-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GSfB4wyKu915Samf/K589faUyhix9Hvev+Xhf7leN+Lz1R6TsdowYGc6i72+kwmF 7ZRViHYVkR2gPPjesaSnvw== 0000912057-00-054873.txt : 20001228 0000912057-00-054873.hdr.sgml : 20001228 ACCESSION NUMBER: 0000912057-00-054873 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20001227 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHICAGO PIZZA & BREWERY INC CENTRAL INDEX KEY: 0001013488 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 330485615 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-47661 FILM NUMBER: 796435 BUSINESS ADDRESS: STREET 1: 16162 BEACH BOULEVARD, SUITE 100 CITY: HUNTINGTON BEACH STATE: CA ZIP: 92647 BUSINESS PHONE: 714-848-3747 MAIL ADDRESS: STREET 1: CORPORATE OFFICES STREET 2: 16162 BEACH BOULEVARD, SUITE 100 CITY: HUNTINGTON BEACH STATE: CA ZIP: 92647 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ASSI INC CENTRAL INDEX KEY: 0001020339 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 880353609 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 5076 SPYGLASS HILL DRIVE CITY: LAS VEGAS STATE: NV ZIP: 89122 BUSINESS PHONE: 7024317232 MAIL ADDRESS: STREET 1: 5076 SPYGLASS HILL DRIVE CITY: LAS VEGAS STATE: NV ZIP: 89122 SC 13D/A 1 a2033947zsc13da.txt SC 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 4) Chicago Pizza & Brewery, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 167889104 - -------------------------------------------------------------------------------- (CUSIP Number) Allyn R. Burroughs 5075 Spyglass Hill Drive Las Vegas, NV 89122 - -------------------------------------------------------------------------------- (Name, address, and telephone number of Person authorized to Receive Notices and Communications) December 20, 2000 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. / / Check the following box if a fee is being paid with the statement. / / SCHEDULE 13D CUSIP No. 83608K 107 Page 2 of 7 Pages ============ =================================================================== 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON ASSI, INC. - ------------ ------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - ------------ ------------------------------------------------------------------- 3 SEC USE ONLY - ------------ ------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ------------ ------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ------------ ------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 NEVADA - -------------------------- --------- ------------------------------------------- 7 SOLE VOTING POWER 2,375,500 --------- ------------------------------------------- 8 SHARED VOTING POWER NUMBER OF SHARES None BENEFICIALLY --------- ------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER EACH REPORTING 2,375,500 PERSON WITH --------- ------------------------------------------- 10 SHARED DISPOSITIVE POWER None - -------------------------- --------- ------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,375,500 - ------------ ------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ------------ ------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31.0% - ------------ ------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO ============ =================================================================== SCHEDULE 13D CUSIP No. 83608K 107 Page 3 of 7 Pages ============ =================================================================== 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LOUIS HABASH - ------------ ------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - ------------ ------------------------------------------------------------------- 3 SEC USE ONLY - ------------ ------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - ------------ ------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / / - ------------ ------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------- --------- ------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 31,000 SHARES --------- ------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 2,375,500 REPORTING --------- ------------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 31,000 --------- ------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,375,500 - -------------------------- --------- ------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,406,500 - ------------ ------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ------------ ------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 31.4% - ------------ ------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN ============ =================================================================== STATEMENT ON SCHEDULE 13D This Amendment No. 4 to Schedule 13D is filed by ASSI, Inc., a Nevada corporation ("ASSI"), and Louis Habash ("Habash") to amend and update the Schedule 13D dated December 11, 1996 (the "Original Schedule 13D"), which was previously amended by Amendment No. 1 dated November 13, 1997 and Amendment No. 2 dated February 18, 1999, and Amendment No. 3 dated July 13, 1999. All capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Original Schedule 13D. Items not included in this Amendment are either not amended or not applicable. The purpose of this Amendment No. 4 is to reflect (i) the agreement by ASSI and Habash to sell all of their shares of Common Stock of the Company under a Stock Purchase Agreement dated as of December 20, 2000 among ASSI, Habash and BJ Chicago, LLC (the "2000 Stock Purchase Agreement"), and (ii) the receipt by ASSI of an option from the Company to purchase 200,000 shares of Common Stock at $4.00 per share pursuant to a Mutual General Release dated December 20, 2000. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 3 is amended to read as follows: ASSI beneficially owns 2,375,500 shares of Common Stock. A total of 866,000 of these shares were acquired by ASSI in an open market transaction on July 13, 1999 at a price of $2.25 per share for aggregate consideration of $1,948,500. Another 59,500 of these shares were acquired by ASSI in open market purchases from April 30, 1999 to June 28, 1999 at prices ranging from $1.375 to $2.00 for aggregate consideration of $97,900. Another 1,250,000 shares were acquired by ASSI on or about March 1, 1999 by the payment of $1,000,000 to the Company, along with the cancellation of 3,200,000 warrants held by ASSI, the termination of certain consulting agreements between the Company and ASSI, and a general release by Habash, ASSI and their affiliates of any claims they have against the Company. Of the 3,200,000 warrants exchanged by ASSI, 3,000,000 warrants were acquired in October 1996 upon the automatic conversion of a bridge loan in the principal amount of $2,000,000 made by ASSI to the Company in March 1996 (which loan automatically converted into 500,000 shares and 3,000,000 warrants upon the closing of the Company's initial public offering) and the remaining 200,000 warrants were acquired in February 1996 in exchange for consulting services provided by ASSI to the Company. All funds used by ASSI to make the 1996 bridge loan were working capital funds of ASSI. In addition, the $2,046,400 used to make the open market purchases from April through July 1999 and the $1,000,000 cash payment for the March 1, 1999 purchase, were also working capital funds of ASSI. The remaining 200,000 shares are beneficially owned pursuant to currently exercisable options, acquired in December 2000 as consideration for the release by ASSI of any claims it had against the Company. Habash, as sole shareholder of ASSI, beneficially owns all of the shares owned by ASSI, plus an additional 31,000 shares individually. Habash purchased the shares owned by him individually with personal funds. Page 4 of 7 Pages Item 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is amended to read as follows: (a) As of the date of this Schedule, ASSI was the record and beneficial owner of 2,375,500 shares of Common Stock, representing approximately 31.0% of the 7,658,321 outstanding shares of Common Stock based upon the information in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. Of this amount, 200,000 are pursuant to a currently exercisable option. As sole shareholder of ASSI, Habash beneficially owns all of the shares of Common Stock beneficially owned by ASSI, plus an additional 31,000 shares directly owned by him, for an aggregate beneficial ownership of 2,406,500 shares representing approximately 31.4% of the outstanding Common Stock. Burroughs and James are not the beneficial owner of any shares of Common Stock and specifically disclaim any beneficial ownership in the shares of Common Stock beneficially owned by ASSI. (b) ASSI has sole power to vote or direct the vote and to dispose or direct the disposition of the 2,375,500 shares of Common Stock beneficially owned by it. Habash, as sole shareholder of ASSI, shares the power to vote or direct the vote, and to dispose or direct the disposition of, the Common Stock beneficially owned by ASSI. Habash has sole power to vote or direct the vote and to dispose or direct the disposition of the 31,000 shares of Common Stock held by him. (c) On December 20, 2000, ASSI agreed to sell to BJ Chicago, LLC, a Delaware limited liability company ("BJC"), 2,175,500 shares of Common Stock under the 2000 Stock Purchase Agreement upon the satisfaction of certain conditions. The purchase price for the shares will be $4.00 per share, for an aggregate purchase price of $8,702,000. Under the 2000 Stock Purchase Agreement, Habash agreed to sell to BJC 31,000 shares at $4.00 per share for an aggregate purchase price of $124,000. These sales are scheduled to close on or before January 18, 2001. (d) -(e) Not applicable. Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is amended to read as follows: Pursuant to the Stock Purchase Agreement dated as of February 18, 1999 by and among the Company, ASSI and Habash (the "1999 Stock Purchase Agreement"), during the period (the "Designation Period") commencing on February 18, 1999 and ending on the earlier of February 18, 2002, or such time as Habash, ASSI and their affiliates no longer beneficially own at least 5% of the Company's outstanding Common Stock, the Company shall, if requested by ASSI, use its best efforts to cause two of the Company's directors to be persons designated by ASSI, and cause each of the ASSI designees to be included on the slate of director nominees for Page 5 of 7 Pages election at each annual meeting of the shareholders of the Company during the Designation Period. In addition, the Company has agreed that during the Designation Period it shall not increase the number of authorized directors of the Company to more than nine without the prior written consent of ASSI. Paul Motenko and Jeremiah Hennessy have each agreed to vote all shares of Common Stock of the Company held of record and beneficially by each of them in favor of the ASSI designees. With respect to the 1,250,000 shares purchased by ASSI under the 1999 Stock Purchase Agreement (the "ASSI Shares"), ASSI has one demand registration right and unlimited piggyback registration rights. The Company has a right of first refusal with respect to the ASSI Shares entitling the Company or its designee to purchase any ASSI Shares to be sold by ASSI at the same price as ASSI proposes to sell such shares to a third party. In connection with the purchase by ASSI of the 866,000 share block on July 13, 1999, and the parties entering into the Mutual Release, the Company has agreed to extend the registration rights granted to ASSI under the Stock Purchase Agreement to include the 866,000 shares purchased at that time. Pursuant to the 2000 Stock Purchase Agreement, ASSI and Habash have agreed to sell 2,175,500 and 31,000 shares, respectively, to BJC, subject to the satisfaction of certain conditions. These sales are expected to close on or before January 18, 2001. Item 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT ----------- ---------------------- Exhibit 6 Stock Purchase Agreement dated December 20, 2000 among ASSI, Inc., Louis Habash and BJ Chicago, LLC. Exhibit 7 Mutual General Release dated December 20, 2000 by and among ASSI, Inc., Louis Habash and Chicago Pizza & Brewery, Inc. Exhibit 8 Option Agreement dated December 20, 2000 between Chicago Pizza & Brewery, Inc. and ASSI, Inc.
Page 6 of 7 Pages SIGNATURES ---------- After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Dated: December 27, 2000 ASSI, INC. By: /s/ Louis Habash --------------------------------- Louis Habash, President /s/ Louis Habash -------------------------------------- Louis Habash Page 7 of 7 Pages EX-6 2 a2033947zex-6.txt EXHIBIT 6 EXHIBIT 6 STOCK PURCHASE AGREEMENT by and between BJ CHICAGO, LLC, as the Buyer and ASSI, INC. and LOUIS HABASH, as the Sellers DECEMBER 20, 2000 STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (the "AGREEMENT") is entered into as of December 20, 2000, by and among BJ Chicago, LLC, a Delaware limited liability company (the "BUYER"), and ASSI, Inc., a Nevada corporation ("ASSI"), and Louis Habash ("HABASH," and together with ASSI, the "SELLERS"), who are each shareholders of Chicago Pizza & Brewery, Inc., a California corporation ("TARGET"). The Buyer and the Sellers are referred to collectively herein as the "PARTIES." RECITALS A. Louis Habash owns 31,000 shares of the common stock of Target, and ASSI, Inc. owns an additional 2,175,500 shares of the common stock of Target, which collectively constitute all of the outstanding shares of capital stock of Target held by Sellers; and B. This Agreement contemplates a transaction in which the Buyer will purchase from the Sellers, and the Sellers will sell to the Buyer, 2,206,500 shares of Target common stock held by the Sellers in return for cash as set forth below in Section 2. AGREEMENT Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the Parties agree as follows. 1. DEFINITIONS. "AAA" has the meaning set forth in Section 9(o) below. "AAA RULES" has the meaning set forth in Section 9(o) below. "ACCREDITED INVESTOR" has the meaning set forth in Regulation D promulgated under the Securities Act. "ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys' fees and expenses. "AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act. "BUYER" has the meaning set forth in the preface above. "CLOSING" has the meaning set forth in Section 2(c) below. "CLOSING DATE" has the meaning set forth in Section 2(c) below. "CONFIDENTIAL INFORMATION" means any information concerning the businesses and affairs of Target or confidential for purposes of the confidentiality agreement in place between the Parties as of the date hereof. "ESCROW ACCOUNT" has the meaning set forth in Section 2(b)(i) below. "ESCROW AGENT" has the meaning set forth in Section 2(b)(i) below. "INDEMNIFIED PARTY" has the meaning set forth in Section 7(c) below. "INDEMNIFYING PARTY" has the meaning set forth in Section 7(c) below. "INITIAL CLOSING" has the meaning set forth in Section 2(c) below. "INITIAL CLOSING DATE" has the meaning set forth in Section 2(c) below. "LIABILITY" means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes. "PARTIES" has the meaning set forth in the preface above with each Party being referred to, individually, as a "PARTY." "PERSON" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or political subdivision thereof). "PURCHASE PRICE" has the meaning set forth in Section 2(b) below. "SECOND CLOSING" has the meaning set forth in Section 2(c) below. "SECOND CLOSING DATE" has the meaning set forth in Section 2(c) below. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance, charge or other security interest. "SELLERS" has the meaning set forth in the preface above. "TARGET" has the meaning set forth in the preface above. "TARGET SHARES" mean any shares of the common stock, no par value per share, of Target, with each Target Share being referred to, individually, as a "TARGET SHARE." 2 "TAX" or "TAXES" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Internal Revenue Code), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. The terms "Tax" and "Taxes" include any liability for any of the foregoing items as a result of being a member of any affiliated, consolidated, combined, unitary or similar group and any liability for payment of any amounts as a result of a Tax sharing or indemnity agreement. "THIRD PARTY CLAIM" has the meaning set forth in Section 7(c) below. 2. PURCHASE AND SALE OF TARGET SHARES. (a) BASIC TRANSACTION. On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from the Sellers, and the Sellers agree to sell to the Buyer, Two Million Two Hundred Six Thousand Five Hundred (2,206,500) Target Shares, which constitute all of the Target Shares held by Sellers, for the consideration specified below in this Section 2. (b) PURCHASE PRICE. Upon the terms and subject to the conditions contained herein, as consideration for the purchase of all of the Target Shares held by the Sellers, the Buyer will purchase such Target Shares for the consideration set forth below (the "PURCHASE PRICE"). The Purchase Price will be due and payable as follows: (i) Upon execution of this Agreement, ASSI will deliver One Million Two Hundred Fifty Thousand (1,250,000) Target Shares and Habash will deliver Thirty-One Thousand (31,000) Target Shares to an independent third party escrow agent ("ESCROW AGENT") to be held in an escrow account (the "ESCROW ACCOUNT") to be administered by Escrow Agent, which shall be released to the Buyer at the Initial Closing, or if the Initial Closing does not occur on or before January 18, 2001 (as such date may be mutually extended in writing by the parties) shall be returned by the Escrow Agent to the Sellers. (ii) Upon confirmation from the Escrow Agent of the delivery by the Sellers of the Target Shares to Escrow Agent pursuant to clause (i) of this Section, the Buyer will pay to the Sellers in cash Two Million Dollars ($2,000,000) as a nonrefundable deposit of an advance portion of the purchase price. In the event of the Initial Closing described in Section 2(c), the deposit shall be credited against the aggregate Purchase Price. If the Initial Closing does not occur on or before January 18, 2001 (as such date may be mutually extended in writing by the parties), the deposit shall be retained by Sellers as a break-up fee unless the Initial Closing does not occur as a result of a material breach hereof by Sellers. (iii) Before the Closing Date, ASSI will deliver Nine Hundred Twenty-Five Thousand Five Hundred (925,500) Target Shares to the Escrow Agent to be held in the Escrow Account to be administered by Escrow Agent, which shall be released to the Buyer at the 3 Initial Closing, or if the Initial Closing does not occur on or before January 18, 2001 (as such date may be mutually extended in writing by the parties) shall be returned by the Escrow Agent to the Sellers. (iv) If the ASSI delivers the Target Shares