r e c om m e n d or re spond to a n y inqu i r y , p ropos a l, or o f f e r ( w h e ther fo r mal or inf o r mal, w r i t ten, o ra l or oth e r w ise) f rom, or p a rticip a t e in a n y discussions or n e g ot i a t i ons with, a n y th i rd p a r t y r e g a rdi n g a n y ( A ) di rec t or indi r ec t ac q uis i t i on or sale of a n y S e l l e r in w hole or in pa r t, ( B ) m er g e r, c onsolidation, r e o r g a ni z a t i on, re ca pi t a l iz a t i on, l i quidation, dis s olu t ion or oth e r busin e ss combination or e x tr a o r dina r y c o r p o ra te t r a ns a c t i on invo l ving a n y S e l l e r, ( C) a c quis i t i on, dispos i t i on, or l i st i ng on a ny s e c u r i t ies e x c h a n g e o f a n y p o rtion of the memb e rship in t e r e sts or vot i ng pow e r of a n y S e l l e r ( w h e ther b y sa l e , a ss i gnment, issuan c e , p r o x y , p l e d g e , e n c umbr a n c e or oth e r w ise, other t h a n the issuan c e o f m e m b e rship in t e r e sts of a n y S e l ler upon e x e r c ise or c onv e rsion of opt i ons, w a r r a nts or other e qui t y - b a s e d se c u r i t ies issu e d p r ior to the d a te of th i s A g r ee ment ) , ( D ) ac quis i t i on or disposi t ion of a n y m a te r ial a sset o r mat e ri a l portion of the a s s e ts of a n y S e l l e r ( wh e t h e r b y sal e , a ss i g n ment, o pt i on, l i ce nse, p ledg e , e n c umbr a n c e or ot h e r w i s e , other than bona fide s a les a nd non e x c lus i ve l i c e nses of pro d u c ts i n

the O rdin a r y Cour s e of Business) (a n y such t r a ns a c t i on d e s c rib e d in c l a us e s ( A ), ( B ), ( C) o r ( D ) of th i s S ec t i on 7.3 (a ) ( i) , a Third P a r t y A c quis i t i o n ); ( i i ) f u r nish a n y no n - publ i c info r mation c on ce rni n g the busi n e ss, prop e rties or a ssets of a n y S e l l e r o r divis i on of a n y S e l l e r to a n y ot h e r P e rson ( other than the P u r c h a s e r or i t s R e p re s e nta t ives ) ; or ( i i i) e n g a ge in d i s c uss i ons or n e g ot i a t i ons with a n y P e r son (oth e r th a n the Pur c h a s e r a nd i t s R e p r e s e ntat i v e s) c on c e rni n g a n y Third Pa r t y A c quis i t i on.  E ac h S e l l e r a g re e s that a n y such discussions or n e g ot i a t i ons in pr o g r e ss a s of the d a te o f this Ag r ee ment sh a ll be i m medi a te l y te r m i n a t e d a nd that i n no e v e nt shall a n y S e l l e r a ppro ve , a c ce pt or e nter in t o a n a g ree ment c on ce rni n g a n y Third P a r t y A c quis i t i on du r ing the E x c lus i vi t y P e riod. Du r ing t h e E x c lus i vi t y P e riod, no S e l l e r or P rin c i p a l shall a uthori z e , dir ec t or c a use a n y o f th e ir re s p ec t i ve R e p re s e ntative or A f filiat e s to continue or p a rtici p a te in a n y n e g ot i a t i ons or dis c u ss i ons with a n y P e rson f o r the pur p ose o f e f f ec t i n g a n ac quis i t i on, jo i nt v e nture with or str a t e g ic investm e nt i n a n y oth e r Pe r son or busin e ss.

 

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(b) E ac h S e l l e r sh a ll i m med i a te l y not i f y a n y P e rson w i t h whom or with which discussions or n e g ot i a t i o ns of the n a ture d e s c rib e d in S ec t i on 7.3 (a ) a r e p e nding a s of t h e d a te h e r e of t h a t such S e l l e r is te r m i n a t i ng such discuss i ons or n e g ot i a t i ons. I f a n y S e l l e r r e c e ives a n y inqu i r y , pro p o s a l or o f f e r of the n a ture d e s c ri b e d in S ec t i on 7.3 (a ) , such S e l ler shall, within one (1) d a y a ft e r su c h re ce ip t , not if y the Pur c h a s e r o f such inqu ir y , p ropos a l or of fe r, in c lud i n g the identi t y of the oth e r p a r t y a nd the t e rms of such i n qui r y , pro p o s a l or o f f e r.

 

( c ) E ac h S e l l e r a g re e s that the r i g hts a nd r e med i e s for non c omp l ian c e with th i s S ec t i on 7.3 shall in c l ude h a vi n g such pro v is i o n sp ec ific a l l y e n fo r c e d b y a n y c ourt h a vi n g e qui t y jurisd i c t i on, it b e ing a c knowl e d g e d a nd a g ree d that a n y s u c h bre ac h or thr ea te n e d bre ac h shall ca use i r r e p a r a ble i n ju r y to t he P u rc h a s e r a nd that mon e y d a m a g e s w o uld not pro v ide a n a d e qu a te r e me d y to t he P u rc h a s e r.

 

7.4 Notice of C e rt a in E v e nt s .

 

( a ) F rom the d a te h e r e of unt i l t he Clos i n g , eac h S e l le r a nd the Prin c ipal sh a ll p r omp t l y not i f y the Pur c h a s e r in w riti n g of:

 

(ii) a n y f a c t, c ir c ums t a n c e , e v e nt or ac t i on the e x is t e n ce , o c c u r r e n c e o r taking of whi c h ( A ) h a s h a d, or c ould r ea sona b l y be e x p ec ted to h a v e , ind i vidual l y or in the a ggre g a t e , a Ma t e ri a l A d v e rse E f f e c t, (B) ha s r e s u l t e d i n, or c ould r ea so n a b l y re sult in, a n y r e p re s e ntation or w a r ra n t y ma d e b y a n y S e l l e r h e r e und e r not b e i n g tr u e a nd c o r re c t or ( C) h a s r e sul t e d in, or c ould r ea s on a b l y b e e x p ec ted to re s ult in, t he fa i l u r e of a n y o f the c ondi t ions s e t fo r th i n S ec t i on 8.1 to be satisfi e d;

 

(iii) a n y not ic e or oth e r c o m mun i ca t i on f r om a n y P e r son a l l e g i n g that the c onse n t of su c h Pe rs o n is or m a y b e re qui r e d i n c onn ec t i on with t he tr a nsa c t i ons c ontemplat e d b y th i s Ag r ee ment;

 

(iv) a n y not ic e or oth e r c o m mun i ca t i on f r om a n y G o v e rnm e ntal B o d y in conn ec t i on with t he tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment;

 

(v) a n y L e g a l P roc ee di n g s c om m e n ce d or, to e ac h Se l l e r s Kno w le d g e , th r ea ten e d a g a ins t , r e lating to or inv o lv i ng or oth e r wise a f f e c t i ng the B usiness, the P u rc h a s e d Ass e ts or t h e Assumed L i a bi l i t ies th a t, i f p e nding on the d a te of th i s A g re e ment, would h a ve b e e n r e qui r e d to have b ee n disclo s e d pursu a nt t o S ec t i on 5.16 or that re lat e s to t he c onsummation of the tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment; and

 

(vi) the o cc u r r e n c e of a n y d a t a br e a c h or c ompromise of a n y of the

S e ll e r s info r mation s ec u ri t y s y stems.

 

(b) The P u rc h a s e r s r ece ipt o f in f o r mation pursu a nt t o th i s S ec t i on 7.4 shall not ope ra te a s a w a i v e r o r oth e r w ise a f f e c t a n y r e p r e s e ntation, w a r ra n t y or a g r ee ment g iven o r made b y a n y S e l l e r in t h i s A g r ee ment a nd sh a ll not be d ee med to a m e nd or suppl e ment the S c h e dules.

 

7.5 Gov e rnm e ntal a nd Third - P a r t y Noti c e s and Cons e nt s .

 

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( a ) E ac h p a r t y s h a ll use its r ea sona b le b e st e f f o rts to ob t a in or ca used to b e obtain e d, a t i ts e x p e nse, a ll w a ive r s, p e rmit s , c ons e nts, app r ov a ls or oth e r authori z a t i ons f r om Gov e rnm e ntal B odies, a n d to e f fe c t all r e g is t r a t i o n s, fil i n g s and not i ce s wi t h or to G ov e rnm e ntal B odies, a s m a y b e re qui r e d for such p a r t y to con s um m a te the tr a ns a c t i ons c ontemplat e d b y th i s Ag ree ment a nd to o t h e r w ise c omp l y with all appl i ca ble L a ws in c onn e c t i on with t he c onsummation of the tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment.

 

(b) E ac h S e l l e r a nd the Prin c ipal sh a ll use th e ir re sp ec t i ve rea sona b l e b e st e f f o r ts t o g ive a ll not i ce s to t hird p a rties in c onn ec ti on with and obt a in all R e quir e d Cons e nts.

 

7.6 Clos i ng E f fo r t s .  E a c h p a r t y shall use its r e a sona b l e b e st e f f o rts to t a ke a ll a c t i ons a nd do a ll th i n g s n e ce ss a r y , p rop e r o r a dvisable to c onsummate the t ra ns a c t ions cont e mp l a ted b y th i s A g re e ment, includi n g usi n g i t s r ea so n a ble b e s t e f fo r ts t o ca u s e ( i) its r e spe c t i ve r e p re s e ntations a nd w a r r a nt i e s to r e main tru e , c o r r e c t and c omp l e te in a ll mat e ri a l r e s p ec ts throu g h the Clo s ing D a te a nd (ii) the c ondi t ions t o the obli g a t i ons of the o t h e r p a r t y to c onsummate the tr a ns a c t i ons c ontemplat e d b y th i s Ag ree ment to be s a t i sfi e d.

 

7.7 F u r ther Assu ra n ce s .

 

( a ) At a n y t i me or f r om t i m e to t i m e a ft e r the Clos i n g , a t t he re qu e st of t h e P u rc h a s e r a nd without f u rth e r c onsid e r a t i on, e a c h S e l l e r a g re e s to e x ec ute a nd d e l i v e r to the P u rc h a s e r a n y f u r t h e r d o c uments or instrum e nts a nd p e r f o r m a n y fu r th e r a c ts t h a t ma y r e a sona b l y b e d ee m e d n e ce ssa r y , a ppro p ri a t e or advisable b y the Pu r c h a s e r to v e st, r ec o rd, p e r f e c t, support a nd/or c onfi r m t he r i g hts h e r e in c onv e y e d, or in t e nd e d so t o b e , with r e sp e c t t o a n y o f the P u rc h a s e d As s e ts.  Nothing h e r e in shall be d ee med a w a i v e r b y t he P u rc h a s e r of their ri g ht t o re ce ive a t t he Clos i ng a n e f f e c t i ve a ss i g n m e nt of su c h r i g hts b y e ac h S e l l e r a s oth e r w ise s e t fo r th i n th i s A g r ee m e nt.

 

(b) A f ter the Closin g , a t the r e qu e st of the Pur c h a s e r a nd without f u r ther c onsid e r a t i on, e ac h S e l le r a g re e s to use i t s r ea so n a ble b e st e f fo r ts t o a ss i st t he P u rc h a s e r in hiri n g those f o r mer e mp l o y e e s of eac h S e l le r sp ec i fi e d b y the Pu r c h a s e r.

 

7.8 Confid e nt i a l i t y .  E ac h Se l l e r a nd the P rin c ipal a c k nowl e dge that it a nd i t s r e spe c t i ve A f filiat e s pos s e ss and m a y c ont i nue to possess a ft e r the Clos i n g knowl e dge of c onfid e nt i a l and v a l u a ble busin e ss i n f o r mation r e l a t i ng to t he B usiness a nd the Pur c h a s e d As s e ts not g e n e r a l l y known b y o r a v a i l a ble to the public a nd a g ree s, a nd sh a ll ca u s e i t s r e spe c t i ve A f filiat e s, at a ll t i mes (a ) to ke e p c onfid e nt i a l a ll such info r mation, (b) not t o use such c onfid e nt i a l i n f o r mation on i t s own b e h a lf (e x ce pt in conn ec t i on with t he t r a nsa c t i ons c ontemplat e d h e r e b y ) or on b e h a lf of a n y other Pe rson, oth e r th a n the Pur c h a s e r or the P u rc h a s e r ’s A f f i l iat e s, a n d ( c ) not t o disclose su c h c onfid e nt i a l i n f o r mation to a n y th i rd par t y (oth e r th a n to e ac h S e l l e r ’s c ouns e l, a c c ountants a nd other a dvisors in c on n ec t i on with the tr a nsa c t i ons c ontemplat e d h e r e b y ) without the Pur c h a s e r ’s p r ior w ritten a p p r ov a l; p r ovided , how e v er , that no S e l le r o r Prin c ipal sh a ll h a ve a n y such obl i g a t i ons with r e s p ec t t o c onfid e nt i a l info r mation t h a t has b ec o me a matter of p u bl i c k n owl e dge or h a s b ee n o r is h e r e a ft e r pu b l i c l y disclosed, in a n y ca se t h r ou g h no f a ult of a n y S e l l e r, a n y P rin c ipal or a n y o f th e ir re s p ec t i ve A f filiat e s or r e p re s e ntatives.

 

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7.9 P r e s e rv a t i on of R e c o r d s . The P u rc h a s e r sh a ll h a v e the r i g ht for a p e riod of s e v e n (7) y e a rs f ol l owi n g the Closing D a te to h a v e r ea s o n a ble a c ce ss t o those bo o ks, r ec o r ds a nd acc ounts, includi n g f i n a n c ial a nd a cc ount i n g r e c o r d s , tax rec o r ds, c o r r e sp o nd e n ce , pro d u c t i on r e c o r ds, e mp l o y ment r e c o r ds a n d other r ec o rds th a t a r e r e tain e d b y eac h S e l l e r pu r s u a nt t o the te r ms of th i s Ag ree ment t o the e x tent that a n y of t h e f o r e g oi n g is n e e d e d b y the Pur c h a s e r for the purp o se of c ond u c t i ng t h e B usiness a ft e r the Clos i ng a nd c omp l y i n g with i t s obli g a t i ons und e r a ppl i ca ble s e c u r i t ies, t a x , e nvironme n tal, e mp l o y m e nt or other L a ws. N e i ther the Pur c h a s e r nor the Selle r s shall destr o y a n y such books, r e c o rds o r a cc ounts r e tain e d b y it without f irst

p r ovid i ng the oth e r p a r t y with t he oppo r tun i t y to ob t a in or c o p y such book s , rec o r ds, o r a c c ounts a t such oth e r par t y s e x p e nse. P rompt l y upon r e q u e st b y the Pu r c h a s e r m a de a t a n y t i me following the Closing D a te, eac h S e l le r sh a ll a ut h o r i z e the re le a s e to t he P u rc h a s e r of a ll f i l e s p e rt a in i ng to eac h S e l le r, the Pur c h a s e d As s e ts or the B usiness h e ld b y a n y f e d e r a l, s t a te, c oun t y or loc a l autho r i t ies, a g e n c ies or ins t rum e ntali t ies.

 

7.10 P ubl i c i t y .  No n e of the S e l l e rs, a n y P rin c ipal or a n y of th e i r re s p ec t i ve A ff i l iat e s shall issue a n y p r e ss r e l e a se or p u bl i c a nnou n ce m e nt con c e rning th i s A g re e ment or a n y of t h e tr a nsa c t i ons c ontemplat e d h e r e b y or m a ke a n y ot h e r pu b l i c disclosure c ontaining the t e rms of th i s A g re e ment without P u rc h a s e r ’s p r ior c on s e nt, which c onse n t shall not be unr e a so n a b l y

withheld or d e l a y e d.  T h e p a rties a c knowl e d ge that the Pur c h a s e r w i l l be r e quir e d to m a ke filin g s with t he S ec u r i t ies a nd Ex c h a n g e Com m is s ion d i s c los i ng the t e rms of th i s Ag ree ment a nd the tr a nsa c t i ons c ontemplat e d the re b y .

 

7.11 Col l ec t i on of R ece ivabl e s .   F ol l owing the Closi n g, if the Pur c h a s e r or i t s A f f i l iate r e ce i v e s or c ol le c ts a n y f unds r e la t ing to a n y E x c luded A sset, the Pur c h a s e r or i t s A f filiate shall r e m i t a n y s u c h fu n ds to t he S e l l e rs w i t hin five ( 5) B usiness D a y s a ft e r its r e ce ipt the re o f.

Further, t h e P urcha s er a n d the Sellers a g ree to use their r e aso n able best e ff o rts to cooper a te in not if y i n g custo m ers, or p rior custo m ers, of the B u siness to make all p a y m e nts i n connect i on with the B usiness direct l y to t he P urchas e r (e x cept as t o a n y E x cluded As s et) a n d shall otherwise direct co r r e sponde n ce a n d inqu i ries relating to t he B usiness to t h e P urcha s e r. All p a y m ents will be appl i ed to t he oldest a ccounts r e ceivable un l ess t he p a y or sp e cific a l l y n o ted where to app l y them.

 

7.12 T a x Matte r s .

 

( a ) E ac h S e l l e r sh a ll p a y , w h e n du e , a ll tr a ns f e r, d o c u ment a r y , sal e s, use, stamp, r e g is t r a t i on a nd o t h e r sim i lar T a x e s, and a ll c onv e y a n c e f ee s, r ec o r d i ng c h a r g e s a nd other f e e s and c h a r g e s (in c lud i ng a n y p e n a l t ies a nd in te r e st) incu r r e d in conn e c t i on with t he c onsummation of a n y of the t ra nsa c t i ons c ontemp l a ted b y th i s Ag ree m e nt a nd sh a l l , a t i ts own e x p e nse, f i l e all n ece s s a r y T a x R e turns a nd other do c ument a t i on with r e s p ec t t o su c h T a x e s, f e e s a nd c h a r g e s.

 

(b) F ol l owing the Closi n g , the Selle r s and the Pur c h a s e r sh a l l , a s r ea sona b l y r e qu e sted b y the ot h e r: ( i ) a ss i st t he other p a r t y in p re p a ri n g a n y T a x R e turns re lati n g to a n y B usiness whi c h su c h ot h e r p a r t y is r e spons i ble f or pr e p a ri n g a nd filin g ; (ii) c oop e r a t e f ul l y in p re p a ri n g f o r a n y T a x a udit of, o r dispute w i t h, a ny T a x ing Autho r i t y re g ar din g , a nd a n y L e g a l P ro c ee di n g r e lating to, l i a bi l i t y f or T a x e s, in t he pr e p a r a t i on or c ondu c t o f a n y L e g a l P roc ee di n g or investi g a t i on of c laims, a nd in conn ec t i on with t he pr e p a r a t i on of f i n a n c i a l s t a tem e nts or other

 

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do c uments to be f i l e d wi t h a n y T a x ing Autho r i t y , in e ac h ca se with r e spe c t t o the B usiness; a nd (iii) make a v a i l a ble to t h e other p a r t y , a s r e a sona b l y re q u e sted, a nd to a n y T a x ing Autho r i t y a ll info r mation, r ec o rds, a nd do c uments r e lati n g to T a x e s r e lating to t he B usi n e s s .

 

( c ) All r ea l prop e r t y T a x e s, pe r sonal p r o p e r t y T a x e s and si m i l a r a d v a lor e m obl i g a t i ons, if a n y , l e vied on the B usiness or the P u rc h a s e d Ass e ts for a S tr a ddle Pe r iod, wh e th e r or not i mpos e d or a ssess e d b e fo r e o r a f t e r the Clos i ng D a t e , shall be a pp o rtion e d b e tw e e n the P u rc h a s e r a nd the Selle r s b a s e d on the numb e r o f d a y s o f su c h ta x a ble p e r i od includ e d in t he ta x a ble p e riod p r ior to the Clos i ng D a te a nd the n umber of d a y s of s u c h t ax a ble p e riod a ft e r the Clos i ng D a te.   T he S e l ler s shall be liable f or the p r oportionate a mount of s u c h T a x e s that is a t t ribut a ble to the t a x a ble p e riod p r ior to the Clos i ng D a te, a nd the Pu r c h a s e r sh a ll be l i a ble f o r the p r oportionate a mount of su c h T a x e s that is attributable to su c h ta x a ble p e riod a ft e r the Clos i ng D a te.

 

7.13 Empl o y ee s .

 

( a ) The e mp l o y m e nt of a ll e mp l o y ee s o f Selle r s emp lo y e d in c onn ec t i on with the Pur c h a s e d As s e ts wi l l be t e rmin a ted b y S e l l e rs a s of the l a ter o f ( i) the Clos i ng D a te or (ii) the d a te th a t i s si xt y ( 6 0 ) d a y s following the d e l i v er y o f the statuto r y not i c e r e quir e d un d e r the H a w a ii Dislo ca ted W o r k e rs Ac t. P u rc h a s e r will of fe r e mp l o y ment without loss of seniori t y to a n y o r a ll e l i g ib l e e mp l o y ee s of Selle r s e mp l o y e d in conn ec t i on with t he P u rc h a s e d Ass e ts as l i sted on a sch e dule mut u a l l y a g ree d to b e tw ee n t h e P u rc h a s e r a nd S e l l e r s , whi c h sc he dule s h a ll include a ll e mp l o y e e s of S e l l e rs e mp l o y e d on c o n n ec t i on with t he P u rc h a s e d Ass e ts ( e x ce pt t he e mp l o y e e s of D e s e rt I sl a nd Restau ra nts, L . L .C.) a s of the Clos i ng D a te. W i t h r e spe c t t o those e mp l o y e e s of Selle r s w h o ac c e pt t he of f e r of e mp l o y ment with P u rc h a s e r, P u rc h a s e r s h a ll not take a n y a c t i on du r ing t h e nin e t y (90) d a y p e riod f ol l owing the Closing D a te w hich w ould c onsti t ute a plant c los i ng or mass l a y o f f ( a s tho s e t e rms a re d e fin e d in t he W o r k e r A djus t ment a nd Retr a in i n g Notifi ca t i on (“ W ARN ) A c t).   F u r the r , S e l l e rs sh a ll not wi t hin n i n e t y ( 90) d a y s of the Clos i ng D a te, e f fe c tuate a n “e mp l o y m e nt l oss”, plant c los i ng” or mass l a y o f f ,” a s tho s e

te r ms a r e d e fin e d in t he W ARN Ac t or a n y ac t i on whi c h would c onsti t ute a “c los i n g , divestitur e , p a rtial c los i n g , o r re l o ca t ion” a s tho s e te r ms a r e d e fin e d in t he H a w a i i Dislo ca ted W o r k e rs A c t , a f f e c t i ng in who l e or in p a rt a n y of the R e s t a u ra nt s .  The P u rc h a s e r sh a ll not assume a n y of S e l l e rs s empl o y m e nt L i a bi l i t ies th a t have a c c rued on or b e fo r e the Closing D a te, in c lud i n g without l i m i ta t ion unpaid F I CA, FUT A , un e mp l o y ment T a x , p e nsion or p r o f i t - sha r i n g plan c ontributions, h ea l t h a nd w e lf a r e b e n e fits, empl o y e e f ri n ge b e n e fits, L iabil i t i e s und e r the W ARN A c t and H a w a i i ’s pl a nt c l osing a nd displa c e d wo r k e rs’ la w s, s e v e r a n c e b e n e fits, bonus e s, v aca t i on t i me or p a y o r in c ent i ve pr o g r a ms of a n y t y p e , nor shall P u rc h a s e r ac quire a n y in t e r e st

in or obli g a t i on und e r a n y p e nsion, pr o fit sha r i n g , re t i r e ment or oth e r pl a n of S e l l e rs. F u r t h e r, S e l l e rs sh a ll re main l i a ble f or a ll e mp l o y ment L i a bi l i t ies a rising out of c la i ms all e g i n g disc r i m ination, ha ra ss me nt, r e taliation, f a i l u r e to p a y w a g e s o r p r ovide b e n e fits, un l a w f ul te r m i n a t i on, m i s c lassifi ca t i on of e mp l o y e e s or a n y other vio l a t i on of f e d er a l, s t a te or loc a l la w filed, thr ea te n e d, or oth e r wise pursu e d b y S e l l e rs’ e mp l o y e e s pr i or to t he C l osing D a t e or b a s e d on e v e nts t h a t a r ose p rior to t he Clos i ng D a te.  Se l le r s shall r e tain a ll se v e ran c e obl i g a t i ons, if a n y , to i ts empl o y ee s. S e l le r s shall r e tain a ll L iabi l i t ies re lating to a n y Emp l o y e e B e n e fit P lan. Notwithstanding the f o r e g oi n g , P u rc h a s e r sh a ll cr e dit eac h e mp l o y e e it hi r e s with their p a st e mp l o y ment with S e l l e rs f or pur p oses of d e te r m i n ing und e r P u rc h a s e r s p o l i c ies a n y v a c a t i on,

 

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sick le a ve a nd ot h e r p a id t i me o f f, if a n y .   P u rc h a s e r sh a ll be sol e l y r e spons i ble f or a n y l i a bi l i t y for a c c ru e d b e n e fits for s u c h e mp l o y e e s, if a ppl i c a ble, f rom a nd a ft e r the C l osing D a t e .

 

(b) S e l l e rs or S e l l e rs’ E R I S A A f f i l iate shall m a in t a i n a H ea l t h P lan a f t e r the Clos i ng D a te a nd p rovide c ont i nu a t i on of h ea l t h c ov e ra g e p u rsu a nt t o CO B RA f or a ll M & A Qu a l i fi e d Ben e f i c ia r ies. M & A Qu a l i fi e d B e n e fi c ia r ie s m e a ns ea c h ind i vidual who is a qu a l i fi e d b e n e fi c i a r y w hose qu a l i f y i n g e v e nt” o cc u r r e d prior to or in c o nn ec t i on with t he sale of the Pur c h a s e d Ass e ts a nd who is, or w hose qu a l i f y i n g e v e nt oc c u r r e d in c onn ec t i on with, a c ov e r e d e mp l o y e e who s e last e mp l o y ment p r ior to the qu a l if y i n g e v e nt w a s a ssoci a ted w i t h the P u rc h a s e d Ass e ts b e ing s old. (The te r ms with i n quotes a re a s de f ined in C O B RA a nd i t s r e la t e d re g ulations). O n the Clo s ing D a t e , a ll B usin e ss E mp l o y ee s a nd K e y B usi n e ss Empl o y e e s hir e d b y P u rc h a s e r s h a ll b ec o me e mp l o y e e s of Pur c h a s e r a nd not of S e l l e rs.

 

( c ) P u rc h a s e r s h a ll c oop e r a te with S e l l e rs in making a n y not i ce s r e quir e d b y the W ARN Ac t or other a p pl i ca ble f e d e r a l or sta t e la w s .

 

(d) P u rc h a s e r s h a ll not if y Se l l e rs r e g a rding whi c h B u siness Emp l o y ee s a nd K e y B usiness Emp l o y e e s h a ve b e e n e mp l o y e d b y P u rc h a s e r with i n ten ( 10) d a y s following the Clos i ng D a te. Pur c h a s e r shall send to the a ppro p r i a te Soci a l S ec u r i t y Adm i nis t r a t i on o f fi c e a du l y c omp l e t e d F o r m W- 3 a nd a c c ompa n y i n g c o p ies of the du l y c omp l e ted F o r ms W - 2. P u rc h a s e r s h a ll pro pe r l y p re p a r e a nd file a f inal F o r m 941 and Sch e dule D ( F o r m 941) with r e spe c t t o the ca lend a r y e a r in w hich the Clos i ng D a te o c c u r s.

 

S e ll e rs sh a ll f u r nish to Pu rc h a ser the Fo r ms W - 4 a nd W - 5 of e a c h B usine s s Empl o y e e a nd K e y B usiness Emplo y ee that S e ll e rs are time l y notifi e d is empl o y e d b y Pu rc h a s e r for the portion of the ca len d a r y ea r up to a nd includi n g t he Closing D a te. I t is the int e nt of the pa rties h e r e to th a t the obl i g a tio n s of Selle r s and Pu rc h a ser un de r this S ec t i on 7.13 shall be ca rri e d out in acc o r d a nce with S ec tions 5 a nd 6 of R e v e n u e Proc e dure 200 4 - 53. S e llers s h a ll re main r e sponsible f or F o r m W- 2 r e porti n g oblig a tions for t h ose B usiness Empl o y ee s and K e y B usi n e ss Empl o y ee s, if a n y , who d o not be c ome e mpl o y e e s of Pur c h a ser.

 

( e ) P u rc h a s e r a nd S e l l e rs ac knowl e dge that a s of t h e Clos i ng D a te th e y will e nter in t o the D I R Ma na g e m e nt A g re e men t , pur s u a nt t o whi c h S e l l e rs sh a ll pro v ide P u r c h a s e r with t he se r vic e s of ce r t a in of its empl o y ee s to as s ist P u rc h a s e r in the tr a ns i t i on p e riod f ol l owing the Closing D a te.

 

7.14 Non - Assi g n a ble Contra c ts and P e rmits a nd L iquor L i c e nse s .

 

( a ) Nothing in t his Agr ee m e nt shall be c onstru e d a s a n a t t e mpt to assi g n to P u rc h a s e r a n y Contr ac t o r Pe r m i t which b y a ppl ic a ble l a w or i t s te r ms i s n o n -a ss i g n a ble or the a ss i g nment of whi c h w o uld constitu t e a vio l a t i on of la w , c ont r ac t, comm i t m e nt, or oth e r a g ree m e nt. To the Kno w l e dge of S e l l e rs, no Cont r ac t or P e rmit i s no n -a ss i gn a ble or would, in the e v e nt i t w e r e a ss i g n e d, c onsti t ute a vio l a t i on of a n y la w , c on t r a c t, c om m i t ment or other a g ree m e nt, e x ce pt for the f ood e stablishment p e r m it is s u e d b y the De p a rtm e nt of Hea l t h of the S tate of Ha w a ii whi c h is no n -a ss i g n a ble a nd Purc h a s e r must app l y f or a nd s ec u r e i t s own f ood e stablishment p e rmit.

 

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(b) I f , a s of the Clos i n g D a t e , a n a t t e mp t e d a ss i g nme n t of a n y n on - Mat e ri a l Contr ac t or P e rmit (other than a L iqu o r L ic e n s e ) would be ine f f ec t i ve or would a f f e c t P u rc h a s e r ’s r i g hts t h e r e u nd e r so th a t P u rc h a s e r w ould not in f ac t r e c e ive a l l such r i g hts (the Non -a ss i g n e d Cont r ac ts a nd P e rmit s ), th e n su c h fa i l u r e shall not a f f e c t t h e Clos i ng e x ce pt as h e r e in a ft e r s e t f o rth.  S e l l e rs must obtain the w ritt e n a ppro va l of the a ppl i c a ble L iquor

Com m is s ions of e ac h c oun t y in which the R e sta u r a nts a r e l o ca ted in c on n e c t i on with t he tr a nsf e r of the L iqu o r L ic e n s e s in t o P u rc h a s e r s n a me a s l i ce nse e . I f, a nd so lo n g a f ter the Closing D a t e a s, such a ss i g nment sh a ll not have b ee n m a de or a tempo ra r y l i quor l i ce n s e not i ssued to P u rc h a s e r, Sell e rs sh a ll f a i t h f ul l y c omp l y with t he pro v is i ons of the Manag e ment S e rvi ce s Ag ree ment in r e lation t o the s a le a nd c onsumpt i on of a lcoholic b e v e rag e s at the a f f ec ted R e stau ra nts.

 

( c ) Nothing in th i s S ec t i on 7.14 shall d e r o g a t e f rom the p a rties’ obl i g a t i ons und e r S ec t i on 7.6 .

 

7.15 Cont i nuing E x is t e n c e of S e l l e r s .   S e l l e rs sh a ll maintain their limi t e d l i a bi l i t y c ompa n y e x is t e n c e f or a p e riod of not l e ss t h a n si x t y ( 60) months a ft e r the Clos i ng D a te.

 

7.16 P os t - Clos i ng Audited F inan c ial S tat e ment s .  To the e x tent the Pur c h a s e r is r e quir e d un d e r a n y a ppl i ca ble L a ws to file or f u r n ish a n y a udi t e d fin a n c i a l s t a tem e nts pr e p a r e d in acc o r d a n c e with GA A P t o a n y Gov e rn m e ntal B o d y , includi n g but not l i m i t e d to t he S ec u r i t ies

and E x change Com m is s i o n, the Sellers shall coo p er a te in g ood f ai t h (incl u ding maki n g a v ai l able appropriate emp l o y e es a nd outside accountants a nd provid i ng r elevant i n f ormation and a c cess t o r e levant i nfor m at i on), d u ring nor m al bus i ness hours and upon r e asonable a dvance not ic e, with P urchase r ’s pre p ar a t i on with i n s i x t y (6 0 ) d a y s a fter the Clos i n g , at P u r ch a ser’s e x pense, of audi t ed financial state m e nts (prepa r ed in a c corda n ce with GAAP and Se cu r i t ies E x chan g e A ct Re g . S - X ) for the o p er a t i ons of the B usiness f o r the fiscal p e riods ended D e cember 31, 2015 and Decem b er 31, 2016, t o g e ther with a rep o rt on su c h financial information b y the P C A O B re g is t er e d account i n g fi r m t her e on.

 

7.17 Gift Ca r ds .  A f ter t h e Clos i ng D a te it is contemplat e d that Gi f t C a rd s , House A cc ounts, Co m ps a n d P romoti o n a l Discounts sold or is s u e d b y S e l le rs p r i o r to the Clos i ng D a te a nd whi c h a r e not r e d e e med p r ior to the Clos i ng D a te w i l l be p re s e nted to P u rc h a s e r for r e d e mp t ion. F ol l owi n g the Closing D a te, Pu r c h a s e r sh a ll rec o g ni z e a nd ho n or such Gift Ca r d s , House A c c ounts, Co m ps a n d P romotion a l Discounts upon p re s e ntation. S ubje c t t o th i s S ec t i on

7.17 a nd the G ift C a rd E s c row a nd Reimbur s e me n t A g r ee ment, f o r a p e riod of e i g h t ee n (1 8 ) mon t hs following the Closing D a t e (the Gift Ca r d L iabil i t y Pe rio d ), Sel l e rs sh a ll r e i m burse a nd indemni f y P u rc h a s e r for a n y s u c h a mount in a c c o r d a n c e with S ec t i on 9.2 h e r e o f . S e l le rs a nd P u rc h a s e r s h a ll e nter in t o the G ift C a rd E s c r o w a n d R e i m burs e ment Ag r ee ment to provide f or a ca sh es c row in t he a mo u nt provid e d the re in and s u c h a g re e m e nt wi l l have a te r m e qu a l t o the

Gift Ca r d L i a bi l i t y P e ri o d . F ol l owing the e x pir a t i on of the G ift C a rd L iab i l i t y Pe rio d , the G ift C a rd E s c row A g e nt shall d e l i v e r to S e l l e rs the re maining b a la n c e of t h e G ift C a rd E s c row A cc ount i n a c c o r d a n c e w i t h the G ift C a rd E s c row a nd Reimburs e ment A g r ee ment. Disburs e ments to P u rc h a s e r in c onn e c t i on with t he re d e mp t ion of Gi f t Car d s , House A cc ounts,

Comps a nd P romotion a l Disc o unts during the p e r i od of the G ift C a rd E s c r o w Acc ount sh a ll be in acc o r d a n c e with t he te r m s, and subj ec t t o the c on d i t ions, s e t fo r th i n the G ift C a rd E s c row a nd R e i m burs e ment Ag r e e ment.

 

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7.18 R e d e mp t ion of Gi f t C a r d s .   F ol l owing the e x pir a t i on of the G ift C a rd L iab i l i t y P e riod, Pu rc h a s e r s h a ll c ont i nue to honor a n y Gift C a rds issued b y S e l le rs p r ior to the Closing D a te a nd p r e s e nted to P u r c h a s e r f or r e d e mp t ion, s ubje c t t o S ec t i on 7.17 a b ov e .

 

7.19 Non - Competi t ion and N o n - S ol i c i t a t i o n .   B oth D e s e rt I slands R e stau r a nts, L . L .C a nd W . Rand a ll S c ho c h will e x ec ute a n a g re e me n t not to comp e te in the f o r m atta c h e d h e r e to as E x hib i t F a nd E x hib i t G , r e spe c t i v e l y .

 

7.20 R ea l P rop e r t y L e a se Not i ce s .   S e l l e rs w i l l provide the Pur c h a s e r with copi e s of a ll not i ce s f r om a n y landlo r d und e r e a c h Re a l P rope r t y L e a se with i n thr e e (3) busin e ss d a y s o f r e ce ipt of s u c h not i c e a n d vice v e r s a .

 

7.21 R e port of B ulk S a le or T r a nsf e r; T a x Cle a r a n c e C e rtifi ca te s .   P u r c h a s e r a n d eac h S e l l e r a c knowl e d ge the a l l o ca t i on of the Pur c h a se P ri c e is r e quir e d to b e set f o r th i n the R e port of B ulk S a le or T r a ns f e r r e quir e d un d e r Se c t i on 2 3 7 - 43 of the H a w a i‘i R e v ised Statutes ( the

B ulk S a le T a x R e por t ”), the form of which is at ta ched he r eto as S c h e du l e 7.2 1 .  The al l ocat i ons set forth i n the B ulk S ta t e Tax Report, or in a n y o ther report r e quired b y a p pl i cable law that r e quires the Pu r chase P r i ce to be al l o c ated amo n g portions of the P urchased Assets and/or amo n g the Sellers shall conform to t he P urchase P rice Allocat i on as det e rmined b y S ect i on 3. 4 P urchase P ri c e Allocat i o n.  Not later than ten (1 0 ) B usiness D a y s pri o r to the Clos i ng Date,

S e ll e r sh a ll f ile with t he State of Ha w a i ʻi D e partme n t of T a x a tion the B ulk S a le T a x R e port a nd a spe c ial H a w a i‘i g e n e r a l e x c ise T a x R e turn f or the Ta x e s due f or the s a le o f inv e nto r y , p a y a ll T a x e s that a r e p a y able in c onn ec tion with the f iling of s u c h r e turn a nd file s u c h r e tu r ns and p a y a n y ot h e r Ta x e s, int e r e st a nd p e n a lties, if a n y , a s m a y b e re qui r e d to c a u s e the De p a rtme n t o f T a x a tion to issue the ce rtifi ca te th a t said B ulk S a les T a x R e port h a s be e n f i led a nd that a ll ta x e s, p e n a lties a nd int e r e st due on the d a te th e r e of ha v e b ee n p a id, and to d e liv e r the f il e d - stamp e d

r e port a nd ce rtifi c a t i on to P u rc h a s e r a nd S e l l e r a t t he Clos i n g .   S e l l e r a nd P u rc h a s e r a g r e e that

the Closing D a te sh a ll be a djourn e d a s n ece s s a r y t o p e rmit d e l i v e r y of su c h re port a nd ce rtifi c a te is s u e d b y t h e D e p a rtme n t of T a x a t i on a t C los i n g .

 

7.22 S u r vivabil i t y .  T h e pro v i sions of this Article V II ( e x ce pt for S ec t i on 7.21) shall survive the Closing D a t e .

 

AR T I C L E V I I I CO N D I T I O NS TO C L O S I NG

8.1 Condi t ions t o Obli g a t i ons of the P u rc h a s e r .  The o bl i g a t i on of the Pur c h a s e r to

consummate the trans a ct i ons contemplated b y th i s Agreement is subject to t he satisfact i on (or wavier b y the Pu r chas e r) of the fol l owing addi t ional condi t ions:

 

( a ) Oth e r th a n the r e p re s e nt a t i ons a nd w a r r a nt i e s of the S e l l e r s and the P rin c ipal c ontain e d in Se c t i on 5. 1 , S ec t i on 5.2 , S ec t i on 5.6 a nd S ec t i on 5.20 , the re p r e s e ntations a nd w a r r a nt i e s of the S e l l e rs a nd the Prin c ipal s e t f o r th i n th i s A g re e ment, the oth e r T r a nsa c t i on Do c uments a nd a n y ce rt i fi ca te or ot h e r w riti n g d e l ive re d pu r su a nt he re to s h a ll be true a nd c o r r ec t in all r e spe c ts (in t he ca s e of a n y r e p re s e ntation or w a r r a n t y q u a l i fi e d b y m a te r iali t y o r M a te r i a l Adv e rse E f f e c t) or in all mat e ri a l r e s p ec ts (in t he ca se of a n y re p r e s e n t a t i on or w a r r a n t y not

 

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qu a l i fi e d b y m a te r iali t y o r M a te r ial Ad v e rse E f f ec t) on a nd a s of the d a te h e r e of a nd on a nd a s of the Closing D a te w i t h the same e f f ec t as tho u g h m a de a t and a s of su c h d a te ( e x ce pt t hose r e p re s e ntations a nd w a r r a nt i e s that add re ss m a t ter s on l y a s of a spe c i fi e d d a te, the a cc u r a c y of whi c h sh a ll be d e t e rmin e d a s of th a t spe c if i e d d a t e ).   T he re p r e s e n t a t i ons a n d w a r r a nt i e s of the S e l l e rs a nd the Prin c ipal c ontain e d in S ec t i on 5.1 , S ec t i on 5. 2 , S ec t i on 5.6 a nd S ec t i on 5. 2 0 shall be true a nd c o r r ec t i n a ll r e spe c ts on a n d a s of the d a te h e r e of a nd on a nd a s of the Clos i ng D a te with t he same e f f ec t as t h ou g h ma d e a t and a s of s u c h d a te ( e x ce pt those r e p re s e ntations a nd w a r r a nt i e s that add r e ss m a t t e rs on l y a s of a s p ec if i e d d a te, the acc u r a c y o f whi c h sh a ll be d e te r m i n e d a s of t h a t sp e c ified d a te in a ll r e spe c t s ).

 

(b) The S e l l e rs a nd the Prin c ipal sh a ll h a ve du l y p e r f o rm e d a nd c omp l ied in a ll mat e ri a l r e s p ec ts with all ag ree m e nts, cov e n a nts and c ondi t ions r e quir e d b y th i s A g re e ment a nd e a c h of the oth e r T ransa c t i on Do c uments to b e p e r f o rm e d or c omp l ied w i t h b y it a s of or p r ior to the Clos i ng D a te.

 

( c ) The S e l l e rs a nd the Prin c ipal sh a ll h a ve obtain e d a t t h e ir o w n e x p e nse ( a nd sh a ll h a ve p rovid e d e x ec uted c opies the r e of t o the Pur c h a s e r) a ll R e q u ir e d Cons e nts, all of whi c h sh a ll be in full f o r c e a nd e f f ec t.

 

(d) No L e g a l P roc ee di n g ( i) c h a l l e n g i n g or s e e king to pr e v e nt t he c onsummation of the tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment, or ( i i ) t h a t would c a use the tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment to b e re s c in d e d following co nsummation, or ( i i i) that would a f f e c t adv e rs e l y the r i g ht of the Pu r c h a s e r to o w n, op e r a te or c o ntrol a n y o f the P u rc h a s e d Ass e ts, or to c ondu c t t he B usiness a s c u r r e nt l y c ondu c t e d, following the Closin g , a nd no su c h jud g ment, o r d e r, d ec re e , st i pulation or in j un c t i on sh a ll be in e f fe c t.

 

( e ) No M a te r ial Ad v e rse E f f ec t shall h a ve o cc u r r e d, a nd no e v e nt or c ir c ums t a n c e shall have o cc u r r e d or aris e n that w ould r ea sona b l y be e x p e c ted to re sult in a Mat e ri a l Adv e rse E f f e c t.

 

(f) No d ata br e ach o r c omp r om i se of a n y S el l e r’s in f ormation securi t y s y stems shall have o ccu r r e d.

 

(g) The S e l l e rs a nd the Prin c ipal sh a ll h a ve du l y e x e c uted a nd d e l i v e r e d e a c h T ra nsa c t i on D o c ument ( o ther than this Ag ree m e nt) to whi c h it is a p a r t y a n d su c h other do c uments or d e l i v e r a bl e s r e quir e d of it in con n e c t i on with t he Clos i ng und e r S ec t i on 4. 2 .

 

(h)       The P u rc h a s e r sh a ll h a ve rece i v e d a ll P e rmits that a re n e ce ss a r y f or it to c ondu c t t he B usi n e ss as c ondu c ted b y the Selle r s a s of the Clos i ng D a te, e x ce pt for the L iqu o r L i c e nses w hich will be tr a nsf e r r e d b y S e l l e rs to P u rc h a s e r a f t e r the Clos i ng D a te.

 

(i) The S e l l e rs sh a ll h a ve d e l i v e r e d to t he P u rc h a s e r pa y o ff lette r s with r e spe c t t o a ll s e c u re d in d e btedn e ss of the Sell e rs a nd do c uments e viden c i n g the re le a s e or te r m i n a t i on of a ll L i e ns on the P u rc h a s e d As s e ts, a nd c opies of UCC te r m i n a t i on st a tem e nts t o be f i l e d upon the Closing with r e spe c t t o a ll UCC f inan c i n g stat e ment e vi d e n c i n g L i e ns.

 

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(j) The S e l l e rs sh a ll h a ve t e r m i n a ted the F r a n c hise A g r ee ments a nd d e l i v e r e d e viden c e o f su c h te r m i n a t i ons to the Pur c h a s e r, p r ovided Pur c h a s e r sh a ll c a use the f r a n c hisor to e nter in t o su c h te r m i n a t i on a g ree m e nts.

 

(k) The P u rc h a s e r sh a ll h a ve rece i v e d f r om t he S e l ler s the re sul t s of a n invento r y c ount of the Business a s of the d a te i m medi a te l y p rior to t he Clos i ng D a t e .

 

8.2 Condi t ions to Obl i g a t i ons of the S e l l e r s .  The obl i g a t i on of the Sell e rs to c onsummate the t ra ns a c t i ons c ontemplat e d b y th i s Ag ree ment is s ubje c t t o t he satisf ac t i on ( o r w a vier b y the Sell e rs) of the f ol l owing a ddi t ional c ondi t ions:

 

( a ) Oth e r th a n the r e p re s e nt a t i ons a nd w a r r a nt i e s of the P u rc h a s e r c ontain e d in S ec t i on 6.1 , S ec t i on 6.2 a nd S ec t i on 6.5 , the re p r e s e ntations a nd w a r r a nt i e s of the P u rc h a s e r s e t fo r th i n th i s A g r ee m e nt, t he other T ra n s ac t i on Do c uments a nd a n y ce rt i fi ca te or ot h e r w riti n g d e l i v e r e d pu r s u a nt he r e to shall be true a nd c o r r ec t in all r e spe c ts (in t he ca s e of a n y r e p re s e ntation or w a r ra n t y qu a l i fi e d b y m a te r iali t y or M a te r ial Ad v e rse E f f ec t) or in all m a t e ri a l r e spe c ts (in t he ca se o f a n y r e p re s e ntation or w a r r a n t y not qualified b y m a te r iali t y o r M a t e ri a l Adv e rse E f f e c t) on a nd a s of the d a te h e r e of a nd o n a nd a s of the Clos i ng D a te w i t h the s a me e f f e c t as tho u g h made a t and a s of su c h d a te ( e x ce pt t hose r e p re s e ntations a nd w a r r a nt i e s that a ddr e ss m a t t e rs on l y a s o f a spe c if i e d d a te, the a cc u ra c y of w hich sh a ll be d e te r m i n e d a s of t h a t spe c ified d a t e ).   T he r e p r e s e ntations a nd w a r ra nt ie s of the P u rc h a s e r c onta i n e d in S ec t i on 6.1 , S ec t i on 6.2 a nd S ec t i on 6.5 shall be true a nd c o r re c t i n a ll re spe c ts on a nd a s of the d a te h e r e of a nd on a nd a s of t h e Clo s ing D a t e with t he same e f fec t a s thou g h ma d e a t a nd a s of su c h d a t e ( e x ce pt t hose r e p r e s e ntat i ons a nd w a r r a nt i e s that a ddr e ss m a t t e rs on l y a s of a spe c ified d a te, the acc u r a c y o f w hich sh a ll b e d e te r m i n e d a s of th a t s p ec ified d a t e in all r e sp ec ts).

 

(b) The P u rc h a s e r sh a ll h a ve du l y p e r fo r med a nd c o m pl i e d in all m a te r ial r e spe c ts with all a g ree m e nts, cov e n a nts and c ondi t ions r e quir e d b y th i s A g r ee ment a nd eac h o f the oth e r T r a n s ac t i on D o c uments to be p e r f o rm e d or c omp l ied w i t h b y it a s of or p r ior to the Clos i ng D a te.

 

( c ) No L e g a l P roc ee di n g ( i) c h a l l e n g i n g or s e e king to pr e v e nt t he c onsummation of the tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment, or ( i i ) t h a t would c a use the tr a nsa c t i ons c ontemplat e d b y th i s A g re e ment to b e re s c in d e d following c o nsummation, or ( i i i ) that would a f f e c t adv e rs e l y the r i g ht of the Pu r c h a s e r to o w n, op e r a te or c o ntrol a n y o f the P u rc h a s e d Ass e ts, or to c ondu c t t he B usiness a s c u r r e nt l y c ondu c t e d, following the Closin g , a nd no su c h jud g ment, o r d e r, d ec re e , st i pulation or injun c t i on sh a ll be in e f fe c t.

 

(d) The P u rc h a s e r sh a ll h a ve du l y e x ec uted a nd d e l i v e r e d e a c h T r a nsa c t i on Do c ument ( other t h a n th i s A g r ee ment) a nd su c h o t h e r do c uments or d e l i v e r a bles re qui r e d of it in c onn ec t i on with t he Clos i ng und e r S ec t i on 4.2 .

 

( e ) The P u rc h a s e r sh a ll h a ve paid S e l l e rs the P u rc h a s e P ri ce .

 

(f) The P urchas e r shall have recei v ed from t he S el ler s the resul t s of an invento r y count of the Business as of the date i m mediate l y p rior to t he Clos i ng Da t e.

