8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 24, 2021

BBQ HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Minnesota	001-39053	83-4222776
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

(Address of principal executive offices) (Zip Code)

12701 Whitewater Drive, Suite 100, Minnetonka, MN 55343

(952) 294-1300

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BBQ	The Nasdaq Global Market

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

Emerging growth company ☐

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

Item 1.01. Entry into a Material Definitive Agreement.

Membership Interest Purchase Agreement

On June 24, 2021, BBQ Holdings, Inc. (the “Company”) entered in to a Membership Interest Purchase Agreement (the “MIPA”) with VIBSQ Holdco, LLC, a Delaware limited liability company (the “Seller”) and Bakers Square Holdings, LLC, a Delaware limited liability company (“BSQ Holdings”), Village Inn Holdings, LLC, a Delaware limited liability company (“VI Holdings”), SVCC I, LLC, an Arizona limited liability company (“SVCC” and collectively with BSQ Holdings and VI Holdings, the “Target Companies), and for certain limited purposes as described in the MIPA, RG Group Holdco, LLC, a Delaware limited liability company (the “Parent”), pursuant to which the Company has agreed, subject to specified terms and conditions, to purchase from the Seller all of the issued and outstanding membership interests (the “Interests”) in each of the Target Companies (such purchase of Interests as contemplated by the MIPA, the “Transaction”).  As a result of the Transaction, each of the Target Companies will become a wholly-owned subsidiary of the Company, and each of the subsidiaries of the Target Companies, which subsidiaries own or franchise Village Inn Restaurants and Bakers Square Restaurants, will become wholly-owned indirect subsidiaries of the Company.  The Company expects the Transaction to close on or about July 30, 2021.

Pursuant to the MIPA, the Company has agreed to purchase the Interests for a cash purchase price equal to approximately $13.5 million, and subject to certain purchase price adjustments as described in the MIPA.

The MIPA contains representations, warranties, covenants and agreements as are customary for a transaction of this size and nature. Closing of the Transaction will be contingent upon, among other things, the accuracy of representations and warranties and the satisfaction of other customary closing conditions.  Subject to certain limitations and conditions set forth in the MIPA, the Company and the Seller, along with the Parent, have agreed to indemnify each other for, among other things, breaches of representations, warranties and covenants contained in the, and certain tax and other pre- and post-closing liabilities.

The MIPA may be terminated prior to closing by the Company or the Seller under certain circumstances, including (i) by mutual written consent of the Company and the Seller, (ii) by the non-breaching party if the other party is in material breach of any covenant, representation or warranty, and (iii) by either party if the closing of the Transaction has not occurred prior to July 30, 2021.

Securities Purchase Agreement

On June 24, 2021, the Company entered into two separate Securities Purchase Agreements (each, a “Securities Purchase Agreement”) with institutional investors pursuant to which the Company expects to raise (i) gross proceeds of $10,000,000, pursuant to an agreement to sell 800,000 shares of the Company’s common stock , and (ii) gross proceeds of $3,000,000 pursuant to an agreement to sell 200,000 shares of the Company’s common stock (such shares of common stock collectively referred to herein as the “Securities”, and the aggregate sale of 1,000,000 Securities referred to herein as the “Offering”). The gross proceeds of $10,000,000 from the sale of 800,000 Securities represents a 3% discount to the Nasdaq: (BBQ) 60 day volume weighted average price (“VWAP”) of $12.90, and an 11.7% discount to its 30 day VWAP of $14.15. The gross proceeds of $3,000,000 from the sale of 200,000 Securities represents a 16.3% premium to the Company’s 60 day VWAP and a 6% premium to its 30 day VWAP.

The Company intends to use the net proceeds of the Offering for the acquisition noted above.  In connection with the closing of the Offering, the Company will pay estimated expenses of $500,000.

Registration Rights

As part of each Securities Purchase Agreement, the Company has agreed to register the Securities sold in the Offering (the “Registrable Securities”) for resale or other disposition, pursuant to a Registration Rights Agreement with each investor (each, a “Registration Rights Agreement”). Specifically, the Company has agreed to (i) file with the Securities and Exchange Commission (the “SEC”) a shelf registration statement with respect to the resale of the Registrable Securities on or before August 10, 2021; (ii) use commercially reasonable efforts to have the shelf registration statement declared effective by the SEC as soon as possible after the initial filing, and in any event no later than September 9, 2021 (or October 9, 2021 in the event of a full review of the shelf registration statement by the SEC); and (iii) keep the shelf registration statement effective until such time as all Registrable Securities may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) without the need for current public information or other restrictions. If the Company is unable to comply with any of the above covenants, it will be required to pay liquidated damages to the investors in the amount of 1% of the investors’ purchase price for every month until such non-compliance is cured (subject to a 6% cap), with such liquidated damages payable in cash.

Page 2 of 4

Closing

The closing of the Offering is expected to occur on or about June 28, 2021, subject to certain customary closing conditions.

Exemption

The Offering and issuance of the Securities pursuant to the Securities Purchase Agreements will be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) of the Securities Act, on the basis that they do not constitute a public offering since they are being made to accredited, qualified investors and involve no general solicitation. The Securities may not be offered or resold in the United States in the absence of an effective registration statement or exemption from the Securities Act’s registration requirements.

Placement Agent

Craig-Hallum Capital Group LLC is acting as exclusive placement agent in connection with this financing.

The foregoing descriptions of the MIPA, the Securities Purchase Agreement, and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the each of the MIPA, the Securities Purchase Agreements, and the Registration Rights Agreement, copies of which are filed as Exhibits to this to Form 8-K, and are incorporated herein by reference. The benefits of the representations and warranties set forth in each of the MIPA, the Securities Purchase Agreements, and the Registration Rights Agreement are intended to be relied upon by the parties to each such agreement only, and do not constitute continuing representations and warranties of the Company to any other party or for any other purpose.

Item 3.02. Unregistered Sales of Equity Securities.

See Item 1.01 above.

Item 7.01. Regulation FD Disclosure.

On June 24, 2021, the Company issued a press release announcing the execution of the MIPA.  The press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

10.1*	Membership Interest Purchase Agreement, dated June 24, 2021
10.2.1*	Form of Securities Purchase Agreement, dated June 24, 2021
10.2.2*	Form of Securities Purchase Agreement, dated June 24, 2021
10.3*	Form of Registration Rights Agreement, dated June 24, 2021
99.1	Press Release

 * The exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b).  The Company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its request.

Page 3 of 4

SIGNATURE

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

	BBQ HOLDINGS, INC.
Date: June 25, 2021	By:	/s/ James G. Gilbertson
		Name: James G. Gilbertson
		Title: Chief Financial Officer and Chief Operating Officer

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EX-10.1

Exhibit 10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

BY AND AMONG

BBQ HOLDINGS, INC.,

VIBSQ HOLDCO, LLC,

BAKERS SQUARE HOLDINGS, LLC,

VILLAGE INN HOLDINGS, LLC,

SVCC I, LLC

AND

RG GROUP HOLDCO, LLC

DATED AS OF JUNE 24, 2021

TABLE OF CONTENTS

		PAGE
ARTICLE I SALE AND PURCHASE OF INTERESTS		1
1.1	Sale and Purchase of Interests	1
ARTICLE II CONSIDERATION		2
2.1	Consideration	2
2.2	Payments at Closing	2
2.3	Purchase Price Adjustment	3
2.4	Tax Treatment; Purchase Price Allocation.	5
ARTICLE III CLOSING AND TERMINATION		6
3.1	Closing Date	6
3.2	Termination of Agreement	6
3.3	Procedure Upon Termination; Effect of Termination	6
3.4	Closing Deliveries	7
ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES		9
4.1	Organization and Good Standing	9
4.2	Authorization of Agreement	9
4.3	Conflicts; Consents of Third Parties	10
4.4	Capitalization	10
4.5	Subsidiaries	10
4.6	Financial Statements; Books and Records; Accounts Receivable; Inventory	11
4.7	No Undisclosed Liabilities	11
4.8	Absence of Certain Developments	11
4.9	Taxes	12
4.10	Real Property	13
4.11	Tangible Personal Property; Sufficiency	14
4.12	Intellectual Property	14
4.13	Material Contracts	15
4.14	Employees	17
4.15	Employee Benefits Plans	17
4.16	Labor	18
4.17	Litigation	19
4.18	Compliance with Laws; Permits	19
4.19	Environmental Matters	19
4.20	Insurance	20
4.21	Significant Suppliers	20
4.22	Affiliate Transactions	21
4.23	Financial Advisors	21
4.24	Privacy and Security	21
4.25	COVID-19 Compliance	21
4.26	PPP Loan; EID Loan	21
4.27	Franchise Matters	22
4.28	No Additional Representations	24
ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER AND THE PARENT		24
5.1	Organization; Good Standing; Authorization of Agreement	24
5.2	Conflicts; Consents of Third Parties	25
5.3	Ownership and Transfer of Interests	25
5.4	Litigation	25
5.5	Financial Advisors	25

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TABLE OF CONTENTS

		PAGE
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER		25
6.1	Organization and Good Standing	25
6.2	Authorization of Agreement	25
6.3	Conflicts; Consents of Third Parties	26
6.4	Litigation	26
6.5	Financial Advisors	26
6.6	Solvency	26
6.7	Financial Capacity	26
ARTICLE VII COVENANTS		27
7.1	Access to Information	27
7.2	No Negotiations	27
7.3	Operation of the Business	27
7.4	Conduct Prior to Closing	28
7.5	Consents and Approvals	29
7.6	Further Assurances	29
7.7	Publicity	30
7.8	Tax Matters	30
7.9	Information Regarding the Companies and the Business	31
7.10	Employment Matters	31
7.11	Indemnification	33
7.12	Royalties Excluded	33
7.13	Environmental Matters Regarding St. Paul Parcel	33
ARTICLE VIII CONDITIONS TO CLOSING		35
8.1	Conditions Precedent to Obligations of the Purchaser	35
8.2	Conditions Precedent to Obligations of the Seller	36
8.3	Frustration of Closing Conditions	36
ARTICLE IX TRANSITION PLANNING; CONFIDENTIALITY		36
9.1	Information for Transition Planning	36
9.2	Business Records	37
9.3	Seller Confidentiality	37
9.4	Purchaser Confidentiality	37
9.5	Certain Permitted Disclosures	37
ARTICLE X INDEMNIFICATION		38
10.1	Survival	38
10.2	Indemnification	38
10.3	Procedures	39
10.4	Calculation of Losses	41
10.5	Payment of Losses	41
10.6	Treatment of Indemnification Payments	42
10.7	Exclusive Remedy	42
ARTICLE XI MISCELLANEOUS		42
11.1	Representation and Warranty Insurance	42
11.2	Payment of Sales, Use, Transfer or Similar Taxes	42
11.3	Expenses	42
11.4	Consent to Jurisdiction; Service of Process; Waiver of Jury Trial	42

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TABLE OF CONTENTS

		PAGE
11.5	Specific Performance	43
11.6	Entire Agreement; Amendments and Waivers	43
11.7	Governing Law	43
11.8	Notices	44
11.9	Severability	45
11.10	Binding Effect; Assignment	45
11.11	Counterparts	45
11.12	Other Definitional and Interpretive Matters	45
11.13	Legal Representation	46
11.14	Investigation; No Additional Representations	47
11.15	No Third Party Beneficiaries	47

Disclosure Schedules:

Schedule 2.2(a)	-	Closing Date Debt
Schedule 2.2(b)	-	Closing Date Company Expenses
Schedule 2.3	-	Calculation of Target Net Working Capital Items
Schedule 3.4(a)(ix)	-	Consents Required for Closing
Schedule 4.1	-	Foreign Qualification and Other Names
Schedule 4.3(a)	-	Conflict with Other Contracts
Schedule 4.3(b)	-	Required Approvals
Schedule 4.4(a)	-	Capitalization
Schedule 4.4(b)	-	Equity and Debt Obligations
Schedule 4.5	-	Interests in Other Persons
Schedule 4.6(a)	-	Financial Statements
Schedule 4.6(b)	-	Exceptions to GAAP
Schedule 4.7	-	Undisclosed Liabilities
Schedule 4.8	-	Absence of Certain Developments
Schedule 4.9	-	Taxes
Schedule 4.10(a)	-	Owned and Leased Real Property
Schedule 4.11(a)	-	Tangible Personal Property
Schedule 4.11(b)	-	Permitted Exceptions
Schedule 4.11(c)	-	Assets Material to the Business
Schedule 4.12(a)	-	Intellectual Property
Schedule 4.12(c)	-	Intellectual Property Obligations
Schedule 4.13(a)	-	Material and Immaterial Contracts
Schedule 4.13(a)(v)	-	Franchise Agreements
Schedule 4.13(a)(vii)	-	Maintenance Contracts
Schedule 4.14(a)	-	Business Employees
Schedule 4.14(c)	-	Business Employee Liabilities
Schedule 4.15(a)	-	Company Benefit Plans
Schedule 4.15(c)	-	Company Pension Plans
Schedule 4.15(f)	-	Multiemployer Plans
Schedule 4.15(g)	-	Employment Liabilities
Schedule 4.16(b)	-	Labor Matters
Schedule 4.17(a)	-	Legal Proceedings
Schedule 4.17(b)	-	Material Orders
Schedule 4.19	-	Environmental Matters
Schedule 4.20	-	Insurance
Schedule 4.21(a)	-	Top Suppliers

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PAGE

Schedule 4.21(b)	-	Issues with Top Suppliers
Schedule 4.22	-	Affiliate Transactions
Schedule 4.25	-	COVID-19 Compliance
Schedule 4.26	-	Cares Act Funds
Schedule 4.27(c)	-	Franchise Agreement Violations
Schedule 4.27(h)	-	Rebates
Schedule 4.27(e)	-	Funds or Cooperatives
Schedule 4.27(f)	-	FDDs
Schedule 4.27(l)	-	Royalties
Schedule 7.4	-	Certain Asset Allocation Actions
Schedule 7.13	-	Environmental Reports for St. Paul Parcel

Exhibits:

Exhibit A	-	Form of Supply Agreement
Exhibit B		Form of Guaranty by Cannae Holdings, Inc.

iv

MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated as of June 24, 2021 (this “Agreement”), is made by and among BBQ HOLDINGS, INC., a Minnesota corporation(the “Purchaser”; as such term is defined in more detail in Annex A hereto), VIBSQ HOLDCO, LLC, a Delaware limited liability company (the “Seller”), BAKERS SQUARE HOLDINGS, LLC, a Delaware limited liability company (“BSQ Holdings”), VILLAGE INN HOLDINGS, LLC, a Delaware limited liability company (“VI Holdings”), SVCC I, LLC, an Arizona limited liability company (“SVCC” and, collectively with VI Holdings and BSQ Holdings, the “Target Companies” and each, a “Target Company”), and, solely with respect to Article V, Article VII (as applicable), Article IX, Article X and Article XI, RG GROUP HOLDCO, LLC, a Delaware limited liability company (the “Parent”).

W I T N E S E T H:

WHEREAS, the Seller owns all of the issued and outstanding membership interests in each of BSQ Holdings (the “BSQ Interests”), VI Holdings (the “VI Interests”) and SVCC (the “SVCC Interests”, collectively with the VI Interests and the BSQ Interests, the “Interests”);

WHEREAS, BSQ Holdings owns all of the issued and outstanding membership interests in each of BSQ BrandCo, LLC, a Delaware limited liability company (“BSQ Brandco”), and BSQ OpCo, LLC, a Delaware limited liability company (“BSQ Opco” and, together with BSQ Holdings and BSQ Brandco, the “BSQ Companies”), which BSQ Companies collectively operate and/or franchise to other operators the Bakers Square^® brand of family dining restaurants (the “Bakers Square Brand”);

WHEREAS, VI Holdings owns all of the issued and outstanding membership interests in each of VI BrandCo, LLC, a Delaware limited liability company (“VI Brandco”), and VI OpCo, LLC, a Delaware limited liability company (“VI Opco” and, together with VI Holdings and VI Brandco, the “VI Companies”), which VI Companies collectively operate and/or franchise to other operators the Village Inn^® brand of family dining restaurants (the “Village Inn Brand”);

WHEREAS, SVCC facilitates the gift and loyalty card programs of the BSQ Companies and the VI Companies (SVCC, the BSQ Companies and the VI Companies are referred to collectively as the “Companies”);

WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, the Interests for the Purchase Price and upon the terms and conditions hereinafter set forth; and

WHEREAS, certain terms used in this Agreement are defined in Annex A hereto.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

SALE AND PURCHASE OF INTERESTS

1.1         Sale and Purchase of Interests.  Upon the terms and subject to the conditions contained herein, on the Closing Date, the Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase from the Seller, the Interests owned by the Seller as set forth on Schedule 4.4(a) and Schedule 4.4(b), free and clear of all Liens; provided, however, that, as more particularly set forth in Section 7.12, all Royalties Excluded shall specifically not be part of the sale to the Seller (and shall be deemed to have been transferred and conveyed at Closing to Seller or its designee; and the parties shall execute such documentation at Closing as the Seller may reasonably request to evidence and implement such transfer and conveyance).

ARTICLE II

CONSIDERATION

2.1         Consideration.  Subject to adjustment, as set forth in this Agreement, the total consideration to be paid by the Purchaser for the Interests shall be an amount in cash equal to Thirteen Million Five Hundred Thousand and No/100 dollars ($13,500,000.00) (the “Purchase Price”).

2.2          Payments at Closing.  On the Closing Date, the Purchaser shall make (or cause one or more of its Affiliates to make) the following payments:

(a)         to the holders of Closing Date Debt set forth on Schedule 2.2(a) (which such schedule shall also contain the wire instructions for each such Person), the Payoff Amounts, as specified in each Payoff Letter;

(b)         to the holders of Closing Date Company Expenses set forth on Schedule 2.2(b) (which such schedule shall also contain the wire instructions for each such Person), the amount due to each such Person as set forth in an invoice or written statement from such Person; and

(c)         to the Seller, the following amount (such total, the “Closing Payment”), which shall be paid by wire transfer of immediately available United States funds into an account or accounts designated by the Seller, without duplication:

(i)          the Purchase Price, plus

(ii)         the amount of the Closing Date Cash; minus

(iii)        the amount of Closing Date Debt and Closing Date Company Expenses; plus

(iv)        the amount of all Royalties Not Invoiced; minus

(v)         the amount of all Royalties Prepaid; minus

(vi)        any rent, fees, costs or other charges attributable to any period prior to the Closing that, due to COVID-19 Impacts, has been deferred (either by agreement between the applicable Company and its landlord or other Person or otherwise) for payment until after the Closing; plus

(vii)       any rent, fees, costs or other charges attributable to any period after the Closing that has been paid prior to the Closing minus

(viii)      [intentionally omitted]; minus

(ix)        the amount of any GUC Fixed Recovery Payments due to unsecured creditors in the Reorganization (except to the extent paid by Seller prior to the Closing or from the proceeds of the Closing); plus

(x)         the amount, if any, by which the Closing Net Working Capital Items, considered in the aggregate, exceed the Target Net Working Capital Items, considered in the aggregate; minus

(xi)        the amount, if any, by which the Closing Net Working Capital Items, in the aggregate, are less than the Target Net Working Capital Items, considered in the aggregate; minus

(xii)       the Supply Accommodation Adjustment; minus

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(xiii)      the amount of any real estate-related Tax for any Company Real Property or related amounts to any Governmental Body that are unpaid, unbilled or accrued for with respect to any period prior to the Closing, plus

(xiv)      the amount of any real estate-related Tax or related amounts to any Governmental Body that have been paid prior to Closing with respect to any period after the Closing; minus

(xv)       the Environmental Credit; plus

(xvi)      the value of inventory.

Upon delivery of the payments by the Purchaser in accordance with this Section 2.2, the Purchaser’s obligations to pay the Purchase Price to the Seller shall be deemed satisfied and discharged.

2.3          Purchase Price Adjustment.

(a)        At least three (3) Business Days prior to the Closing Date, the Seller shall deliver to the Purchaser a statement (the “Closing Estimates”), including reasonable supporting documentation, setting forth its good faith estimate of:  (i) the Closing Net Working Capital Items; (ii) the Closing Date Cash; (iii) the Closing Date Debt; (iv) the Closing Date Company Expenses; and (v) the calculation of all outstanding Royalties attributable to the period prior to the Closing and all Prepaid Royalties for all Franchise Locations, all determined in accordance with the Accounting Principles.  The Purchaser shall be entitled to review, comment on, and request reasonable changes to the Closing Estimates and the Seller shall consider the Purchaser’s proposed changes in good faith.  If the Seller and the Purchaser are unable to reach agreement on any of the Purchaser’s proposed changes, the Closing Estimates as proposed by the Seller shall control solely for the purposes of calculating the Closing Payment, and shall not limit or otherwise affect the Purchaser’s remedies under this Agreement or otherwise or constitute an acknowledgment by the Purchaser of the accuracy of the Closing Estimates or the accounting methods or policies utilized in the calculation thereof.

(b)       Within forty-five (45) calendar days following the Closing Date, the Purchaser shall prepare and deliver to the Seller a statement of the Purchaser’s calculations of: (i) the Closing Net Working Capital Items; (ii) the Closing Date Cash; (iii) the Closing Date Debt; (iv) the Closing Date Company Expenses;and (v) the calculation of all outstanding Royalties attributable to the period prior to the Closing and all Prepaid Royalties for all Franchise Locations (the “Adjustment Calculations”), all determined in accordance with the Accounting Principles.  The Seller and the Purchaser agree that the calculation of Closing Net Working Capital shall be prepared in a format consistent with the sample calculations, which have been included for illustrative purposes only, set forth on Part 2 of Schedule 2.3.  If the Purchaser fails to timely deliver the Adjustment Calculations, the Purchaser will be deemed conclusively to have agreed to the Closing Estimates, which shall be final and binding upon the Purchaser as the definitive calculation of Closing Net Worth Capital.

(c)       Within thirty (30) calendar days following the Purchaser’s delivery of the Adjustment Calculations, the Seller may deliver a written notice to the Purchaser of any disagreement with any item contained within the Adjustment Calculations (the “Objection Statement”).  For each disputed item, the Seller shall include: (i) the basis for any disagreement, (ii) the nature and amount of such disagreement, and (iii) reasonable supporting documentation, information and calculations thereof for any disagreement.  The Seller shall be deemed to have agreed with all other items and amounts contained in the Adjustment Calculations that are not disputed in the Objection Statement.  If the Seller fails to timely deliver the Objection Statement, the Seller will be deemed conclusively to have agreed to the Adjustment Calculations, which shall be final and binding upon the Seller.

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  (d)          If the Seller delivers an Objection Statement, the Purchaser and the Seller shall, during the fifteen (15) calendar days following the Seller’s delivery of the Objection Statement, use their commercially reasonable, good faith efforts to reach agreement on the disputed items and amounts in order to determine, as may be required, the Adjustment Calculations, which shall not be more favorable to the Purchaser than the amount thereof shown in the Purchaser’s calculation delivered pursuant to Section 2.3(b) nor more favorable to the Seller than the amount thereof shown in the Objection Statement.  If, during such period, the Seller and the Purchaser are unable to reach such agreement, they shall promptly thereafter select an independent accounting firm of national standing mutually agreed to by the Seller and the Purchaser) (the “Accounting Referee”) to review this Agreement and the disputed items and amounts for the purpose of calculating the Adjustment Calculations.  There shall be no ex parte communications between any party and the Accounting Referee.  In making such calculation, the Accounting Referee shall consider only those still unresolved items and amounts in the Purchaser’s calculation of Adjustment Calculations as to which the Seller duly objected in accordance with Section 2.3(c) and the Accounting Referee shall not consider any settlement offers exchanged between the Purchaser and the Seller.  The Accounting Referee’s calculation shall not be more favorable to the Purchaser than the amount thereof shown in the Purchaser’s calculation delivered pursuant to Section 2.3(b) nor more favorable to the Seller than the amount thereof shown in the Objection Statement.  The Accounting Referee shall agree that, between the time the Seller delivered the Objection Statement to the Purchaser and the date thereof, the Purchaser and the Seller may have exchanged certain proposals relating to the disputed items, which were intended solely for purposes of facilitating settlement discussions, and such proposals were confidential and were provided solely on the condition and understanding that such proposals would not be permitted to be disclosed in any court or arbitration hearing, including with respect to the Accounting Referee’s engagement in the dispute.  The Accounting Referee will be instructed to disregard any evidence of such settlement proposals and negotiations in its consideration of the disputed matters.  The Accounting Referee shall deliver to the Seller and the Purchaser, as promptly as practicable (but in any case, no later than thirty (30) calendar days after the date of engagement of the Accounting Referee), a report setting forth calculations of the disputed amounts, and its reasonable basis for each of its determinations.  Absent manifest error, such report shall be final and binding upon the Seller and the Purchaser.  The cost of such review and report by the Accounting Referee shall be borne equally by the Seller and the Purchaser.  Other than the fees and expenses of the Accounting Referee, the Purchaser and the Seller will each be responsible for its own costs and expenses in connection with any action taken pursuant to this Section 2.3(d).

(e)        The Purchaser and the Seller each shall (and shall cause its respective representatives to) use commercially reasonable efforts to cooperate and assist, to the extent reasonably requested by the other, in the preparation of the Adjustment Calculations and in the conduct of the review referred to in this Section 2.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel.  If the Purchaser claims that the Seller has, or the Seller claims that the Purchaser has, as applicable, failed to comply with its obligation under this Section 2.3(e), it may refer such alleged non-compliance to the Accounting Referee.  The Accounting Referee shall have the authority to determine if the applicable party has complied with its obligations under this Section 2.3(e) and to order the non-compliant party to comply with its obligations under this Section 2.3(e).  The Purchaser and the Seller each shall comply with any such determination by such Accounting Referee.

(f)        The “Final Closing Amounts” shall be the Adjustment Calculations, as applicable:  (i) as shown in the Purchaser’s calculation thereof, if the Seller does not duly deliver the Objection Statement in accordance with Section 2.3(c); or (ii) if the Seller duly delivers the Objection Statement in accordance with Section 2.3(a):  either (A) as agreed by the Seller and the Purchaser pursuant to Section 2.3(d); or (B) as shown in the Accounting Referee’s calculation delivered pursuant to Section 2.3(d); provided, however, that in no event shall Final Closing Amounts be more favorable to the Purchaser than the Purchaser’s calculation of the Adjustment Calculations or more favorable to the Seller than the Seller’s calculation in the Objection Statement.  After the Final Closing Amounts have been determined, the Closing Payment shall be adjusted, if necessary, so that the Purchaser, on the one hand, and the Seller, on the other hand, receive or make payments to each other so that, after taking into account the prior adjustments to the Closing Payment in this Section 2.3, the Purchaser will have paid and the Seller will have received the appropriate Closing Payment.  In furtherance of the foregoing, the following provisions shall apply:

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(i)          If, upon determination of the Final Closing Amounts, the Purchaser is required to pay an additional amount to the Seller (such additional amount being the “PP Underpayment”), then the Purchaser shall pay to the Seller the PP Underpayment.