described in clause (iii) of this Section by the Initial Closing Date, the Buyer will pay the Sellers on the Initial Closing Date in cash an aggregate of Eight Million Eight Hundred Twenty-Six Thousand Dollars ($8,826,000) which shall be paid by (A) Sellers retaining the deposit paid by Buyer pursuant to Section 2(b)(i) of this Agreement, and (B) by Buyer paying Sellers the balance of the Purchase Price on the Initial Closing Date in an amount of Six Million Eight Hundred Twenty-Six Thousand Dollars ($6,826,000) by same day wire transfer, cashier's check or other "same day funds" acceptable to the Sellers. The Purchase Price shall be allocated among the Sellers in proportion to their respective holdings of Target Shares. (v) If ASSI has not delivered the Target Shares described in clause (iii) of this Section before the Initial Closing Date, the Buyer will pay the Sellers on the Initial Closing Date in cash an aggregate of Five Million One Hundred Twenty-Four Thousand Dollars ($5,124,000) which shall be paid by (A) Sellers retaining the deposit paid by Buyer pursuant to Section 2(b)(i) of this Agreement, and (B) by Buyer paying Sellers the balance of the Purchase Price on the Initial Closing Date in an amount of Three Million One Hundred Twenty-Four Thousand Dollars ($3,124,000) by same day wire transfer, cashier's check or other "same day funds" acceptable to the Sellers. The Purchase Price shall be allocated among the Sellers in proportion to their respective holdings of Target Shares. (vi) If ASSI has not delivered the Target Shares described in clause (iii) of this Section before the Initial Closing Date, ASSI will have thirty (30) days from the Initial Closing Date to deliver the Target Shares described in clause (iii) of this Section to the Escrow Agent. Upon confirmation from the Escrow Agent of the delivery by ASSI of the Target Shares and executed stock powers in blank to Escrow Agent pursuant to this clause, the Buyer will pay ASSI in cash in an amount of Three Million Seven Hundred Two Thousand Dollars ($3,702,000) by same day wire transfer, cashier's check or other "same day funds" acceptable to the Sellers. It shall be a material breach of this Agreement if ASSI does not deliver the Target Shares described in clause (iii) to the Escrow Agent prior to the expiration of such thirty-day period. In the event of such breach, the Buyer shall be entitled to the remedies specified in Section 9(a) of this Agreement in addition to any other remedy to which it may be entitled at law or in equity. (c) THE CLOSING. The purchase and sale of the Shares hereunder shall take place at one or more closings (each of which is referred to in this Agreement as a "CLOSING") on one or more closing dates (each a "CLOSING DATE"). The initial closing of the transactions contemplated by this Agreement (the "INITIAL CLOSING") shall take place at the offices of Latham & Watkins at 12636 High Bluff Drive, Suite 300, San Diego, California, commencing at 10:00 a.m. local time on January 18, 2001, or if any of the conditions set forth in Section 6(a) (other than conditions with respect to actions the respective Parties will take at the Initial Closing itself) has not been satisfied, a later date selected by the Buyer, which date shall be within five business days following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the 4 transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Initial Closing itself) (such date, the "INITIAL CLOSING DATE"). If necessary, a second closing will be held no later than thirty (30) days following the Initial Closing for the Shares described in Section 2(b)(vi) (the "SECOND CLOSING") at the offices of Latham & Watkins at 12636 High Bluff Drive, Suite 300, San Diego, California, commencing at 10:00 a.m. local time on a date agreed upon by the Sellers and the Buyer (the "SECOND CLOSING DATE"). (d) DELIVERIES AT THE EXECUTION OF THIS AGREEMENT. At the execution of this Agreement, (i) the Buyer will deliver to the Sellers the nonrefundable deposit described in Section 2(b)(ii); (ii) the Sellers will deliver to the Escrow Agent the Target Shares described in Section 2(b)(i); and (iii) the counsel to the Sellers will deliver an opinion to the Buyer in form and substance as set forth in EXHIBIT A attached hereto, addressed to the Buyer, and dated as of the date of Execution of this Agreement. (e) DELIVERIES AT THE INITIAL CLOSING. At the Initial Closing, (i) Escrow Agent will release to the Buyer stock certificates representing the Target Shares then held in the Escrow Account, endorsed in blank or accompanied by duly executed assignment documents, (ii) the Buyer and the Sellers will execute and deliver to the Escrow Agent a Joint Notice in form and substance reasonably acceptable to the Escrow Agent instructing the Escrow Agent to release the Target Shares held by it to the Buyer; and (iii) the Buyer and the Escrow Agent will deliver to the Sellers the consideration specified in Section 2(b)(iv) if ASSI has delivered the shares described in Section 2(b)(iii) or the consideration specified in Section 2(b)(v) if Seller has not delivered the shares described in Section 2(b)(iii). (f) DELIVERIES AT THE SECOND CLOSING. If ASSI has not delivered the shares described in Section 2(b)(iii) by the Initial Closing Date, (i) ASSI will deliver the shares described in Section 2(b)(iii), endorsed in blank or accompanied by duly executed assignment documents, within thirty (30) days of the Initial Closing Date; (ii) upon confirmation from the Escrow Agent of the delivery by ASSI of the shares described in Section 2(b)(iii), the Buyer will deliver to Sellers the consideration specified in Section 2(b)(vi), and (iii) the Buyer and the Sellers will execute and deliver to the Escrow Agent a Joint Notice in form and substance reasonably acceptable to the Escrow Agent instructing the Escrow Agent to release the Target Shares held by it to the Buyer. 3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION. (a) REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers jointly and severally represent and warrant to the Buyer that the statements contained in this Section 3(a) are correct and complete as of the date of this Agreement and will be correct and complete as of the Initial Closing Date or, if applicable, the Second Closing Date (as though made then and as though the Initial Closing Date or, if applicable, the Second Closing Date were substituted for the date of this Agreement throughout this Section 3(a)) with respect to itself. (i) AUTHORIZATION OF TRANSACTION. ASSI, Inc. has been duly incorporated and is validly existing and in good standing under the laws of the State of Nevada. The Sellers have full power and authority to execute and deliver this Agreement and to perform their obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the 5 Sellers, enforceable in accordance with its terms and conditions. The Sellers need not give any notice to, make any filing with, or obtain any authorization, consent or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (ii) NONCONTRAVENTION. Except for the right of first refusal set forth at Section 8.1 of the Stock Purchase Agreement dated as of February 18, 1999 among the Sellers and Chicago Pizza, neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any government, governmental agency or court to which either of the Sellers is subject or (B) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which either of the Sellers is a party or by which they are bound or to which any of their assets are subject, except where the conflict, breach, default, acceleration, termination, modification, cancellation or failure to give notice would not have a material adverse effect on the ability of the parties to consummate the transactions contemplated hereby. (iii) TARGET SHARES. ASSI holds of record and owns beneficially 2,175,500 Target Shares, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities laws and except for the right of first refusal set forth at Section 8.1 of the Stock Purchase Agreement dated as of February 18, 1999 among ASSI and Chicago Pizza), Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, encumbrances and demands. Habash holds of record and owns beneficially 31,000 Target Shares, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities laws), Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims, encumbrances and demands. The Target Shares constitute all of the issued capital stock of Target held by the Sellers and any affiliate of the Sellers. Neither of the Sellers is a party to any option, warrant, purchase right or other contract or commitment that could require either of the Sellers to sell, transfer or otherwise dispose of any capital stock of Target or any of the assets of Target (other than this Agreement). Neither of the Sellers is a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any capital stock of Target. (b) REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Sellers that the statements contained in this Section 3(b) are correct and complete as of the date of this Agreement and will be correct and complete as of the Initial Closing Date or, if applicable, the Second Closing Date (as though made then and as though the Initial Closing Date or, if applicable, the Second Closing Date were substituted for the date of this Agreement throughout this Section 3(b)). (i) ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware. The Buyer has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement 6 constitutes the valid and legally binding obligation of the Buyer, enforceable in accordance with its terms and conditions. The Buyer need not give any notice to, make any filing with, or obtain any authorization, consent or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (ii) INVESTMENT. The Buyer is not acquiring the Target Shares with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act. (iii) ACCREDITED INVESTOR. The Buyer is an Accredited Investor within the meaning of Rule 501(a) under the Securities Act, and the Target Shares to be acquired by it pursuant to this Agreement are being acquired for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distributions thereof. The Buyer has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Target Shares, and it is capable of bearing the economic risks of such investment. (iv) RESTRICTED SECURITIES. The Buyer understands that the Sellers are "affiliates" of the Target for the purposes of Rule 144 promulgated under the Securities Act ("Rule 144"), and the Buyer is familiar with the provisions of Rule 144. The Buyer understands that the Target Shares will be transferred to the Buyer without registration under the Securities Act under applicable state securities laws and constitute "restricted securities" for the purposes of Rule 144. The Buyer understands that the Target Shares must be held indefinitely unless subsequently registered under the Securities Act and any applicable state securities laws or unless exemptions from such registrations are available. 4. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to the period between the execution of this Agreement and the Initial Closing or, if applicable, the Second Closing: (a) GENERAL. Each of the Parties will use its reasonable best efforts to take all action and to do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 6 below). (b) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice to the other of any material adverse development causing a breach of any of its own representations and warranties in Section 3 above. No disclosure by any Party pursuant to this Section 4(b), however, shall be deemed to cure any misrepresentation, breach of warranty or breach of covenant. (c) EXCLUSIVITY. The Sellers will not, and the Sellers will not permit or cause any of their employees, officers, shareholders or other affiliates or agents to, directly or indirectly, (i) solicit, initiate or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or other voting securities, or any substantial portion of the assets of, Target (including any acquisition structured as a merger, consolidation or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, 7 assist or participate in or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. The Sellers will not vote their Target Shares in favor of any such acquisition structured as a merger, consolidation or share exchange. The Sellers will notify the Buyer immediately if any Person makes any proposal, offer, inquiry or contact with respect to any of the foregoing. In addition, the Sellers will not reallocate, issue, transfer, sell, pledge or otherwise dispose of any equity interests in the Target prior to the Initial Closing or, if applicable, the Second Closing. Further, Sellers will not and will not cause or permit any of their employees, officers, stockholders, or other affiliates or agents to, directly or indirectly, discuss, negotiate or consider any other proposals or inquiries from any other persons or entities relating to the sale or other transfer of the Target Shares. 5. POST-CLOSING COVENANTS. The Parties agree as follows with respect to the period following the Initial Closing or, if applicable, the Second Closing: (a) GENERAL. In case at any time after the Initial Closing or, if applicable, the Second Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Section 7 below). (b) CONFIDENTIALITY. For a period of two years following the termination of this Agreement, the Parties will treat and hold as such all of the Confidential Information, refrain from using any of the Confidential Information except in connection with this Agreement, and, in respect of Sellers, deliver promptly to the Buyer or destroy, at the request and option of the Buyer, all tangible embodiments (and all copies) of the Confidential Information which are in their possession. In the event that a Party is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, the Party will notify the other Party promptly of the request or requirement so that the other Party may seek an appropriate protective order or waive compliance with the provisions of this Section 5(b). The foregoing provisions shall not apply to any Confidential Information which are generally available to the public immediately prior to the time of disclosure. 6. CONDITIONS TO OBLIGATION TO CLOSE. (a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer to consummate the transactions to be performed by it in connection with the Initial Closing or, if applicable, the Second Closing is subject to satisfaction of the following conditions: (i) the representations and warranties set forth in Section 3(a) above shall be true and correct in all material respects at and as of the Initial Closing Date or, if applicable, the Second Closing Date; 8 (ii) the Sellers shall have performed and complied with all of their covenants hereunder in all material respects through the Initial Closing or, if applicable, the Second Closing; (iii) no action, suit or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling or charge shall be in effect), or (C) affect adversely the right of the Buyer to own the Target Shares; and (iv) From the date hereof through the Initial Closing Date or, if applicable, the Second Closing Date, there shall have been no material adverse change in the financial condition, results of operations, properties, business or prospects of Target. All actions to be taken by the Sellers in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer. The Buyer may waive any condition specified in this Section 6(a) if it executes a writing so stating at or prior to the Initial Closing or, if applicable, the Second Closing. (b) CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of the Sellers to consummate the transactions to be performed by them in connection with the Initial Closing or, if applicable, the Second Closing is subject to satisfaction of the following conditions: (i) the representations and warranties set forth in Section 3(b) above shall be true and correct in all material respects at and as of the Initial Closing Date or, if applicable, the Second Closing Date; (ii) the Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Initial Closing or, if applicable, the Second Closing; and (iii) no action, suit or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement or (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling or charge shall be in effect). All actions to be taken by the Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to 9 the Sellers. The Sellers may waive any condition specified in this Section 6(b) by executing a writing so stating at or prior to the Initial Closing or, if applicable, the Second Closing. 7. REMEDIES FOR BREACHES OF THIS AGREEMENT. (a) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER. (i) In the event either of the Sellers breaches (or in the event any third party alleges facts that, if true, would mean either of the Sellers has breached) any of its representations, warranties and covenants contained herein, then the Sellers jointly and severally agree to indemnify the Buyer from and against the entirety of any Adverse Consequences the Buyer may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach). (b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS. In the event the Buyer breaches (or in the event any third party alleges facts that, if true, would mean the Buyer has breached) any of its representations, warranties and covenants contained herein, then the Buyer agrees to indemnify Sellers from and against the entirety of any Adverse Consequences the Sellers may suffer through and after the date of the claim for indemnification resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach). (c) MATTERS INVOLVING THIRD PARTIES. (i) If any third party shall notify any Party (the "INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which may give rise to a claim for indemnification against any other Party (the "INDEMNIFYING PARTY") under this Section 7, then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing; PROVIDED, HOWEVER, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced. (ii) Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, and (C) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. (iii) So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 7(c)(ii) above, (A) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party 10 Claim, (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (such consent not to be withheld unreasonably) and (C) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (such consent not to be withheld unreasonably and such consent not to be withheld at all if the judgment or settlement contains a full release reasonably satisfactory to the Indemnified Party). (iv) In the event any of the conditions in Section 7(c)(ii) above is or becomes unsatisfied, however, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying Party in connection therewith), (B) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys' fees and expenses) and (C) the Indemnifying Party will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Section 7. 