Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
April 1, 2015, by and among JAMBA JUICE COMPANY, a California corporation
(“Seller”), and Vitaligent, LLC, a Delaware limited liability company, or its
permitted assigns (“Buyer”).

 

RECITALS

 

WHEREAS, Seller is the lessee under certain leases (a “Prime Lease” and
collectively, the “Prime Leases”) of certain parcels of real property (a “Leased
Property” and collectively, the “Leased Properties”) currently operated as JAMBA
JUICE® stores (each a “Store” and collectively, the “Stores”). Section 4.8 of
the Disclosure Schedule contains a complete and accurate list of the Prime
Leases, Leased Properties and Stores.

 

WHEREAS, Seller desires to sell and transfer to Buyer, and Buyer desires to
purchase from Seller certain assets concerning the Stores; Seller desires to
sublease to Buyer and Buyer desires to sublease from Seller the Leased
Properties; Seller and Buyer desire to enter into Jamba Juice’s franchise
agreements for the operation of the Stores by Buyer as a JAMBA JUICE® Store (a
“Franchise Agreement” and collectively, the “Franchise Agreements”), all upon
the terms and subject to the conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereby
agree as follows:

 

ARTICLE I
DEFINITIONS

 

1.1           Defined Terms. Unless otherwise defined in this Agreement, all
capitalized terms shall have the meanings set forth in Annex 1.1, attached
hereto.

 

ARTICLE II
Purchase and Sale

 

2.1           Transfer of Assets. At the Closing, Seller hereby agrees to sell,
transfer, convey, assign and deliver to Buyer, and Buyer agrees to purchase,
acquire and assume from Seller, all of Seller’s right, title and interest in and
to the assets listed below (collectively, the “Purchased Assets”). The Purchased
Assets shall include:

 

(i)          all machinery, equipment, computer hardware (including the point of
sale equipment), furniture, fixtures, tools, signs, vehicles owned by Seller,
and other items of tangible personal property (including Marketable Inventory)
located at the Stores (the “Fixed Assets”); and

 

(ii)         all goodwill associated with the Stores, subject to the limitations
contained in Section 2.2(c).

 

 

 

 

2.2           Excluded Assets. The Purchased Assets shall include only the
assets expressly listed in Section 2.1 and shall not include, and Seller shall
not sell, convey, transfer, assign and deliver to Buyer, any other assets of any
kind, including but not limited to the following assets, properties, rights,
contracts or claims, wherever located, whether, real, personal, tangible, or
intangible, accrued, contingent or otherwise (the “Excluded Assets”):

 

(a)          all cash on hand or in banks, checks, drafts or other negotiable
instruments except the Change Fund;

 

(b)          all accounts receivable, refunds, rebates and credits due from the
Stores as of the Effective Time;

 

(c)          all of Seller’s rights provided with respect to the Stores under
the Franchise Agreements, including without limitation, the Marks and the System
and any goodwill associated with the Marks and the System;

 

(d)          except as provided in the Subleases, Seller’s interest as tenant in
the Leased Properties and all tenant improvement allowances still due and
outstanding for work completed prior to the Effective Time under the Prime
Leases for the Leased Properties;

 

(e)          all computer software, including without limitation, Kronos, eRS,
email access, and all locally installed applications (such as HRB);

 

(f)          all employee benefit plans;

 

(g)          all insurance policies and any benefits paid thereunder; and

 

(h)          all claims and rights to receive tax refunds, credits and benefits
relating to the operation or ownership of the Stores or the Purchased Assets
prior to the Effective Time.

 

2.3           Sublease of Leased Properties.

 

(a)          At Closing, Seller shall sublease to Buyer all of the Leased
Properties. The rental for the Leased Properties shall be an amount equal to the
rent, additional rent, and any and all other amounts due under the Prime Leases.
The subleases of the Leased Properties shall be in the form to be agreed upon by
Buyer and Seller prior to Closing and to be attached hereto as Exhibit 2.3(a)
prior to Closing (each a “Sublease” and collectively, the “Subleases”). Prime
Leasor will send all notices and communications directly to Buyer, and Seller
shall provide any communications it receives from the landlords to Buyer
promptly but no later than 72 hours after receiving the communications.

 

(i)          Simultaneously with the execution of the Sublease, Buyer and Seller
shall enter into a side agreement in the form to be agreed upon by Buyer and
Seller prior to Closing and to be attached hereto as Exhibit 2.3(b) prior to
Closing that governs the use and assignment language of the sublease (each a
“Side Agreement” and collectively, the Side Agreements”).

 

 

 

 

(b)          Buyer has reviewed the Prime Lease of each Leased Property and,
except as may be otherwise provided below, acknowledges that the remaining term
under each Prime Lease (specifically excluding any option renewals in the Prime
Lease) is acceptable to Buyer.