(ii)        If, upon determination of Final Closing Amounts, the Seller is required to refund an amount to the Purchaser (such amount being the “PP Overpayment”), then the Seller shall pay to the Purchaser the PP Overpayment.

(g)        Any payment due to either the Seller or the Purchaser pursuant to Section 2.3(f) shall be made within five (5) Business Days after the Final Closing Amounts have been determined pursuant to this Section 2.3, and shall be made by wire transfer by the Purchaser or the Seller (or their respective designees), as the case may be, of immediately available funds to the account of the receiving party as may be designated in writing by such party.  All payments made pursuant to Section 2.3(f) shall be treated by the Purchaser and the Seller as an adjustment to the Purchase Price.

(h)        The process set forth in this Section 2.3 shall be the sole and exclusive remedy of the Seller and the Purchaser and their respective Affiliates for any disputes related to the Closing Estimates and the calculations and amounts on which the Closing Estimates are based or set forth in the related statements and notices delivered in connection therewith.

2.4          Tax Treatment; Purchase Price Allocation.

(a)        The Purchaser and the Seller agree that, since each Company is classified as a disregarded entity for U.S. federal and applicable state and local income Tax purposes, the sale and purchase of the Interests shall be treated for U.S. federal and applicable state and local income Tax purposes as a sale by Seller and purchase by Purchaser of the assets of each Company, subject to the liabilities of the Company.  The Parties agree to file all applicable Tax Returns consistent with the treatment described in this Section 2.4(a) and to not otherwise take any Tax position to the contrary, unless otherwise required by applicable Law.

(b)        Within 60 days after the final determination of the Final Closing Amounts in accordance with Section 2.3, Purchaser shall prepare and deliver to Seller a schedule setting forth the allocation of the Purchase Price among the assets of the Company in accordance with Section 1060 of the Code (the “Proposed Allocation”) for Seller’s review. If Seller disagrees with the Proposed Allocation, Seller may, within 30 days after delivery of the Proposed Allocation, deliver written notice to Purchaser setting forth in reasonable detail its disagreement with the Proposed Allocation. In the event that Seller does not provide such a notice of disagreement within such 30-day period, Seller and Purchaser shall be deemed to have agreed to the Proposed Allocation, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided, the Proposed Allocation will be final, binding and conclusive for all purposes hereunder except as to the disagreements duly raised in such notice, and Seller and Purchaser shall work together in good faith for a period of 30 days (or such longer period as they may mutually agree) to resolve any such disagreements with respect to the Proposed Allocation. If, at the end of such period, they are unable to resolve such disagreements, then any such remaining disagreements shall be resolved by the Accounting Referee in accordance with the procedures, and the fees and expenses of the Accounting Referee shall be borne by Seller and Purchaser in accordance with the rules, set forth in Section 2.3(d). The Proposed Allocation as finally agreed or determined pursuant to this Section 2.4(a) shall be the “Final Allocation.”

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(c)        The Final Allocation shall be adjusted as mutually agreed by Seller and Purchaser for any subsequent adjustments to the purchase price for the Interests under this Agreement. Seller and Purchaser shall file all Tax Returns consistent with  the Final Allocation.

ARTICLE III

CLOSING AND TERMINATION

3.1        Closing Date.  Subject to the satisfaction of the conditions set forth in Sections 8.1 and 8.2 (or waiver in writing by the party entitled to waive such conditions), the closing of the sale and purchase of the Interests (the “Closing”) shall take place by simultaneous transmission of signature pages via electronic mail, on the second (2nd) Business Day after the satisfaction or waiver of each condition to the Closing set forth in Article VIII (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), unless another time or date, or both, are agreed to in writing by the parties hereto.  The date on which the Closing shall be held is referred to in this Agreement as the “Closing Date”.  The Closing shall be deemed to have occurred at 12:01 A.M., Central Time, on the Closing Date.

3.2          Termination of Agreement.  This Agreement may be terminated at any time prior to the Closing as follows:

(a)         by mutual written consent of the Seller and the Purchaser;

(b)        by the Seller’s written notice to the Purchaser at any time prior to the Closing if:  (i) the Purchaser has breached any covenant, representation or warranty in any material respect contained in this Agreement and such breach has not been cured within thirty (30) calendar days following the delivery of notice of such breach to the Purchaser (so long as neither the Seller nor any Company is then in material breach of any covenant, representation or warranty contained in this Agreement); or (ii) the Closing shall not have occurred on or before July 30, 2021 (the “Expiration Date”) by reason of the failure of any condition precedent under Section 8.2 (unless the failure results primarily from the Seller’s or any Company’s breach of any representation, warranty or covenant contained in this Agreement);

(c)        by the Purchaser’s written notice to the Seller at any time prior to the Closing if:  (i) the Seller or any Company has breached any covenant, representation or warranty in any material respect contained in this Agreement and such breach has not been cured within thirty (30) calendar days following the delivery of notice of such breach to the Seller (so long as the Purchaser is not then in material breach of any covenant, representation or warranty contained in this Agreement); or (ii) the Closing shall not have occurred on or before the Expiration Date by reason of the failure of any condition precedent under Section 8.1 (unless the failure results primarily from the Purchaser’s breach of any representation, warranty or covenant contained in this Agreement); or

(d)        by the Seller or the Purchaser if there shall be in effect any Law that makes the consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or if there is an Order of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby.

3.3          Procedure Upon Termination; Effect of Termination.

(a)        In the event of the termination of this Agreement pursuant to Section 3.2, written notice thereof shall forthwith be given to the non-terminating party, and this Agreement shall terminate, and the purchase of the Interests hereunder shall be abandoned, without further action by the Purchaser or the Seller.

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 (b)        In the event that this Agreement is validly terminated in accordance with Section 3.2, then the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to the parties; provided, however, that (i) no such termination shall relieve any party hereto from liability for any willful breach prior to the termination of this Agreement and (ii) the obligations of the parties set forth in Section 7.7 (Publicity) and Article XI (Miscellaneous) shall survive any such termination and shall be enforceable hereunder.

3.4          Closing Deliveries.

(a)         The Seller shall deliver, or cause to be delivered, to the Purchaser the following:

(i)          at least three (3) Business Days prior to the Closing Date, the Closing Estimates;

(ii)       at the Closing, (A) if the Interests are certificated, certificates representing the Interests, duly endorsed in blank or accompanied by membership interest transfer powers, or (B) if the Interests are not certificated, an executed assignment of the Interests in form and substance reasonably satisfactory to the Purchaser;

(iii)        at the Closing, a certificate signed by an authorized officer of each Company, dated as of the Closing Date, certifying the conditions referred to in Sections 8.1(a) through 8.1(c);

(iv)       at the Closing, a certificate of the Secretary or Assistant Secretary of each Company, dated as of the Closing Date, certifying as to (A) the incumbency of any officer or representative executing any Company Document on behalf of such Company; (B) the resolutions of such Company’s Board of Managers (or similar governing body) approving the transactions contemplated by the Company Documents of such Company; (c) the correct and complete copies of such Company’s Organizational Documents, as then in effect; and (d) a good standing certificate(s) of such Company, from the applicable authority(ies), dated within thirty (30) calendar days prior to the Closing Date, reflecting such Company’s good standing in each jurisdiction in which such Company is required to be duly qualified, including, specifically, qualification as foreign entities in States where its Company Restaurants are located;

(v)         at the Closing, a certificate of the Secretary or Assistant Secretary of the Seller, dated as of the Closing Date, certifying as to (A) the incumbency of any officer or representative executing any Seller Document on behalf of the Seller; (B) the resolutions of the Seller’s Board of Managers (or similar governing body) approving the transactions contemplated by the Seller Documents; (C) the correct and complete copies of Seller’s Organizational Documents, as then in effect; and (D) a good standing certificate of the Seller, from the jurisdiction of its organization, dated within thirty (30) calendar days prior to the Closing Date, reflecting the Seller’s existence and good standing in such jurisdiction;

(vi)        at the Closing, the written resignations of managers, directors and officers (or similar governing individuals) of the Companies;

(vii)      at the Closing, executed payoff letters, reasonably satisfactory to the Purchaser and its counsel, reflecting the amounts required to release the Companies from liability from all of their Debt that is required under this Agreement to be discharged at Closing pursuant to Section 2.2, which payoff letters shall confirm that all Liens (other than Permitted Exceptions) against the Companies or any of their respective assets held by the holders of such discharged Debt shall be released and terminated upon payment of the amount set forth therein (collectively, the “Payoff Letters”);

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(viii)     at the Closing, evidence in form and substance reasonably satisfactory to the Purchaser and its counsel that any mortgages, security interests, collateral assignments or other Liens (other than Permitted Exceptions) on any of the properties or assets of the Companies shall have been released, discharged and terminated;

(ix)        at the Closing, copies of executed approvals, consents or waivers that are identified on Schedule 3.4(a)(ix) as required in order to permit the Closing to occur;

(x)         at the Closing, a certificate dated as of the Closing Date certifying that the Seller is not a “foreign person” within the meaning of Section 1445 of the Code;

(xi)        at the Closing, a counterpart of the Supply Agreement, duly executed by Legendary Baking I, LLC, a Delaware limited liability company (or such other relevant Subsidiary of the Parent as it may designate);

(xii)       at the Closing, a domain name assignment in form and substance reasonably satisfactory to the Purchaser and its counsel;

(xiii)     at the Closing, a guaranty executed by Cannae Holdings, Inc., of the obligations of Parent under this Agreement in the form attached hereto as Exhibit C.

(xiv)      at the Closing, any other deliverable contemplated by Section 8.1;

(xv)        a funds flow statement in form reasonably acceptable to the Purchaser and the Seller (the “Funds Flow Statement”), executed by the Seller; and

(xvi)      such other documents and instruments as may be reasonably requested by the Purchaser, consistent with the requirements of this Agreement (and that do not expand the potential liabilities or obligations of the Seller or the Parent from those created by this Agreement).

(b)         At the Closing, the Purchaser shall deliver, or cause to be delivered to the Seller, the following:

(i)          evidence of the wire transfers contemplated by Section 2.2;

(ii)         a certificate signed by an authorized officer of the Purchaser, dated as of the Closing Date, certifying the conditions referred to in Sections 8.2(a) and 8.2(b);

(iii)       at the Closing, a certificate of the Secretary or Assistant Secretary of the Purchaser, dated as of the Closing Date, certifying as to (A) the incumbency of any officer or representative executing any Purchaser Document on behalf of the Purchaser; (B) the resolutions of the Purchaser’s Board of Directors (or similar governing body) approving the transactions contemplated by the Purchaser Documents; (C) the correct and complete copies of the Purchaser’s Organizational Documents, as then in effect; and (D) a good standing certificate of the Purchaser, from the applicable jurisdiction of its organization, dated within thirty (30) calendar days prior to the Closing Date, reflecting the Purchaser’s existence and good standing in such jurisdiction;

(iv)        a counterpart of the Supply Agreement, duly executed by the Purchaser;

(v)          any other deliverable contemplated by Section 8.2;

(vi)        the Funds Flow Statement executed by the Purchaser; and

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(vii)      such other documents and instruments as may be reasonably requested by the Seller, consistent with the requirements of this Agreement (and that do not expand the potential liabilities or obligations of Purchaser from those created by this Agreement).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES

As a material inducement to the Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, except as set forth in the Disclosure Schedules (each section of which qualifies the sections of this Article IV to which such Disclosure Schedules relate and other sections in this Article IV to the extent it is reasonably apparent on its face that such disclosure is applicable to such other sections and subsections), the Parent, the Seller and the Target Companies, jointly and severally, represent as follows (it being understood that the mere inclusion of an item in the Disclosure Schedules as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had, would have or would reasonably be expected to have a Material Adverse Effect), provided, however, that, to the extent any of the following representations would not be true and correct until the completion of the Asset Allocation Actions, such representation and warranty will be deemed only to be required to be true and correct by the time of Closing:

4.1         Organization and Good Standing.  Each of the Companies is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware (and the State of Arizona for SVCC) and has all requisite power and authority to conduct its business as now conducted and to own and operate its assets as now owned and operated by it.  Each of the Companies is duly qualified or authorized to do business as a foreign limited liability company and is in good standing under the laws of each jurisdiction in which it owns or leases real property (including any Company Restaurant) and each other jurisdiction in which the conduct of its business or the ownership of its assets requires such qualification or authorization (which jurisdictions are set forth on Schedule 4.1). Except as set forth on Schedule 4.1 and except for the names of the predecessor entities to the Companies who held the assets of the Companies prior to the Reorganization Plan Confirmation Date (as reflected in the Reorganization Proceedings), since the Reorganization Petition Filing Date, no Company has conducted any business under or otherwise used, for any purpose or in any jurisdiction, any fictitious names, assumed name, trade name or other name.

4.2          Authorization of Agreement.  The Companies have all requisite limited liability company power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Companies in connection with the consummation of the transactions contemplated by this Agreement (collectively with this Agreement, the “Company Documents”), and to consummate the transactions and perform their respective obligations as contemplated thereby.  The execution, delivery and performance of the Company Documents and the consummation of the transactions contemplated thereby have been duly authorized by all requisite limited liability company action on the part of the Companies.  This Agreement has been, and each of the other Company Documents will be at or prior to the Closing, duly and validly executed and delivered by the Companies and (assuming the due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and each of the other Company Documents will constitute, the legal, valid and binding obligation of the Companies, enforceable against them in accordance with its terms, subject to the Enforceability Exceptions.

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 4.3         Conflicts; Consents of Third Parties.

(a)         None of the execution, delivery or performance by the Companies of the Company Documents, the consummation of the transactions contemplated thereby, or compliance by the Companies with any of the provisions thereof will:  (i) cause the Companies to violate or breach any Law or Order in any material respect; (ii) conflict with or result in a violation of the Organizational Documents of the Companies; (iii) except as set forth on Schedule 4.3(a), conflict with or result in a material breach or termination of any of the terms, conditions or provisions of, or constitute a material default under, accelerate any obligations arising under, trigger any payment under, result in the creation of any Lien pursuant to, or otherwise materially and adversely affect, any Material Contract to which any Company is a party or by which its assets may be bound (provided, however, that nothing in this clause (iii) shall be deemed to apply to any Consent purportedly required of, or notice purportedly required to, the counterparty to any Contract (or any other Persons with interests therein) other than Franchise Agreements or leases for Leased Real Property); or (iv) require the Companies to make a payment or provide other compensation to any officer, director, employee, consultant or agent of the Companies (other than any such payment that will be borne by the Seller as part of the Company Expenses).

(b)       Except as set forth on Schedule 4.3(b), no Order, Permit or Consent of, any Person or Governmental Body is required on the part of the Companies in connection with the execution and delivery of the Company Documents or the compliance by the Companies with any of the provisions thereof, or the consummation of the transactions contemplated thereby (provided, however, that, this Section 4.3(b) is deemed not to apply to any Contracts).

4.4          Capitalization.

(a)         All of the Interests are held by the Seller (or certain of the Companies) as set forth on Schedule 4.4(a), free and clear of all Liens.  All of the Interests were duly authorized for issuance and are validly issued, fully paid and non-assessable, and were issued in compliance with the applicable provisions of the Securities Act of 1933, as amended (the “Securities Act”), any applicable state “blue sky” or securities law and any other applicable Law.  The Interests constitute 100% of the total issued and outstanding membership interests in the Target Companies.   None of the Interests were issued in violation of the Organizational Documents or any pre-emptive, preferential or similar rights of any Person.  The delivery to the Purchaser of the Interests pursuant to this Agreement will vest in the Purchaser good and valid title to the Interests, free and clear of all Liens other than any restrictions imposed by applicable securities laws (and the transfer thereof to the Purchaser under this Agreement will not violate any preemptive, preferential or similar rights of any Person).

(b)         Except as set forth on Schedule 4.4(b), there are no authorized or outstanding:  (i) options, warrants, calls rights of first refusal or other rights of any character to acquire equity or debt interests from the Companies, or any phantom interests, membership interest appreciation rights or any other rights intended to provide an economic return based on changes in the value of any debt or equity securities of the Companies; (ii) authorized or outstanding equity or debt securities of the Companies convertible into or exchangeable for equity or debt securities of the Companies; or (iii) rights or options pursuant to which the Companies are required to or have the right to redeem, purchase or otherwise reacquire any equity securities, or other instrument convertible or exercisable into equity securities, of the Companies.  Except for its Organizational Documents, no Company is party to any voting trust or other Contract with respect to the voting, redemption, sale, transfer or other disposition of its equity interests.

4.5          Subsidiaries.  Except as set forth on Schedule 4.5 (or the ownership by any Company of the equity interests of another Company as reflected on Schedule 4.4(a)), the Companies do not own any shares, equity or debt securities or other ownership interest, directly or indirectly, in any other Person, nor are any of them party to any Contract to acquire any such shares, securities or other ownership interest, or subject to any obligation to make any further debt or equity investment in any Person listed in Schedule 4.5.  The Companies are the sole record and beneficial owners of all shares, securities or ownership interests described on Schedule 4.5, free and clear of any Liens.

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4.6          Financial Statements; Books and Records; Accounts Receivable; Inventory.

(a)         Schedule 4.6(a) sets forth true and complete copies of:  (i) the unaudited, consolidated balance sheet of the Companies for the fiscal year ended December 27, 2020 and the related, unaudited, consolidated profit and loss statement and statement of cash flows (the “Annual Financial Statements”); and (ii) the unaudited, consolidated balance sheet of the Companies at May 16, 2021, and the related statements of income for the five (5) fiscal month period then ended (the “Interim Financial Statements”, and together with the Annual Financial Statements, the “Financial Statements”).

(b)        Except as set forth on Schedule 4.6(b), the Financial Statements: (i) have been prepared in accordance with GAAP and fairly present the financial position, results of operations and cash flows of the Companies as at the dates and for the periods indicated therein, (ii) are correct and complete in all material respects, and (iii) are consistent with the books and records of the Companies maintained in the Ordinary Course of Business; provided, however, that the Interim Financial Statements are subject to year-end adjustments and the Financial Statements lack footnote disclosure otherwise required by GAAP.

(c)        The minute books and stock record books of the Target Companieswith respect to matters related to the period from and after the Reorganization Plan Confirmation Date, all of which have been made available to Purchaser (and Seller will also make a good faith effort to provide Purchaser with all such available books and records related to matters prior to the Reorganization Plan Confirmation Date), are complete and correct and have been maintained in accordance with sound business practices. The minute books of the Target Companies with respect to matters related to the period from and after the Reorganization Plan Confirmation Date contain accurate and complete records of all meetings, and actions taken by written consent of, the members, stockholders, the board of directors and any committees of the board of directors of the Company, and no meeting, or action taken by written consent, of any such members, stockholders, board of directors or committee has been held with respect to such period for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Target Companies.

(d)        The inventories on hand are all in the physical possession of the Companies at the Company Restaurants, in transfer from a supplier of the Companies, or at a supplier’s location.  The inventories on hand are reasonable in all material respects in relation to the existing circumstances of the Companies and are classified as current assets in accordance with GAAP.

4.7         No Undisclosed Liabilities.  Except as set forth on Schedule 4.7 or to the extent reflected in the Reference Balance Sheet, none of the Companies have any Liabilities which, under GAAP, should be accrued or disclosed on a balance sheet of any Company similar to that included in the Financial Statements, other than:  (i) accounts payable and accrued expenses incurred after the Reference Balance Sheet Date in the Ordinary Course of Business; (ii) executory obligations or liabilities under Contracts listed on Schedule 4.13(a) or that are not required to be listed thereon (but not including any Liabilities or obligations arising out of any breach of Contract); or (iii) Liabilities incurred in connection with the transactions contemplated hereby.

4.8        Absence of Certain Developments.  Since the Reorganization Plan Confirmation Date: (i) each Company has conducted its business in the Ordinary Course of Business; and (ii) there has not been any event, change, occurrence, development or circumstance that has had, or is reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.  Except as contemplated by this Agreement or as set forth on Schedule 4.8, since the Reorganization Plan Confirmation Date, the Companies have not, and solely with respect to Section 4.8(c), the Parent and its Subsidiaries have not:

(a)         incurred any Debt, other than Debt with respect to which the Companies shall be released from all liability at Closing;

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(b)        changed any material accounting principles, methods or practices (except to the extent required by GAAP), or the manner in which it keeps its books and records, or its practices with regard to the booking of sales, receivables, payables or accrued expenses or materially altered its payment or collection practices;

(c)        (i) granted any severance, continuation or termination pay to any Business Employee; (ii) entered into any employment, consulting, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any Business Employee; (iii) increased, amended, or changed compensation, bonus or other benefits payable or potentially payable to any current or former Business Employee, other than that as may be required by Law; (iv) adopted any new, or changed the terms of, any existing bonus, pension, insurance, health or other benefit plan in which any Business Employee participates; or (v) represented to any Business Employee or former Business Employee that the Parent or its Subsidiaries, the Purchaser or any other Person would continue to maintain or implement any benefit or would continue to employ such employee after the Closing Date;

(d)        suffered any damage, destruction or loss (whether or not covered by insurance) to any of its material properties or material assets in an aggregate amount in excess of $250,000 or disposed of any material assets other than inventory in the Ordinary Course of Business;

(e)         Agreed to any material reduction in discounts received from suppliers;

(f)          made any declaration, setting aside or payment of any dividend or other distribution with respect to, or any repurchase, redemption or other acquisition of, any of the Interests or other equity interests of the Companies;

(g)       purchased, leased or otherwise acquired (whether by merger, consolidation or other business combination, purchase of securities, purchase of assets or otherwise) any material portion of the business or assets of any other Person;

(h)        made, changed or revoked any material Tax election, elected or changed any material method of accounting for Tax purposes, settled any Legal Proceeding in respect of a material amount of Taxes or entered into any Contract in respect of Taxes with any Governmental Body, in each case other than in the Ordinary Course of Business;

(i)          except in the Ordinary Course of Business, written up or down any of its material properties or assets;

(j)         cancelled, waived or compromised any Debt owing to, or right or claim held by, the Companies having a value of more than $50,000 (individually) or an aggregate value in excess of $250,000;

(k)        sold, assigned, transferred or granted any rights to any material Intellectual Property, entered into any settlement regarding the breach or infringement of any material Intellectual Property, or taken any action (or, to the Seller’s Knowledge, failed to take any action) that has resulted in, or would reasonably be likely to result in, the loss, lapse, abandonment, invalidity or enforceability of any of its material Intellectual Property; or

(l)         committed or agreed to do any of the foregoing (to the extent any such commitment or agreement remains effective on the date of this Agreement).

4.9          Taxes.  Except as set forth on the applicable subpart of Schedule 4.9:

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(a)        Each Company has timely filed or has had filed on its behalf all material Tax Returns and reports required by Law to be filed by it (taking into account any applicable extension of time within which to file), all of which were true, correct and complete in all material respects.  All Taxes required by Law to be paid by or on behalf of each Company have been fully and timely paid or accrued on the books and records of the applicable Company in accordance with GAAP.  No waivers or extensions of statutes of limitations have been given or requested with respect to any such Tax Returns or with respect to any Taxes.  To the Knowledge of Seller and the Companies, no claim has been made by any Taxing Authority in a jurisdiction where a Company does not file Tax Returns that such Company was, is, or may be subject to taxation by, or required to file a Tax Return in, that jurisdiction.  To the Knowledge of Seller and the Companies, there is no Tax deficiency or delinquency asserted or threatened against any Company.

(b)        All Taxes required by Law to be withheld or collected by or on behalf of the Companies in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, member or other third party have been withheld or collected and have been duly and timely paid to the proper Taxing Authority to the extent due and payable.

(c)       As of the date of this Agreement, no Company is currently the subject of an audit or other examination relating to the payment of Taxes of such Company by any federal, state or local tax authorities nor has any Company received any written notices from any Taxing Authority indicating an intent to open an audit or other examination or that such an audit or examination is pending.  There are no Liens for Taxes (other than Liens for current Taxes not yet due and payable) upon the Interests or any Assets.

(d)       No Company (i) has received or applied for a Tax ruling or entered into a closing agreement that would be binding upon the Company after the Closing Date, (ii) is, or has been since the Reorganization Plan Confirmation Date, a member of any affiliated, consolidated, or unitary group for purposes of filing Tax Returns or paying Taxes and (iii) has liability for the Taxes of any other Person (whether under Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign Law, or as a transferee or successor, or pursuant to any Tax sharing, allocation or indemnity agreement or any other contractual agreements, or otherwise).  No Company is, or has been since the Reorganization Plan Confirmation Date, a party to or bound by any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract.

(e)         No Company has engaged in a trade or business, had a permanent establishment (within the meaning of an applicable Tax treaty), or otherwise has become subject to Tax jurisdiction in a country other than the country of its formation.

(f)         No Company has been a party to a transaction that is or is substantially similar to a “reportable transaction,” as such term is defined in Treasury Regulations Section 1.6011-4(b)(1), or any other transaction requiring disclosure under analogous provisions of state, local or foreign Tax Law.

(g)        Each Company has continuously since its formation been properly treated as a “disregarded entity” for federal and applicable state income Tax purposes under Treasury Regulations Section 301.7701-3.  No Company has filed an election to be treated as an “association” that is taxable as a corporation for federal and applicable state income Tax purposes.

4.10        Real Property.

(a)        No Company owns any real property except as identified as such on Schedule 4.10(a) (the “Owned Real Property”).  No Company occupies as a tenant any real property except as identified as such on Schedule 4.10(a) (the “Leased Real Property” and, together with the Owned Real Property, the “Company Real Property”).  Schedule 4.10(a) sets forth the address of each parcel of real property from which a Company operates its business, each of which is a Company Restaurant located on Company Real Property, as well as each real estate location at which any Franchisee of any Company is authorized to operate a Franchise Restaurant (collectively, the “Franchise Locations”).  The Company Real Property comprises all of the real property used by the Companies in the Business.  As of the date of this Agreement, each Company has good, marketable and valid title to its Owned Real Property, or good and valid leasehold or sublease interests or other comparable contract rights to its Leased Real Property, free and clear of all Liens except for Permitted Exceptions.

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(b)        No portion of the Company Real Property is subject to any pending condemnation or eminent domain Legal Proceeding or other Legal Proceeding by any Governmental Body and, to the Knowledge of the Seller, there is no threatened condemnation or eminent domain Legal Proceeding or other Legal Proceeding with respect thereto.

(c)       No Company is in violation of any easement, covenant, condition, restriction or similar provision in any instrument of record or other unrecorded agreement affecting the Company Real Property in any material respect.  Neither the Seller nor the Companies has received any written notice of violation of the foregoing.