8. TERMINATION. (a) TERMINATION OF AGREEMENT. The Parties may terminate this Agreement as provided below: (i) the Buyer and the Sellers may terminate this Agreement by mutual written consent at any time; (ii) the Buyer may terminate this Agreement by giving written notice to the Sellers at any time prior to the Initial Closing or, if applicable, the Second Closing (A) in the event either of the Sellers has breached any material representation, warranty or covenant contained in this Agreement in any material respect, the Buyer has notified Sellers of the breach and the breach has continued without cure for a period of 10 days after the notice of breach or (B) if such Closing shall not have occurred on or before the applicable Closing Date by reason of the failure of any condition precedent under Section 6(a) hereof (unless the failure results primarily from the Buyer itself breaching any representation, warranty or covenant contained in this Agreement); and (iii) The Sellers may terminate this Agreement by giving written notice to the Buyer at any time prior to the Initial Closing or, if applicable, the Second Closing (A) in the event the Buyer has breached any material representation, warranty or covenant contained in this Agreement in any material respect, the Sellers have notified the Buyer of the breach and the breach has continued without cure for a period of 10 days after the notice of breach or (B) if such Closing shall not have occurred on or before January 18, 2001 in respect of the Initial Closing or the applicable Closing Date in respect of the Second Closing by reason of the failure of any condition precedent under Section 6(b) hereof (unless the failure results primarily from Sellers themselves breaching any representation, warranty or covenant contained in this Agreement). 11 9. MISCELLANEOUS. (a) CONFIDENTIALITY OF AGREEMENT, PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Except as set forth below, the Parties shall, and shall cause their officers, employees and representatives to, treat and hold as confidential the existence and terms of this Agreement at all times prior to the Initial Closing Date, or if applicable, the Second Closing Date. Specifically, no Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement prior to the Initial Closing or, if applicable, the Second Closing without the prior written approval of the Buyer and the Sellers; PROVIDED, HOWEVER, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities to make such disclosure (in which case the disclosing Party will use its reasonable best efforts to advise the other Parties prior to making the disclosure). (b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns. (c) ENTIRE AGREEMENT. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter hereof. (d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the Buyer and the Sellers; PROVIDED, HOWEVER, that the Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases the Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder). (e) COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. (f) HEADINGS. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. (g) NOTICES. All notices, requests, demands, claims and other communications hereunder will be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below: 12 IF TO THE SELLERS: Louis Habash 5075 Spyglass Hill Drive Las Vegas, NV 89122 Facsimile: (702) 431-8012 ASSI, Inc. 5075 Spyglass Hill Drive Las Vegas, NV 89122 Facsimile: (702) 431-8012 WITH A COPY TO: William L. Twomey, Esq. Hewitt & McGuire, LLP 19900 MacArthur Boulevard, Suite 1050 Irvine, CA 92612 Fax: (949) 798-0511 IF TO THE BUYER: BJ Chicago, LLC c/o The Jacmar Companies, Inc. 2200 W. Valley Boulevard Alhambra, CA 91803 Attn: James A. Dal Pozzo Telephone: (626) 576-0737 Facsimile: (626) 576-2211 WITH A COPY TO: Latham & Watkins 12636 High Bluff Drive, Suite 300 San Diego, CA 92130 Attn.: Robert E. Burwell, Esq. Telephone: (858) 523-5400 Facsimile: (858) 523-5450 Any Party may send any notice, request, demand, claim or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service or ordinary mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, 13 demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth. (h) GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California. (i) AMENDMENTS AND WAIVERS. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Buyer and Sellers. No waiver by any Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. (j) SEVERABILITY. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any applicable jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other applicable jurisdiction. (k) EXPENSES. Each of the Parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. Buyer and Sellers agree to evenly share the fees of the Escrow Agent and any other fees or costs associated with the Escrow Account. (l) CONSTRUCTION. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder and any applicable common law, unless the context requires otherwise. The word "including" shall mean including without limitation. (m) INCORPORATION OF EXHIBITS, ANNEXES AND SCHEDULES. The Exhibits identified in this Agreement are incorporated herein by reference and made a part hereof. (n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with, their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter in addition to any other remedy to which they may be entitled, at law or in equity. 14 (o) ARBITRATION. Any dispute arising out of this Agreement, or its performance or breach, shall be resolved by binding arbitration in Los Angeles, California under the Commercial Arbitration Rules (the "AAA RULES") of the American Arbitration Association (the "AAA"). This arbitration provision is expressly made pursuant to and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-14. The Parties agree that pursuant to Section 9 of the Federal Arbitration Act, a judgment of a United States District Court of competent jurisdiction shall be entered upon the award made pursuant to the arbitration. A single arbitrator, who shall have the authority to allocate the costs of any arbitration initiated under this paragraph, shall be selected according to the AAA Rules within ten (10) days of the submission to the AAA of the response to the statement of claim or the date on which any such response is due, whichever is earlier. The arbitrator shall be required to furnish to the parties to the arbitration a preliminary statement of the arbitrator's decision that includes the legal rationale for the arbitrator's conclusion and the calculations pertinent to any damage award being made by the arbitrator. The arbitrator shall then furnish each of the parties to the arbitration the opportunity to comment upon and/or contest the arbitrator's preliminary statement of decision either, in the discretion of the arbitrator, through briefs or at a hearing. The arbitrator shall render a final decision following any such briefing or hearing. The arbitrator shall conduct the arbitration in accordance with the Federal Rules of Evidence. The arbitrator shall decide the amount and extent of pre-hearing discovery which is appropriate. The arbitrator shall have the power to enter any award of monetary and/or injunctive relief (including the power to issue permanent injunctive relief and also the power to reconsider any prior request for immediate injunctive relief by any Party and any order as to immediate injunctive relief previously granted or denied by a court in response to a request therefor by any Party), including the power to render an award as provided in Rule 43 of the AAA Rules; PROVIDED, HOWEVER THAT THE ARBITRATOR SHALL NOT HAVE THE POWER TO AWARD CONSEQUENTIAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES UNDER ANY CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER APPLICABLE LAW. THE PARTIES HEREBY WAIVE THEIR RIGHTS, IF ANY, TO RECOVER ANY SUCH DAMAGES, WHETHER IN ARBITRATION OR LITIGATION. The arbitrator shall have the power to award the prevailing party its costs and reasonable attorney's fees; PROVIDED, HOWEVER, that the arbitrator shall not award attorneys' fees to a prevailing party if the prevailing party received a settlement offer unless the arbitrator's award to the prevailing party is greater than such settlement offer without taking into account attorneys' fees in the case of the settlement offer or the arbitrator's award. In addition to the above courts, the arbitration award may be enforced in any court having jurisdiction over the Parties and the subject matter of the arbitration. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 15 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written. "BUYER" BJ CHICAGO, LLC, a Delaware limited liability company By: THE JACMAR COMPANIES Its: Managing Member By: /s/ James A. Dal Pozzo -------------------------------- Name: James A. Dal Pozzo Title: President "SELLERS" ASSI, INC., a Nevada corporation, By: /s/ Louis Habash --------------------------------------- Name: Louis Habash Title: /s/ Louis Habash --------------------------------------- Louis Habash 16 EXHIBIT A FORM OF OPINION OF COUNSEL TO SELLERS The Buyer shall have received from counsel to the Sellers an opinion, addressed to the Buyer and dated as of the Initial Closing Date, in form and substance as set forth below: (a) ASSI, Inc. has been duly incorporated and is validly existing and in good standing under the laws of the State of Nevada with corporate power and authority to enter into the Stock Purchase Agreement to which they are a party and to perform their obligations thereunder. (b) The execution, delivery and performance of the Stock Purchase Agreement has been duly authorized by all necessary corporate action of the Sellers, and the Stock Purchase Agreement has been duly executed and delivered by the Sellers. (c) The Stock Purchase Agreement constitutes a legally valid and binding obligation of the Sellers, enforceable against the Sellers in accordance with its terms. (d) No registration of the Target Shares under the Securities Act of 1933, as amended, is required in connection with the offer, purchase, sale and delivery of the Target Shares in the manner contemplated by the Stock Purchase Agreement. A-1 EX-7 3 a2033947zex-7.txt EXHIBIT 7 EXHIBIT 7 MUTUAL GENERAL RELEASE ---------------------- THIS MUTUAL GENERAL RELEASE is made and entered into as of December 20, 2000 by and between ASSI, Inc. ("ASSI"), a Nevada corporation, and Louis Habash ("Habash"), on the one hand, and CHICAGO PIZZA & BREWERY, INC. (the "Company"), a California corporation, on the other hand, with reference to the following facts: A. During the months of November and December 2000, the Company and ASSI were negotiating the terms of a Stock Purchase Agreement (the "Pending Agreement") between them whereby ASSI would purchase 1,500,000 shares of common stock of the Company. B. On or about December __, 2000, ASSI received an unsolicited offer from Jacmar, Incorporated ("Jacmar"), to purchase all of ASSI's 2,200,000 shares of common stock of the Company, constituting 100% of the shares owned by ASSI in the Company. ASSI has now agreed to sell its shares to Jacmar. C. The parties now desire to waive any claims they may have against each other, whether arising under the Pending Agreement or otherwise, and the parties have agreed to waive such claims, upon the terms set forth in this Mutual General Release ("Release"). NOW, THEREFORE, the parties hereby agree as follows: 1. GRANT OF STOCK OPTION. The Company agrees to issue to ASSI a stock option exercisable for 200,000 shares of the Company's common stock at a purchase price of $4.00 per share as full consideration for the issuance of this Release. 2. RELEASE. 2.1 RELEASE BY ASSI AND HABASH. ASSI and Habash hereby release and forever discharge the Company and all of its directors, officers, employees agents and affiliates (collectively, "Affiliates") of and from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action, of every nature, character and description, known or unknown (collectively, "Claims"), which ASSI or Habash now owns or holds, or has at any time heretofore owned or held, or may at any time own or hold, by reason of any matter, cause or thing whatsoever occurred, done, omitted or suffered to be done prior to the date of this instrument, including without any limitation any Claims arising out of or relating to the Pending Agreement. 2.2 RELEASE BY THE COMPANY. The Company hereby releases and forever discharges ASSI and Habash of and from any and all Claims which the Company now owns or holds, or has at any time heretofore owned or held, or may at any time own or hold, by reason of any matter, cause or thing whatsoever occurred, done, omitted or suffered to be done -1- prior to the date of this instrument, including without any limitation any Claims arising out of or relating to the Pending Agreement. 3. WAIVER OF UNKNOWN CLAIMS. Each party hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California. Each party understands that the facts in respect of which the releases made in this instrument are given may hereafter turn out to be other than or different from the facts in that connection now known or believed by either of them to be true; and each of them hereby accepts and assumes the risk of facts turning out to be different and agree that this instrument shall be and remain in all respects effective and not subject to termination or rescission by virtue of any such difference in facts. Section 1542 of the Civil Code of the State of California reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 4. NO ASSIGNMENT. Each party represents and warrants that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm, or corporation whomsoever any Claim herein released. Each party hereby agrees to indemnify and hold harmless the other party against any Claim based on, arising out of or in connection with any such transfer or assignment or purported transfer or assignment. 5. NO REPRESENTATIONS. Each party acknowledges that no representations of any kind or character have been made to it by the other party, or by any of the other party's agents, representatives or attorneys, to induce the execution of this instrument. 6. NO ADMISSION OF LIABILITY. Each party acknowledges that this instrument effects the settlement of claims which are denied by the other party, and that nothing contained herein shall be construed as an admission of liability by or on behalf of the other party, by whom liability is expressly denied. 7. REPRESENTATION BY INDEPENDENT COUNSEL. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED, OR HAS HAD THE OPPORTUNITY TO HAVE BEEN REPRESENTED, BY COUNSEL OF ITS OWN CHOICE THROUGHOUT ALL OF THE NEGOTIATIONS WHICH PRECEDED THE EXECUTION OF THIS INSTRUMENT AND IN CONNECTION WITH THE PREPARATION AND EXECUTION OF THIS INSTRUMENT. 8. SUCCESSORS AND ASSIGNS. This instrument shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns. -2- 9. NO FUTURE ACTIONS. Each of ASSI and Habash agrees that it will forever refrain and forbear from commencing, instituting or prosecuting any lawsuit, action or other proceeding against the Company or any of its Affiliates based on, arising out of, or in connection with any Claim that is released and discharged by reason of this instrument. The Company agrees that it will forever refrain and forbear from commencing, instituting or prosecuting any lawsuit, action or other proceeding against ASSI or Habash based on, arising out of, or in connection with any Claim that is released and discharged by reason of this instrument. 10. GOVERNING LAW. This instrument is made and entered into in the State of California and shall be interpreted and enforced under and pursuant to the laws of California. 11. TERMS. Wherever in this instrument the context may require, the masculine shall be deemed to include the feminine and/or neuter, and the singular to include the plural. IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the day and year first above written. ASSI, Inc. By: /s/ Louis Habash /s/ Louis Habash ------------------------------ ---------------------------- Louis Habash, President Louis Habash CHICAGO PIZZA & BREWERY, INC. By: /s/ Paul A. Motenko ------------------------------ Paul A. Motenko, Co-Chief Executive Officer, Vice President and Secretary -3- EX-8 4 a2033947zex-8.txt EXHIBIT 8 EXHIBIT 8 THE SECURITIES REPRESENTED HEREBY AND THE UNDERLYING SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SALE OF SUCH SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. OPTION AGREEMENT This Option Agreement (the "AGREEMENT") is made as of the __ day of December, 2000 between Chicago Pizza & Brewery, Inc. (the "COMPANY") and ASSI, Inc. ("OPTIONEE"). The Company hereby grants to Optionee options to purchase shares of Common Stock of the Company, as follows: SECTION 1. NUMBER OF OPTIONS. Optionee is hereby entitled to purchase (the "OPTIONS") up to 200,000 shares of the Company's authorized but unissued Common Stock (the "SHARES"), all of which have been reserved for issuance pursuant to the Options. Each Option shall represent the right to purchase one Share, subject to adjustment as provided in Section 6 hereof. SECTION 2. EXERCISE PRICE. The exercise price for the Shares shall be $4.00 per share ( the "OPTION PRICE"), subject to adjustment as provided in Section 6 hereof. The Company and Optionee hereby acknowledge that the Option Price is greater than the fair market value of one share of Common Stock of the Company as of the date of this Agreement. SECTION 3. WHEN OPTIONS MAY BE EXERCISED. The Options issued pursuant to Section 1 shall be exercisable commencing upon the date of issuance and terminating at 5:00 P.M. Los Angeles time on December 31, 2005. SECTION 4. INVESTMENT REPRESENTATION OF OPTIONEE. Optionee acknowledges that the Options and the Shares issuable upon exercise of the Options (the "RESTRICTED SECURITIES") have not been registered under the Securities Act of 1933, as amended (the "ACT") or applicable state securities laws. Optionee acknowledges that the offer, sale and delivery of the Restricted Securities to Optionee is made in reliance Page 1 of 8 upon Optionee's representations, warranties, agreements and undertakings reflected herein. Optionee represents and warrants that Optionee is acquiring the Restricted Securities solely for Optionee's own account and interest and not with a view to distribute them to the public. Optionee understands and agrees that unless the Restricted Securities either are registered under the Act or are disposed of in transactions for which exemptions from such registration are available, Optionee must continue to own and hold the Restricted Securities for Optionee's own account and interest indefinitely. Optionee further understands that whether