 

2.4           Excluded Liabilities. Buyer will not and does not assume, and will
not and does not become responsible for, any Liabilities of any kind of Seller
or its affiliates, parent or subsidiary companies, shareholders, directors,
employees, successors or assigns (collectively, for purposes of this Section
2.4, “Seller”), to any person or entity, including, without limitation, any of
Seller’s Liabilities relating to or involving its employees, landlords, vendors,
lenders, creditors or suppliers with respect to Seller’s acts, omissions, or
conduct of the Seller’s business occurring prior to the Closing Date. Seller
will remain solely responsible and liable for all such Liabilities including all
such Liabilities arising after the Closing Date based upon acts, omissions or
such conduct prior to the Closing Date. “Liabilities” means any debt, claim,
liability, obligation or cause of action of whatever kind or nature, whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including but not limited to any liability for
taxes, employee benefits, fees, fines, penalties, those items set forth in the
last sentence of Section 3.5(a), Sections 3.5(c) and 3.5(d), and for the waivers
set forth in Section 13.12.

 

2.5           Area Development Rights. During the term of the Franchise
Agreement, prior to granting any new or recaptured area development rights
within the markets being sold to Buyer in California, Seller shall first offer
such area development rights to Buyer. Upon notice thereof (“Seller’s Notice”),
Buyer may notify Seller (“Buyer’s Notice”) of Buyer’s interest therein and, upon
providing such notice, Seller shall enter into good faith negotiations with
Buyer with respect thereto. Buyer’s rights with respect to any such area
development rights shall expire 15 days after Buyer receives Seller’s Notice. If
Buyer provides the Buyer’s Notice, Buyer and Seller will cooperate and negotiate
in good faith to enter into an appropriate area development rights agreement
within 30 days after Seller receives Buyer’s Notice.

 

2.6           Store Software. Commencing upon the execution of this Agreement,
Seller shall use its reasonable good faith commercial efforts, working with
Buyer, to effectuate the transfer or assist Buyer with obtaining new licenses,
of any necessary software and software agreements reasonably necessary for the
efficient operation of the Stores following the Closing Date without
interruption in service.

 

ARTICLE III
Purchase Consideration

 

3.1           Cash Consideration from Buyer at Closing.

 

(a)          The purchase price (the “Purchase Price”) for the Purchased Assets
shall be Thirty-Six Million Dollars ($36,000,000) plus the amounts due pursuant
to Section 3.1(b). The Purchase Price includes the Initial Fee for each of the
Stores otherwise due under any Franchise Agreement.

 

 

 

 

(b)          The amount Buyer shall pay Seller for the (i) Change Fund shall be
$1,200.00 per Store, and (ii) Marketable Inventory shall be the value of
Marketable Inventory actually located at a Store at the Effective Time as
determined pursuant to this Section. Ten (10) business days prior to Closing,
Seller shall provide Buyer with an estimate of Marketable Inventory using the 2
weeks prior inventory count, which value shall be used to estimate the
Marketable Inventory portion of the Purchase Price. During the evening on the
Closing Date, representatives of Buyer and Seller shall conduct a physical
inventory of all items of Marketable Inventory at the Stores. The final value of
the Marketable Inventory shall be determined within 10 business days following
the Closing Date by mutual agreement of Seller and Buyer at cost using the most
current price list of each vendor for the Marketable Inventory in effect on the
Closing Date. For the Change Funds, Seller shall ensure that there is exactly
$1,200.00 in each Store register at the Effective Time.

 

(c)          The Purchase Price shall be paid by Buyer as follows:

 

(i)          An amount equal to the lesser of (y) $10,000 for each Store that
Buyer, using commercially reasonable efforts, does not complete a Fixed Assets
due diligence review prior to the Closing Date or (z) $200,000, shall be paid to
the Escrow Agent to cover defects in and replacements to the Fixed Assets at
these Stores as further described in Section 12.3 (“Fixed Assets Escrow”).

 

(ii)         The balance of the Purchase Price, after the payment in (i) above
is made shall be paid to Seller by wire transfer of immediately available funds
to an account designated by Seller at Closing.

 

3.2           Franchise Agreements and Fees.

 

On the Closing Date, Buyer as franchisee and Seller as franchisor, shall enter
into, for each Store, a mutually acceptable Franchise Agreement together with
any applicable state addendum; provided however, that the Franchise Agreement
for each Store shall be modified by a mutually acceptable addendum to change
certain standard terms and conditions (the “Addendum to Franchise Agreement”) as
the parties mutually agree, the form of which will be attached hereto as Exhibit
3.2 prior to Closing. The Addendum to Franchise Agreement shall provide, among
other things, that the continuing royalty rate shall not exceed 5.5% during the
initial term of the Franchise Agreement, the initial term of the Franchise
Agreement will be 15 years with 2 successive 10 year renewal periods, the
royalty rate and marketing contribution rates for any renewal term will not
exceed the rates being charged to 80% or more of all Jamba franchisee stores,
that there will be no renewal fee upon the first renewal of any franchise
agreement and that the renewal fee on the second renewal of any franchise
agreement will be the lesser of $5,000 per Store or the then-current renewal fee
offered in the then-current Franchise Agreement upon exercise of a renewal term.
Furthermore, the Buyer agrees to complete the refresh of those Stores identified
in Section 3.2 of the Disclosure Schedule on or before the earlier of (y)
December 31, 2016 or (z) the date set forth in the Prime Lease requiring the
complete refresh for any Store identified in Section 3.2 of the Disclosure
Schedule. The form of the Franchise Agreement will be Seller’s current form as
of the Closing Date subject to such modifications provided in the Addendum to
Franchise Agreement as the parties mutually agree.