4.11        Tangible Personal Property; Sufficiency.

(a)         Except as noted on Schedule 4.11(a):  (i) all material Tangible Assets owned or leased by each of the Companies are in the possession of such Company, as applicable, at a portion of the Company Real Property; and (ii) to the Knowledge of the Seller, such Tangible Assets are in good operating condition and repair (ordinary wear and tear excepted) and adequate for the conduct of the Business in the Ordinary Course of Business (taking into account the provision of Overhead and Shared Services under the Shared Services Agreements).

(b)         The Companies own all right, title and interest in and to all of the properties and assets reflected in the Reference Balance Sheet or acquired by the Companies since the Reference Balance Sheet Date, free and clear of any and all Liens (other than Permitted Exceptions, including those on Schedule 4.11(b)).

(c)         Except as set forth on Schedule 4.11(c) and for Overhead and Shared Services, the properties and assets (tangible and intangible) owned or leased by the Companies constitute all of the material properties and material assets necessary to conduct the Business in the Ordinary Course of Business.

4.12        Intellectual Property.

(a)        Set forth on the applicable subpart of Schedule 4.12(a) is a list of all:  (i) patents and applications therefor; (ii) trademarks, service marks, service names or trade names or registrations or applications for registration thereof; (iii) copyright registrations and applications for copyright registration; and (iv) domain names, in each case with respect to the foregoing clauses (i) through (iv), owned or held by each Company (collectively, the “Listed Intellectual Property”).  Each item of Listed Intellectual Property is in full force and effect in all material respects.  All necessary registration, maintenance and renewal fees in connection with such Listed Intellectual Property have been paid and all necessary documents and certificates in connection with such Listed Intellectual Property have been filed with the relevant Governmental Body for the purpose of perfecting or maintaining such Listed Intellectual Property.  None of the Listed Intellectual Property is the subject of any challenge pending with any patent or trademark office or received by the Companies in writing.

(b)        To the Knowledge of the Seller, the current use of any material Intellectual Property by each Company in the Business as conducted in the Ordinary Course of Business does not conflict with, infringe upon or violate in any material respect any rights of any third party.  Neither the Companies nor the Seller has received any written notice, charge, claim or other assertion of any present, impending (or to the Knowledge of the Seller, threatened) infringement by, or misappropriation of, or conflict with any material Intellectual Property of any other Person that has not been resolved, in each case with respect to the operations of the Business.  To the Knowledge of the Seller, no third party is infringing any material Intellectual Property used by the Companies.

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(c)         The Companies have, and immediately following the Closing will have, the right to use all material Intellectual Property used in the conduct of the Business in the Ordinary Course of Business.  Except as set forth on Schedule 4.12(c), none of the Companies are required to pay any royalties, honoraria, fees or other payments to any Person by reason of the use of any material Intellectual Property.  All credentials required to access the Intellectual Property will be available to the Purchaser immediately following Closing.

(d)        The representations and warranties in this Section 4.12 are the sole and exclusive representations and warranties of the Companies relating to Intellectual Property (or liabilities, obligations, or compliance with Laws related thereto), and no other representation or warranty in this Agreement shall be construed to apply to any matter relating to Intellectual Property associated with the Business.

4.13        Material Contracts.

(a)       Schedule 4.13(a) sets forth those Contracts to which any Company is a party (that are in effect on the date hereof and which have not yet been fully performed by the applicable Companies and any applicable counterparties) that satisfy any of the following criteria (collectively, the “Material Contracts”, provided, however, that any Contract identified on Schedule 4.13(a) as an “Immaterial Contract” is conclusively deemed not to be a Material Contract regardless of whether it satisfies any of the following criteria):

(i)         Contracts relating to the acquisition or disposition by any Company of (A) any business, real property or business segment (whether by merger, consolidation or other business combination, sale of assets or otherwise) or the equity interest of any Person, or (B) any of the assets of any Company (other than sales of inventory or the disposition of obsolete equipment, in each case in the Ordinary Course of Business) for consideration in excess of $50,000;

(ii)       Contracts relating to any indebtedness or guaranties of indebtedness, including Debt and guaranties of Debt (but only to the extent any of the foregoing will survive the Closing in regard to any of the Companies);

(iii)        Contracts (or groups of related Contracts) that are not terminable by the applicable Company without penalty on notice of sixty (60) calendar days or less, which individually (A) involve the expenditure or receipt of more than $37,500 annually or more than $100,000 over the remaining term thereof, or (B) require performance by any Company more than one year from the date hereof;

(iv)        Contracts restricting or purportedly restricting the ability of any of the Companies to operate or compete in any business or with any Person or in any geographic area during any period of time following the Closing;

(v)         Contracts granting to any Person the right to operate a restaurant or other commercial enterprise under the Bakers Square Brand, the Village Inn Brand or using any of the Listed Intellectual Property (each such agreement that remains in effect on the date of this Agreement is referred to herein as a “Franchise Agreement”; all of which are listed on Schedule 4.13(a)(v)), it being understood that the granting of any licenses or other rights to utilize baking recipes to another Person (without use of a Target Company’s branding or trade dress and without otherwise satisfying the legal definition of a “franchise agreement”) does not constitute a Franchise Agreement;

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(vi)        Contracts pursuant to which any Company is the lessor or lessee of any real property, building or structure;

(vii)      Contracts (that have not yet been fully performed by the applicable Company and any applicable counterparty) related to the construction, acquisition or development of any restaurant location at which a Company Restaurant is located, or improvements, upgrades or maintenance to any Company Restaurant (provided, however, that any maintenance contracts that remain in effect will be listed on Schedule 4.13(a)(vii));

(viii)     all broker, distributor, dealer, manufacturer’s representative, agency, sales promotion, market research, marketing consulting and advertising Contracts to which any Company is a party, which individually involve the expenditure or receipt by the Companies of more than $25,000;

(ix)       Contracts that require the Companies to purchase minimum quantities (or pay any amount for failure to purchase any specific quantities) of goods or services, comply with “take or pay” arrangements, deal with any Person on an exclusive basis, or provide “most favored nation” or similar pricing to any Person;

(x)        Contracts that require the Companies to indemnify or hold harmless any other Person or assume any Tax or environmental liabilities (other than, with respect to any of the foregoing, leases for Leased Real Property and any other documents of record regarding any real property);

(xi)        Contracts that provide for any partnership, joint venture, strategic alliance, teaming or similar arrangement;

(xii)       Contracts that provide for or relate to any employment or consulting relationship with any Person and not terminable upon sixty (60) calendar days’ notice without penalty;

(xiii)      Contracts with any Governmental Body, including any settlement, conciliation or similar agreements with any Governmental Body;

(xiv)      Contracts pursuant to which any Company grants or is granted a license of any Intellectual Property (other than “off-the-shelf” or “shrink-wrap” licenses);

(xv)       Contracts granting a power of attorney;

(xvi)      Any other Contract that individually requires a minimum annual spend of at least $25,000 by the Companies and is not previously disclosed pursuant to this Section 4.13(a);

(xvii)     Any Contract between any of the Companies on the one hand and the Seller or the Parent (or any Affiliate of the Seller or the Parent) on the other hand that will survive the Closing;

(xviii)    all collective bargaining agreements or Contracts with any union or group of employees to which any Company is a party; and

(xix)      Contracts with any of the parties listed or required to be listed on Schedule 4.21(a) (to the extent not already included in clause (iii) of this Section 4.13(a)).

(b)        True, correct and complete copies of all Material Contracts as currently in effect have been made available to the Purchaser.  Each Material Contract is a valid and binding obligation of the applicable Company party thereto, enforceable against such Company in accordance with its terms, subject to the Enforceability Exceptions.  The Companies are not in default in any material respect under any Material Contract as of the date of this Agreement.  To the Knowledge of the Seller, no other party to a Material Contract has breached, violated or defaulted under any Material Contract in any material respect that has not been cured.

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4.14        Employees.

(a)        Schedule 4.14(a) lists (i) all Business Employees existing on the date of this Agreement and (ii) the wages, bonus commissions and benefits of those Business Employees existing on the date of this Agreement.  All wages, bonus commissions and benefits with respect to any Business Employee for any period prior to the Closing Date have been fully paid or accrued, other than any amounts that would not, individually or in the aggregate, result in a material Liability to any Company.

(b)       With respect to the Business Employees, the Companies are in compliance with all applicable labor and employment Laws (including with respect to hiring, termination, wage and hour requirements, tips and tip credits, correct classification of independent contractors and of employees as exempt and non-exempt, unfair labor practices, work authorization status, immigration, discrimination in employment, harassment, retaliation and reasonable accommodation, leaves of absence, terms and conditions of employment, employee health and safety, and WARN and any similar state or local “mass layoff” or “plant closing”), except to the extent that any noncompliance would not reasonably be expected to result in a Material Adverse Effect.

(c)         Except as set forth on Schedule 4.14(c): (i) there are no Legal Proceedings pending or, to the Seller’s Knowledge, threatened, against the Companies, by or regarding any Business Employee (or former employee of the Parent and its Subsidiaries, which former employee, but for his or her cessation of employment prior to the date of this Agreement, would have been categorized hereunder as a Business Employee); and (ii) no Company is liable for any payment to any trust or other fund or to any Governmental Body with respect to unemployment compensation benefits, social security or other benefits for employees (other than routine payments to be made in the Ordinary Course of Business).

(d)        To the extent permitted under applicable law, Seller will cooperate (at Purchaser’s cost) to allow Purchaser to assume Seller’s unemployment rate with respect to Business Employees that become Hired Employees on the Closing Date.

4.15        Employee Benefits Plans.

(a)         Schedule 4.15(a) lists, with respect to the Companies (whether provided directly or through the Shared Services Agreements) with respect to all Business Employees, each material “employee benefit plan” (as defined in ERISA) and any other plan, Contract or policy providing bonuses, profit sharing benefits, retirement benefits, pension benefits, compensation, deferred compensation, incentives, equity options, phantom equity, equity appreciation rights, equity purchase rights, fringe benefits, severance payments, post-retirement benefits, scholarships, health and welfare benefits, basic or supplemental disability benefits, life insurance coverage, sick leave pay, vacation pay, commissions, payroll practices, retention payments, fringe benefits, flexible spending accounts, insurance premium reimbursements or other benefits that the Company sponsors or has Liability with respect to, and has an obligation to contribute to for the benefit of any Business Employees (collectively, the “Company Benefit Plans”).  The Companies have made available to the Purchaser true, correct and complete copies of: (i) each Company Benefit Plan document; (ii) to the extent applicable, Forms 5500; and (iii) the most recent summary plan description for each Company Benefit Plan for which such summary plan description is required.

(b)        Each Company Benefit Plan maintained, contributed to or required to be contributed to with respect to the Business Employees has been administered in accordance with its terms and with the applicable provisions of ERISA and the Code (including the rules and regulations thereunder), except as would not reasonably be expected to result in a Material Adverse Effect.

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(c)       Schedule 4.15(c) lists each Company Benefit Plan that is an “employee pension benefit plan” (as defined in Section 3(2) of ERISA) that is intended to be tax qualified under Section 401(a) of the Code and each retirement plan covered under Section 408 of the Code (each, a “Company Pension Plan”).  All Company Pension Plans that are maintained, contributed to or required to be contributed to by the Companies or any ERISA Affiliate are so qualified.  To the Knowledge of the Seller, no event has occurred since the date of the most recent determination letter or application therefor relating to any such Company Pension Plan that would adversely affect the qualification of such Company Pension Plan.  No Legal Proceeding (other than routine benefit claims) has been asserted or instituted or, to the Knowledge of the Seller, threatened against any Company Benefit Plan, any trustee or fiduciaries thereof, the Parent, the Companies or any ERISA Affiliate, or any of the assets of any Company Benefit Plan or any related trust.  All required participant annual notices have been provided by the Companies to the participants in each Company Pension Plan on a timely basis.

(d)         No Company Benefit Plan provides for the payment of any tax gross-up payment to any individual in connection with any penalties or taxes imposed under Code Section 409A.

(e)        All contributions, deferrals, premiums and benefit payments under or in connection with the Business Employees under the Company Benefit Plans that are required to have been made as of the Closing will have been (or will be) timely made or have been reflected on the Reference Balance Sheet.

(f)         Except as set forth on Schedule 4.15(f), the Companies do not currently maintain, contribute to or participate in, nor at any time have any of them had an obligation to maintain, contribute to, or otherwise participate in, any employee benefit plans that are “multiemployer plans”(within the meaning of Section 3(37) of ERISA or Code Section 414(f)), “multiple employer plans” (within the meaning of Code Section 413(c)), plans that are subject to the provisions of Title IV of ERISA, or a welfare plan that is a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA).  None of the Companies (i) has withdrawn or partially withdrawn from any multiemployer plan, or (ii) has, or reasonably expects to have, any withdrawal liabilities with respect to any such plans.

(g)       Except to the extent set forth on Schedule 4.15(g), neither the execution and delivery of this Agreement or any other Company Document nor the consummation of the transactions contemplated by the Company Documents will:  (i) result in any material payment becoming due to any Business Employee; (ii) materially increase any benefits otherwise payable with respect to the Business Employees with respect to the Business; or (iii) result in the acceleration of the time of payment or vesting of any such benefits.  No Company Benefit Plan provides for post-employment benefits of any kind whatsoever (other than under COBRA, the Federal Social Security Act or any employee plan qualified under Section 401(a) of the Code) to any former director or employee of, or other provider of services to, the Company or an ERISA Affiliate (or a beneficiary of any such Person), nor have any representations, agreements, covenants or commitments been made by any Company to provide such benefits.

4.16        Labor.

(a)       No Business Employee is represented by a labor union in connection with his or her employment with any Company and there are no Contracts with any labor union or association representing any Business Employees.  To the Knowledge of the Seller, no petition has been filed or other proceedings instituted by an employee or group of employees with any labor relations board seeking recognition of a bargaining representative with respect to any Business Employees; and to the Knowledge of the Seller, there is no organizational effort currently being made or threatened by, or on behalf of, any labor union to organize any Business Employees, and, to the Knowledge of the Seller, no demand for recognition of Business Employees has been made by, or on behalf of, any labor union.

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(b)        Except as set forth on Schedule 4.16(b): (i) there are no material strikes, work stoppages, work slowdowns, picketing or lockouts pending or, to the Knowledge of the Seller, threatened against or involving the Business (or any Business Employees); and (ii) neither the Companies nor any of their officers, directors or employees is or has been the subject of any charge, grievance or complaint of any unfair labor practice, grievance, arbitration, negotiation, suit or action by any employee or employee representative that has not been resolved, and no complaint or charge is pending against any Company before the National Labor Relations Board or any other Governmental Body.

4.17        Litigation.

(a)         Except as set forth on Schedule 4.17(a), there are no Legal Proceedings pending or, to the Knowledge of the Seller, threatened against any Company or to which any Company is otherwise a party, which, if determined adversely in accordance with the opposing party’s demands therein, individually or in the aggregate, would be reasonably likely to result in a Material Adverse Effect.

(b)        Except as described on Schedule 4.17(b), there are no outstanding material Orders that are applicable to, or otherwise affect, any Company.  Schedule 4.17(b) lists any effective settlement agreements to which each Company is a party or by which it is bound that has not yet been fully performed by any Company.

(c)        There is no Legal Proceeding pending, or, to the Knowledge of the Seller, threatened, that in any manner challenges or seeks, or reasonably could be expected to prevent, enjoin, alter or delay any of the transactions contemplated by this Agreement.  To the Knowledge of the Seller, no Order that remains effective against the Companies after the Closing has been issued (nor is any motion for such Order pending in any Legal Proceeding) that is applicable to any Company or its Assets.

4.18        Compliance with Laws; Permits.

(a)        The Companies are, and the Business is being operated, in compliance with all Laws, except to the extent that any failure to do so would not reasonably be expected to result in any Material Adverse Effect.  No claims or investigations alleging any material violation by the Companies of any Laws are pending or, to the Knowledge of the Seller, threatened.

(b)        The Companies currently have all required Permits for the operation of the Business in the Ordinary Course of Business and are presently in compliance with the terms and conditions thereof, except where the failure to have, maintain or be in compliance with any such Permit, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No loss, non-renewal, suspension, modification or expiration of, nor any noncompliance with, any material Permit is pending or, to the Knowledge of the Seller, threatened.

4.19        Environmental Matters.  Except as set forth on the applicable subpart of Schedule 4.19 or as would not reasonably be expected to result in a Material Adverse Effect:

(a)        each Company is in compliance in all material respects with all Environmental Laws applicable to the operation by the Companies of the Company Real Property, which compliance includes possessing and complying with all material Permits, authorizations and approvals required by Environmental Laws for its operations thereat and complying with all requirements related to notice, recordkeeping and reporting;

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(b)       (I) there are no non-compliance Orders, warning letters, notices of violation, suits, actions, judgments, claims or governmental or judicial investigations or proceedings pending or, to the Knowledge of the Seller, threatened, against any Company alleging the violation of or liability under Environmental Laws in regard to the operation by the Companies of the Company Real Property; (ii) to the Knowledge of the Seller, no Company currently is the subject of, or threatened with, any governmental enforcement action or third-party claim under any Environmental Law in regard to the operation by the Companies of the Company Real Property; (iii) the Seller has no Knowledge that any of the above is reasonably likely to be forthcoming; and (iv) neither any Company nor the Seller has received any unresolved written request for information, notice, demand letter, administrative inquiry or claim with respect to any Environmental Condition (including under the citizen suit provision of any Environmental Law) in regard to the operation by the Companies of the Company Real Property;

(c)         to the Knowledge of the Seller, there is no Release or Threat of Release of any Hazardous Materials by any Company at or in the vicinity of the Company Real Property;

(d)        to the Knowledge of the Seller:  (i) no Company has received written notice of an Environmental Condition at any off-site location or locations to which any Company transported or arranged for the transportation of Hazardous Material; and (ii) to the Knowledge of the Seller, no Company has, since the Reorganization Petition Filing Date, Released or allowed or arranged for any third party to Release, Hazardous Materials to, at or upon any site that, pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or any similar state Law, has been placed on the National Priorities List or its state Law equivalent or as to which the United States Environmental Protection Agency or any relevant state agency or other Governmental Body has notified the Seller or any Company that it has proposed or is proposing to place on the National Priorities List or such state Law equivalent; and

(e)         to the Knowledge of the Seller, no Company is required or obligated by a Governmental Body to make any capital or other expenditure to comply with any Environmental Law.

The representations and warranties in this Section 4.19 are the sole and exclusive representations and warranties relating to Environmental Laws, Environmental Conditions or Hazardous Materials (or liabilities, obligations, or compliance with Laws related thereto) and no other representation or warranty in this Agreement shall be construed to apply thereto.

4.20       Insurance.  All insurance policies pertaining to the Companies or the Business (whether maintained directly or through the Shared Services Agreements) are listed on Schedule 4.20 and are in full force and effect on the date hereof.  Excluding insurance policies that have expired and been replaced in the Ordinary Course of Business, no insurance policy applicable to the Companies or the Business has been cancelled or not renewed within the last two (2) years and, to the Knowledge of the Seller, no threat has been made to cancel or not renew any insurance policy applicable to the Companies or the Business.  The Seller has delivered to the Purchaser: (i) a complete (in all material respects) insurance claims history regarding the Companies or the Business during the three (3) years ending December 27, 2020; and (ii) a list of all pending insurance claims regarding the Companies or the Business.  None of the insurers under any such insurance policies has rejected the defense or coverage of any claim purported to be covered by such insurer or has reserved the right to reject the defense or coverage of any claim purported to be covered by such insurer.  No Company has any Liability for retrospective premium adjustments under any insurance policies.

4.21        Significant Suppliers.

(a)        Schedule 4.21(a) sets forth a complete and accurate list of the ten (10) largest suppliers of materials, products or services to the Companies (measured by the aggregate amount purchased by such entity) during the fiscal year ended December 27, 2020 (excluding the maintenance or upgrade of any Company Restaurant), and, with respect to each, the dollar volume of billings involved (collectively, the “Top Suppliers”).

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 (b)      Except as set forth on Schedule 4.21(b), since the Reorganization Plan Confirmation Date, no Top Supplier has canceled, delayed deliveries, declared any force majeure, declared a default, terminated or otherwise materially altered its business relationship with the Companies outside of the Ordinary Course of Business, or has notified the Seller or the Companies in writing of any intent to do so.  To the Knowledge of the Seller, no Top Supplier has defaulted under any Contract or relationship with the Companies.

4.22       Affiliate Transactions.  Except in respect of the provision of Overhead and Shared Services, or any agreement that will be terminated prior to or at the Closing (with no further liability or obligation on the part of any Company) or as disclosed on Schedule 4.22:  (i) neither the Seller nor any Affiliate of the Seller is a party to any Contract or transaction with any Company that were in effect since the Reorganization Petition Filing Date; and (ii) no current officer or director of the Parent or any of its Subsidiaries (including any Company) is a party to any Contract or transaction with any Company.

4.23      Financial Advisors.  Other than Stephens Inc., no Person has acted, directly or indirectly, as a broker, finder or financial advisor for the Seller or any Company in connection with the transactions contemplated by this Agreement and no other Person is entitled to any fee or commission or like payment in respect thereof.

4.24        Privacy and Security.

(a)       The Companies have taken commercially reasonable steps (in light of the Business) to ensure that all Personal Data in their possession or control is protected against damage, loss, and against unauthorized access, acquisition, use, modification, disclosure or other misuse.  To the Knowledge of the Seller: (i) there has been no unauthorized access, use or disclosure of Personal Data in the possession or control of the Companies (or any of the contractors of the Companies, with regard to any Personal Data obtained from or on behalf of the Companies); and (ii) none of the Companies has experienced any Security Incidents related to the privacy or security of Personal Data which would reasonably be expected to have a Material Adverse Effect.

(b)        The Companies take commercially reasonable steps (in light of the Business) to ensure that all Personal Data in possession or control of third parties, including vendors, Affiliates and other Persons providing services to such Person that have access to or receive Personal Data from or on behalf of such Person, is protected against damage, loss and against unauthorized access, acquisition, use, modification, disclosure or other misuse.

(c)        Except as would not reasonably be expected to have a Material Adverse Effect, each Company has made backups of all computer software and databases utilized by it and maintains such software and databases at a secure, off-site location.

(d)       The representations and warranties in this Section 4.24 are the sole and exclusive representations and warranties relating to data privacy and data security (or liabilities, obligations or compliance with Laws related thereto) and no other representation or warranty in this Agreement shall be construed to apply thereto.

4.25      COVID-19 Compliance.  Except as set forth on Schedule 4.25, to the Knowledge of the Seller, the Companies are currently complying with the COVID-19 Measures, except to the extent of any failure that would not reasonably be expected to result in a Material Adverse Effect.

4.26        PPP Loan; EID Loan.  Except as set forth on Schedule 4.266:

(a)        none of the Companies has applied for or received any funds under the “Paycheck Protection Program” through the U.S. Small Business Administration (a “PPP Loan”) under the CARES Act or any similar funding under subsection 7(a) of the Small Business Act; and

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(b)        none of the Companies has applied for or received any funds pursuant to the “Economic Injury Disaster Loan” program (an “EID Loan”, and together with any PPP Loan, the “CARES Act Funds”) or an advance on an EID Loan pursuant to Section 1110 of the CARES Act or any similar programs in any state, local or non-U.S. jurisdiction.

4.27        Franchise Matters.

(a)         Other than the franchise systems operated under the Bakers Square Brand and the Village Inn Brand, no Company owns or operates any franchise system.

(b)       Schedule 4.13(a)(v) sets forth a list of all Franchise Agreements to which any Company is a party. The Companies have made available to Purchaser accurate and complete copies of each Franchise Agreement (including all amendments and waivers thereto as are currently in effect).  The list of Franchise Agreements includes:  (i) the name of the counterparty to the Franchise Agreement the (“Franchisee”); (ii) the business address of each Franchised Location authorized thereunder to be operated by such Franchisee; (iii) the effective and expiration dates; (iv) the number of remaining renewals; and (v) a description of any material waivers, alterations, amendments or other modifications thereto agreed by any Company that are not reflected in the Franchise Agreements.

(c)        Except as set forth in Schedule 4.27(c), since the Reorganization Plan Confirmation Date, no Company or, to the Knowledge of the Companies, any other party thereto, is in, or, has received written notice of any, presently effective (i) violation of, (ii) written asserted violation of, or (iii) default under (including any condition that with the passage of time or the giving of notice would cause such a violation or default under) any Franchise Agreement.  Subject to the Enforceability Exceptions, each Franchise Agreement:  (i) is a valid and binding agreement of the Company party thereto, is in full force and effect (except to the extent such Franchise Agreement is terminated or expires after the date hereof in accordance with its terms), and is enforceable in accordance with its terms against the Company party thereto; and (ii) to the Knowledge of the Companies, is valid, binding and enforceable in accordance with its terms against each Franchisee and not subject to any right to termination (other than as may be provided in such Franchise Agreement) or rescission by any Franchisee.

(d)        Other than as may exist in the Franchise Agreements, no Franchisee or other Person has been granted by the Companies any right of first refusal, option or other right or arrangement to sign any Franchise Agreement or acquire any rights granted by a Franchise Agreement.

(e)       All funds or cooperatives administered by or paid to the Companies on behalf of any Franchisees since the Reorganization Plan Confirmation Date, including funds that Franchisees contributed for advertising and promotion:  (i) have been administered and used in material compliance with all applicable Laws, descriptions in the Franchise Disclosure Documents and Uniform Franchise Offering Circulars (together, “FDDs”), and all Franchise Agreements, and (ii) each Company has in all material respects properly accounted for all payments made by each Franchisee with respect to any such fund or cooperative.  There are no loans owed to or owing from any such funds or cooperatives. To the Knowledge of the Companies, there are no written claims made against any of the Companies after the Reorganization Plan Confirmation Date that any of the expenditures from any such funds or cooperatives have been improperly collected, accounted for, maintained, used or applied.  Schedule 4.27(e) contains a listing of all advertising funds or cooperatives administered by or paid to the Companies on behalf of any Franchisees since the Reorganization Plan Confirmation Date.

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(f)        Schedule 4.27(f) sets forth a list of all forms of FDDs that the Company has used to offer or sell franchises at any time since 2016 and the time period of effectiveness of each such FDD. The Companies have made available to Purchaser accurate and complete copies of each such form of FDD.  All FDDs that the Company has used to offer or sell franchises at any time since the Reorganization Plan Confirmation Date have contained all information required by Law and the North American Securities Administrators Association guidelines and commentaries then published (“Franchise Laws”) and have otherwise been prepared and delivered to prospective Franchisees in compliance with Franchise Laws, and no such FDD contains any statement which is false or misleading with respect to any material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statements made therein not false or misleading in light of the circumstances under which they are made. The Company has made available to Purchaser correct and complete copies of all material correspondence since the Reorganization Plan Confirmation Date with state and federal authorities concerning compliance with Franchise Laws.

(g)        No Company has granted any Person any protected or exclusive territory rights, a designated area, or an option, right of first refusal or other arrangement regarding additional territory rights, except as set forth in the Franchise Agreements.