an exemption from the registration requirements of the Act will be available for such future transactions as Optionee may propose will depend upon the nature of each such transaction, the pertinent surrounding facts and circumstances then extant, and the then applicable law. Any certificate evidencing the Restricted Securities shall bear a legend substantially in the following form: THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW. Any certificate evidencing the Restricted Securities shall bear any additional legend required under state or Federal securities laws, by contract, or otherwise. SECTION 5. EXERCISE OF OPTIONS. The Options, or any portion of the Options, may be exercised from time to time, in whole or in part, in accordance with the provisions of Section 3 above, which exercise shall be effective immediately upon written notice to the Company at its principal offices, setting forth the number of Options being exercised, accompanied by the full amount of the purchase price for such Shares. Payment of the Option Price of the Shares shall be made by means of cash or check made payable to the Company. Upon receipt of notice and payment, the Company shall promptly make arrangements for the issuance to Optionee of the number of Shares as to which the Options were exercised. Upon exercise of the Options, the number of Shares subject to this Agreement shall be automatically reduced to the extent of the number of Shares as to which Options are exercised, and this Agreement shall remain in effect as to the remaining number of Options and Shares. The Company reserves the right to require Optionee, before receipt of the Shares, to represent and warrant in writing, in form and substance reasonably satisfactory to the Company, that the Shares purchased are being acquired without any view to distribution and to agree in writing to the imposition of legends on the share certificates setting forth any restrictions upon disposition required by applicable federal or state securities laws. Page 2 of 8 SECTION 6. ADJUSTMENTS. The number of Shares purchasable upon the exercise of an Option and the Option Price shall be subject to adjustment as follows: 6.1 Whenever the number of Shares purchasable upon the exercise of each Option or the Option Price is adjusted, as herein provided, the Company shall promptly mail by first class mail, postage prepaid, to Optionee, notice of such adjustment or adjustments setting forth the number of Shares purchasable upon the exercise of each Option and the Option Price after such adjustment, a brief statement of the facts requiring such adjustment, and the computation by which such adjustment was made. 6.2 For the purpose of this Section 6, the term "shares of Common Stock" shall mean (i) the class of stock designated as the Common Stock of the Company as of the date of this Agreement, or (ii) any other class of stock resulting from successive changes or reclassifications of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value. In the event that at any time, as a result of an adjustment made pursuant to Section 6.3 below, the Holders shall become entitled to purchase any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so purchasable upon exercise of each Option and the Option Price of such shares shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions relating to the Shares contained in this Section 6. 6.3 In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution to all holders of shares of Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) issue by reclassification of its shares of Common Stock other securities of the Company, the number of Shares purchasable upon exercise of each Option immediately prior thereto shall be adjusted so that Optionee shall be entitled to receive the kind and number of Shares or other securities of the Company which Optionee would have owned or would have been entitled to receive after the happening of any of the events described above, had the Option been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this Section 6.3 shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. 6.4 In case of any consolidation of the Company with or merger of the Company into another corporation or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, the Company or such successor or purchasing entity, as the case may be, shall be obligated to issue to Optionee, upon exercise of each Option, the same consideration as Optionee would have owned or would have been entitled to receive after the happening of such consolidation, merger, sale or conveyance had such Option been exercised immediately prior to such action. If the action Page 3 of 8 involves two or more transactions involving different consideration to holders of Common Stock, Optionee may elect which consideration to receive pursuant to this Section 6.4. 6.5 In case the Company shall distribute to all holders of its shares of Common Stock a stock dividend, evidence of its indebtedness or assets (excluding regular and ordinary cash dividends) or rights, options or warrants or convertible securities containing the right to subscribe for or purchase shares of Common Stock, then in each case the Option Price shall be adjusted to a price determined by multiplying the Option Price in effect immediately prior to such distribution by a fraction, of which the numerator shall be the then current market price per share of Common Stock (as defined in Section 6.7 below) on the date of such distribution, less the then fair value (as determined in good faith by the Board of Directors of the Company) of the portion of the stock dividend, assets or evidence of indebtedness so distributed or of such rights, options, options or convertible securities applicable to one share of Common Stock, and of which the denominator shall be such then current market price per share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and shall become effective on the date of distribution retroactive to the record date for the determination of stockholders entitled to receive such distribution. 6.6 No adjustment in the number of Shares purchasable hereunder shall be required unless such adjustment would require an increase or decrease in the number of Shares purchasable upon the exercise of each Option of at least One (1) Share; provided, however, that any adjustments which by reason of this Section 6.6 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. 6.7 Whenever the number of Shares purchasable upon the exercise of each Option is adjusted, as herein provided, the Option Price per Share payable upon exercise of each Option shall be adjusted (to the nearest cent) by multiplying such Option Price immediately prior to such adjustment by a fraction, of which the numerator shall be the number of Shares purchasable upon the exercise of each Option immediately prior to such adjustment, and of which the denominator shall be the number of Shares so purchasable immediately thereafter. 6.8 For the purpose of any computation pursuant to this Section 6, the current or closing market price per share of Common Stock at any date shall be deemed to be (i) the average of the mean between the bid and asked prices, as reported by the National Association of Securities Dealers, Inc., if the shares of Common Stock are traded on the National Market System, the SmallCap Market or the OTC Bulletin Board, or, (ii) if the shares of Common Stock are traded on a national securities exchange, the average daily closing price on the New York Stock Exchange, Inc., or, if such shares are not listed on such exchange, then on any other national securities exchange on which they are so listed, or (iii) the average daily closing price as reported by any foreign exchange on which the shares of Common Stock are traded, on the last ten (10) trading days before the day in question. If the shares are not traded as provided in clauses (i) or (ii) or (iii) above, then the current market price shall be determined in good faith by the Board of Directors of the Company, which determination shall Page 4 of 8 be final absent clear and convincing evidence of bad faith by the Board. The closing price referred to in clause (ii) and (iii) above shall be the last reported sales price or in case no such reported sale takes place on such day, the average of the reported closing bid and asked prices, in either case on the aforesaid securities exchange. SECTION 7. ASSIGNABILITY OF OPTIONS. The Options may be assigned, transferred, pledged, hypothecated, sold or otherwise disposed of (collectively, a "Transfer"), in whole or in part, either voluntarily or involuntarily, provided that in the opinion of the Company's counsel or counsel to the Optionee (in either case at the expense of Optionee) such Transfer may be made in compliance with applicable federal, state, or other securities laws. SECTION 8. RESERVATION OF SHARES; PAYMENT IN FULL The Company will at all times reserve and keep available out of its authorized capital stock, solely for issuance upon the exercise of this Option, such number of shares of Common Stock as shall be issuable upon the exercise of this Option. Such Common Stock, when issued pursuant to this Agreement, shall be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof. SECTION 9. REGISTRATION RIGHTS. The Company covenants and agrees to provide the following registration rights at any time from and after the date of this Agreement to Optionee: 9.1 Whenever the Company proposes to