 

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AR T I C L E I X I N DEM N I F I CA T I ON

9.1 S u r vival .  The re p r e s e nt a t i ons a nd w a r r a nt i e s of the p a rties c on t a ined in th i s

Ag ree ment s h a ll survive for e i g hte e n (18) mon t hs a f ter the Closi n g D a te; p r ovided that the r e p re s e ntations a nd w a r r a nt i e s co n tain e d in ( a ) Se c t i on 5.1 ( O r g a ni z a t i on a nd Good S t a ndin g ), S ec t i on 5.2 ( A uthori z a t i on of A g re e ment ) , S ec t i on 5.7 ( U ndisclosed L iabil i t i e s), S ec t i on 5.11 ( b) ( T i t le to a nd S u f fi c ien c y of Ass e ts) a nd Se c t i on 5.21 ( F ina n c ial Advisors) s h a ll survive inde f in i te l y , a nd (b) S ec t i on 5.9 ( Ta x e s), S ec t i on 5.14 ( E mp l o y e e B e n e fit P lans) a nd S ec t i on

5.18 ( E nvironme n tal Ma t te r s) ( t o g e th e r w i t h the r e p re s e ntations a nd w a r r a n t i e s des c rib e d in c lause ( a ) of th i s S ec t i on 9. 1 , eac h, a F und a ment a l R e p re s e ntatio n a nd c o l le c t i v e l y , the F und a m e ntal R e p re s e ntation s ) sh a ll survive f or the f ull p e riod of a ll a pp l ic a ble statut e s of l i m i tations ( g iv i ng e f f e c t to a n y w a ive r , m i t i g a t i on or e x tension th e r e o f ) pl u s s i x t y (60) d a y s . Notwithstanding the f o re g oi n g , if a w r i t ten c laim or w r i t ten notice is g iven und e r this A r t i c le I X with r e spe c t t o a n y r e p re s e ntation or wa r r a n t y pr i or to t he e x pir a t i on of the a ppl i ca ble su r vival p e riod, the c laim wi t h r e s p ec t t o su c h r e p r e s e n t a t i on or w a r r a n t y shall cont i nue unt i l such c laim is final l y re sol v e d.

 

9.2 I n d e mn i fi ca t i on b y the S e l l e rs a nd the Prin c ipa l . S ubje c t t o S ec t i on 9.5 h e r e o f , the Selle r s a nd the Prin c i p a l , jo i nt l y a nd s e v e r a l l y , h e r e b y a g r e e to r e i m bur s e , d e f e nd, in d e mn i f y a nd hold ha r m l e ss the Pur c h a s e r a nd i t s A f filiat e s a nd their re s p ec t i ve di r e c tors, o f fi ce rs, e mp l o y e e s, s t o c kholde r s, memb e rs, m a n a g e rs, p a r tne r s, a g e nts, atto r n e y s, r e p re s e n t a t i v e s, suc c e ssors a nd p e rmit t e d a ss i g ns ( c ol l ec t i v e l y , the P u rc h a s e r I nd e mn i fi e d P a rtie s ) f rom a nd a g a inst a n y a nd a ll los s e s , L iabil i t i e s, fin e s, d a ma g e s, T a x e s a nd E x p e nses (individu a l l y , a L os s a nd, c ol l ec t i v e l y , L os s es ) re lati n g to, ba s e d up o n, r e sul t ing f rom or a ris i ng out of:

 

( a ) a n y i n acc u r a c y o r b r e ac h of a n y of the r e p r e s e nta t ions or wa r r a nt i e s made b y a n y S e l le r, the P rin c i p a l, or both, in th i s A g re e ment or a n y of the oth e r T ra nsa c t i on Do c uments;

 

(b) a n y b r e a c h of o r f a i l u r e t o p e r f o r m a n y c ov e n a nt or a g re e ment made b y a n y S e l le r or the Prin c ip a l i n th i s A g r e e m e nt or a n y of the ot h e r T r a nsa c t i o n Do c uments;

 

( c ) the o w n e rship, use or o p e r a t i on of a n y o f the a ss e ts or p r op e rties of a n y S e l l e r ( including a n y of t he P u rc h a s e d Ass e t) or t h e B usiness prior to t he C l osin g , including but not l i m i t e d to a n y c laims und e r the Environm e ntal L a ws or the Rel e a se of H a z a rdous M a te r ials whi c h a rise f rom e v e nts or c ir c ums t a n c e s prior to the Closin g ;

 

(d) a n y o f the E x c luded A ss e ts or E x c luded L iabil i t i e s;

 

( e ) a n y a nd a ll T a x e s (i) r e l a t i ng to a n y P r e - Clos i n g T a x P e riod w i t h r e spe c t to t he S e l l e rs, the B usin e ss or a n y of the P u rc h a s e d Ass e ts, (i i ) re lati n g to t he portion of a n y S tr a ddle Pe r iod endi n g o n a nd including the Clos i ng D a te with r e s p ec t t o the Selle r s, the

Business or a n y o f the P u rc h a s e d Ass e ts, (i i i) a n y other T a x e s of the S e l l e rs or a n y of th e ir e qui t y holde r s or A f filiat e s, including a n y T a x e s that a r ise in c onn ec t i on with t he e x ec ut i on a nd

d e l i v e r y of this A g re e m e nt or the c onsummation of a n y of the t r a nsa c t i ons c ontemplat e d h e r e b y

 

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(in c lud i n g , without l i m i tation, all t r a nsf e r, d o c u m e nta r y , sal e s, u s e , stamp, r e g is t r a t i on a nd other si m i l a r Ta x e s, and a ll c onv e y a n c e f e e s, r e c o r di n g c h a r g e s a nd other f e e s a n d c h a r g e s (in c l u ding a n y p e n a l t ies a nd in te r e s t ) ) ;

 

(f) a n y Env i ronmental Claim or the investi g at i on, re mediat i on or cor r ect i on of a n y Environmental C o ndi t ion caused b y , r e lati n g to or a rising out of (i) a n y condi t ion prior to the Closing at t he L e ased Real P rop e r t y or a n y pro per t y p r e vious l y owned, l eased or o p er a t ed b y a n y S el le r or a n y o f its r e spe c t i ve pr e d e c essors in i nterest, as appl ic able; a n d (ii) the oper a t i ons prior to the Clos i ng of a n y S el l er o r a n y of its pre d ecessors in i nte r est, as a p pl i cable, includ i ng arising out of the dispos a l, m i g r a t i on, Relea s e or t hreate n ed Rele a s e of a n y Ha z ardous Subs t ance owned, controlled or po s sessed b y a n y S el l er o r a n y of its p r ede c essors in i nterest, as appl ic able;

 

(g) a n y f a i l u r e o f the S e l l e rs or a n y of th e ir p r e d e ce s s o r s in i nte re s t , a s a ppl i ca ble, to c omp l y with a n y E n vironment a l L a w p r ior to the Clos i n g , i n c lud i ng the ins t a l l a t i on of a n y pol l ut i on c ontrol eq u ip m e nt or other e quip m e nt t o bri n g the B usiness or P u rc h a s e d Ass e ts i nto c o mp l ian c e with all Environm e ntal L a ws;

 

(h) a n y L i a bi l i t y a rising un d e r a n y Environm e n t a l L a w a ssu m e d b y the Selle r s or a n y of its pr e d ece ss o rs in in t e r e st, as a ppl i ca ble, prior to t he Clos i ng pur s u a nt t o the t e rms of a n y Cont r ac t, R ea l P roper t y L e a s e , s e t t lem e nt or o ther w r i t ten a nd l e g a l l y b ind i ng a r r a n g e m e nt b e tw ee n or a mo n g the S e l l e rs or a n y of its pr e d e ce ssors in i nte re s t , a s ap p l i ca ble, a nd a n y other P e rson;

 

(i) a n y m a t t e r or S e l l e r B e n e fit P lan dis c losed or re q u ir e d to be dis c losed in

S c h e dule 5.14 ( a ) or S c h e dule 5.1 6 ;

 

(j) 100% of the a mount of a n y Gift C a rds i ssued b y t he S e l l e rs p r ior to the

Clos i ng D a te a nd p r e s e n t e d to P u rc h a s e r f or r e d e mp t ion during t h e Gift Ca r d L iabil i t y P e riod;

 

(k) a n y a nd a ll e mp l o y ment L iabil i t i e s a r is i n g out of c laims a l l e g i n g disc r i m ination, ha ra ss me nt, r e taliation, f a i l u r e to p a y w a g e s o r p r ovide b e n e fits, un l a w f ul te r m i n a t i on, m i s c lassifi ca t i on of e mp l o y e e s, or a n y other vio l a t i on of f e d er a l, s t a te or loc a l la w filed, thr ea te n e d, or oth e r wise pursu e d b y S e l l e rs’ e mp l o y e e s prior to t he C l osing D a t e or b a s e d on e v e nts t h a t a rose p rior to the Closing D a te; or

 

(l) a n y d a ta b r eac h o r c omp r om i se of a n y S e l l e r s in f o r mation s ec u r i t y s y stems t h a t oc c u r re d p r i or to t he Clos i n g , r e g a rd l e ss of w h e th e r a n y S e l l e r w a s a w a re o f a n y d a ta b r e ac h or c ompromise of its i n f o r mation s ec u ri t y s y stems prior to or af ter the Closin g ; p r ovided, how e v e r, that t he P u rc h a s e r I nd e mn i fi e d P a rties’ r i g ht t o indemnifi ca t i on und e r th i s S ec t i on 9.2 ( l) shall e x pire a ft e r e i g hte e n mon t hs f ol l owing the Closing D a te.

 

The f o r e g oi n g a g re e ment to i nd e mn if y s h a ll not i n c lude a n y L oss sole l y re s ul t ing f rom a

Pu rc h a s e r I nd e mnifi e d P a r t y ’s willful mis c ondu c t.

 

9.3 I n d e mn i fi ca t i on b y P u rc h a s e r .   S ubje c t t o S ec t i on 9.5 h e r e o f , t h e P u rc h a s e r

h e r e b y a g r e e s to r e i m bu r s e , d e f e nd, in d e mn if y a n d hold ha r m l e ss t he S e l l e rs a nd their r e spe c t i ve dir ec tors, o f f i ce rs, e mp l o y ee s, s t o c kholde r s, me m b e rs, m a n a g e rs, p a rtn e rs, a g e nts, atto r n e y s,

 

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r e p re s e ntatives, su c c e ss o rs a nd p e rmit t e d a ss i g ns ( c ol l ec t i v e l y , t h e S e l l e r Ind e mn i fi e d P a rtie s )

f r om and a g a inst a n y a nd a ll L osses r e lati n g to, b a s e d upon, re sul t ing f r om or a rising out of:

 

( a ) a n y i n acc u r a c y o r b r e ac h of a n y of the r e p r e s e nta t ions or wa r r a nt i e s made b y the Pu r c h a s e r in this Ag ree ment o r a n y of the other T ra n s ac t i on Do c u m e nts;

 

(b) a n y b r e a c h of o r f a i l u r e t o p e r f o r m a n y c ov e n a nt or ag re e ment made b y the Pur c h a s e r in this A g r ee ment or a n y o f the oth e r T r a ns a c t i on Do c ument s ;

 

( c ) a n y o f the Assumed L ia b i l i t ies; or

 

(d) a n y L i a bi l i t y r e lating to t he B usiness a rising f r om a nd a ft e r the Clos i ng D a te, e x ce pt t o the e x tent e x p re ss l y c o v e r e d b y the S e l le r s’ a nd P rin c ipal’s i nd e mn i fi ca t i on obl i g a t i ons und e r Se c t i on 9. 2 .

 

The f o r e g oi n g a g re e ment to i nd e mn if y shall not include a n y L oss sole l y re s ul t ing f rom a S e l l e r

In d e mn i fi e d P a r t y ’s w i l l f ul m iscondu c t .

 

9.4 I n d e mn i fi ca t i on P ro c e d u r e s .

 

( a ) I n the e v e nt t h a t a n y L e g a l P ro c ee di n g s shall be i n st i tu t e d, or that a n y c laim sh a ll be a sse r t e d, b y a n y Pe rson not p a r t y to th i s A g re e ment in r e s p e c t of a n I n d e mn i fi ca t i on C l a i m , the p a r t y s e e king in d e mn i fi ca t i on (the I nd e mn i fi e d P a r t y ) sh a ll p r omp t l y ca u s e w r i t ten n ot i c e of the a ss e rtion of a n y I n d e mn i fi ca t i on C l a im of w hich it has knowl e dge that is c ov e red b y th i s indemni t y to be d e l i v e r e d to t he p a r t y f r o m whom indemnifi ca t i on is sou g ht ( the I n d e mn if y i n g Pa rt y ); p rovid e d that no d e l a y on t h e p a rt of t h e I n d e mn i fi e d P a r t y in g iv i ng a n y s u c h not i c e shall r e l i e ve the I n d e mn i f y i n g P a r t y of a n y indemnifi ca t i on obl i g a t i o n h e r e und e r unl e ss ( a nd then sole l y to t he e x tent t h a t) the I nd e mn i f y i n g P a r t y is m a te r i a l l y p r e ju d ic e d b y such d e l a y . The I n d e mn i f y i n g Pa r t y s h a ll h a ve the r i g ht, at i t s sole option a nd e x p e nse, to e ng a g e c oun s e l of its c hoic e , whi c h must be r e a sona b l y satis f ac to r y to t he I n d e mn i fi e d P a r t y , to de fe nd the I n d e mn i fi e d P a r t y a g a inst a n y I nd e mn i fi ca t i on C l a im a nd if the I nd e mn i f y i n g P a r t y e le c ts t o d e f e nd a g a inst an y I nd e mn i fi c a t i on C l a i m , it shall within tw e n t y ( 2 0) B usiness D a y s ( o r soon e r, if the n a tu r e of the I n d e mn i fi ca t i on Claim so r e quir e s)

(the Dispute P e riod ) n ot if y the I n d e mn i fi e d P a r t y of its i ntent to do so. I f the I nd e mn i f y i n g P a r t y do e s not e le c t w i th i n the D ispu t e P e riod to de fe nd the I nd e mn i fi e d Pa r t y a g a inst a n y I n d e mn i fi ca t i on C l a i m , the I nd e mn i fi e d P a r t y m a y d e f e nd a g a inst such I n d e mn i fi ca t i on C l a i m . I f the I nd e mn i f y i n g P a r t y e le c ts t o d e f e nd the I nd e mn i fi e d P a r t y a g a inst a n y I n d e mn i fi ca t i on C l a i m , ( i) the I n d e mn i f y i ng P a r t y shall use its c o m m e r c ial l y r e a so n a ble ef fo r ts t o d e f e nd a nd

p r ote c t t he in t e r e sts of t h e I nd e mn i fi e d P a r t y with r e spe c t t o su c h I nd e mn i f i ca t i on C l a i m , ( i i ) the I n d e mn i fi e d P a r t y , prior t o or d u r ing t h e p e riod in whi c h the I n d e mn i f y i n g P a r t y a ssu m e s the d e f e nse o f su c h matte r , m a y ta k e such r ea sona b l e ac t i ons a s the I n d e mn if ied Pa r t y d ee ms n ece ss a r y to pr e s e rve a n y a nd a ll r i g hts with r e s p ec t t o su c h matte r , with o ut such ac t i ons b e i n g c onstru e d a s a w a iv e r of the I n d e mn i fi e d P a r t y ’s r i g hts t o d e f e n s e a nd ind e mn i fi ca t i on pu r suant to t his A g re e ment, ( i i i) the I nd e mn i f y i n g P a r t y sh a ll be d ee med to h a v e a g r ee d that it shall indemni f y the I nd e mn i fi e d P a r t y f o r su c h I n d e mn i fi ca t i on C l a im pursu a nt t o the p r ovis i ons of th i s A r t i c le I X a nd (iv) t h e I nd e mn i fi e d P a r t y m a y p a rticip a te, a t h i s or its o wn e x p e nse, in the d e f e nse o f su c h I n d e mn if ic a t i on C l a i m ; p r ovided , how e v e r , that s u c h I nd e mn i fi e d P a r t y shall be

 

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e nt i t l e d to pa r t i c ipate in an y such d e f e n s e with s e p a r a te c ouns e l at the e x p e n s e of the I n d e mn i f y i n g Pa r t y i f ( A ) so r e qu e sted b y t h e I n d e mn if y i n g P a r t y to p a rti c ipate or ( B ) b a s e d upon the a dvice of c oun s e l t o the I n d e mn i fi e d P a r t y , a c onfli c t or potential c onfli c t e x is t s b e tw ee n the I nd e mn i fi e d P a r t y a nd the I nd e mn i f y i ng P a r t y , or t h e re a re d e f e nses a v a i l a b l e to t he I n d e mn i fi e d P a r t y that ar e dif fe r e nt f r om or in a d d i t ion t o those a v a i l a ble to the I n d e mn i f y i n g P a r t y , that would ma k e s u c h se pa r a te r e p re s e ntation advisabl e ; and p r ovi d e d , fu r ther , t h a t t he I n d e mn i f y i n g Pa r t y s h a ll not be re quir e d to p a y f or more than one f irm o f c o unsel f or a ll I n d e mn i fi e d P a rties in c o nn ec t i on with an I nd e m n ific a t i on C l a i m .  The p a r t ies h e r e to a g re e to c oop e r a t e f ul l y with e a c h other in conn ec t i on with the d e f e n s e , n e g ot i a t i on or settl e ment of a n y such I nd e mn i fi ca t i on C la i m .  Notwiths t a nding a n y th i ng in t his S ec t i on 9.4 to t he c ontr a r y , t h e

In d e mn i f y i n g Pa r t y s h a ll not, wi t hout t he prior w r i t ten c onse n t of the In d e mn i fi e d P a r t y , s e t t le or c ompromis e , or pe rmit a d e f a ult or c on s e nt t o e nt r y of a n y ju d g m e nt wi t h r e spe c t t o, a n y In d e mn i fi ca t i on C l a im ( e ac h, a S e t t lem e n t ) unl e ss (i) the c laimant a nd s u c h Ind e mn i f y i n g

P a r t y pro v i d e to su c h I n d e mnifi e d P a r t y a n unqu a l ified r e l e a se f rom a ll L i a bili t y in r e spe c t of t h e I n d e mnifi ca tion Cl a im, ( ii) such S e ttlement does not impose a n y L iabiliti e s on the I n d e mnifi e d P a r t y , a n d (iii) with r e spe c t to a n y no n - monet a r y p rovision of su c h S e ttlem e nt, su c h pr o visions would not, in the I nd e m n ified P a r t y ’s re a sona b le j ud g ment, h a v e or be re a sona b l y e x p ec ted to h a ve a n y ma t eri a l ad v e r s e e ff ec t on the busin e ss, a ssets, prop e rties, c ondition ( f inan c ial or othe r wise ) , r e sults of oper a tions or p r ospe c ts of the I nd e mnifi e d P a r t y .

 

(b) I f the I nd e mn i f y i n g P a r t y do e s not und e rt a ke with i n the D ispu t e P e riod to d e f e nd I n d e mn i fi e d P a r t y a g a inst a n I nd e mn i fi c a t i on C l a i m , then the I n d e mn if y i n g P a r t y shall h a ve the r i g ht t o p a rtici p a te in a n y such d e f e nse a t i ts s ole c ost and e x p e nse, b ut, i n su c h ca s e , t h e I n d e mn i fi e d P a r t y shall c ontrol the investi g a t i on a nd d e f e nse a nd m a y sett l e or t a ke a n y other ac t i ons the I nd e mn i fi e d P a r t y d e e ms r e a sona b l y a dvisable without in a n y w a y w a iv i n g or othe r wise a f fe c t i ng the Ind e mn i fi e d P a r t y ’s r i g hts to i nd e mn i fi ca t i on pu r suant to this A g re e ment.

 

( c ) I n the e v e nt t h a t an I nd e mn i fi e d P a r t y should h a v e a n I nd e mn i f i c a t i on

Claim a g a inst the I n d e mn if y i n g P a r t y h e r e und e r whi c h it d e te r m i n e s to a s s e rt, but which do e s

not i nvolve a L e g a l P roc ee di n g or c laim b y a th ir d p a r t y , t h e I nd e mn i fi e d P a r t y shall send w r i t ten not i c e to t he I nd e mn i f y i n g P a r t y d e s c ribi n g in r e a sona b le d e tail t he n a tu r e o f su c h I n d e mn i fi ca t i on C l a im a nd the I n d e mn i fi e d P a r t y ’s e st i mate of the a mount of L os s e s attributable to such I n d e mn i fi ca t i on Claim.  The I n d e mn i f y i n g P a r t y shall ha v e tw e n t y ( 20) B usiness D a y s f r om t he d a te su c h c laim not i c e is deliv e r e d du r i n g whi c h to no t i f y the I nd e mn i fi e d P a r t y in w r i t ing of a n y g ood fa i t h obje c t i ons it has to the I nd e mn i fi e d P a r t y ’s noti c e or I nd e mn i fi c a t i on Claim, s e t t ing f o r th i n re a sona b le d e tail e ac h of the I nd e mn i f y i n g P a r t y ’s o bje c t i ons th e r e to. I f the I n d e m ni f y i n g P a r t y d o e s not d e l i v e r su c h w ritten noti c e of o b j e c t i on with i n su c h tw e n t y (20) B usiness D a y p e riod, the I n d e mn i f y i n g Pa r t y s h a ll be d ee med to h a ve a cc e pted re spons i bi l i t y f or the p r ompt p a y m e nt of t h e I nd e mn i fi e d P a r t y ’s I n d e mn i fi ca t i on C l a i m , a nd shall h a ve no f u rth e r ri g ht t o c ontest the v a l i di t y of su c h I nd e mn i fi c a t i on C l a i m . I f the I nd e mn if y i n g P a r t y do e s

d e l i v e r su c h w ritten noti c e of o b je c t i on with i n su c h tw e n t y (20) B usiness D a y p e riod, the I n d e mn i f y i n g Pa r t y a nd t he I nd e mn i fi e d P a r t y s h a ll a t t e mpt in g ood fa i t h to r e solve a n y s u c h dispute w i t hin t hir t y ( 3 0 ) d a y s o f the d e l i v e r y b y t he I nd e mn i f y i n g P a r t y of such w r i t ten notice of obje c t i on, a nd if not r e s o lved in su c h th i r t y ( 3 0 ) da y p e riod, m a y be r e sol v e d through L e g a l P ro c ee di n g s bro u g ht b y e i t h e r p a r t y or b y such ot h e r m ea ns a s such p a rties mutual l y a g r ee .

 

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(d) I f the Selle r s do not d e l i v e r a w ritten noti c e of o b j ec t i on to a Pur c h a s e r I n d e mn i fi e d P a r t y with r e spe c t t o a n I n d e mn i fi ca t ion C laim i n acc o r d a n c e with S ec t i on 9.4 (c ) , or a n I nd e mn i fi c a t i on C l a im of a P u rc h a s e r I n d e mn i fi e d P a r t y h a s be e n fin a ll y re sol v e d b y a L a w

of a Gov e rnm e ntal B o d y with r e spe c t t o whi c h a ll a pp ea ls ha v e b ee n d e te r m i n e d or r i g hts t o a pp ea l ha v e e x pir e d, b y a S e t t lem e nt or b y a g r e e ment of such P u rc h a s e r I n d e mn i fi e d P a r t y a nd the Selle r s (in a n y such c a s e , a R e solu t io n ), the a mount of L os s e s incu r re d b y such P u r c h a s e r I n d e mn i fi e d P a r t y with r e spe c t t o su c h I n d e mn i fi ca t i on C l a im shall be the jo i nt and s e v e r a l obl i g a t i ons of the S e l l e rs a nd the Prin c ipal a nd sh a ll be p a id t o su c h P u rc h a s e r I nd e mn i fi e d Pa r t y p r omp t l y f ol l owi n g such R e solu t ion.

 

9.5 Addit i on a l I nd e mn i f i ca t i on P rovision s .

 

( a )       A n y I nd e mn i fi ca t i on C la im to be m a de b y t h e P u rc h a s e r o r the S e l l e rs, a s the ca se m a y b e , shall be made on or prior to t he e x pir a t i on of the a ppl i ca ble su r vival p e riod s e t fo r th i n S ec t i on 9.1 , e x ce pt as othe r wise p r ovided the re in.

 

(b) Oth e r th a n with r e s p ec t t o a n y r e p r e s e ntations a nd w a r r a nt i e s the ina cc u r a c y or b r e a c h of whi c h is t he re sult of f ra ud, on or prior to t he Clos i n g , or a n y L osses und e r S ec t i on 9.2 ( j) , to w hich the I nd e mn i t y Th re s hold ( a s de f ined b e low) s h a ll not app l y , none of the Pur c h a s e r I n d e mn i fi e d P a rties sh a ll be p e rmit t e d to r ec ov e r a n y L os s e s und e r S ec t i on 9.2 , unless a nd unt i l t he a ggre g a t e a mount of L osses u n d e r su c h S ec t i on c onsid e r e d togeth e r e x cee ds

$200,000 ( the I n d e mn i ty Th r e shol d ), w h e r e up o n the Pur c h a s e r I nd e mn if ied Pa r t i e s shall be e nt i t l e d to i nd e mn i fi ca t i on h e r e und e r or oth e r w ise for a ll such L osses in e xc e ss of the I nd e mn i t y Th re shold.

 

( c ) Oth e r th a n with r e s p ec t t o a n y r e p r e s e ntations a nd w a r r a nt i e s the ina cc u r a c y or b r e a c h of whi c h is t he re sult of f ra ud, on or prior to t he Clos i n g , to which the I n d e mn i t y Th r e shold sh a ll not app l y , none of the S e l l e r I nd e mn i fi e d P a rti e s shall be p e rmit t e d to r e c ov e r a n y L osses un d e r S ec t i on 9.3 (a ) , unless a n d unt i l t he a g g re g a te a mount of L osses un d e r such S ec t i on c onsid e r e d t o g e t h e r e x cee ds t h e I nd e mn i t y T h r e shold, wh e r e u pon the Seller I n d e mn i fi e d P a rties sh a ll be e nt i t l e d to i nd e mn i fi ca t i on h e r e und e r f or a ll such L os s e s in e x ce ss of the I n d e mn i t y T h r e shold.

 

(d) I n no e v e nt shall the total indemnifi ca t i on to be p a id under S ec t i on 9.2 or S ec t i on 9.3 for L osses a rising with r e s p ec t t o a ll m a t t e rs e x cee d the Pu r c h a s e P ri ce , p r ovided t h a t the indemnifi ca t i on obl i g a t i on of t h e P rin c ipal un d e r this A r t i c le I X s h a ll not e x cee d F ift e e n Mil l ion Dol l a rs ( $15,000,000 ) , with t he e x ce pt i on of indemnifi ca t i on f o r ( x ) a n y ina c c u r a c y or b reac h o f a n y of t h e re p r e s e ntations a nd w a r ra nt ie s as a re sult of f r a ud a nd ( y ) a n y in a cc u r a c y or b reac h o f a n y of t h e F u n d a ment a l R e p re s e ntations to which no su c h l i m i t s h a ll a pp l y a nd to

whi c h the r e s h a ll be no l i m i t on t he a bi l i t y to pur s ue a ll l e g a l r e m e die s .

 

( e )       The w a iv e r of a n y c ondi t ion bas e d on the a c c u r a c y of a n y re p r e s e n t a t i on or w a r r a n t y , or o n t h e p e r fo r man c e of or c omp l ian c e with a n y c o v e n a nt or a g ree m e nt, sh a ll not a f f e c t t he r i g ht t o indemnific a t i on or other r e me d y b a s e d on a n y such r e p r e s e ntation, w a r r a n t y , c ov e n a nt or a g re e ment.

 

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9.6 T a x T rea t m e nt of I nd e m ni t y P a y m e nt s .  The S e l l e rs a nd the Pu r c h a s e r a g r e e to tr ea t a n y indemni t y p a y ment made pursu a nt t o t h is A r t i c le I X or oth e r w ise a s an a djus t ment to the c onsid e r a t i on f o r the P u rc h a s e d Ass e ts f o r fe d e r a l, s t a te, lo c a l and f o r e i g n income t a x purp o s e s.

 

9.7 E x c lus i ve R e me d y .  The sole a nd e x c lus i ve re me d y followi n g Clos i ng f o r a n y b reac h o f or d e f a ult und e r th i s A g r ee ment sh a ll be indemnifi ca t i on in acc o r d a n c e with t his A r t i c le I X (i n c lud i ng but not l i m i t e d to S ec t i on 9. 5 (b ) ) , e x ce pt wi t h r e s p ec t to a n y c laim bas e d upon f r a ud b y the Pu r c h a s e r or the Selle r s.

 

9.8 Gift Ca r d Es c row A cc o u n t .  At the Clos i n g , P u rc h a s e r, Selle r s a nd a b a nki n g or e s c row ins t i t ut i on s e le c t e d b y P u rc h a s e r with t he r ea sona b le c onse n t of S e l l e rs, a s the G ift Ca rd e s c row a g e nt, sh a ll e nt e r in t o the Gift Ca r d Es c r o w a nd Reimburs e ment A g r ee ment.

 

9.9 L iabil i t y Es c row A r r a n g e men t .  On the Clos i ng D a te, Selle r s shall deposit a ca sh a mount e qu a l t o T w o Mil l ion Dol l a rs ( $2,000,000.00) ( the L iabil i t y Es c r o w F un d ) w i t h a b a nking o r oth e r f ina n c i a l i nst i tu t ion sel ec ted b y P u rc h a s e r w i t h the r e a son a ble c onse n t of S e l l e rs a s es c r o w a g e nt, su c h d e posit t o be g ov e r n e d b y t he te r ms s e t fo r th t h e r e in a nd in t he I n d e mn i fi ca t i on Es c r o w Ag ree ment a t t ac h e d h e reto as E x hib i t I . The L i a bi l i t y E s c row F und sh a ll be a v a i l a ble sole l y to c o mpens a te the P u rc h a s e r Ind e mn i fi e d P a rties pu r s u a nt t o the indemnifi ca t i on obl i g a t i o ns of Selle r s ( e x c lus i ve of the Gift Ca r d indemnif i ca t i on in cl a use ( j) s e t fo r th i n S ec t i on 9.2 a bo v e ), subj ec t t o the I n d e mn i t y Th r e shold und e r Se c t i on 9.5 ( b ) , a nd sh a ll be e x h a usted p r ior to the P u rc h a s e r pu r sui n g a n y c laims in e x ce ss of the L iab i l i t y E s c row F un d .  At the d a te w hich is s i x ( 6) mon t hs a f ter Clos i n g , if l e ss t h a n ten p e r ce nt ($2 0 0,000) of the e s c row a mount h a s be e n d r a wn, then the b a lan c e of the e s c row a cc o unt wi l l be r e d u ce d to $1,000,000. This es c row a cc ount sh a l l r e main in p l ac e f or tw e l ve ( 12) months following Clos i n g .

 

AR T I C L E X TER M I N A T I ON

10.1 T e rmin a t i o n .  This Ag re e ment m a y b e te r m i n a ted a t a n y t i me p r ior to the Clos i n g :

 

( a ) b y mu t u a l writt e n c on s e n t of the p a rties;

 

(b) b y the Pu r c h a s e r b y w r i t ten notice to t he S e l l e rs i f :

 

(ii) a n y S e l le r is in br e a c h of a n y r e p r e s e ntation, w a r r a n t y or c o v e n a nt c ontain e d in t his Agr ee m e nt t h a t would g ive rise t o the fa i l u r e of a n y of the c ondi t ions s p ec ified in S ec t i on 8.1 a nd su c h br e ac h is not c u r e d with i n five ( 5) d a y s following d e l i v e r y b y the P u rc h a s e r to the S e l le r of w r i t ten notice d e tail i n g the n a ture o f su c h b r eac h; or

 

(iii) the Closing shall not h a ve o cc u r r e d on or b e fo r e o ne hund re d tw e n t y ( 1 20) d a y s follo w ing the d a t e of th i s A g re e ment b y r ea son of the f a i lure of a n y c ondi t ion p rece d e nt under A r t i c le V I I I (un l e ss t he fa i l u r e r e sul t s prima r i l y f rom a b re ac h b y the Pur c h a s e r of a n y re p r e s e n t a t i on, w a r ra n t y or c o v e n a nt con t a ined in th i s A g r ee ment ) ;

 

( c ) b y the Selle r s b y w r i t t e n not i c e to t he P u rc h a s e r i f :

 

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(ii) the Pur c h a s e r is in b r ea c h of a n y re p r e s e n t a t i on, w a r r a n t y o r c ov e n a nt con t a ined in th i s A g r ee ment that would g ive r i s e to t he fa i l u r e of a n y o f the c ondi t ions spe c ified in S ec t i on 8.2 a nd su c h br e a c h is not cu r e d with i n five (5) d a y s f o l l owing d e l i v e r y b y the Seller to t he P u rc h a s e r of w r i t ten notice d e tail i ng the n a ture of s u c h bre ac h; or

 

(iii) the Closing shall not h a ve o cc u r r e d on or b e fo r e o ne hund re d tw e n t y ( 1 20) d a y s follo w ing the d a t e of this A g re e ment b y r ea son of the f a i l u re of a n y c ondi t ion p rece d e nt under A r t i c le V I I I (un l e ss t he fa i l u r e r e sul t s prima r i l y f rom a b re ac h b y a n y S e l l e r o f a n y r e p r e s e ntation, w a r r a n t y or c o v e n a nt con t a in e d in t his A g re e ment ) .

 

10.2 E f f e c t o f Te rmin a t i o n . I f a n y p a r t y te r m i n a t e s th i s Ag ree ment p u r s u a nt t o S ec t i on

10.1 , a ll obl i g a t i ons of t h e p a rties h e r e und e r sh a ll te r m i n a te w i t hout a n y L i a bi l i t y of a n y p a r t y to the oth e r p a rties ( e x ce pt f or a n y L iabil i t y of a p a rty f o r f r a ud or wil l ful b r e ac h of a n y p rovision of th i s A g r ee ment p r ior t o su c h te r m i nat i on).

 

AR T I C L E X I M I S C E L L A N E O U S

11.1 E x p e nses .  E x ce pt as ot h e r w ise e x p re ss l y pro v id e d in t his A g re e ment, the

Pu rc h a s e r a nd the S e ll e rs shall b ea r its own E x p e nses incu r r e d in c on n ec ti o n with the n e g oti a tion, p re p a r a tion a nd e x ec uti o n of this A g r ee ment a nd eac h oth e r T r a n s ac tion D o c ument a nd the c onsummation of the transa c tions c ontemplat e d h e r e b y a nd t h e r e b y , i n c luding a ll f e e s and disburs e ments of c ouns e l , acc ountants, inv e stm e nt b a nk e rs a nd ot h e r a dvis o rs re tain e d b y s u c h p a r t y .

 

11.2 S ubm i ss i on to J u r is d icti o n; C onse n t t o S e rvi c e of P ro c e s s .

 

( a ) The p a rties h e r e to h e r e b y ir re vo c a b l y submit to t he e x c lus i ve jurisd i c t i on of a n y fe d e r a l o r st a te c o u r t l o ca ted w i t hin t he S tate of Ha w a ii ov e r a n y di s pute a rising out of o r r e lating to t his A g r ee me n t or a n y o f the tr a n s ac t i o ns c o ntem p lat e d h e r e b y a nd eac h p a r t y h e r e b y ir re vo c a b l y a g re e s that a l l cl a i m s in r e spe c t of su c h dispute or a n y suit, a c t i on p r o cee di n g r e lat e d the re to shall be h e a rd a n d d e te r m i n e d in su c h c o u rts.  The p a rties h e r e b y i r r e vo ca b l y w a ive, to the f ul l e st e x tent p e rm i t te d b y a ppl i ca ble L a w, a n y obj e c t i on whi c h th e y m a y n o w or h e r e a ft e r h a ve to t he l a y i n g of v e n ue of a n y such dispute b r ou g ht i n su c h c o u rt or a n y d e f e nse o f inconv e nient f o r um f o r the mainten a n c e of su c h d ispu t e .  E ac h of the p a rti e s he re to a g r ee s that a

jud g ment in a n y such di s pute m a y b e e n f o rc e d in o t h e r ju r isd i c t i ons b y suit on t he jud g ment or in a n y ot h e r m a nn e r p r ovi d e d b y L a w.

 

(b) E ac h of the p a rties h e r e to h e r e b y c on s e nts t o pr oc e ss being s e rv e d b y a n y p a r t y to t his A g r ee ment i n a n y suit, a c t i on or proc ee di n g b y d e l i v e r y o f a c o p y the r e of in acc o r d a n c e with t he pro v is i ons of S ec t i on 11.5 .

 

11.3 Entire A g re e ment; Ame n dments a nd W a ive r s .  T h is A g r ee ment ( includi n g the s c h e dules a nd e x hib i ts h e r e to) a nd the T r a ns a c t i on Do c uments r e p r e s e nt t he e nt i re und e rst a ndi n g a nd a g re e ment a mo n g t h e p a rties h e r e to wi t h r e s p ec t t o the subj ec t m a t t e r h e r e o f .  This Ag ree ment ca n be a men d e d, suppl e ment e d or c h a n g e d, a nd a n y p rovision he re of ca n b e w a ived, on l y b y w r i t ten instrum e nt m a king spe c i fic r e f e re n c e to t his Agr ee m e nt s i gn e d b y t h e p a r t y

 

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a g a inst whom e n f o r ce m e nt of a n y s u c h a mend m e nt, supplem e nt, m odifi ca t i on or w a iver is sou g ht.  No a c t i on tak e n purs u a nt t o th i s A g r ee m e nt, i n c lud i n g , without l i m i tation, a n y investi g a t i on b y or on b e h a lf of a n y p a r t y , shall be d ee med to c onsti t ute a w a iver b y the p a r t y taking such ac t i on of c o mp l ian c e with a n y re p r e s e ntation, w a r r a n t y , c ov e n a nt or a g r ee ment c ontain e d h e r e in.  The w a iver b y a n y p a r t y h e r e to of a bre ac h of a n y pro v i s ion of this A g r ee ment shall not op e r a te or b e c o nstru e d a s a f u rth e r o r c o nt i nuing w a iver o f su c h b r e ac h o r a s a w a iv e r of a n y other o r subs e qu e nt br eac h.  No fa i l u r e on the p a rt of a n y p a r t y t o e x e r c ise, a nd no d e l a y

in e x e r c is i n g , a n y r i g ht, p ow e r or r e me d y h e r e un d e r sh a ll op e r a te a s a w a i v e r th e r e o f , nor shall a n y si n g le o r p a rtial e x e r c ise of such r i g ht, po w e r or re me d y b y s u c h p a r t y p rec lude a n y other or fu r ther e x e r c ise th e r e of o r the e x e r c ise of a n y oth e r r i g ht, po w e r or r e me d y .

 

11.4 Gov e rni n g L a w . This A g r ee ment sh a ll be g o v e r n e d b y a nd c onstr u e d in acc o r d a n c e with t he L a w s of the S tate of H a w a ii a ppl i ca ble to c ontr a c ts m a de a nd p e r fo r med in such S tat e , without re feren c e to con f l i c t of l a w r u l e s that would r e quire t h e a ppl i ca t i on of the L a ws of a not h e r ju r isd i c t ion.

 

11.5 Notic e s .  All no t ic e s and other c om m unic a t i ons u n d e r this Ag ree m e nt shall be in w r i t ing a nd s h a ll be d e e med g iven ( a ) wh e n d e l i v e r e d p e rson a l l y b y h a nd ( with w r i t ten c onfi r mation of r ece ip t ), (b) wh e n s e nt b y f a c si m i l e ( with w r i t ten c onf i rm a t ion of tr a nsm i ss i on) or (c ) o n e ( 1) B usiness D a y following the d a y sent b y ov e rn i g ht cou r ier ( w i th w r i t ten c onfi r mation of r ece ip t ), in e ac h c a se a t t he follo w ing a dd r e sses a nd fa c si m i l e numbe r s (or to

such other a d d r e ss or f a c si m i l e number a s a p a r t y m a y h a ve sp e c ified b y n o t i c e g i v e n to t he other p a r t y ( ies) purs u a nt t o th i s provision):

If to t he S e l l e rs or the Pr i n c ipal to: D e s e rt Island R e stau ra nts LLC

6263 N. Scottsd a le Rd. # 374

Pho e ni x , AZ 85250

Attention: W . Rand a ll S c ho c h

Phon e : (480) 945 - 0088

Facsi m i l e: (602) 22 4 -78 7 6

With a c o p y to ( w hich s h a ll not constitute noti ce ) to: Sullivan M e h e ula L e e

733 B ishop S tr ee t, S te. 2 900

Honolulu, H a w a ii 96813

Attention: T e r re n c e M. L e e , Esq. P hon e : 808 - 599 - 9555

Facsi m i l e:  80 8 -533-24 6 7

 

If to t he P u rc h a s e r, to:

 

RC S H O p e r a t i ons, I n c .

c/o R uth’s Hospital i t y G r oup, I n c.

 

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1030 W . Canton Av e . S ui t e 100

Wint e r Pa r k, FL 32789

Attention: G e n e r a l C ou n s e l

Phon e : (407) 829 - 3451

With a c o p y ( whi c h s h a ll not c onstitute notic e ) to: Olsh a n F rome Wolos k y L L P

1325 Av e nue of t h e Am e ri ca s

N e w Y o r k, N e w Y o rk 1 0 019

Attention: J e f f r e y S pind l e r, E sq. P hon e :  (212) 45 1 - 2300

Facsi m i l e:  (212) 45 1 -2 2 22

 

11.6 S e v e r a bi l i t y . I f a n y t e rm or oth e r p r ovis i on of th i s Ag ree ment is in v a l i d, i l leg a l,

or inc a p a ble o f b e i n g e n f o rce d b y a n y L a w o r pu b l i c pol ic y , a ll other t e rms a nd p r ovis i ons of this Ag ree ment s h a ll n e v e rt h e less re main in full f o r c e a nd e f f ec t so l o n g a s the ec onom i c or l e g a l subs t a n c e of the t r a nsa c t i ons c ontemplat e d h e r e b y is not a f f e c ted in a n y m a nn e r m a te r i a l l y

adverse to a n y p a r t y . U p on such determ i nat i on t h at a n y term or other pro v is i on is invalid, i l le g al, or incapable o f b e i n g e n f orced, the p arties h e r e to shall ne g ot i ate in g ood fai t h to m odi f y th i s Agreement so as to ef f ect the ori g inal in t ent of the parties as close l y as possib l e in an a c ceptable manner in ord e r that t he t r a nsa c t i ons contempla t ed her e b y a re consummat e d as ori g i n al l y contemplated to t he g rea t est e x tent poss i ble.   E x cept as otherwise e x press l y provi d ed for in t his Agreement, noth i n g con t ained in a n y re p r e sen t at i on or wa r r a n t y , or the f a c t t hat a n y

r e p re s e ntation or w a r ra n t y m a y or m a y not be mo r e spe c ific t h a n a n y other r e p re s e ntation or w a r r a n t y , s h a ll in a n y w a y l i m i t or re strict the s c o p e , a ppl i ca b i l i t y o r m ea n i ng of a n y other r e p re s e ntation or w a r ra n t y c on t a ined in th i s Ag re e ment.

 

11.7 B ind i ng E f f e c t; No T hir d - P a r t y B e n e fi c i a ri e s; As s i g nmen t .  This A g re e me n t shall be bind i ng upon a nd inu r e to t he b e n e fit of t h e p a r t i e s and their re s p ec t i ve s u cce ssors a n d p e rmit t e d a ss i g ns.  Noth i ng in t his A g re e ment sh a ll c r e a te o r be d e e med to c r e a t e a n y th i rd par t y b e n e fi c i a r y r i g hts i n a n y P e rson not a p a r t y to t his Agr ee ment, e x ce pt as othe r wise c on t e mp l a ted b y S ec t i ons 9.2 a nd 9.3 . No a ss i g nment o f this Ag ree ment o r o f a n y r i g hts or obl i g a t i ons h e r e und e r m a y be m a de b y the Selle r s o r the P u r c h a s e r, di r e c t l y o r indir ec tl y ( b y o p e r a t i on of

law or oth e r w i s e ), w i t h o ut t he prior w r i t ten c ons e nt of the o ther p a rties h e r e to, and a n y a t t e mp t e d a ss i g nment without the r e quired c on s e nts s h a ll be void; p r ovided , how e v e r , that the Pur c h a s e r m a y a ss i g n i t s r i g hts, i nte re sts a nd obl i g a t i ons h e reund e r to a n y A f filiat e ; p r ovided , fu r the r , that no a ss i g nment of a n y obl i g a t i ons h e r e und e r s h a ll r e l i e ve the p a rties h e r e to of a n y such obli g a t i ons.  Upon a n y s u c h p e rmit t e d a ss i g nme n t, t he re fer e n c e s in t his A g r ee ment to t he P u rc h a s e r s h a ll a lso apply to a n y s u c h a ss i g n e e u n less the c onte x t o t h e r w ise re qui r e s.

 

11.8 S p ec ific Pe r f o rm a n c e .   T he p a rties a c knowl e d ge a nd a g re e t h a t a n y b r eac h of th i s Ag ree ment w ould g ive r i se to i r re p a r a ble h a rm f or whi c h monet a r y d a m a g e s would not be a n a d e qu a te r e me d y .  T h e S e l l e rs a nd the Pur c h a s e r a cc o r di n g l y a g r e e that the no n - b re a c hi n g p a r t y shall be e nt i t l e d, in addit i on to a n y oth e r re m e dies a v a i l a ble und e r a pp l ic a b l e L a w or th i s Ag ree ment, to e n fo r c e t h e te r ms of th i s A g re e me n t b y d e c ree of sp e c ific p e r f o r man c e without

 

52

43 0 6 9 8 3 -11

 


the n ece ss i t y of p r ovi n g t he inad e qu a c y of monet ar y d a m a g e s a s a r e me d y a nd to ob t a in in j un c t i ve re l i e f ag a inst a n y b r eac h o r th r e a ten e d b r e ac h o f this A g re e ment, without the r e quir e ment to post bond or oth e r s ec u ri t y .

 

11.9 Counte r p a rt s .  This A g re e ment m a y be e x ec uted i n two or more c ount e rp a r ts, eac h of whi c h sh a ll be d e e med to be a n or i g inal c op y of this A g r ee ment a nd a ll of w hich, w h e n tak e n togeth e r, s h a ll be d ee med to c onsti t ute one a nd the s a me a g r ee ment, a nd photostatic, .pdf or fac si m i l e c opies o f f u ll y -e x ec uted c ounte r p a rts of th i s A g r ee ment sh a ll b e g i v e n the s a me e f f e c t as o r i g inals.

 

** REM A IN D ER O F PA G E INT E NTI O N A LLY L E F T BLA N K **

 

53

43 0 6 9 8 3 -11

 


I N W I T NESS W HERE OF , e a c h of the p a rties h a s ca used th i s A g r ee ment to be du l y e x ec uted on its b e h a lf a s of the d a te f irst w ritten a bov e .

 

P U R C HA S ER:

RC S H O P ERA T I O N S , I N C . B y : /s/ Mi c h ae l P . O Donn e ll

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

 

SEL L ERS:

DESERT I S L A N D RE S TAURA N TS, L . L .C. B y : /s/ W . Rand a ll S c ho c h

N a me: W . Rand a ll S c ho c h, T r ustee of

the Scho c h Revo ca b l e L i ving

T r ust dat e d Nov e mb e r 1 9, 2001

Tit l e : Mana g e r

 

H O N O L U L U S TE A K H O U S E, LL C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y : / s/ W. Ra n da l l S c hoch

 

N a m e:

W. Rand a l l Sch o ch, T r ust e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed No v e m ber 19, 2001

 

Ti t l e: M a na g er

 

MA U I S TE A K H O USE L L C, b y i t s Man a g e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y : / s/ W. Ra n da l l S c hoch

 

N a m e:

W. Rand a l l Sch o ch, T r ust e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed No v e m ber 19, 2001

 

Ti t l e: M a na g er

 

[ Signa t ure P age to Ass e t Purchase Agr e e m e n t ]

43 0 6 9 8 3 -11

 


WA I L E A S T E A K HOU SE LLC , b y i t s Man a g e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y : / s/ W. Ra n dall S c hoch

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

BE A CHWALK S T E A K H OUSE, LL C , b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y : / s/ W. Ra n dall S c hoch

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

L A V A COA ST S T E A K H OU S E , L L C , b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y : / s/ W. Ra n dall S c hoch

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

K AUA I STE A K HOU S E , L L C , b y i t s Man a g e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y : / s/ W. Ra n dall S c hoch

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

P R IN CI P AL :

 

 

 

/s/ W. Ra n da l l S c hoch

W. R A NDA LL S CHOCH , T r us t ee o f t he Sc h och

Re v ocab l e L i v i ng T r u st dated No v e m ber 19, 2001

 

[ Signa t ure P age to Ass e t Purchase Agr e e m e n t ]

43 0 6 9 8 3 -11

 


   EXHIBIT A

 

FORM OF BILL OF SALE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

BILL O F S AL E

 

De s e r t Is l and Re s t au r ants, L.L.C., H on o l ulu S t eak H ou s e, L LC, Maui S t eak H o u se LLC,

Wa i l ea S t eak H ou s e L LC , B e a c h w a l k S t eak H ou s e, LLC ,

Lava Coast S t eak H o u s e , LLC, and

Kau a i St e ak H ouse, L L C

 

Da t ed: ,

 

Pur s u a nt t o t h e t e r m s of t h at ce r t a i n A s s e t P u r ch a se A g r ee m en t , da t ed a s o f N ov e m ber 2 , 2 01 7 (t he P u r c h a s e A g r ee m ent ) , by and a m ong RC SH O pe r a t i ons, I nc . , a C a l i f o r n i a c o r p o r a ti o n (t h e “ Pur c h a s e r ) , D e s e r t I s l and R e s t a u r a n t s, L. L . C ., an A ri z ona li m i t e d l i ab i l i t y c o m pan y , H ono l u l u St e ak H ous e , L LC , a H aw a i i l i m it ed l i ab i l i t y co m pan y , M a ui St e ak H ouse L LC , a H awa i i l i m it ed l i a b i li t y co m pan y , Wa il e a S t eak H ouse L LC , a H awa i i li m it ed l i ab i l i t y co m pan y , B eachwalk St e ak H ous e , L L C , an A ri z ona l i m it ed   li a b i l i t y  co m pan y , La v a C oa s t St e ak   H ous e , L LC , an A ri z ona l i m it ed l i a b i l i t y co m pan y , and K au a i S t e a k H ous e , L LC , an A ri z o n a l i m it ed l i a b i l it y co m pa n y ( each, a S e l l e r a n d co l l e c ti v e l y , t h e S e l l e r s ) , and t he P ri n c i p al p a r t y t h e r e to , a n d f o r g ood and v a l uab l e co n s i d e r a t i o n , t he r ec e i p t and s u f fi c i e n cy of w h i ch a r e h e r eby ac k no w l e d g ed, each S e l l er d o es h e r e by s ell , a s si g n, t r a n s f er , con v ey and de l i v er t o t he Pur c h a s e r , e ff e c t i v e as of t he d a t e he r eo f , a l l o f i t s re sp e c ti v e r i g h t , t i t l e a n d i n t e r e st i n and t o t he P u r c h a s ed A s s e t s ( as de f i n e d i n t he Pu r cha s e A g r ee m en t ) , f r ee and c l e a r of a l l L i en s of any na t u r e w h a t so e v e r . N o t h i ng co n t a i ned i n t h i s B il l o f S a l e s h a l l be co n s t r ued t o li m i t or t e r m i n a t e t he r e p r e s e n t a t i o n s, w a r ra n t i e s , co v ena n t s and a gr ee m en t s s e t f o r t h i n t he Pu r cha s e A g r ee m en t . C ap i t a l i z ed t e r m s us e d i n t h i s Bi l l of S a l e n o t de f i ned he r e i n sh a l l ha v e t h e m ean i n g s g i v en t o t hem i n t he Pur c h a se A g r ee m en t .