(h)        Except as set forth on Schedule 4.27(h), there is not in effect after the Reorganization Plan Confirmation Date any Contract with a Company or any Affiliate whereby it receives rebates, allowances, discounts or other payments or remuneration of any kind (collectively, “Rebates”) from suppliers or other third parties selling products or services, directly or indirectly, to Franchisees.  Except as set forth on Schedule 4.27(h):  (i) no Company or any Affiliate thereof has made any commitment, promise or pledge (oral or written) that remains effective after the Reorganization Plan Confirmation Date to share with Franchisees any Rebates; and (ii) since the Reorganization Plan Confirmation Date, the Company has not received any revenue or other consideration as a result of Franchisees’ required purchases or leases of products or services.

(i)        Except to the extent set forth in any Franchise Agreement, no Company has waived enforcement of any non-compete restriction under any Franchise Agreement, and, to the Knowledge of the Companies, no current Franchisee is currently in violation of any non-compete covenant under any Franchise Agreement.

(j)         Since the Reorganization Plan Confirmation Date, the Companies have consistently enforced the terms of the Franchise Agreements against all Franchisees in all material respects, including, to the Knowledge of the Companies, enforcement of any material violations of the operating standards set forth in the operations manuals of the Companies.

(k)       Since the Reorganization Plan Confirmation Date:  (i) no Company has issued policies that violate applicable Laws (including any Franchise Laws) relating to, or otherwise exercised control over, any Franchisee’s relationship with its employees, including hiring, firing, disciplining, compensation, benefits, supervision, and scheduling; (ii) none of the Companies has received, any formal or informal written complaint, allegation or notice of inquiry or investigation from a Franchisee, any employee of a Franchisee or Governmental Authority, that any Company is or may be, joint employers with or subject to joint employment liability with, any Franchisee.

(l)        Schedule 4.27(l) sets for the calculation of all unpaid and prepaid Royalties as of the date of this Agreement, together with any aging of unpaid Royalties and any agreements with any Franchisee with respect to the payment of Royalties on a deferred basis.

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4.28      No Additional Representations.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES, THE SELLER AND THE PARENT THAT ARE EXPRESSLY SET FORTH IN ARTICLE IV, ARTICLE V OR ANY CERTIFICATE DELIVERED HEREUNDER OR THEREUNDER, THE COMPANIES, THE SELLER AND THE PARENT AND EACH OF THEIR RESPECTIVE AFFILIATES AND REPRESENTATIVES EXPRESSLY DISCLAIM AND MAKE NO, AND SHALL NOT BE DEEMED TO HAVE MADE ANY, REPRESENTATION, WARRANTY, STATEMENT OR DISCLOSURE OF ANY KIND (WHETHER EXPRESS OR IMPLIED) TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES (ABOUT THE BUSINESS, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR OTHERWISE).  IN PARTICULAR, WITHOUT LIMITING THE FOREGOING DISCLAIMER, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES MADE IN THIS ARTICLE IV, NONE OF THE PARENT, THE SELLER, THE COMPANIES OR ANY OTHER PERSON MAKES OR HAS MADE ANY REPRESENTATION OR WARRANTY TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES WITH RESPECT TO (I) ANY FINANCIAL PROJECTION, FORECAST, ESTIMATE, BUDGET OR PROSPECT INFORMATION RELATING TO THE PARENT, THE SELLER, THE COMPANIES OR THE BUSINESS, OR (II) ANY ORAL OR WRITTEN INFORMATION FURNISHED OR MADE AVAILABLE TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES IN THE COURSE OF THEIR DUE DILIGENCE INVESTIGATION OF THE COMPANIES AND THE BUSINESS, THE NEGOTIATION OF THIS AGREEMENT AND ANY RELATED DOCUMENTS, OR IN THE COURSE OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

REGARDING THE SELLER AND THE PARENT

As a material inducement to the Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, each of the Parent and the Seller, jointly and severally, represents as follows:

5.1          Organization; Good Standing; Authorization of Agreement.

(a)        The Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to conduct its business as heretofore conducted.  The Seller has all requisite power, authority and legal capacity to execute and deliver this Agreement and each other agreement, document, instrument or certificate to be executed by the Seller in connection with the consummation of the transactions contemplated by this Agreement (collectively with this Agreement, the “Seller Documents”), and to consummate the transactions and perform its obligations contemplated hereby and thereby.  The execution, delivery and performance by the Seller of each Seller Document and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on behalf of the Seller.  This Agreement has been, and each other Seller Document will be at or prior to the Closing, duly and validly executed and delivered by the Seller, and (assuming the due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and each other Seller Document, when so executed and delivered will constitute, the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to the Enforceability Exceptions.

(b)        The Parent is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to conduct its business as heretofore conducted.  The Parent has all requisite power, authority and legal capacity to execute and deliver this Agreement and each other agreement, document, instrument or certificate to be executed by the Parent in connection with the consummation of the transactions contemplated by this Agreement (collectively with this Agreement, the “Parent Documents”), and to consummate the transactions and perform its obligations contemplated hereby and thereby.  The execution, delivery and performance by the Parent of each Parent Document and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on behalf of the Parent.  This Agreement has been, and each other Parent Document will be at or prior to the Closing, duly and validly executed and delivered by the Parent, and (assuming the due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and each other Parent Document, when so executed and delivered will constitute, the legal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with its terms, subject to the Enforceability Exceptions.

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5.2         Conflicts; Consents of Third Parties.

(a)        None of the execution, delivery and performance by the Seller of the Seller Documents or the Parent of the Parent Documents, the consummation of the transactions contemplated hereby and thereby, or compliance by the Seller or the Parent with any of the provisions hereof and thereof will:  (i) cause the Seller or the Parent to breach any applicable Law or Order of any Governmental Body in any material respect; or (ii) materially conflict with or result in a material breach or termination of any of the terms, conditions or provisions of, or constitute a material default under, accelerate any obligations arising under, trigger any payment under, or result in the creation of any Lien pursuant to, or otherwise materially and adversely affect any of the terms, conditions or provisions of any material agreement or instrument to which the Seller or the Parent is a party or by which the Seller or the Parent (or the Seller’s or the Parent’s assets) may be bound, or constitute a default thereunder.

(b)        No consent, waiver, approval or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body not previously obtained is required on the part of the Seller in connection with the execution and delivery of the Seller Documents or the Parent in connection with the execution and delivery of the Parent Documents, or the compliance by the Seller or the Parent with any of the provisions hereof or thereof, or the consummation of the transactions contemplated hereby or thereby.

5.3         Ownership and Transfer of Interests.  The Seller is the sole record and beneficial owner of the Interests as set forth on Schedule 4.4(a), free and clear of any and all Liens.  The Seller has the power and authority to sell, transfer, assign and deliver the Interests as provided in this Agreement, and such delivery will vest in the Purchaser good and valid title to such Interests, free and clear of any and all Liens.  The Seller is not a party to any voting trust or other Contract with respect to the voting, redemption, sale, transfer or other disposition of the Interests.

5.4         Litigation.  There are no Legal Proceedings pending, or to the Knowledge of the Seller, threatened, that are reasonably likely to prohibit or restrain the ability of the Seller or the Parent to enter into this Agreement or timely consummate the transactions contemplated hereby.

5.5        Financial Advisors.  Other than Stephens Inc., no Person has acted, directly or indirectly, as a broker, finder, agent, representative or similar intermediary for any Company, the Seller or the Parent in connection with this Agreement and the transactions contemplated by this Agreement and no other Person is entitled to any fee or commission or like payment in respect thereof.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller and the Parent, as of the date hereof and again as of the Closing, that:

6.1          Organization and Good Standing.  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota and has all requisite corporate power and authority to conduct its business as heretofore conducted.

6.2         Authorization of Agreement.  The Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Purchaser in connection with the consummation of the transactions contemplated hereby (collectively with this Agreement, the “Purchaser Documents”), and to consummate the transactions and perform its obligations contemplated hereby and thereby.  The execution, delivery and performance by the Purchaser of each Purchaser Document and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on behalf of the Purchaser.  This Agreement has been, and each other Purchaser Document will be at or prior to the Closing, duly executed and delivered by the Purchaser and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each other Purchaser Document when so executed and delivered will constitute, the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to the Enforceability Exceptions.

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6.3          Conflicts; Consents of Third Parties.

(a)        None of the execution, delivery or performance by the Purchaser of the Purchaser Documents, the consummation of the transactions contemplated hereby and thereby, or compliance by the Purchaser or its Affiliates with any of the provisions hereof and thereof will:  (i) cause the Purchaser or its Affiliates to violate or breach any Law or Orderof any Governmental Body in any material respect; or (ii) materially conflict with or result in a material breach or termination of any of the terms, conditions or provisions of, or constitute a material default under, accelerate any obligations arising under, trigger any payment under, or result in the creation of any Lien pursuant to, or otherwise materially and adversely affect any of the terms, conditions or provisions of any material agreement or instrument to which the Purchaser is a party or by which the Purchaser (or the Purchaser’s assets) may be bound, or constitute a default thereunder.

(b)        No consent, waiver, approval or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body not previously obtained is required on the part of the Purchaser in connection with the execution and delivery of the Purchaser Documents, or the compliance by the Purchaser with any of the provisions hereof or thereof, or the consummation of the transactions contemplated hereby or thereby.

6.4         Litigation.  There are no Legal Proceedings pending, or to the knowledge of the Purchaser, threatened, that are reasonably likely to prohibit or restrain the ability of the Purchaser to enter into this Agreement or consummate the transactions contemplated hereby.

6.5         Financial Advisors.  No Person has acted, directly or indirectly, as a broker, finder, agent, representative or similar intermediary for the Purchaser in connection with this Agreement and the transactions contemplated by this Agreement and no Person is entitled to any fee or commission or like payment in respect thereof.

6.6          Solvency.  Immediately following the Closing, and assuming the accuracy and completeness of the representations and warranties set forth in Sections 4.6, 4.7, 4.9, and 4.11, in each case, in all material respects, the Purchaser: (a) will be solvent (in that both the fair value of its assets will not be less than the sum of its debts and that the present fair saleable value of its assets will not be less than the amount required to pay its probable liability on its debts as they become absolute and matured); (b) will have adequate capital with which to engage in its business; and (c) will not have incurred and will not plan to incur debts beyond its ability to pay as they become absolute and matured.

6.7         Financial Capacity.  The Purchaser has sufficient funds presently available, and, no third-party debt financing will be required, in connection with the Purchaser’s payment of the Purchase Price and any other fees or expenses incurred in connection with the transactions contemplated herein.

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ARTICLE VII

COVENANTS

7.1         Access to Information.

(a)         Between the date of this Agreement and the Closing Date, the Companies, the Seller and the Parent shall give to the Purchaser, its officers, agents, employees, counsel, accountants, engineers and other representatives, reasonable access (for the purpose of examination) to the properties, businesses and operations relating to the Companies and the Business and such examination of the books and records of the Companies as the Purchaser reasonably requests.  The Companies, the Parent and the Seller shall cause the officers, employees, consultants, agents, accountants, attorneys and other representatives of the Companies to reasonably cooperate with the Purchaser and the Purchaser’s representatives in connection with such examination.

(b)        For a period of eighteen (18) months following the Closing, the Seller and the Parent shall provide the Purchaser and its representatives with reasonable access (for the purpose of examination), subject to applicable Law, at reasonable times, on reasonable notice and during normal business hours, at the Seller’s place of business, to such information reasonably related to the Companies or the Business in the Seller’s possession or control as is reasonably necessary for financial reporting, human resources, contract administration, audit, regulatory compliance and accounting matters, the preparation and filing of any Tax Returns, reports or forms, or the defense of any Legal Proceeding, and the Purchaser and its representatives shall be permitted to make extracts from or take copies of the same.  Such access may be subject to the Purchaser’s execution and delivery of a non-disclosure agreement in form and substance reasonably acceptable to the Parent.

(c)        Notwithstanding anything herein to the contrary, no access pursuant to Section 7.1 shall be permitted to the extent that it would (i) be prohibited by applicable Law; (ii) require the Purchaser, the Companies or the Parent and its Subsidiaries to disclose information subject to attorney-client privilege (provided, however, that the parties shall use commercially reasonable efforts to enter into such joint defense agreements or other arrangements as appropriate, to allow for disclosure of information regarding the Companies or the Business in a manner that does not result in the loss of attorney-client privilege); or (iii) conflict with any confidentiality obligation to which the Purchaser, the Companies or the Parent or its Subsidiaries is bound.  Such access shall be permitted at such times as the business of the Seller is customarily conducted, and in a manner so as to not unreasonably interfere with the business of the Parent and its Subsidiaries.

7.2        No Negotiations.  Until the earlier of the Closing or the termination of this Agreement, neither the Seller or the Parent, nor any of their respective officers, employees, consultants, agents, accountants, attorneys and other representatives, shall, directly or indirectly, solicit, initiate, encourage or enter into any discussions or negotiations with, or provide any assistance or information to, or enter into any agreement with, any Person or group of Persons (other than the Purchaser) concerning any acquisition, directly or indirectly, of the membership interests of the Companies, or any merger, consolidation, recapitalization, liquidation, dissolution or similar transaction involving, or any purchase of all or a substantial portion of the assets of, the Companies.  In furtherance of the foregoing, the Seller and the Parent shall, and shall cause their respective officers, employees, consultants, agents, accountants, attorneys and other representatives to, terminate any current discussions or negotiations with any Person or group of Persons (other than the Purchaser) concerning any acquisition, directly or indirectly, of the membership interests of the Companies, or any merger, consolidation, recapitalization, liquidation, dissolution or similar transaction involving, or any purchase of all or a substantial portion of the assets of (or any material asset of), the Companies.

7.3          Operation of the Business.

(a)       Between the date of this Agreement and the Closing Date (or earlier termination of this Agreement), unless otherwise agreed in writing by the Purchaser (which agreement shall not be unreasonably withheld, conditioned or delayed), the Companies will (and the Seller will cause the Companies to):

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(i)          except as otherwise required pursuant to the terms of this Agreement, conduct the Business in the Ordinary Course of Business;

(ii)         maintain all of the material assets of the Companies (collectively, the “Assets”) in their current condition, ordinary wear and tear and damage by casualty or condemnation excepted;

(iii)        pay the debts and Taxes of the Companies when due and pay and perform other obligations of the Companies when due;

(iv)        maintain their books and records in the usual, regular and ordinary manner, on a basis consistent with prior years;

(v)       maintain the Companies’ material Intellectual Property (including paying all necessary registration, maintenance and renewal fees and filing all necessary documents and certificates with the relevant Governmental Body); and

(vi)         maintain in full force all material insurance policies currently in effect in regard to the Companies and the Business.

7.4         Conduct Prior to Closing.  Except as otherwise expressly permitted by this Agreement, without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed; and, if consent is not granted for any reason, the Seller and the Companies shall be deemed not to be in breach of any obligation under this Agreement that otherwise would be caused by the resulting inability of the Seller or the Companies to take the requested action), between the date of this Agreement and the Closing Date (or earlier termination of this Agreement), each Company will not (and the Seller will ensure each Company does not) do any of the following (other than to the extent constituting Asset Allocation Actions, which are deemed to include, but not be limited to, the matters set forth on Schedule 7.4 hereto):

(a)         enter into any (i) inbound license agreement with respect to the Intellectual Property rights of any third party, other than shrink-wrap code; or (ii) outbound license agreement with respect to any Company’s Intellectual Property or Technology, other than for the licensing of their products in the Ordinary Course of Business;

(b)         settle any pending Legal Proceedings or obtain any releases of threatened Legal Proceedings involving or related to either Company;

(c)         enter into (i) except in the Ordinary Course of Business, any Contract of the type described in Section 4.13(a); or (ii) any new employment agreement or modify any existing employment agreement with any Business Employee (other than to remove any change of control or severance provisions);

(d)         incur (or guarantee) any additional Debt, other than Debt with respect to which the Companies will be released at Closing;

(e)         file a petition in bankruptcy, make an assignment for the benefit of creditors or file a petition seeking reorganization or arrangement or other action under federal or state bankruptcy laws;

(f)         enter into any agency, partnership, joint venture or trust;

(g)       acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets (other than purchases of inventory and equipment in the Ordinary Course of Business) or any equity securities;

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(h)        sell, assign, license, lease, transfer, convey or pledge the Assets or commit itself to sell, assign, license, lease, transfer, convey or pledge the Assets or subject any of the Assets to a security interest, in all cases other than entering into licenses and sales of business products in the Ordinary Course of Business;

(i)         enter into any agreement to purchase any interest in real property or enter into any lease, sublease, license or other occupancy agreement with respect to real property (other than with respect to extensions or renewals of any Leased Real Property, provided, however, that the Companies are not required by this Agreement to exercise any extension or renewal option with respect to any Leased Real Property).

(j)          unless otherwise reasonably requested by the Companies’ accountants or required by GAAP, re-value any of the Assets, including writing down the value of inventory;

(k)         issue any equity interests or equity securities;

(l)         unless otherwise reasonably requested by the Companies’ accountants or required by GAAP, change any accounting principles, methods or practices, or the manner in which they keep their books and records, or their practices with regard to the booking of sales, receivables, payables or accrued expenses or materially alter their payment or collection practices;

(m)       make, change or revoke any material Tax election, elect or change any material method of accounting for Tax purposes, settle any Legal Proceeding in respect of Taxes or enter into any Contract in respect of Taxes with any Governmental Body; or

(n)        take, or agree in writing or otherwise to take, any of the actions described in Sections 7.4(a)-(m).

7.5       Consents and Approvals.  The Purchaser, the Seller, the Parent and each of the Companies shall use its commercially reasonable efforts to: (i) take all actions necessary or appropriate to consummate the transactions contemplated by this Agreement, including obtaining all consents and waivers identified in Schedule 3.4(a)(ix) (provided, however, that, notwithstanding anything to the contrary in this Agreement, the Seller’s obligation to pursue such consents and waivers hereunder shall not be interpreted as a requirement that the Seller make any payments to the third parties from whom such consents or waivers are requested, but the Seller reserves the right to elect to make such payments in its sole discretion); and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement. In furtherance of the foregoing, the Seller shall be responsible for any fees and expenses associated with obtaining such consents, including those listed on Schedule 3.4(a)(ix).

7.6          Further Assurances.  All deliveries, payments and other transactions and documents relating to the transactions contemplated herein shall be interdependent and none shall be effective unless and until all are effective (except to the extent that the party entitled to the benefit thereof has waived in writing satisfaction or performance thereof as a condition precedent to Closing).  The Purchaser, the Seller, the Parent and each of the Companies shall use its commercially reasonable efforts to, from time to time (including after the Closing) and without further consideration, execute and deliver (or cause to be executed and delivered) such other documents, certificates, agreements and other writings, and take such other actions as may be reasonably necessary or requested by another party in order to consummate, evidence or implement expeditiously the transactions contemplated by any Company Document, Seller Document or Purchaser Document, as applicable.  In furtherance of the foregoing, it is the intent of the parties hereto that all of the assets primarily used in the Business be transferred to the control of the Purchaser pursuant to the transactions contemplated hereby.  As such, each of the parties hereto shall, and shall cause their respective Affiliates to, take all commercially reasonable best efforts, execute and deliver such additional documents, instruments, conveyances and assurances, and take such further actions as may be reasonably required, to ensure that any asset primarily used in the Business which is not currently owned by the Companies be transferred to one of the Companies (as mutually agreed to by the parties) for no further consideration.

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7.7         Publicity.  None of the Purchaser, the Seller or any Company (or their respective Affiliates) shall issue any press release or public announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of the Seller and the Purchaser; provided, however, that any public disclosures which may be required by Law to be made by the Seller, the Parent, the Purchaser or their respective Affiliates (including with respect to any publicly traded entity) may be made without the consent of any Person (but, to the extent feasible, the Seller, the Parent and the Purchaser shall be afforded an opportunity to review the proposed public disclosure and provide input in advance of such disclosure).

7.8          Tax Matters.

(a)        The Seller shall have the authority to prepare (or cause to be prepared) and file (or cause to be filed) all Tax Returns relating to the income or operations of the Companies that are to be reported or otherwise included on the Tax Returns of the Seller or its Affiliates (collectively, the “DRE Tax Returns”).  After the Closing, the Purchaser shall have the obligation and authority to prepare (or cause to be prepared) and file (or cause to be filed) when due (taking into account all extensions properly obtained) all Tax Returns (other than DRE Tax Returns) required to be filed by or with respect to the assets, properties and operations of the Companies for any taxable year or other taxable period (collectively, the “Purchaser Tax Returns”).  Any Purchaser Tax Returns relating to any Pre-Closing Period shall be prepared in accordance with past practices of the Companies, and submitted (with copies of any relevant schedules, work papers and other documentation then available) to the Seller for the Seller’s approval not less than thirty (30) calendar days prior to the due date for the filing of each such Purchaser Tax Return, which approval shall not be unreasonably withheld, conditioned or delayed.  The Seller shall have the option of providing to the Purchaser, at any time at least ten (10) calendar days prior to the date each such Purchaser Tax Return is due to be filed (taking into account any valid extensions), written instructions as to how the Seller wants any, or all, of the items that relate to a Pre-Closing Period for which it may be liable to be reflected on such Purchaser Tax Return.  The Purchaser shall, in preparing such Purchaser Tax Return, cause the items for which the Seller is liable hereunder to be reflected in accordance with the Seller’s instructions, unless such position is inconsistent with past practices of the Companies (after the Reorganization Plan Confirmation Date) or a different position is required by applicable Law.  The Purchaser shall deliver to the Seller copies of each such Purchaser Tax Return, along with a statement (a “Tax Statement”) showing the pre-Closing portion of any Tax Liability required to be paid with such Tax Return (computed in accordance with Section 7.8(c)), at least twenty (20) calendar days prior to the due date for filing such Purchaser Tax Return, and shall permit the Seller to review and comment on such Purchaser Tax Return and Tax Statement prior to filing.

(b)        Not later than five (5) Business Days prior to the due date for the payment of Taxes on any Purchaser Tax Return, the Seller shall be responsible for and shall pay to the Purchaser the amount of cash Taxes shown as due and payable by the Seller on the Purchaser Tax Return, except to the extent such Taxes have been included as a liability in Net Working Capital Items.

(c)        All Taxes and Tax Liabilities with respect to the income, property or operations of the Companies that relate to the Straddle Period shall be apportioned between the Seller and the Purchaser as follows: (i) in the case of Taxes other than income, sales and use and withholding Taxes, on a per-diem basis; and (ii) in the case of income, sales and use and withholding Taxes, as determined from the books and records of the relevant Company as though the taxable year of the relevant Company terminated at the Effective Time on the Closing Date.

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(d)        Notwithstanding any other provisions hereof, if an audit or other proceeding is commenced, and an adjustment is proposed or any other claim is made by any Taxing Authority with respect to a Tax Liability of any Company relating to a Pre-Closing Period for which the Seller is liable under this agreement (a “Tax Claim”), the Purchaser shall promptly notify the Seller of such audit or other proceeding, proposed adjustment or claim.  The Seller shall, at its expense, handle, defend, conduct and control any such Tax Claim; provided, however, that the Seller shall consult periodically with the Purchaser as to strategic and tactical issues for pursuing or defending any Tax Claim.  The Seller shall not have the right to compromise or settle any such Tax Claim which could result in a materially increased Tax Liability or a materially decreased refund to the Purchaser without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed.

(e)       At the Seller’s reasonable request and expense, the Companies shall apply for any Tax refund available for any Pre-Closing Period.  Any refunds (and any interest received thereon) of any Taxes imposed on the Companies, and any amounts of overpayments of Taxes credited against Taxes that the Purchaser or the Companies otherwise would be or would have been required to pay (and any amount of Taxes that is included in the calculation of Net Working Capital Items for such taxable year, to the extent such amount was not paid over to the appropriate Taxing Authority) for any Pre-Closing Period shall be for the account of the Seller, and the Purchaser shall pay over to the Seller any such amounts within fifteen (15) calendar days after the receipt or entitlement of such refund or credit or request to return amounts not paid over to the appropriate Taxing Authority.  The Purchaser shall pay the Seller interest at the rate prescribed under Section 6621(a)(1) of the Code, compounded daily, on any amount not paid when due under this Section 7.8(e).  Any other refunds of any Taxes imposed on the Companies (and any interest received thereon) shall be the property of the Companies and shall inure to the benefit of the Purchaser.

(f)        Following the Closing, the Purchaser and the Seller shall provide each other with such assistance as may reasonably be requested by either of them in connection with the preparation of any Tax Return, any audit or other examination by any Taxing Authority, or any judicial or administrative proceedings relating to Liability for Taxes of the Companies or with respect to the operations of the Companies.  The party requesting assistance hereunder shall reimburse the other for reasonable out-of-pocket expenses incurred in providing such assistance.  The Purchaser shall preserve and cause to be preserved all information, returns, books, records and documents relating to any Liabilities for Taxes of the Companies with respect to a taxable period until the later of sixty (60) calendar days after the expiration of all applicable statutes of limitations and extensions thereof or the conclusion of all litigation with respect to Taxes for such period.

7.9          Information Regarding the Companies and the Business.  From the date of this Agreement and for a period continuing until ninety (90) calendar days following the Closing Date, the Seller will continue to permit the Purchaser and its designees access to the virtual data room in which the Seller has placed documents and information regarding the Companies and the Business.

7.10        Employment Matters.

(a)        The Purchaser or an Affiliate of the Purchaser (which, for purposes of this Section 7.10 shall include the Companies) may offer employment with the Purchaser or an Affiliate of the Purchaser to any Business Employee on terms determined solely by Purchaser; provided, however, that all Business Employees will be offered employment by Purchaser except to the extent expressly recited to the contrary on Schedule 4.14(a) (it being agreed that, without Seller’s further consent in its sole discretion, Purchaser shall not be entitled, including, without limitation, after Closing, to hire any Business Employee identified on Schedule 4.14(a) as not being offered employment by Purchaser).  Each Business Employee who accepts any such offer from Purchaser, as of the Closing Date, will become an employee of the Purchaser or Affiliate of the Purchaser (each, a “Hired Employee”).  As of the Closing, the Seller and the Purchaser shall cause all Business Employees to receive all amounts, benefits, and other payments due to such Business Employee as of such date and assuming termination of employment on such date.

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(b)         With respect to all Hired Employees, the Purchaser and the Seller agree to equally bear the cost of any earned or accrued but unused vacation and sick benefits calculated as of the Closing Date (with the Purchase Price to be adjusted to reflect the same). Following the Closing Date, the Hired Employees shall be subject to the vacation and other paid time off policies of the Purchaser.