file a registration statement relating to any of its capital stock under the Act, other than a registration statement required to be filed in respect of employee benefit plans on Form S-8 or similar form or any registration statement on Form S-4 or similar form relating to securities issued in connection with a reorganization, the Company shall, at least seven business days prior to such filing, give written notice thereof to Optionee. Upon receipt by the Company, not more than four business days after receipt of such notice by Optionee, of a written request by Optionee for registration of all or a portion of the Shares of the Common Stock of the Company issued or issuable upon exercise of the Option ("REGISTRABLE SHARES") then owned by Optionee, the Company shall include such Registrable Shares in such registration statement or in a separate registration statement concurrently filed, and shall use all reasonable efforts to cause such registration statement to become effective with respect to such Registrable Shares, unless the managing underwriter therefor concludes in its reasonable good faith judgment that compliance with this Section 9.1 would materially adversely affect such offering. If the managing underwriter determines in good faith that a portion but not all of such Registrable Shares may be included, then only such portion shall be included. Page 5 of 8 9.2 The Company will use all reasonable efforts to cause such registration statement to remain effective until the earlier of 45 days from the effective date of the registration statement or the date that Optionee completes his distribution of the Registrable Shares. The Company will use all reasonable efforts to effect such qualifications under applicable blue sky or other state securities laws as may be reasonably requested by Optionee to permit or facilitate such sale or other distribution. The Company will cause the Registrable Shares for which the registration statement is effected to be listed on any national securities exchange or quoted on any stock quotation system on which the shares of Common Stock are listed or quoted. 9.3 Optionee shall furnish to the Company such information as the Company may reasonably request and as shall be required in connection with any registration, qualification or compliance referred to in this Section 9. The Company agrees to furnish to Optionee the number of prospectuses, offering circulars or other documents, or any amendments or supplements thereto, incident to any registration, qualification or compliance referred to in this Section 9 as Optionee from time to time may reasonably request. 9.4 The Company will bear all expenses of registrations, qualifications or compliance pursuant to this Section 9 (other than underwriting discounts and commissions and brokerage commissions and fees, if any, payable with respect to the Registrable Shares or the cost of counsel for Optionee), including, without limitation, registration fees, printing expenses, expenses of blue sky or other state securities law registration or compliance, and legal and auditing fees incurred by the Company in connection therewith. 9.5 During the effectiveness of a registration statement in which Registrable Shares are included pursuant to this Section 9, the Company will notify Optionee promptly of any notice from a regulatory authority affecting the sale of the Registrable Shares and of any event or facts that, in the reasonable judgment of the Company, should be set forth in such registration statement. The Company will, as promptly as practicable, take such action as may be necessary to amend or supplement such registration statement in order to set forth or reflect such event or facts. 9.6 The Company shall indemnify and hold harmless Optionee and its respective officers, directors, affiliates, successors and assigns from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in any registration statement filed by the Company under the Securities Act by reason of this Agreement, any post-effective amendment to such registration statements, or any prospectus included therein, or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission based upon information furnished or required to be furnished in writing to the Company by Optionee (or the authorized representatives or agents of Optionee) expressly for use therein, which indemnification shall include each person, if any, who controls Optionee within the meaning of the Securities Act and each officer, director, employee and agent of Optionee; provided, however, that the indemnification in this Section 9.6 with respect to any prospectus Page 6 of 8 shall not inure to the benefit of the Optionee (or to the benefit of any person controlling the Optionee) on account of any such loss, claim, damage or liability arising from the sale of Shares, if a copy of a subsequent prospectus correcting the untrue statement or omission in such earlier prospectus was provided to Optionee by the Company prior to the subject sale and the subsequent prospectus was not delivered or sent by Optionee to the purchaser of such securities prior to such sale; and provided further, that the Company shall not be obligated to so indemnify Optionee or any other person referred to above unless Optionee or such other person, as the case may be, shall at the same time indemnify the Company, its directors, each officer signing the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any and all losses, claims, damages and liabilities caused by any untrue statement of a material fact contained in any registration statement or any prospectus required to be filed or furnished by reason of this Agreement or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission based upon information furnished in writing to the Company by Optionee expressly for use therein. If for any reason the indemnification provided for in this subparagraph is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. SECTION 10. GENERAL PROVISIONS. 10.1 EXECUTION OF THE COMPANY. The Options have been duly authorized, executed, and delivered by and on behalf of the Company. 10.2 ARBITRATION. Any controversy or claim arising out of or relating to the terms of these Options, or otherwise related to the compliance by the Company with its obligations hereunder, shall be settled by binding arbitration in Los Angeles County, California. The arbitration shall be conducted by the American Arbitration Association, whose rules applicable to commercial disputes shall be in force, and judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof; provided, however, that if the controversy or claim also relates to an employment or other agreement between the Company and Optionee, then the Company shall have the right, at its sole election, to require the controversy or claim to be resolved pursuant to any arbitration procedure set forth in such other agreement. Either the Company or Optionee may submit to arbitration any controversy or claim hereunder. The parties hereto agree that Los Angeles County, California is the proper venue for the arbitration of any dispute among the parties hereto. If the arbitration relates to "fair market value," the arbitrators will be instructed to Page 7 of 8 value the Company as it would be valued by a willing strategic purchaser and that there will be no discount for illiquidity or for minority interest. 10.3 CHOICE OF LAW AND VENUE. These Options shall be deemed to be a contract made under the laws of the State of California and for all purposes it shall be construed in accordance with and governed by the laws of the State of California. Proper venue of any action or arbitration shall be exclusively in the County of Los Angeles, State of California. 10.4 SEVERABILITY. If a court or an arbitrator of competent jurisdiction holds any provision of these Options to be illegal, unenforceable or invalid in whole or in part for any reason, such provision shall be adjusted rather than voided, if possible to achieve the intent of the parties to the extent possible, and in any event the validity and enforceability of the remaining sections shall not be affected unless an essential purpose of these Options would be defeated by the loss of the illegal, unenforceable, or invalid provision. 10.5 AMENDMENT, MODIFICATION OR WAIVER. The terms of these Options may not be and shall not be deemed or construed to have been modified, amended, rescinded, canceled or waived, in whole or in part, except by written instrument signed by the Company and Optionee. 10.6 HEADINGS AND LANGUAGE. The various headings herein are inserted for convenience only and shall not be deemed a part of or in any manner affect the terms of the Options or their provisions. As used in this Agreement, the masculine, feminine or neuter gender and the singular and plural shall be deemed to include the other whenever the context so indicates. 10.7 RIGHTS OF OPTIONEE. Prior to the exercise of these Options, except as otherwise provided herein, Optionee shall not be entitled to any rights of a shareholder of the Company, including without limitation the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive notice of any proceedings of the Company. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day and year first above written. CHICAGO PIZZA & BREWERY, INC. By /s/ Paul A. Motenko ------------------------------- ASSI, INC. By /s/ Louis Habash ------------------------------- Page 8 of 8 -----END PRIVACY-ENHANCED MESSAGE-----