 

T h i s B i l l o f S a l e s ha l l b e b i n d i ng upon t he s uc c e s s o r s a n d p e r m itt e d a s s i g ns o f t he S e l l e rs a nd sh a l l i n u r e t o t he be n e f i t o f t he su c c e s s o r s a n d pe r m i tt ed a s s i g ns of t he P u r ch a s e r . I n case of any con fl i ct or i nco n s i s t e n cy be t w e en t h i s B i l l o f S a l e and t he P u r ch a se A g r ee m en t , t he P u r ch a se A g r ee m ent s h a l l p r e v a i l .

 

T h i s Bi l l of S a l e s h a l l be g o v e r n e d by t he l aws of t he St a t e of H awa i i , wi t ho u t r eg a r d t o con f l i ct of l aws r u l e o r p ri n c i p l e t h a t m i g ht r e f e r t he g o v e r nan c e or t he c on s tr u c t i on o f t h i s B il l of S a l e t o t he l a w s of an o t h e r j u r i s d i c t i on, and m ay not be a m ended or m od i f i ed e xce p t by a w ri t t en i ns t r u m ent ex e cu t ed by t he p a r ti e s h e r e t o.

 

The S e l l ers a g r ee t o ex e cu t e and d e li v er t o t he P u r c ha s e r s u ch f u rt h er i n s tr u m en t s of t r an s f e r and a s s i g n m ent as t h e P u r ch a s e r m ay r eason a b l y f r om ti m e t o t i m e r equ e st i n o r d er t o t r an s f er and a s s i g n t o , and v e s t i n, t he Pu r cha s er a l l o f t he ri g h t , t i t l e and i n t e r e s t h e r eby t r an s f e r r ed a n d a s s i g ned or i n t en d ed so t o be.

 

T h i s Bil l of S a l e m ay be execu t ed i n one o r m o r e co un t e r p a r t s, each of w h i ch s ha l l be d ee m ed t o be an o r i g i n a l copy of t h i s B i l l of S a l e and a l l o f w h i ch, w hen t a k en t o g e t h e r , s h a l l be d e e m ed t o con s ti t u t e one and t he s a m e i ns tr u m en t , and p h o t o s t a t i c, .p d f or f a c s i m il e c op i es of f u ll y - execu t e d coun t e r p a r t s o f t h i s B i l l o f Sa l e sh a l l b e g i v en t he s a m e e f f e c t a s o r i g i na l s.

 

[ S i g n a t u re Pa g e Fo l l o ws ]

 

 

 

43 6 1 4 6 7 -1

 

 


I N W I T N E S S W H E R E O F, the u n de r s i g ned h as c au s e d t h i s B i l l o f S a l e t o be du l y exec u t ed as o f t h e d a t e f i r s t w ri t t en abo v e.

 

 

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 1 9 , 2001

 

Ti t l e: M a na g er

 

 

HONOL U LU S T E A K HOUSE, LLC, by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

MA U I S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

WA I L E A S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 


B E A CH WA L K S T E A K H OU S E , L LC , by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

L A V A COA ST S T E A K H OU S E , L LC , by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 1 9 , 2001

 

Ti t l e: M a na g er

 

 

 

K AUA I STE A K HOU S E , L LC , by its M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 


EXHIBIT B

 

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 6 1 5 0 5 -1

 


 

ASSIGNME N T AND A S SUM P T I O N AGREEME N T

 

De s e r t Is l and Re s t au r ants, L.L.C., H on o l ulu S t eak H ou s e, L LC, Maui S t eak H o u se LLC,

Wa i l ea S t eak H ou s e L LC , B e a c h w a l k S t eak H ou s e, LLC , L ava C oast S t eak H o u s e , LLC , and

Kau a i St e ak H ouse, L L C

 

T h i s As s i g n m ent and Assu m p ti on A g r ee m ent (t h i s A g r ee m en t ”) i s d a t ed a s of ,

 

201

, by a n d a m ong RC SH O pe r a ti o ns, I nc., a C a l i f o r n i a c o r po r a t i on ( t he Pur c h a s e r ) , and D e s e r t

 

Is l and R e st a u r a n t s, L. L . C ., an A ri z ona l i m it ed l i a b i l i t y c o mpan y , H ono l u l u St e a k H ous e , L LC , a H awa i i li m it ed li a b i l i t y co m pan y , M a ui S t eak H ouse L LC , a H awaii l i m it ed li a b i l i t y co m pan y , Wa il ea S t eak H ouse L LC , a H aw a i i li m it ed l i a b i l it y co m pan y , B eachw a l k St e ak H ous e , L LC , an A r i z ona li m it ed li a b i l i t y co m pan y , La v a C o a s t S t eak H ous e , L LC , an A r i z ona l i m it ed l i a b i l it y c o mpa n y , and K au a i S t eak H ous e , L LC , an A ri z ona l i m it ed l i ab i l i t y co m pany ( each, a S e l l e r ” a n d c o ll e c t i v e l y , t he Se l l e rs ) .

 

WH ER E A S, pu r su a n t t o t he A s s et P u r ch a se A g r e e m en t , da t ed as of N o v e m ber 2 , 2017 ( t h e “ Pur c h a s e A g r ee m en t ) , b y and a m ong t he Pur c h a s e r , t he S e l l e r s a nd t he P r i nc i p a l p a r t y t h e r e t o , t he Se l l e r s ha v e a g r e e d t o t r an s f er t o t he Pu r cha s e r , and t h e Pur c ha s er h as a g r eed t o a s s u m e fr om t he S e l l e r s , t he A s su m ed L i ab il i t i e s ; a n d

 

WH ER E A S, cap i t a li z ed t e r m s us e d i n t h i s A g r ee m ent b u t n o t d e fi n ed h e r e i n sh a l l ha v e t he m ean i n g s g i v en t o t hem i n t he Pu r cha s e A g r ee m en t .

 

NOW, T HEREFOR E , f o r g ood and v a l u able c on s i d e r at i on, t h e r e c e i p t and suf f ic i e n cy of w h i c h a r e h e r e by ac k now l ed g ed, the p a r t i es h ereby a g r ee as f o ll o w s:

 

1.         A S S I GN ME N T AN D D E LEGAT I O N . The S e l l ers he r eby a s s i g n, tr a n s f e r , co nv ey and de l e g a t e t o t he Pu r cha s er t h e Assu m ed L i a b i l i t i e s ( a s d e fi n ed i n t h e P u r ch a se A g r e e m en t ) of t he S e l l e rs .

 

2.         A S SU M P T I O N O F OBL I GAT I O N S AN D L I A B ILI T IE S .   T h e Pu r cha s er h e r eby a s su m es , e f f e c ti v e as of t h e da t e h e r e o f , t h e A s s u m ed Li a b i l i t i es of t he S e ll e rs . From and a ft er t he d a t e he r e o f , t he Pu r ch a s e r sh a l l pa y , hono r , p e rf o r m and d i s c h a r g e w hen d u e t h e A s s u m ed Li a b i l it i es o f t h e Se l l e r s . T he Pu r cha s er s h a l l n o t , by en t e r i ng i n t o t h i s A g r ee m ent or any o t her T r a n s a c t i on D ocu m en t , a s su m e or be ob l i g a t ed or l i ab l e f o r any Exc l u ded L i a b i l i ti e s .

 

3. M I S CELLANE O U S .

 

3.1       A m end m en t .   T h i s A g r ee m ent can  be a m ended,  s u pp l e m en t ed o r ch a n g ed, and any p r o v i s i on h e r e of can be w a i v ed, o n l y by w ri t t en i n s t r u m ent m a k i ng sp e c i f i c r e f er ence t o t h i s A g r ee m ent s i g ned by t he p a r t i es h e r e t o .

 

3.2 I n t e r p r e t a t i o n .

 

(a) I n case of any con f l i ct b e tw een t h is A g ree m ent and t he Purc h ase A g ree m en t , t h e

Pur c h a se A g r ee m ent s h a l l p r e v a i l .

 

(b) T he de s c r ip t i v e hea d in g s cont a in e d in t h is A g ree m ent a re f or con v enie n ce o f re f er e nce o nly and s ha l l n o t af f ect or b e u t i li z ed in co ns tr u ing or i nt e rp r e t ing th i s A g ree m ent.

 

43 6 1 5 0 5 -1

 


3.3 B i nd i ng E ff e c t . T h i s A g r ee m ent s h a l l b e b i n d i ng u pon a n d i nu r e t o t he b e ne f i t of t h e pa r t i e s a nd t h e i r r e sp e c ti v e su c c e s s o r s a nd p e r m itt e d a s s i g ns.

 

3.4       C oun t e r p a rt s .   Th i s A g r e e m ent m a y be e x ec u t ed i n one o r m o r e cou n t e r pa r t s, each of w h i ch s h a l l be d ee m ed t o be an o ri g i n a l copy of t h i s A g r ee m ent and a l l of w h i ch, w hen t a k en t o g e t h e r , sh a l l be d e e m ed t o con s t i t u t e one a nd t he s a m e a g r ee m en t , and pho t o s t a t i c, .p d f or f a c si m i l e cop i es o f f u l l y - execu t e d cou n t e r p a r t s of t h i s A g r ee m ent sh a l l b e g i v en t he s a m e e f f e c t as o r i g i na l s .

 

[ S i g n a t u re Pa g e Fo l l o ws ]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

43 6 1 5 0 5 -1

 


I N W I T N E S S WH ER E O F, each o f t h e p a r t i es h as c au s ed t h i s A g r ee m ent t o b e du l y exec u t ed on i t s b eh a l f as o f t he d a t e f i r s t w r i t t en abo v e .

 

P URC H A S ER :

 

RCSH OPERA T I ONS, I NC .

 

 

B y :

N a m e: M i c h a e l P. O D on n e l l

Ti t l e: C h i ef E xec u ti v e O f f i cer

 

 

S ELLER S:

 

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. R and a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

HONOL U LU S T E A K HOUSE, LLC, by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

MA U I S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

WA I L E A S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

43 6 1 5 0 5 -1

 


 

BE A CHWALK S T E A K H OUSE, LLC, by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

L A V A COA ST S T E A K H OU S E , L LC , by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. R and a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

K AUA I STE A K HOU S E , L LC , by its M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

43 6 1 5 0 5 -1

 


EXHIBIT C

 

FORM OF DOMAIN NAME ASSIGNMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 6 1 5 1 9 -2

 


D O MAIN NA ME A S S I G N ME N T

T h i s D o m a i n N a m e Ass i g n m ent i s e f f e c t i v e as o f t h e day of , 2 01    . WH ER E A S, D es e r t I s l and R e st a u r a n t s, L. L . C . , a n A ri z ona l i m it ed l i a b i l it y c o m pa n y, w it h an

add r e ss of 623 N . Sc o t t s d a l e R d. # 37 4 , Pho e n i x, A Z 85250 ( A s s i g no r ) , o w ns t h e do m a i n na m e s

h tt p : / / www . r u t hs c h r i sh a w a i i .com and h t t p : / / j p . r u t h s c h ri s h awa i i . c o m , as w e l l as co m m on l aw r i g h t s t o s ai d do m a i n na m e s ( c o l l e c t i v e l y , t he D o m a i n N a m e ) ;

 

WH ER E A S, RC SH O pe r a ti o n s, I nc., a C a l if o r n i a c o r po r a t i o n , w it h an ad d r es s of c / o R u t h s H osp i t a l it y G r oup, I nc . , 1030 W. C a n t on A v e . , S u it e 1 00, W i n t e r P a r k , FL 32789 ( A s s i g ne e ) , de s i r es t o acqu i r e t h e D o m a i n N a m e, t o g e t h er w it h t h e g ood wi l l of t he bu s i n e ss conn e c t ed w it h and s y m bo li z ed by t he Do m a i n N a m e .

 

NOW, T HEREFORE, f o r g ood and v a l u able c on s i d e r at i on, t h e r e c e i p t and suf f ic i e n cy of w h i c h a r e h e r eby ac k now l ed g ed, As si g nor hereby s e l l s, t r a ns f e r s and a s s i g n s, f r ee a n d c l e a r of a l l l iens a n d encu m b r anc e s, t he Do m a i n Na m e and t he r e g i s t r at i on t hereof, t o g e t h e r w i th t he g oodw i ll of the bu s i n e ss conne c t ed wi t h and s y m bo l i z ed by su c h Do m a i n Na m e, and any t r a d e m a r k , s er v ice m a r k , or i ntel l e c t u a l p r op e rt y r i g h t s r e l a ti ng th e r e t o , to t he extent any s uc h t r ade m a r k , s e r v i ce m a r k , or i n t e ll e c t u al p r o per t y ri g h t s e x i s t . Ass i gnor sh a ll coop e r a t e wi t h Ass i g nee and f ol l ow Ass i g nee s r e a s ona b l e i n s tr u ct i ons i n o r d e r t o ef f e c t u a t e t he t r an s f er of t he Do m a i n Na m e r eg i s tr a t io n s i n a t i m e l y m anne r . S p e c i f i c a ll y , w i thin fi v e ( 5 ) da y s o f t he ef f e c t i v e date of t h i s Do m a i n N a m e As si g n m en t , As si g nor a g r e e s t o exe c u t e and tr a n s m i t any nece s s a r y do c u m en t a ti o n and/or e l e c tr o nic i n s tr u ct i ons to t he r e g i st r ar of the Do m a i n Na m e , p r opo s ed by As si g nee i n r ea s ona b l e f o r m and co n ten t , a nd / o r to cor r e spon d , as m ay be r eason a b l y r equ e sted by As si g nee, w i th t he r e g i s tr a r t o a u t h o ri z e the t r an s f e r of t he Do m a i n Na m e t o As si g nee.

 

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he S c hoch Re v oc a b l e L i v i ng T r ust d a t ed No v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

RCSH OPERA T I ONS, I N C.

 

 

 

B y :

N a m e: M i c h a e l P. O D on n e l l

Ti t l e: C h i ef E xec u ti v e O f f i cer

 

43 6 1 5 1 9 -2

 


EXHIBIT D

 

CONSULTING AGREEMENT – W. RANDALL SCHOCH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 2 6 6 9 7 -6

 


CONSULTING AGRE E M ENT

 

T H I S CO N S U L T I NG A GREEME N T ( th i s A g re e men t ) is made a nd e nt e r e d in t o th i s

 

d a y o f

, 201

, b e tw ee n RC S H O p e r a t i ons, I n c ., a C a l i fo r nia

 

c o r por a t i on (the Comp an y ), a nd W . Rand a ll Sc ho c h (“ Consultant ). C a p i t a l iz e d te r ms u s e d but not o t h e r w ise d e fin e d h e r e in shall h a ve the m e a nin g s a s c rib e d to t h e m i n the A sset P u rc h a s e Ag ree ment, d a ted a s of Nov e mber 2 , 2017, a mong the Comp a n y , D e s e rt I sl a nd Restau ra nt s , L . L . C ., a n A r i z ona l i m i ted liabil i t y c ompa n y , Ho n olu l u S te a k Hous e , LL C, a H a w a ii l i m i ted l i a bi l i t y c ompa n y , Ma u i S te a k House L L C, a H a w a ii l i m i ted liabil i t y c o m p a n y , W a i le a S te a k House L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , B e a c hw a lk S t ea k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , L a v a Co a st S te a k Hou s e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , a nd K a u a i S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y ( e ac h, a S e l l e r a nd c ol l ec t i v e l y , t h e S e l l e r s ), a nd Consultant ( As s e t P u rc h a se A g ree m e n t ) .

 

RECITALS

 

WHERE A S, the Selle r s a r e e n g ag e d in the busin e s s of o w ning a nd op e r a ting six e x is t ing

Ruth’s Ch r is S te a k House re stau r a nts op e r a t i ng in H a w a i i ;

 

WHERE A S, pursu a nt to the t e rms of the A sset P u r c h a se A g re e ment, the C ompa n y will pur c h a se f r om the S e ll e rs the Pur c h a s e d As s e ts; a n d

 

WHERE A S, a s a m a te r i a l indu ce ment to c a use the Compa n y to enter into the Ass e t Pu rc h a se A g ree m e nt, Consultant h a s ag ree d to ac t a s a c onsultant to the Compa n y f o r a p e riod of one y e a r.

 

N O W TH E RE F ORE, the p a rties a g r e e a s follows:

 

1. S e rvi ce s .  Consul t a nt wi l l se r ve a s a c onsultant to t he Compa n y . I n s u c h c a p ac i t y , Consultant sh a ll use h is b e st e f fo r ts t o p r e s e r v e a n d e nh a n c e the g ood will of the Compa n y with i t s custome r s, i t s empl o y ee s, and the r e stau ra nt b u siness, a nd with t he publ i c g e n e r a l l y in

H a w a i i , includi n g but not l i m i ted to: ( a ) m a in t a in i ng a vis i ble p r e s e n c e a nd invo l v e ment a t t he R e stau ra nt s , c onsistent w i t h his t o r ic a l pr ac t i c e ; ( b ) in t rodu c ing the Comp a n y to l o ca l o r g a ni z a t i ons or g roups wi t h whi c h Consul t a nt has p r ior re l a t i onships; ( c ) a ss i st i ng the Comp a n y with a n y m a rk e t i n g e f fo r ts i n H a w a i i ;  (d) voici n g support f or the Comp a n y , i t s A f filiat e s a nd the Ruth’s Ch r is br a nd g e n e r a l l y ; ( e ) a ss i st i ng the C o mpa n y in t he r e tention a n d r e c ruitm e n t of k e y man a g e ment a nd ho u r l y e mp l o y e e s; (f) supp o rting e x is t in g , a nd a ss i st i n g the Comp a n y in d e v e lop i ng n e w, v e nd o r r e lationships, including r e lationships with l a ndlor d s; ( g ) up o n r e qu e st of the Comp a n y , a ss i st i n g the Comp a n y with ne g ot i a t i ons of l ea se r e n e w a ls or le a se a mendm e nts r e lating to t he R e stau ra n t s; and ( h) othe r wi s e a ss i st i ng in t he smooth t r a nsi t ion of own e rship of the Rest a u ra nts f r om t he S e l l e rs to the Comp a n y . Consultant will re port on his a c t i vi t ies p e riodi ca l l y to Mich ae l O Donn e l l , Ch a irman & CEO. Upon re qu e st of t h e Compa n y ,

Consultant will make h i mself a v a i l a ble to Mr. O’ Donn e ll a nd the Comp a n y f o r c onsultation on a n y o f the a bo v e obje c t i v e s.

 

2.         T e rm a nd T e rmin a t i o n .  Unl e ss soon e r t e rmin a ted pursu a nt t o the t e rms h e r e o f , th i s A g re e ment shall c o m m e n c e on the d a t e h e re of a nd sh a ll c ont i nue f o r a p e riod of o n e y e a r (the T e rm ). T h e T e rm m a y b e e x tend e d upon mu t u a l writt e n a g re e ment b e tw ee n the p a rties.

 

43 2 6 6 9 7 -6

 


Notwithstanding a n y th i n g e lse c ontain e d h e r e in t o the c ontr a r y , a nd in add i t i on to a n y other ri g hts and r e medi e s a v a i l a ble a t l a w, in e qui t y or h e r e und e r, the Compa n y m a y t e rmin a te this Ag ree ment for C a use ( a s h e r e in a ft e r defin e d) a t a n y t i me.   F o r pu r poses o f this A g r ee ment, C a use m e a ns ( a ) a n in t e nt i on a l a c t of f r a ud, e m b e zz lem e nt, t h e ft or a n y other mat e ri a l vio l a t i on of law that o cc u rs du r ing o r in the c our s e of the T e rm, ( b ) int e nt i on a l d i s c losure of the Compa n y ’s c onfid e nt i a l i n f o r mation contra r y to t he Compa n y s polici e s, ( c ) int e nt i on a l br ea c h of a n y of the Compa n y ’s mat e ri a l po l i c ies, ( d) the wil l ful a nd c ont i nu e d f a i l u r e of Consultant to p e r f o r m h i s duties und e r th i s A g re e ment, a nd ( e ) c onviction of a c rime inv o lv i ng mor a l turpitud e .  Upon a n y te r m i n a t i on b y the Comp a n y other t h a n for C a u s e , the Comp a n y s h a ll c ont i nue to p a y Con s ul t a nt under S ec t i on 3 h e r e of f or the b a la n c e of t h e T e rm.

 

3. Fee s a nd E x p e nses . I n c onsid e r a t i on f o r Consult a nt’s s e rvi ce s r e nd e r e d to the Compa n y , the Comp a n y a g ree s to p a y to C onsultant the sum of $500,000, p a y a ble r a tab l y ov e r the tw e lve - mon t h T e rm, a s full a nd c omp l e te c ompens a t i on f o r the s e rvi ce s h e r e und e r.   T he Compa n y a g ree s to r e i m burse Consultant, upon rece ipt of a p p rop r iate d o c ument a t i on, f o r su c h r e a sona b l e ou t - o f- p o c k e t e x p e nses in c u r r e d b y C o nsultant in pe r fo r m i ng t h e obl i g a t i ons und e r th i s A g r e e ment in an a m ount not to e x cee d $50,000 in t he a ggre g a t e ov e r t he T e rm.

 

4. Obli g a t i ons of Consu l ta n t; I nd e p e nd e nt C ontr ac t o r St a tu s .  Consul t a nt sha l l p e r f o r m t he s e rvi ce s h e reund e r in a c c o r d a n c e with a ll a ppl i ca ble l a ws, rul e s a nd re g ulations a nd b y followi n g a nd a pp l y i n g c om me r c ial l y r e a sona b le p r o fe ss i on a l g uidelines a nd st a nd a rds. I t i s e x p re ss l y und e rstood a nd a g ree d t h a t C onsultant sh a l l , a t all t i m e s, a c t as a n indep e nd e nt c ontr ac tor with r e sp e c t t o the Compa n y a nd not a s a n e mp l o y e e or a g e nt o f t he Compa n y , a nd noth i ng c ontain e d in t his Ag ree ment s h a ll be c ons t ru e d to c r ea te a jo i nt ventu re , p a rt n e rship, a ssoci a t i on or other a f f i l i a t i on, or l i ke re lationship, betw ee n the Consu l tant a nd the Comp a n y . Consultant sh a ll be sol e ly r e spons i ble f or a l l of his wi t hhold i ng ta x e s, soci a l se c u r i t y ta x e s, un e mp l o y ment ta x e s, a n d wo r k e rs’ c ompens a t i on insur a n c e p r e m i um s , subj ec t t o S ec t i on 5 b e low.  Consultant re p re s e nts t h a t he c u r r e nt l y h a s no a g ree m e nt wi t h, or a n y other o bl i g a t i on to, a n y th i rd p a r t y that con f l i c ts with t he te r ms of th i s Ag ree ment.

 

5. T ra de Se c r e ts and Confi d e nt i a l I n fo r matio n .  Consultant ac knowl e d g e s that in t he c ourse of p roviding s e rv i ce s und e r this A g r ee men t , he m a y r e ce ive in f o rm a t i on f r om t he Compa n y that h a s ec on o m i c v a lue th a t i s n o t g e n e r a l l y known or r e a di l y a s ce rt a inab l e thro u g h a ppro p ri a te m ea ns b y p er sons who m i g ht find it use f ul and a s s u c h, Consultant will e x e r c ise r e a sona b l e e f fo r ts t o k e e p su c h info r mation con f i d e nt i a l.   Consultant sh a ll not d i s c lose su c h info r mation ou t si d e the Comp a n y or u s e it a g a in s t t he Compa n y . A n y th i n g to t he c ont r a r y h e r e in notwi t hstandin g , the Comp a n y ac knowl e d g e s a n d a g ree s t h a t C onsultant: (i) d e v e lops, owns or op e r a tes oth e r re sta u r a nts a nd a t h i s dis c r e t i on m a y d e vo t e the m a jori t y of his t i m e t o su c h r e stau ra nts; a nd (ii) is pri v y to i n f o r mation, da t a , p ro c e sses, methods a nd other in t e l l ec tual p r op e r t y g e n e r a l l y kno w n b y s e a soned e x ec ut i v e s in t he re stau ra nt i ndust r y , a nd no su c h info r mation or p r op e r t y s h a ll be d ee med to b e o w n e d or t ra ns f e r r e d to t he Compa n y or a n y S e l l e r und e r a n y wo r k f o r hi r e or oth e r d o c trine.

 

43 2 6 6 9 7 -6

 


6. Notic e s .

 

( a ) All no t ic e s provid e d for or re quir e d b y th i s A g re e ment sh a ll be in w r i t ing a nd sh a ll be d e l i v e r e d p e rson a l l y to t he oth e r p a r t y , or m a i l e d b y c e rtifi e d or r e g is t e r e d mail ( re turn r e c e ipt re qu e ste d ) , or de l i v e r e d b y a r e c o g n i z e d ov e rni g ht co u ri e r s e rvi ce s, as f ol l ows:

 

If to t he Compa n y : RC S H O p e r a t i ons, I n c .

c/o R uth’s Hospital i t y G r oup, I n c.

1030 W . Canton Av e . S ui t e 100

Wint e r Pa r k, FL 32789

Attention: G e n e r a l C ou n s e l

 

If to C onsultant: W . Rand a ll S c ho c h

c/o Desert I s l and Restau r ants, L . L .C.

6263 N. Scottsd a le Rd., #374

S c ottsdal e , AZ 85250

 

(b) Notic e s delive r e d pu r su a nt t o S ec t i on 6 (a ) h e r e of shall be d ee med g iven: a t t he t i me d e l i v e r e d, if p e rson a l l y d e l i v e r e d; t h re e ( 3) busin e ss d a y s a ft e r b e ing d e posited in the mail, i f m a i l e d; and one ( 1) busin e ss d a y a f t e r tim e l y d e l i v e r y to t he c o u ri e r, if b y o v e rn i g ht c ouri e r.

 

( c ) Either p a r t y h e r e to m a y c h a nge the a d d r e ss t o wh i c h not i c e is t o be sent b y w r i t ten not i c e to t he oth e r p a r t y in a c c o r d a n c e wi t h the p r ovis i ons of this S e c t i on 6.

 

7. Mis ce l l a n e ou s .  This A g r ee ment m a y on l y be a m e nd e d, mod i fi e d, or suppl e ment e d b y a n a g r e e ment in w r i t ing s i g n e d b y e ac h p a r t y h e r e to, and a n y o f the te r ms the re of m a y b e w a i v e d, o n l y b y a w ritten do c ume n t s i g n e d b y e ac h p a r t y to t his A g re e ment o r , in the ca se o f wa iv e r, b y the p a r t y o r p a rties w a iv i n g c omp l ian ce .  Consul t a nt ma y not ass i g n th i s Ag ree ment o r a n y of its r i g hts, i nte re st s , or o bl i g a t ions h e r e und e r w i t hout t he prior w r i t ten a ppro va l of the Compa n y . This A g r ee ment sh a ll b e g o v e rn e d b y a nd c onst r u e d in a cc o rd a n c e with t he L a ws of the S t a t e of F lori d a a ppl i ca b l e to cont rac ts m a d e a nd p e r f o r med in su c h S tat e , without re f e r e n c e to c on f l i c t of l a w r ules that w o u ld r e quire the a ppl i ca t i on of the L a ws of a nother jurisd i c t i on. This Ag ree ment m a y b e e x e c uted in two or more c ou n te r p a rts, e ac h of

whi c h sh a ll be d ee m e d to be a n or i g inal c o p y o f this A g r ee ment a nd a ll of whi c h, wh e n ta k e n to g e th e r, sh a ll be d e e med to constitu t e one a nd the same a g r ee ment, a nd p h otos t a t i c , .pdf or f a c si m i l e c opies of ful l y - e x ec uted c ounte r p a rts of th i s A g re e ment sh a ll be given the same e f f e c t a s ori g i n a ls.

[ Signa t ure p age fo l lo w s ]

 

43 2 6 6 9 7 -6

 


IN WITNE S S W H ER E O F , the und e rsi g n e d h a v e e nte r e d in t o th i s A g r e e ment a s witness e d b y t h e ir si g n a t u re s belo w .

 

CO M PA N Y:

 

RC S H O P ERA T I O N S , I N C .

 

 

B y :

 

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

 

CONSULTA N T:

 

 

 

 

W. Rand a ll S c ho c h

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[ Signa t ure P age to C on s ul t ing Agre e m e n t ]

 

43 2 6 6 9 7 -6

 


EXHIBIT E

 

DESERT ISLAND RESTAURANTS MANAGEMENT AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

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DE S ERT I S LA N D R E S TA U R A NTS M A N A G E M ENT A G R EE M ENT

 

 

 

This MA N A G EME N T A GREEME N T ( the A g re e men t ) is made a s of th i s

d a y

 

of , 201

, by a nd b e tw e e n RC S H O p e r a t i ons, I n c ., a C a l i fo r n i a c o r po r a t i on (the

 

O w n e r ”), and De s ert I s l and Restaurants, L . L . C., an Ari z ona l i m i ted liabili t y compa n y (“ D I R ”).

 

BA C K G ROU N D

 

A. The O w n e r a nd D I R, t o g e ther with Honolu l u S te a k Hous e , L L C, a H a w a ii l i m i ted l i a bi l i t y c ompa n y , Ma u i S te a k House L L C, a H a w a ii l i m i ted liabil i t y c o m p a n y , W a i le a S te a k House L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , B e a c hw a lk S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , L a v a Co a st S te a k Hou s e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , a nd K a u a i S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y ( e ac h a S e l l e r a nd c ol l ec t i v e l y , t h e S e l l e r s ) a nd the Prin c i p a l ( a s d e fin e d the r e in) h a v e e nt e r e d in t o that ce rt a in Ass e t P u rc h a se A g r e e m e nt, dat e d a s of No v e mber 2, 2017 ( the P u rc h a se Ag ree men t ).

 

B. All c a pi t a l iz e d te r ms not o t h e r w ise d e fi n e d in t his Agr ee ment h a ve the m ea nings p r ovid e d in t he P u rc h a se Ag ree ment.

 

C. The p a rties d e si r e to a g ree on ce r t a in tr a nsition issues in c o nn ec tion with the c onsummation of the Pu rc h a se A g ree m e nt on the te r ms and c onditions s e t f o r th he re in.

 

TER M S OF A G RE EM ENT

 

N O W , T H ERE F ORE, in conside ra t i on of t h e p rem i s e s and the mutual p r om i s e s he re in mad e , a nd other g ood a n d v a luable c onsid e r a t i on, the re c e ipt a nd suf f ic i e n c y o f w hich a re h e r e b y ac knowl e d g e d, the p a rti e s ag re e a s follows:

 

1. G e n e r a l .

 

a. D I R a g rees and a cknow l edges that, as of the Clo s ing Da t e, D I R intends to provide c e rtain i nformat i on technolo g y s ervi c es, a s l i sted in E x hib i t A (the I T Se r vi c e s ”), certain pu r chasi n g serv i c es, as listed in E x hib i t B (the “ P u rc h a sing Se rvi c es ”), a nd c ertain finance, account i n g and other adm i nis t r a t i ve serv i ce s , as l is ted in E x hib i t C (the “ S uppo r t S e rvi ce s ”) with resp e ct t o the oper a t i on of the B u siness which we r e used p rior to C los i ng on a transi t ional basis to enable the Own e r to continue t o oper a te the B usiness on an unin t errupted

b a sis in a m a nn e r g e n e r a l l y c onsis t e nt wi t h the Se l le r s’ histo r ic a l p r ac t i ce s. The p a rties a g r e e that n e twork c h a n g e s m a y be n ece ss a r y to ensu r e o n- going se c u ri t y to t he S e l le rs’ a nd D I R’s e nvironme n t duri n g the T e rm (a s d e fin e d b e lo w ).

 

b. The p a rties r ec o g ni z e th a t during the T e rm, the O wn e r wil l , a s c ir c ums t a n c e s pe r m i t, r e du c e or p ha s e - out t he S e r vic e s ( a s d e fin e d in S ec t i on 3.b. 2 ) s e t fo r th h e r e in. A c c o r di n g l y , a s p rompt l y a s p r ac t i ca b l e f o l l owing the e x ec ut i on of th i s A g re e ment, the O w n e r a g re e s to use c o m me rc ial l y r e a sona b le e f f o rts to m a ke a tr a nsi t ion o f e ac h Se rvi c e to i ts own inte r n a l o r g a ni z a t i o n or to obtain a l t e rn a te t h ir d - p a r t y sou r ce s to prov i de the Se r vic e s. T h e p a rties w i l l coop e r a te in a n or de r l y r e du c t i on or p h a s e -out of the Se rvi ce s. The O w n e r a g r ee s to

 

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c oordin a te a n y n e twork c h a ng e s with D I R so th a t t he S e l l e rs a nd D I R ca n make a n y c h a n g e s n ece ss a r y to ensu r e o n - going se c u ri t y o f the S e l le rs’ a nd D I R’s n e twork a n d d a ta.

 

c. D I R s h all r e quest ap p ro v al from Own e r prior to h i ring or ut i l i z ing th i rd- par t y su b contr a ctors to provide a l l or part o f a n y S ervice h e r e und er , such consent not to be unr e asonab l y withheld.

 

2. T e rm .

 

a. The term of this A g ree m ent (the T e rm ), and all S ervices to be provided her e und e r, shall com m e n ce on the Closing D ate a nd shall term i nate on the earlier o f:

 

(1) 180 d a y s t h e re a ft e r; or

 

 

 

 

p a rties.

(2) te r m i n a t i on of th i s A g r e e ment b y the mutual w r i t t e n c onse n t of the

 

 

b. O w n e r sh a ll h a v e the r i ght t o te r m i n a te a n y S e rv i c e pro v ided h e r e un d e r a ft e r g iv i n g a t l ea st t hir t y d a y s w ritten noti c e to D I R sp e c i f y i n g the sp ec i fic S e rvi c e to be discontinu e d a nd the e f fe c t i ve d a te.

 

c. Either par t y shall ha v e the ri g ht t o t e rminate this Agreement with r espe c t to a n y Se rvice, in whole or in part, i f the other p a r t y com m i t s a material b reach of this Agreement and f a i l s to c ure such b r each with i n 10 d a y s after receiv i n g wr i t t en not i ce of such breach.

 

d. The T e rm m a y on l y be e x tend e d upon mu t u a l writt e n a g ree m e nt of the p a rties, w hich sh a ll be in eac h p a r t y ’s sole dis c r e t i on.

 

3. Compens a t i o n .

 

a. R e spons i bi l i t y f or Wa g e s a nd F e e s . F o r such t i me as a n y emp l o y ees o f D I R are p roviding Se rvi c es to t he Owner un d er th i s A g r eement, (1) such e mp l o y ees will remain emp l o y e es of D I R and s h all not be deemed to be e mp l o y ees o f the Ow n er f or a n y purpose, and (2) D I R shall be sole l y re spons i ble for the p a y me n t and provis i on of all w a g es, bonu s es, and com m is s ions, emp l o y ee benefits, i nclud i ng s eve r ance and work e r’s com p ensation, and the withho l ding and p a y ment of a ppl i cable T a x es rela t ing to such emp l o y ment.

 

b. T e rms of P a y ment f or Se rvi ce s .

 

(1) As c onsid e r a t i on f o r p r o vis i on of the I T S e r v ic e s, the Pur c h a si n g S e rvi ce s and the Support S e rvi ce s , the O w n e r shall p a y D I R $45,000.00 p e r mon t h (the Month l y S e rvi c e s F e e ) , whi c h sh a ll be due on t he tenth ca len d a r d a y o f eac h ca len d a r month for the I T Se r vic e s, the P u rc h a si n g S e rvi c e s and t he S up p o r t S e rvi ce s r e n d e r e d b y D I R in such mon t h.

 

(2) As c onsid e r a t i on f o r p r o vis i on of a n y a ddi t ional info r mation te c hnolo g y s e rvi c e s not l i sted on E x hib i t A but t h a t ma y b e pro v ided following mu t u a l

 

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a g ree m e nt b y t h e p a rties (the Addit i on a l I T Se r v i ce s , a nd t o g e t h e r w i t h t he I T Se r vi c e s, the P u rc h a sing Se rvi ce s a nd the S uppo r t S e rvi ce s, the S e rvi ce s ), the O wn e r s h a ll p a y D I R a t a r a te of $100.00 p e r ho u r, if D I R p r ovi d e s such Addit i on a l I T Se r vic e s us i n g its in t e rn a l r e so u r c e s, o r the O w n e r s h a ll p a y D I R the a ppl i ca ble hou r l y r a t e (tog e ther with a n y g e n e r a l e x c ise t a x e s) on a p a ss - thro u g h” b a si s , subj ec t t o a n y a ppl i ca ble m i ni m ums, if a th i rd p a r t y p rovid e s the

Addit i on a l I T Se r v i ce s ( i n e i t h e r instan ce , t h e A d di t ional I T Se r vi c e s F e e ).

 

(3) I n a ddi t ion t o the Mon t hly S e rvi c e s F e e a nd a n y A ddi t ional I T S e rvi ce s F ee , in t he e v e n t t h a t D I R incu r s a n y v a l i d ou t - o f- po c k e t e x p e nses in the p r ovis i on of a n y Se rvi ce , includi n g , w i t hout l i m i tation, p a y m e n ts t o th i r d - p a r t y s e rvi c e p rovid e rs, subc o ntr ac tors, a nd pu r c h a sing c o n sul t a nts and c osts a ssoci a ted w i t h maintaining D I R’s e x is t ing s y stems envi r onment, b u t e x c lud i ng p a y m e nts ma de to empl o y e e s of D I R or a n y of its A f filiat e s pursu a nt t o S ec t i on 3.a ( s u c h includ e d e x p e nses, c ol l ec t i v e l y , Out - o f- P o c k e t C ost s ), the O w n e r sh a ll re i m burse the D I R f or a ll such Ou t - o f - P o c k e t Cost s , in a cc o r d a n c e wi t h S ec t i on 3.c. D I R shall obt a in w r i t ten a pp r ov a l f r om Own e r b e f o re i n c u r ri n g Ou t - o f - P o c k e t Costs in e x ce ss of

$10,000, su c h a ppro va l not t o be unr e a sona b l y w i t hh e ld.  To the e x tent a n y l i ce n s e f e e s a r e due during the T e rm, D I R s h a ll c oop e r a t e with Own e r to m in i m i z e the c ost of su c h f e e s a nd n e g ot i a t e a ppro p ri a te c o v e ra g e a nd d u r a t i on of su c h l i ce nse.

 

c. I nvoici n g . A n y ch ar g es f or the Services s h all be incurr e d on a w e ek l y basi s , and unless otherw i se spe c ified in E x hib i t B , D I R s h all provide the O wner, in a c cor d ance with S ec t i on 9. g , with i nvoices ( I nvo i ce s ) issu e d once e v e r y two w eeks, which shall set forth in reasonable d etail, wi t h such supporting d o cum e ntation as the Owner m a y r equest with res p ect to a n y Ou t -of- P oc k et C ost s , amoun t s p a y able un d er this Agree m ent. The O wner shall make p a y m ents t o D I R p u rsu a nt t o th i s A g r e e m ent wi t hin 14 d a y s after the d ate s uch I nvoice is g iven from D I R to t he Own e r.

 

d. T a x e s .  The O w n e r s h a ll be re spons ib le f o r a ll sal e s or use T a x e s i m posed or a ssess e d a s a r e sult of the pro v is i on of S e rvi ce s b y D I R, c u r r e nt l y e qu a l t o 4.712 % .

 

4. Use of the P r e m i s e s .

 

a. Du ring t h e Term, D I R , i t s Affiliates, their r espe c t i ve emp l o y e es, and a n y th i rd-par t y servi c e provi d ers or s u bcont r actors w h o provide the S ervi c es shall have a ccess t o the P urchased Assets, p r em i ses and a n y books and re c ords of the B usi n ess r e a s onab l y n eces s a r y f o r the purpose of t r ansi t ion i ng the B usiness and oth e rwise monitoring the B u s iness sole l y as it r e lates to t he provis i on of the Services und e r this Agreement. S uch emp l o y ees of D I R , the i r Affiliates and emp l o y e es of a n y th i r d -p a r t y s ervi c e providers or su b contr ac tors shall be permit t ed to reasonable u s e of the p r e m i ses and f aci l i t ies, includ i ng telephone a nd I nt e rn e t a c cess, at no addi t ional cost.

 

b. D I R s h a ll not be obli g a t e d to p a y r e nt or a n y ot h e r si m i l a r fe e with r e s p ec t to t h e ir use of the O w n e r ’s fac i l i t ies or a ssets dur i ng the T e rm.

 

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5. Confid e nt i a l i t y .  E ac h p a r t y a g r e e s to m a in t a in, a n d to c a use its r e s p e c t i ve A f filiat e s, r e p r e s e n t a t i v e s and a g e nts t o maintain in strict c onfid e n c e a ll c o n f idential info r mation in a cc o r d a n c e with S ec t i on 7.8 of the Pur c h a s e A g r ee ment.

 

6. L i m i t a t i on of L i a bi l i t y ; Insu ra n ce ; I n d e mn i fi ca t i o n .

 

a. I n no event shall ei t her p ar t y b e l i a ble to the other par t y for lost profi t s or for a n y puni t ive, indirect, spe c ial, incidental or c o nsequent i al dam a g es, e x cept i n the case o f g ross n e g l i gence o r wi l lful misconduct, o t her than as set forth i n S ec t i ons 6.c or 6.d of th i s

Ag ree ment. E x ce pt i n t he ca se of g r oss n e g l i g e n c e or w i l lful miscondu c t on t he p a rt of D I R o r a s s e t fo r th i n S ec t i on 6.d of th i s A g re e ment, D I R’s s ole liabil i t y a nd the O w n e r’s sole r e me d y f o r a n y b r e a c h of D I R ’s obli g a t i on to provide Se rvi c e s pursu a nt t o th i s A g r e e ment sh a ll be f or D I R to pe r fo r m or r e- p e r f o r m such S e rvi ce s a t no cost to the O w n er .

 

b. The O w n e r shall c a r r y , maintain a nd p a y the p re m i um for g e n e r a l l i a bi l i t y insur a n c e c ov e ra g e f o r the R e stau ra nts and t h e S e r vic e s and shall name D IR a s a n a ddi t ional insur e d und e r a ll such l i a bi l i t y insu r a n c e pol i c ies. The O w n e r shall provide to D I R a ce rtif i ca te e viden c i n g such insur a n c e c ov e ra g e if so r e qu e st e d.

 

c. S ubject t o the li m i t at i ons set forth i n S ec t i on 6.a o f this A g r eement, and in addi t ion t o the provis i ons of Sect i on 9.3 o f the P u r chase A gree m ent, t he O wner shall indemn i f y and hold harm l ess D I R, a s one of the S el l er I n d e m nified P arties (“ D I R I nd e mn i fi e d P a r t y ) in r e spe c t of a n y L osses of a n y D I R I ndemn i fied Par t y as a r e sult of, in con n e ct i on with, or arising out of the provis i on of the Services and, to t he e x tent throu g h the Own e r’s ne g l i g e n ce or wil l ful m i sconduct, data breac h e s. The Own e r’s respons i b i l i t y f o r a n y such L osses shall not be subject

to t he l i m i tations of S ec t i on 9.5 (c ) of t h e P u rc h a s e Ag ree ment.

 

d. Notwithstanding the li m i t a t i ons set f o r th i n S ec t i on 6.a of th i s Ag r e e ment, a nd in addit i on to t he pro v is i ons of Se c t i on 9.2 of the Pur c h a se A g r e e ment, D I R s h a ll indemni f y a nd hold ha r m l e ss t he O wn e r in r e s p ec t of a n y Loss e s of the O w n e r a s a r e sult of, in c onn ec t i on with, or a rising out of a n y d a t a bre ac h, but on l y to t he e x tent su c h L oss w a s ca used b y D I R ’s n e g l i g e n c e or wil l ful mis c ondu c t. D I R’s r e spons i bi l i t y f o r a n y such L osses shall not be subj ec t t o the li m i t a t i ons of Se c t i on 9.5( b ) of the Pur c h a se A g r ee ment.

 

7. S t a nd a rd of C a r e. D I R s h a ll use g ood f a i t h e f fo r ts to provide the Se r vic e s u nd e r th i s A g re e ment in a c c o r d a n c e with t he sa m e stan d a rd of c a re follow e d b y D I R in t he o p e r a t i on of the B usiness prior to C l o sin g .

 

8. F o r c e Maj e u r e. I f D I R is un a ble to p e r f o rm a n y of its dut i e s or f ulfill a n y of its c ov e n a nts or obl i g a t i ons und e r this Ag r e e ment a s a re sult of c a uses b e y ond its c ontrol and without its f a ult or n eg l i g e n ce , includi n g but not l i m i ted to ac ts of God or gov e rnm e nt, fir e , flood, te r ro r is m , w a r, g o v e rnm e ntal controls, and labor st r if e , then the obl i g a t i ons of D I R un d e r th i s A g re e ment with r e s p ec t t o a n y S e rvi c e shall b e suspend e d d u ri n g the p e riod that D I R is p re v e nted o r hind e r e d f r o m providing such S e rvi c e , or the O w n e r is pr e v e n ted or hinde re d f r om r e ce iv i n g such Se rvi ce , a nd D I R s h a ll not be d e e med to be in de fa ult of t h is A g r ee ment du r i n g the c ont i nu a n c e o f su c h e v e nts whi c h r e n d e r e d th e m unable to pe r fo r m. D IR shall prompt l y the re a ft e r t a k e such a c t i on a s is rea sona b l y n ece s s a r y to en a ble it to r e sume p e r f o r ma n c e o f its

 

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dut i e s and obl i g a t i ons u n d e r this Ag ree m e nt.

 

9. Mis ce l l a n e ou s .

 

a. This A g r eement shall be bind i ng upon and inure t o the benefit of the parties named h er e in and their resp e ct i ve success o rs and permit t ed ass i g ns. No par t y m a y ass i g n th i s A g reement or a n y o f i t s ri g hts, i nterest s , or o b l i g at i ons he r eunder wi t h o ut t he prior wri t ten approval of the ot h er parties her e to.

 

b. This A g r ee ment c onsti t u t e s the e nt i re a g re e ment b e tw ee n the p a rties w i t h r e spe c t t o the subj e c t m a t t e r c ontain e d h e r e in a n d supe r s e d e s a n y prior un d e rst a ndi n g s, a g ree m e nts, or re p r e s e n t a t i ons b y or b e tw ee n t h e p a rties, w ritten or o r a l, t o the e x tent th e y re l a te in a n y w a y to t he subj ec t matter h e r e o f . I n the e v e nt and to the e x tent that t h e re is a c onfli c t b e tw ee n the p rovisions of this A g r ee ment a nd t h e p r ovis i ons of the P u rc h a s e A g re e ment a s it r e lat e s to t he S e rvi c e s h e r e und e r, t h e pro v is i ons of this A g r ee ment sh a ll c o ntrol.

 

 

 

 

Ag ree ment.

c . S ec t i ons 3 , 5 a nd 6 shall survive inde f in i te l y b e y o nd the Te rm of th i s

 

 

d. No a mendm e nt of a n y p r ovis i on o f this A g re e me n t shall be v a l i d unless the s a me sh a ll be in w r i t i n g , s i g n e d b y eac h o f the p a rties h e r e to and id e nt if ied in su c h w r i t ing a s a n a mendm e nt t o th i s Ag ree ment. A n y w a iver b y a n y p a r t y of a n y bre ac h h e r e und e r, w h e t h e r in t e nt i on a l or not, must b e in w r i t ing b y the w a iv i ng p a r t y a nd sh a ll not be d ee med to e x tend to a n y ot h e r or subseq u e nt b reac h h e r e und e r.

 

e. The se c t i on h e adin g s co n tained in t his A g r eement are inser t ed for convenien c e on l y and s h all not affect i n a n y w a y t he meani n g or inter p r e ta t ion of th i s Agreement.

 

f. A n y t e rm or provis i on of th i s A g reement that is invalid or unenfo r ceab l e in a n y si t uat i on in a n y j u risdiction shall not aff e ct the val i di t y or e n for c eab i l i t y o f the r emaining terms and provis i ons he r eof or the v al i di t y or e n f orceabi l i t y of the o f f e nd i ng term o r provis i on in a n y ot h er jurisd i ct i on.

 

g. A n y not ic e , re q u e st, i n f o r mation or oth e r docum e nt t o be given un d e r this Ag ree ment s h a ll be giv e n in a cc o r d a n c e with t he pro v is i on s e t fo r th i n S ec t i on 11.5 of the P u rc h a se A g ree m e nt.

 

h. This A g r ee ment a nd a n y disputes a rising und e r it shall be g o v e rn e d a nd c onstru e d in a c c o r d a n c e with t he la w s of H a w a i i , without re f e r e n c e to i ts c onfli c ts of law p r inciples. All disput e s a r is i ng und e r this Ag ree m e nt shall be re solved in a cc o r d a n c e with S ec t i on 11.2 of the Pur c h a se A g r ee ment.