(c)        Effective as of the Closing Date, the Hired Employees shall cease to be eligible to participate in the benefit plans of the Seller and its Affiliates (collectively, the “Company Benefit Plans”).  The Purchaser shall be responsible for the expenses covered under the terms of the Purchaser plan or plans providing all medical, prescription drug, vision, dental benefits and other benefit plans provided by the Purchaser or its Affiliates (collectively, the “Purchaser Benefit Plans”) incurred on or after the Closing Date by a Hired Employee and/or his or her covered dependents who are enrolled in the Purchaser Benefit Plans.  Seller and its Affiliates shall be responsible only for expenses under the Company Benefit Plans covered under the terms of the applicable Company Benefit Plan incurred or arising prior to the Closing Date by a Hired Employee and/or his or her covered dependents.  The Purchaser shall use commercially reasonable efforts to:  (i) cause all pre-existing conditions (or actively at work or similar) limitations, eligibility waiting periods, evidence of insurability requirements, and other conditions under any Purchaser Benefit Plan offered to the Hired Employees to be waived with respect to each Hired Employee and his or her respective eligible, covered dependents to the extent that such limitation, waiting periods, requirements or other conditions were satisfied or did not apply under the comparable Company Benefit Plan in effect prior to the Closing; and (ii) recognize or credit each Hired Employee for all deductibles, co-payments and out-of-pocket maximums paid by such Hired Employees and their respective covered dependents under any Company Benefit Plan to the extent that such deductibles, co-payments or out-of-pocket maximums did not apply or were satisfied under the comparable Company Benefit Plan in effect prior to Closing.

(d)        As soon as administratively practicable after the Closing Date (and in accordance with applicable Law), the Purchaser shall cause any Purchaser Benefit Plan that is intended to be a qualified defined contribution plan or such plan of an Affiliate of the Purchaser (the “Purchaser 401(k) Plan”) to accept an eligible rollover distribution (within the meaning of Section 402(c)(4)of the Code) of each Hired Employee’s account balance under the Seller’s or its Affiliates’ 401(k) Plan or any other Company Benefit Plan intended to be qualified under Section 401(a) of the Code, to the extent such rollover is timely elected by such Hired Employee.  Such rollovers shall be in cash, provided that the Purchaser shall use commercially reasonable efforts, including, for the avoidance of doubt, the adoption of any necessary plan amendments, to provide for the rollover of plan loans for any such Hired Employee who chooses a direct rollover of his or her account balance into the Purchaser 401(k) Plan.  The Purchaser shall use commercially reasonable efforts to permit any outstanding 401(k) loans under the Company Benefit Plans of any Hired Employee to be transferred to the Purchaser 401(k) Plan rather than requiring such loans to be repaid as a result of the change in employment.

(e)         After the Closing, the Purchaser shall be responsible for offering or providing coverage under COBRA with respect to Hired Employees who first incur a COBRA-qualifying event after the Closing Date.

(f)         If annual bonuses for the portion of calendar year 2021 occurring prior to the Closing Date (if any, it being understood that Seller retains discretion under the Company Benefit Plans whether to award any bonuses in any amounts to the Business Employees) for the Hired Employees under Company Benefit Plans have not been paid prior to the Closing Date (the “2021 Pre-Closing Bonuses”), the Seller shall, or shall cause one of their Affiliates to, pay 2021 Pre-Closing Bonuses to the Hired Employees in the amount each Hired Employee would have received under the Company Benefit Plans for the portion of calendar year 2021 elapsed prior to the Closing Date, subject to all applicable terms and conditions thereunder.  All 2021 Pre-Closing Bonuses shall be Excluded Liabilities.

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(g)       The provisions of this Agreement are for the benefit of the Purchaser, the Companies and the Seller only, and no employee of the Companies or any of their Affiliates or any other Person shall have any rights hereunder.  In furtherance of the foregoing, nothing in this Section 7.10 will:  (i) confer upon any Business Employee or any Governmental Body or other third party any rights, claims, benefits, causes of actions or remedies, including any right to employment or continued employment for any period or terms of employment, of any nature whatsoever; (ii) be interpreted to prevent or restrict the Purchaser and its Affiliates from terminating the employment of any Hired Employee; or (iii) be treated as an amendment or other modification of any Company Benefit Plan or other employee benefit plan or arrangement.  For the avoidance of doubt, any and all obligations to Business Employees who do not become Hired Employees (whether with respect to the period prior to or after the Closing) shall remain the sole and exclusive Liability of the Seller as Excluded Liabilities.

7.11        Indemnification.

(a)      For a period of not less than four (4) years from and after the Closing Date, the Purchaser shall cause the Organizational Documents of each Company to contain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of current or former directors, managers and officers of any Company (each, a “Covered Party”) than are set forth in their respective Organizational Documents as of the date hereof.  Any indemnification agreements with Covered Parties in existence on the date of this Agreement shall remain effective, without any further action, and shall survive the Closing and continue in full force and effect in accordance with their terms.

(b)        In the event the Purchaser or any Company (i) consolidates with or merges into any other Person and shall not be the continuing entity after such consolidation or merger, or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, a provision shall be made so that such continuing entity or transferee of such assets, as the case may be, shall assume the obligations set forth in this Section 7.11.

7.12       Royalties Excluded.  Notwithstanding anything to the contrary in this Agreement, Seller retains the sole and exclusive right, both prior to and after Closing, to collect and retain all Royalties Excluded (with no impact on the Purchase Price); provided, however, if Purchaser desires Seller to cease collection efforts (either directly or through any other Person) regarding any one or more of the Royalties Excluded, Purchaser shall have the right within one (1) year after the Closing Date to give irrevocable written notice to Seller that Purchaser will purchase from the Seller at par (without paying any accrued interest or late fees) the subject Royalties Excluded, with payment required from Purchaser to Seller within ten (10) days of such notice (unless the obligated party makes payment to Seller within such ten (10) day period in an amount equal to or greater than the amount Purchaser would have paid, in which case the sale to Purchaser is deemed cancelled).  Purchaser agrees that, at Seller’s request and expense, Purchaser will cooperate with Seller (or its designee) after Closing in any efforts to collect the Royalties Excluded.  Purchaser further agrees that, should it (or any of its Affiliates) ever at any time after Closing receive any collections with respect to any Royalties Excluded, it is deemed to be receiving such amounts in trust for the Seller and will promptly turn over the same to the Seller (or its designee).

7.13        Environmental Matters Regarding St. Paul Parcel.

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(a)         Purchaser engaged Terracon Consultants, Inc. (“Terracon”) to complete Phase I Environmental Site Assessments for the parcels of Owned Real Property commonly known as 6370 South Parker Road Aurora, Colorado (the “Aurora Parcel”) and as 2239 Ford Parkway, St. Paul, Minnesota (the “St. Paul Parcel”), as Project #25217263 for Aurora, Colorado (the “Aurora Phase I”) and as Project #MP217310 for St. Paul, Minnesota (the “St. Paul Phase I” and collectively, the “Phase I’s”).  Upon determining that the St. Paul Phase I identified the existence of one or more recognized environmental conditions (“RECs”), Purchaser engaged Terracon to prepare a Phase II Environmental Site Assessment of the St. Paul Parcel(the “Phase II” and, together with the St. Paul Phase I, the “Subject Assessments”), subject to Seller’s agreement herein to permit access to the St. Paul Parcel to conduct the sampling contemplated in the Subject Assessments (to the extent anticipated herein to be performed prior to Closing).  The Phase I’s and the St. Paul Phase II will be addressed by Terracon to both Purchaser and Seller for their mutual use and reliance.

(b)         Pursuant to the requirements of the Minnesota Pollution Control Agency (the “MPCA”), for the St. Paul Parcel to complete the MPCA’s Best Management Practices in a manner sufficient to obtain the appropriate liability assurances, Purchaser may be required to perform certain tests for Hazardous Materials, applications and related activities, which may include, without limitation, two rounds of testing, one between April 1 and October 30 (the “Cooling Season Test”) and, if the results of the Cooling Season Test indicate further testing is required under the MPCA, a second round between November 1 and March 31st (the “Heating Season Test”) to determine the presence of soil vapor impacts.  The Purchaser will conduct the Cooling Season Test prior to the Closing Date but, if a Heating Season Test is required, given the currently anticipated Closing Date, the Heating Season Test cannot be completed until after the Closing Date.  As such, the parties agree to the following:

(i)       Prior to the Closing Date, the Purchaser will conduct the Cooling Season Test in a manner consistent with the Phase II.  At the Closing, Seller will credit Purchaser against the Purchase Price (the “Environmental Credit”) with the actual out-of-pocket cost of Terracon (and any applicable testing laboratories) for the conduct of the Cooling Season Test, not to exceed Seventeen Thousand Dollars ($17,000) in the aggregate.  If the results of the Cooling Season Test show no release of Hazardous Materials of the type suspected pursuant to the Phase II on the St. Paul Parcel above the Remediation Threshold (as defined below), Seller shall have no further obligations under this Section 7.13.  If the results of the Cooling Season Test show a release of Hazardous Materials of the type suspected pursuant to the Phase II on the St. Paul Parcel above the Remediation Threshold, then Purchaser may elect to enroll the St. Paul Parcel in the MPCA Voluntary Brownfield Program (the “Program”) and to request that the MPCA issue a No Association Determination (the “NAD”) and/or other applicable liability assurance letters (“MPCA Assurances”) in favor of Purchaser with respect to the groundwater, soil and soil vapor impacts identified in the Phase II (and Seller shall pay the costs of the environmental consultant and any applicable testing laboratory for such sampling and submissions under the Program up to the Seller Cap (as defined below)).  For the avoidance of doubt, Seller shall also have the right, at its own expense, to avail itself of the Program and seek a NAD and other MPCA Assurances in its favor (and all work performed by any environmental consultant and any applicable testing laboratories shall be addressed jointly to Seller and Purchaser for their mutual use and reliance).  If it is necessary to obtain the MPCA Assurances, Purchaser shall cause Terracon to perform the Heating Season Testing as soon after November 1, 2021 as is reasonably possible.  The Phase II Scope of Services is attached hereto as Schedule 7.13.  If the results of the Cooling Season Test or the Heating Season Test indicate that further Phase II testing is required to determine the nature or scope of any Hazardous Material(s) impacts, Seller shall pay the costs of such additional testing up to the Seller Cap.  Furthermore, if the MPCA requires additional Phase II testing or imposes other requirements, fees or costs in order for Purchaser to obtain any of the MPCA Assurances, the costs of such additional testing or requirements shall be payable by the Seller up to the Seller Cap.

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(ii)        If the results of either of the Cooling Season Test or the Heating Season Test indicate that the levels of soil vapor impacts exceed 33 times the MPCA’s Commercial Intrusion Screening Values (“ISVs”) or any groundwater impact or soils impacts cause the MPCA to require remediation of the St. Paul Parcel (collectively, the “Remediation Threshold”), then Seller agrees to pay (up to the Seller Cap) for the reasonable and documented costs to remediate (which remediation may include, without limitation, installation of a vapor mitigation system in the current or any new improvements upon the St. Paul Parcel or any soils or groundwater remediation of contaminants of the type suspected in the Phase II, collectively “Remediation”) the St. Paul Parcel and obtain any or all of the MPCA Assurances; provided, however, that Seller shall not be responsible for any amounts incurred more than two (2) years after the Closing Date.  Purchaser shall obtain three (3) quotes for the cost to complete any Remediation from qualified environmental consultants and the cost for which Seller shall be responsible (up to the Seller Cap) shall be the lowest of the quotes.

(iii)       As used herein, the “Seller Cap” means Seventy-five Thousand Dollars ($75,000) in the aggregate for any and all costs to be paid or credited by Seller under this Section 7.13.  Any payment hereunder due from Seller after the Closing Date will be paid by Seller within ten (10) Business Days after being presented with invoices for completed work.  Notwithstanding anything to the contrary, each of Seller and Purchaser shall bear its own counsel fees and any other costs associated with the environmental testing and remediation of the St. Paul Parcel other than those fees of Terracon or its testing laboratories and any fees charged under the Program which Seller has agreed to pay hereunder up to the Seller Cap).

(c)        Purchaser and Seller expressly acknowledge and agree that the amount of the Seller Cap was negotiated freely in order to induce both parties to proceed to execution of this Agreement and, subsequently, Closing.  As such, Purchaser acknowledges that Seller shall have no further liability for any environmental investigation or remediation for the St. Paul Parcel in excess of the Seller Cap (and then only for the items contemplated in this Section 7.13 to be reimbursed by Seller thereunder), and Seller shall have no liability for any environmental investigation or remediation for the Aurora Parcel.

ARTICLE VIII

CONDITIONS TO CLOSING

8.1         Conditions Precedent to Obligations of the Purchaser.  The obligation of the Purchaser to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions:

(a)         (i) the Fundamental Representations shall be true and correct at and as of the Closing (except to the extent such representations and warranties relate to an earlier date (in which case such representations and warranties shall be true, correct and complete in all material respects on and as of such earlier date)); and (ii) all other representations and warranties set forth in Article IV and Article V shall be true and correct in all respects (without giving effect to any limitations as to “materiality” or “Material Adverse Effect” set forth therein) as of the Closing (except to the extent such representations and warranties relate to an earlier date (in which case such representations and warranties shall be true, correct and complete on and as of such earlier date)), except where the failure of such representations and warranties covered under this clause (ii) to be so true, complete and correct (giving effect to any applicable exceptions set forth in the disclosure schedules attached hereto, but without giving effect to any limitations as to “materiality” or “Material Adverse Effect” set forth therein) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)         the Companies and the Seller shall have performed and complied in all material respects (except for the obligations set forth in Section 3.4(a) for which the Companies and the Seller shall have performed and complied in all respects) their respective obligations and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date;

(c)         since the Reorganization Plan Confirmation Date, there shall not have occurred any event, change or circumstance that has had or which would reasonably be expected to result in a Material Adverse Effect;

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(d)        there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; and

(e)        the Purchaser shall have received each of the Closing deliveries required by Section 3.4(a).

8.2        Conditions Precedent to Obligations of the Seller.  The obligation of the Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions:

(a)        the representations and warranties of the Purchaser set forth in this Agreement shall be true, correct and complete in all material respects (disregarding for the purposes of the condition set forth in this Section 8.2(a) any “material adverse effect” or other “materiality” qualifier contained in any such representations or warranties) at and as of the Closing (except to the extent such representations and warranties relate to an earlier date (in which case such representations and warranties shall be true, correct and complete on and as of such earlier date));

(b)       the Purchaser shall have performed and complied in all material respects (except for the obligations set forth in Section 3.4(b) for which the Purchaser shall have performed and complied in all respects) with all obligations and covenants required by this Agreement to be performed or complied with by the Purchaser on or prior to the Closing Date; and

(c)         there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby.

8.3        Frustration of Closing Conditions.  None of the Companies, the Purchaser or the Seller may rely on the failure of any condition set forth in Sections 8.1 or 8.2, as the case may be, if such failure was caused by such party’s failure to comply with any provision of this Agreement.

ARTICLE IX

TRANSITION PLANNING; CONFIDENTIALITY

9.1        Information for Transition Planning.  Upon reasonable advance notice and subject to applicable Law, each of the Seller and the Purchaser shall, and shall cause each of their respective relevant Affiliates to, afford the representatives of the other party reasonable access during normal business hours to its properties, books, records, Contracts, Permits, legal counsel, financial advisors, accountants, consultants and personnel, and shall furnish, and shall cause to be furnished, as promptly as practicable to the other party, all other information as the other party may reasonably request for purposes of integration, planning and facilitating the transfer of the ownership of the Companies and Business; provided, however, that the foregoing access to information related to the Parent and its Subsidiaries (other than the Companies) shall be strictly limited to the books, records, personnel, properties and such other permitted access as set forth above, relating solely to the Business; and, provided, further, that each party may restrict the foregoing access to those Persons who have entered into or are bound by a confidentiality agreement with it and to the extent required by applicable Law or Contract to which the Purchaser or the Seller, or their respective Affiliates is a party, as applicable (provided that such party uses reasonable efforts to obtain consent from the relevant counterparties and, failing that, redacts sensitive information).  All such access shall be subject to reasonable restrictions imposed from time to time with respect to the provision of privileged communications or any applicable confidentiality agreement with any Person.  In conducting any inspection at any properties of the Purchaser or the Seller and their respective Affiliates, the other party and its representatives shall not unreasonably interfere with the business conducted at such property.

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9.2        Business Records.  Substantially all Business Records, to the extent material, will be made available to Purchaser at Closing (all Business Records accessible to Purchaser in the dataroom or located at any Company Real Property are deemed to be delivered to Purchaser at Closing).  As soon as practicable after the Closing Date, and in no event later than thirty (30) calendar days after Closing, the Seller shall use its commercially reasonable efforts to make available to the Purchaser all remaining Business Records then in the possession of the Parent or any of its Subsidiaries.

9.3         Seller Confidentiality.  The Seller shall not, and shall cause its Affiliates and their respective representatives not to, directly or indirectly, for a period of the longer of (a) three (3) years after the Closing Date, or (b) until such information no longer constitutes a trade secret under applicable Law, without the prior written consent of Purchaser, disclose to any Person (other than each other and their respective Affiliates) any confidential information concerning the Business or the business of the Purchaser and its Affiliates; provided, however, that the foregoing restriction shall not (i) apply to any information that (A) is or becomes generally available to, or known by, the public (other than as a result of disclosure in violation of this Section 9.3), (B) is or becomes generally available to the Seller from a source other than Purchaser or its Affiliates (provided that such source is not known by the Seller to be bound by a duty of confidentiality with the Purchaser or its Affiliates), or (C) the Seller can establish was independently developed by the Seller or any of its Affiliates (other than by or in connection with the Business prior to the Closing), without use of any confidential information concerning the Business, or the business of the Purchaser and its Affiliates; or (ii) prohibit any disclosure (A) required by Law or the rules and regulations of any applicable national securities exchange (so long as, to the extent legally permissible, the Seller provides the Purchaser with reasonable prior notice of such disclosure and a reasonable opportunity to review and discuss with the Seller such disclosure), or (B) necessary to be made in connection with the enforcement of any right or remedy relating to this Agreement or any related document.  For the avoidance of doubt, nothing in this Section 9.3 or elsewhere in this Agreement shall limit or prohibit the Parent, the Seller and their respective Affiliates from conducting any restaurant, food or beverage related business (whether or not in competition to the operations of the Purchaser and its Affiliates, including the Business acquired by the Purchaser hereunder); provided, however, that after the Closing, the Parent, the Seller and their respective Affiliates shall not utilize the Bakers Square Brand or the Village Inn Brand.

9.4         Purchaser Confidentiality.  The Purchaser shall not, and shall cause its Affiliates and their respective representatives not to, directly or indirectly, for a period of the longer of (a) three (3) years after the Closing Date, or (b) until such information no longer constitutes a trade secret under applicable Law, without the prior written consent of the Seller, disclose to any Person (other than each other and their respective Affiliates) any confidential information with respect to the business of the Seller or its Affiliates (other than the Business and the Companies); provided, however, that the foregoing restriction shall not (i) apply to any information that (A) is or becomes generally available to, or known by, the public (other than as a result of disclosure in violation of this Section 9.4 or any other confidentiality obligations owed to the Seller), (B) is or becomes generally available to the Purchaser from a source other than the Seller or its Affiliates (provided that such source is not known by the Purchaser to be bound by a duty of confidentiality with the Seller or its Affiliates), or (C) the Purchaser can establish was independently developed by the Purchaser or any of its Affiliates without use of any confidential information with respect to the business of the Seller or its Affiliates (other than the Business and the Companies); or (ii) prohibit any disclosure (A) required by Law or the rules and regulations of any applicable national securities exchange (so long as, to the extent legally permissible, the Purchaser provides the Seller with reasonable prior notice of such disclosure and a reasonable opportunity to review such disclosure), or (B) necessary to be made in connection with the enforcement of any right or remedy relating to this Agreement or any related document.

9.5        Certain Permitted Disclosures.  Notwithstanding anything to the contrary herein, the parties hereto acknowledge and agree that any party (or its respective Affiliates) may disclose confidential information to any financial institution providing credit to such party or any of its Affiliates or to any Governmental Body or any rating agency with jurisdiction over such party or any of its Affiliates.

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ARTICLE X

INDEMNIFICATION

10.1      Survival.  Any obligation of a party to indemnify any other party (A) under Sections 10.2(a)(i) or 10.2(b)(i), respectively, in respect of any breach of any representation or warranty of the Parent, the Seller or the Target Companies set forth in Article IV, any representation or warranty of the Parent or the Seller set forth in Article V, or any representation or warranty of the Purchaser set forth in Article VI, or (B) under Sections 10.2(a)(ii) or 10.2(b)(ii), respectively, in respect of any breach of any covenant or agreement required by its terms to be performed or complied with prior to the Closing, shall survive the Closing until the date that is twelve (12) months following the Closing Date.  In addition, any obligation of the Seller to indemnify the Purchaser Indemnitees pursuant to Sections 10.2(a)(iii) through 10.2(a)(vi) shall survive the Closing until the expiration of the applicable statute of limitations.  All of the covenants contained in this Agreement that by their nature are required to be performed after the Closing shall survive the Closing until fully performed or fulfilled, unless and to the extent only that non-compliance with such covenants or agreements is waived in writing by the party entitled to such performance. Notwithstanding the preceding two sentences, any breach or inaccuracy of any covenant, agreement, representation or warranty in respect of which indemnity may be sought under this Agreement, and the obligation of a party to indemnify any other party in respect thereof, shall survive the time at which it would otherwise terminate pursuant to the preceding two sentences, if written notice in accordance with the requirements set forth in Section 10.3 of the breach or inaccuracy thereof giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought prior to such time. The parties acknowledge and agree that with respect to any claim that any party may have against any other party which is permitted pursuant to the terms of this Agreement, the survival periods set forth and agreed to in this Section 10.1 shall govern when any such claim may be brought.

10.2        Indemnification.

(a)        Subject to the provisions of this Article X, from and after the Closing, the Parent and the Seller shall, on a joint and several basis, indemnify the Purchaser and its Affiliates (which shall include the Companies), directors, officers, employees, successors, permitted assigns, agents and representatives (collectively, the “Purchaser Indemnitees”) against and agree to hold each of them harmless from any and all Losses incurred or suffered by any Purchaser Indemnitee arising out of or relating to:

(i)          any breach of or inaccuracy in any representation or warranty in Articles IV or V;

(ii)         any breach of any covenant or agreement made or to be performed by the Parent, the Seller (or, prior to the Closing, the Companies) pursuant to this Agreement;

(iii)        any and all Taxes (or the nonpayment thereof) of the Companies for all Pre-Closing Periods;

(iv)       any and all payments due and owing by the Companies pursuant to any and all Material Contracts (and any Immaterial Contracts listed on Schedule 4.13(a)) with respect to the period prior to the Closing (which pre-Closing liabilities, for the avoidance of doubt, are agreed to be Excluded Liabilities);

(v)        any and all Liabilities for payments due to Business Employees for salary, wages, tips or bonuses (or funding required for their benefits) with respect to the period prior to the Closing Date, except for any obligation (A) expressly assumed by the Purchaser under this Agreement or (B) resulting from any breach by Purchaser of this Agreement;

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(vi)        any and all Liabilities associated with any Legal Proceedings against the Companies or their Assets pending (or known by the Seller to be threatened in writing) prior to the Closing Date; and

(vii)       any and all Excluded Liabilities;

provided, however, that (A) the Parent and the Seller shall not be liable for any claim for indemnification pursuant to Sections 10.2(a)(i) or 10.2(a)(ii) unless and until the aggregate amount of Losses incurred by Purchaser Indemnitees which may be recovered under such subsections in the aggregate exceeds $135,000 (the “Deductible”), after which only the amount of such Losses incurred which are in excess of the Deductible shall be recoverable hereunder, and (B) in no event shall the Parent’s and the Seller’s aggregate Liability arising out of or relating to any claim for indemnification pursuant to Sections 10.2(a)(i) and (ii) exceed $1,350,000 (the “Liability Cap”).

(b)       Subject to the provisions of this Article X, from and after the Closing, the Purchaser and the Companies shall indemnify the Parent and the Seller and their respective Affiliates, directors, officers, employees, successors, permitted assigns, agents and representatives (collectively, the “Seller Indemnitees”) against and agree to hold each of them harmless from any and all Losses incurred or suffered by any Seller Indemnitee arising out of or relating to

(i)          any breach of or inaccuracy in any representation or warranty set forth in Article VI; and

(ii)         any breach of any covenant or agreement made or to be performed by the Purchaser (or, after the Closing, the Companies) pursuant to this Agreement;

provided, however, that (A) the Purchaser shall not be liable for any claim for indemnification pursuant to Section 10.2(b) unless and until the aggregate amount of Losses incurred by Seller Indemnitees which may be recovered from Purchaser exceeds the Deductible, after which only the amount  of such Losses incurred which are in excess of the Deductible shall be recoverable hereunder, and (B) in no event shall Purchaser’s aggregate Liability arising out of or relating to Section 10.2(b) exceed the Liability Cap.

(c)        For purposes of determining whether a breach has occurred and for computing the dollar amount of any claim for indemnification resulting from a breach of any representation or warranty herein, all materiality, material adverse effect and similar qualifications shall be disregarded.

10.3        Procedures.  Claims for indemnification under this Agreement shall be asserted and resolved as follows:

(a)       Any Purchaser Indemnitee or Seller Indemnitee claiming indemnification under this Agreement (each, an “Indemnified Party”) with respect to any claim asserted against the Indemnified Party by a third party (a “Third Party Claim”) in respect of any matter that is subject to indemnification hereunder shall promptly notify in writing (such notice, a “Claim Notice”) the Parent and the Seller, on the one hand. or the Purchaser, on the other hand, (the “Indemnifying Party” or “Indemnifying Parties”) of the Third Party Claim within thirty (30) calendar days after receipt by such Indemnified Party of written notice of the Third Party Claim, which Claim Notice shall describe in reasonable detail the nature of the Third Party Claim, including the basis of the Indemnified Party’s request for indemnification under this Agreement and the amount of the Losses arising or in good faith estimated to arise therefrom (if available); provided, however, that, subject to Section 10.1, failure to timely provide such Claim Notice shall not affect the right of the Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party is materially prejudiced by such delay or omission.

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(b)        The Indemnifying Party shall have the right to participate in the defense of such Third Party Claim at any time and, subject to the limitations contained in this Section 10.3(b), assume and control the defense thereof. If the Indemnifying Party notifies the Indemnified Party that the Indemnifying Party elects to assume and control the defense of the Third Party Claim at any time, then the Indemnifying Party shall have the right to defend such Third Party Claim with counsel selected by the Indemnifying Party in all appropriate legal, arbitration or other proceedings (the “Proceedings”), to a final conclusion or settlement at the discretion of the Indemnifying Party in accordance with this Section 10.3(b). The Indemnifying Party shall have full control of such defense and Proceedings, including any compromise or settlement thereof; provided, however, that (i) the Indemnifying Party shall not be entitled to assume or control such defense and Proceedings if such Third Party Claim seeks equitable or other non-monetary relief (including any sanction or restriction upon the conduct or operation of any business of the Indemnified Party) or if the Third Party Claim alleges conduct that would constitute criminal activity, or if the resolution of such Third Party Claim in a manner adverse to the Indemnified Party could result in Losses to the Indemnified Party in excess of the amount claimed or expected to be received from the Indemnifying Party; and (ii) the Indemnifying Party shall not enter into any settlement agreement without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, such consent shall not be required if (A) the settlement agreement contains a complete and unconditional general release by the third party asserting the claim to all Indemnified Parties affected by the claim, and (B) the settlement agreement does not contain any admission by, or sanction or restriction upon the conduct or operation of any business by, the Indemnified Party or its Affiliates, including any injunction or other equitable relief against the Indemnified Party or its Affiliates. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 10.3(b), and the Indemnified Party shall bear its own costs and expenses with respect to such participation unless (aa) the employment of separate legal counsel has been specifically authorized in writing by the Indemnifying Party, (bb) there exists a material conflict of interest, or (cc) the Indemnifying Party fails to pursue the defense of such Third Party Claim actively and diligently, in the case of clause (bb) or this clause (cc), whereupon the Indemnified Party shall be entitled to retain the defense of such Third Party Claim.

(c)        If the Indemnifying Party does not notify the Indemnified Party that the Indemnifying Party has elected to defend the Indemnified Party pursuant to Section 10.3(b) within ten (10) Business Days after receipt of any Claim Notice or is not otherwise entitled to defend such Third Party Claim, then, subject to Section 10.3(b), the Indemnified Party shall defend and be reimbursed for its reasonable cost and expense (but only if the Indemnified Party is actually entitled to indemnification hereunder) in regard to the Third Party Claim with counsel selected by the Indemnified Party, in all appropriate Proceedings, which Proceedings shall be prosecuted diligently by the Indemnified Party. In such circumstances, the Indemnified Party shall defend any such Third Party Claim in good faith and have full control of such defense and Proceedings; provided, however, that the Indemnified Party may not enter into any compromise or settlement of such Third Party Claim if indemnification is to be sought hereunder, without the Indemnifying Party’s consent (which consent shall not be unreasonably withheld, conditioned or delayed). The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this Section 10.3(c), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation

(d)        If requested by the Indemnifying Party, the Indemnified Party agrees, at the sole cost and expense of the Indemnifying Party, to reasonably cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim which the Indemnifying Party elects to contest, including providing access to documents, records and information. In addition, the Indemnified Party will make its personnel available at no cost to the Indemnifying Party for conferences, discovery, Proceedings, hearings, trials or appeals as may be reasonably required by the Indemnifying Party. If the Indemnifying Party has assumed the defense of a Third Party Claim, the Indemnified Party also agrees to reasonably cooperate with the Indemnifying Party and its counsel in the making of any related counterclaim against the Person asserting the Third Party Claim or any cross-complaint against any Person and executing powers of attorney to the extent necessary unless doing so would materially impair the conduct of the business conducted by the Indemnified Party.

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 (e)        A claim for indemnification for any matter not involving a Third Party Claim shall be asserted by notice to the Indemnifying Party, which notice shall describe in reasonable detail the nature of the claim, the basis of the Indemnified Party’s request for indemnification under this Agreement and the amount of the Losses arising or in good faith estimated to arise therefrom (to the extent reasonably estimable). Subject to Section 10.1, failure to timely provide such notice shall not affect the right of the Indemnified Party’s indemnification hereunder, except to the extent the Indemnifying Party is materially prejudiced by such delay or omission.

10.4        Calculation of Losses.

(a)        No Purchaser Indemnitee or Seller Indemnitee shall be entitled to indemnification to the extent a Liability or reserve relating to the matter giving rise to such Losses has been included in the final determination of the Final Closing Amounts.

(b)        Each Indemnified Party shall, and shall cause their respective Affiliates to, take reasonably prudent steps consistent with customary business practices to mitigate any Losses arising out of or relating to this Agreement or the transactions contemplated hereby after becoming actually aware of the incurrence of such Losses,

(c)        The amount of any Loss for which an Indemnified Party claims indemnification under this Agreement: (i) shall be reduced by any insurance proceeds actually received from third-party insurers with respect to such Loss; (ii) shall be reduced by any reduction in Taxes actually paid (or any increase in any Tax refund actually received) by the Indemnified Party as a result of the incurrence or payment of such Loss in the taxable year of the incurrence or payment of such Loss, or in any prior taxable year; and (iii) shall be reduced by indemnification or reimbursement payments actually received from third-parties with respect to such Loss, net, in the case of each of clauses (i) and (ii) above, of any reasonable costs associated with the recovery of such amounts. In the event any Indemnified Party actually recovers any insurance proceeds, indemnity payments or any third-party recoveries in respect of any Losses, in each case at any time subsequent to any indemnification payment pursuant to this Article X, such Indemnified Party shall thereafter promptly reimburse the Indemnifying Party for any indemnity payment made up to the amount actually received by the Indemnified Party (net of any costs, fees or expenses incurred by the Indemnified Party in collecting such amount).

(d)        Except with respect to those actually awarded and paid on account of a Third Party Claim, and identified as such in connection with such award, no party shall be liable for punitive, exemplary, speculative or remote damages, or any damages based on any multiple of earnings or revenue or loss of profits, whether based on contract, tort, strict liability, other Law or otherwise and whether or not arising from any other party’s sole, joint or concurrent negligence, strict liability or other fault.

10.5        Payment of Losses.  In the event any Purchaser Indemnitee or Seller Indemnitee is entitled to indemnification hereunder, the applicable Indemnifying Party or Indemnifying Parties shall pay or cause to be paid to the Purchaser Indemnitee or Seller Indemnitee, as applicable, an amount in immediately available United States funds (by wire transfer in accordance with written instructions provided by the Purchaser Indemnitee or Seller Indemnitee, as applicable) equal to the indemnifiable Losses, subject to the limitations set forth in Section 10.2. The date of final determination of Losses shall be the date on which such Losses are agreed by the applicable Indemnifying Party or Indemnifying Parties, or the date of a final, nonappealable order of a court of competent jurisdiction or other arbitrator or arbitral body.

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10.6      Treatment of Indemnification Payments.  Any payment made pursuant to the indemnification obligations arising under this Article X shall be treated as an adjustment to the Purchase Price to the extent allowable under applicable Law, including for the purposes of Taxes.

10.7        Exclusive Remedy.  Notwithstanding anything to the contrary in this Agreement, except (i) with respect to the matters covered by Section 2.3 (Purchase Price Adjustment), (ii) in the case where a party seeks to obtain specific performance pursuant to Section 11.5, or (iii) for claims of Fraud, the parties hereby agree that, following the Closing, the sole and exclusive remedy of a party for any breach or inaccuracy of any representation, warranty, covenant or agreement contained in this Agreement shall be the applicable indemnification rights set forth in this Article X.

ARTICLE XI

MISCELLANEOUS

11.1       Representation and Warranty Insurance.  If the Purchaser or any of its Affiliates (in their sole discretion) procures a representation and warranty insurance policy (or other similar policy) (a “R&W Policy”), then (a) such R&W Policy shall be at the Purchaser’s sole expense, and (b) the Purchaser shall cause such R&W Policy to expressly include a waiver by the insurer, other than with respect to Fraud, of any and all subrogation rights against the Parent, the Seller and their Affiliates and their respective officers, directors and employees, and the Purchaser shall not, and shall cause each insured party under any such R&W Policy not to, waive, amend, modify or otherwise revise such subrogation provision, or allow such provision to be waived, amended, modified or otherwise revised, without the prior written consent of the Seller.  The Parent and the Seller shall reasonably cooperate with the Purchaser (at the Purchaser’s expense) with respect to the Purchaser’s procurement of any such R&W Policy. The R&W Policy shall be the sole and exclusive source of recovery or satisfaction of any Losses (other than with respect to Fraud), and none of the Seller, the Parent or any of their Affiliates shall have any obligation to directly satisfy any claim by the Purchaser or any of its Affiliates.

11.2       Payment of Sales, Use, Transfer or Similar Taxes.  All sales, use, transfer, intangible, recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable to or resulting from, the transactions contemplated by this Agreement shall be borne equally by the Purchaser and the Seller; provided, however, that they are reflected in the Closing Estimates or the Final Closing Amounts (otherwise the Purchaser shall have no liability therefor).  Notwithstanding the provisions of Section 7.8, the Seller shall, at its own expense, prepare and timely file all required Tax Returns relating to such transfer Taxes.

11.3       Expenses.  Unless otherwise stated herein, the Parent, the Seller and the Purchaser shall bear their own expenses (and the Seller shall bear the expenses of the Companies) incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby.

11.4        Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.

(a)        EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS LOCATED IN THE CITY OF CHICAGO OR, IF SUCH COURTS SHALL NOT HAVE PROPER JURISDICTION, OF ANY UNITED STATES FEDERAL DISTRICT COURT SITTING IN CHICAGO (THE NORTHERN DISTRICT OF ILLINOIS), AND ANY APPELLATE COURT THEREOF, IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE BROUGHT ONLY IN SUCH COURTS (AND WAIVES AND AGREES NOT TO ASSERT ANY OBJECTION BASED ON FORUM NON CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN OR JURISDICTION THEREOF); PROVIDED, HOWEVER, THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS SECTION 11.4 AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION OF SAID COURTS OR IN THE STATE OF ILLINOIS OTHER THAN FOR SUCH PURPOSE.

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(b)        Any and all process may be served in any action, suit or proceeding arising in connection with this Agreement by complying with the provisions of Section 11.8.  Such service of process shall have the same effect as if the party being served were a resident in the State of Illinois and had been lawfully served with such process in such jurisdiction.  The parties hereby waive all claims of error by reason of such service.  Nothing herein shall affect the right of any party to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the other in any other jurisdiction to enforce judgments or rulings of the aforementioned courts.

(c)        EACH PARTY TO THIS AGREEMENT HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.4.

11.5        Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity.

11.6       Entire Agreement; Amendments and Waivers.  This Agreement (including the Schedules and Exhibits hereto), the Company Documents, the Seller Documents, the Parent Documents and the Purchaser Documents represent the entire understanding and agreement among the parties with respect to the subject matter hereof.  This Agreement may be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the Parent, the Seller, the Companies and the Purchaser.  No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein.  The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.  No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

11.7        Governing Law.  This Agreement shall be governed by and construed in accordance with the internal Laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than the State of Delaware.

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11.8       Notices.  All notices, requests, demands, claims and other communications hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly given:  (a) if personally delivered, when so delivered; (b) if mailed, five (5) Business Days after having been sent by first class, registered or certified U.S. mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below; (c) if sent through a nationally-recognized overnight delivery service that guarantees next day delivery, the Business Day following its delivery to such service in time for next day delivery; or (d) if given by electronic mail during normal business hours of the recipient, when so given, but if not sent during normal business hours, then on the recipient’s next Business Day:

If to the Seller or the Parent (or, prior to the Closing, any Company), to:

RG Group Holdco, LLC

1701 Village Center Circle

Las Vegas, NV 89134

Attention:  Michael L. Gravelle

E-mail:  mgravelle@fnf.com

with a required copy to:

Restaurant Growth Services, LLC

3038 Sidco Drive

Nashville, TN 37204

Attention:  Wendy Harkness

E-mail:  wendy.harkness@restgrowthservices.com

with a further required copy to:

Nelson, Mullins, Riley & Scarborough, LLP

One Wells Fargo Center, 23^rd Floor

301 South College Street

Charlotte, NC 28202

Attention:  Francis C. Pray, Jr.

Email: frank.pray@nelsonmullins.com

If to the Purchaser (or, after the Closing, any Company), to:

BBQ Holdings, Inc.

12701 Whitewater Drive

Minnetonka, MN 55343

Attention:  Jeffery Crivello

Email:  jeff.crivello@bbq-holdings.com

with a required copy to:

Lathrop GPM LLP

80 South 8^th Street

500 IDS Center

Minneapolis, MN 55402

Attention: Ryan R. Palmer

Email:  ryan.palmer@lathropgpm.com

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Any party entitled to notice hereunder may change the physical or email address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

11.9        Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

11.10      Binding Effect; Assignment.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.  No assignment of this Agreement or of any rights or obligations hereunder may be made by the Seller or the Purchaser, directly or indirectly (by operation of law or otherwise), without the prior written consent of the Seller or the Purchaser, as applicable.  Upon any such permitted assignment, the references in this Agreement to the assignor shall also apply to any such assignee unless the context otherwise requires.

11.11      Counterparts.  This Agreement may be executed in one or more counterparts, including by way of electronic transmission, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

11.12      Other Definitional and Interpretive Matters.

(a)         Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

(i)         Exhibits/Schedules.  A reference to a “Schedule” or “Exhibit” means the referenced Schedule or Exhibit to this Agreement unless otherwise expressly stated.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.  Any matter set forth on any of the Schedules hereto shall be deemed set forth in all other Schedules to the extent there is a specific cross-reference or to the extent the relevance of such matter to another Schedule is readily apparent from the face of the disclosure notwithstanding the absence of a cross-reference contained therein.  The information contained in this Agreement, the Schedules and Exhibits is disclosed solely for purposes of this Agreement, and no information contained herein or therein shall be deemed to be an admission by any party to any third party of any matter whatsoever (including any violation of applicable Law or breach of contract).

(ii)         Gender and Number.  Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

(iii)        Headings.  The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any “Section” or “Article” are to the corresponding Section or Article of this Agreement unless otherwise specified.

(iv)       Herein.  The words such as “herein,” “hereinafter,” “hereof;” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

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(v)        Including.  The word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(vi)        Reflected On or Set Forth In.  An item arising with respect to a specific representation, warranty or other provision of this Agreement shall be deemed to be “reflected on” or “set forth in” a balance sheet or financial statements, to the extent any such phrase appears in such provision, if (A) there is a reserve, accrual or other similar item underlying a number on such referenced balance sheet or financial statements that related to the subject matter of such representation; (B) such item is otherwise specifically set forth on the referenced balance sheet or financial statements; or (C) such item is reflected on the referenced balance sheet or financial statements and is specifically set forth in the notes thereto.

(vii)      Accounting Terms.  Unless otherwise specified in this Agreement, all accounting terms used in this Agreement will be interpreted and all accounting determinations hereunder will be made in accordance with GAAP.

(b)        The parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

11.13      Legal Representation.

(a)        Each party to this Agreement acknowledges that (i) each of the Parent, the Seller and the Companies have retained Nelson Mullins Riley & Scarborough LLP (“NMRS”) to act as its counsel in connection with this Agreement and the transactions contemplated herein as well as other past and ongoing matters; (ii) NMRS has not acted as counsel for any other Person in connection with this Agreement and the transactions contemplated herein; and (iii) no Person other than the Parent, the Seller and the Companies has the status of a NMRS client for conflict of interest or any other purpose as a result thereof.  The Purchaser (A) waives and will not assert, and will cause each of its Affiliates (including, after Closing, the Companies) to waive and not assert, any conflict of interest relating to NMRS’s representation after the Closing of the Parent, the Seller or any of their respective Affiliates in any matter, whether involving this Agreement and the transactions contemplated herein (including any litigation, arbitration, mediation, dispute resolution procedure or other proceeding) or otherwise; and (B) consents to, and will cause each of its Affiliates (including, after the Closing, the Companies) to consent to, any such representation, even though in each case (aa) the interests of the Parent, the Seller and/or their respective Affiliates may be directly adverse to the Purchaser or the Companies (following the Closing), and/or (bb) NMRS may have represented the Companies in a substantially related matter.

(b)          The Purchaser agrees that, after the Closing, neither the Purchaser nor any of its Affiliates (including, after the Closing, the Companies) will have any right to access or control any of NMRS’s records relating to or affecting any of the transactions contemplated under this Agreement, which will be the property of (and be controlled by) the Parent and the Seller.  In addition, the Purchaser agrees that it would be impractical to remove all Attorney-Client Communications from the records (including e-mails and other electronic files) of the Companies.  Accordingly, the Purchaser will not, and will cause each of its Affiliates (including, after the Closing, the Companies) not to, use any Attorney-Client Communication remaining in the records of any Company after the Closing in a manner that may be adverse to the Parent or the Seller or any of their respective Affiliates.

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(c)        The Purchaser agrees, on its own behalf and on behalf of its Affiliates (including, after the Closing, the Companies), that from and after the Closing (i) the attorney-client privilege, all other evidentiary privileges, and the expectation of client confidence as to all Attorney-Client Communications are hereby assigned to and shall belong to the Parent and the Seller and will not pass to or be claimed by the Purchaser or any of its Affiliates (including, after the Closing, the Companies), and (ii) the Parent and the Seller will have the exclusive right to control, assert or waive the attorney-client privilege, any other evidentiary privilege, and the expectation of client confidence with respect to such Attorney-Client Communications.  Accordingly, the Purchaser will not, and will cause each of its Affiliates (including, after the Closing, the Companies) not to, (A) assert any attorney-client privilege, other evidentiary privilege, or expectation of client confidence with respect to any Attorney-Client Communication, except in the event of a post-Closing dispute with a Person that is not the Parent, the Seller or any of their respective Affiliates, or (B) take any action with the intent to cause any Attorney-Client Communication to cease being a confidential communication or to otherwise lose protection under the attorney-client privilege or any other evidentiary privilege, including waiving such protection in any dispute with a Person that is not the Parent, the Seller or any of their respective Affiliates.

11.14      Investigation; No Additional Representations.  Notwithstanding anything to the contrary herein, the Purchaser acknowledges and agrees that, in connection with the decision to enter into this Agreement and consummate the transactions contemplated hereby, the Purchaser has inspected and conducted such independent review, investigation and analysis (financial and otherwise) of the Companies and their respective businesses as desired by the Purchaser.  The Purchaser further acknowledges and agrees that, notwithstanding anything to the contrary contained herein, except for the specific representations and warranties expressly made by the Companies, the Seller and the Parent in this Agreement (as qualified or modified by the Schedules) or contained in any ancillary document or in any certificate delivered in connection herewith or therewith or except in the case of Fraud, none of the Parent, the Seller or the Companies or any of their respective Affiliates has made, is making or will make, and the Purchaser and its Affiliates and their representatives have not relied, are not relying and will not rely on, any representation or warranty, express or implied, at law or in equity, with respect to (a) the Companies; (b) their respective businesses, assets, liabilities, operations, prospects or condition (financial or otherwise); (c) the transactions contemplated hereby; (d) the accuracy or completeness of any information regarding any of the forgoing, including any confidential information memorandum, management presentation, projections, budgets or any other information, document or material made available to the Purchaser or its Affiliates or any of their representatives in any virtual data room and online “data sites,” management presentations or in any other form; or (e) any other matter whatsoever.  Without limiting the generality of the foregoing, the Purchaser further acknowledges and agrees that, with respect to any estimate, projection, forecast or other forward looking statement delivered by or on behalf of any Company to the Purchaser, its Affiliates and/or their representatives, (i) there are uncertainties inherent in attempting to make such estimates, projections, forecasts and forward looking statements; (ii) the Purchaser is aware that actual results may differ materially; and (iii) no Person shall have any claim against the Parent, the Seller or any of their Affiliates or any other Person with respect to any such estimate, projection, forecast or forward looking statement, except in the case of Fraud.  Any evaluation or investigation by the Purchaser or its representatives shall not affect the representations and warranties made by the Companies, the Parent or the Seller in this Agreement (as qualified or modified by the Schedules) and any ancillary document and in any certificate delivered in connection herewith or therewith or the rights or remedies of the Purchaser for breaches of those representations and warranties.

11.15     No Third Party Beneficiaries.  Other than Sections 7.11 and 11.13, which are intended to benefit and may also be enforced by the Covered Parties, NMRS, the Purchaser and their Affiliates, and the rights and protections provided under Article XI, no provision of this Agreement is intended to confer upon any Person other than the parties any rights or remedies hereunder.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, the parties have executed and caused this Agreement to be executed and delivered as of the date first written above.

BBQ HOLDINGS, INC.
By:	/s/ Jeffery Crivello
Name:		Jeffery Crivello
Title:		Chief Executive Officer
VIBSQ HOLDCO, LLC
By:	/s/ Kurt J. Schnaubelt
Name:		Kurt J. Schnaubelt
Title:		Chief Financial Officer
BAKERS SQUARE HOLDINGS, LLC
By:	/s/ Kurt J. Schnaubelt
Name:		Kurt J. Schnaubelt
Title:		Chief Financial Officer
VILLAGE INN HOLDINGS, LLC
By:	/s/ Kurt J. Schnaubelt
Name:		Kurt J. Schnaubelt
Title:		Chief Financial Officer
SVCC I, LLC
By:	/s/ Kurt J. Schnaubelt
Name:		Kurt J. Schnaubelt
Title:		Chief Financial Officer
RG GROUP HOLDCO, LLC
By:	/s/ Bryan D. Coy
Name:		Bryan D. Coy
Title		President

[Signature Page to Membership Interest Purchase Agreement]

ANNEX A

DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings specified in this Annex A:

“2021 Pre-Closing Bonuses” has the meaning set forth in Section 7.10(f).

“Accounting Principles” means the accounting principles, practices and methodologies set forth in Schedule 2.3.

“Accounting Referee” has the meaning set forth in Section 2.3(d).

“Adjustment Calculations” has the meaning set forth in Section 2.3(b).

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.  With respect to any natural person, “Affiliate” will include such person’s grandparents, any descendants of such person’s grandparents, such person’s spouse, the grandparents of such person’s spouse, and any descendants of the grandparents of such person’s spouse (in each case, whether by blood, adoption or marriage).

“Agreement” has the meaning set forth in the Recitals.

“Annual Financial Statements” has the meaning set forth in Section 4.6(a).

“Asset Allocation Actions” means any and all actions (including, without limitation, as contemplated by Schedule 7.4 and any other asset transfers authorized under the Reorganization Proceedings) to be taken by the Seller, the Parent or their respective Affiliates at any time prior to the Closing to cause legal title to the assets (whether real or personal, tangible or intangible) primarily associated with (i) the Bakers Square Brand to be transferred or conveyed to any of the BSQ Companies and (ii) the Village Inn Brand to be transferred or conveyed to any of the VI Companies.

“Assets” has the meaning set forth in Section 7.3(a)(ii).

“Attorney-Client Communication” means any communication occurring on or prior to Closing between NMRS, on the one hand, and the Parent, the Seller, any Company or any of their respective Affiliates or representatives, on the other hand.

“Bakers Square Brand” has the meaning set forth in the Recitals.

“BSQ Brandco” has the meaning set forth in the Recitals.

“BSQ Companies” has the meaning set forth in the Recitals.

“BSQ Holdings” has the meaning set forth in the Recitals.

“BSQ Interests” has the meaning set forth in the Recitals.

“BSQ Opco” has the meaning set forth in the Recitals.

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“Business” means the business of operating and/or franchising to other operators the Bakers Square Brand and/or the Village Inn Brand of restaurants in the United States.

“Business Day” means any day of the year on which national banking institutions in New York City, New York, and Nashville, Tennessee are open to the public for conducting business and are not required or authorized to close.

“Business Employee” means (i) all Company Restaurant employees employed by RGS (pursuant to the Shared Services Agreements) or the Companies as of the date of this Agreement; (ii) each employee (other than a Company Restaurant employee) of RGS or the Companies whose employment duties immediately prior to the Closing are primarily dedicated to the performance of services (including administrative or back-office support services) for the Business as of the date of this Agreement, but only if such employees are set forth on Schedule 4.14(a); and (iii) any employees hired by RGS (as Company Restaurant employees or primarily to support the Business) or the Companies after the date of this Agreement and before the Closing Date as permitted by this Agreement.

“Business Records” means all files, documents, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters, advertising and promotional materials, marketing information, recipes, menus, studies, pricing information, customer and supplier data, ledgers, journals, technical documentation (design specifications, building and construction plans, architectural and engineering plans, surveys, engineering or property condition reports, zoning reports or letters, environmental reports, title insurance policies, functional requirements, operating instructions, logic manuals, flow charts, etc.), user documentation (installation guides, user manuals, release notes, working papers, etc.), and other similar materials in each case related primarily to the Business, but limited, in the case of any of the foregoing that are not exclusively related to the Business, solely to the portion thereof related to the Business.

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, Pub.L. 116–136 (116th Cong.) (Mar. 27, 2020), together with all amendments thereto and the statutes, rules and regulations promulgated thereunder and any successor to such statutes, rules or regulations, as in effect on the date hereof.

“CARES Act Funds” has the meaning set forth in Section 4.26(b).

“Cash” means all cash and cash equivalents, as determined in accordance with the Accounting Principles, excluding the effects of the transactions on the Closing Date.  Cash shall be reduced by issued or outstanding checks and drafts and pending electronic debits or any other uncleared payments written or otherwise made by the Companies as of the Effective Time and Cash shall include outstanding checks, drafts, wire transfers and other uncleared payments written to or made for the order of the Companies as of the Effective Time.

“Claim Notice” has the meaning set forth in Section 10.3(a).

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Date Cash” means the aggregate amount of petty cash at the locations of the Company Restaurants on the Closing Date.

“Closing Date Company Expenses” means the Company Expenses unpaid as of the Effective Time.

“Closing Date Debt” means all Debt of the Companies outstanding as of the Effective Time.

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“Closing Estimates” has the meaning set forth in Section 2.3(a).

“Closing Net Working Capital Items” means the Net Working Capital Items as of the Effective Time (using the same calculation methods as are applicable to the calculation of Target Net Working Capital Items which is set forth on Schedule 2.3 calculated as of May 16, 2021).

“Closing Payment” has the meaning set forth in Section 2.2(c).

“COBRA” means Sections 601 through 608 of ERISA, Section 4980B of the Code or any other similar applicable Law (including applicable state insurance continuation Law).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the Recitals.

“Company Benefit Plan” has the meaning set forth in Section 4.14(a).

“Company Documents” has the meaning set forth in Section 4.2.

“Company Expenses” means the aggregate amount of all out-of-pocket fees and expenses, incurred by or on behalf of, or paid or to be paid by, the Seller or the Companies in connection with the process of selling the membership interests of the Companies or otherwise relating to the negotiation, preparation or execution of this Agreement or any documents or agreements contemplated hereby or the performance or consummation of the transactions contemplated hereby, including, (i) all brokers’ or finders’ fees of brokers’ or finders’ retained by Seller or its Affiliates; (ii) costs, fees, disbursements and expenses of counsel, advisors, consultants, investment bankers, accountants, auditors and experts retained by Seller or its Affiliates; (iii) any fees or expenses associated with obtaining the release and termination of any Liens (other than Permitted Exceptions and fees and expenses included in the definition of Debt); (iv) all transaction bonus, discretionary bonus, change-of-control, success, sale, “stay-around,” retention or similar bonuses or payments to current or former directors, officers, managers, employees and consultants due and payable by a Company solely as a direct result of transactions contemplated hereby; and (v) any severance obligations as a direct result of the transactions contemplated hereby, provided that in no event will Company Expenses include any fees, expenses or other liabilities to the extent incurred by or at the direction of the Purchaser or otherwise included in Net Working Capital Items or Debt; and, provided, further, that for items (iv) and (v) hereof, any such amounts shall include the employer’s portion of any payroll Taxes and similar Taxes.