 

i.         This A g r ee ment is not i ntend e d to and sh a ll not be c onstru e d a s c re a t i ng a jo i nt ventu re , p a rtn e rshi p , a g e n c y or ot h e r a ss o c ia t ion wi t hin t he me a ning o f the c om m on law or und e r the la w s o f the sta t e in which a n y p a r t y is i n c o r p o ra t e d, o r g a ni z e d, or c ondu c t i ng busin e ss. I t i s the int e nt of the p a rties th a t wi t h r e spe c t t o p r ovid i ng tr a nsi t ional a ss i stan c e h e r e un d e r, D I R is an inde pe nd e nt cont r a c tor. E ac h p a r t y h e r e b y a c knowl e dg e s r e spons i bi l i t y f o r f ull p a y ment of

 

6

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w a g e s and ot h e r c ompe n s a t i on to all empl o y ee s a nd a g e nts e n g a g e d in t he p e r f o r ma n c e o f its s e rvi ce s and o bl i g a t i ons und e r this Ag r e e ment.

 

j. This A g r ee ment sh a ll not c onf e r a n y r i g hts or r e medi e s upon a n y P e rson other than the p a rties h e r e to and th e ir r e spe c t i ve s u cce ssors a nd p e rmit t e d a ss i g ns.

 

k.         This A g r ee ment m a y b e e x ec uted in one or mo r e c ounte r p a rts, eac h o f whi c h sh a ll be d ee m e d a n ori g inal but all of w h i c h to g e th e r w i l l constitu t e one a nd the s a me ins t rum e nt.

 

l. The E x hib i ts i d e nt i fi e d i n th i s A g re e ment a r e in c o r por a ted h e r e in b y r e fer e n c e a nd ma d e a p a r t he re o f .

 

[ Signa t ures app e ar on t h e fo l lo w ing pag e ]

 

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I N W I T NESS W HERE OF , the p a rties h a ve ca us e d th i s A g re e ment to be d u l y e x ec uted a s of the d a te fi r st w ritten a bov e .

 

RC S H O P ERA T I O N S , I N C .

 

 

B y :

 

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

 

 

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the Scho c h Revo ca b l e L i ving T r ust dat e d Nov e mb e r 1 9, 2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[ Signa t ure P age to D e s e rt Island R e stau r ants Manag e m e nt Agr e e m e n t ]

 

8

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EXHI B IT A IT S er vic e s

 

1.

D I R will make r e a so n a b l e e f f o r ts t o pr o vide use a nd b rea k/fix support f or the Rest a u ra nts a nd a ss i stan c e to O wn e r i n tr a nsi t ion e f fo r t s , to t he e x tent a l l ow e d b y law o r c ontr ac tual a g ree m e nt and c onsistent with h i storic a l pr ac t i ce s, including c ont i nui n g to m a in t a in and support n e twork h a r d w a r e a nd a cce ss, f o r:

 

 

 

a .

the cur r ent Aloha har d w a re and soft w are and r e l ated support and mainten a nce, including but not l i m i ted to the poin t -of-sale s y st e m ;

 

 

b. P e opleMatt e r so f tw a re a nd support;

 

c. R estaurant A c count i ng S y s tem;

 

 

d.

support of a ll c u r r ent w e bsi t e s ( f o re i g n a nd dom e st i c ) in c lud i ng hosting a n d mainten a n ce , s o c ial n e t w o r ks, all r e s e r v a t i on s y st e ms and e mail m a rk e t i n g ;

 

 

e. curr e nt ma rk e t i n g s y s t em for banquet contracts a n d bookin g ;

 

f. a n y m edia that has b e en pur c hased o r a uthori z ed; and

 

 

g .

a ll custom or oth e r so f t w a re, includi n g but not l i m i ted to a n y sp r ea dsh e e t s , requir e d to run the Busi n e ss consis t e nt wi t h his t o r ic a l pr ac t ic e s.

 

 

2. D I R will make r e a so n a b l e e f f o rts to provid e :

 

 

a .

data fi l es to t he Ow n er f o r use in p a y roll pro c ess i ng on the O w ne r ’s s y s t ems and ass i stance in c r eat i n g e x port fi l es to l oad HR/ Pa y r oll s y s t em data (his t ori c a l and on- g oi n g ) to support p a y roll process i n g; and

 

 

 

b.

d a ta f i l e s or sp r ea dsh e e t s of f inan c ial r e stau r a nt d a ta, in c lud i ng but not l i m i t e d to d a ta re lati n g to sales, v e n dor in f o r mation, pur c h a sing tr a n s ac t i ons a nd ta x e s ( c u r r e nt and histo r ic a l).

 

 

 

3.

F or a n y inf o rm a t i on te c h nolo g y se r v i ce s provid e d b y a th i rd p a r t y , D I R wi l l use c om m e r c ial l y r e a sona b le e f f o r ts t o c a use su c h th ir d p a r t y to c ont i nue to pr o vide su c h support.

 

 

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EXHI B IT B P u rc h asi n g S er vic e s

 

1.

D I R will wo r k with the O wn e r in g ood f a i t h to continue to e n a ble O w n e r to pur c h a se I n v e nto r y f or t h e R e stau r a nts f r om all suppl i e rs of the Rest a u ra nts prior to t he Clos i ng D a te a t t he sa m e F O B pr i c e a v a i l a ble to the S e l l e r s .

 

 

2. D I R will ins t ru c t all t hird p a r t y suppli e rs to p r ovide su c h I nv e nt o r y a t the S e l l e rs’ s a me

F O B cos t .

 

3. D I R , in collab o r a t i on with the O wn er , will make r ea sona b le e f f o rts to:

 

 

a .

r e view volu m e com m i t ments and e x pirat i ons of c ontracts with cur r e n t nat i onal food and pac k a g i n g sup p l i ers and counsel w h ether to renew such contr a cts;

 

 

 

b.

p r ovide re porti n g support on p r odu c ts d i stribu t e d throu g h dis t ribution c h a n n e ls, including supplier inven t o r ies, p r opri e t a r y pro d u c t s, and smallw a r e s;

 

 

 

c .

ass i st i n tra n sfer of all n a t i onal d i stribu t ed products t o the Owner’s d esi g n a t ed dis t ributors;

 

 

d. p r ovide suppo r t for l i m i ted ti m e of fe rs/hol i d a y p r omo t ions;

 

e. ass i st i n transfer of p rop r ieta r y smallwa r es to the Owner’s d esi g n ated dist r ibu t or;

 

f. p rovide support for pr o c e ss i ng pur c h asing t r a ns a ct i ons;

 

 

g .

p r ovide pu rc h a sing sup p o r t for r e gio n a l l y dis t rib u ted p r odu c ts ( e . g., s ea fo o d, p r odu ce ); a nd

 

 

 

h.

other se r vi c e s co n si s tent with t he spe c ific a l l y l i st e d P u rc h a sing Se rvi ce s in th i s E x hib i t B that a re n ece s s a r y f or the Own e r to con t inue to op e r a te the B usi n e ss following the Closing D a te a nd mu t u a l l y a g re e d to b y the p a rties.

 

 

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EXHI B IT C Su p p o r t S er vic e s

D I R will make r e a son a b l e e f f orts to provide a ss i stan c e in conn ec t i on with t r a nsi t ion i ng a ll fin a n ce , acc ount i n g , hu m a n r e sou r ce s and ot h e r a dm i nis t r a t i ve se r vic e s r e lat i ng to t he B usiness to t he O w n e r, in c lud i ng but not l i m i ted to the f ol l owin g :

 

 

1.

I f n ee d e d, D I R will wo r k with t he O w n e r in g ood f a i t h a t t he O w n e r s cost a nd e x p e nse to c a use the S e l l e r s G ift C a rd p r o ce ss o r to c ont i nue to provide such s e rvi c e s for the O w n e r un d e r the e x is t ing S e l l e rs’ c ontr a c t but bi l led di rec t l y to t he O w n e r, or if the th i rd p a r t y p roc e ssor w i l l not dir ec t l y bi l l t he O w n e r, t h e O w n e r w i l l p a y or r e i m burse D I R f or a ll c osts incu r r e d b y D I R f or t he proc e ss i n g of G i f t C a rds f or the Rest a u r a n ts on a nd a ft e r the Closing D a te.

 

 

 

2.

I f n ee d e d, D I R will wo r k with t he O w n e r in g ood f a i t h a t t he O w n e r s cost a nd e x p e nse to c a use the S e l l e r s c r e d it ca rd m e r c h a nt pro c e s s or to continue to p r ovide such s e rvi ce s for the O w n e r un d e r the S e l l e rs’ e x is t ing c ontr ac t.

 

 

 

3.

D I R will c ont i nu e , a t t he O w n e r s so l e di s c r e t i on a nd to t he e x tent le g a l l y p e rmissib l e , to c ol l ec t and p r ovide t h e e mp l o y e e d a ta n e ce ss a r y f or the O wn e r to p r o c e ss p a y r oll f or the R e stau ra nts.

 

 

 

4.

D I R wi l l, at the O wn e r ’s sole disc re t i on, a ss i st with dai l y a cc ount i n g proc e sses f or the R e stau ra nts, i n c lud i ng d a i l y sal e s r e porti n g , invo ic e pro c e ss i n g , p a y roll a cc ount i ng a nd tr ea su r y a cc ount i n g .

 

 

 

5.

D I R will c ont i nu e , a t t he O w n e r s so l e di s c r e t i on, to provide t r e a su r y s e rvi c e s for the B usiness, in c lud i ng p rov i ding b a nk d e posit a cc ou n ts, bank disburs e ment a c c ounts a nd a rmo re d ca r s e rvi ce s for eac h r e stau r a nt l o ca t i on a s w e ll a s for the B usiness a s a w hole, to t he e x tent n ee d e d.

 

 

 

6.

D I R will c ont i nue to pr o vide m a rket i n g support f or e x is t ing pro g r a ms, i n c lud i ng but not l i m i ted to those with t he J a p a n e se Tou r ism B u r e a u, A N A, H . I . S . H a w a ii a nd v a rious hotels, r e sorts a nd tr a v e l a g e n c ies w h i c h se n d c us t ome r s to t he B usiness.

 

 

 

7.

D I R will c ont i nue to pr o vide suppo r t for local a n d in t e rn a t i on a l adv e rtis i ng pr o g ra ms, w e bsi t e hostin g , tr a ns l a t i on s e rvi ce s, soc i a l m e dia ma r k e t i n g , c on c i e r g e r e f e r ra ls and loc a l pub l ic re lations ma t te r s.

 

 

8. D I R will c o o rdin a te w i t h O w n e r to tr a n s f e r in f o r mation f r om S e l l e rs’ g u e st datab a se to

O w n e r, includi n g e mails a nd c onta c t i n f o rm a t i on f or g u e st s .

 

9. D I R will a ss i st with pro c e ss i ng v e nd o r invoic e s a nd acc ounts p a y a ble m a t t e rs.

 

 

10.

D I R will a ss i st with hu m a n r e sou r ce s s e rvi ce s, in c lud i ng r e c ruitin g , e mp l o y ment v e ri f ic a t i on, hiri n g , tr a in i n g , h e a l t h & s a f e t y c e rti f ic a t i ons, b e n e fits, wo r k e r s

 

 

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c ompens a t i on c laim pro c e ss i n g , p e r f o r m a n c e ma n a g e ment a nd t e rmin a t i on, a ll a s dir ec ted a nd r e q u e sted b y O w n e r.

 

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EXHIBIT F

 

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

DESERT ISLAND RESTAURANTS, L.L.C.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pa g e 1 o f 5

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NON - CO M P ETI T ION A N D N O N - S O L ICITATI O N A G RE E M ENT

 

T H I S N ON - COMPE T I T I O N A ND N O N - S O L I C I T A T I ON A GREEME N T ( th i s

 

A g re e ment ”) is ma d e a n d entered in t o th i s

d a y o f

_, 201

, b e tw ee n

 

RC S H O p e r a t i ons, I n c ., a C a l i fo r nia c o r po r a t i on ( t he Compa n y ), a nd D e s e rt I sland

R e stau ra nts, L . L .C., a n A ri z ona l i m i ted liabil i t y c o mpa n y ( Consultant ). C a pi t a l iz e d te r ms u s e d but not othe r wise d e fin e d h e r e in shall h a v e the m e a nin g s a s c rib e d to them i n the A sset P u rc h a se Ag ree ment, d a ted a s of Nov e mber 2, 2017, a mong the Comp a n y , a s t h e P u rc h a s e r, Consultant a nd the oth e r Selle r s ( a s d e fin e d the r e in) p a r t y t h e r e to, a nd the Prin c ipal (a s de f ined th e r e in) (“ Ass e t P u rc h a se A g r e e men t ).

 

RECITALS

 

WH E REA S , the Comp a n y , a nd i t s p a r e nt comp a n y a nd a f f i l iat e s, a s a r e s ult of the e x p e ndi t u r e of tim e , skil l , e f f o r t and mo n e y , d e v e l op e d a nd owns a uniq u e s y stem (the S y stem ) f or the d e v e l o pment a nd op e r a t i on of f ul l - s e rvi c e r e stau r a nts und e r the n a me a nd m a rk Ruth’s Ch r is S te a k House ( RC S H R e stau r a nt s );

 

WH E REA S , the S y stem includ e s, but is not l i m i te d to, c e rt a in tr a de n a m e s, se r vice ma r ks, tr a d e m a rks, s y m b ols, l o g os, emblems a nd i ndicia of o r i g in, i n c lud i n g , but not l i m i ted to, the m a rk Ruth’s Ch r is S te a k House a nd su c h oth e r t ra de n a mes, s e rvi c e m a rks, t ra d e m a rks, s y mbo l s, lo g os, e mb l e ms and indi c ia of or i g in as t he Compa n y m a y d e v e l o p in t he f uture to identi f y f o r the publ i c the sour c e of s e rvi ce s a nd p r odu c ts m a rk e ted un d e r s u c h ma r ks ( M a rks ) a nd und e r the S y stem a n d r e p re s e nt i ng the S y st e m’s hi g h st a nd a rds of q u a l i t y , a p p ea r a n c e a nd s e rvi ce ; sp e c ial re c ipes a nd menu items; unifo r m s t a nd a rds, sp ec i fi ca t i ons a nd p r o ce d u r e s f o r op e r a t i ons; qu a l i t y a nd u nifo r m i t y of p r od u c ts a n d se r vic e s o f f e r e d; pro ce du r e s for invent o r y a nd man a g e ment a nd fin a n c i a l cont r ol; tr a in i ng a nd a s si s tan ce ; and a d v e rtis i ng a nd p r omo t ional p r ogr a ms; a ll of w hich m a y b e c h a n g e d, i m p r ov e d a nd f u rth e r d e v e loped b y the Comp a n y f rom t i me to t i me a nd a re used b y the Comp a n y in con n ec t i on with t he op e r a t i on of the S y stem, but e x c lud i ng such info r mat i on a nd knowl e d g e posse s s e d or o btain e d b y Cons u l t a nt i nd e p e nd e nt l y throu g h its own indust r y knowl e dge a nd e x p e ri e n c e without the a id or involv e ment of the Compa n y or the S y stem ( P rop r iet a r y I n fo r matio n );

 

WH E REA S , the M a rks a nd P rop r iet a r y I n f o r mat i on p r ovide ec onom i c a d v a nt a g e s to t he Compa n y a nd ma n y a r e not g e n e r a l l y known to, a nd a re not r ea di l y a s c e rt a inable b y p rop e r me a ns b y , the Comp a n y s comp e t i tors who c ould ob t a in e c onom i c v a lue f r om knowl e dge a nd use o f the Ma r ks a nd P r o p r iet a r y I n fo r mation;

 

WH E REA S , the Comp a n y h a s t a k e n a nd in t e nds to t a ke a ll rea so n a ble st e ps to maintain the c onfid e nt i a l i t y a nd s e c r e c y o f the P rop r ie t a r y In f o r mation;

 

WH E REA S , the Comp a n y h a s p r e vious l y g r a nt e d the S e l l e rs ce r t a in f ra n c hise r i g hts, including use o f t h e S y s t e m and the P rop r iet a r y I n fo r mation, r e lati n g to t he own e rship, op e r a t i on a nd d e v e lop m e nt of the R e stau ra nts pursu a nt t o t he F r a n c hise A g r e e ments;

 

WH E REA S , the Comp a n y a nd Consultant h a v e a g r ee d on the import a n c e t o the Compa n y a nd oth e r lic e n s e d us e rs of the S y stem o f re stricti n g use, a c c e ss a nd diss e m i n a t i on of the Prop r iet a r y I n fo r mat i on a nd the Selle r s and C onsultant h a ve a g r ee d in the A sset P u rc h a se

 

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Ag ree ment that the Co m p a n y s obligation t o p u rch a se the Pur c h a s e d Ass e t s is subj ec t t o the c ondi t ion t h a t C onsultant e nte r s in t o th i s A g r ee m e nt; a nd

 

WH E REA S , in ord e r to indu c e the Comp a n y to c onsummate the pu rc h a s e s und e r the Ass e t P u rc h a se A g r e e m e nt on t he Clos i ng D a te, C onsultant is wil l ing to ex e c ute, d e l i v e r, p e r f o r m a nd b e bound b y th i s A g re e men t .

 

NOW, TH E RE F OR E , in conside ra t i on of the m u tual c ov e n a nts and obl i g a t i ons c ontain e d h e r e in, t he p a rties a g r e e a s follows:

 

1. Con f i d e n ti a l i ty A g re e me nt .

 

( a ) The Compa n y h a s dis c l o s e d to C onsultant a nd i t s A f filiat e s so m e or a ll of t he P rop r iet a r y I n fo r mation r e lating to t he S y stem a nd not g e n e r a l l y known b y the public or c ompeti t o r s. All non - publ i c , pro p ri e ta r y o r c onfi d e nt i a l i n f o r mation, i n c lud i n g , without l i m i tation, t he S y stem, d r a win g s, s p ec ifi c a t i ons, t ec h niques a nd c omp i lati o ns of d a ta, w hich the Compa n y or its A f filiat e s provid e d to C onsultant, wh e ther prior to o r f ol l owing the d a te of th i s Ag ree ment, will be d ee m e d c onfid e nt i a l P rop r ie t a r y I n fo r mation for the p u r poses of th i s Ag ree ment.

 

(b) Consultant ac knowle d g e s that C onsultant a nd i t s A f filiat e s pr e vious l y r ec e ived the Prop r iet a r y I n fo r mat i on in con f iden c e a nd wil l , a t all t i m e s, maint a in t h e m, or ca u s e them to be maintain e d, in con f id e n c e a nd will not use th i s info r mation for a n y r e a s o n wh a tsoev e r e x ce pt a s m a y b e othe r wise p e r m i t t e d in t he Consult i ng Ag ree ment d a ted a s of t h e d a te h e r e of b e tw e e n the Comp a n y a nd Consu l tant.

 

( c ) Consultant will not, and will ca use i t s A f filiat e s, not t o, a t a n y t i me dis c l o s e , c o p y do c uments or c omp i lations c ontaining some or a ll of the P rop r iet a r y I n f o r mation, or p e rmit t he disclosure of the P rop r ie t a r y I n f o rm a t i on unless requir e d b y l a w a nd Cons u l t a nt a c knowl e d g e s that su c h info r mation sh a ll re main c onfid e nt i a l. C onsultant sh a ll not use or a dopt a n y secr e t r e c ipes, f o rmul a s, or oth e r Prop r iet a r y I n fo r matio n , use or dupl i ca te the S y s tem or a n y portion the re of or a ss i st o t h e rs to do so.

 

(d) On the Clos i ng D a te, C o nsultant will sur re nd e r, and will ca use its A f filiat e s, to sur re nd e r, a n y mat e ri a l c ontaining some or a ll of the P rop r iet a r y I n f o r mati o n to C ompa n y , including c opies o f r e c ipes a nd other ins t ru c t i ons or mat e ri a ls, unless othe r wise r e quir e d und e r the F r a n c hise A g ree men t s to s u r r e nd e r s u c h mat e r ials on a n ea rli e r d a te.

 

( e ) F or a p e riod of f i v e ( 5) y ea rs f ol l owi n g the Closing D a te, Consu l tant will not, and will ca use its A f filiat e s n ot t o, a t a n y t i me, di r e c t l y or ind ir ec t l y e n g a ge in a n y ac t or omiss i on of ac t which c a uses Consu l tant or a n y A f filiat e s to e n g a ge in a n y a c t which w i l l de fa me or dispa r a g e the R CS H R e stau ra nts or the g oo d will a ssoci a ted w i t h the Prop r i e ta r y I n f o rm a t i on a nd the S y stem.

 

2. Non - C o m p e ti t ion a n d No n - S ol i c ita t io n .

 

( a ) I n c onsid e r a t i on of t h e P u rc h a se P ri c e p a id b y the Compa n y on the Closing D a te to t he S e l l e rs pu r suant to the Ass e t P u rc h a se A g re e ment a nd in ord e r to p r o te c t t he g oodwill a nd

 

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unique qu a l i t i e s of the S y stem, the c onfid e nt i a l i t y a nd v a lue of the Pro p ri e t a r y I n f o rm a t i on, a nd the g oodwill a ssoc i a ted with B usiness, Consultant a g r ee s a nd c ov e n a nts t h a t, during the p e riod c om m e n c i n g on the Closing D a t e a nd e ndi n g on t he f ive ( 5) y ea r a nnive r s ar y th e r e of with i n the S tate of Ha w a ii a nd t h e two ( 2) y e a r a nni v e rs a r y t h e r e of outs i de o f the S tate of H a w a ii ( the R e strict e d P e riod ):

 

(i) Consultant will not, wi l l ca use i t s A f filiat e s not t o , ( A) a ss i st o t h e rs in a n y busin e ss or s e rvi c e subs t a nt i a l l y si m i l a r to the RC S H R e stau ra nts e x is t ing a s of the d a te o f this Ag ree ment, o r ( B ) div e rt, or a t t e mpt to d i v e rt, dir e c t l y or ind ir ec t l y , a n y b u siness, bus i n e ss oppo r tun i t y , or c usto me r of the R CS H R e stau ra nts t o a n y c ompeti t or e n g a g e d in a business si m i l a r to the RC S H R e s t a u ra nts e x is t ing a s of the d a te of th i s A g re e ment, including a fine

din i ng re sta u r a nt t h a t of f e rs st ea k a s th e prim a r y menu item;

 

(ii) Consultant will not, and will ca use i t s A f filiat e s n ot t o, ( A ) a ss i st o t h e rs in a n y busi n e ss or s e rvi c e s ubst a nt i a l l y si m i l a r to the RC S H R e stau ra nts e x is t i ng a s o f the d a te o f th i s A g re e ment to, ( B ) k nowin g l y e mp l o y , or s ee k to empl o y , a n y p e rson who is a s of Closing D a te, or w a s at a n y t i me with i n the tw e lve ( 12) m onths i m medi a te l y pre c e ding the Closing D a te, e mp l o y e d b y ( x ) the Compa n y or a n y of its A f filiat e s, ( y ) b y a n y S e l le r, Consultant or a n y o f their r e sp e c t i ve A f filiat e s , or (z) a n y other f r a n c hisee or d e v e loper o f the C o mpa n y , o r oth e r w ise dir ec t l y o r indir ec t l y in d u c e such p e rson to le a ve that p e rson s empl o y me n t;

 

(iii) Consultant will not, d i r e c t l y or indir e c t l y , f o r i t s e lf or throu g h, on b e h a lf o f , or in c onjunction wi t h a n y P e rson, w i t hout t he prior w r i t ten c onse n t of t he Compa n y , o wn, maintain, op e r a te, e n g a ge in or h a ve a n y f ina n c ial or b e n e f i c ial in t e r e st of f ive p e rc e nt (5 % ) o r more of a n y publ i c l y - t r a d e d c ompa n y in (in c lud i ng a n y in te r e st i n c o r p o rat i ons, p a rtn e rships, trust s , uninco r por a ted a s s o c iations or joint v e ntur e s), or a dvise, a ss i st or m a ke loans to, a n y r e stau ra nt business that i s of a c h a r a c t e r a nd c on c e pt s i m i lar to t he RC S H R e stau ra nts e x is t ing a s of the d a te of th i s A g r e e ment, including a n y f i n e din i ng re sta ur a nt t h a t of f e rs st ea k a s t h e

p r i m a r y menu item; and

 

(iv) with i n the S t a te of H a w a i i, C onsultant will not, a n d will ca use its

A f filiat e s not to, sol i c i t , i ndu ce , influ e n c e or a t t e mpt to i n f luen c e a n y suppl i e r, l e ssor, li ce ns o r, or a n y ot h e r Pe r son who h a s a b u s i n e ss r e lationship wi t h the Compa n y , a n y A f filiate of Compa n y ,

or h a d a busin e ss r e lationship wi t h a n y S e l l e r, to d iscontinue or re du c e the e x tent or sco p e of such r e lationship wi t h the Compa n y .

 

(b) Consultant a g re e s that t h e f o r e g oi n g c ov e n a nts a r e rea so n a ble with r e s p ec t to t h e ir dur a t i on, g e o g r a ph i c a r e a a nd s c op e , to prot e c t, a mong other th i n g s, the C ompa n y ’s ac quis i t i on

of the g o odwill a ssoci a t e d with t he B usiness. I f a jud i c ial or a rbitr a l de t e r m i n a t i on is made that a n y p rovision of this S ec t i on 2 c onsti t utes a n un re a sona b le or othe r wise un e n f o rc e a ble r e striction a g a inst Consultant or a n y of its A f filiat e s, then the pro v is i ons of this S ec t i on 2 shall be re nd e r e d void on l y to t he e x tent su c h jud i c ial or a rbit r a l de t e rmin a t i on finds su c h p r ovis i ons to be un e n f o r c ea ble. I n that r e g a rd, a n y jud i c ial or a rbi t r a l autho r i t y c onstrui n g t his S ec t i on 2 shall be e mpow e r e d to s e v e r a n y p r ohib i ted busin e ss a c t i vi t y , t i me p e riod or g e o g raphic a l a r e a f rom the c ov e rage of a n y such a g r ee ments a nd to app l y the r e maining p r o vis i ons of this S ec t i on 2 to t he r e maining busi n e ss a c t i v i t i e s, t i me p e riods a nd/or g e o g ra phi c a l a r ea s not so sev e r e d.  M o r e ov e r, in t he e v e nt t h a t a n y pro v is i on, or the a ppl i ca t i on the re o f , o f this S ec t i on 2 is dete r m i n e d not t o

 

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be spe c ifi c a l l y e n f o r cea bl e , the Comp a n y s h a ll n e v e rth e less be e nt i t l e d to r ec ov e r mo n e ta r y d a m a g e s as a re sult of t h e br e a c h of su c h a g r ee m e nt.

 

3. M isc e l l a n e o u s

 

( a ) Consultant a g re e s that, in the e v e nt of a b re ac h of t his A g r ee ment, the Co m p a n y would be ir re p a r a b l y in j u r e d a nd be without a n a d e qu a te r e me d y a t l a w. T h e r e f o r e , in t he e v e nt of such a b r eac h, or a t te mp t e d br e ac h o f a n y of t he pro v is i ons h e r e o f, the Compa n y will be e nt i t l e d to en f o rc e the p r ovis i ons of this A g re e m e nt and w i l l be e nt i t l e d, in addit i on to a n y other r e medi e s whi c h a re m a de a v a i l a ble to it a t l a w or i n e qui t y , to an injunction pro h ib i t i ng such b reac h.

 

(b) The non - p re v a i l ing p a r t y a g ree s to p a y a ll r e a son a ble e x p e nses ( including c ourt c osts a nd r e a so n a ble a t t o rn e y s’ f ee s) in c u r re d b y t he pr e v a i l i n g p a r t y ( a s d e te r m i n e d b y t h e c ourt) in en f o r c i n g th i s A g r ee ment.

 

( c )       A n y f a i l u r e b y the Com p a n y to ob je c t t o or t a ke a c t i on with r e spe c t t o a n y b reac h of a n y pro v is i on of th i s Ag ree ment b y Consulta n t wi l l not op e r a te or be c onstru e d a s a w a iver o f or c onse n t t o that b r e ac h or a n y s ubse q u e nt b r e a c h b y Consultant.

 

(d)       Consultant ac knowl e d g e s the re c e ipt a nd a d e q u a c y of the c onsid e r a t i on p a y a b l e und e r the Ass e t P u rc h a se Ag ree ment, a portion of whi c h is g ood a nd v a lua b le c onsid e r a t i on in e x c h a nge f or Consultant making the c ov e n a nts c o ntain e d in t his A g r ee me n t and a g re e ing to b e leg a l l y bound b y the c o v e n a nts contain e d in t his Ag ree ment ( a nd a ll other te r ms he re o f ) .

 

( e ) Consultant ac knowl e d g e s (i) i t s r e spons i bi l i t y to c a use the S e l l e rs a nd its o t h e r A f filiat e s to comp l y with t he l i m i tations in t h is Agr ee ment a nd (ii) th a t a n y ac t i on tak e n b y a n y of the Selle r s or its other A f filiat e s that would, if t a k e n b y Consultant dir e c t l y , c onsti t ute a b reac h o f this A g re e ment shall consti t ute a br e a c h for whi c h Consul t a nt i s l i a ble h e r e und e r.

 

(f) This A g r eement shall be g ov e rn e d b y a nd constr u ed in acc o rd a n c e with t he L a ws of the S t ate of H a waii a p pl i cable to contr a cts m ade and pe r formed in such S tate, without r e fer e n c e to confl i ct of l a w rules that would requi r e the appl i cat i on of the Laws of ano t h e r jurisd i ct i on.  The parties her e to h e r e b y ir r evo c ably submit to t he e x clus i ve jurisd i ct i on of a n y f e de r al or state court located wi t hin t he S tate of Hawaii over a n y dispute a r is i ng out of or r elating to t his A g reement or a n y of the trans a ct i ons cont e mp l ated her e b y and e a ch par t y h e r e b y irrevo c ab l y a g rees that a l l clai m s in respe c t of su c h dispute or a n y suit, act i on proceedi n g r e lated thereto shall be h e ard a n d determ i ned in such co u rts.  The parties h e r e b y i r r e vocab l y w aive, to

the f ul l e st e x tent p e rmi t t e d b y a ppl i ca ble L a w, a n y obj e c t i on whi c h th e y m a y n o w or h e r e a ft e r h a ve to t he l a y i n g of v e n ue of a n y such dispute b r ou g ht i n su c h c o u rt or a n y d e f e nse o f inconv e nient f o r um f o r the mainten a n c e of su c h d ispu t e .  E ac h of the p a rti e s he re to a g r ee s that a jud g ment in a n y such di s pute m a y b e e n f o rc e d in o t h e r ju r isd i c t i ons b y suit on t he jud g ment or in a n y ot h e r m a nn e r p r ovi d e d b y l a w.

 

(g) This A g r ee ment c on t a ins t he e nt i re a g ree ment o f the p a rties re g a rdi n g the s ubje c t matter h e r e o f . This A g re e ment m a y be mod i f i e d o n l y b y a du l y a uthori z e d w r i t ing e x ec uted b y a ll p a rties.

 

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(h) All no t ic e s provid e d for or re quir e d b y th i s A g re e ment sh a ll be in w r i t ing a nd shall be d e l i v e r e d p e rso n a l l y to t he other p a r t y , or mailed b y ce rtifi e d o r r e gis t e r e d mail ( re turn r e ce ipt r e qu e s t e d ), or d e l i v e r e d b y a re c o g ni z e d ov e rni g ht c ouri e r s e rvi c e s, a s follows:

 

If to t he Compa n y : RC S H O p e r a t i ons, I n c .

c/o R uth’s Hospital i t y G r oup, I n c.

1030 W . Canton Av e . S ui t e 100

Wint e r Pa r k, FL 32789

Attention: G e n e r a l C ou n s e l

 

If to Consultan t : D e s e rt Island R e stau ra nt s , L . L.C.

6263 N. Scottsd a le Rd, #374

S c ottsdal e , AZ 85250

 

Notic e s delive r e d pu r su a nt t o th i s S ec t i on 3 ( h) h e r e of shall be d e e med g iv e n: at the ti m e d e l i v e r e d, if p e rson a l l y d e l i v e r e d; t h r e e ( 3) busin e ss d a y s a ft e r b e i n g d e po s i t e d in t he mail, i f mailed; a nd one ( 1) busi n e ss d a y a ft e r tim e l y d e l i v e r y to t he c our i e r, if b y o v e rni g ht c ouri e r. Either p a r t y h e r e to m a y c h a nge the a d d r e ss t o wh i c h not i c e is t o be sent b y w r i t ten notice to t he other p a r t y in a cc o r d a n c e w i th t he pro v is i ons of this S ec t i on 3 ( h) .

 

(i) The r i g hts and re m e dies of the Comp a n y un d e r t h is A g r ee ment a re f ul l y a ss i g n a b l e a nd tr a n s f e r a b le to a n y o f the Compa n y ’s A f f i l iat e s and will inure to t he b e n e fit of such a ss i g n ee . T h e re s p e c t i ve obl i g a t i ons of Con s ul t a nt he re und e r m a y not be a ss i g n e d b y Consultant without the p r ior w ritten c onse n t of the Compa n y ,

 

(j) Consultant h e r e b y r e p r e s e nts t o the Compa n y that Consultant h a s r ea d a nd und e rst a nds, a nd a g re e s to be bound b y , t h e te r ms of th i s A g r ee ment.  Con s ul t a nt a c knowl e d g e s that the g e o g r a phic s c ope a nd du ra t i on of the c ov e n a nts contain e d in t his A g r ee ment a re the r e sult of a rm s - le n g th ba r g a in i n g a nd a re f a ir a nd r ea sona b le in l i g ht of ( i) t he i m port a n c e o f the g oodwill ac qui r e d b y the Compa n y via the As s e t P u rc h a se A g re e ment, ( i i ) t he n a ture a nd wide g e o g ra phic s c ope of the op e r a t i ons of the RC S H R e stau ra nts, and ( i i i) the f a c t t h a t t he RC S H R e stau ra nts a r e c ondu c t e d throu g hout, and d e riv e d f r om, t he e nt i re g e o g raphic a rea wh e re c ompeti t ion i s r e strict e d b y th i s A g re e ment. I t i s the d e sire a nd in t e nt of the pa rties th a t t he p r ovis i ons of this A g re e ment be e n f o r ce d to t he f ul l e st e x tent p e rmit t e d u n d e r a ppl i ca b l e la w , wh e ther now o r h e r ea f t e r in e f fe c t and th e r e fo r e , to t he e x tent p e rmit t e d b y a ppl i ca ble l a w, t h e p a rties h e r e to w a ive a n y p r ovis i on of a ppl i ca ble l a w th a t would r e nd e r a n y p r ovis i on of th i s Ag ree ment invalid or u n e n f o r c ea ble.

 

(k) This A g r ee ment m a y b e e x ec uted in two or more c ounte r p a rts, eac h o f w h i c h shall be d ee med to be a n o r i g inal c o p y o f this Ag r ee m e nt and a ll of w hich, wh e n tak e n t o g e t h e r, shall be d ee med to c onst i tu t e one a nd the s a me a g r ee ment, a nd photostatic, . pdf o r f a c si m i l e c opies of f ul l y -e x ec uted c ounte r p a rts of th i s Ag r e e ment sh a ll be g iven the s a me e f f ec t as o r i g inals.

 

[ Signa t ures on fo l lo w ing page ]

 

 

 

 

Pa g e 5 o f 5

 

43 6 3 2 4 3 -3

 


I N W I T NESS W HERE OF , the und e rsi g n e d h a ve e nte re d in t o th i s A g re e ment a s witness e d b y t h e ir si g n a t u re s belo w .

 

CO M PA N Y:

 

RC S H O P ERA T I O N S , I N C .

 

 

B y :

 

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

 

 

CONSULTA N T:

 

DESERT I S L A N D RE S TAURA N TS, L . L .C.

 

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the Scho c h Revo ca b l e L i ving T r ust dat e d Nov e mb e r 1 9, 2001

 

Tit l e : Mana g e r

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[ Signa t ure P age to N o n - Comp e t i t i on and No n - So l icita t ion Agre e m e n t ]

 

43 6 3 2 4 3 -3

 


EXHIBIT G

 

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

W. RANDALL SCHOCH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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NON - CO M P ETI T ION A N D N O N - S O L ICITATI O N A G RE E M ENT

 

T H I S N ON - COMPE T I T I O N A ND N O N - S O L I C I T A T I ON A GREEME N T ( th i s

 

A g re e ment ”) is ma d e a n d entered in t o th i s

d a y o f

_, 201

, b e tw ee n

 

RC S H O p e r a t i ons, I n c ., a C a l i fo r nia c o r po r a t i on ( t he Compa n y ), a nd W . Rand a ll S c ho c h (“ Consultant ). C a pi t a l iz e d te r ms u s e d but not othe r wise d e fin e d h e r e in sh a ll h a ve the m ea ni n g s a s c rib e d to t h e m i n the A sset P u rc h a se A g ree m e nt, dat e d a s of No v e mber 2 , 2017, a mong the Compa n y , a s the Pu r c h a s e r, the Selle r s ( a s de f i n e d the re in) p a r t y t h e r e t o , a n d Consul t a nt (“ Ass e t P u rc h a se A g ree m e n t ).

 

RECITALS

 

WH E REA S , the Comp a n y , a nd i t s p a r e nt comp a n y a nd a f f i l iat e s, a s a r e s ult of the e x p e ndi t u r e of tim e , s ki l l , e f f o r t and mo n e y , d e v e l op e d a nd owns a uniq u e s y stem (the S y stem ) f or the d e v e l o pment a nd op e r a t i on of f ul l - s e rvi c e r e stau r a nts und e r the n a me a nd ma r k Ru t h s C h r is S te a k House ( RC S H R e stau r a nt s );

 

WH E REA S , the S y stem includ e s, but is not l i m i te d to, c e rt a in tr a de n a m e s, se r vice ma r ks, tr a d e m a rks, s y m b ols, l o g os, emblems a nd i ndicia of o r i g in, i n c lud i n g , but not l i m i ted to, the m a rk Ruth’s Ch r is S te a k House a nd su c h oth e r t ra de n a mes, s e rvi c e m a rks, t ra d e m a rks, s y mbo l s, lo g os, e mb l e ms and indi c ia o f o r i g in as t he Compa n y m a y d e v e l o p in t he f uture to identi f y f o r the publ i c the sour c e of s e rvi ce s a nd p r odu c ts m a rk e ted un d e r s u c h ma r ks ( M a rks ) a nd und e r the S y stem a n d r e p re s e nt i ng the S y st e m’s hi g h st a nd a rds of q u a l i t y , a p p ea r a n c e a nd s e rvi ce ; sp e c i a l r e c ipes a nd menu items; unifo r m s t a nd a rds, sp ec i fi ca t i ons a nd p r o ce d u r e s f o r op e r a t i ons; qu a l i t y a nd u nifo r m i t y of p r od u c ts a n d se r vic e s o f f e r e d; pro ce dur e s for invent o r y a nd man a g e ment a nd fin a n c i a l cont r ol; tr a in i ng a nd a s si s tan ce ; and a d v e rtis i ng a nd p r omo t ional p r ogr a ms; a ll of w hich m a y b e c h a n g e d, i m p r ov e d a nd f u rth e r d e v e loped b y the Comp a n y f rom t i me to t i me a nd a re used b y the Comp a n y in con n ec t i on with t he op e r a t i on of the S y stem, but e x c lud i ng such info r mat i on a nd knowl e d g e posse s s e d or o btai n e d b y Cons u l t a nt i nd e p e nd e nt l y throu g h his own indust r y knowl e dge a nd e x p e ri e n c e without the a id or in v olvem e nt of the Compa n y or the S y stem ( P rop r iet a r y I n f o r matio n );

 

WH E REA S , the M a rks a nd P rop r iet a r y I n f o r mat i on p r ovide ec onom i c a d v a nt a g e s to t he Com p a n y a nd ma n y a r e not g e n e r a l l y known to, a nd a re not r ea di l y a s c e rt a inable b y p rop e r me a ns b y , the Comp a n y s comp e t i tors who c ould ob t a in e c onom i c v a lue f r om knowledge a nd use o f the Ma r ks a nd P r o p r iet a r y I n fo r mation;

 

WH E REA S , the Comp a n y h a s t a k e n a nd in t e nds to t a ke a ll rea so n a ble st e ps to maintain the c onfid e nt i a l i t y a nd s e c r e c y o f the P rop r ie t a r y In f o r mation;

 

WH E REA S , the Comp a n y h a s p r e vious l y g r a nt e d the Selle r s c e r t a in f ra n c hise r i g hts, including use o f t h e S y s t e m and the P rop r iet a r y I n fo r mation, r e l a t i n g to t he own e rship, op e r a t i on a nd d e v e lop m e nt of the R e stau ra nts pursu a nt t o t he F r a n c hise A g r e e ments;

 

WH E REA S , the Comp a n y a nd Consultant h a v e a g r ee d on the import a n c e t o the Compa n y a nd oth e r lic e n s e d us e rs of the S y stem o f re stricti n g use, a c c e ss a n d dis s e m i n a t i on of the Prop r iet a r y I n fo r mat i on a nd the Selle r s and C onsultant h a ve a g r ee d in the A sset P u rc h a se

 

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Ag ree ment that the Co m p a n y s obligation t o pu r c h a se the Pur c h a s e d Ass e t s is subj ec t t o the c ondi t ion t h a t C onsultant e nte r s in t o th i s A g r ee m e nt; a nd

 

WH E REA S , in ord e r to indu c e the Comp a n y to c onsummate the pu rc h a s e s und e r the Ass e t P u rc h a se A g r e e m e nt on t he Clos i ng D a te, C onsultant is wil l ing to ex ec ute, d e l i v e r, p e r f o r m a nd b e bound b y th i s A g re e men t .

 

NOW, TH E RE F OR E , in conside ra t i on of the m u tual c ov e n a nts and obl i g a t i ons c ontain e d h e r e in, t he p a rties a g r e e a s follows:

 

1. Con f i d e n ti a l i ty A g re e me nt .

 

( a ) The Compa n y h a s dis c l o s e d to C onsultant a nd his A f filiat e s so m e or a ll of the P rop r iet a r y I n fo r mation r e lating to t he S y stem a nd not g e n e r a l l y known b y the public or c ompeti t o r s. All non - publ i c , pro p ri e ta r y o r c onfi d e nt i a l i n f o r mation, i n c lud i n g , without l i m i tation, t he S y stem, d r a win g s, s p ec ifi c a t i ons, t ec hniques a nd c omp i lati o ns of d a ta, w hich the Compa n y or its A f filiat e s provid e d to C onsultant, w h e ther prior to o r f ol l owing the d a te of th i s Ag ree ment, will be d ee m e d c onfid e nt i a l P rop r ie t a r y I n fo r mation for the p u r poses of th i s Ag ree ment.

 

(b) Consultant ac knowl e d g e s that C onsultant a nd his A f filiat e s pr e vious l y r ec e ived the Prop r iet a r y I n fo r mat i on in c o n f iden c e a nd wil l , a t all t i m e s, maint a in t h e m, or ca u s e them to be maintain e d, in con f id e n c e a nd will not use th i s info r mation for a n y r e a s o n wh a tsoev e r e x ce pt a s m a y b e othe r wise p e r m i t t e d in t he Consult i ng Ag ree ment d a ted a s of t h e d a te h e r e of b e tw e e n the Compa n y a nd Consu l tant.

 

( c ) Consultant will not, and will ca use h is Af f i l iat e s, not t o, a t a n y t i me dis c l o s e , c o p y do c uments or c omp i lations c ontaining some or a ll of the P rop r iet a r y I n f o r mation, or p e rmit t he disclosure of the P rop r ie t a r y I n f o rm a t i on unless requir e d b y l a w a nd Cons u l t a nt a c knowl e d g e s that su c h info r mation sh a ll re main c onfid e nt i a l. C onsultant sh a ll not use or a dopt a n y secr e t r e c ipes, f o rmul a s, or oth e r Prop r iet a r y I n fo r matio n , use or dupl i ca te the S y s tem or a n y portion the re of or a ss i st o t h e rs to do so.

 

(d) On the Clo s ing D a te, C o nsultant will sur re nd e r, and will ca use h is Af f i l ia t e s, to sur re nd e r, a n y mat e ri a l c ontaining some or a ll of the P rop r iet a r y I n f o r mati o n to C ompa n y , including c opies o f r e c ipes a nd other ins t ru c t i ons or mat e ri a ls, unless othe r wise r e quir e d und e r the F r a n c hise A g ree men t s to s u r r e nd e r s u c h mat e r ials on a n ea rli e r d a te.

 

( e )       F or a p e riod of f i v e ( 5) y ea rs f ol l owi n g the Closing D a te, Consu l tant will not, and will ca use h is Af f i l iat e s n ot t o, a t a n y t i me, di r e c t l y or ind ir ec t l y e n g a ge in a n y ac t or omiss i on of ac t which c a uses Consu l tant or a n y A f filiat e s to e n g a ge in a n y a c t which w i l l de fa me or

dispa r a g e the R CS H R e stau ra nts or the g oo d will a ssoci a ted w i t h the Prop r i e ta r y I n f o rm a t i on a nd the S y stem.

 

2. Non - C o m p e ti t ion a n d No n - S ol i c ita t io n .

 

( a ) I n c onsid e r a t i on of t h e P u rc h a se P ri c e p a id b y the Compa n y on the Closing D a te to t he S e l l e rs pu r suant to the Ass e t P u rc h a se A g re e men t , $250,000 of whi c h is b e ing a l l o c a ted to

 

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Consultant’s obli g a t i ons und e r this Ag r e e ment ( t h e Alloc a t i o n ) , a nd in o r d e r to p r ote c t t he g oodwill a nd unique q u a l i t i e s of the S y stem, the c onfid e nt i a l i t y a nd v a lue of the Prop r iet a r y I n fo r mation, and the g o o dwill a ssoci a ted w i t h B u siness, C onsultant a g re e s a nd c ov e n a nts t h a t, during the p e riod c om me n c ing on the Closi n g D a t e a nd e ndi n g on the f i v e ( 5) y e a r a nnive r s a r y the re of with i n the S t a te o f Ha w a ii a nd the two ( 2) y ea r a nni v e rs a r y the re o f outs i de of the S tate of H a w a ii ( the R e strict e d P e rio d ):

 

(i) Consultant will not, wi l l ca use h is A f filiat e s not to, ( A ) a ss i st o t h e rs in a n y busin e ss or s e rvi c e subs t a nt i a l l y si m i l a r to the RC S H R e stau ra nts e x is t ing a s of the d a te o f this Ag ree ment, o r ( B ) div e rt, or a t t e mpt to d i v e rt, dir e c t l y or indi r ec t l y , a n y b u siness, bus i n e ss oppo r tun i t y , or c usto me r of the R CS H R e stau ra nts t o a n y c ompeti t or e n g a g e d in a bu s iness si m i l a r to the RC S H R e s t a u ra nts e x is t ing a s of the d a te of th i s A g re e ment, including a fine

din i ng re sta u r a nt t h a t of f e rs st ea k a s t h e prim a r y menu item;

 

(ii) Consultant will not, and will ca use h is Af f i l iat e s n ot t o, ( A ) a ss i st o t h e rs in a n y busi n e ss or s e rvi c e s ubst a nt i a l l y si m i l a r to the RC S H R e stau ra nts e x is t i ng a s o f the d a te o f th i s A g re e ment to, ( B ) k nowin g l y e mp l o y , or s ee k to empl o y , a n y p e rson who is a s of Closing D a te, or w a s at a n y t i me with i n the tw e lve ( 12) m onths i m medi a te l y pre c e ding the C l osing D a te, e mp l o y e d b y ( x ) the Compa n y or a n y of its A f filiat e s, ( y ) b y a n y S e l le r, Consultant or a n y o f

their r e sp e c t i ve A f filiat e s , or ( z ) a n y other f r a n c hisee or d e v e loper o f the C o mpa n y , o r oth e r w ise dir ec t l y o r indir ec t l y in d u c e such p e rson to le a ve that p e rson s empl o y me n t;

 

(iii) Consultant will not, d i r e c t l y or indir e c t l y , f o r himself or th r o u g h, on b e h a lf o f , or in c onjunction wi t h a n y Pe rson, w i t hout t he prior w r i t ten c onse n t of t he Compa n y , o wn, maintain, op e r a te, e n g a ge in or h a ve a n y f ina n c ial or b e n e f i c ial in t e r e st of f ive p e rc e nt (5 % ) o r more of a n y publ i c l y - t r a d e d c ompa n y in (in c lud i ng a n y in te r e st i n c o r p o rat i ons, p a rtn e rships, trusts, uninco r por a ted a s s o c iations or joint v e ntur e s), or a dvise, a ss i st or m a ke loans to, a n y r e stau ra nt business that i s of a c h a r a c t e r a nd c on c e pt s i m i lar to t he RC S H R e stau ra nts e x is t ing a s of the d a te of th i s A g r e e ment, including a n y f i n e din i ng re sta u r a nt t h a t of f e rs st ea k a s t h e

p r i m a r y menu item; and

 

(iv) with i n the S t a te of H a w a i i, C onsultant will not, a n d will ca use h is

A f filiat e s not to, sol i c i t , i ndu ce , influ e n c e or a t t e mpt to i n f luen c e a n y suppl i e r, l e ssor, li ce ns o r, or a n y ot h e r Pe r son who h a s a b u siness r e lationship wi t h the Compa n y , a n y A f filiate of Compa n y ,

or h a d a busin e ss r e lationship wi t h a n y S e l l e r, to d is c ont i nue or re du c e the e x tent or sco p e of such r e lationship wi t h the Compa n y .