“Company Pension Plan” has the meaning set forth in Section 4.15(c).

“Company Real Property” has the meaning set forth in Section 4.10(a).

“Company Restaurants” means those restaurants directly operated by the Companies under either the Village Inn Brand or the Bakers Square Brand, as applicable.

“Consent” means any approval, consent, ratification, waiver or other authorization of any Person.

“Contract” means any written contract, indenture, note, bond, lease, purchase order, commitment, plan, arrangement, instrument or other agreement.

“Covered Party” has the meaning set forth in Section 7.11(a).

“COVID-19” means the 2019 novel Coronavirus or any mutation, variation or evolution thereof, whether now or hereafter existing or discovered.

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“COVID-19 Impact” means the financial or other impact on any relevant Person of COVID-19 including the threat or fear thereof, or response thereto, any resulting epidemic, pandemic, disease spread or outbreak, or other health crisis or public health event associated therewith (in each case whether now existing or arising in the future), or the continuation, evolution, resurgence or worsening thereof (including by reason of (i) any COVID-19 Measures (which for this purpose shall be deemed to include measures of any Governmental Body, whether mandatory or advisory, and any policies of relevant private parties related to COVID-19); or (ii) the scarcity or lack of availability of any services, materials or labor on commercially reasonable terms).

“COVID-19 Measures” means any quarantine, “shelter in place”, “stay at home”, workforce reduction, social distancing, shut down, closure, occupancy limitation, moratorium, sequester, state of emergency, declaration of martial law, travel or other activity restrictions, or any other mandatory Law, Order, directive, guidelines or recommendations by any Governmental Body having jurisdiction over the Companies or any Company Restaurant in connection with or in response to COVID-19, including as a result of the presence, transmission, threat or fear of, or response to, any resulting epidemic, pandemic, disease spread or outbreak, or other health crisis or public health event, or the continuation, evolution, resurgence or worsening thereof.

“Debt” of any Person means, without duplication: (i) the principal, accreted value, accrued and unpaid interest, prepayment and redemption premiums or penalties (if any), unpaid fees or expenses and other monetary obligations in respect of:  (A) indebtedness of such Person for money borrowed (including any current portion thereof), and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person issued or assumed as the deferred or unpaid purchase price of property or assets or other title retention agreements or securities or services, including all Tax-related payments, “earn-out” payments, “seller notes”, post-closing true-up obligations and other similar payments (whether contingent or otherwise) calculated as the maximum amount payable under or pursuant to such obligation (but excluding trade accounts payable, inventory purchases, and other accrued current Liabilities arising in the Ordinary Course of Business); (iii) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (iv) all obligations of such Person for the reimbursement of any obligor on any banker’s acceptance; (v) all obligations of such Person under interest rate, currency swap or other hedging transactions (valued at the termination value thereof); (vi) accrued and unpaid dividends or distributions; (vii) any pre-Closing income Tax Liabilities; (viii) management fees or other Liabilities to Affiliates (whether payable or accrued, and except to the extent included in the final determination of Closing Net Working Capital Items); (ix) all obligations of the type referred to in clauses (i) through (viii) of any Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (x) all obligations of the type referred to in clauses (i) through (x) of other Persons secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person).

“Deductible” has the meaning set forth in Section 10.2(a).

“Disclosure Schedules” means the schedules setting forth certain matters disclosed by the Parent, the Seller or any Company pursuant to the representations and warranties made by or with respect to such Persons in this Agreement, as attached hereto.

“DRE Tax Returns” has the meaning set forth in Section 7.8(a).

“Effective Time” shall mean 12:01 A.M. Central Time, on the Closing Date.

“EID Loan” has the meaning set forth in Section 4.26.

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“Enforceability Exceptions” means those exceptions to enforceability due to applicable bankruptcy, insolvency, reorganization, moratorium, or other similar Laws affecting the enforcement of creditor’s rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

“Environmental Credit” has the meaning set forth in Section 7.13(b)(i).

“Environmental Condition” means any condition in regard to any of the Company Real Property with respect to the environment (whether such condition originated on or off Company Real Property), whether or not yet discovered, which would reasonably be expected to or does result in any damage, loss, cost, expense, claim, demand, Order or Liability to or against the Companies or the Purchaser by any third party or Governmental Body.

“Environmental Law” means any Law relating to the protection of human health, safety or the environment including all requirements pertaining to reporting, licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or threatened releases of Hazardous Materials, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, whether solid, liquid or gaseous in nature.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business or Person, whether or not incorporated, that, together with each of the Companies, would be deemed a “single employer” within the meaning of Section 4001(b) of ERISA or Sections 414(b), (c), (m) or (o) of the Code.

“Excluded Liabilities” means any Liabilities of any of the Companies specifically identified as “Excluded Liabilities”, regarding which the Seller shall remain solely responsible.

“Expiration Date” has the meaning set forth in Section 3.2.

“Final Closing Amounts” has the meaning set forth in Section 2.3(f).

“Financial Statements” has the meaning set forth in Section 4.6(a).

“Franchise Agreement” has the meaning set forth in Section 4.13(a)(v).

“Franchise Locations” has the meaning set forth in Section 4.10(a).

“Franchise Restaurants” means those restaurants franchised by the Companies to other operators under either the Village Inn Brand or the Bakers Square Brand, as applicable.

“Franchisee” has the meaning set forth in Section 4.27(b).

“Fraud” means the intentional misrepresentation of material facts by a party having actual knowledge (as opposed to imported or constructive knowledge) on the date hereof of such facts with the intent to deceive and/or mislead the other party in respect of the representations and warranties set forth in Article IV, Article V or Article VI, or any officer’s certificate delivered pursuant to this Agreement (as applicable), in each case as finally determined by a court of competent jurisdiction; provided, however, that in no event shall “Fraud” include any equitable fraud, negligent misrepresentation, promissory fraud, unfair dealings, extra-contractual fraud, or any fraud or tort based on recklessness or negligence.

“Fundamental Representation” means the representations and warranties contained in Sections 4.1 (Organization and Good Standing), 4.2 (Authorization of Agreement), 4.4 (Capitalization), 4.23 (Financial Advisors), 5.1 (Authorization of Agreement) and 5.3 (Ownership and Transfer of Interests)

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“Funds Flow Statement” has the meaning set forth in the Section 3.4(a)(xv).

“GAAP” means generally accepted accounting principles in the United States, as in effect during the applicable time.

“Governmental Body” means any government or governmental (or quasi-governmental) or regulatory body thereof, or political subdivision thereof, whether federal, state, local or foreign, or any agency, board, commission, instrumentality, authority or other entity or group thereof; or any court or arbitrator (public or private).

“Hazardous Material” means any substance, material or waste:  (i) that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” or “radioactive,” including petroleum and its by-products, asbestos, gasoline or diesel fuel or other petroleum hydrocarbons or polychlorinated biphenyls (PCBs); (ii) the presence of which requires investigation or remediation under any Environmental Laws; or (iii) that is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic or mutagenic or otherwise hazardous and is regulated under Environmental Laws.

“Hired Employee” has the meaning set forth in Section 7.10(a).

“Immaterial Contracts” has the meaning set forth in Section 4.13(a).

“Indemnified Party” has the meaning set forth in Section 10.3(a).

“Indemnifying Party” has the meaning set forth in Section 10.3(a).

“Intellectual Property” means all intellectual property rights in respect of the following:  (i) patents and applications therefor, including continuations, divisionals, continuations-in-part or reissues of patent applications and patents issuing thereon, docketed inventions; (ii) trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, domain names, corporate names and all IP addresses and URL/Internet domain names, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof; (iii) copyrights and registrations and applications therefor, works of authorship and mask work rights; and (iv) Software and Technology.

“Interests” has the meaning set forth in the Recitals.

“Interim Financial Statements” has the meaning set forth in Section 4.6(a).

“IRS” means the Internal Revenue Service.

“Knowledge” means the actual knowledge of a particular Person, after reasonable internal inquiry.  The words “know,” “knowing” and “known” shall be construed accordingly.  In the case of the Parent, the Seller, the Companies and their respective Affiliates, “Knowledge” means the actual knowledge of Craig Barber or Kurt Schnaubelt.

“Law” means any foreign, federal, state, local law, statute, code, ordinance, rule or regulation.

“Leased Real Property” has the meaning set forth in Section 4.10(a).

“Legal Proceeding” means any judicial, administrative or arbitral action, audit, claim, complaint, notice of violation, citation, notice of potential responsible party liability, grievance, suit, litigation, inquiry, hearing or proceeding (public or private), in each case, whether civil, criminal or administrative, by or before, or otherwise involving, a Governmental Body.

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“Liability” means any debt, liability, commitment or obligation of any nature whatsoever (whether direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, matured or unmatured or due or to become due) and including all costs and expenses relating thereto.

“Liability Cap” has the meaning set forth in Section 10.2(a).

“Lien” means any lien (statutory or otherwise), encumbrance, pledge, condition on title, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, encroachment, right of way, community property interest, servitude or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

“Listed Intellectual Property” has the meaning set forth in Section 4.12(a).

“Losses” means losses, liabilities, obligations and damages (but specifically excluding consequential damages, lost profits, diminution in value or punitive damages) and any and all assessments, judgments, costs, penalties and expenses, including defense costs, e-discovery costs, amounts paid in settlement and reasonable out-of-pocket attorneys’ and other professionals’ fees and disbursements directly payable with respect to any and all Losses with respect to which indemnification is provided hereunder, including costs of enforcing rights to indemnification provided herein and expenses of Legal Proceedings directly relating thereto.

“Material Adverse Effect” means any change, effect, event, occurrence or development that, individually or in the aggregate, (a) has, or would reasonably be expected to have, a materially adverse effect to the business, financial condition or operations of the Companies, taken as a whole, or (b) would reasonably be expected to prevent or materially impair the ability of the Seller or the Companies to consummate the transactions contemplated by this Agreement; provided, however, that there shall not be taken into account in determining whether there is a Material Adverse Effect any adverse effect, change, event or development arising from or relating to any of the following:  (i) general business, industry or economic conditions, whether global, national, regional or local; (ii) global, national, regional or local political or social conditions, including the engagement (whether new or continuing) by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack, any natural or man-made disaster or acts of God; (iii) changes in financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index); (iv) any failure of any Company to meet any internal or published projections, forecasts, estimates or predictions of revenues, earnings or other financial or operating metrics for any period (provided that this clause (iv) shall not prevent a determination that any effect, change, event or development underlying such failure has resulted in a Material Adverse Effect (provided further that any such effect, change, event or development is not otherwise excluded hereunder from determining whether there is a Material Adverse Effect)); (v) changes in GAAP; (vi) changes in Laws; (vii) the taking of any action by the Purchaser, the Seller or any Company as expressly required pursuant to this Agreement (except for any consents required to be obtained hereunder); (viii) the announcement or pendency of the transactions contemplated by this Agreement (or the performance of any action, or refraining from performing any action, as expressly required by this Agreement, except for the consents required to be obtained hereunder) or (ix) any matter of which the Purchaser is aware on the date of this Agreement; and, provided, further, that any change, effect, event, occurrence, or development referred to in clauses (i), (ii), and (iii) above shall be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such change, effect, event, occurrence or development has a disproportionate effect on the Companies compared to other participants in the family dining segment of the restaurant industry and geographic areas in which the Companies operate.

“Material Contracts” has the meaning set forth in Section 4.13(a).

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“NMRS” has the meaning set forth in Section 11.13(a).

“Net Working Capital Items” means the assets and liabilities of the type set forth in Schedule 2.3.  Notwithstanding anything to the contrary herein, for purposes of determining Net Working Capital Items:  (i) no such assets or liabilities shall reflect any changes in such assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting as a consequence (including Tax consequences) of the transactions contemplated hereby; and (ii) such assets and liabilities shall exclude (a) any income or deferred Tax assets and (b) any amounts that were otherwise expressly taken into account in the calculation of the Closing Payment pursuant to Section 2.2.

“Objection Statement” has the meaning set forth in Section 2.3(c).

“Order” means any order, injunction, judgment, decree, consent decree, ruling, writ, assessment or award of a Governmental Body.

“Ordinary Course of Business” means (i) with respect to the Seller, the Companies or the Business, the usual and ordinary course of normal day-to-day operations of the Business, consistent (in scope, manner, amount and otherwise, taking into account seasonality and any COVID-19 Impact) with the Seller’s and the Companies’ past practices (since the Reorganization Plan Confirmation Date) through the date of this Agreement, and (ii) with respect to the Parent, the usual and ordinary course of normal day-to-day operations of the business of the Parent and its Subsidiaries (in scope, manner, amount and otherwise, taking into account seasonality and any COVID-19 Impact) with the Parent’s and its Subsidiaries past practices through the date of this Agreement.

“Organizational Documents” means, as applicable, the certificate or articles of incorporation, certificate or articles of formation or organization, as applicable, and bylaws, shareholder agreements, operating agreements, partnership agreements and any similar governing or constitutive documents or agreements of any Person, each as currently in effect.

“Overhead and Shared Services” shall mean the shared services that have been provided to the Companies prior to the date of this Agreement (and will continue to be provided until the Closing) in regard to the Business by one or more Affiliates of the Parent pursuant to the Shared Services Agreements (or any predecessor agreements).

“Owned Real Property” has the meaning set forth in Section 4.10(a).

“Parent” has the meaning set forth in the Recitals.

“Parent Documents” has the meaning set forth in Section 5.1(b).

“Payoff Amount” means the amount of outstanding principal, accrued and unpaid interest and any pre-payment penalties, break-fees or other fees associated with any Debt that is required to be paid to the holder thereof in order for such holder to release the Companies from all liability therefor at the time of the Closing.

“Payoff Letters” has the meaning set forth in Section 3.4(a)(vii).

“Permits” means any approvals, authorizations, Consents, licenses, permits or certificates of, or registrations with, a Governmental Body necessary for the ownership or operation of the assets of the Companies, or the conduct of the Business as currently conducted.

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“Permitted Exceptions” means:  (i) Liens for Taxes that are not yet due and payable or that may hereafter be paid without penalty or that are being contested in good faith and for which adequate reserves have been established on the Reference Balance Sheet in accordance with GAAP; (ii) statutory or contractual Liens of landlords and workers’, carriers’, materialmen’s, suppliers’ and mechanics’ or other like Liens incurred in the Ordinary Course of Business; (iii) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation; (iv) with respect to any Company Real Property (and the improvements and property located thereat), any gaps in the chain of title evident from the records of the applicable Governmental Body maintaining such records, Liens, easements, rights-of-way, covenants, conditions, restrictions, encroachments and other similar matters of record which would be disclosed by current title policies, current title surveys or other documents or writings recorded in the public records or a physical inspection of the subject property and do not materially interfere with the present use of the properties they affect or materially and adversely affect their value; (v) with respect to any Leased Real Property, the terms of the related leases; (vi) non-exclusive licenses to Intellectual Property granted in the Ordinary Course of Business; (vii) Liens that will be released in full prior to or as of the Closing; (viii) any Liens which are reflected in the Reference Balance Sheet (other than for Debt that is required to be repaid or released by Closing pursuant to the terms of this Agreement; (ix) Liens created by or through the Purchaser; (x) restrictions on the offer and sale of securities under federal or state securities laws; and (xi) Liens set forth on Schedule 4.11(b).

“Person” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

“Personal Data” means all data relating to one or more individual(s) that is personally identifying (i.e., data that identifies an individual or, in combination with any other information or data available to the Companies, is capable of identifying an individual) or non-personally identifying, including aggregate or de-identified data and data collected automatically, including data collected through a mobile or other electronic device.

“PP Overpayment” has the meaning set forth in Section 2.3(f).

“PP Underpayment” has the meaning set forth in Section 2.3(f).

“PPP Loan” has the meaning set forth in Section 4.26.

“Pre-Closing Periods” means all taxable years or other taxable periods ending on or prior to the Closing Date and the portion of any Straddle Period ending on and including the Closing Date.

“Proceedings” has the meaning set forth in Section 10.3(b).

“Purchase Price” has the meaning set forth in Section 2.1.

“Purchaser” has the meaning set forth in the Recitals; provided, however, that the entity specifically named as “Purchaser” in the Recitals may designate (in its sole discretion, at least ten (10) calendar days prior to Closing; to be effective at the time of Closing) one or more of its Affiliates to be the actual entity(ies) that will directly acquire the Interests from the Seller under this Agreement; and, provided, further, that (i) such initially named entity shall be jointly and severally liable with such designated Affiliate(s) under this Agreement, and (ii) at the Closing, all representations, warranties, covenants and other obligations applicable to the Purchaser shall be deemed to apply both to such initially named entity and such designated Affiliate(s).

“Purchaser Documents” has the meaning set forth in Section 6.2.

“Purchaser Benefit Plans” has the meaning set forth in Section 7.10(c).

“Purchaser Indemnitees” has the meaning set forth in Section 10.2(a).

“Purchaser Tax Returns” has the meaning set forth in Section 7.8(a).

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“Purchaser 401(k) Plan” has the meaning set forth in Section 7.10(d).

“Reference Balance Sheet” means the balance sheet contained in the Interim Financial Statements.

“Reference Balance Sheet Date” means the date of the Reference Balance Sheet.

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping into the environment.

“Reorganization Petition Filing Date” means the date on which the bankruptcy petition of the debtors was filed in the Reorganization Proceedings, which was January 27, 2020.

“Reorganization Plan Confirmation Date” means the date on which the plan of reorganization of the debtors was confirmed by the court in the Reorganization Proceedings, which was October 2, 2020.

“Reorganization Proceedings” means the Chapter 11 bankruptcy proceedings of American Blue Ribbon Holdings, LLC, a Delaware limited liability company, et al., in the United States Bankruptcy Court for the District of Delaware, designated as Case No. 20-10161 (LS) (Jointly Administered).

“RGS” means Restaurant Growth Services, LLC (formerly known as ABRH, LLC), a Delaware limited liability company, which is a Subsidiary of the Parent.

“Royalties” means amounts that are required to be paid by a Franchisee to any of the Companies pursuant to the terms of the applicable Franchise Agreement.  The status of all Royalties as of the date of this Agreement (including all Royalties Delinquent, Royalties Deferred, Royalties Not Invoiced and Royalties Prepaid) is set forth on Schedule 4.27(l) hereto, which Schedule will be updated by the Seller contemporaneously with the delivery of the Closing Estimates.

“Royalties Delinquent” means Royalties to the extent attributable to the period prior to the Closing that have been invoiced by a Company to a Franchisee and have not been paid by the Franchisee by the Closing, but only to the extent that the payment thereof is overdue pursuant to the terms of the Franchise Agreement; provided, however, that this term shall be deemed to exclude Royalties Deferred.

“Royalties Deferred” means Royalties to the extent attributable to the period prior to the Closing that have been invoiced by a Company to a Franchisee and have not been paid by the Franchisee by the Closing, but only to the extent that both (i) the payment thereof is overdue pursuant to the terms of the Franchise Agreement and (ii) the Franchisee has entered into a written agreement with the relevant Company establishing an agreed plan with timing required for the payment of such Royalties (which may include, but not be limited to, any obligation to pay such Royalties that has been converted to a promissory note).

“Royalties Excluded” means together, all Royalties Delinquent and all Royalties Deferred.

“Royalties Not Invoiced” means Royalties to the extent attributable to the period prior to the Closing that, in the Ordinary Course of Business, have not yet been invoiced by the relevant Company to the Franchisee.

“Royalties Prepaid” means Royalties to the extent attributable to the period after the Closing that have been paid by a Franchisee to the applicable Company prior to the Closing, whether by prepayment through the applicable Franchise Agreement or otherwise.

“R&W Policy” has the meaning set forth in Section 11.1.

“Securities Act” has the meaning set forth in Section 4.4(a).

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 “Seller” has the meaning set forth in the Recitals.

“Seller Documents” has the meaning set forth in Section 5.1(a).

“Seller Indemnitees” has the meaning set forth in Section 10.2(b).

“Shared Services Agreements” means the following agreements, as they may have been or may hereafter be amended from time to time, between RGS and American Blue Ribbon Holdings, LLC, a Delaware limited liability company (predecessor-in-interest to the Companies): (i) that certain Services Agreement dated as of December 30, 2019; and (ii) that certain Contract Staffing Agreement dated as of December 30, 2019.

“Software” means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (iii) descriptions, flowcharts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons; and (iv) all documentation including user manuals and other training documentation related to any of the foregoing.

“Straddle Period” means any taxable year or other taxable period beginning on or before and ending after the Closing Date.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other Person of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees (or similar Person) thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; or (ii) if a limited liability company, partnership, association or other Person (other than a corporation), a majority of the partnership interests, limited liability interests or other comparable ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof.

“Supply Accommodation Adjustment” means $100,000.00.

“Supply Agreement” means the food products supplier agreement to be executed by the Purchaser and Legendary Baking I, LLC, a Delaware limited liability company (or such other Subsidiary of the Parent as may be involved in the commercial baking operations), in the form attached to this Agreement as Exhibit A; provided, however, that, if the Pre-Closing Purchase Commitment (as defined in such form of Supply Agreement) is not delivered by the date contemplated in the definition of such term, then the form of Supply Agreement shall be revised to delete therefrom (i) all references to the “Guarantor” therein, (ii) Section 15(p) thereof, (iii) the form of Limited Guaranty of Performance attached thereto as Exhibit A (and such guaranty will not be required to be executed and delivered in connection with the execution and delivery of the Supply Agreement), (iv) the definitions of the “Guarantor”, “Guaranty Expiration Date” and “Pre-Closing Purchase Commitment” therein, (v) the fourth grammatical sentence of Section 2 thereof, and (vi) the phrase “(and Guarantor to the extent required by Section 15(p))” in Section 15(i) thereof.

“SVCC” has the meaning set forth in the Recitals.

“SVCC Interests” has the meaning set forth in the Recitals.

“Tangible Assets” means all machinery, equipment, furniture, fixtures, furnishings, trade fixtures, tableware, barware, vehicles, rolling stock and other tangible assets (other than inventory or real estate).

Annex A - 11

“Target Companies” has the meaning set forth in the Recitals.

“Target Net Working Capital Items” means the assets and liabilities set forth in Schedule 2.3.

“Taxes” means (i) all federal, state, local or foreign taxes, charges, fees, levies or other assessments in the nature of taxes, including all of the following types of taxes:  income, capital gains, sales, use, transfer, franchise, profits, windfall profits, capital stock, license, withholding, payroll, excise, severance, stamp, occupation, real or personal property, or other taxes, customs, duties, fees, assessments and charges of any kind whatsoever in the nature of taxes; and (ii) all estimated taxes, deficiency assessments, interest, penalties, fines, or additions to tax, resulting from or attributed to any item described in clause (i).

“Tax Claim” has the meaning set forth in Section 7.8(d).

“Tax Return” means any return, report or statement required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto and any amendment thereof), including any information return, claim for refund and amended return.

“Tax Statement” has the meaning set forth in Section 7.8(a).

“Taxing Authority” means the IRS and any other Governmental Body or Person in any way responsible for the imposition, collection or administration of any Tax, or for any other matters directly relating to Taxes.

“Technology” means, collectively, all designs, formulae, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, programs, subroutines, tools, materials, specifications, processes, engineering, product specifications, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing, in any form whether or not specifically listed herein, and all related technology.

“Third Party Claim” has the meaning set forth in Section 10.3(a).

“Threat of Release” means a substantial likelihood of a Release that requires action to prevent or mitigate damage to the environment that may result from such Release.

“Top Suppliers” has the meaning set forth in Section 4.21(a).

“Treasury Regulations” means the regulations promulgated under the Code, or corresponding future regulations.

“VI Brandco” has the meaning set forth in the Recitals.

“VI Companies” has the meaning set forth in the Recitals.

 “VI Holdings” has the meaning set forth in the Recitals.

“VI Interests” has the meaning set forth in the Recitals.

“VI Opco” has the meaning set forth in the Recitals.

“Village Inn Brand” has the meaning set forth in the Recitals.

 

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EX-10.2.1

Exhibit 10.2.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of June 24, 2021, between BBQ Holdings, Inc., a Minnesota corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

1.1          Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”  or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally are open for use by customers on such day.

“Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived.

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“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company Counsel” means Lathrop GPM LLP, with offices located at 80 South Eighth Street, 500 IDS Center, Minneapolis, MN 55402.

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.

“Effective Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission, (b) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions,  (c) following the one year anniversary of the Closing Date provided that a holder of Shares is not an Affiliate of the Company, or (d) all of the Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Shares issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.11 herein, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities and (d) up to $3 million in Common Stock, on the same terms and conditions as hereunder, other than the price per share, which shall be $15.00, with investors executing definitive agreements for the purchase of such securities on the same date as the date hereof.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(bb).

 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).

“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).

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“Per Share Purchase Price” equals $12.50, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Placement Agent” means Craig-Hallum Capital Group LLC.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Public Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).

“Public Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).

 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

“Registration Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company, the Purchasers, and the purchasers of Common Stock pursuant clause (d) of the definition of Exempt Issuance, in the form of Exhibit A attached hereto.

“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

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“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).

“Transaction Documents” means this Agreement, the Registration Rights Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“Transfer Agent” means Broadridge Corporate Issuer Solutions, Inc., the current transfer agent of the Company, with a mailing address of 1155 Long Island Avenue Edgewood, NY 11717 and a telephone number of 1-877-830-4932, and any successor transfer agent of the Company.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Shares then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

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ARTICLE II.

PURCHASE AND SALE

2.1          Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of 800,000 Shares at a price per Share equal to the Per Share Purchase Price.  Each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Shares as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.

2.2          Deliveries.

(a)          On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

(i)          this Agreement duly executed by the Company;

(ii)         a legal opinion of Company Counsel, substantially in the form of Exhibit B attached hereto;

(iii)        a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, evidence of the issuance of such Purchaser’s Shares hereunder as held in DRS book-entry form by the Transfer Agent equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser,, which evidence shall be reasonably satisfactory to such Purchaser;

(iv)        the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer; and

(v)          the Registration Rights Agreement duly executed by the Company.

(b)          On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

(i)           this Agreement duly executed by such Purchaser;

(ii)          such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company; and

(iii)         the Registration Rights Agreement duly executed by such Purchaser.

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2.3          Closing Conditions.

(a)          The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

(i)          the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

(ii)          all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

(iii)         the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

(b)          The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

(i)          the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

(ii)          all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

(iii)          the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

(iv)          there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

(v)          from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1          Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

(a)          Subsidiaries.  All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

(b)        Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(c)         Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

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(d)          No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(e)         Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights  Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Shares and the listing of the Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

(f)         Issuance of the Shares.  The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.

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(g)         Capitalization.  The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.  The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.  The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary.  There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

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(h)         SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(i)          Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Shares contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

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(j)         Litigation.  Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”).  None of the Actions set forth on Schedule 3.1(j), (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k)        Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good.  To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l)          Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

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(m)       Environmental Laws.          The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(n)        Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

(o)         Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

(p)        Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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(q)         Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(r)          Transactions with Affiliates and Employees.  Except as set forth on Schedule 3.1(r), none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

(s)         Sarbanes-Oxley; Internal Accounting Controls.  The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

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(t)          Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by the Company or  any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

(u)        Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Trading Market.

(v)        Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

(w)       Registration Rights.  Other than each of the Purchasers, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

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(x)         Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

(y)         Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti‑takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares.

(z)         Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information.   The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

(aa)        No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

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(bb)       Solvency.  Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $250,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $250,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

(cc)       Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

(dd)      No General Solicitation.  Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising.  The Company has offered the Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

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(ee)       Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.

(ff)         Accountants.  The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules.  To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending January 3, 2022.

(gg)       No Disagreements with Accountants and Lawyers.  There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.

(hh)      Acknowledgment Regarding Purchasers’ Purchase of Shares.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

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(ii)        Acknowledgment Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Shares are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

(jj)          Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Shares.

(kk)        Form S-3 Eligibility.  The Company is eligible to register the resale of the Shares for resale by the Purchaser on Form S-3 promulgated under the Securities Act.

(ll)       Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated.  The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(mm)     Office of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

(nn)        U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

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(oo)      Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(pp)       Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(qq)       No Disqualification Events.  With respect to the Shares to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

(rr)       Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Shares.

(ss)         Notice of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

3.2         Representations and Warranties of the Purchasers.  Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):

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(a)         Organization; Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b)         Own Account.  Such Purchaser understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).  Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business.

(c)         Purchaser Status.  At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act.

(d)         Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

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(e)        General Solicitation.  Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.

(f)          Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Shares nor is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Shares and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the Shares to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

(g)          Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.  Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).  Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

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The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.  Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1         Transfer Restrictions.

(a)        The Shares may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.

(b)          The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares in the following form:

THIS SECURITY HAS NOT BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

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The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Shares to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares, including, if the Shares are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.

(c)         Certificates evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares pursuant to Rule 144, (iii) if such Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively.  If such Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Shares shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares, as the case may be, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.  Certificates for Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Shares issued with a restrictive legend.

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(d)         In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated damages and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the date such Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Shares so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Shares and ending on the date of such delivery and payment under this clause (ii).

(e)         Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Shares are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

4.2          Furnishing of Information; Public Information.

(a)        Until the time that no Purchaser owns Shares, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

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(b)         At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Shares may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Shares, an amount in cash equal to one percent (1.0%) of the aggregate Subscription Amount of such Purchaser’s Shares on the day of a Public Information Failure and on every thirtieth (30^th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the Shares pursuant to Rule 144; provided, the aggregate amount of the liquidated damages shall not exceed six percent (6%) of the aggregate Subscription Amount.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure Payments.”  Public Information FailurePayments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information FailurePayments are incurred and (ii) the third (3^rd) Business Day after the event or failure giving rise to the Public Information FailurePayments is cured.  In the event the Company fails to make Public Information FailurePayments in a timely manner, such Public Information FailurePayments shall bear interest at the rate of 0.75% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

4.3          Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

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4.4         Securities Laws Disclosure; Publicity.  The Company shall by the Disclosure Time file a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby, including the Transaction Documents as exhibits thereto (the “PIPE 8-K”).  From and after the filing of the PIPE 8-K, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the PIPE 8-K, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with (i) any registration statement contemplated by the Registration Rights Agreement and (ii) the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

4.5         Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.

4.6         Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.  To the extent that the Company, any of its Subsidiaries, or any of their respective officers, director, agents, employees or Affiliates delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

4.7        Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Shares hereunder for working capital purposes and shall not use such proceeds: (a)  for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

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4.8         Indemnification of Purchasers.   Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

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4.9         Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement.

4.10       Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly as possible.  The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

4.11       Subsequent Equity Sales.  From the date hereof until 30 days after the Effective Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Registration Rights Agreement.  Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance or the filing of a universal shelf registration statement.

4.12        Equal Treatment of Purchasers.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this Agreement.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise.

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4.13       Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the PIPE 8-K as described in Section 4.4.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the PIPE 8-K as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the PIPE 8-K as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the PIPE 8-K as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the filing of the PIPE 8-K as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.

4.14       Form D; Blue Sky Filings.  The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

4.15       Capital Changes.  Until the one-year anniversary of the Effective Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of the Shares.

4.16        Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Shares may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.  The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares pursuant to this Agreement, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

ARTICLE V.

MISCELLANEOUS

5.1         Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5^th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

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5.2         Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Shares to the Purchasers.

5.3         Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

5.4         Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2^nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

5.5        Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Shares and the Company.

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5.6          Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

5.7         Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”

5.8       No Third-Party Beneficiaries.  The Placement Agent shall be the third-party beneficiary of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.

5.9         Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.   If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.

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5.10        Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Shares.

5.11       Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

5.12       Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

5.13      Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

5.14       Replacement of Shares.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Shares.

5.15      Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.

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5.16      Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

5.17       Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through EGS.  EGS does not represent any of the Purchasers and only represents the Placement Agent.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

5.18       Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

5.19       Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

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5.20       Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

5.21       WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(Signature Pages Follow)

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

BBQ HOLDINGS, INC.		Address for Notice: 12701 Whitewater Drive, Suite 190 Minnetonka, MN 55343
By:	/s/ Jeffrey Crivello	Email: jeff.crivellow@bbq-holdings.com

	Name:	Jeffrey Crivello	Fax: 952-294-1301
	Title:	Chief Executive Officer
With a copy to (which shall not constitute notice): JC Anderson Lathrop GPM LLP 500 IDS Center 80 S. Eighth St. Minneapolis, MN 55402 Email: Jc.anderson@lathropgpm.com Fax: 612-632-4002

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

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[PURCHASER SIGNATURE PAGES TO BBQ SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:

Signature of Authorized Signatory of Purchaser:

Name of Authorized Signatory:

Title of Authorized Signatory:

Email Address of Authorized Signatory:

Address for Notice to Purchaser:

Address for Delivery of Shares to Purchaser (if not same as address for notice):

Subscription Amount: $

Shares:

EIN Number:

[SIGNATURE PAGES CONTINUE]

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EX-10.2.2

EXHIBIT 10.2.2

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES Purchase Agreement (this “Agreement”) is dated as of June 24, 2021, between BBQ Holdings, Inc., a Minnesota corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

ARTICLE I.
DEFINITIONS

1.1         Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”  or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally are open for use by customers on such day.

“Closing” means the closing of the purchase and sale of the Shares pursuant to Section 2.1.

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“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Shares, in each case, have been satisfied or waived.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company Counsel” means Lathrop GPM LLP, with offices located at 80 South Eighth Street, 500 IDS Center, Minneapolis, MN 55402.

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.

“Effective Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission, (b) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions,  (c) following the one year anniversary of the Closing Date provided that a holder of Shares is not an Affiliate of the Company, or (d) all of the Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion that resales may then be made by such holders of the Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders.

“EGS” means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Shares issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.11 herein, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities and (d) up to $10 million in Common Stock, on the same terms and conditions as hereunder, other than the price per share, which shall be $12.50, with investors executing definitive agreements for the purchase of such securities on the same date as the date hereof.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(bb).

 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).

“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).

“Liens” means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).

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“Per Share Purchase Price” equals $15.00, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Placement Agent” means Craig-Hallum Capital Group LLC.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Public Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).

“Public Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).

 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

“Registration Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company, and the Purchasers, and the purchasers of Common Stock pursuant clause (d) of  the definition of Exempt Issuance, in the form of Exhibit A attached hereto.

“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares.

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

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“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock). 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).

“Transaction Documents” means this Agreement, the Registration Rights Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“Transfer Agent” means Broadridge Corporate Issuer Solutions, Inc., the current transfer agent of the Company, with a mailing address of 1155 Long Island Avenue Edgewood, NY 11717 and a telephone number of 1-877-830-4932, and any successor transfer agent of the Company.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Shares then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

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ARTICLE II.
PURCHASE AND SALE

2.1       Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of 200,000 Shares at a price per Share equal to the Per Share Purchase Price.  Each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Shares as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall mutually agree.

2.2         Deliveries.

(a)          On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

(i)            this Agreement duly executed by the Company;

(ii)          a legal opinion of Company Counsel, substantially in the form of Exhibit B attached hereto;

(iii)        a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, evidence of the issuance of such Purchaser’s Shares hereunder as held in DRS book-entry form by the Transfer Agent equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser,, which evidence shall be reasonably satisfactory to such Purchaser;

(iv)          the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer; and

(v)           the Registration Rights Agreement duly executed by the Company.

(b)          On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

(i)            this Agreement duly executed by such Purchaser;

(ii)           such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company; and

(iii)          the Registration Rights Agreement duly executed by such Purchaser.

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2.3         Closing Conditions.

(a)          The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

(i)          the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

(ii)          all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

(iii)          the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

(b)         The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

(i)         the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);

(ii)          all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

(iii)          the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;

(iv)          there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

(v)          from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.

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ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1         Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:

(a)         Subsidiaries.  All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

(b)       Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(c)       Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

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(d)          No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(e)          Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights  Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Shares and the listing of the Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

(f)         Issuance of the Shares.  The Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.

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(g)         Capitalization.  The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.  The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Shares, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.  The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary.  There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

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(h)         SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(i)          Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Shares contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

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(j)         Litigation.  Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”).  None of the Actions set forth on Schedule 3.1(j), (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k)         Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good.  To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l)          Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

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(m)        Environmental Laws.          The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(n)        Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

(o)         Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

(p)        Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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(q)         Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(r)          Transactions with Affiliates and Employees.  Except as set forth on Schedule 3.1(r), none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

(s)         Sarbanes-Oxley; Internal Accounting Controls.  The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

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(t)          Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by the Company or  any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

(u)        Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Trading Market.

(v)         Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

(w)        Registration Rights.  Other than each of the Purchasers, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

(x)         Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

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(y)         Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti‑takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares.

(z)         Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information.   The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

(aa)       No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

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(bb)      Solvency.  Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Shares hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $250,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $250,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

(cc)       Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

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(dd)       No General Solicitation.  Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Shares by any form of general solicitation or general advertising.  The Company has offered the Shares for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

(ee)       Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.

(ff)         Accountants.  The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules.  To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending January 3, 2022.

(gg)       No Disagreements with Accountants and Lawyers.There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.

(hh)      Acknowledgment Regarding Purchasers’ Purchase of Shares.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

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(ii)       Acknowledgment Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Shares for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Shares are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

(jj)         Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Shares.

(kk)       Form S-3 Eligibility.  The Company is eligible to register the resale of the Shares for resale by the Purchaser on Form S-3 promulgated under the Securities Act.

(ll)         Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated.  The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(mm)    Office of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

(nn)        U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.

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(oo)      Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(pp)       Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

(qq)       No Disqualification Events.  With respect to the Shares to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.

(rr)       Other Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Shares.

(ss)        Notice of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

3.2         Representations and Warranties of the Purchasers.  Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):

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(a)         Organization; Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b)         Own Account.  Such Purchaser understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Shares pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).  Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business.

(c)         Purchaser Status.  At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act.

(d)         Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

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(e)        General Solicitation.  Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.

(f)          Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Shares nor is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Shares and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the Shares to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

(g)         Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.  Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).  Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

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The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.  Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1         Transfer Restrictions.

(a)         The Shares may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.

(b)         The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares in the following form:

THIS SECURITY HAS NOT BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

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The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Shares to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares, including, if the Shares are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.

(c)        Certificates evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Shares pursuant to Rule 144, (iii) if such Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).  The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively.  If such Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144, or if the Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Shares shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares, as the case may be, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.  Certificates for Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.  As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Shares issued with a restrictive legend.

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(d)         In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated damages and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the date such Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Shares so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product of (A) such number of Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Shares and ending on the date of such delivery and payment under this clause (ii).

(e)         Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Shares are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

4.2         Furnishing of Information; Public Information.

(a)         Until the time that no Purchaser owns Shares, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

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(b)         At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Shares may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Shares, an amount in cash equal to one percent (1.0%) of the aggregate Subscription Amount of such Purchaser’s Shares on the day of a Public Information Failure and on every thirtieth (30^th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required  for the Purchasers to transfer the Shares pursuant to Rule 144; provided, the aggregate amount of the liquidated damages shall not exceed six percent (6%) of the aggregate Subscription Amount.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure Payments.”  Public Information FailurePayments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information FailurePayments are incurred and (ii) the third (3^rd) Business Day after the event or failure giving rise to the Public Information FailurePayments is cured.  In the event the Company fails to make Public Information FailurePayments in a timely manner, such Public Information FailurePayments shall bear interest at the rate of 0.75% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

4.3        Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

4.4        Securities Laws Disclosure; Publicity.  The Company shall by the Disclosure Time file a Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby, including the Transaction Documents as exhibits thereto (the “PIPE 8-K”).  From and after the filing of the PIPE 8-K, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the PIPE 8-K, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with (i) any registration statement contemplated by the Registration Rights Agreement and (ii) the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

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4.5        Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.

4.6         Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.  To the extent that the Company, any of its Subsidiaries, or any of their respective officers, director, agents, employees or Affiliates delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

4.7        Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Shares hereunder for working capital purposes and shall not use such proceeds: (a)  for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

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4.8        Indemnification of Purchasers.   Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

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4.9        Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement.

4.10      Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly as possible.  The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

4.11      Subsequent Equity Sales.  From the date hereof until 30 days after the Effective Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Registration Rights Agreement.  Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance or the filing of a universal shelf registration statement.

4.12       Equal Treatment of Purchasers.  No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties to this Agreement.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise.

4.13      Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the PIPE 8-K as described in Section 4.4.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the PIPE 8-K as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules.  Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the PIPE 8-K as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the PIPE 8-K as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the filing of the PIPE 8-K as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.

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4.14      Form D; Blue Sky Filings.  The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

4.15     Capital Changes.  Until the one-year anniversary of the Effective Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of the Shares.

4.16      Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Shares may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.  The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares pursuant to this Agreement, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

ARTICLE V.
MISCELLANEOUS

5.1        Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5^th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).

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5.2        Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Shares to the Purchasers.

5.3       Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

5.4        Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2^nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

5.5      Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Shares and the Company.

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5.6         Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

5.7       Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”

5.8        No Third-Party Beneficiaries.  The Placement Agent shall be the third-party beneficiary of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.

5.9        Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.   If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.

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5.10       Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Shares.

5.11       Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

5.12      Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

5.13      Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

5.14      Replacement of Shares.  If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Shares.

5.15     Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.

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5.16      Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

5.17      Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents.  For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through EGS.  EGS does not represent any of the Purchasers and only represents the Placement Agent.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.

5.18      Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

5.19       Saturdays, Sundays, Holidays, etc.If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

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5.20      Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

5.21      WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(Signature Pages Follow)

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

BBQ HOLDINGS, INC.		Address for Notice: 12701 Whitewater Drive, Suite 190 Minnetonka, MN 55343
By:	/s/ Jeffrey Crivello	Email: jeff.crivellow@bbq-holdings.com
	Name:  Jeffrey Crivello	Fax: 952-294-1301
	Title:    Chief Executive Officer
With a copy to (which shall not constitute notice):
	JC Anderson
	Lathrop GPM LLP
	500 IDS Center
	80 S. Eighth St.
	Minneapolis, MN 55402
	Email: Jc.anderson@lathropgpm.com
	Fax: 612-632-4002

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

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[PURCHASER SIGNATURE PAGES TO BBQ SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:

Signature of Authorized Signatory of Purchaser:

Name of Authorized Signatory:

Title of Authorized Signatory:

Email Address of Authorized Signatory:

Address for Notice to Purchaser:

Address for Delivery of Shares to Purchaser (if not same as address for notice):

Subscription Amount: $_________________

Shares: _________________

EIN Number: _______________________

[SIGNATURE PAGES CONTINUE]

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EX-10.3

Exhibit 10.3

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 24, 2021, between BBQ Holdings, Inc., a Minnesota corporation (the “Company”), and each of the several purchasers signatory hereto (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).

This Agreement is made pursuant to the Securities Purchase Agreements, dated as of the date hereof, between the Company and each Purchaser (the “Purchase Agreements”).

The Company and each Purchaser hereby agrees as follows:

1.           Definitions.

Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreements shall have the meanings given such terms in the Purchase Agreements. As used in this Agreement, the following terms shall have the following meanings:

“Advice” shall have the meaning set forth in Section 6(c).

“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, September 9, 2021 (or, in the event of a “full review” by the Commission, the October 9, 2021) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the 60^th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a “full review” by the Commission, the 90^th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Event” shall have the meaning set forth in Section 2(d).

“Event Date” shall have the meaning set forth in Section 2(d).

“Filing Date” means, with respect to the Initial Registration Statement required hereunder, August 10, 2021 and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

“Losses” shall have the meaning set forth in Section 5(a).

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means, as of any date of determination, (a) all Shares and (b) any securities issued or then issuable upon any stock split, dividend or other distribution,  recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company, as reasonably determined by the Company, upon the advice of counsel to the Company.

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“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.

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2.           Shelf Registration.

(a)          On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise directed by at least 85% in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex A and substantially the “Selling Stockholder” section attached hereto as Annex B; provided, however, that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent.  Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”).  The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. (New York City time) on a Trading Day.   The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement.  The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424.  Failure to so notify the Holder within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).

(b)           Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form, and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however, that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.

(c)          Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:

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a. First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities; and

b. Second, the Company shall reduce Registrable Securities represented by Shares (applied, in the case that some Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Shares held by such Holders).

In the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment.  In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.

(d)          If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period, as applicable, is exceeded being referred to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreements; provided the liquidated damage amount shall not exceed 6% of such aggregate Subscription Amount.  If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 9% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

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(e)           If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission.

(f)            Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as any Underwriter without the prior written consent of such Holder.

3.           Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company shall:

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(a)          Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of [a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) (or on a similar form, such form’s acceptance not to be unreasonably denied by the company) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4^th) Trading Day following the date on which such Holder receives draft materials in accordance with this Section.

(b)         (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

(c)           If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.

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(d)          Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries.

(e)          Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

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(f)          Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission, provided that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

(g)          Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

(h)          Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i)          If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreements, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.

(j)            Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus.  The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.  The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.

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(k)           Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.

(l)            The Company shall use its best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.

(m)         The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

4.          Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.  In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.  In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

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5.           Indemnification.

(a)         Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(c).  The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(f).

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(b)           Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto.  In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

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(c)           Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

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(d)           Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, severally and not jointly with the other Indemnifying Parties, shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of such Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

6.           Miscellaneous.

(a)         Remedies.  In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement.  Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

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(b)         No Piggyback on Registrations; Prohibition on Filing Other Registration Statements.  Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities.  The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement so long as no new securities are registered on any such existing registration statements, further provided that this Section 6(b) shall not prohibit the Company from filing a universal shelf registration statement.

(c)          Discontinued Disposition.  By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed.  The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.  The Company agrees and acknowledges that any individual period in excess of 30 days during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d).

(d)        Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of 50.1% or more of the then outstanding Registrable Securities (for purposes of clarification, this includes any Registrable Securities issuable upon exercise or conversion of any Security), provided that, if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group of Holders) shall be required.  If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first  sentence of this Section 6(d). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

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(e)          Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreements.

(f)          Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities.  Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreements.

(g)          No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.  Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

(h)          Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

(i)          Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreements.

(j)          Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

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(k)        Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(l)          Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.

(m)        Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder.  It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.

********************

(Signature Pages Follow)

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

BBQ HOLDINGS, INC.
By:	/s/ Jeffery Crivello

Name:	Jeffery Crivello
Title:	Chief Executive Officer

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

[SIGNATURE PAGE OF HOLDERS TO BBQ RRA]

Name of Holder:

Signature of Authorized Signatory of Holder:

Name of Authorized Signatory:

Title of Authorized Signatory:

[SIGNATURE PAGES CONTINUE]

Annex A

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions.  These sales may be at fixed or negotiated prices.  A Selling Stockholder may use any one or more of the following methods when selling securities:

• ordinary brokerage transactions and transactions in which the broker‑dealer solicits purchasers;

• block trades in which the broker‑dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

• purchases by a broker‑dealer as principal and resale by the broker‑dealer for its account;

• an exchange distribution in accordance with the rules of the applicable exchange;

• privately negotiated transactions;

• settlement of short sales;

• in transactions through broker‑dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

• through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

• a combination of any such methods of sale; or

• any other method permitted pursuant to applicable law.

The Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.

Broker‑dealers engaged by the Selling Stockholders may arrange for other brokers‑dealers to participate in sales.  Broker‑dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker‑dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume.  The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities.  The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales.  In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities.  The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.  The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution.  In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person.  We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

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SELLING SHAREHOLDERS

The common stock being offered by the selling shareholders are those previously issued to the selling shareholders.  For additional information regarding the issuances of those shares of common stock, see “Private Placement of Shares of Common Stock” above.  We are registering the shares of common stock in order to permit the selling shareholders to offer the shares for resale from time to time.  Except for the ownership of the shares of common stock, the selling shareholders have not had any material relationship with us within the past three years.

The table below lists the selling shareholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling shareholders.  The second column lists the number of shares of common stock beneficially owned by each selling shareholder, based on its ownership of the shares of common stock, as of ________, 2021.

The third column lists the shares of common stock being offered by this prospectus by the selling shareholders.

In accordance with the terms of a registration rights agreement with the selling shareholders, this prospectus generally covers the resale of the sum of the number of shares of common stock issued to the selling shareholders in the “Private Placement of Shares of Common Stock” described above as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration right agreement.The fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.

The selling shareholders may sell all, some or none of their shares in this offering.  See "Plan of Distribution."

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Name of Selling Shareholder Number of shares of Common Stock Owned Prior to Offering Maximum Number of shares of Common Stock to be Sold Pursuant to this Prospectus Number of shares of Common Stock Owned After Offering

4

Annex C

BBQ HOLDINGS, INC.

Selling Stockholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the “Registrable Securities”) of BBQ Holdings, Inc., a Minnesota corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

NOTICE

The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

QUESTIONNAIRE

1. Name.

(a) Full Legal Name of Selling Stockholder

(b) Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:

(c) Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):

2.  Address for Notices to Selling Stockholder:

Telephone:

Fax:

Contact Person:

3.  Broker-Dealer Status:

(a) Are you a broker-dealer?

Yes    ☐         No   ☐

(b) If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

Yes   ☐          No   ☐

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Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

(c) Are you an affiliate of a broker-dealer?

Yes   ☐          No   ☐

(d) If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes   ☐         No   ☐

Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

4.  Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.

Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreements.

(a) Type and Amount of other securities beneficially owned by the Selling Stockholder:

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5.  Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Date:	Beneficial Owner:
	By:

Name:

Title:

PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:

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EX-99.1

Exhibit 99.1

BBQ Holdings to Acquire Village Inn and Bakers Square Restaurants

The multi-brand restaurant company is expanding beyond BBQ with the addition of two fast-growing family restaurant concepts.

Minnetonka, MN – BBQ Holdings, Inc., the multi-brand restaurant company behind fan-favorite restaurant concepts such as Famous Dave’s and Granite City Food & Brewery, is adding two exciting brands to its roster with the acquisition of Village Inn, a family restaurant concept with 21 company-owned restaurants and 114 franchised restaurants, and Bakers Square, a pie and comfort food concept currently with 13 company-owned restaurants.

The transaction, which was announced by BBQ Holdings, Inc. and VIBSQ, LLC—the parent company behind Village Inn and Bakers Square—is expected to close by the end of July.

Since 1958, guests have visited Village Inn because they can enjoy great-tasting food and extra-friendly service in a clean and comfortable family-friendly environment. Their breakfast heritage remains made-from-scratch buttermilk pancakes, eggs cooked any-style and a pot of hot coffee on every table. With over five decades of service behind them, including corporate and franchise restaurants located in the Rocky Mountain region, the Midwest, Arizona and Florida, and other states. While the business has grown and changed to include home-style lunches and dinners, they have not forgotten what made a family tradition—providing good food and good feelings at a reasonable price.

Bakers Square began in the early 1970’s as an independent restaurant in Des Moines, Iowa, serving soups, sandwiches and–as it happens–some of the most incredible pies anyone in the area had ever tasted. Today, Bakers Square has grown into a network of restaurants across the upper Midwest that, in many ways, still maintains the charm and friendly appeal of that original restaurant in Iowa.

We love award winning food! Bakers Square now has the distinction of being the most awarded pies in America. Bakers Square pies have placed first in the America Pie Council National Pie Championships over 300 times. Hence their proudly earned claim that Bakers Square serves The Best Pie in America®.

“Over the last several years, we’ve focused on creating a foundation for these concepts to have sustainable long-term health and value-creation,” said VIBSQ, LLC CEO Craig Barber. “We have an amazing group of franchisees whose operational execution is a core strength for the brand. We are excited to have reached an agreement with BBQ Holdings with confidence in their leadership for the future of these great brands. We wish them, our operational teams and the franchisees the very best in the years ahead.”

According to Jeff Crivello, BBQ Holdings’ CEO, Village Inn and Bakers Square are particularly well-suited to the restaurant group’s existing stable of brands. “We believe the Village Inn and Bakers Square concepts are a great complement to our growing portfolio of restaurants,” said Crivello. “Adding them to our family of brands will only strengthen our company as a whole. We can’t wait to start working with the wonderful people who have made Village Inn and Bakers Square what they are today, and we’re excited to put these two brands on a new and reinvigorated growth path.”

As VIBSQ, LLC and BBQ Holdings prepare for the transition, Barber and Crivello both see a bright future for the Village Inn and Bakers Square brands, as well as their hundreds of owners and employees.

“To all our team members, support staff, franchisees and suppliers, we sincerely appreciate your sustained commitment to excellence over the years,” Barber said. “It’s been a privilege to work with you and be associated with these brands that have truly stood the test of time.”

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About BBQ Holdings

BBQ Holdings, Inc. (NASDAQ: BBQ) BBQ Holdings is a national restaurant company engaged in the ownership and operation of casual and fast dining restaurants. As of April 4, 2021, BBQ Holdings had four brands with 136 “brick and mortar” locations in 31 states and three countries, including 47 company-owned and 100 franchise-operated restaurants. In addition to these locations, the Company opened eight Company-owned Famous Dave’s ghost kitchens operating within its Granite City locations, and 11 Famous Dave’s franchisee ghost kitchens operating out of the kitchen of another restaurant location or a shared kitchen space. While BBQ Holdings continues to diversify its ownership in the restaurant community, it was founded with the principle of combining the “art and science” of barbecue to serve up the very best of the best to barbecue lovers everywhere. BBQ Holdings, through partnerships, has extended Travis Clark’s award-winning line of barbecue sauces, rubs and seasonings into the retail market. Along with a wide variety of BBQ favorites served at their BBQ restaurants, BBQ Holdings newest addition, Granite City Food and Brewery, offers award winning craft beer and a made-from-scratch, chef driven menu featuring contemporary American cuisine.