 

(b) Consultant a g re e s that t h e f o r e g oi n g c ov e n a nts a r e rea so n a ble w i t h r e s p ec t to t h e ir dur a t i on, g e o g r a ph i c a r e a a nd s c op e , to prot e c t, a mong other th i n g s, the C ompa n y ’s ac quis i t i on

of the g o odwill a ssoci a t e d with t he B usiness. I f a jud i c ial or a rbitr a l de t e r m i n a t i on is made that a n y p rovision of this S ec t i on 2 c onsti t utes a n un re a sona b le or othe r wise un e n f o rc e a ble r e striction a g a inst Consultant or a n y of his A f filiat e s, then the pr o vis i ons of this S ec t i on 2 shall be re nd e r e d void on l y to t he e x tent su c h jud i c ial or a rbit r a l de t e rmin a t i on finds su c h p r ovis i ons to be un e n f o r c ea ble. I n that r e g a rd, a n y jud i c ial or a rbi t r a l autho r i t y c onstrui n g t his S ec t i on 2 shall be e mpow e r e d to s e v e r a n y p r ohib i ted busin e ss a c t i vi t y , t i me p e riod or g e o g raphic a l a r e a f rom the c ov e rage of a n y such a g r ee ments a nd to app l y the r e maining p rovisions of this S ec t i on 2 to t he r e maining busi n e ss a c t i v i t i e s, t i me p e riods a nd/or g e o g ra phi c a l a r ea s not so sev e r e d .  M o r e ov e r,

 

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in t he e v e nt t h a t a n y pro v is i on, or the a ppl i ca t i on the re o f , o f this S ec t i on 2 is dete r m i n e d not t o be spe c ifi c a l l y e n f o r cea b le, the Compa n y s h a ll n e v e rth e less be e nt i t l e d to r ec ov e r mo n e ta r y d a m a g e s as a re sult of t h e br e a c h of su c h a g r ee m e n t .

 

3. M isc e l l a n e o u s

 

( a ) Consultant a g re e s that, in the e v e nt of a b re ac h of t his A g r ee ment, the Co m p a n y would be ir re p a r a b l y in j u r e d a nd be without a n a d e qu a te r e me d y a t l a w. T h e r e f o r e , in t he e v e nt of such a b r eac h, or a t te mp t e d br e ac h o f a n y of t he pro v is i ons h e r e o f, the Compa n y will be e nt i t l e d to en f o rc e the p r ovis i ons of this A g re e m e nt and w i l l be e nt i t l e d, in addit i on to a n y other r e medi e s which a re m a de a v a i l a ble to it a t l a w or i n e qui t y , to an injunction pro h ib i t i ng such b reac h.

 

(b) The non - p re v a i l ing p a r t y a g r e e s to p a y a ll r e a son a ble e x p e nses ( including c ourt c osts a nd r e a so n a ble a t t o rn e y s’ f ee s) in c u r re d b y t he pr e v a i l i n g p a r t y ( a s d e te r m i n e d b y t h e c ourt) in en f o r c i n g th i s A g r ee ment.

 

( c )       A n y f a i l u r e b y the Com p a n y to ob je c t t o or t a ke a c t i on with r e spe c t t o a n y b reac h of a n y pro v is i on of th i s Ag ree ment b y Consulta n t wi l l not op e r a te or be c onstru e d a s a w a iver o f or c onse n t t o that b r e ac h or a n y subsequ e nt b r e a c h b y Consultant.

 

(d) Consultant ac knowl e d g e s the re c e ipt a nd a d e q u a c y of the c onsid e r a t i on p a y a b l e und e r the Ass e t P u rc h a se Ag ree ment, a nd that the Alloc a t i on is g ood a nd v a luable c onsid e r a t i on in e x c h a n g e for Consult a nt m a king the c o v e n a nts c ontain e d in t his Agr ee m e nt and a g r ee i n g to be leg a l l y bound b y the c o v e n a nts contain e d in t his Ag ree ment ( a nd a ll other te r ms he re o f ) .

 

( e ) Consultant ac knowl e d g e s (i) h is r e spons i bi l i t y to c a use the S e l le rs a nd his other A f filiat e s to comp l y with t he l i m i tations in t h is Agr ee ment a nd (ii) th a t a n y ac t i on tak e n b y a n y of the Selle r s or his oth e r A f filiat e s that would, if t a k e n b y Consultant dir e c t l y , c onsti t ute a b reac h o f this A g re e ment shall consti t ute a br e a c h for whi c h Consul t a nt i s l i a ble h e r e und e r.

 

(f) This A g r eement shall be g ov e rn e d b y a nd constr u ed in acc o rd a n c e with t he L a ws of the S t ate of H a waii a p pl i cable to contr a cts m ade and pe r formed in such S tate, without r e fer e n c e to confl i ct of l a w rules that would requi r e the appl i cat i on of the Laws of anoth e r jurisd i ct i on.  The parties her e to h e r e b y ir r evo c ably submit to t he e x clus i ve jurisd i ct i on of a n y f e de r al or state court l o c a ted wi t hin t he S tate of Hawaii over a n y dispute a r is i ng out of or r elating to t his A g reement or a n y of the trans a ct i ons cont e mp l ated her e b y and e a ch par t y h e r e b y irrevo c ab l y a g rees that a l l clai m s in respe c t of su c h dispute or a n y suit, act i on proceedi n g r e lated thereto shall be h e ard a n d determ i ned in such co u rts.  The parties h e r e b y i r r e vocab l y w aive, to

the f ul l e st e x tent p e rmit te d b y a ppl i ca ble L a w, a n y obj e c t i on whi c h th e y m a y n o w or h e r e a ft e r h a ve to t he l a y i n g of v e n ue of a n y such dispute b r ou g ht i n su c h c o u rt or a n y d e f e nse o f inconv e nient f o r um f o r the mainten a n c e of su c h d ispu t e .  E ac h of the p a rti e s he re to a g r ee s that a jud g ment in a n y such di s pute m a y b e e n f o rc e d in o t h e r ju r isd i c t i ons b y suit on t he jud g ment or in a n y ot h e r m a nn e r p r ovi d e d b y l a w.

 

(g) This A g r ee ment c on t a ins t he e nt i re a g ree ment o f the p a rties re g a rdi n g the s ubje c t matter h e r e o f . This A g re e ment m a y be mod i fi e d o n l y b y a du l y a uthori z e d w r i t ing e x ec uted b y a ll p a rties.

 

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(h) All no t ic e s provid e d for or re quir e d b y th i s A g re e ment sh a ll be in w r i t ing a nd shall be d e l i v e r e d p e rso n a l l y to t he other p a r t y , or mailed b y ce rtifi e d o r r e gis t e r e d mail ( re turn r e ce ipt r e qu e ste d ), or d e l i v e r e d b y a re c o g ni z e d ov e rni g ht c ouri e r s e rvi c e s, a s follows:

 

If to t he Compa n y : RC S H O p e r a t i ons, I n c .

c/o Ruth’s Hospital i t y G r oup, I n c.

1030 W . Canton Av e . S ui t e 100

Wint e r Pa r k, FL 32789

Attention: G e n e r a l C ou n s e l

 

If to Consultan t : W . Rand a ll S c ho c h

c/o Desert I s l and Restau r ants, L . L .C.

6263 N. Scottsd a le Rd, #374

S c ottsdal e , AZ 85250

 

Not i ce s delive r e d pu r su a nt t o th i s S ec t i on 3 ( h) h e r e of shall be d e e med g iv e n: at the ti m e d e l i v e r e d, if p e rson a l l y d e l i v e r e d; t h r e e ( 3) busin e ss d a y s a ft e r b e i n g d e po s i t e d in t he mail, i f mailed; a nd one ( 1) busi n e ss d a y a ft e r tim e l y d e l i v e r y to t he c our i e r , if b y o v e rni g ht c ouri e r. Either p a r t y h e r e to m a y c h a nge the a d d r e ss t o wh i c h not i c e is t o be sent b y w r i t ten notice to t he other p a r t y in a cc o r d a n c e with t he pro v is i ons of this S ec t i on 3 ( h) .

 

(i) The r i g hts and re m e dies of the Comp a n y un d e r t h is A g r ee ment a r e f ul l y a ss i g n a b l e a nd tr a n s f e r a b le to a n y o f the Compa n y ’s A f f i l iat e s and will inure to t he b e n e fit of such a ss i g n ee . T h e re s p e c t i ve obl i g a t i ons of Con s ul t a nt he re und e r m a y not be a ss i g n e d b y Consultant without the p r ior w ritten c onse n t of the Compa n y ,

 

(j) C onsultant h e r e b y r e p r e s e nts t o the Compa n y that Consultant h a s r ea d a nd und e rst a nds, a nd a g re e s to be bound b y , t h e te r ms of th i s A g r ee ment.  Con s ul t a nt a c knowl e d g e s that the g e o g r a phic s c ope a nd du ra t i on of the c ov e n a nts contain e d in t his A g r ee ment a re the r e sult of a rm s - le n g th ba r g a in i n g a nd a re f a ir a nd r ea sona b le in l i g ht of ( i) t he i m port a n c e o f the g oodwill ac qui r e d b y the Compa n y via the As s e t P u rc h a se A g re e ment, ( i i ) t he n a ture a nd wide g e o g ra phic s c ope of the op e r a t i ons of the RC S H R e stau ra nts, and (iii) the f a c t t h a t t he RC S H R e stau ra nts a r e c ondu c t e d throu g hout, and d e riv e d f r om, t he e nt i re g e o g raphic a rea wh e re c ompeti t ion i s r e strict e d b y th i s A g re e ment. I t i s the d e sire a nd in t e nt of the pa rties th a t t he p r ovis i ons of this A g re e ment be e n f o r c ed to t he f ul l e st e x tent p e rmit t e d u n d e r a ppl i ca b l e la w , wh e ther now o r h e r ea f t e r in e f fe c t and th e r e fo r e , to t he e x tent p e rmit t e d b y a ppl i ca ble l a w, t h e p a rties h e r e to w a ive a n y p r ovis i on of a ppl i ca ble l a w th a t would r e nd e r a n y p r ovis i on of th i s Ag ree ment invalid or u n e n f o r c ea ble.

 

(k) This A g r ee ment m a y b e e x ec uted in two or more c ounte r p a rts, eac h o f w h i c h shall be d ee med to be a n o r i g inal c o p y o f this Ag r ee ment a nd a ll of w hich, wh e n tak e n t o g e t h e r, shall be d ee med to c onst i tu t e one a nd the s a me a g r ee ment, a n d photostatic, . pdf o r f a c si m i l e c opies of f ul l y -e x ec uted c ounte r p a rts of th i s Ag r e e ment sh a ll be g iven the s a me e f f ec t as o r i g inals.

 

[ Signa t ures on fo l lo w ing page ]

 

 

 

Pa g e 5 o f 5

 

43 2 6 8 9 9 -5

 


I N W I T NESS W HERE OF , the und e rsi g n e d h a ve e nte re d in t o th i s A g re e ment a s witness e d b y t h e ir si g n a t u re s belo w .

 

CO M PA N Y:

 

RC S H O P ERA T I O N S , I N C .

 

 

B y :

 

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

 

CONSULTA N T :

 

 

 

 

W. Rand a ll S c ho c h

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[ Signa t ure P age to N o n - Comp e t i t i on and No n - So l icita t ion Agre e m e n t ]

 

43 2 6 8 9 9 -5

 


EXHIBIT H

 

GIFT CARD ESCROW AND REIMBURSEMENT AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 2 0 4 7 8 -4

 


G I F T C A RD E S C R O W A N D R EI M BU R S E M ENT A G RE E M ENT

 

This G I F T C A RD E S C ROW A N D R EI M BU RS E M ENT A G RE E M ENT (this

 

A g re e ment ”), d ated

, 201

, is b y a nd a mong RC S H Op e r a t i ons, I n c ., a

 

C a l i fo r nia c o r po r a t i on ( t he P u rc h a s e r ), D e s e rt Isl a nd Restau ra nts, L . L .C . , a n A r i z ona l i m i ted l i a bi l i t y c ompa n y , Hono l ulu S te a k Hous e , L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , M a ui S te a k House L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , W a i l e a S te a k Hou s e LLC, a H a w a ii l i m i ted l i a bi l i t y c ompa n y , Be a c h w a lk S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , L a va Co a st S te a k Hous e , L L C, a n A r i z ona l i m i ted liabi l i t y c ompa n y , a nd K a u a i S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y ( e ac h, a S e l l e r a nd c ol le c t i v e l y , the S e l l e rs ), a nd Title Gu a r a n t y Es c row S e rv i c e s, I n c ., a H a w a ii c o rpo ra t ion ( Tit l e Gu a r a n t y Es c r o w ), a s e s c row a g e nt (the Es c row A g e n t ) ( e ac h a P a r t y a nd, c ol l ec t i v e l y , the P a rties ”) . Capit a l iz e d te r ms used but not d e fin e d h e re in shall h a ve the m ea ni n gs g iven to them in t h a t c e rt a in Asset P u rc h a s e Ag ree ment ( Ass e t P u rc h a se A g r ee men t ), d a ted Nov e mber 2, 2017, b y a n d a mong the P u rc h a s e r, the S e l l e rs a n d the Prin c ipal (a s d e fin e d the re in). The Pa rties a c knowl e dge that the Es c r o w A g e nt i s not a p a r t y to, has not r ece i v e d a nd will not be re spons i ble f or the A s s e t P u rc h a se A g ree m e nt.

 

W I T N E S S E T H

 

WH E REA S , pursu a nt t o the A sset P u rc h a se A g re e ment, the Selle r s ha v e a g r ee d to s e ll to t he P u rc h a s e r, a nd the P u rc h a s e r h a s a g r ee d to p u rc h a se f r om t he S e l l e rs, the Pur c h a s e d Ass e ts, upon the t e rms a nd subj ec t t o the c ondi t ions s e t fo r th t h e r e in;

 

WH E REA S , pursu a nt t o the t e rms of S ec t i on 9.8 of the A sset P u rc h a s e A g ree ment, the P u rc h a s e r a nd the Selle r s d e sire to establish an e s c row ac c ount for the b e n e fit of the P u rc h a s e r to s ec u r e ce r t a in ob l i g a t i ons of the S e l l e rs to indemni f y the Pu r c h a s e r f or t h e v a lue of Gift Ca r d r e d e mp t ions, House A c c ounts, Co m ps a n d P rom o t i on a l Discounts b y the P u rc h a s e r f or a n 1 8 - mon t h p e riod a ft e r the C l osi n g D a t e , a s set f o rth in S ec t i on 7.17 of the A ss e t P u rc h a se Ag ree ment.

 

NOW, TH E RE F OR E , f or a nd in conside r a t i on of the mutual a g re e ments a nd c ov e n a nts c ontain e d h e r e in and in t he Ass e t P u rc h a s e A g r e e ment, the p a rties h e r e to h e r e b y a g r e e a s follows:

 

1. Ap p oi n t m e n t of Es cr ow Ag e n t.

 

The P u rc h a s e r a nd the S e l l e rs h e r e b y a ppoint Title G u a r a n t y Es c row a s t h e Es c row A g e nt for the pu r poses s e t fo r th h e r e in and the Es c row A g e nt h e r e b y ac c e pts s u c h a ppoin t ment.

 

2. C er tain D e f i n itio n s.

 

Comp s ” means a n y c ar d s, vouchers, c r e di t s or o t her a r r a n g e m ents i ssued on a comp l i m enta r y b asis b y S el l ers to vendors and c u sto m er a nd r e d eemable f or food or be v erages at Ruth’s Chris S teak House restau r ants i n Ha w ai i .

 

43 2 0 4 7 8 -4

 


Gift Ca r ds m e a ns a n y p r e - p a id b a lan c e c a rds a n d a n y ot h e r ar ra n g e men t s whi c h a re sold b y the Selle r s to cu s to m e rs or to a re t a i l e r f or re s a le to c usto me rs a nd r e d ee mab l e f or the pur c h a se o f f ood or b e v e ra g e s at a Ruth’s Ch r is S t ea k House r e stau r a nt.

 

Gift Ca r d Outst a ndi n g B a la n c e ” s h all mean the t otal sum of the l i abi l i t ies for

outs t a nding Gift Ca r ds, p r e s e nted to a nd r e d e e med b y the Pu r c h a s e r f or a p e riod of e i g hte e n (1 8 )

mon t hs following the Closing D a t e .

 

House A cc ount s ” m e a n s a n y ar r a n g ements b y m eans of vouc h ers, c r e di t s or trade or barter accounts which a r e e x tended b y S el le rs to th i rd p a rties and custo mer s and red e emable f o r the purcha s e of food o r b everages at Ru t h’s C hris S teak House res t aurants i n Hawaii and that do not g e n er a te a c o rrespo n ding a ccounts r e ceivab l e in favor of Purc h aser. F o r the sake of clari t y , house accounts with an e x i s t i ng cr e dit at t ributable to services provided to S el l ers on trade a r e consider e d a House A cc o unt under th i s defin i t i on.  Howev e r, a r r a n g ements where vo u chers are presented in e x cha n ge f o r meals and upon r edem p t i on the voucher spons o r ( e . g ., the J apanese Tourism B ur e au) is invo i ced for t h e re d eemed vo u chers a re not consid e r e d a House A ccount.

 

P romotion a l Discount s ” means a n y incent i ves i s s ued b y S el le rs to custo m ers in connect i on with m ark e t i n g and p romotional s t r a t e g ies r esul t ing in discoun t s or cr e di t s that m a y be appl i ed to t he pur c h a s e of food or b eve ra g es at R uth’s Chris S teak House restau r ants i n Hawai i .

 

3. D e p osit I n to Es cr ow A cc o un t.

 

( a ) Con c u r r e nt l y with t he e x ec ut i on a nd d e l i v e r y o f t his A g r ee ment, in a cc o r d a n c e with S ec t i on 7.17 a nd S ec t i on 9.8 of the A sset P u rc h a s e Ag ree ment, the Sell e rs s h a ll d e posit wi t h the Es c row A g e nt and the E s c row A g e nt wi l l a c know l e dge upon r e ce ipt a n a mount e qu a l t o

 

$[ ] ( the Es c ro we d F unds B a lan c e ) t o be h e ld i n A cc ount No. [

] ( t h e

 

Es c row A cc oun t ”) a nd disbursed b y t h e Escrow Agent i n acc o rd a n c e wi t h the terms and condi t ions s et forth i n th i s A g r eement. As u s ed in t his A g reement, the term Es c ro w e d F und s ” shall be deemed to inclu d e a n y in t er e st or ot h er in c ome ear n ed the r eon.

 

(b) Notwi t hstanding a n y th i n g h e r e in t o the c ont r a r y , during the t e rm of th i s A g r ee ment, the Pur c h a s e r s h a ll be e n t i t led to rece ive 10 0 % of t he v a lue of a n y Gift Ca r d s r e d ee m e d up to t he Gift Ca r d Outst a nding B a lan c e f r om t he Es c row A cc ount.

 

( c )   The P u rc h a s e r a nd S e l l e rs a g ree that P u rc h a s e r w i l l honor House A cc oun t s, C omps a nd P romotion a l Discounts which a re r e d e e med f o l l owing the Closing D a t e .  To the e x tent the to t a l sum of Comps a nd P romotion a l Discounts r e d ee med du r i n g the six ( 6) mon t hs following the Closing D a te e x cee ds Th re e P e r ce nt ( 3 % ) of g r oss sal e s, then Pur c h a s e r shall be e nt i t l e d to r e ce i v e re i m bur s e ment f r om t he Es c ro we d F unds B a la n c e f o r the a mount i n e x ce ss of that thr e shold (the E x ce ss C & P D ). I n ca l c ulating Ex ce ss C & P D, the c ost of g oods so l d for t h e food or b e v e ra g e i t e m w i ll be used a nd not t he sa l e s pri ce . F or e x a mp l e , if a promotion a l vou c h e r f o r a f r e e p i ec e of c ho c olate ca k e is r e d e e med, the c ost of g oods s old i s 20% a nd the p r ice is $10 for that i t e m, $2.00 will be used a nd n ot t he $10.00 s a l e pri c e i n ca lcul a t i n g E x ce ss C & P D. I f a p romotion a l vouch e r f o r a $20 dis c o u nt on a n y m e a ls of a t le a st $100 is r e d ee med a nd c ost of g oods so l d a r e 30 % , on l y $6.00 will be use d .

 

43 2 0 4 7 8 -4

 


(d) The P u rc h a s e r a nd the S e l l e rs ac knowl e d ge a nd a g re e that th i s A g re e ment c onsti t utes a subs t a nt i a l r e striction o n the r i g hts of the Sell e rs with r e spe c t t o the E s c r o w e d F unds a nd that the Pur c h a s e r a nd the Se l le r s shall t r e a t t he E s c r o w e d F unds a s an install m e nt ob l i g a t i on.

 

4. I n v e st me n t of Es cr o w e d F und s.

 

Du r ing t h e te r m of this A g r ee ment, the E s c ro w e d F unds shall be d e posited in an inte re st b ea ri n g a cc ount wi t h a fe d e r a l l y insur e d fi n a n c ial ins t i t ut i on or invested in such other investm e nts as sh a ll be dir ec ted in w riting b y the S e l l e rs a nd a s s h a ll be a cc e ptable to t he P u rc h a s e r a nd the E s c r o w A g e nt. The P a rties ac k nowl e dge that the Es c r o w A g e nt ch ar g e s and c ol l ec ts f e e s for s e rvi ce s r e nd e r e d pu r suant to this Agr ee ment. Unl e ss o t h e r wise ins t ru c ted in w r i t ing b y the Selle r s, t h e Es c row A g e nt shall invest and re invest the E s c r o w e d F unds in the in t e r e st be a ri n g acc ount or other investm e nt, as a ppl i ca ble.

 

5. Dis bu r s eme n ts F r o m t h e Es cr ow A cc o un t; Clo s i n g.

 

( a ) The Es c row A g e nt shall disburse the E s c ro w e d F unds to the Pur c h a s e r b y in t r a b a nk tr a nsf e r o f c ol l ec t e d fu n d s or w ire w h e n a c c ompa n ied b y v a l i d wi r e ins t ru c t ions i n the a moun t s spe c ified the r e on upon p r e s e nt m e nt j oin t l y b y the P u rc h a s e r a nd the Selle r s to t he Es c row A g e nt of do c ument a t i on f r om t he P u rc h a s e r r e fl ec t i n g c usto m e r c h a r g e s a g a inst Gift Ca r ds a n d House A cc ounts ( the GC&HA Ch a rg e s ), a nd f o r a n y Ex ce ss C & P D.  Disburs e ment R e qu e sts (a s d e fin e d b e lo w ) w i l l not be made more f re q u e nt l y t h a n on a mon t h l y b a si s .

 

(b) All of the jo i nt r e qu e sts f rom the Pur c h a s e r a nd D e s e rt I sland Resta u r a nts, L . L .C., a s a uthori z e d a g e nt for the S e l l e rs, f or disburs e men t s of E s c ro w e d F unds to t he P u rc h a s e r sh a ll be acc ompan i e d with i nstru c t i ons f r om P u rc h a s e r a n d a ppro ve d b y S e l l e rs for p a y m e nt t h e r e o f in subs t a nt i a l l y the f o r m a t t ac h e d h e r e to as S c h e dule 1 whi c h ins t ru c t i ons in c lude a c e rtifi ca t i on b y the Pur c h a s e r t h a t t he G C & HA Ch a r g e s w e re m a de a nd the E x ce ss C & P D w e re inc u r re d with i n e i g ht e e n (1 8 ) months fol l owing the Closing D a te ( the Disburs e ment R e q u e st s ).

 

( c ) The Es c row A g e nt shall honor a nd make disbur s e ments to the Pur c h a s e r f o r a ll Disburs e ment R e qu e sts p r e s e nted to the E s c row A g e nt wi t hin e i g ht e e n (1 8 ) mon t hs a f ter the Clos i ng D a te. W i t hin t h re e ( 3) B usiness D a y s ( a s h e r e in a ft e r defin e d) following the e i g h t ee n (18) mon t h a nnive r s a r y o f this A g r ee ment a nd su b je c t t o a f inal r e c on c i l iat i on p r o ce ss wi t h P u rc h a s e r a nd S e l l e rs, t h e Es c row A g e nt shall dis t ribute to t he S e l l e rs the b a lan c e (if a n y ) o f the Es c ro we d F unds, in a c c o rd a n c e with w r i t ten p a y ment instru c t i ons f r om S e l l e rs a nd P u rc h a s e r.

 

(d) I n a ddi t ion t o disbu r s e ments und e r Se c t i on 5 (a ), 5( b ) , a nd 5 ( c ) of th i s A g re e ment, the Es c row A g e nt i s autho r i z e d a nd dir e c ted to d e l i v e r the E s c ro we d F unds in a cc o r d a n c e with t he w r i t ten instru c t i ons of Pur c h a s e r a nd S e l l e rs. W h e n dir ec t i ons or instru c t i ons f r om m o r e than one p a r t y a r e re qui r e d, su c h d ir ec t i ons or i n stru c t i ons m a y b e g iven b y separ a te ins t rum e nts of

si m i l a r t e nor. A n y p a r t y m a y ac t he r e und e r th r o u g h a n a g e nt or a t t o r n e y i n f a c t, provided s a t i sf ac to r y w ritten e vid e n c e of su c h a uthori t y is f i rst f u rnish e d to t he Es c r o w A g e nt. The Es c row A g e nt m a y c on c l u sive l y r e l y on t h e a uth e nt i c i t y of su c h di r ec t i ons or ins t ru c t i ons d e l i v e r e d b y e m a i l . Distributions shall be m a de only f rom the E s c r o w e d F u n ds a n d with i n a r e a sona b l e t i me a ft e r t h e Es c row A g e nt’s r e ce ipt o f su c h ins t ru c t i ons.

 

43 2 0 4 7 8 -4

 


6. C o m p e n sation of Es cr ow Ag e n t .

 

Pu rc h a s e r a nd S e ll e rs agr e e joint l y a nd s e v e r a l l y t o (i) p a y the E scrow A gent upon e x ec ution of this A g re e m e nt and f rom time to time th e r e aft e r r ea sona b l e c o mpens a tion f o r the s e rvi ce s to be r e nder e d h e r e under, w hich, unl e ss o the r wise a g r ee d in w ritin g , shall be a s d e s c rib e d in E x hib i t B (to be a tt ac h e d h e r e to upon s e le c tion of a n E s c row Ag e nt), a nd (ii) p a y or r e imburse the E scrow A g e nt upon r e qu e st f o r a ll e x p e nses, disburs e ments a nd a dv a nc e s, including r e a sona b le a tto r n e y ’s f ee s and e x p e nses, in c u r r e d or m a de b y it in conn ec tion with the p e r f o r ma n ce , modific a tion a nd te r min a tion of this Ag ree ment. As b e twe e n the Pur c h a ser a nd the S e ll e rs, su c h fe e s and e x p e nses of the E s c row A g e nt shall be sha re d e qu a l l y .

 

7. Conc er n i n g the Es cr ow Ag e n t.

 

( a ) Notwithstanding a n y p r o vis i on c ontain e d h e r e in t o the c ontr a r y , t h e Es c r o w A g e nt, including i t s of f ic e rs, di r ec tors, e mp l o y e e s and a g e nts, wil l :

 

(i) Not be l i a ble f or a n y ac t i on tak e n or o m i t t e d und e r this A g r ee ment so lo n g a s it will h a ve ac ted in g ood fa i t h a nd without gross n e g l i g e n c e or wil l ful mis c ondu c t;

 

(ii)  H a ve no r e spons i bi l i t y to inqu i re in t o or de te r m i ne the g e nuinen e ss, a uthentici t y , or s u f f ici e n c y o f a n y s e c u r i t ies, c h e c ks, or oth e r do c uments or ins t rum e nts submi t ted to it in conn ec t i on with i ts du t ies h e r e und e r;

 

(iii)   B e e nt i t l e d to d e e m t he si g n a tor i e s of a n y d o c um e nts or instrum e nts submi t ted to it h e r e und e r a s being tho s e pur p o r ted to be a uthori z e d to si g n such do c uments or ins t rum e nts on b e h a lf of the p a rties h e r e to, and w i ll be e nt i t l e d to r e l y upon the g e nuinen e ss of the si g n a tu r e s of su c h s i gn a tori e s without i nqui r y a nd without re quiri n g subs t a nt i a t i ng e vide n c e of a n y kind;

 

(iv) B e e nt i t l e d to r e f r a in f r o m t a king a n y ac t i on c on t e mp l a ted b y th i s Ag ree m e nt in t he e v e nt t h a t i t be c o m e s a w a re of a n y dis a g r e e ment b e tw ee n the ot h e r P a rties h e r e to as to a n y f a c ts or a s to t he h a pp e n i ng of a n y c ontemplat e d e v e nt pr e c e d e nt t o su c h ac t i on. I n the e v e nt t h a t the E s c row A g e nt shall be un ce r t a in as to its du t ies or r i g hts h e r e un d e r or s h a ll rece i v e ins t ru c t i ons, c laims or d e mands f rom a n y P a r t y w hich, in i t s opinion, con f l i c t wi t h a n y of t h e p r ovis i ons of this A g re e ment, it shall be e nt i t l e d to r e f r a in f r om t a ki n g a n y ac t i on a nd i t s so l e obl i g a t i on sh a ll be to ke e p sa fe l y a ll f unds h e ld i n e s c row unt i l i t shall be dir ec ted oth e r w ise in w r i t ing b y a ll of the ot h e r Pa r t i e s or b y a fin a l or d e r or ju d g ment of a c ourt of c ompet e nt jurisd i c t i on. The Es c row Ag e nt m a y in t e rpl ea d a ll of the a ssets h e ld h e r e u n d e r into the Cir c uit Court of the F irst C ir c ui t , S tate of Ha w a i i , or m a y s ee k a d e c la r a to r y j u d g ment in t he e v e nt t h a t such c ir c ums t a n c e s a r i s e , a nd the r e a ft e r b e f ul l y r e l i e v e d f r om a n y a nd a ll l i a bi l i t y or o b l i g a t i on with r e spe c t t o su c h in t e r ple a d e d a s s e ts or a n y a c t i on or ina c t i on b a s e d on s u c h d ec l a r a to r y jud g ment;

 

(v) B e indemnifi e d a nd s a v e d h a rml e ss j oin t l y a nd s e v e r a l l y b y the oth e r P a rties f r om a n y a nd a ll los s e s, l i a bi l i t ies, c laims, pro c ee d in g s, su i ts, dem a nds, p e n a l t ies, c osts a nd e x p e nses, in c lud i ng wit h out l i m i t a t i on r e a sona b le fee s and e x p e nses of outs i de c ouns e l and e x p e rts a nd p re p a r a t i on to de fe nd a n y of the f o regoing ( L osses ), whi c h m a y b e incu r r e d b y it a s a re sult of its e x ec ut i on, d e l i v e r y or per f o r ma n c e of this Ag r e e ment, unl e ss such L osses a re

 

43 2 0 4 7 8 -4

 


ca used b y the b a d f a i t h, g r oss n e g l i g e n c e o r w i l lful miscondu c t of the Es c r o w A g e n t, and the p r ovis i ons of this S ec t i on 7 (a ) ( v ) w i l l survive the r e si g n a t i on or r e moval of the E s c row A g e nt a nd the t e rmin a t i on of th i s A g r ee ment.  T h e P u rc h a s e r a nd t h e S e l l e rs h e r e b y g r a nt t he Es c r o w Ag e nt a lien on, r i g ht of s e t - o f f ag a inst a nd s ec u ri t y i nte re st i n the E s c ro w e d F unds for the p a y m e nt of a n y c l a im f or indemnifi ca t i on, c omp e nsation, e x p e nses a nd a moun t s due h e r e un d e r;

 

(vi) H a ve on l y those duti e s as a re sp e c ific a l l y pro v i d e d h e r e in, which will be d ee med pu r e l y m i nis t e ri a l i n n a tur e , a nd will und e r no c ir c ums t a n c e be d e e med a f iduci a r y f or a n y o f the other Pa rties. The Es c row A g e nt wi l l neither be r e spons i ble f o r , nor c h a r g ea ble with, knowl e dge of the t e rms a nd c ondi t ions of a n y ot h e r a g re e ment, instrum e nt or do c ument b e tw e e n the oth e r p a rties h e r e t o , i n c onn ec t i on h e r e with, i n c lud i ng without l i m i tati o n the A sset P u rc h a se Ag ree ment. This A g ree m e nt sets fo r th all m a t t e rs p e rtine n t t o the E s c row A cc ount and the Es c ro we d F unds c onte m plat e d h e r e un d e r, a nd no a ddi t ional obl i g a t i ons of the E s c row A g e nt wi l l be inf e r r e d f r om t he t e r m s of this A g r ee ment or a n y other A g re e ment. I N N O E V ENT W I L L THE ES C ROW A G ENT B E L I A B L E, D I REC T L Y O R I N D I REC T L Y, F OR A N Y S P E C I A L , I ND I RECT OR C O N S EQ U EN T I A L L OS S ES OR D A MA G ES OF A NY K I ND W H A TSOEV E R ( I N C L U D I NG B UT N OT L I M I T ED T O L O S T P R OF I T S ), E VEN I F THE ES C ROW A G ENT H A S B EEN A D V I S ED O F T HE POS S I B I L I TY OF S UCH L OS S ES OR D A MA G ES AND RE G AR D L ESS OF THE F O RM OF AC T I O N ;

 

(vii)  H a ve the r i g ht, but not t he obl i g a t i on, to consult w i t h a nd r e tain c ouns e l of i t s ch o ice with r e sp e c t t o matte r s (in c l u ding but n o t l i m i t e d to l i t i g a t i on) a r i sing out of this Ag ree ment a nd will not be liable f or ac t i on tak e n o r omitted to be tak e n b y the E s c row A g e nt i n g ood f a i t h in a cc o rd a n c e with t he a dvice of s u c h c ouns e l; a nd

 

(viii)  H a ve the r i g ht t o p e r f o r m a n y o f its du t i e s he re un d e r th r o u g h a g e nts, a t t o r n e y s, custodians or n om i n ee s.

 

8. A t ta c h me n t of Es cr ow A cc o un t; C o m p l i a n c e w ith L e gal O r d er s.

 

In the e v e nt t h a t t he E s c r ow e d F unds a re o r w i l l be a t t ac h e d, g a rnish e d o r l e vied upon, or the d e l i v e r y the r e of will be st a y e d or e n j oined, b y a n or de r o f a n y c ourt of c ompet e nt

jurisd i c t i on, or a n y o rd e r, jud g ment or d e c r e e will be made or e nte r e d b y a n y c o u rt o r d e r a f f e c t i ng t h e Es c ro w e d F unds, the Es c row A g e nt i s he re b y e x p re ss l y a utho r i z e d, in i ts s ole disc re t i on, to ob e y a nd c omp l y with all w r i t s, or d e rs or d e c re e s so ent e r e d or is s u e d, whi c h it is a dvised b y l e g a l coun s e l of its own c hoosing is b i nding upon i t , wh e ther w i t h or w i t hout jurisd i c t i on, a nd in t he e v e nt t h a t t he Es c row A g e n t ob e y s or c omp l ies w i t h a n y s u c h w r i t , or d e r or d e c r e e it will not be liable to a n y of the oth e r Pa r t i e s or to a n y oth e r p e r s on, fi r m or c o r por a t i on, b y r ea son of such c omp l ian c e notwi t hstanding such w rit, ord e r or d e c r e e b e subsequ e nt l y r e v e rs e d, m odifi e d, a nnul l e d, set a s i de or v a c a ted.

 

9. R e sig n a t ion or R e m ov a l of Es cr ow Ag e n t.

 

( a ) The Es c row A g e nt m a y r e si g n a s s u c h followi n g the g iv i n g of thir t y ( 3 0 ) da y s ’ p r ior not i c e to t he P u rc h a s e r and the Selle r s. S i m i l a r l y , the E s c row A g e nt m a y b e re moved a nd r e pla c e d followi n g the g i ving of thir t y ( 30) d a y s’ p r ior not i c e to t he Es c r o w A g e nt b y the oth e r P a rties. I n e i t h e r e v e nt, t he dut i e s of the Es c r o w Ag e nt wi l l t e rmin a te thirty (3 0 ) d a y s a ft e r

 

43 2 0 4 7 8 -4

 


r e ce ipt of s u c h not i c e ( o r a s of su c h e a rlier d a te a s m a y b e mu t u a l l y a g re e a ble ) ; and the Es c row Ag e nt wi l l t h e n d e l i v e r t he b a lan c e of the mon e y s or a ssets th e n in i ts po s s e ss i on to a su cce ssor e s c row a g e nt as w i l l be a ppoin t e d b y the Pur c h a s e r a nd the Selle r s as e vid e n ce d b y not i c e to t he Es c row A g e nt.

 

(b) I f the Pur c h a s e r and the S e l l e rs h e r e to ha v e f a i l e d to appoint a su cc e ssor to the Es c row A g e nt prior to the e x pir a t i on of th i r t y d a y s following r ece ipt of the not i c e of re s i g n a t i on or re moval, the E s c row Ag e nt m a y a ppoint a su c ce ssor or p e t i t i on the Cir c uit Court of the F irst Cir c ui t , S tate of Ha w a i i , for the a ppoin t ment of a suc c e ssor e s c row a g e nt o r f or other a ppro p r i a te r e l i e f, a nd a n y such r e sul t ing a ppoin t ment sh a ll be f ind i ng upon a ll of the p a rties h e r e to.

 

10.       T e r m .

 

This Esc r ow A g r ee ment shall a uto m a t i ca l l y t e rmin a te a s of the e nd of the e i g ht e e nth mon t h following the Clo s ing D a te a nd upon disb u rs e ment of a ll of the E s c r ow e d F unds in acc o r d a n c e with S ec t i on 5 h e r e o f .

 

11.       No t ic e s.

 

All no t ic e s, r e qu e st s , d e mands, c laims, a nd other c om m unic a t i ons h e r e un d e r w i l l be in w r i t in g . A n y not i ce , r e q u e st, dem a nd, c laim, or o t h e r c om m unic a t ion h e r e u nd e r sh a ll be d e e med du l y g iven ( i) if s e rv e d p e rson a l l y , on the d a y of s u c h se r vi c e , or ( i i ) if mai l e d b y ce rtif i e d or re g is t e r e d mail ( r e turn re ce ipt re qu e s t e d ) , on the s ec ond B usi n e ss D a y a ft e r mail i n g , a nd (iii) if tr a nsm i t t e d b y r ec o g ni z e d o v e rnight c a r ri e r, on t h e n e x t B usiness D a y a ft e r tend e r to the c a r r i e r. S u c h c om m unic a t i ons shall be s e nt t o the f ol l owing a d d r e sses:

 

I f to t he S e l l e rs :         c /o D e s e rt Is l a nd Restau r a nts LLC

6263 N. Scottsd a le Rd. # 374

S c ottsdal e , AZ 85250

Attention: W . R a nd a ll S c ho c h

Phon e :   (480) 945 - 0088

Facsi m i l e:  (602) 22 4 -7 8 76

 

 

Co p y t o :

S ul l ivan M e h e ula L ee , LL L P P ac ific G u a rdi a n Center Mak a i Tow e r

 

733 B ishop S tr ee t, S ui t e 2900

Attention: T e r re n c e L e e

Phon e : (808) 628 - 7530

Facsi m i l e: (808) 53 3 -24 6 7

 

I f to P u rc h a s e r : RC S H O p e r a t i ons, I n c .

c/o R uth’s Hospital i t y G r oup, I n c.

1030 W . Canton Av e . S ui t e 100

Wint e r Pa r k, FL 32789

Attention: G e n e r a l C ou n s e l

Phon e : (407) 829 - 3451

 

43 2 0 4 7 8 -4

 


 

Co p y t o : Olsh a n F rome W olos k y L L P

1325 Av e nue of t h e Am e ri ca s

N e w Y o r k, N e w Y o rk 1 0 019

Attention: J e f f r e y S pind l e r, E sq. P hon e :  (212) 45 1 - 2300

Facsi m i l e:  (212) 45 1 -2 2 22

 

I f to t he Es c r o w A g e n t : Tit l e Gu a r a n t y Es c row S e rvi ce s, I n c

235 Qu ee n S tr e e t

Honolulu, H a w a ii 96813

Attention: B a rbara P a u l o

Phon e :  (808) 521 - 0209

Facsi m i l e:  (808) 52 1 -0 2 80

 

Notwithstanding the a b o v e , in t he ca se o f c om m u nic a t i ons d e l i v e r e d to t he Es c row A g e nt such c om m unic a t i ons shall be d ee med to h a v e b ee n g i v e n on the d a te r e c e ived b y the E s c row A g e nt. I n the e v e nt t h a t t he E s c r ow A g e n t, i n i t s so l e disc re t i on, sh a ll d e te r m i ne t h a t an e me r g e n c y e x is t s, the Es c row Ag e nt ma y use s u c h other m e a n s of c om m unic a t i on a s the Es c row A g e nt d ee ms app r o p ri a te. F o r p u r poses of th i s A g re e m e nt, “ B usiness D a y shall me a n a n y d a y ot h e r than a S a turd a y , S und a y or a n y other d a y on whi c h the E s c row A g e nt l o ca t e d a t t he not i c e a ddr e ss set f o rth a bove is a uthori z e d or re qui r e d b y law o r e x ec ut i ve or d e r to r e main c losed.

 

12. G ov e r n i n g La w .

 

This A g r ee ment sh a ll be c onstru e d in a c c o r d a n c e with t he la w s of the S tate of H a w a ii without re g a rd to the c o n flicts of law prin c ip l e s t h e r e o f . T h e P a rties f u rth e r h e r b y w a ive a n y ri g ht t o a trial b y ju r y wi t h r e spe c t t o a n y l a wsuit or judici a l pro c e e di n g a ri s ing or r e lati n g to t his Ag ree ment. Disput e s b e tw ee n the Pur c h a s e r a nd t he S e l l e rs sh a ll be g ov er n e d b y t h e law d e s c rib e d in t he As s e t P u rc h a se A g re e ment.

 

13. A m e nd me n ts and Waive r .

 

No a mendm e nt of a n y p r ovis i on of th i s A g re e me n t shall be v a l i d unless the s a me sh a ll be in w r i t in g , si g n e d b y e a c h of the p a rties h e r e to a n d identifi e d in su c h w r i t ing a s a n a mendm e nt t o th i s A g re e ment. No w a iver b y a n y p a r t y of a n y d e f a ul t , m i sr e p re s e n t a t i on, or br e a c h of w a r r a n t y or c ov e n a nt h e r e un d e r, w h e ther in t e nt i on a l or not, shall be d ee med to e x te n d to a n y p rior or subsequ e nt de f a ul t , m i sr e p re sentation, or b r e a c h of w a r r a n t y o r c ov e n a nt h e r e und e r o r a f f e c t i n a n y w a y a n y r i g hts a r is i ng b y virtue o f a n y prior o r subs e qu e nt such o c c u r r e n ce .

 

14. Assig n m e n t.

 

This A g r ee ment sh a ll be bind i ng upon a nd inure t o the b e n e fit of the p a rti e s nam e d h e r e in and th e i r re s p ec t i v e suc c e ss o rs a nd p e rmit t e d a ss i g ns. No p a r t y m a y a ss i g n th i s Ag ree ment o r a n y of its r i g hts, i nte re st s , or o bl i g a t ions h e r e und e r w i t hout t he prior w r i t ten a ppro va l of the ot h e r parties h e r e to or th e r e to, e x c e pt t h a t t he P u rc h a s e r m a y a ss i g n so m e or a ll of i t s ri g hts, i nte re sts a nd obl i g a t i ons pursu a nt t o th i s A g r ee ment to one or more one of its

 

43 2 0 4 7 8 -4

 


subs i dia r ies w i t hout t he c onse n t of a n y S e l l e r or t h e Es c row A g e nt; pro v id e d that the Pur c h a s e r shall r e main l i a ble f or i t s obl i g a t i ons h e r e und e r.

 

15. F o r c e M a je ur e .

 

Notwithstanding a n y ot h e r p r ovis i ons of this Agr e e ment, the Es c row A g e nt shall not be obl i g a ted to p e r f o r m a n y obl i g a t i on h e r e und e r a nd will not i n c ur a n y l i a bi l i t y f o r the nonp e r f o r ma n c e o r b r e a c h of a n y obl i g a t i on h e r e u nd e r to the e x tent that t h e Es c row A g e nt i s d e l a y e d in pe r fo r m i n g , u n a ble to p e r f o rm or bre a c h e s such obligation be c a use o f a c ts of God, w a r, t e r ro r is m , f ir e , floods, strik e s, el ec tri c a l ou ta g e s, eq u ip m e nt or tr a nsm i ss i on f a i l u re s, or other ca u s e s r e a sona b l y b e y ond i t s co n trol.

 

16. Ass e t P u rc h ase A g r ee me n t.

 

In the e v e nt of a c onfli c t b e tw ee n the t e rms a nd p r ovis i ons of this A g re e m e nt and the te r ms and p r ovis i ons of the Ass e t P u rc h a s e A g r e e ment, the t e rms a nd p r o v is i ons of the Ass e t P u rc h a se A g ree m e nt shall c ontrol for the Pur c h a s e r a nd the Selle r s and th i s Ag ree ment s h a ll c ontrol for the E s c row A g e nt.

 

17. F und s T r a n s f er .

 

In the e v e nt funds t r a nsf e r instru c t i ons a re g iven ( other than in w r i t ing a t t he t i me of e x ec ut i on of th i s Agre e m e nt, as indi ca ted in S ec t i on 11 a bov e ), w h e ther in w r i t in g , b y f ac si m i l e or othe r wise, the E s c row Ag e nt i s autho r i z e d to s ee k c onfi r mation of s u c h ins t ru c t i ons b y tel e phone c a l l - b ac k to t h e p e rson or p e rsons d e s i gn a ted on E x hib i t A h e r e to, and the Es c r o w Ag e nt m a y re l y upon the c onfi r mation of a n y o n e p u r porting to be t h e p e rs o n or pe rsons so d e si g n a t e d. E a c h fu n ds t r a nsf e r instru c t i on sh a ll b e e x ec uted b y a n a uthori z e d si g n a t o r y .  A list of such a uthori z e d si g n a t o r ies is s e t fo r th on E x h i bit A . The p e rsons a nd t e lephone numbe r s f o r ca l l - b ac ks m a y be c h a n g e d on l y in a w r i t ing ac tu a l l y r e ce ived a nd ac kn o wl e dg e d b y the E s c row Ag e nt. The Es c row A g e n t and the b e n e f i c ia r y ’s b a nk in a n y funds t ra ns f e r m a y r e l y sol e l y upon a n y a c c ount nu m b e rs or s i m i l a r id e nt if y i n g numb e rs p r ovided b y the Pur c h a s e r or the Sell e rs to identi f y (i) t h e b e n e fi c ia r y , ( i i ) the b e n e f i c ia r y ’s b a nk, or ( i i i) a n in t e r m e dia r y b a nk. T h e Es c r o w Ag e nt m a y a pp l y a n y of t he e s c r o w e d fu n ds for a n y p a y m e nt ord e r it e x ec u t e s us i ng a n y s u c h identi f y i n g numbe r , e v e n wh e n i t s use m a y re sult i n a p e rson oth e r th a n the b e n e fi c i a r y b e i n g p a id, or the tr a ns f e r of f u nds to a b a nk other than t he b e n e f i c ia r y ’s b a nk or a n in t e rm e dia r y b a nk so d e si g n a t e d. The P a rti e s a c knowl e d ge that these s ec u r i t y proc e dur e s a re c om m e r c ial l y r e a sona b l e .

 

18. TINs; Tax M a t te r s.

 

The P u rc h a s e r a nd the S e l l e rs eac h r e p r e s e nt t h a t t h e ir re sp e c t i ve c o r r e c t T a x p a y e r I d e nt i fi ca t i on Numb e r ( T I N ) a ss i g n e d b y the I n t e rn a l R e v e n u e S e rvi c e ( I R S ) o r a n y oth e r ta x ing a uthori t y is s e t fo r th on t he si g n a tu r e p a g e h e r e o f . I n a ddi t ion, all i nte re st or oth e r i n c ome ea rn e d un d e r the A g re e ment sh a ll be a l l o ca ted a n d /or p a id as dir ec t e d in a j oint w r i t ten di rec t i on of the Selle r s and the Pu r c h a s e r a nd r e p o rt e d b y t h e rec ip i e nt t o the I n t e rn a l R e v e nue S e rvi c e . I f I nt e rn a l R e v e n u e S e rvi c e r ules that a ll or a n y port i o n of the Gift Ca r d r e d e mp t ions du r ing the te r m of this Ag ree m e nt a re ta x a ble to a n y S e l l e r o r the P u rc h a s e r, the ta x e d p a r t y s h a ll be e nt i t l e d to t a ke a d e d u c t i on with r e spe c t t o su c h po r t i on of the re d e mp t ions on i t s ap p l i ca ble fe d e r a l

 

43 2 0 4 7 8 -4

 


income tax re turn. Notwithstanding such w ritten dir ec t i ons, the Es c row A g e nt shall re port a nd, a s r e quir e d, withho l d a n y ta x e s as it det e rmin e s m a y b e re qu i r e d b y a n y l a w or r e g ulation i n e f f e c t at the ti m e of the d is t ribution. I n t h e a bse nc e of tim e l y di r ec t i on, a ll p r o cee d s o f the Es c ro we d F unds shall be r e tain e d in t he Es c ro we d F unds a nd r e invested f r o m t i m e to t i m e b y the

Es c row A g e nt as p r ovid e d in S ec t i on 4. I n the e v e nt t h a t a n y ea rni n g s r e m a in und i stribu t e d a t t he e nd of a n y c a lend a r y e a r, the E s c row A g e nt shall r e po r t t o the I nte r n a l R e v e nue S e rvi c e o r su c h other a uthori t y such e a r n in g s as it de e ms ap p rop r i a te or a s r e quir e d b y a n y a ppl i ca ble l a w o r re g ulation or, to the e x tent c onsistent th e r e with, a s dir e c ted in w r i t i n g b y the Pur c h a s e r a nd the S e l l e rs. T h e Es c r o w A g e nt shall h a ve no r e spons i bi l i t y f o r the p r e p a r a t i on a nd/or f i l ing or a n y

tax or oth e r pa y m e nts r e q uir e d to be m a de b y the P u rc h a s e r or S e l l e r in c o n n ec t i on with t his Ag ree ment. T h e Es c r o w Ag e nt shall h a ve no r e s p onsibi l i t y f or t h e p a y me n t of t a x e s b y the P u rc h a s e r o r the S e l l e rs u nless dir ec ted to do so b y the a ppro p ri a t e a uthori z e d p a r t y .

 

19. S e v er a b i l ity and O p er a t ion of L a w .

 

A n y t e rm or pro v is i on of th i s A g re e ment that is invalid or un e n f o r cea b l e in a n y si t u a t i on in a n y jurisd i c t i on sh a ll n ot a f fe c t t he v a l i di t y or e n f o rc e a bi l i t y of the r e ma i ning te r ms and p r ovis i ons h e r e of or t h e v a l i di t y or e n fo r c ea bi l i t y of the o f f e ndi n g t e rm or p r ovis i on in a n y other si t u a t i on or in a n y other j u r isd i c t i on.

 

20. Ex te n sio n ; W a ive r .

 

The fa i l u r e o f a n y p a r t y to t his A g re e ment to ass e r t a n y of its r i g hts und e r t his A g r ee ment or othe r wise shall not c o nst i tu t e a w a iver of s u c h ri g hts. F u rth e r, no w a iver b y e i t h e r p a r t y of a n y te r m, condit i on, d e f a ul t , or br e a c h sh a ll c onsti t ute or be c onstr u e d a s a w a i v e r of a n y ot h e r t e rm, c ondi t ion, de fa ul t , or b re ac h of this A g r ee ment.

 

21. Cou n t e r p a r ts.

 

This A g r ee ment m a y b e e x ec uted in two or more c ounte r p a rts, eac h o f w h i c h sh a ll be d ee med to be a n or i g inal c o p y o f this Ag r e e ment a nd a ll of w hich, w h e n ta k e n togeth e r, sh a ll be d ee med to c onsti t ute one a nd the s a me a g r e e ment, a nd photostatic, .pdf or f ac si m i l e c opies of ful l y - e x ec uted c ounte r p a rts of th i s A g r ee ment sh a ll be g iven the s a me e f f e c t as o r i g inals.

 

22. E n ti r e Ag r ee m e n t

 

This A g r ee ment ( i n c lud i ng the d o c uments r e f e r re d to he re in) c onsti t utes t h e e nt i re a g ree m e nt betw e e n the p a rties a nd sup e rs e d e s a n y prior und e rst a ndi n g s, a g ree ments, or r e p re s e ntations b y o r b e t w ee n the p a rties, w ritten or or a l, t o the e x tent th e y re lat e d in a n y w a y to the subje c t m a t t e r her e o f .

 

23. No T h ird P a r ty B e n e f i c iari e s.

 

This A g r ee ment sh a ll not c onf e r a n y r i g hts or r e medi e s upon a n y P e rson o t h e r th a n the p a rties h e r e to and th e ir re spe c t i ve succ e ssors a nd p e rmit t e d a ss i g ns, e x ce pt as othe r wise e x p re ss l y pro v ided h e r e i n.

 

[ Signa t ures on fo l lo w ing page ]

 

43 2 0 4 7 8 -4

 


IN WITNE S S W H ER E O F , the p a rties h e r e to h a ve ca used th i s A g ree me n t t o be e x ec uted e f f ec t i ve the d a y a nd y e a r fi r st above w r i t ten.

 

P U R C HA S ER

RC S H O P ERA T I O N S , I N C. B y :

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

T I N:

 

SEL L ERS:

 

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the Scho c h Revo ca b l e L i ving T r ust dat e d Nov e mb e r 1 9, 2001

 

Tit l e : Mana g e r

 

 

H O N O L U L U S TE A K H O U S E, LL C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the S c ho c h Revo ca ble L iv i n g T r ust d a ted Nov e mber 19, 2001

 

Tit l e : Mana g e r

T I N:

 

MA U I S TE A K H O USE L L C, b y i t s Man a g e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the S c ho c h Revo ca ble L iv i n g T r ust d a ted Nov e mber 19, 2001

 

Tit l e : Mana g e r

T I N:

 

43 2 0 4 7 8 -4

 


W A IL EA STE A K H O US E LL C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the S c ho c h Revo ca ble L iv i n g T r ust d a ted Nov e mber 19, 2001

 

Tit l e : Mana g e r

T I N:

 

BEACH W A L K STEAK H O USE, L L C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the S c ho c h Revo ca ble L iv i n g T r ust d a ted Nov e mber 19, 2001

 

Tit l e : Mana g e r

T I N:

 

L A VA CO A S T STEAK H O USE, L L C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the S c ho c h Revo ca ble L iv i n g T r ust d a ted Nov e mber 19, 2001

 

Tit l e : Mana g e r

T I N:

 

K A U A I S TE A K H O U S E, LL C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

B y :

 

N a me:

W . Rand a ll S c ho c h, T r ustee of the S c ho c h Revo ca ble L iv i n g T r ust d a ted Nov e mber 19, 2001

 

Tit l e : Mana g e r

T I N:

 

43 2 0 4 7 8 -4

 


E S C R OW A G ENT

 

T I T L E G U ARA N TY E S CROW S E RV I CES, I NC.

 

B y : N a me: Tit l e :

 

43 2 0 4 7 8 -4

 


EXHI B IT A

 

T e lep h o n e Nu m b er ( s ) f or Call - Ba c k s a n d

P e r so n (s) D e sig n a te d t o G ive and Con f irm F und s T r a n s f e r I n st r u c tion

 

If to t he P u rc h a s e r:

 

N a m e T e lep h o n e Nu m b e r S ig n a t u r e

1.

 

2.

 

 

 

I f to t he S e l l e rs:

 

N a m e T e lep h o n e Nu m b e r S ig n a t u r e

1.

 

2.

 

 

 

I n a smuch a s y ou a re the on l y ind i vidual who ca n c onfi r m wire t r a nsf e rs, w e will ca ll y ou to c onfi r m a n y f e d e r a l fun d s wire tr a ns f e r p a y m e nt ord e r pu r p o rt e d l y is s u e d b y y o u. Yo u r c ont i nu e d is s u a n c e of pa y m e nt or d e rs to us a nd c onfi r mation i n acc o r d a n c e with t his pro ce dure

will c onsti t ute y o u r a g r e e ment ( 1) to t he ca l l - b ac k s ec u r i t y proc e dure out l i n e d h e r e in a nd ( 2 ) th a t the s ec u r i t y proc e du r e o u t l ined h e r e in constitu t e s a c om m e r c i a l l y r ea so n a b le m e thod of v e ri f y i n g the a uthentici t y o f p a y m e nt ord e rs. Mo re o v e r, y ou a g re e to ac c e pt a n y r isk a ssoci a ted w i t h a d e viation f r om t his bank poli c y .

 

T e lephone c a l l - b ac ks s h a ll be made to e ac h of the P u rc h a s e r a nd e a c h S e l le r if jo i nt i nstru c t i ons a re r e quir e d p u rsu a nt t o th i s A g r ee ment. All funds tr a nsf e r instr u c t i ons must i n c lude the si g n a tu r e of the p e rson ( s) a uthori z ing said f und tr a nsf e r.

 

43 2 0 4 7 8 -4

 


EXHI B IT B C o m p e n sation of Es cr ow Ag e n t

 

[To b e p r ovi d e d b y E s c r ow Ag e n t]

 

43 2 0 4 7 8 -4

 


S c h e du le 1

( Da te)

 

Via F a c si m i l e a nd U.S. Mail

 

Attn: Fa x :

R e : (the Gift Ca r d E s c row A cc ount”)

 

L a d i e s and G e nt l e men:

 

R e f e r e n c e is m a d e to t h a t c e rt a in Gift Ca rd E s c r o w a nd Reimburs e ment A g r ee ment ( t h e

 

“Escrow A g reement”) e n tered in t o as of the

d a y o f

, 2 017 b y a nd a mo n g

 

RC S H O p e r a t i ons, I n c ., a C a l i fo r nia c o r po r a t i on ( t he P u rc h a s e r ), D e s e rt Isl a nd Res t a u ra nts, L . L .C., a n A r i z ona l i m i ted liabil i t y c ompa n y , Ho n olu l u S te a k Hous e , LL C, a H a w a ii l i m i ted l i a bi l i t y c ompa n y , Ma u i S te a k House L L C, a H a w a ii l i m i ted liabil i t y c o m p a n y , W a i le a S te a k House L L C, a H a w a ii l i m i ted liabil i t y c ompa n y , B e a c hw a lk S te a k Hou s e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , L a v a Co a st S te a k Hou s e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y , a nd K a u a i S te a k Hous e , L L C, a n A r i z ona l i m i ted liabil i t y c ompa n y ( e ac h, a S e l l e r a nd c ol l ec t i v e l y , t h e S e l l e r s ), a nd Title G u a r a n t y E s c row S e rvi c e s, I n c ., a H a w a ii c o r po r a t i on, a s e s c row a g e nt (the Es c r o w A g e nt” ) . All t e rms us e d but not othe r wise d e fi n e d h e r e in s h a ll h a ve the m ea ni n g s as c ri b e d to su c h te r ms i n the E s c row Ag ree ment.

 

Pu r suant to S ec tion 5 of the E s c row A g re e ment, w e a re e ntit l e d to dir e c t di s burs e ment

 

f r om t he Es c r o w A c c ou n t i n the a mount of $

in conn ec t i on with C G & HA

 

Ch a rg e s an d , if a ppl i ca b l e , E x ce ss C & P D. A t t ac h e d h e r e to i s do c u m e ntation subst a nt i a t i ng the CG & HA Ch ar g e s an d , if a ppl i ca ble, E x ce ss C & P D a s of t h e d a t e h e r e o f . W e h e r e b y a uthori z e a nd dir ec t t he E s c row A g e nt t o disbu r se such a m o unt d i r e c t l y to t he P u r c h a s e r s a cc ount as s e t fo r th below. W e h e r e b y c e rti f y that we b e l i e ve in g ood f a i t h the f o r e g oi n g a mount is entit l e d to be disburs e d und e r t h e E s c row A g r ee ment a nd that the CG & H A Ch a r g e s a nd, if a ppl i ca ble, E x ce ss C & P D we re m a d e with i n 18 mon t hs foll o wing the Closing D a te ( o n or a bout

) . P le a se make the p a y m e nt as f ol l ows: [ ]

Th a nk y o u for y our a ss i stan c e in t his m a t t e r.

 

43 2 0 4 7 8 -4

 


S inc e r e l y ,

RC S H O P ERA T I O N S , I N C. B y :

N a me: Tit l e :

 

AP P RO V ED:

 

DESERT I S L A N D RE S TA U RA N TS, L . L .C., b y i t s S ole M a n a g e r:

 

 

 

 

W . Rand a ll S c ho c h, T r ustee of the S c ho c h

R e vo ca ble L iv i n g T r ust d a ted N ov e mb e r 19,

2001

 

In i t s C a p a c i t y a s Autho r i z e d Ag e nt f o r Selle r s

 

43 2 0 4 7 8 -4

 


EXHIBIT I

 

INDEMNIFICATION ESCROW AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 3 0 9 0 9 -5

 


IN D E MNIFI CAT I O N E S CR O W AGREE ME N T

 

 

T h i s I nd e m n ifi c a t i on Es cr ow A g r e e m en t , da t e d t h i s

day of

_, 201

( t h i s

 

E s c row A gr e e m e n t ) , i s en t e r ed i n t o by and a m ong RC SH O pe r a t i ons, I nc., a C a l i f o r n i a co r p o r a t i o n (t he P u r c h a s e r ) , D e s e r t I s l and R e st a u r a n t s, L. L . C ., an A ri z ona l i m it ed l i a b i li t y co m pa n y , H ono l u l u St e ak H ous e , L LC , a H a w a i i li m it e d l i a b i l it y co m pan y , M a u i S t eak H ouse L LC , a H awa i i l i m it ed l i ab i l i t y co m pan y , Wa il e a S t eak H ouse L LC , a H awa i i li m it ed l i ab i l i t y co m pan y , B eachwalk St e ak H ous e , L L C , an A ri z ona l i m it ed   li a b i l i t y  co m pan y , La v a C oa s t St e ak   H ous e , L LC , an A ri z ona l i m it ed l i a b i l i t y co m pan y , and K au a i St e a k H ous e , L LC , an A ri z ona li m it ed l i ab i l i t y co m pany ( each, a S e l l e r ” and co l l e c ti v e l y , t he S e l l e r s a nd t o g e t h e r w it h t he Purch a s er , t he Tra n sa c ti on P a r ti e s ”) a nd T i tl e G u a r a n t y Esc r ow S e r v i c e s, I nc. ( A t t n : B a r ba r a Pa u l o ) , a s e s c r o w a g ent ( E s c row A g en t ) . C ap i t a li z ed t e r m s us e d he r e i n a n d not de f i n e d h e r e i n sh a l l ha v e t he m ean i n g s a s s i g ned t o su c h t e r m s i n t h a t c e r t a i n A s s e t Pur c h a se A g r ee m ent (t h e A s s et P u r chase A g r e e m e n t ) , d a t ed a s of N o v e m ber 2, 2017 by and a m ong t he P u r c h a s e r , t h e S e l l e r s a nd t he P r i n c i p a l ( a s d e fi n ed t h e r e i n ) .

 

W H EREA S , p u r su a nt t o t he A s s et Pu r cha s e A g r ee m en t , t h e S e l l e r s ha v e a g r e e d t o s e l l t o t he Pu r ch a s e r , and t he Pu r ch as er has a g r eed t o p u r c ha s e f r om t he Se ll e r s, t he Pu r ch as ed A s s e t s ( as d e fi n ed i n t he A s s e t P u r c ha s e A g r ee m en t ) , upon t he t e r m s a nd s ub j e c t t o t h e co n d i ti o ns s et f o rt h t h e r e i n;

 

W H EREA S , p u r su a nt t o S ec t i on 9 .9 o f t he A s s e t P u r chase A g r ee m en t , i n o r d e r t o s ec u r e ce r t a i n i nde m n i f i c a ti o n o b li g a t i ons of t he S e l l e r , t he P u r c h a s er a nd t he S e l l e r s ha v e a gr eed t h a t on t he C l o s i ng D a t e, t he S e l l e r s s h a l l de po s i t c e rt a i n c a s h f un d s w i t h Esc r ow A g en t ;

 

W H EREA S , t he p a r t i e s a ck no w l ed g e t hat E s c r o w A g ent i s not a p a r t y t o, i s n o t bound by and has no du t i es o r ob l i g a ti o ns unde r , t he A s s e t Pu r c h a s e A g r ee m en t , t h a t a l l r e f e r enc e s i n t h i s Es c r ow A g r ee m ent t o t he A s s e t P u r ch a se A g r ee m ent a r e f o r con v en i e n ce, and t h a t E s c r ow A g ent sh a l l ha v e no i m p li ed d u t i es b e y ond t he e xp r e s s d u t i es s et f o r t h i n t h i s Es c r ow A g r ee m en t ; a n d

 

W H EREA S , Es c r ow A g ent has a g r eed t o a cce p t , h o l d, and d i sb u r se t he E s c r ow A ccou n t B a l an c e

(as d e f ined in S e c t i on 1 ( d ) belo w ) in acc o rda n ce w ith t he ex p re s s t er m s of t his E s c row A g reement.

 

N O W, T H ER E F O R E , f or and i n c on s i d e r a t i on of t he m u t ual a g r ee m en t s and co v enan t s con t a i n e d h e r e i n and i n t he A s s et P u r c h a s e A g r ee m en t , t he p a r ti e s h e r e t o h e r eby ag r ee as f o l l o w s :

 

1. A ppo i n t m ent of E s c r ow A g en t ; Es c r ow A cc o un t .

 

(a)       T he P u rch a ser a n d the S e l l e r s h er e by desi g n a te and appoi n t E s c row A g ent a s esc r ow a g ent to a ct in a c c o rdan c e w ith t h e ter m s o f t h is E sc r ow A g ree m ent, a nd Escrow A g ent a g r e es to act as s u ch e sc r ow a g ent on the ter m s, con d i tio n s and p ro v isi o ns p ro v ided in t his E scrow A g ree m ent.

 

(b)       O n the C l o sing D a te, the Sel l ers s h a l l d epo s it wi th Escrow A g ent an a gg re g ate a m ount equal to T w o M i l lion D o l l a rs ($ 2 ,000,0 00 ) in i m m ediat e ly a v ailab l e funds ( the E s c r ow A m ou nt ”).

 

(c)       Escrow A g ent sh a ll ho l d t he Escrow A m ount as pa r t of the E s crow A ccou n t B alan c e in a se g re g at e d a c count and, su b je c t to the t e r m s and con d i t io n s h e re o f, sha l l in v est and r e in v e s t the E s crow A c cou n t B a l an c e as d i r ec t ed in Se c t i on 2 h ere o f.

 

(d)       A s of any g i v en date, the s um of (x) the t hen r e m aini n g Escrow A m ount, p l us ( y ) any rel a ted i n t e r e s t a n d o t h er i nco m e ( E s c r ow E ar n i ng s ”) e a rned o n t h e E s cr o w A m ount and any pr i or Escrow Ea r nin g s, sh a ll be her e in a f t er r e f e rr e d to co l l e cti v ely as the E s c r ow A c c ou n t B a l an c e .” Escrow

 

43 3 0 9 0 9 -5

 


A g ent sh a l l ho l d, i n v e s t , r e i n v e st , ad m i n i s t e r , d i s t r i b u t e and d i s p o s e of t he Es c r ow A cco u nt B a l a nce i n acc o r da n ce wi t h t he t e r m s a nd con d i t i ons of t h i s E s c r o w A g r ee m en t .

 

2. I n v e st m ent of Es c r ow A cc o unt B a l an c e .

 

(a)       U nt i l the r e l e ase of t he en t ire a m ount of t h e Escrow A ccount B a lan c e, pur s ua n t to the t er m s here o f, and the ter m ina t ion of t h is Es c row A g re e m ent, the Es c row A ccou n t B ala n ce sh a ll b e fu l ly in v ested and r e in v es t e d by Escrow A g ent (a) in a se g re g ated bank m oney m ar k et depo s it a ccou n t as set f o rth i n E x hib i t A he r e to o r (b) a s joi n tly d i r ec t ed in w r it ing by the Pu r cha se r a n d the Se l l e rs in any oth e r t y pe of in v est m ent or int e r e st b e a r ing accou n t o ff e red by Esc r ow A g ent. Escrow A g ent i s h e reby auth o ri z ed and d i re c ted to se l l or re d eem any such in v est m ents as i t d ee m s nece s s a ry to m a k e any pay m ents or d i s t ri b u t ions req u i r ed u n d er t h is E sc row A g ree m ent.   Es c row A g ent sh a ll ha v e no resp o ns i b i l i ty or lia b i l ity f or any loss t h at m ay resu l t from any in v est m ent or sale of in v est m ent m ade purs u ant to t his Es c row A g ree m ent, un l ess s u ch los s , l ia b i l it y , c o st, da m a g e or expen s e sh a ll h a v e b e en fin a l ly a d j u d ic a ted to ha v e been d i r ec t ly cau s ed by the w i l lf u l m iscond u ct or g ro s s ne g li g ence of E sc ro w A g ent. Es c row A g ent is h e reby a u tho r i z ed, in m a k ing or d i spo s ing of any in v e s t m ent per m it t ed by th i s Escrow A g ree m ent, to d e al w ith i ts e lf (in its in d i v idu a l cap a c i t y ) or wi th any one or m ore of i t s a f f i l i a t e s , w heth e r i t or any such a f f i li a te is a c t ing as a g ent o f Escrow A g ent o r f o r any t hird p e r son or de a ling as pri n ci p al for i t s o w n a c co u nt. T he Tran s a c tion P a r t i e s ac k no w led g e t h at E s crow A g ent is n o t pro v i d ing in v est m ent su p er v i s ion, re c o m m endations, or a d v ice.

 

(b)       Escrow A g ent sh a ll ho l d t he Es c row A c c ount B a l a n ce i n a c cor d an c e wi th th i s Escrow A g ree m ent and sh all r e le a se a m ounts f rom the Esc r ow A ccou n t B a l a n ce only as p ro v ided by Sec t i on 3 he r eof o r a s o t he rw ise joi n tly d i r e ct e d in w r it ing by the Pur c ha s er a nd t h e Se l l e rs.

 

(c)       T he T r ans a c t ion Pa r t i es a g ree th a t c o n f ir m ati o ns o f p e r m itted in v est m ents a r e no t req u ir e d to be iss u ed by Escrow A g ent f o r each m onth in w h i ch a m onthly st a t e m ent is ren d e r e d. N o st a te m ent nee d s to be r en d ered f or any fund or a cco u nt if no a c t i v ity occu r red i n such fu n d or a c cou n t during su c h m onth. N ot wi th s tan d ing the fo r e g oin g , the Tra n sa c t i on P a r t ies m ay obt a in c o n f ir m atio n s a t no ad d i t ion a l c o st u pon its w ri t ten re q ue s t to Es c row A g ent.

 

3. R e l e a s e s fr om Esc r o w .

 

(a) C l a i m s P r o c e s s / Pa y m en t s Under E s c r ow R e l e a s e s .

 

(i) I f prior t o or on t h e d a te th a t is t w e l v e (1 2 ) m onths f o l l o w ing the C l os i ng D ate (t h e “ E s c row E x p i r a t i on D a te ), the P u rc h as e r or any other Pur c ha s er I nde m ni f ied P a r ty h as a c l a im for inde m ni f ic a t i on un d er t he Ass e t P u rch a se A g ree m ent (ot h er than a c l a im for i nde m nifi c a t ion u n der Sec t ion 9 . 2( h ) of the A ss e t Purch a se A g ree m ent) (a C l a i m ), t he P u rch a ser sh a ll de l i v er a w r i t ten inde m ni f ic a ti o n c l aim not i c e exe c ut e d by an o f f i cer of the P u rc h as e r (a C l a i m N o ti c e ”) to the S e l l e rs a n d Escrow A g ent.   S uch C l aim N oti c e s h a l l s p ec i fy in r ea s onab l e d e t a il the L o ss e s c l a i m ed (and a g ood fa i th rea s ona b le e s t i m ate t h e r eo f , w hich a m ount sh a ll b e r e f er r ed t o as the C l a i m ed A m ou nt ”), in c lu d ing the nat u re o f and the und e rl y i n g factu a l a n d l e g al ba s is for such c l a i m .

 

( i i)       Fol l o w ing de l i v ery of a C l aim N otice to the S e l l e rs a nd Es c row A g ent, if, w i t hin t en (1 0 ) B usi ne ss D a y s after s uch C l a im N otice i s de l i v ered to t h e Sel l ers ( the D i sp u t e P er i o d ”), t he S e l le r s d e li v er a w r i tt e n r esp o nse to the P u rch a se r , wi th a c o py to E s crow A g ent ( a “ R e s pon s e N o t i c e ”), a g ree i ng that t he f u l l C l a i m ed A m ount is o w ed t o t h e Pu rc has e r I nd e m nifi e d Pa r t y , or if no R e spon s e N o t ice i s de l i v ered to the P u rch a s e r and Es c row A g ent pri o r to the e xp i r a ti o n of t h e D isp u te Pe r iod, t he Se l l er s sha l l be co n cl u si v ely d e e m ed to ha v e consent e d t o the r e co v ery by the Purch a s e r I nd e m nifi e d Pa r t y of the f u l l a m ount of the C lai m ed A m ount. A s pr o m ptly as pra c ti c ab l e a f t e r

 

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t he e x p i r a t i on o f t h e D i s p u t e P e ri o d, i f t he S e l l e r s d e li v e r ed a R e s pon s e N o t i c e a g r ee i ng t h at t he f u l l C l a i m ed A m ount i s o w ed t o t he Pur c h a s e r I nd e m n ifi e d Pa rt y , or i f no R e s p o nse N o ti c e i s d e li v e r e d t o t h e Pur c h a s e r a nd E s c r ow A g ent p r i or t o t h e e xp i r a ti on o f t he Di spu t e P e r i od, E s c r o w A g ent s h a l l p ay t o t he Pur c h a s e r fr om t he Esc r ow A ccount B a l a nce ( i f s u ch a m ount i s g r ea t er t han z e r o ) an a m ount equal t o t h e l e s s er of t he C l a i m ed A m o unt a n d t h e Es c r ow A cc o u n t B a l ance.

 

( i i i )       I f w ithin the Di sp u te P e ri o d (x) t he S e ll e r s d e l i v ers a R espon s e N ot i ce t o the P u rc h as e r, wi th a copy to E s crow A g ent, co n te s t i ng all o r p a rt of the C l a i m ed A m ount and ( y ) t h e Purch a s e r and the S e l l e r s are u n ab l e to a g ree on a r e sol u ti o n of the Cl aim w it h in t w e n ty (20) B u si n e s s D a y s aft e r the S e l l e rs d e li v er a R es p onse N o t ice to t he Pu r cha s er (up o n t he ex pir a t ion o f w h i ch e i ther T r an s ac t ion P a rty sha l l no t ify Escrow A g ent), t h en t h e cont e s t ed C l a i m ed A m o unt s t at e d in t h e C laim N oti c e s h a l l b e d e e m ed to con s t i t u te a C o n t e s t ed C l a i m and E sc r ow A g ent sh a ll not d i s t rib u te t h e a m ount of such C o n te s ted C laim to any T ra n sa c t i on Part y , but r at h er E s crow A g ent sha l l r e ser v e t h e a m ount of the C o nt e s t ed C laim (su b je c t, as b et w ee n the T r an s ac t ion P a r t i e s, to t h e d i spu t e r e so l u t ion proc e du r es a n d pro v i s io n s set fo r th in t he A s s et P u rc h ase A g ree m ent) ( w h i ch a m ount for each C o nt e s t ed C laim is ref e r r ed to he r ein as the C l a i m R e s e r v e ”). A ny portion of t he C l a i m ed A m ount th a t is not a C onte s ted C l a im shall be p aid by Es c row A g ent to the Purch a s e r.

 

(b)       C on t e s t ed Cl a i m Di sbu r se m en ts . T he a m ount con s t it uting the Cl aim R eser v e ( o r any por t ion t h er e o f ) f or ea c h C on t es t ed C l a im sha l l be paid f rom the E scrow A cc o unt B a la n ce only ( 1) i n acc o rda n ce w ith a joi n t w r i tt e n in s tr u c t ion by the Pur c has e r and the S e l l ers d e li ve red to E s c row A g ent (a “ Jo i n t W r it t en Ins t ru c ti o n ”) o r (2) p u rsu a nt to, and only to t h e e x te n t ex p re s s l y set fo r th in, a f i na l , bin d ing and non - appeala b l e ord e r of a c ou r t of co m pete n t j u r i sd i c t ion p u rsu a nt to the d is p ute re s ol u ti o n proc e du r es a n d p r o v isio n s set f o r th in the A s set Pu r c h ase A g ree m ent a s to t h e v a l id i ty and a m ount o f any C onte s ted Cl ai m , w hich d e ci s ion co m pli e s w ith the t e r m s of the A sset Pu r ch a se A g ree m ent and is se n t t o Escrow A g ent by the Se ll ers or the P u rch a ser (a F i nal D e t e r mi n a t i o n ) c e r t if y i ng that s u ch Fi n al D eter m in a ti o n i s fi n al, and w hich pa y m ent sh a l l be p roc e ssed as f o l lo w s: p ro m ptly f o l lo w ing t he F i na l D eter m in a ti o n of a Co n t e s t ed Cl a im g i v ing rise to a ny C laim R eser v e wi t h r e spe c t to t h e Es c row A m ount, and a f t e r pa y m ent by Escr o w A g e n t of the Con t es t ed Claim as so d i re c ted in su c h Fin a l D et e r m ina t ion, ( i ) if t h e Escrow Ex p ir a t ion D ate has p a ss e d, Escrow A g ent shall r e l ea s e and d i sbur s e to t h e Se l le r s t h e a m ount of the E s crow A c count B a l an c e, less t he a m ount of C laim R es e r v es f o r a ll o t her C on t e s ted C lai m s, if an y ; and ( i i ) i f t h e Esc r ow Exp i ra t ion D a te h as not y et p as s ed, up o n r ec ei p t by Escrow A g ent o f a Fin a l D e t e r m inati o n or Joint W ri tt e n I nstru c ti o n of the P u rc h as e r a n d t h e S e l le r s, any po r t ion o f t h e C laim R eser v e n ot d is b u r sed to the P u rc h as e r fr o m the Escrow A ccou n t a s s e t f o r th in the F in a l D eter m in a ti o n or Joi n t Wr i t ten I nstru c t ion, s h a l l c ea se to b e a Cl aim R eser v e and sh a ll re v e r t to the Escrow A c cou n t B a l anc e .

 

(c)       Ear l y R edu c ti on o f Es c r ow A ccount B a l a n c e .   I f, at the date t hat i s s ix ( 6 ) m onths fo l lo w ing the C lo s ing D ate, the t hen r e m aining Escrow A m ount is a t l ea s t $1, 8 00 , 000, t h en Es c row A g ent sha l l r e l ea s e and di s bur s e t o the S e l l e rs an a m ount e q ual to ( i) the a m ount of the then o ut s ta n ding Es c row A ccount B a l ance, l e ss ( i i) $ 1,000,000.

 

(d)       D i s t ri b u t i ons F o l l o w i ng E s c r ow Ex p ir a t i on D a t e .   W i thin f i f t een (1 5 ) B u s ine s s D a y s follo w ing the Es c r o w Expir a t i on D at e , the Tr a nsa c tion P a r t i es s h a l l j o in tl y instr u ct E s crow A g ent by m eans of a J o i n t W r i t t e n I nstru c t i on to d is t r i bu t e t o the Se l l e rs an a gg re g ate a m ount in cash ( if su c h a m ount is g reat e r t h an z e r o) equ a l to ( i) the Es c row A ccount B a la n ce, l e s s ( i i ) the a m ount of a ll Cl aim R eser v es and any C laim Not i ce a g ain s t t h e Es c row A ccou n t B al a nce p u rs u ant t o the t er m s set f o r t h he r e i n and t h e A s s et P u rc h ase A g r ee m ent.

 

(e) D i sbu r s e m en t s . A ll d isb ur se m ents from the Es c row A ccount B a la n ce by Escr o w

A g ent sh a ll be p u r su a nt to t he te r m s of t h i s E s c r ow A g r ee m en t . No t w it h s t a nd i n g any o t her p r o v i s i o n in

 

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t h i s Es c r ow A g r ee m en t , d i sb u r s e m en t s sh a l l be m a d e f r om t he E s c r ow A c co u nt B a l an c e by Es c r ow A g ent pu r su a nt t o ( i ) t he i n s tr u c t i o n s s e t f o rt h i n any a pp l i ca b l e J o i n t W r i tt e n I ns tr uc t i on o r ( i i ) t h e t e r m s of t h i s E s c r ow A g r ee m ent t hat do not r e q u i r e J o i n t W r i tt e n I ns tr u c ti o n .

 

4.           Secu r it y Pr o ced u r e f or Fu n ds T r an s f e r s . E s c r ow A ge nt s h a l l c on f ir m each f un d s t r an s f er i n s tr u c t i on r e c e i v ed i n t h e na m e of a T r an s a c t i on P ar t y by m eans of t he s e cu r i t y p r ocedu r e s e l e c t ed by su c h T r an s ac t i on P a r t y and co m m un i ca t e d t o E s c ro w A g ent t h r ou g h a s i g ned ce r t i fi c a t e i n t he f o r m of E x hib i t B - 1 or E x hib i t B - 2 a tt a ched h e r e t o, w h i c h upon r ec e i p t by Esc r ow A g e nt sh a l l b e co m e a pa r t o f t h i s E s c r ow A g r ee m en t . O nce d e l i v e r ed t o E s c r ow A g en t , E x hib i t B - 1 o r E x hi b i t B - 2 m ay be r e v i s ed o r r e s c i n d ed o n l y i n w r i t i ng and s i g ned by an a u t h o ri z ed r e p r e s e n t a ti v e of su c h T r an s ac t i on P a r t y .   Su c h r e v i s i o ns o r r e s c i s s i o n s s ha l l b e e ff e c t i v e on l y a f t e r a c t u a l r ec e i p t and f o ll o w i ng su c h p e r i od o f ti m e as m a y be nece s s ar y t o a f f o r d Esc r ow A g ent a r eas o na b l e opp o rt u n it y t o a c t on it . I f a r e v i s e d E x hib i t B - 1 or E x hib i t B - 2 or a r e s c i s s i on of an ex i s t i ng E x hib i t B - 1 o r E x hib i t B - 2 i s d e li v e r ed t o Es c r ow A g ent by an e n t i t y t hat i s a su c ce s so r - i n - i n t e r e s t t o su c h T r a ns a c ti on P a r t y , su c h d o cu m ent s ha l l be a cco m pan i e d by add i ti o nal do c u m en t a t i on s a t i s f a c t o r y t o Es c r ow A g ent s ho w i ng t h at su c h e n t i t y has s u cce e ded t o t h e ri g h t s and r e spon s i b i l i t i es of t he T r a ns a c t i on P ar t y und e r t h i s Es c r ow A g r e e m en t .   The Tran s a c ti o n Pa r t i es und e r s t and t h a t E sc r ow A g en t’ s i n a b i l i t y t o r e c e i v e or c on f ir m f unds t r an s f er i n s t r uc t i o n s pu r su a n t t o t h e s e c u r it y p r o c edu r e s e l e c t ed by su c h T r a n s a c t i o n Pa rt y m ay r e s u l t i n a d e l ay i n acco m p li s h i ng su c h f unds t r an s f e r , and a g r ee t h at E s c r ow A g ent s ha l l n o t b e l i ab l e f o r a ny l oss c au s ed by any su c h de l a y .

 

5.         T e r m i na t i o n .   Th i s Es c r o w A g r e e m ent sh a l l t e r m i na t e on t he d a t e on w h i ch Esc r ow A g ent sh al l h a v e de li v e r ed t he en t i r e a m oun t s of t h e Esc r ow A ccou n t B a l a nce i n acc o r d a nce wi t h t h e p r o v i s i ons of t h i s Es c r ow A g r ee m en t , and t h i s Es c r o w A g r e e m ent sh a l l be o f n o f u r t h e r f o r ce a n d e f f e c t exce p t t hat t he p r o v i s i o n s o f Se c ti o ns 7 ( a ) , 7 ( b ) , a n d 7 ( d) h e r e o f sh a l l s u r v i v e t e r m i n a ti on.

 

6. D u ti e s of E s c r ow A g en t .

 

(a)       Scope o f R e s po n s i b i li t y . N ot w i t hs t an d ing any pro v ision to t h e co n t r ar y , Esc r o w A g ent is ob l i g ated o n ly to per f orm the du t ies s p ec i f i c ally s e t fo r th in th i s Escrow A g re e m ent, w hich s h a l l be dee m ed pur e ly m inis t e ri al in n a t u re and w h ich s h a l l in c lude the s afe c us t ody of the E s crow A c c ount B alan c e a c tu a lly in t h e p o sse s sion o f Es c row A g ent. U nder no c i rcu m sta n ces w ill E s crow A g ent be dee m ed to be a f i du c iary t o any of t he P urc h as e r or the S e l l e rs or any o t her p e rson und e r t h is E sc ro w A g ree m ent. Escrow A g ent w i l l n o t be r espo n si b le o r l i ab l e f o r t h e f a il u re o f a ny T ran s a c tion P a r ty to per f orm in acc o rda n ce w i t h this E sc r ow A g ree m ent. Escrow A g e n t sh a ll n e i th e r be r e spon s i b le f o r, n o r char g ea b le wi th, k no w led g e of the ter m s and con d i t i o ns of any other a g ree m ent, in s tru m ent, or d o cu m ent oth e r than t h is Es c row A g ree m ent, w h et h er or not a n o r i g inal or a copy of s u ch a g ree m ent has be e n pro v ided to E s crow A g en t ; and Es c row A g ent s h a l l h av e no duty to k now or i nqu i re as to the pe r for m an c e or no n pe r f o r m ance of any pro v is i on o f any s u ch a g ree m ent, in s t r u m ent, or doc u m ent. R ef e re n ces in t h i s Escrow A g ree m ent to any other a g r e e m ent, in s tru m ent, or d ocu m ent a r e for the con v e n ien c e of t h e Purch a s e r and t h e Se l l e rs, and Esc r ow A g ent has n o dut i es or o b l i g atio n s w i t h res p ect th e r e to.   Th i s Escrow A g ree m ent s e ts f orth a l l m atte r s pe r t i ne n t to the  es c row co n te m plated h er e und e r, and n o add i ti o nal o b li g a t ions o f Es c row A g ent sha l l be i n fe r red or i m pl i ed from the ter m s of this E s cr o w A g ree m ent or any oth e r a gr ee m ent.

 

(b)       A tt o r ne y s and A g en t s . E s c row A g ent sh a ll b e e n t i t l ed to r e ly on and s h a l l n o t be li a ble f o r any a c ti o n ta k en or o m itt e d to b e ta k en b y Escrow A g ent in a c co r d ance w i t h the ad v ice of couns e l or o th e r pr o fe s sio n als r e t ai n ed or co n su l ted by Escrow A g ent. Escrow A g ent sha l l be r e i m burs e d as s e t fo r th h er e in for any and a ll r e ason a ble co m pensa t ion (r e aso n ab l e f ees, e x pens e s and ot h er co s t s ) paid a n d/ o r r e i m bursed to such co u ns e l an d /or p ro f e s sion a ls. E s crow A g ent m ay perform any and all of its du t ies t h rou g h i ts a g en t s , re p re s en t a t i v es, a t t o rne y s, cust o di a ns, a nd/ o r no m ine e s.

 

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( c)       R e l i anc e . Es c r ow A g ent s h a l l not be l i ab l e f or a ny ac ti on t a k en o r n o t t a k en by i t i n ac c o r d a nce wi t h t h e w r i tt e n d i r e c ti on o r w r i t t en c o ns e nt o f t h e Tra n s a c ti o n Pa r t i es o r t h e i r r e s pe c ti v e a g en t s, r ep r e s e n t a ti v e s , su c ces s o r s, or a s s i g ns. Es c r o w A g ent sh a l l n o t be l i a b l e f or ac t i ng or r e f r a i n i ng fr om ac t i ng upon any w r i t t en no t i c e, r e q u e s t , con s en t , d i r ec t i on, r e q u i s i ti on, c e r ti fi c a t e , o r d e r , a f fi d a v i t , l e t t e r , or o t h e r pa p er o r do c u m ent be l i e v ed by i t t o be g enu i ne and co r r e c t and t o ha v e been s i g ned or s en t by   t he p r oper p e r s o n or pe r so n s, w it h o ut f u r t her i nqu i r y   i n t o t he p e r s on s or pe r s on s au t h o r it y . C oncu r r e n t wi t h t he exe c u t i on o f t h i s Es c r ow A g r ee m en t , t he T r a ns a c t i on P a r t i e s sh a l l de l i v er t o E s c r ow A g ent au t h o ri z ed s i g n e r s’ f o r m s i n t he f o r m of E x hib i t B - 1 or E x hib i t B - 2 t o t h i s Esc r ow A g r ee m en t , w h i ch s ha l l c o n t a i n au t h o r i z ed s i g ner d e s i g na t i on i n P a r t I t he r eo f .

 

(d) R i g ht N ot D u t y U nde r t a k e n . T he p er m is s i v e ri g hts o f Escrow A g ent to do th i n g s enu m erated in t h is E s crow A g ree m ent sha l l n o t be co n str u ed a s d u ti e s.

 

(e)       N o Fin a n c i a l O b li g a t i o n . N o pro v is i on o f t his Es c r o w A g ree m ent s h a l l r eq u ire Escrow A g ent to risk or a d v ance i t s o w n fun d s or o ther w ise inc u r any fi n an c i al l ia b i l ity or p o te n ti a l fin a nc i al li a b i l i ty  in the per f or m ance of i ts d u t i es or the ex e r c ise o f i t s r i g hts under t h is E s cr o w A g ree m ent.

 

(f)         A ccount St a t e m en t s . S u b ject t o S e c t i on 2 ( c) h e reo f , dur i ng the t erm here of , Escrow A g ent s ha l l d e l i v er m onthly  acco u nt st a t e m ents to t h e   T r ans a c t ion  Par t i e s w i t h r e spe c t to the E s crow A c cou n t B a la n ce f o r the p r i or m onth, w hich s t ate m ents sh a ll i n cl u de t h e a c cou n t b a l a nc e , disb u rse m en t s m ade pu rs uant to th i s E s crow A g ree m ent, and E s c row Ea r n i n g s ear n ed d u r i ng the pre c eding m onth.

 

7. Pro v i s i o ns C on c e r n i ng Es c r ow A g en t . I n o r der t o i n d uce Es c r ow A g ent t o act as e s c r ow a g ent h e r eun d e r , t he Tra n s a c t i on P a r t i es a g r ee t h a t :

 

(a)       I nd e m n ifi c a ti o n . T he Tra n sac t ion P a r t i e s, j o in t ly and se v era l l y , sha l l in d e m nif y , defe n d and hold Es c row A g ent har m less f r om and a g ain s t any and a l l l oss, l i a b i l it y , co s t, da m a g e and expen s e, i nc l udin g , wi tho u t li m it a ti o n, r e aso n ab l e a tt or ne y s’ f e es a n d ex p ens e s or oth e r pr o f e ss i on a l f e es and ex p en s es th a t Es c row A g ent m a y suff e r or i n cur by reason of any ac t ion, cl a im or pro c ee d ing brou gh t a g ainst E s crow A g ent, a r is i ng out of or rel a t i ng in any w ay to this Es c row A g re e m ent or any transa c ti o n to w hich t h is Es c row A g ree m ent r e l a tes ( the E s c r ow A gent D a m age ”), u n less s uch lo s s, l i ab i l i t y , cos t , da m a g e or ex p ense s h a l l ha v e been f in a lly ad j u d i c ated to ha v e been d ir e c tl y caused by t h e wi l l f u l m isconduct o r g ross ne g li g ence of Es c row A g en t . The inde m ni f ic a ti o n pro v id e d for und e r th i s Sec t i on

7 ( a) sh a l l be a l l oc a t ed and pa i d i n t h e s a m e m anner as t he f ees and ex p en s e s u n der Se c t i on 7 ( d ) b e l o w , un l e s s d e t e r m i ned by a co u r t o f co m pe t e n t j u r i s d i c ti on t h a t su c h i n de m n if i ca t i on sh a l l be a l l o c a t e d ba se d

on t he r e l a ti v e f a u l t of ea c h Tra n s a c ti o n Pa r t y i n c au s i ng t he E s c r ow A g ent D a m a g e. T he p r o v i s i o n s o f

th i s Se c t i on 7 ( a ) s h a l l s u rv i v e the r esi g n a tion or r e m o v al of E s crow A g ent a nd t h e t er m ina t ion of t h i s

Esc r ow A g r ee m en t .

 

(b)       Li m it a t i on o f L i a b i l it y .     E SCRO W AG E N T S H A LL N O T B E L I AB L E , D I R E C T LY O R I ND I R EC T L Y , FOR AN Y ( I ) DA M AG E S , L O S S ES O R EXP EN S E S A R I S I N G OU T O F   T H E   S E R V I C ES   P RO V I D ED   H E R E UND E R ,   O T H ER   T HA N   D A MA G E S ,   L O SSES   O R EXP EN S E S T H A T HAV E BE E N F I NA L L Y AD J U D I C AT ED T O HA VE D I R E C T LY R E SU LTED F RO M   E SCRO W   AG E N T ’S   GRO SS   N E G L I GE N C E   O R   W I L L F U L   M I S C O NDUC T ,   O R ( I I ) S P EC I A L, I ND I R E C T , P U N I T I VE O R CON SE QU EN T I A L D A MA G ES O R L O SSES O F AN Y K I N D WH A T S O EVER (I N CL U D I NG , W I T HO UT L I M I T A T I O N , L O ST P RO F I TS ), E VEN I F E SCRO W AG E N T HA S B EEN AD V I S E D O F T H E P O S S I B I L I T Y O F S UC H L O S S E S OR DA MA G ES AN D R E G A R D LESS O F T H E F OR M O F AC T I ON .

 

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( c)       R e si g na t i on or R e m o v a l . Esc r ow A g ent m ay r e si g n by f u r n i s h i ng w ri t t en n o t i c e of i t s r e s i g na t i on t o t he T r an s a c t i on P a r t i e s, and t h e T r an s ac t i on Pa r t i es m ay r e m o v e Esc r ow A g ent by f u r n i s h i ng t o Esc r ow A g e nt a j o i nt w r i tt e n no t i ce o f i t s r e m o v al a l ong w it h pay m ent of a l l f e es a n d expen s es t o w h i c h i t i s e n t i tl e d t h r ou g h t he d a t e o f t er m i na ti on. Su c h r e s i g na t i on or r e m o v a l , as t h e c a s e m a y be, s ha l l be e f f e c t i v e t h i r t y ( 30) da y s af t er t h e de l i v e r y of su c h no t i ce or u po n t he e a r l i er a p po i n t m e n t of a su c ce s so r , a n d Esc r o w A g en t’ s so l e r e s p on s i b i l i t y t he r e a f t er s ha l l be t o s af e l y k eep t he Esc r ow A ccount B a l a n ce and t o d e l i v er t he s a m e t o a s ucc e s s o r e s c r ow a g ent a s s h a l l b e s e l e c t ed by t he Pu r ch a s e r ( w it h t he r e a son a b l e c ons e nt of t he S e l l e r s ) , a s e v i de n ced by a w ri t t en n o t i ce f i l e d w it h E s c r ow A g ent o r i n ac c o r d ance w it h a c ou r t o r d e r . I f t he Pur c h a s e r h as f a i l ed t o app o i n t a su c ce ss or e s c r ow a g ent p ri o r t o t he ex p ir a t i on o f t h i rt y ( 30) da y s f o l l o w i ng t h e d e l i v e r y of su c h n o t i ce of r e s i g na t i on o r r e m o v a l , Es c r ow A g ent m ay pe titi o n any cou r t o f co m pe t e n t j u ri s d i c t i o n f or t he app o i n t m ent of a su c c e s s o r e s c r ow a g ent or f or o t h er app r op r i a t e r e l i e f , a nd a ny su c h r e s u l ti ng appo i n t m ent s ha l l b e b i n d i ng upon t h e T r an s ac t i on Pa r t i e s .

 

(d)       C o m pen s a ti o n . Es c row A g ent sha l l be en ti tl e d to c o m pensation f or i ts s e r v ic e s as s t a ted in the fee sc h edu l e a t ta c hed h e r eto as E x hib i t C , w hi c h co m pens a ti o n s ha l l be pa i d on e - half by the Pu r cha s er and on e - half by the Sel l er s . T he f ee ag reed upon for t he s e r v ic e s rend e red h e reu n der i s in t ended as fu l l co m pens a t ion f or E s crow A g en t ’s s e r v ices as co n te m plat e d by this E s crow A g ree m en t ; pro v i ded , h o w ev e r , t h at in the e v e n t t h at the c on d i t io n s for t h e d i sbu r se m ent of f unds un d er th i s Es c row A g ree m ent are not fu l f i l l e d, or Es c row A g ent ren d ers any ser v i c e not c on t e m plated in t h i s Esc r ow A g ree m ent, or t h ere is any assi g n m ent of in t e r est in t h e su b je c t m att e r of th i s Es c row A g ree m ent, or any m ateri a l m odif i c a tion he r e of, or i f any m ater i al co n t r o v ersy ari s es h er e und e r, o r Escrow A g ent is m ade a party to any l it i g ation p e r t ai n ing to t h is Es c row A gr ee m ent or t he su b je c t m at t er h e r eof, t h en E s c row A g ent sha l l be co m pensa t e d for such ex t ra o r d inary s e r v ices a nd r ei m bursed f o r all co s ts a nd ex p en s es, in c lud i ng re a sona b le a tt o r n e y s’ f ees and ex p en s es, o c cas i oned by any su c h d el ay , cont r o v ers y , l i t i g ati o n or e v ent. I f any a m ount d ue to Es c row A g ent he r e u nder is not p a id wi t h in th i r ty (30) da y s of t h e d ate due, Es c row A g ent, in i t s s ole d i s c re t ion, m ay char g e in t er e st on s u ch a m ount at 10% p e r annu m . A ny in t er e st c har g ed by Escrow A g ent sha l l be p a id by the T r ans a c t ion P a rty w hose p ay m ent is l at e . Esc r ow A g ent sha l l ha v e, and i s h e reby g ranted, a p ri o r l ien u pon the E s crow A c c ount B ala n ce wi th r e spe c t to i t s unpaid fe e s, non - rei m burs e d expen s e s a n d uns a t i s f ied inde m nif i c a tion ri g ht s , s u per i or to t h e i n te r e s ts o f any other pe r sons o r en t i ti es and is h e reby g ranted t h e ri g ht to s e t off a n d ded u ct any unpaid f e es, no n - rei m burs e d ex p ens e s and u nsa t i s fi e d i n de m nif i ca t ion r i g hts f rom the Es c row A c c o u nt.

 

(e)       D i s a g r ee m en t s . I f any co n f l ict, d i sa g ree m ent or d i s p u te a r i ses b e t w een, a m on g , or i n v ol v ing any of the T r a nsa c tion P a r t ies con c er n ing the m ean i ng or v al i d i ty of any pro v isi o n h e reu n d e r or c onc e rn i ng any oth e r m at t er r e l a ting to th i s E s cr o w A g ree m ent, or E s c row A g ent is in dou b t as to t h e ac t ion t o be ta k en h e reu nd er, Es c row A g ent is a u th o ri z ed to re t ain the E s crow A ccount B a la n ce u n t i l Escrow A g ent ( i ) r e cei v es a fin a l, no n - appeal a ble or der of a c o u r t of co m pet e nt j u ri s di c t i on d i re c ting de l i v ery of t he E sc r ow A ccou n t B a lan c e, ( i i) r e ce i v es a w r i t ten a g ree m ent e xecu t ed by e ach of t h e T r an s ac t ion P a r t i es i n v ol v ed in s u ch d isa g r e e m ent or disp u te d i r e c ting d e li v ery of t h e Es c row A c c ou n t B alan c e, in w hi c h e v ent Escrow A g ent sha l l be a u t h ori z ed to d i sb u rse t h e Esc r ow A ccount B al a nce i n acc o rda n ce w i t h such f in a l court o rd e r, or a g ree m ent, or ( i i i ) f i les a n i n ter p l e ad e r ac t ion i n any court o f co m petent j u r i sd i c t ion, and upon a g ra n t by such co u rt of r e l i ef by i n te r pl e ad e r, Es c row A g ent sh a ll b e re l ie v ed o f a l l li a b i l i ty as to t h e E s crow A c c ount B a lan c e and sh a ll be e n t it led to r eco v er re a sona b le at t orne y s’ f ee s , expe n ses a nd oth e r cos t s inc u r r ed in c o m m encing and m aintai n i n g a n y such inte r pl e ad e r ac t ion.   E s crow A g ent sh all be e n t i t l ed t o a c t on a ny such a g ree m e nt or c o u rt o rd e r w i t hout f u rt h er ques t ion, in q u i r y , or co n se n t.

 

(f)         M er g er o r C onso l i d a t i o n . A corpo r a t ion or a sso c i a ti o n into w h i ch Es c row A g ent m a y be con v erted o r m er g ed, or wi th w h i ch i t m ay be cons o li d at e d, or to w h ich it m a y sell o r t ran s f e r a l l or sub s ta n t i a l ly all of i ts c orpo r a t e tr u st bu s in e ss and asse t s as a w hole o r sub st an t ia l ly as a w hole, or a

 

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co r p o r a ti on or a s so c i a t i on r e s u l t i ng f r om any su c h c o n v e r s i on, s a l e, m e r g e r , c o n so l i d a ti on or t r an s f e r t o w h i ch E s c r ow A g ent i s a pa r t y , m ay be and b ec o me t he s u cc e s s o r e s c r ow a g ent un d er t h i s Es c r ow A g r ee m ent and m ay ha v e and su c ceed t o t he ri g h t s , po w e r s, d u t i e s , i mm un it i es a nd p ri v i l e g es a s i t s p r ed e ce s so r , w it h out t he e x ecu t i on o r f i l i ng of a ny i ns t r u m ent or p ap e r or t he pe r f o r m ance of any f u r t h e r ac t ; pro v i ded t hat a nd on l y i f su c h c o r p o r a t i on o r a s s o c i a ti o n i s a bank or tr u st c o m pa n y o r g an i z ed und e r t he l aws o f t he S t a t e of D e l aware and h a s a co m b i ned cap i t a l and su r p l u s of not l e ss t h an $5 0 ,000,0 0 0.

 

( g )       A tt a c h m ent of Es c r ow A m oun t ; C o m p li a n ce w it h Le g al O r de r s . I n the e v ent t h at any Escrow A m ount sha l l be att a ched, g ar n ished o r le v ied upon by any court order, or the d e li v ery the r eof s h a l l be sta y ed or en j o i ned by an order of a c o urt, or any ord e r, j ud g m ent or decr e e sha l l be m ade or e n te r ed by any court o r d er a f f e c t ing the Es c row Am ount, E s crow A g ent i s he re by expres s ly auth o ri z ed, in its s o le d i sc r e t ion, to r es pond a s it dee m s ap p ro p ri a te o r to co m ply w ith a l l w r its, o r de r s o r d ec r ees s o ent e red or i ssue d , o r t h a t i t is ad v is e d by l e g al c o un s el o f i t s o w n cho o sing i s b ind i ng upon it, w he t h e r w ith o r w i t hout j u ri s di c t io n . I n the e v ent th a t Es c row A g ent obe y s or co m pli e s w ith any such w r it, o rd e r or d e c r ee,  it s h a l l n o t b e l i ab l e to a ny  of the Tr a nsa c tion  P a r t ies or to  any ot h er pe r son, f i rm or corp o r a tio n , shou l d, by reason o f such co m pli a n c e not wi th s tan d in g , such w rit, o rd e r or de c ree b e subse q ue n tly re v er s ed, m odi f ied, a nnu l l e d, s e t a si d e or v acated.

 

(h)       For c e M a j e u r e . E s crow A g ent s ha l l n o t be r e spon s i b le or l ia b le for any fa i l u re o r delay i n the pe r for m a n ce o f i ts o b li g a t ion u nd e r th i s E scrow A g r e e m ent a r i s ing o ut o f o r c au s ed, d i r e c tly or i n d i re c tl y , by cir c u m stances b e y ond i t s r e aso n ab l e con t rol, in c lu d in g , w ith o ut li m it a ti o n, a c ts o f G o d ; ea r thqua k e s ; f i r e; flo o d; w ar s ; a c ts o f t e r ro r is m ; ci v il or m ili t ary di s t u rba n ce s ; s a bota g e; e pi d e m ic; r io t s ; in t er r up t io n s, l oss or m al f unc t ions of u t i l i t ie s , co m put e r ( hard w are or so f t w a re) or co m m unica t io n s ser v ic e s; a c c ide n t s ; la b or disp u t e s; a c ts o f ci v i l or m ilit a ry autho r ity or g o v ern m ental a c ti o n; i t b e ing unde r sto o d t h at E s crow A g ent s h a l l use co m m erci a lly rea s ona b le e ff o r t s t h at a re c ons i st e nt wi th a c ce p t e d pra c t i ces i n the b a n k ing indus t ry to resu m e per f o r m ance as soon as r e aso na bly prac t ic a ble u n der the ci r cu m stanc e s.

 

8. T ax M a t t e r s .

 

(a)       U pon ex e cu t ion of t h is Es c r o w A g ree m ent, e ach of t h e T r a ns a c t ion P a r t i es sh a l l pro v ide E sc r ow A g ent wi th a fu l ly exe c ut e d I R S form W - 9, w hich s h a l l in c lude s uch T r an s ac t ion Pa r t y ’s T a x pa y er I dent i fi c a t ion N u m bers as s i g ned by the I nte r nal R e v enue S er v i c e.  No t w ith s ta n ding the t e r m s of th i s Es c row A g ree m ent, E s crow A g ent s h a l l r epo r t an d, as req u ir e d, wi thh o ld a n y taxes a s i s r e qu i red by any law or re g u l a t ion in eff e ct a t t he t i m e of a ny dist r ib u tion bas e d up o n the i nf o r m ation a n d docu m enta t ion p ro v ided.

 

(b)       For i n co m e tax pu r pos e s,  the   T r ans a c t ion P a r t i e s  a g ree to  tr e at the E sc r ow A ccount B a la n ce as b en ef ic i a l ly o w ned by the Pur c has e r.   T h e Pur c has e r s ha ll pay a l l ta x es on t he Escrow E a r n in g s and s ha ll , w ith o ut a ny J o i n t W r i tt e n I nstruc t ion, re c ei v e a d i s t r ibu t ion o f the E s cr o w Earn i n g s earned d u r i ng a cal e nd a r y ear w it h in th i rty (30) c a len d ar da y s af t er t he end of such c al e nd a r y ear. T he S e l l ers a n d the P urch a s e r in t end and a g r e e, for a ll t ax pur p os e s, th a t a m ounts dis t ri b ut e d to t h e Sel l er s , if an y , in a y ear fol l o w ing the Closing D ate f ro m the Escrow A ccou n t B a l ance sh a ll ( ex c ept to t he exte n t a t t r i bu t ab l e to i m puted in t er e st as r eq u ir e d by app l ic a ble la w ) be tr e a t ed as t h e p r oce e ds o f an in s ta l l m ent s a le p u rsu a nt t o Sec t ion 453 o f the I nter n al R e v enue C ode of 1986, as a m ended, and sh a l l n o t be t r e a ted a s con s t r uc t i v ely rec e i v ed by the Se l l e rs u n l ess, a n d un t il, di s t r ib u ted t o the S e l l ers pur s ua n t to th i s Es c row A g ree m ent.

 

(c)       A ny tax ret u rns r eq u ir e d t o be f i led, o th e r t h an the t ax and i n for m a t ion r e t u rns req u ir e d to be r e po r ted by Escrow A g ent as de s c r ibed in Sec t i on 8 ( a ) he r eof, wi ll be prep a red a nd f i led by the P u rc h as e r or S e l l e rs, a s ap p li c ab l e, wi th the I R S and any ot h er ta x ing auth o r i ty as re q u i red by la w .

 

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43 3 0 9 0 9 -5

 


T he S e l l e r s and t he P u r ch a s e r a c k no w l ed g e and a g r ee t hat E s c r ow A g ent s h a l l h a v e no r e s po n s i b i l it y f o r t he p r e p a r a t i on a nd / o r f i li n g of any t ax r e t u r n, o t h e r t han t he t ax and i n f o r m a ti o n r e t u r ns r eq u i r ed t o b e r ep o rt e d by Esc r ow A g ent as de s c r i bed i n Sec t i on 8 ( a ) he r e o f . I n t he ab s en c e o f w r i tt e n d i r e c ti on fr om t he S e l l e r s and t h e Pu r c h a s e r , a l l p r o c eeds of t he Esc r ow A c cou n t B a l an c e sh a l l be r e t a i ned i n t he app l i ca b l e E s c r ow A ccou n t B a l ance and r e i n v e st ed f r om ti m e t o ti m e by Esc r o w A g ent as p r o v i d ed i n t h i s Esc r ow A g r ee m en t . Esc r ow A g ent sh a l l wi t hh o l d any t axes i t d e e m s app r o p r i a t e i n a c co r d an c e w i t h app l i ca b l e l aw, i n c l u d i n g , but not l i m it ed t o, r eq u ir ed wi t hh o l d i ng i n t he ab s e n ce of p r op e r t ax docu m en t a t i on, and s ha l l re m i t su c h t ax e s t o t he ap p r o p ri a t e au t ho r i t i e s .

 

(d)       T o t h e ex t ent t h at Es c row A g ent beco m es liab l e for t he pa y m ent of any taxes i n res p ect o f i n co m e deri v ed from the in v est m ent of t he Esc r ow A ccou n t B ala n ce, Es c row A g ent sha l l sa t isfy s uch l i ab il ity to t h e exte n t pos s i b le from the a p pl i ca b le E sc r ow A cco u nt B ala n ce.   T he T r a ns a c t i o n Par t ie s , j o i n tly and se v er a l l y , shall in d e m nif y , defend and h o ld E s crow A g ent ha r m less from and a g a i n s t any tax, l a te p ay m ent, i n t e re s t, p e na l ty or o th e r c ost or ex p en s e t hat m ay be asses s ed a g ai n st Es c row A g ent on o r w ith r esp e ct to the E s crow A ccou n t B al an ce a nd the in v e s t m ent t he r e of u n l e ss such t ax, l a te pay m ent, i nt e re s t, pen a l ty or ot h er exp e nse w as d i re c tly c a used by the g ro s s ne g li g en c e o r w i l lf u l m isconduct o f Es c row A g ent.   T he inde m ni f ic a ti o n pro v ided by th i s Se c ti o n 8 ( d) i s in a dd i t i on to the inde m ni f ic a ti o n pro v ided i n Sec t i on 7 ( a ) and s h a l l s u r v i v e the re s i g nati o n or r e m o v al of Escrow A g ent and t h e t er m ina t ion o f th i s Escrow A g ree m ent.

 

9. M i s ce l l a n eous .

 

(a)       Succe s so r s a nd A s s i g n s . This E s c row A g ree m ent s h a ll be bin d ing on and in u re to t he b e ne f it of the Tra n s a ct i on P a r t ies and E sc r ow A g ent and th e ir res p e c ti v e s u cce s so r s and per m i t t e d assi g ns. N o other p ers o ns shall ha v e any ri g hts un d er t h is Es c row A g ree m ent. N o assi g n m ent of the in t er e st o f any of t h e T r ansa c t i on Pa r t ies s ha l l be bind i ng unless and u n t i l w ri t ten n o t ice o f su c h assi g n m ent sh a ll be d e li ve red t o t h e o t her Tra n sa c ti o n Pa r ti e s and E sc r ow A g ent and sh a ll req u i r e t h e pri o r w r i t t en co n se n t of each o ther Tra n sa c ti o n Party and Es c row A g ent ( such co n se n t not to be unre a son a bly w ithh e ld, c o ndi t io n ed or d e la y ed ) ; exc e pt th a t the P u rch a s e r m a y assi g n so m e or all of it s ri g hts, i n t e re s ts and o b li g a t ions pu r sua n t to t h is E s c r o w A g ree m ent to one or m ore o ne o f i t s sub s id i a r ies w itho u t t h e con s ent o f any Sell e r, t h e Pr i nc i pal o r t h e Escrow A g ent; p ro v ided th a t the P u rch a ser s ha l l re m ain l ia b le f or i t s o b li g a ti ons h e reun d e r .

 

(b)       Esche a t .   T he T r a ns a c t ion Pa r t i es are aw a re th a t u nder ap p l i ca b le st a te la w , prop e rty t hat i s p re s u m ed abando n ed m a y , under c er ta i n c i r cu m stanc e s, esc h e a t to t h e a pp l ic a ble s t a te. Escrow A g ent s ha l l ha v e no l iabi l ity to the T r ansa c t i on P a r t ies, th e ir r espe c ti v e h e i r s, l e g al rep r es e nt a ti v es, s ucc e ss o rs and as s i g ns, or any oth e r part y , sho u ld any or a l l of the E scrow A m ount esch e at by oper a ti o n of la w .

 

(c)       N o ti c e s .   Al l no t ic e s, re q ues t s, d e m ands, c l a i m s, a nd o ther com m unicat i ons here u nd e r w i l l be in w r i ti ng . A n y notice, r equ e st, de m and, c l ai m , or oth e r co m m unic a t i on he r eun d er s h a l l be dee m ed duly g i v en (i) i f ser v ed per s on a ll y , on the day of such s e r v ice, or ( i i) if m ailed by ce r t i f i ed or re g is t er e d m ail  (r e t u rn re ceipt  requ e s t ed),  on  the  second   B u s ine s s D ay  a ft er m ai l in g , and  ( i i i ) i f tra n s m itt e d by reco g ni z ed o v erni g ht ca r r i er, on the n ext B u s ine s s D ay after te n der to the c a r r i e r. Such co m m unicat i ons s ha l l b e s e nt to t h e f o llo w ing add r es se s:

 

I f t o t he S e l l e r s : D e s e r t Is l and Re s t a u r a n t s, L. L . C .

6263 N . Sc o t t sd a l e Rd. # 3 74

Sco t t sd a le , A Z 85250

A tt e n t ion: W. Ra n dall Sc h och

Phone: ( 48 0 ) 9 4 5 - 0088

 

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Fac si m i l e: ( 60 2 ) 22 4 - 7876

 

 

C opy t o:

Sull i v an M e h eula Le e , LL L P Paci fi c Gua r d i an Center M a k ai T ow e r

 

733 B i s h op S t r e e t , S u i t e 2 9 00

A tt e n t ion: Te r r en c e Lee

Phone: ( 80 8 ) 62 8 - 7530

Fac si m i l e: ( 80 8 ) 53 3 - 2467

 

I f t o Pur c h a s e r : RC SH O pe r a t i ons, Inc.

c / o R u t h s Hos p it a l it y G r o u p, I nc.

1030 W. C an t o n A v e. Sui t e 100

W i n t er Pa r k , FL 327 8 9

A tt e n t ion: G e neral Co u ns e l

Phone: (4 0 7 ) 829 - 3451

 

C opy t o: O l sh a n F r o m e Wo l o s k y L L P

1325 A v enue of t he A m e ri c as

New Y o r k , New Y o r k 10019

A tt e n t ion: J e ff r ey Spin d l er, Esq. Phone: ( 21 2 ) 4 5 1 - 2300

Fac si m i l e: ( 21 2 ) 45 1 - 2222

 

I f t o t he E s c r ow A g ent : Ti t l e Gu a r a n t y Esc r ow S erv i ces, I nc

235 Q ueen S t r e e t

Hono l u l u, Haw a i i 9 6813

A tt e n t ion: B a r b a r a P aulo

Phone: ( 80 8 ) 5 2 1 - 0209

Fac si m i l e: ( 80 8 ) 52 1 - 0280

 

(d)       A m end m ent and Mod i f i c a t i o n .   This E scrow A g ree m ent m a y be a m ended, m odified or sup p le m ented only by w ritten a g ree m ent of each o f t h e Pu r cha s er, Escrow A g ent and t h e Sel l er s .

 

(e)       G o v e r n i ng La w ; V enu e .     T h is E s c row A g ree m ent sh a ll be co n s t rued i n acc o rda n ce w ith the laws o f the St a te of H aw a ii wi th o ut re g ard to t he co n f l i c ts of law prin c i p les t he r eo f . T he p a r t ies fu r th e r h erby w ai v e any ri g ht to a t r i a l by j u ry w ith res p e c t to any lawsu i t o r jud i ci a l proc e ed i ng aris i ng or rel a t i ng to this Escrow A g ree m ent. D isp u tes b e t w e e n the P urch a s e r and the S e ll e rs sha l l be g o v erned by the l a w desc r ib e d in the A ss e t P u rch a se A g ree m ent

 

(f)         C oun t e r p a rt s .   T h is A g re e m ent m a y be ex e cu t ed in t w o or m ore c o un t erp a r t s, each of w hi c h s h a l l b e d e e m ed to be an o r i g inal co p y of t h is A g ree m ent and a l l o f w h i ch, w h en ta k en to g eth e r, s ha l l b e d ee m ed to c on s t i tu t e o n e a n d t he s a m e a g ree m ent, and pho t o st a t i c, .p d f o r fa c si m ile copi e s o f f u ll y - executed c o unt e rp a rts of th i s A g ree m ent s h a l l be g i v en t h e sa m e e ff e ct a s o ri g in a ls.

 

( g )       I n t e r p r e t a t i o n . T he s e c t i o n and pa r a g raph hea d in g s co n ta i ned in t h is E sc r ow A g ree m ent are s o l e ly for t h e purp o se o f r e f e ren c e, a r e not p a rt o f t h is E scrow A gr ee m ent, and s h a l l n o t in any w ay affect the m eaning or i n t e rp r e t a t ion o f t h is E s crow A g ree m ent. W h en a r ef e ren c e i s m ade in t his

 

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Esc r ow A g r ee m ent t o s e c t i ons, e xh i b i t s or s ched u l es , su c h r e f e r en c e sh a l l b e t o a s e c t i on, exh i b i t or s c hed u l e t o t h i s Es c r ow A g r ee m ent u n l e s s o t he r w i se i n d i c a t ed.

 

(h)       Se v e r ab i l i t y . I n the e v ent t hat any pa r t of t his E sc r ow A g ree m ent is dec l ar e d by any court or o th e r j u di c i a l or ad m ini s t r a t i v e body to b e nu l l, v oid o r une n fo r ce ab le, s u ch p ro v isi o n sh a l l sur v i v e to t h e e x te n t i t i s n ot so d ec l a r ed, and a l l of t he ot h er p ro v is i ons o f t h is Escrow A g ree m ent s h a l l re m ain in f u ll fo r ce a n d e f f ect.

 

(i)         Wa i v e r s . T h e f a i lu r e o f a n y party at any ti m e or t i m es to re q u i re p e r for m ance o f any pro v is i on u n der t h is E scrow A g r e e m ent sh a ll i n no m anner af f e c t the ri g ht at a l a t er t i m e to e nf o rce the sa m e pe r for m ance. A w ai v er by any pa r ty of a n y such co n d i tion or b r each of any ter m , co v ena n t, rep r es e nt a t i on, o r w a r ra n t y contai n ed in t his Es c r o w A g ree m ent, in any one or m ore i n s t anc e s, s h a l l ne i ther be c on s tr u ed a s a f u rth e r o r co n t inu i ng w ai v er of any such con d i t ion or br each n or a w ai v er o f any oth e r c o nd i ti o n or b r each of a ny oth e r t er m , co v enant, re p re s en t a t ion, or w ar ranty c o nt a in e d in t h i s Escrow A g ree m ent.

 

( j )       Ent i r e A g r ee m en t . T h i s Esc r ow A g r ee m ent t oge t her wi t h t he A s s et Purchase A g r ee m en t , i nc l ud i ng t he exh i b i t s and s c hedu l es a t t ached he r e t o and t he r e t o, e m bod i es t he en t i re ag r ee m ent and unde r s t and i ng of t he pa r t i es i n r espect of t he sub j ect m a t t er he r eo f .   T he r e a r e no r es t r i c t i ons, p ro m i s e s, r epre s en t a t i ons, w a r r an t i e s , covenan t s or unde r t ak i ngs, o t her t han t hose expre s s l y s e t f or t h or r e f e rr ed t o he r e i n or t he r e i n. I n t he event t hat any of t he t e r m s of t h i s Esc r ow A g r ee m ent con f li ct wi t h any of t he t er m s of t he Asset Purchase A g r ee m e n t w it h r ega r d t o t he m a tt e r s s et f or t h he r e i n, t he t e r m s of t h i s Esc r ow A g r ee m ent sh a l l gove r n.

 

( k )       Publ i c a ti o n ; Di s c l os u r e .   B y execut i ng this Es c r o w A g ree m ent, the p a r t i e s ac k no w led g e th a t t h is Es c row A g ree m ent (in c lu d ing rel a ted a t tach m ent s ) co n t ains c e r t a i n i n for m at i on th a t i s s en s i t i v e and con fi den t i a l i n n a tu r e a nd a g r e e th a t s uch i n for m ati o n n ee ds to be pr o te c ted f rom i m proper d i s cl o su r e, i nc l u ding the pu b li c a t ion or di s se m inat i on o f t his Es c row A g ree m ent and r e la t ed inf o r m ation to i n di v idu a ls or e n t i t i e s not a pa r ty to t h is E sc r ow A g ree m ent. T h e pa r t i es f u rt h er a g ree to ta k e re a son a ble m eas u res to m iti g ate any ris k s a s s o ci a ted wi th the p u b l ic a t i o n or d i s c los u re o f t h is Escrow A g ree m ent and in f or m ation co n t a ined t h e r ei n . I f a party m ust disclo s e or pub l ish t h is E s cr o w A g ree m ent or inf o r m ation cont a ined th e r e in pu r su a nt to a ny re g ulat o r y , sta t utor y , or g o v ern m ent a l req u ire m ent, as w e ll as any j u d i c i a l, or ad m ini s tr a ti v e ord e r, subpo e na or d i sco v e r y request, i t sh a ll no t ify in w r i t ing the ot h er p a r t i es of the le g al req u i r e m ent t o do so as soon as p ra c t i c able a f t e r b e co m ing so obli g a t ed. I f any party beco m es aware of any threa t e n ed or act u al un a uth o ri z ed d is c los u re, pu b l i ca t ion or use o f t h is E scrow A g ree m ent, th a t p a rty sh a ll pro m pt l y notify in w r i t ing the ot h er pa r ti e s.

 

[ R em a in d e r o f p age l e ft i n ten t ion a lly b lan k ]

 

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I N W I T N E S S WH ER E O F, t he u nd e r s i g ned h a v e exe c u t ed t h i s E s c r ow A g r ee m ent as of t he d a t e fi r st w r i t t en abo v e.

 

P URC H A S ER :

 

RCSH OPERA T I ONS, I NC .

 

 

B y :

N a m e: M i c h a e l P. O D on n e l l

Ti t l e: C h i ef E xec u ti v e O f f i cer

 

 

S ELLER S:

 

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

HONOL U LU S T E A K HOUSE, LLC, by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

MA U I S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

WA I L E A S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r u s t da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

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B E A CH WA L K S T E A K H OU S E , L LC , by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

L A V A COA ST S T E A K H OU S E , L LC , by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

K AUA I STE A K HOU S E , L LC , by its M ana g e r : D E S E R T I S LA ND R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

ESCR O W AGENT:

 

T I TLE GUARAN TY E SCRO W SE R V I C E S , I NC .

 

 

B y :

 

N a m e: Ti t l e:

 

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EX H I B IT A

 

AGE N CY AND CUS T ODY ACCOUNT D I REC T I O N FOR CASH BAL A N CES

[ ] D E PO S I T ACCOU N T S

 

 

D ir e c t i on t o use t h e f o ll o w i ng [

] D epo s i t A c c ount f o r C a s h B a l an c es f or

 

the e s c row ac c ount ( the A ccou nt ”) e s t ab l is h ed un d er the E s crow A g r ee m ent to w hich th i s

Exhi b i t A i s a t t ach e d.

 

You a r e hereby d ir e c t ed to depo s i t , as indicated b e low, or as we j o i n tl y sh a ll d ir e ct f u r t h e r i n w ri t i ng fr om ti m e t o ti m e, a l l c a sh i n t h e Acco u nt ( s ) i n t he f o ll o w i ng m oney m a r k et depo s it accou n t o f [                                        ] ( B a n k ) :

 

[ ACCOUN T NA ME]

 

The Pu r cha s er a nd t he S e l l e r s a c k no wl ed g e t h a t a m oun t s on depo s i t i n t he A ccou n t a r e i n su r ed, su b j e ct t o t he app l i c ab l e r u l es and r e g u l a t i ons o f t he F e de r a l D ep o s i t I nsu r ance C o r po r a t i on ( F D I C ) , i n t he b a s i c F D I C i nsu r ance a m ount of $ 2 50, 0 00 per dep o s i t o r , per i s su e d ban k . T h i s i n c l udes p r i n c i p a l and ac cr ued i n t e r e s t up t o a t o t a l of $250,000.

 

Esc r ow A g ent u nde r s t ands t h a t t h e Pu r cha s er and t he S e l l e r s m ay j o i n tl y i n s t r u c t E s cr ow A g ent t o c h an g e t h i s d ir e c t i on a t a ny t i m e and t h a t i t s ha l l c on ti n u e i n e f f e c t u n t i l r e v o k ed or m od if i ed by w rit t en n o t i ce t o Es c r ow A g en t .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 3 0 9 0 9 -5

 

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EX H I B IT B - 1

 

RCSH Ope r at i ons, I nc. ( the P u r c h as e r ”) ce r t i f ies t h a t t he na m e s , t i t le s , tel e phone nu m be r s, e -m a i l add r e s s e s and sp e c i m en si g na t u r es s e t f o r t h i n P a r ts I and I I of t h i s Ex h i b i t B - 1 i dent if y t he p ersons au t h o ri z ed t o p r o v i de di r e c ti on a n d i ni t iate or conf ir m tr an s a c ti o n s, i n c l u d i ng f unds tr a nsfer i n st r u c ti o n s , on beh a l f o f t h e Pu r cha s er and t h at t he o p ti o n ch e c k ed i n P a r t II I of t h i s Ex h i b i t B - 1 i s t he s e c u r i t y p r oc e du r e s e l e c t e d by t he Pur c h a s e r f o r u se i n v er i fy i ng t hat a f u n ds t r an s f er i n s tr u c t i on r e c e i v ed by Esc r ow A g ent i s t h a t of t he Pur c h a s e r .

 

The Pur c ha s er h as r e v i ew e d each of t he s ec u r i t y p r oc e du r es and h as d e t e r m i ned t hat t he o p t i on c h ec k ed i n Pa r t II I of t h i s Exh i b i t B - 1 be s t m ee t s i t s r eq u i re m en t s; g i v en t he s i z e, t y pe and f r eq u ency of t h e i n s tr u c t i ons i t w i l l i s sue t o Esc r ow A g en t . B y s el e c t i n g t he s e c u r i t y p r oce d u r e s p ec i fi e d i n P a r t II I of t h i s Exhi b i t B - 1, t he Pur c h a s e r ac k no w l e d g es t h at i t h a s e l e c t ed n o t t o u se t h e o t her s e cu r it y p r o c edu r es de s c ri b ed a nd a g r e es t o be bound by any f un d s tr a n s f er i n s tr u c t i on, w he t h er or n ot a u t h o ri z ed, i s s ued i n it s na m e and a c ce p t ed by Esc r ow A g ent i n co m p l i a n ce wi t h t he p a r t i c u l a r s e cu r it y p r o c ed u r e c h os e n by t he P u r c h a s e r .

 

NO T I C E : T he s e c u r i t y p r ocedu r e s e l e c t ed by t he Pur c ha s e r w i ll not be u s ed t o d e t e c t er r o r s i n the f u nd s tr a n sfer in s tr u c t i ons g i v en by t he Pu r c h a s e r .   I f a f un d s t r an s f er i n s tr u ct i on d e s c r ibes t h e be n ef i cia r y of t h e pay m ent i n c on s i s t e n tl y by na m e and acc o unt nu m be r , pay m ent m ay be m ade on t he b a s is o f t h e a c cou n t nu m ber e v en if i t i d e n t i fi e s a p e r s on d i f f e r e n t fr om t h e na m ed b e nef i c i a r y . I f a f unds t r an s f er i n st r u c t ion de s c ri b es a par t ic i p at i ng f i nan c i a l insti t ut i on i nco n s i s t e n tl y by na m e and i de n t i fi c at i on nu m be r , t h e i de n t i f icat i on n u m ber m a y  be r el i ed u pon a s t h e p r op e r ide n t i fi c at i on o f t he fi n an c i al i n st it u ti o n. T h e r e f o r e, it is i m po r tant t h at the Pu r ch a s e r t a k e su c h s t eps as it d e e m s p r ude n t t o en s u r e t h at t h e r e a r e n o su c h i nco n sis t e ncies i n the f unds t r an s f er i n st r u c ti o n s it s e n ds t o Es c r ow A g en t .

Pa r t I

Na m e, T i t le, T e l ephone Numbe r , E l e c t ro n i c M a i l ( e - m ai l ”) Add r e s s and Sp e c i m en S i gnat u re f or per s o n ( s) de s i gna t ed t o p r ov i de d i r e ct i on, i nc l u ding but not l i m it ed t o f unds t r an s f e r i n s t r u ct i ons, and t o o t he r w ise a ct o n b e ha l f o f t h e P ur c has e r.

 

Na m e

Ti t l e

T e l ep h one

Nu m ber

E - m a i l A dd r e s s

Spec i m en S i g na t u r e

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pa r t I I

Na m e, T i t le, T e l ephone Number and E - m ail Addr e ss f o r per s o n ( s) de s i gna t ed t o c o nf i r m f unds tran s f er i n s t r uc ti o ns

 

Na m e

Ti t l e

T e l ep h one

Nu m ber

E - m a i l A dd r e s s

 

 

 

 

 

 

 

 

 

 

 

 

 

43 3 0 9 0 9 -5

 


P a r t I II

 

Means f or d e l i v e ry o f i n st ruc t i ons an d / or co n fi r m at i ons

 

The s e cu r it y p r o ced u r e t o b e u s ed w it h r e sp e c t t o f u nds tr a ns f er i n s tr u c t i ons i s ch e c k ed be l o w :

 

O p ti on 1. C o n f i rma t i on by t e l e phone c a ll- ba c k . Esc r ow A g ent sh a l l co n f i r m f unds t r an s f e r i n s tr u c t i ons by t e l e p hone ca l l - back t o a p e r son at t h e t e l e phone nu m ber de s i g na t ed on P a r t I I abo v e.   T he p e r s o n con f i r m i ng t he f unds tr a ns f er i n s tr u c t i on s h a l l be a p e r s o n o t her t han t he pe r s o n fr om w h o m t he f unds t r an s f e r i n s tr u c t i on w as r ec e i v ed, un l e s s o n l y one pe r s o n i s de si g na t ed i n b o t h P a r t s I and I I of t h i s Ex h i b i t B - 1 .

CHEC K box, i f a pp l i c a b l e :

If Esc r ow A g ent i s u n ab l e t o ob t a i n c on f ir ma ti o n by t e l epho n e c a l l -bac k , Esc r ow A g ent m a y , at i t s d i s c r e t i on, c on f ir m by e - ma il , as d e s c r i b e d i n O p t i on 2.

 

O p ti on 2. C o n f i rma t i on b y e - m a i l . E s c r ow A g ent s ha l l c on f ir m f unds t r an s f e r i n s tr u c t i o n s by e - m a i l t o a p e r son a t t he e - m a i l add r e s s s pe c i f i ed f or su c h pe r s on i n P a r t I I of t h i s E xh i b i t B - 1 . T h e pe r s o n con f ir m i ng t he f u n ds t r an s f er i n s tr u c t i on s h a l l be a p e r son o t h e r t h a n t he pe r son f r om w hom t he f unds t r ans f e r i ns t r uc t i on w a s r e c e i v ed, u n l e s s on l y one p e r son i s d e si g na t ed i n b o t h Pa r t s I and I I of t h i s Exhi b i t B - 1 .   T he Pur c h a s er und e r s t ands t he r i s k s a s so c i a t ed wi t h co m m un i ca t i ng s e ns i ti v e m a tt e r s, i n c l u d i ng ti m e s e ns i ti v e m a tt e r s, by e - m a il . T he P u r c h a s e r f u r t h e r ac k no w l e d g es t h a t i ns t r uc t i o n s and da t a s e nt b y e - m a i l m a y be l e s s con fi den t i a l or s e c ur e t han i n s t r u c ti o ns or d a t a t r an s m itt e d by o t her m e t hods. Esc r ow A g ent sh a l l n o t be li a b l e f or any l oss of t he con f i d e n t i a l it y o f i n s t r u c ti o n s a nd d a t a p ri o r t o r ec e i pt by Esc r ow A g e n t .

CH E C K box, i f a pp l i c a b l e :

If Esc r ow A g ent i s u n ab l e t o o b t a i n c o n f ir ma ti on by e - ma il , Esc r ow A g ent m a y , at it s d i s c r e ti o n , co n f i r m by t e l e p hone c a l l -bac k , as de s c r i b e d i n O p ti on 1.

 

O p ti on 3. D e l i v e ry of f u n ds t r a ns f er i n s t r uc t i o n s b y p a s s w ord pr o t e c t ed f i l e t ra n s f er s y s t em o n l y - no co n fi rm a t i o n . E s c r ow A g ent o f f e r s t he op t i on t o de l i v er f u n ds tr a ns f er i n s t r uc t i ons t h r ou g h a pa s sw o r d p r o t e c t ed f i l e t r a ns f e r s y s t e m . I f t he Pu r cha s er wi sh e s t o u se t he pas s w o r d p r o t e c t ed f il e tr a n s f er s y s t e m , f u r t h e r i n s t r uc t i o n s wi l l be p r o v i ded b y Esc r ow A g en t . I f t he P u r ch a s e r ch o os e s t h i s O p ti o n 3, i t a g r e es t hat no f u r t her c o n f ir m a t i on of f un d s t r an s f er   i n s t r uc t i ons wi l l b e pe r f o r m ed by Esc r ow A g en t .

 

O p ti on 4. D e l i v e ry o f f un d s t r an s f er i n s t r uc t i o n s by p as s w ord pr o t e c t ed f i l e t ra n s f er s y s t em wi t h con f i rm a ti on .   Sa m e as O p ti on 3 a b o v e, but Es c r ow A g ent sh a l l co n f i r m f unds t r a n s f e r i n s tr u c t i ons by       t e l epho n e ca l l - back or     e - m a i l ( m ust c heck at l e a s t o n e, m ay che c k bo t h) t o a p e r son a t t he t e l e p hone n u m ber or e - m a i l ad d r e s s d e si g na t ed o n P a r t I I abo v e. B y chec k i ng a box i n t he p r i or s e n t en ce , t he p a r t y sh a l l be dee m ed t o h a v e a g r eed t o t he t e r m s of su c h con f ir m a ti o n op t i on as m o r e f u ll y de s c r i bed i n O p t i on 1 and Op t i on 2 abo v e.

 

Da t ed t h i s day o f , 2 0 1

 

43 3 0 9 0 9 -5

 


EX H I B IT B - 2

 

Each o f D e s e r t I s l and R e s t au r a n t s, L. L . C ., H o no l u l u St e ak H ou s e, L LC , M a u i S t eak H ou s e L LC , W a i l ea St e ak H ouse L LC , B each w a l k St e ak H ous e , L LC , Lava C oa s t S t eak H ous e , L L C and K a uai S t eak H ous e , L L C (t he S e l l e r s ) c e r t i f i es t h at t he na m e s , t i t l e s , t e l ep h one nu m be r s, e - m a i l add r e s s e s and s pe c i m en s i g na t u r es s e t f o rt h i n P a r t s I and I I of t h i s Ex h i b i t B - 2 i de n t i f y t he p e r s on a u t h o r i z ed t o p r o v i d e d i r e c t i on and i n i t i a t e o r c o n f ir m tr an s a c t i o n s, i n c l u d i ng f un d s t r an s f er i n s t r uc t i o n s, on be ha l f of t he S e l l e r s, and t hat t he o p ti on c h ec k ed i n P a r t I I I of t h i s Exh i b i t B - 2 i s t h e s e c u r i t y p r oced u r e s e l e c t ed by t he Se ll e r s f or use i n v e r i f y i ng t hat a f u nds t ra ns f e r i ns t r u c t i on r ec e i v ed b y Esc r ow A g ent i s t h a t o f t he Se l l e r s.

 

The S e l l e r s ha v e r e v i ewed each of t h e s ec u r i t y p r o c e d u r es and ha v e d e t e r m i ned t hat t he o p ti o n c h ec k ed i n Pa r t II I of t h i s Exh i b i t B - 2 be s t m ee t s i t s r eq u i re m en t s; g iv en t he s i z e, t y pe and f r eq u ency of t h e i n s tr u c t i ons i t w i l l i s sue t o Esc r ow A g en t . B y s el e c t i n g t he s e c u r i t y p r oce d u r e s p ec i fi e d i n P a r t II I of t h i s Exhi b i t B - 2, t he S e l l e r s a c k no w l ed g e t h at t hey h a v e e l e c t ed not t o u se t he o t her s ecu r i t y p r o c edu r es de s c ri b ed a n d a g r ee t o b e bound by any f un d s t r a n s f er i ns t r u c t i on, w h e t h e r o r not a u t h o ri z ed, i s su e d i n t h e i r na m e and acce p t ed by Esc r ow A g ent i n co m p li a n ce w it h t h e pa r t i cu l ar s e c u r it y p r oced u r e ch o s e n by t he S e l l e r s.

 

NO T I C E : The s e c u r i t y p r oced u r e s e l e c t ed by t he S e ll e r s w i ll not be us e d t o d e t e c t er r o r s i n t he f u n d s tr a n sfer in s tr u c t i ons g i v en by t he Sel l ers. I f a f unds t r an s f e r i n s t r uct i on d e s c ri be s t he b en e fi c i a r y of t h e pay m ent i n c on s i s t e n tl y by na m e and acc o unt nu m be r , pay m ent m ay be m ade on t he b a s is o f t h e a c cou n t nu m ber e v en if i t i d e n t i fi e s a p e r s on d i f f e r e n t fr om t h e na m ed b e nef i c i a r y . I f a f unds t r an s f er i n st r u c t ion de s c ri b es a par t ic i p at i ng f i nan c i a l insti t ut i on i nco n sis t e n tl y by na m e and i de n t i fi c at i on nu m be r , t h e i de n t i f icat i on n u m ber m a y  be r el i ed u pon a s t h e p r op e r ide n t i fi c at i on o f t he fi n an c i al i n st it u ti o n. T h e r e f o r e, it i s i m po r t a n t that t he S el l ers ta k e su c h steps a s it d e e m s p r ude n t t o en s u r e that t h e r e a r e no su c h i nco n sis t e ncies i n the f unds t r an s f er i n st r u c ti o n s it s e n ds t o Es c r ow A g en t .

 

Pa r t I

Na m e, T i t le, T e l ephone Numbe r , E l e c t ro n i c M a i l ( e - m ai l ”) Add r e s s and Sp e c i m en S i gnat u re f or per s o n ( s) de s i gna t ed t o p r ov i de d i r e ct i on, i nc l u ding but not l i m it ed t o f unds t r an s f e r i n s t r u ct i ons, and t o o t he r w ise a ct o n b e ha l f o f t h e S e l lers

 

 

N a me

 

Ti t l e

 

T e l ep h one

N u m ber

 

E - m a i l A dd r e s s

 

Spec i m en S i g na t u r e

 

 

 

 

 

Pa r t I I

Na m e, T i t le, T e l ephone Number and E - m ail Addr e ss f o r per s o n ( s) de s i gna t ed t o c o nf i r m f unds tran s f er i n s t r uc ti o ns

 

 

N a m e

 

Ti t l e

 

T e l ep h one

N u m ber

 

E - m a i l A dd r e s s

 

 

 

 

 

43 3 0 9 0 9 -5

 


P a r t I II

 

Means f or d e l i v e ry o f i n st ruc t i ons an d / or co n fi r m at i ons

 

The s e cu r it y p r o ced u r e t o b e u s ed w it h r e sp e c t t o f u nds tr a ns f er i n s tr u c t i ons i s ch e c k ed be l o w :

 

O p ti on 1. C o n f i rma t i on by t e l e phone c a ll- ba c k . Esc r ow A g ent sh a l l co n f i r m f unds t r an s fe r i n s tr u c t i ons by t e l e p hone ca l l - back t o a p e r son at t h e t e l e phone nu m ber de s i g na t ed on P a r t I I abo v e.   T he p e r s o n con f i r m i ng t he f unds tr a ns f er i n s tr u c t i on s h a l l be a p e r s o n o t her t han t he pe r s o n fr om w h o m t he f unds t r an s f e r i n s tr u c t i on w as r ec e i v ed, un l e ss o n l y one pe r s o n i s de si g na t ed i n b o t h P a r t s I and I I of t h i s Ex h i b i t B - 2 .

CH E C K box, i f a pp l i c a b l e :

If Esc r ow A g ent i s u n ab l e t o ob t a i n c on f ir ma ti o n by t e l epho n e c a l l -bac k , Esc r ow A g ent m a y , at i t s d i s c r e t i on, c on f ir m by e - ma il , as d e s c r i b e d i n O p t i on 2.

 

O p ti on 2. C o n f i rma t i on b y e - m a i l . E s c r ow A g ent s ha l l con f ir m f unds t r an s f e r i n s tr u c t i o n s by e - m a i l t o a p e r son a t t he e - m a i l add r e s s s pe c i f i ed f or su c h pe r s on i n P a r t I I of t h i s E xh i b i t B - 2 . T h e pe r s o n con f ir m in g t he f u n ds t r an s f er i n s tr u c t i on s h a l l be a p e r son o t h e r t h a n t he pe r son f r om w hom t he f unds t r an s f e r i ns t r uc t i on w a s r e c e i v ed, u n l e s s on l y one p e r son i s d e si g na t ed i n b o t h Pa r t s I and I I of t h i s Exhi b i t B - 2 .     T he Se l l e r s und e r s t and t he r i s k s a s so c i a t ed w it h co m m un i ca t i ng s e ns i ti v e m a t t e r s , i n c l u d i ng ti m e s e ns it i v e m a tt e r s, by e - m a il . T h e Se ll e r s f u r t her ac k no w l ed g e t h a t i n s t r u c t i ons and d a t a s e n t by e - m a i l m ay be l e s s c o n f i de n t i al or s e c u r e t h a n i n s tr u c t i ons or da t a t r a n s m itt e d by o t h er m e t ho d s. E s c r ow A g ent sh a l l not be l i a b l e f o r any l oss of t he c on f i de n t i a l it y of i n s tr u c t i ons a nd d a t a p r i or t o r ec e i pt by Es c r ow A g en t .

CH E C K box, i f a pp l i c a b l e :

If Esc r ow A g ent i s u n ab l e t o o b t a i n c o n f ir ma ti on by e - ma il , Esc r ow A g ent m a y , at it s d i s c r e ti o n , co n f i r m by t e l e p hone c a l l -bac k , as de s c r i b e d i n O p ti on 1.

 

O p ti on 3. D e l i v e ry of f u n ds t r a ns f er i n s t r uc t i o n s b y p a s s w ord pr o t e c t ed f i l e t ra n s f er s y s t em o n l y - no co n fi rm a t i o n . E s c r ow A g ent o f f e r s t he op t i on t o de l i v er f u n ds tr a n s f er i n s t r uc t i ons t h r ou g h a pa s sw o r d p r o t e c t ed f i l e t r a ns f e r s y s t e m . I f t he Se l l e r s w i sh t o u s e t he p a s s w or d p r o t e c t ed f i l e tr a n s f er s y s t e m , f u r t her i n s t r uc t i o n s wi l l be p r o v i ded b y Esc r ow A g en t . I f t he S e l l e r s ch o ose t h i s O p ti on 3, t h ey a g r ee t hat n o f u r t her c o n f ir m a ti on o f f unds t r an s f er i n s tr u c t i ons w il l be p e r f o r m ed by Esc r ow A g en t .

 

O p ti on 4. D e l i v e ry o f f un d s t r an s f er i n s t r uc t i o n s by p as s w ord pr o t e c t ed f i l e t ra n s f er s y s t em wi t h con f i rm a ti on .   Sa m e as O p ti on 3 a b o v e, but Es c r ow A g e n t sh a l l co n f i r m f unds t r a n s f e r i n s tr u c t i ons by       t e l epho n e ca l l - back or     e - m a i l ( m ust c heck at l e a s t o n e, m ay che c k bo t h) t o a p e r son a t t he t e l e p hone n u m ber or e - m a i l ad d r e s s d e si g na t ed o n P a r t I I abo v e. B y chec k i ng a box i n t he p r i or s e n t en ce , t he p a r t y sh a l l be dee m ed t o h a v e a g r eed t o t he t e r m s of su c h con f ir m a ti o n op t i on as m o r e f u ll y de s c r i bed i n O p t i on 1 and Op t i on 2 abo v e.

 

43 3 0 9 0 9 -5

 


D a t ed t h i s day of , 20 1

 

S ELLER S:

 

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

HONOL U LU S T E A K HOUSE, LLC, by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

MA U I S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 20 0 1

 

Ti t l e: M a na g er

 

 

 

WA I L E A S T E A K HOU SE L LC , by it s M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

BE A CHWALK S T E A K H OUSE, LLC, by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

 

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

43 3 0 9 0 9 -5

 


L A V A COA ST S T E A K H OU S E , L LC , by it s

M a na g e r :

DESERT I SLAND RES T A URAN T S, L.L.C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

K AUA I STE A K HOU S E , L LC , by its M ana g e r : D E S E R T I S LAN D R E S T A URAN T S, L .L. C .

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

43 3 0 9 0 9 -5

 


EX H I B IT C

 

F E E SCH E D U LE

 

43 3 0 9 0 9 -5

 


EXHIBIT J

 

MANAGEMENT SERVICES AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43 6 3 2 6 8 -4

 


M A N A G E M ENT S ER V ICES A G RE E M ENT

 

This Man ag e m e nt S e rvi ce s A g r ee ment (the A g r e e m e n t ) is made a nd e nte re d in t o a s

 

of , 2 0 1

, b y a nd a mong H O N O L U L U S TE A K H O US E , LL C , a H a w a ii

 

l i m i ted l i a bi l i t y c ompa n y , MA U I S TE A K H O U S E LL C , a H a w a ii l i m i ted l i a bi l i t y c ompa n y , W A IL EA S TE A K H O U S E L L C , a H a w a ii l i m i t e d l i a bi l i t y c ompa n y , B E ACH W A L K S TE A K H O USE, L L C , a n A r i z o n a l i m i ted liabil i t y c om p a n y , L A VA CO A S T ST E AK H O US E, L L C , a n A r i z ona l i m i ted l i a bi l i t y c ompa n y , a nd K A UA I S TE A K H O USE, L L C , a n A r i z ona l i m i t e d l i a bi l i t y c ompa n y ( e ac h, a S e l le r a nd c ol l ec t i v e l y , the S e l le r s ) a nd RC S H OPE R A T I O NS, I NC., a C a l i f o rnia c o r p o r a t i on ( the B u y e r ). E ac h of the S e l l e rs a nd B u y e r a re sometimes r e fer re d to h e r e in a s a P a r ty or c ol l ec t i v e l y a s the P a r ti e s . C a pi t a l iz e d te r ms used in th i s Ag ree ment but not d e fi n e d h e r e in shall h a v e the me a nin g s g iven to them in the Ass e t P u rc h a se Ag ree ment (d e fin e d b e l o w ) .

 

W I T N E SS E T H :

 

WHERE A S, S e ll e rs a nd B u y er a re p a rties to that c ert a in Ass e t Pu rc h a s e A g r ee ment made a nd e n t e r e d into a s of Nov e mber 2, 2017 (t h e Ass e t P u rc h ase A g r ee m e n t ”);

 

WHERE A S, pursu a nt to the Ass e t Pu rc h a s e A g re e men t , a mo n g other thin g s, B u y e r will ac quire the Pu rc h a s e d A ssets, a ll on the te r ms a nd c onditions s e t fo r th i n the Ass e t Pu rc h a se Ag ree ment; and

 

WHERE A S, the Selle r s cu r r e nt l y hold liquor li ce n s e s as f ollows: ( a ) L i c e n s e No. E1052 (R e stau ra nt Ro w ) a nd Lic e nse No. R0811 (W a i k iki) issu e d b y the L iqu o r Commission of the Ci t y a nd Coun t y o f Honolulu; (b) L i ce nse No. R EST - G - 640 issu e d b y t h e L iquor Commission of the Coun t y o f H a w a ii; ( c ) L i c e nse No. 2 G - 077 ( Ka u a i) issu e d b y the L i quor Commission of the Coun t y of K a u a i; a nd (d) L ic e n s e No. 153 (M a ui) a nd L i c e nse No. 320 (W a il e a ) issu e d b y the L iquor Commission of the Coun t y o f Maui ( c oll ec tiv e l y a nd individual l y the Lic e n se ”), whi c h L i c e nse is to be tr a nsfer re d to B u y er, su b je c t to the a ppro va l of the fo r e g oi n g L iquor Commissions (c oll ec tiv e ly a nd individual l y the L i qu or Co m m is s io n ), w hich tr a nsf e r will not take place until a f ter the Closing D a te.

 

NO W , TH E RE F ORE, in c onsid e r a t i on of the m u tual c ov e n a nts a nd a g r e e ments of the P a rties c ontain e d h e r e in a nd in the Ass e t P u rc h a s e A g r ee men t , a nd in o r d e r to d e fine t h e rol e s a nd r e spons i bi l i t ies of t h e P a rties a s th e y r e late to the tr a nsi t ion of S e l le rs’ e mp l o y e e s, includi n g without l i m i tation S e l l e rs’ B usi n e ss Emp l o y ee s , with r e sp e c t to the B usiness a nd c omp l ian c e with f e d e r a l a nd state l a b o r a nd e mp l o y m e nt la w , a s w e ll a s t h e s c o p e of s e rvi c e s p r ovided b y S e l l e rs whi c h will include e x c lus i ve c ontrol a nd man a g e ment b y S e l l e rs o f a ll l i quor op e r a t i ons unt i l such t i me a s the L i ce nse ca n be tr a ns f e r r e d to B u y e r, a nd B u y e r ’s c onsid e r a t i on for su c h s e rvi ce s, the Pa rties a g re e a s follows:

 

1. S e rvi ce s; Te r m.

 

( a )       E m p l o y m e n t S er v i ces . I n th e e v e n t th a t t h e C l os i n g Da t e o cc u r s p r i o r t o th e d a t e th a t i s s i x t y - f iv e ( 65 ) d a y s f r om the d a te that S e l l e rs p r ovide not i c e in c omp l ian c e with H a w. R e v. S tat. § 3 94 B 9 a nd H a w. Admin. Rules §1 2 - 506 - 7, whi c h shall be d e e med to h a ve b ee n s a t i sfi e d a uto m a t i ca l l y a nd without f u rth e r ac t i on b y S e l l e rs u pon the tr a nsm i t t a l b y

 

43 6 3 2 6 8 -4

 


S e l l e rs of not i ce s to B u siness Empl o y e e s a nd the Dire c tor of the D e p a rtm e nt of L a bor a n d I ndustri a l R e l a t i o n s for t he S tate of H a w a ii in s u b st a n t ia l ly the fo r m of t he d ra ft no t i c e s a t ta c h e d h e r et o a s E x h i b it 1 (su c h si xt y - fiv e - d a y p e riod, the Notice Pe riod ), t h e n d u r in g th e p er i o d c omm e n c in g o n th e C l o sin g D a te a nd e ndi n g a u to m a t i ca l l y a nd without fu r th e r a c t i on b y the P a rties a t 5:00 P M H a w a i i S tand a rd Time on t h e d a te of e x pir a t i on of t he Notice P e riod (the E m p lo y me n t Se r vic e s T e r m i n a t ion Da t e ) :

 

(i)       S e l l e rs shall c ont i nue to e mp l o y   a ll B usiness Empl o y ee s who w e re e mp l o y e d i m medi a te l y b e fo r e the Clos i ng D a te to p e r fo r m the s a me dut i e s a nd fun c t i ons that th e y p e r f o rm e d i m medi a te l y b e fo r e the Clos i ng D a te, a t t h e s a me w a g e s, hours a nd other te r ms a nd c ondi t ions of e mp l o y ment that w e r e in e f fe c t i m medi a te l y b e fo r e t h e Clos i ng D a t e.

 

(ii)       S e l l e rs s h a l l c o nt i nu e to b e t h e e m p l o y e r o f a ll   B u si n e s s Emp l o y ee s , in t he s a m e ma nn e r i n w h i c h S e l l e r s e m pl o y e d s u c h B u si n e ss E m pl o y ee s i m m e d i a t e l y p r i o r to t h e Clos i n g D a t e , w i t h D e s e rt I s l a n d R e s t a u r a n t s, L . L . C . ( D I R ) , t o g e t h e r wi t h t h e i r a g e n ts a n d c o n t ra c t o rs, c o n t i nui n g to o p er a t e t he B u si n e ss a n d t he d a i l y a c t i v i t i e s a n d a ff a i r s wi t h re s p e c t to t h e B us in e ss Emp l o y ee s p u rs u a nt to t h e t e r m s of t h e m a n a g e m e nt a g re e m e nt to b e e n t er e d i nto b y a n d b e t w e e n B u y e r a n d D I R a s o f the C l os i n g D a t e (as it m a y b e a m e n d e d, m o d i f i e d or ot h er wi s e s u pp l e m e n t e d f r om t i m e to t i m e ) o r a n y m a n a g e me n t a g re e m e nt e n t e red in t o t h erea f t e r b y a n d b e t w e e n B u y e r a n d a n y su c c e ss o r th i r d - p a r t y m a n a g er .

 

(iii)     B u y e r shall h a v e no r e s ponsibi l i t ies with r eg a rd to the B usiness Empl o y ee s a nd shall e x e r c ise no c ontrol ov e r the wo r ksi t e c ondi t ions un d e r whi c h the B usiness Empl o y e e s p e r f o r m their s e rvi c e s p r ior to the Empl o y m e nt S e rvi ce s T e rmin a t i on D a te.

 

(iv)     Notwithstanding the fo r e g oi n g , S e l l e rs shall n o t a uthori z e a n y c h a n g e s in e mp l o y e e b e n e f i t s that would, or wou l d r e a so n a b l y be e x p ec ted to, mat e ri a l l y inc rea s e B u y e r’s l i a bi l i t ies und e r th i s A g re e m e nt without B u y e r’s a d v a n c e w ritten c onse n t.

 

(v)       B u y e r s h a ll h a ve no a u thori t y to c ontrol B usi n e ss Empl o y e e s ' te r ms a nd c ondi t ions of e mp l o y ment, e i t h e r di r ec t, ind i r e c t, or e v e n res e rv e d. Th e s e te r ms a nd c ondi t ions of e mp l o y ment include not on l y hiri n g , fi r i n g , discipline, supe r vis i on, dir ec t i on, a n d d e te r m i ning w a g e s a nd hours, but it a lso dict a t i ng the numb e r of wo r k e rs to b e suppl i e d, c ontrolli n g s c h e dul i n g , s e niori t y , ov e rtime, a nd a ss i g ni n g wo r k a nd d e t e rmining t h e mann e r a nd method of how w o r k is t o be p e r fo r med.

 

(b)       L i qu o r L i c e ns i n g . Un ti l t h e e a r li e r t o o c c u r o f ( i ) f i v e ( 5 ) bus i n e s s d a y s a ft e r t h e d a te on whi c h the L iqu o r Com m is s ion e i t h e r a p p rov e s the tr a n s f e r o f the L i c e nse to B u y e r or is s u e s to B u y e r a tempo ra r y l i quor l i ce n s e c ov e ring a ll op e r a t i ons c u r r e nt l y c o v e r e d b y the L i c e nse, a nd (ii) s i x (6) mon t hs a ft e r the Clos i ng D a te (t h e Lic e n se S er vice T er m i n a t i o n Da te ), S e l le r s sh a l l h a v e e x c l u s ive c o n tr o l a nd man a g e m e nt of the l iq u or o p e r at i o ns a t ea c h R e s tau r a n t , w h ich l o ca t i o n is s e t f o r t h in t he a p pli ca ble L ic e nse ( the L ic e n s e d P re m ise s ), a n d sh a ll k ee p the L ic e nse i n g ood s ta n d ing t o p e r m i t the u n i n te r r u pt e d s a le a n d s e r v i ng of a l c o h o l ic

 

2

43 6 3 2 6 8 -4

 


b e v e r ag e s a t t he L ic e ns e d P r emi s es , in c l u d i ng b u t n o t l i m i ted t o r e n e w i ng t he L ic e nse a s m a y be n ece s s a r y . I n th i s r eg a rd, S e l le r s sh a ll c a use B u s ine s s E m p lo y ee s a nd the r e spe c t i ve l i q uor op e r a t i o n s u nd e r t he L ic e nse to be i n f u l l c o m p l ia n c e w i th a l l a p pl ic a b le l iq u or r e l a ted l a w s , rul e s, a nd re g ul a t i o n s. S e l l e r s a g r e e to c o o p e r a te w i t h B u y e r in t r an sf e r r ing t he L ic e nse to B u y er . S u c h c o o p e r at i o n sh a l l i n c lu d e : (1) p r o m pt c o m pli a n c e w i th a l l r e a s o n a b le r e qu e st s of B u y e r for the e x ec u t i on of d o c u m e n t s r eq uir e d i n c o nn e c t i o n w i th su c h tr a ns f e r; ( 2) c om pl ian c e w i th a n y r e a so n a b le r e qu e s t of Bu y e r in c o n n ec t i o n w it h t h e i s suan c e of a t e m p o ra r y l i ce nse to B u y er ; (3) p r o m p t l y p r ovi d ing a l l r e qu i r e d f e d e r a l a nd st a te t a x c le a r a n ce s f or the tr a n s f e r of the L ic e nse t o B u y e r; (4) p r om p t l y s ec u r i ng a n y a nd a ll n e c e ssa r y a ppro v a ls t o e n s u r e th a t the L ic e nsed P r e m i s e s a re f u l l y a nd acc u ra t e l y c ov e r e d b y the L ic e nse, (5) p r o m p t l y p a y ing a n y outs t a n d ing f e e s a n d f in e s ow e d to t h e L iquor C o mm i s s i on a r i s i ng f r om c ir c u ms tan c e s p rece d ing t he C l o s ing D a t e ; a nd ( 6) if r eq uir e d b y the L iquor C o m m i s s i o n , p e r s on a l a p p ea r a n c e b y such o f fi c e r s , man a g e r s , d ir ec t o r s or e m p l o y ee s of S e l l e rs a s r e qu i r e d by the L iquor C o m m i s s i o n , p ro v id e d th a t, w i t h o u t du pl ic a t i o n of o t h e r s u ms p a y a ble h e r eu nd e r , S e l l e r s’ r e a s on a b le o u t - o f - po c k e t e xp e n s e s ( e x c l u d ing a n y unp a id t a x e s, f e e s or f in e s ow e d by S e l l e rs a r i s ing f r om c ir c u ms tan c e s p r i or t o t he C l o s ing D a t e) in c o n n ec t i o n w i t h th e fo re g oing sh a ll be r e i mb u rs e d b y B u y e r, but S e l le r s sh a ll rec e ive no f e e or o t h e r c o n s i d e r a t i on f or s u c h tr a n s f e r o f the L ic e nse.

 

( c ) S er v i c e s . The s e rvi ce s t o be p r ovided b y S e l l er s und e r th i s A g r ee ment a re r e fer re d to h e r e in c ol l ec t i v e l y a s the Se r vic e s ”.

 

(d)       Consid e r a t i on. E x ce pt a s othe r wise  p r ovided   i n the  last s e nten c e  of S ec tion 1 ( b ) , a bov e , B u y e r shall p a y to S e l ler s a n a mount e qu a l to S e l l e rs’ a c tual c ost in p e r f o r m i n g S e l l e rs’ obl i g a t i ons und e r th i s Ag r e e men t , including witho u t l i m i tation, S e l le rs’ obl i g a t i ons to p e r fo r m t he S e rvi ce s a nd to c ont i nue to e mp l o y the B usi n e ss Empl o y e e s und e r th i s A g re e ment. I n no e v e nt shall S e l l e rs be e nt i t l e d to g e n e r a te a n y ma r k - up or p r o f it on the S e rvi ce s. H a w a i i G e n er a l E x c ise T a x (“ Ha w aii G E T ) a t t h e r a te of (i) 4.712 % , in the c a se of the R e stau ra nts loc a ted i n Honolulu, a nd (ii) 4.166 % , in the ca se of the o t h e r R e stau r a nts, shall be a dd e d to a ll invo i ce s a nd shall be p a id b y B u y e r, unless B u y e r obtains a w r i t ten ruli n g f rom the H a w a i i S tate T a x D e p a rtme n t that ce rt a in a moun t s r e ce ived b y S e l l e r s a re e x c luded und e r H a w. R e v. S tat. Se c t i on 23 7 - 24.7 ( 1 ) ; if B u y e r ob t a ins such a rulin g , S e l l e r s a g ree to a pp l y for a r e fund o f H a w a i i GET p r e vious l y p a id on a moun t s d e te r m i n e d to be p r o p e r l y e x c ludable a n d upon r e ce ipt of a n y s u c h r e fund to i m medi a te l y f o r w a rd the s a me to B u y e r. No g e n e r a l e x c ise tax will be p a id on the c ost of r e i m b u r si n g S e l l e r s for l i quor invento r y or for c osts whi c h a re p a id b y w a y of o f f s e t a g a inst r e v e n u e s f rom l i q uor s a les. S e l l e rs shall a dvise B u y e r of t h e spe c ific a moun t s whi c h S e l l e rs disbur s e f o r e m p l o y e e w a g e s, s a l a ri e s, p a y r oll ta x e s, insur a n c e p re m i ums, a nd b e n e fits, including r e t i r e ment, v a ca t i on, sick p a y , a nd h e a l t h b e n e fits, in ca se the tax d e p a rtme n t rul e s that th e y a re e x e mp t . F o r p u r poses of th i s A g r ee m e n t , “ac t u a l c os t shall includ e , but not be l i m i te d to, the followin g : (1) w a g e s a nd s a l a ri e s; (2) p a y r oll ta x e s; (3) c osts a nd f e e s for a n y e mp l o y ment s e rvi c e p r ovid e r; (4) p re m i ums for wo r k e rs’ c ompen s a t i on insur a n ce , t e mpor a r y disabili t y insur a n ce , h ea l t h insur a n c e a nd oth e r insur a n c e r e qui r e d b y th i s Ag ree ment othe r wi s e b y a ppl i ca ble law to be ca r r ied b y S e l l e rs, a nd a n y d e du c t i bles for c laims made b a s e d on a n y i l ln e ss or in j u r y o cc u r ri n g b e tw ee n the Clos i ng D a te a nd the Empl o y ment S e rvi ce s T e rmin a t i on D a t e ; (5) p r e m i ums for long t e rm disabili t y insur a n c e a nd l i fe insur a n ce ; (6) c ontributions to 401( k ), p e nsion, r e t i r e ment, a nd p r o f i t - sha r i n g plans b a s e d on a n y ho u rs wo r k e d b y B usi n e ss Empl o y ee s b e tw ee n the Clos i ng D a te a nd the Empl o y m e nt S e rvi c e s T e rmin a t i on D a te; (7) if not inclu d e d with i n w a g e s, sums ac t u a l l y p a id for v a ca t i on a nd sick

 

3

43 6 3 2 6 8 -4

 


le a ve tak e n b e tw e e n the Clos i ng D a te a nd the E mp l o y m e nt S e rvi ce s T e r m i n a t i on D a t e , (8) a n y c osts or l i a bi l i t ies incu r r e d b y the B usiness Empl o y e e s in p e r f o r m i n g their fun c t i ons f r om a nd a ft e r the C losi n g D a te t o the e x tent r e i m burs a ble b y S e l le rs, (9) the c o s t of pur c h a si n g n e w l i quor invento r y for s a le a nd p a y ment of H a w a ii GET on l i quor s a les, a nd (10) a n y a nd a ll other f e e s a nd c osts includi n g without l i m i tation a t t o r n e y s f ee s a nd c onsultant f e e s that a r e d e e med n ece ss a r y in S e l l e rs’ re a sona b le disc re t i on to p r ovide the S e rvi ce s a nd p e r f o r m i t s obl i g a t i ons und e r this Ag r e e ment.

 

( e ) Pa y ment.

 

(i)       Empl o y m e nt S e rv i ce s . No lat e r than s e v e n ( 7 )  busin e ss d a y s b e fo r e eac h p a y d a te, S e l l e rs shall p r ovide B u y e r a n invo i c e for the e s t i m a ted p a y r oll e x p e nses for t h e p a y r oll p e riod for s u c h p a y d a t e . W i t hin two (2) busin e ss d a y s a ft e r B u y e r r e c e ives such in v oic e , B u y e r shall d e posit (or ca use the d e posit o f) ca sh in the invo i ce d a mount to S e l le r s’ p a y roll acc ount l is t e d on Ex h i b it 2 a t t ac h e d h e r e to. S e l l e rs shall hold a nd disbur s e s u c h sums c onsistent with S e l l e rs’ o r dina r y busin e ss p rac t ic e s in pla c e p r ior to the Clos i n g D a t e. All such a moun t s shall be h e ld b y S e l le rs in trust for disburs e ment, a nd S e l l e r s shall maintain r ec o r ds c on ce rni n g the acc ounts a nd p r ovide a n acc ount i n g th e r e of a t t h e r e q u e st of B u y e r (but not more f re q u e nt l y t h a n mon t h l y ) . B e g inn i n g with the s ec ond invo i ce , eac h invo i c e shall include a r e c on c i l i a t i on of ac tual p a y r oll e x p e nses for the p r e c e di n g p a y r oll p e ri o d with the e st i mat e d a moun t s. E ac h invo i c e shall c r e dit to B u y e r the a moun t , if a n y , that ac tual p a y roll e x p e nses for t h e p re vious p a y r oll p e riod a re less than the invo i ce d a moun t s d e posited b y B u y e r for such p a y r oll p e riod.   S e l l e rs shall d e l i v e r to B u y e r a fin a l r ec o n c i l iation a nd invo i c e f o r unp a id e x p e nses (or r e i mburs e ment for ov e r p a id e x p e nses, a s the ca s e m a y b e ) with i n ten ( 10) b usiness d a y s a f t e r the Empl o y m e nt S e rv i c e T e rmin a t i on D a t e .

 

(ii) Oth e r Costs and E x p e nses. F or a ll other c osts a nd e x p e nses d e s c rib e d h e r e in t h a t S e l l e rs incur ( ot h e r th a n p a y r oll e x p e nses c ov e r e d b y S ec tion 1 (e)( i ) a bov e) , S e l l e rs s h a ll pro v ide B u y e r with i nvoic e s f rom time to t i me ( but no more f re qu e nt l y than month l y ) .   B u y e r s h a ll p a y a ll s u c h invo i ce s in full in c a sh, b y wi r e tr a nsf e r o r b y w a y o f c a s hie r ’s c h e c k with i n ten ( 1 0) d a y s followi n g B u y e r s r ece ipt of mon t h l y invo ic e s for s u c h e x p e nses. A n y p a y m e n ts m a de to S e l l e rs b y w i r e tr a nsf e r sh a ll be sent p e r the wiring in s tru c t i ons a t t ac h e d a s Ex h i b it 3 to t his A g r e e ment.

 

(iii)       L a t e Ch a r g e s, Etc. A n y l a te p a y m e nt c h ar g e , in te r e st or ot h e r f e e or e x p e nse incu r r e d b y S e l l e rs a s a r e sult of B u y e r’s f a i l u r e to p a y a n y in v oice wh e n due shall be rec o v e r a b l e b y S e l l e rs pursu a nt t o S ec ti o n 1 ( d ) h e r e o f .

 

2. Obli g a t i ons of the P a rtie s .

 

( a ) I n th e e v e n t th a t th e C l o sin g D a t e o cc u r s p r io r t o t h e Empl o y ment S e rvi ce s T e rmin a t i on D a te, th e n S e l l e rs shall use c om m e r c ial l y r e a sona b le e f f o r ts t o p e r fo r m, or to c a use its contractors a nd a g e nts t o p e r f o rm the followin g : (1) hiri n g , di s c ip l in i ng a nd te r m i n a t i ng the B usiness Empl o y ee s a t a n y t i me in acc o r da n c e with applic a ble l a w; e x e r c is i ng sole m a n a g e ment r i g hts a nd c ontrol of the B usi n e ss Empl o y ee s a t t he wo r k pla ce , includi n g the d a y - t o - d a y j ob dut i e s of B usiness Emp l o y e e s; d e t e rmi n ing the suit a bi l i t y o f B usiness Emp l o y ee s

 

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for e mp l o y m e nt; mat c h ing B usiness Emp l o y e e s w o r k skil l s with job r e quir e ments; a ss i g n i n g B usiness Emp l o y e e s job dut i e s; dete r m i n ing a p p r opri a te ti m e s, methods a nd p e r f o r ma n c e r e quir e ments f o r jobs p e r fo r med b y B usiness Emp l o y e e s; a nd d e t e rmining t he a ppro p r i a te l e v e l of c ompens a t i on f o r B us i n e ss Empl o y e e s. ( B u y e r h a s no r e s e rv e d r i g ht of d ir ec t i on or c ontrol ov e r the B usiness Emp l o y ee s.); ( 2 ) re maini n g sol e l y re spons i ble for c omp l i a n c e with coun t y , state a nd f e d e r a l la ws a n d re g ulations a ppl i ca ble t o the w o r kpla c e a nd r e la t ionship wi t h t h e B usiness Emp l o y e e s, in c lud i ng without l i m i tatio n , e mp l o y ment dis c rimin a t i on la w s, w a g e a nd hour la w s, i m m i g r a t i on l a ws, a nd a ll other c oun t y , state a nd f e d e r a l la ws r e lating to a n y a s p ec ts of the e mp l o y m e nt r e lat i onship ( 3) t i me l y a nd ac c u ra te l y p a y i n g the B usiness Emp l o y e e s a ll w a g e s, be n e fits, va c a t i on p a y , sick p a y a nd oth e r f o r ms of c ompens a t i on ea rn e d or a cc r u e d throu g h the Empl o y ment S e rvi ce s T e rmin a t i on D a t e ; (4) p r o p e r l y a nd t i m e l y c omp l y i n g with all la w s g o v e rni n g r e porting, c ol l ec t i on a n d p a y ment of fe d e r a l and sta t e p a y r o ll ta x e s on w a g e s p a id, i n c lud i n g : ( a ) fe d e r a l i n c ome t a x withho l di n g pro v is i ons of the I nte r n a l R e v e nue Cod e ; ( b ) state a nd/or lo ca l i n c ome tax withho l ding a nd un e mp l o y m e nt t a x pro v is i ons; (c ) Fe de r a l I ns u r a n c e Contrib u t i ons A c t ( “F I CA ) c ontributions; ( d) Fe d e r a l U n e mp l o y m e nt T a x A c t c ontributions; (e ) c ourt o rd e r e d w a g e g a rnishmen t s ( e . g ., jud g m e nts, t a x l i e ns, c h i l d support

o r d e rs, e tc . ); a nd ( f) la w s g ov e rni n g the p a y ment o f w a g e s includi n g the F LSA a nd H a w a ii Wa g e a nd Hour la w s includi n g , but not l i m i ted to H a w a ii R e vised Statutes Chapt e rs 387 a nd 38 8 ;

(5) provid i n g the B usine s s Emp l o y ees and their d e pendents all work e rs c o mpensat i on, tempora r y disabili t y and pre p aid h e al t h care cov e ra g e and b e nefits require d , and adm i nis t erin g , ma n a g ing and process i n g a n y B us i ness Empl o y e e claims f o r these co v erages and b e nefits, throu g h the Empl o y m ent S ervi c es T e rminat i on Dat e ; (6) p r o vi ding the B u s in e ss E m p l o y e es and t heir qua l if y ing benefi c ia r ies t he o p p or t u n i t y to ele c t h e alth care c o n t i n ua t i o n c o ver ag e, e x c e pt B u y er wi l l pr o v i de c o n tinu a t ion cover ag e if S e l lers m a i nt ain no c o ver ag e aft e r the Em p lo y ment S er v ice Ter m in a tion D a te, a nd c o n t i n u ed cover a ge to a n y B usiness Emp l o y e e hos p i t al iz ed or pr e vented b y sickness from worki n g f o r a p e riod not to e x ceed three mon t hs followi n g the month duri n g which the emp l o y ee b e ca me hospital iz ed from working as r e qui r ed b y Ha w aii Revised Statutes

§393 - 15, e x ce pt B u y e r w i l l provide the c ov e ra g e i f S e l l e rs maintains no c o v e ra g e a ft e r the Emp l o y m e nt S e rvi c e T e r m i n a t i on D a t e ; ( 7) p a y ing a ll b e n e f i t s , ma k ing a ll c on t r i b u t i o n s a nd s a t isf y ing a ll c o n d it io n s r e qu i r e d b y plan do c u m e n ts a nd a p p l ic a b le la w s f or a n y e mp l o y e e w e lf a re b e n e f i t pl a ns t h a t c ov e r t he Bus in e ss E m p l o y ee s or t h e i r d e p e n d e n ts a nd m a in t a in i ng a n y

p r o f it sha r i n g or p e nsion plans c ov e ri n g B usiness Empl o y ee s a c c o r di n g to t he te r ms of the pl a ns, the I n t e rn a l R e v e nue C o de a nd the E mp l o y e e R e t i r e ment I n c ome S e c u r i t y A c t ; ( 8) c o m p l y ing wi t h a l l la w s c o n ce r n ing e qu a l e m p l o y ment o p po r t un i ty and no n - d isc r i m i n a t io n ; ( 9) c o m p l y ing wi t h a n y a pp l ic a b le la b or la w s; ( 1 0) p r o v i d i ng t he B us i n e s s E m pl o y ee s who b e g in t o take le a ve p r i or to t he E m p lo y ment S e r v ic e s T e r m in a t i on D a t e a l l r i g h t s th a t they m a y h a v e , u n t il t he Em p lo y ment S e r v ic e s T e rm i n a t i o n D a t e , e x ce p t B u y e r w i l l o f f e r a n y le g a l l y re quir e d h e a l t h ca re c ov e r ag e a n d r e i n s t a t e m e nt for le a ve e xt e n d ing p a s t th a t d a t e ; ( 11) a p p r o p r i a tely re spon d ing to

a n y vio l a t io n s of occ u pa t ion a l saf e t y and he a l th r e g ula t i o ns t hat are c ited p r ior t o the E mp l o y ment S er v ic e s Te r m in a tion Da t e; ( 12) P rompt l y and ef fe ct i ve l y addr e ss i n g a n y i n ternal complaints or al l egat i ons of workpl a ce saf e t y vio l at i ons, al le g at i ons of emp l o y ment dis c riminat i on, har a ss m ent or retaliation, w a ge vio la t i ons and workplace m i s c onduct and / or other al le gat i ons r e g ardi n g vio l at i ons of law; (13) D ef e ndi n g a n y act i on co m menced b y a B usiness E mp l o y ee o r

gov e rnm e nt a g e n c y p e rt a in i ng to t he Business E m pl o y e e ’s e mp l o y ment wi t h the S e l l e rs a nd i m medi a te l y not i f y i n g Se l l e rs’ E P LI insur e r o f a n y c laim alle g i n g vio l a t i on of law a t S e l l e rs’ wo r ksi t e or the Business Empl o y ee s ’ emp l o y m e n t ; ( 14) p r oviding the e mpl o y ee s and the dir ec tor

 

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of lab o r an d i n d u st r i a l r e l a t i o n s a d v a n c e w r i t ten no t i c e a s re q uir e d b y H a w. R e v . S t a t. § 3 9 4B - 9 a nd H a w. A d m i n. R ul e s §12 - 5 0 6 - 7 ; ( 15) p r o v i d i n g the e m p lo y ee s who b e c ome e l i g i b le the d i s l o ca t e d w o r k e r s a l lo w a n c e re qu ir e d b y Ch a p ter 394B - 1 0 a nd H a w. A d mi n. R u l e s § 1 2 - 5 0 6 - 8, ( 16) m a i n ta in ing a s a fe a nd h ea l t h f u l w o r k ing e nv ir o nm e n t ; ( 17) c o n t i n u i ng the w ork e r s c om p e ns a t i o n, a u t o m o bil e l ia b i l i t y , g e n e r a l l i a b il i t y a nd e m p lo y ment p ra c ti ce s l i a b il i t y insur a n c e c ov e r ag e w i t h r e spe c t to t he B u si n e s s E m p lo y ee s in e f f e c t i m m e di a tely b e fo r e t he C l o s ing D a te, a nd c on f i r m i ng p a r t of t h e fee s p a id b y B u y e r a re used t o s ec u r e wo r k e r s c omp e ns a t i o n c ov e r ag e ; a nd ( 1 8) c o m p l y ing with a l l o t h e r a p p l i c a ble la w s, r u le s , a nd r eg ula t i o n s .

 

(b)       Du r ing t h e p e riod c om m e n c i n g on the d a te h e r e o f, throu g h a nd includi n g the L i ce n s e S e rvi c e T e r m i n a t i on D a t e , S e l l e rs s h a ll use c om me r c ial l y r ea sona b le e f fo r ts, or ca use i t s c ontr a c tors a nd a g e nt s , to c omp l y with a l l la w s, rul e s a nd re g u l a t i ons a ppl i ca ble to the L i c e nse a nd t h e re s p ec t i v e l i quor op e r a t i ons.

 

( c )       B u y e r shall h a ve no r e s ponsibi l i t y for c omp l y i n g with a n y obl i g a t i ons with r e spe c t t o t h e B usiness Emp l o y e e s unt i l t he Empl o y m e nt S e rvi c e T e r m i n a t i on D a t e .

 

(d) B u y e r s h a ll c oop e r a t e with S e l l e rs to the e x t e nt r e quir e d in o r d e r f o r

S e ll e rs to pe r fo r m its obli g a tions under this Ag re ement.

 

( e )     On or b e fo r e the Empl o y ment S e rvi c e T e rmin a t i on D a t e , S e l l e rs shall p r ovide B u y e r with a n u pd a ted s c h e dule of S e l l ers e mp l o y ee s, i n c lud i ng t he n a me, a d d r e ss a nd soci a l s ec u r i t y numb e r of eac h e mp l o y ee , their a n nu a l s a la r y o r hour l y w a g e , the a mount of a n y acc r u e d v a c a t i on a nd sick le a ve or s e v e r a n c e p a y b e n e fits, the a mount of a n y bonus e s p a id with i n the p a st 12 mon t hs, a l i st a nd d e s c ription o f a n y g r i e v a n c e s or c la i ms (in c lud i ng w o rk e rs c ompens a t i on, disc r i m i n a t i on or A DA c laims) filed p r ior to the E mp l o y m e nt S e rv i ce s T e rmin a t i on D a t e, a d e s c ription of a n y sp e c ial a c c om m od a t i on made with r e sp e c t to a n y e mp l o y e e for A D A c omp l ian c e purp o s e s, a nd c o pies of a ll e mp l o y m e nt r ec o r ds with r e spe c t to the e mp l o y e e s hir e d b y B u y e r.

 

(f)       All g ross r e v enues from the sale of alcoholic b e vera g es shall be offset against the costs incurred b y S el le rs in perform i n g the S ervices h e reun d er, including the cost of pur c hasi n g the l i quor in v ento r y . After the is s ua n ce o f the tempor a r y l ic e n se or appro v al of the transfer of the L i c ense to B u y e r and on or befo r e the L icen s e S ervice T er m i nat i on Dat e , S el l ers shall, to the e x tent r e quired b y the L iqu o r Com m is s io n , r e turn the r e maining l i quor invento r y to the vendors for c r edi t , which c r edit shall be o f fset a g ainst the costs i n curr e d b y S el le rs in perform i n g the S ervi c es hereund e r. A n y r e m ain i ng invento r y shall be t r a nsfer r ed to B u y e r at no cost on the L i cense S e rvice T e rminat i on Dat e .

 

(g)       S e l l er s sh a l l p r o m p t l y n oti f y B u y e r o f a n y noti c e o f v i ol a ti o n s o r o t h e r c i t a t i ons it m a y re ce ive f rom the L iquor Com m is s ion, the Honolulu P ol i c e D e p a rtme n t, or oth e r law e n f o r c e m e nt a g e n c y r e lat e d to a n y vio l a t i ons o cc u r ring in c on n e c t i on with the l i quor op e r a t i ons or a f f e c t i ng t h e L i ce nse p rior to the L i c e nse S e rvi c e T e rmin a t i o n D a t e . To the e x tent that a n y c i t a t i ons or not i c e of vio l a t i ons a re is s u e d with r e spe c t to the p e riod p r ior to the L i ce n s e S e rvi c e T e rmin a t i on D a t e , S e l l e rs shall be r e sp o nsib l e for p a y i n g a n y f i n e s or other p e n a l t ies a ssess e d b y the L iquor C om m is s ion or a n y law e n fo rce m e nt a g e n c y in co n n ec t i on the re with.

 

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3. P e r f o r man c e S tand a rd.

 

S e ll e rs shall use c ommer c ial l y re a sona b le e f f o rts to p r ovide the S e rvices a t the s a me qu a li t y a nd lev e l of p e rfo r man ce , a nd with subst a nti a l l y t h e s a me de g ree of ca r e , a s a ppli e d to such s e rvi ce s p rior to the Closing D a te.

 

4. C o n f i d e n t i a l i t y .

 

S e ll e rs will h a ndle a nd p r ote c t f r om disclosure a ll p r opri e ta r y a nd c onfid e nti a l info r mation disclosed to them b y B u y e r with r e s p ec t to the S e rvi ce s in the s a me g e ner a l manner a s th e y h a ndle a nd p rot e ct its own in f o r mation th a t it c onside r s p r opri e t a r y and c onfid e nti a l.

 

5. P o i n ts of C o n ta c t .

 

The followi n g ind i viduals shall s e rve a s the poin t s of c ont a c t for a ll qu e st i ons a nd is s u e s r e lating to t he Se rvi ce s :

 

S e ll er s : W . R a nd a l l S c h o c h

6263 N. S c o tt s d a l e R d., # 3 74

S c o tt sd a l e , A Z 8525 0

T e l e phon e : ( 480) 945 - 0088

E m a il : r s c ho c h@d i re s t a u ra n t s. c om

 

B u y e r : G e n era l C ouns e l

1030 W . C a n t on Av e ., S t e . 100

W i n t e r P ar k , F L 3278 9

T e l e phon e : ( 407) 829 - 3451

E m a il : a g i v e ns@ r h g i . c om

 

6. R ec o r ds .

 

The P a rties shall provide to e ac h oth e r a ll info r m a t i on a nd re c o r ds r ea sona b l y r e quir e d to maintain full a nd acc u r a te books r e lating to the B usiness Empl o y e e s a nd the p r ovis i on of S e rvi ce s a nd the c ost the re of a nd a ll other r e c o r ds r e lev a nt to th i s A g re e m e n t . Upon r ea sona b le not i c e f rom a nother P a r t y , eac h P a r t y s h a ll make a v a i l a ble for insp e c t i on a nd c o p y b y s u c h other P a r t y ’s a g e nts s u c h inf o r mation, books and rec o r d s during r ea sona b l e busin e ss hours.

 

7. I n d e mn i fi ca t i on: No Conse q u e nt i a l D a m a g e s ; L i m i t a t i on on L iabil i t y .

 

( a )       B u y e r shall d e f e nd, i n d e mn if y a nd hold h a r m l e ss S e l l e rs a nd their r e spe c t i ve p a rt n e rs, m e mbe r s, sha r e holde r s, di r ec t a nd ind i r e c t own e r s , a g e nts, e mp l o y e e s, o f fi ce rs, dir e c tors a nd a f filiat e s (“ S e l l e r I nd e m n i f ied P a r ti e s ) f r om a nd a g a inst a n y a nd a ll c laims, ac t i ons, c ost s , d a mag e s, l i a bi l i t ies, los s e s, a nd e x p e nses of a n y ki n d (in c lud i n g , without l i m i tation, r e a sona b le, a t t o r n e y s’ f ee s, c onsult a nt f e e s a nd c ost s ) ( I n d e m n i f ied Clai m s ”) incu r r e d o r suf f e r e d b y a n y one o r more o f the Se l l e r I nd e mn i fi e d P a rties a s a r e sult of S e l le rs’ or their A f filiat e s’ p r o vid i ng the S e rvi c e s a n d p e r f o r m i n g their ob l i g a t i ons und e r th i s Ag ree ment, e x ce pt to the e x tent I nd e mn i fi e d Cla i ms a rise f r om the b r e ac h of th i s Ag ree m e nt b y a n y S e l l e r or the g ross n e g l i g e n ce , b a d f a i t h or wil l ful m i s c ondu c t of a n y S e l l e r ( e x c lud i ng

 

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B usiness Empl o y e e s , e x ce pt with r e spe c t to ac ts tak e n or om i ss i o n s b y such B usiness Empl o y ee s a t t h e di r ec t i on of a n y S e l l e r or a n y of their A f filiat e s a nd e x ce pt with r e sp e c t to ac t i ons or om i ss i ons of B usiness Empl o y e e s r e sul t ing f r om the g r oss n e g l i g e n c e , b a d f a i t h or wil l ful m i s c ondu c t of a n y S e l le r or a n y o f their A f f i l iat e s in hiri n g or sup er vis i ng such B usi n e ss Empl o y ee s ) . B u y e r ’s obl i g a t i ons und e r th i s S ec tion 7(a) shall survive t he te r m i n a t i on of th i s Ag ree ment.

 

(b)       I N NO EV E N T S H A LL A N Y P ARTY B E L I AB L E TO A N OT H ER F OR I N D I RECT, I N C I D E NT A L , EX E M P LARY, SP EC I A L , CO N S EQ U EN T I A L OR P U N I T I VE D AM A GES ( I N C L U D I N G B UT N O T L I M I TED TO L OST REV E N U E, P ROF I TS OR OT H ER B U S I N ES S L OS S ES OR OP P ORTU N I T I ES), EV E N I F I T H A S B EEN A D V I S ED O F THE P O SS I BI L I T Y T H ERE O F .

 

8. No T hird P a r t y B e n e fi c i a ri e s.

 

This Ag ree ment is for t he sole b e n e fit of the P a rties h e r e to a nd noth i n g e x p re ssed or i m pl i e d shall g ive o r b e c onstru e d to g ive a n y oth e r p e rson a n y l e g a l or e qui t a b l e r i g hts h e r e und e r, w h e t h e r a s a th i rd p a r t y b e n e fi c ia r y o r othe r wise.

 

9. Entire A g re e men t .

 

This A g re e ment supe r s e d e s a ll p r ior a g ree m e nts a nd u n d e rst a ndi n g s b e t w ee n the P a rties h e r e to with r e s p ec t to t h e p r ovis i on of the Se rvi c e s e x ce pt f o r a n y p r ior w r i t ten a g r ee ment that e x p re ss l y stat e s that it i s not sup e rs e d e d b y th i s A g r ee men t .

 

10. Am e ndment a nd Modifi c a t i on.

 

This A g r ee ment m a y be a mend e d, mod i fi e d or s u pplem e nted on l y b y w ritten a g re e ment of the P a rties h e r e to.

 

11. W a iver of Comp l ian ce ; Conse n ts.

 

E x ce pt a s othe r wise p ro v ided in th i s A g r ee men t , a n y f a i l u r e o f a n y of the P a rties h e r e to to c omp l y with a n y obl i g a t i on, c o v e n a nt, a g r e e ment or c ondi t ion h e r e in m a y b e w a ived b y the P a r t y e nt i t l e d to the b e n e fits the re o f on l y b y a w ritten ins t rum e nt si g n e d b y the P a r t y g r a nt i ng such w a i v e r, but a n y su c h w a iv e r of such obl i g a t i on, c ov e n a nt, a g ree m e nt or c ondi t ion shall not op e r a te a s a w a iver of, o r e stopp e l with r e spe c t t o, a n y sub s e qu e nt f a i l u r e to c omp l y the r e with.

 

12. No t ic e s .

 

All not i ce s a nd other c om m unic a t i ons h e r e u n d e r shall be in w r i t ing a nd d e l i v e r e d p e rson a l l y or b y f a c si m i l e tr a nsm i ss i on with c omp l e ted tr a nsm i ss i on a c k n owl e d g m e nt, or mailed b y ov e rn i g ht d e l i v e r y via a n a t i on a l l y r e c o gni z e d c ouri e r or re g is t e r e d or c e rtifi e d fi r st c lass mail ( re turn r ece ipt r e q u e sted ) , post a g e p r e p a id, to the r e c ip i e nt p a r t y a t i t s a dd r e ss b e low (or a t such other a dd r e ss or f ac si m i l e number f o r a P a r t y a s sh a ll b e spe c ified b y l i ke not i c e ) , a nd a ll not i ce s shall be e f f ec t i ve upon d e l i v e r y or r e fus a l of d e l i v e r y :

 

If to S e l l e rs: W . Rand a ll S c ho c h

 

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c /o D e s e rt I s l a nd Restau r a nts, LL C

6263 N. Scottsd a le Rd., #374

S c ottsdal e , AZ 85250

T e lephon e :   ( 480) 94 5 - 0 088

Facsi m i l e:  (480) 94 5 -4 7 47

 

with a c o p y to: S ul l ivan M e h e ula L e e

733 B ishop S tr ee t, S te. 2 900

Honolulu, H a w a ii 96813

Attention: T e r re n c e M. L e e , Esq. T e lephon e :  (808) 62 8 - 7 530

Facsi m i l e:  (808) 53 3 -2 4 67

 

If to B u y e r: RC S H O p e r a t i ons, I n c .

c/o Ruth’s Hospital i t y G r oup, I n c.

1030 W . Canton Av e nu e , S te. 100

Wint e r Pa r k, FL 32789

Attn: G e n e r a l C ouns e l

T e lephon e :  (407) 82 9 - 3 451

 

with a c o p y to: Olsh a n F rome W olos k y L L P

1325 Av e nue of t h e Am e ri ca s

N e w Y o r k, NY 10019

Attention: J e f f r e y S pind l e r, E sq. T e lephon e : (212) 45 1 - 2 3 00

Facsi m i l e: (212) 45 1 -22 2 2

 

13. As s i g nm e n t .

 

This A g re e ment a nd a ll of the p r ovis i ons h e r e of shall be bind i ng upon a n d inure to the b e n e fit of the Pa rties h e r e to a nd their r e spe c t i ve s u cce ssors a nd p e rmit t e d a ss i g ns, but, e x ce pt to the e x tent p e rmit t e d b y t his S ec tion 13 , n e i t h e r t h is A g r ee ment n o r a n y o f the ri g hts, in te r e sts or obl i g a t i ons h e r e und e r s h a ll be a ss i g n e d b y a n y P a r t y h e r e to, includi n g b y op e r a t i on of l a w, without the p r ior w ritten c onse n t of the oth e r P a r t i e s , nor is th i s A g r ee m e nt in t e nd e d to c o n fer upon a n y other p e rson e x ce pt the P a rties h e r e t o a n y r i g hts, in t e r e st s , o bl i g a t i ons or r e medi e s h e r e und e r.

 

14. Constru c t i on of Ag ree m e n t .

 

The  te r ms a nd p r ovis i o ns of  th i s A g re e ment r e p re s e nt t h e  r e sul t s of n e g ot i a t i ons b e tw ee n B u y e r a nd S e l le r s , eac h of whi c h h a s b ee n r e p re s e n t e d b y c oun s e l of i t s own c hoosin g , a nd none of whi c h h a s a c ted und e r dur e ss or c om p uls i on, wh e ther leg a l, e c onom i c or othe r wise. A cc o r di n g l y , the te r ms a nd p r ovis i ons of th i s A g r e e ment shall be in t e r p reted a nd c onstru e d in acc o r d a n c e with their usual a nd c usto m a r y me a n in g s, a nd B u y e r a nd S e l l e rs h e r e b y w a ive t h e a ppl i ca t i on in c onn ec t i on with the in t e rp re tation a nd c onstru c t i on of th i s A g r ee ment of a n y rule of law to the e f f e c t that a mb i g uous or c onfl i c t i ng t e rms or p r ovis i o ns c ontain e d in th i s

 

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Ag ree ment s h a ll be in te rp re ted o r c onstr u e d a g a inst the P a r t y whose a t t o r n e y p r e p a r e d t h e e x ec uted d ra ft or a n y e a r l ier dr a ft o f this Ag ree m e n t .

 

15. Counte r p a rts.

 

This Ag r e e ment m a y be e x ec uted in two or mo r e c ount e rp a rts, e a c h of whi c h shall b e d ee med a n o ri g i n a l, but a ll of w hich to g e t h e r sh a ll c onsti t ute one a nd the s a me instrum e nt.

 

16. S ec t i on H ea di n g s.

 

The s ec t i on h ea di n g s in th i s A g r e e m e nt a re f o r r e fer e n c e purp o s e s on l y a nd shall not a f f e c t t he me a ni n g or in t e rp re t a t i on of th i s A g r e e ment.

 

17. S e v e r a bi l i t y .

 

If a n y t e rm o r o t h e r p r o v is i o n of t his A g re e m e nt i s in v a l i d, i l l e g a l or i n ca p a b l e o f b e i n g e n f orc e d b y a n y r u le o f l a w o r pu b l i c pol i c y , a ll ot h e r c on d i t i o ns a n d p r o vi s i o ns of t his A g r e e m e nt s h a ll n e v e rt h e l e ss rem a in in f u ll f or c e a n d e f fe c t so l o n g a s t he ec on o m i c o r l e g a l su b s t a n c e of t he t r a n s ac t i o n s c o n t e m p l a t e d h e re b y is n o t a f fe c t e d i n a n y m a nn e r m a t e r i a l l y a d v er se to a n y p a r t y h e reto. U pon s u c h d e t er m i n a t i o n t h a t a n y t e rm or ot h e r p r ov i si o n is in v a l i d, i l l e g a l o r i n c a p a b l e o f b e i n g e n f or c e d , t h e P a rt i e s s h a l l n e go t ia t e in g o od f a i t h t o mod i f y t his A g r e e m e nt s o a s to e f fe c t t h e o r i gi n a l in te nt o f t h e Pa r t i e s a s c l o s e l y a s p o ss i b l e in a n a c ce p t a b l e m a nn e r t o t h e e nd t h a t t r a n s ac t i ons c o n t e mp l a t e d h e re b y ar e f u l f i l l e d t o t h e g re a t e st e x te n t p o s sib l e .

 

18. F o r c e Maj e u r e .

 

The P a rties h e r e to will not be l i a ble to the other P a rties for f a i l u r e or d e l a y in p e r f o r ma n c e und e r th i s A g r ee ment (oth e r than a n y f a i l u r e or d e l a y in p e r f o r ma n c e of a n obl i g a t i on to p a y mon e y ) due to c i r c ums t a n c e s b e y ond the P a r t y ’s r e a sona b le c ontrol. E ac h P a r t y a g re e s to not i f y the other P a rties p rompt l y of a n y such c ir c u ms t a n c e d e l a y i n g i t s p e r f o r ma n c e a nd to r e s u me p e r f o r m a n c e a s soon a s r ea so n a b l y p r a c t i ca bl e .

 

19. Gov e r n i ng L a w.

 

This A g r ee ment shall be g ov e rn e d b y a nd c onst r u e d in acc o r d a n c e with the la w s of the S tate of H a w a ii ( w i t hout g iv i n g e f f e c t to c onfli c t of law p r inciples) a s to a ll matte r s, including but not l i m i ted to matte r s of v a l i di t y , c onstr u c t i on, e f f e c t, pe r fo r man c e a nd r e medi e s.

 

20. W a iver of J u r y T r ial.

 

The P a rties h e r e b y kno w in g l y , volun t a ri l y a nd in t e nt i on a l l y w a ive the r i g h t to a trial b y ju r y in r e s p ec t of a n y l i t i g a t i on b a s e d h e r e on, a r i sing out o f , und e r or in c onn ec t i on with th i s Ag ree ment or a n y other do c uments c ontemplat e d to be e x ec uted in c onju n c t i on h e r e with, or a n y c ourse of c ondu c t, c o u r s e of d e a l i n g s, stat e m e nts ( w h e ther v e r b a l or w r i t t e n) or ac t i ons of e i t h e r p a r t y o r a n y e x e r c ise b y e i t h e r p a r t y of i t s r e sp e c t i ve ri g hts und e r th i s A g r ee men t , th i s w a iver b e ing a mat e rial indu c e m e nt for the p a rties to ent e r into this A g re e ment.

 

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21. L iquor Co m m i ss i on App r ov a l

 

The P a rties: ( a ) ac know l e dge that th i s A g ree m e nt is subj ec t to the r e view a nd a ppro v a l of the L iquor Com m is s io n , a nd (b) a g r e e to p r omp t ly a m e nd th i s Ag ree m e nt to the e x tent r e quir e d to obtain such a ppro va l, p r ovided that a P a r t y shall not be r e quir e d to a g ree to a n y such a mendm e nt which m a t e ri a l l y a nd a dv e r s e l y c h a n g e s i t s ri g hts und e r this A g r ee men t .

 

[ Signa t ure p age fo l lo w s ]

 

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I N W I T NESS W HERE OF , the Pa rties h e r e to h a ve e x ec uted th i s A g r e e ment a s of the d a y a nd y e a r f irst abo v e w r i t ten.

 

P U R C HA S ER:

 

RC S H O P ERA T I O N S , I N C .

 

 

B y :

 

N a me: Mi c h ae l P . O Donn e ll

Tit l e : Chief E x ec ut i ve O f fi c e r

 

 

SEL L ERS:

 

H O N O L U L U S TE A K H O U S E, LL C, b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

MA U I S TE A K H O USE L L C, b y i t s Man a g e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

N a m e:

W. R and a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

 

WA I L E A S T E A K HOU SE L L C , b y i t s Man a g e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

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B E A CH WA L K S T E A K H OU S E , L L C , b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

L A V A COA ST S T E A K H OU S E , L L C , b y i t s

Mana g e r:

DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

 

 

K AUA I STE A K HOU S E , L L C , b y i t s Manag e r: DESERT I S L A N D RE S TA U RA N TS, L . L .C.

 

 

B y :

N a m e:

W. Rand a l l Sch o ch, T r us t e e of t he Schoch Re v oca b l e L i v i ng T r ust da t ed N o v e m ber 19, 2001

 

Ti t l e: M a na g er

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Contact:  Terri Kaupp/ tkaupp@deveney.com

504-450-5848

 

Ruth’s Chris Steak House to Acquire Six Hawaiian Restaurant Locations

From Longtime Franchise Partner

 

 

Winter Park, Fla. – November 3, 2017 – Ruth’s Hospitality Group, Inc. (RHGI) is pleased to announce the acquisition of six Hawaii Ruth’s Chris Steak House locations from longtime franchise partner Desert Island Restaurants.  Since 1994, the Desert Island Restaurants team, led by Founder and Chief Executive Officer Randy Schoch, has operated an award-winning group of restaurants, leveraging founder Ruth Fertel’s successful recipe: sizzling prime steaks and legendary hospitality – enhanced with the aloha spirit of Hawaii.  

 

“We’re delighted to welcome these outstanding restaurants and their wonderful teams into the Ruth’s Hospitality Group family and are committed to continuing their success. These locations truly embody the culture of hospitality, quality and service that has set us apart for more than 50 years,” said Mike O’Donnell, Chairman and Chief Executive Officer for Ruth’s Hospitality Group. “Having spent time with the teams in Hawaii, I’ve seen firsthand why our guests so enjoy their dining experiences with us. I look forward to continuing our great work with the Hawaii teams.”

 

For over twenty years, the Hawaii Ruth’s locations have become a favorite among both locals and travelers, consistently delivering the hospitality of Ruth’s Chris and exceeding guest expectations. These six locations include: Honolulu, Waikiki, Lahaina, Wailea, Mauna Lani and the newest location, Kauai.

 

Together with Schoch’s team at Desert Island Restaurants, RHGI will work closely to ensure a seamless transition for team members and guests.

 

“With RHGI’s leadership and the strength of the Ruth’s Chris Steak House brand, the future of these locations is in excellent hands,” said Schoch. “I’m confident that RHGI will build upon our accomplishments and embrace the island spirit that has continuously guided everything our team members do.”

 

Both RHGI and Desert Island Restaurants are diligently working on the integration. The anticipated completion of the transaction is expected no later than the end of the first quarter of 2018.

 

 

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About Ruth's Hospitality Group

 

Ruth's Hospitality Group, Inc., headquartered in Winter Park, Florida, is the largest fine dining steak house company in the U.S. as measured by the total number of company-owned and franchise-owned restaurants, with over 150 Ruth’s Chris Steak House locations worldwide specializing in USDA Prime grade steaks served in Ruth’s Chris’ signature fashion – “sizzling.”

 

For information about our restaurants, to make reservations, or to purchase gift cards, please visit www.RuthsChris.com . For more information about Ruth’s Hospitality Group, Inc., please visit www.rhgi.com .

 

 

 

 

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