 

(a)          JambaGo’s.  Seller will use commercially reasonable efforts to
provide at least thirty (30) days prior written notice to Buyer with regard to
any new JambaGo locations to open within Buyer’s markets.

 

 

 

 

3.3           Pro-Rations; Etc.

 

(a)          The following pro-rations relating to the Purchased Assets will be
made as of the Effective Time, with Seller liable to the extent such items
relate to any time period up to and including the Effective Time and Buyer
liable to the extent such items relate to periods after the Effective Time.
 Except as otherwise specifically provided herein, the net amount of all such
pro-rations, to the extent not already paid by Buyer, will be settled and paid
on the Closing Date:

 

(i)          Personal property taxes and other assessments, if any, on or with
respect to the Purchased Assets; including special assessments for work actually
commenced or levied prior to the Effective Time;

 

(ii)         Rents, additional rents, taxes and other items payable or paid by
Seller under any lease, license, permit, contract or other agreement or
arrangement to be assigned to or assumed by Buyer;

 

(iii)        The amount of rents, real property taxes and charges for sewer,
water, fuel, telephone, electricity and other utilities; provided that if
practicable, meter readings shall be taken at the Effective Time and the
respective obligations of the parties determined in accordance with such
readings;

 

(iv)        The amount payable to Seller by Buyer, or payable by Seller to
Buyer, based upon loads and redemptions of “jambacards” prior to the Effective
Time;

 

(v)         Gross sales receipts;

 

(vi)        Sales tax accruing prior to the Effective Time; and

 

(vii)       Such other items customarily pro-rated in connection with similar
transactions.

 

If the actual receipts or expenses of any of the above items for the billing
period within which the Effective Time falls is not known on the Closing Date,
the pro-ration shall be settled and paid as soon as is reasonably practicable
after the Closing Date. Seller agrees to furnish Buyer with such documents and
other records as shall be reasonably requested in order to confirm all
pro-ration calculations.

 

(b)          Notwithstanding the foregoing, the parties agree that the following
items will be handled as set forth below:

 

(i)          Seller shall not transfer to Buyer any security deposits paid by
Seller under the Real Property Leases and the Purchase Price shall not be
adjusted by any security deposits paid by Seller pursuant to the Real Property
Leases; provided, however, in the event Buyer secures a lease in Buyer’s name as
lessee or tenant for any of the Leased Properties, any security deposit on file
with the landlord of such Leased Property shall be retained and transferred to
Buyer by the landlord without any further obligation between Buyer and Seller;

 

 

 

 

(ii)         The Purchase Price shall not be increased by any prepaid expenses
paid by Seller with respect to the Stores and for which the benefit is not
transferred to Buyer hereunder; provided however, that to the extent the benefit
is transferred to Buyer, such prepaid expenses shall be pro-rated pursuant to
Section 3.3(a) above;

 

(iii)        Seller shall be responsible for any sales, use or similar taxes
arising in connection with the transfer and sale of any personal property
comprising the Purchased Assets to Buyer and Seller shall remit payment of all
such taxes to the appropriate taxing authority; and

 

(iv)        Seller will extend its ISP services for the Stores for up to sixty
(60) days after the Closing in order to allow Buyer to obtain its own ISP
services and Buyer shall pay for or reimburse Seller, at Seller’s actual cost,
for such ISP services but not exceeding $50,000 for providing such DSL services.

 

(c)          In lieu of the Closing adjustments provided for in this Section,
either party may, subsequent to the Closing Date, invoice the other party for
any item for which such party would be entitled to a credit under this Section
3.3, and the other party shall pay the undisputed amount within thirty (30) days
of receipt of the invoice. 

 

3.4           Allocation of Purchase Price. On or prior to the Closing Date, the
parties shall agree on an estimated allocation of the Purchase Price and, within
ninety (90) days following Closing, the parties shall agree on a final
allocation of the Purchase Price. Seller and Buyer agree that said final
allocation of the Purchase Price shall be used by Seller and Buyer in reporting
the transactions covered by this Agreement for income tax purposes. The final
allocation shall include all state and local sales and use taxes caused by the
sale of the Purchased Assets, which shall be paid by Seller to the appropriate
taxing authority.

 

3.5           Employees.

 

(a)          Section 3.5 of the Disclosure Schedule contains a true, accurate
and complete list of all employees required to operate the Stores and the
respective position, job location and salary rate of each employee listed
thereon. Subject to the provisions of this Section 3.5, as of the Effective
Time, Seller will terminate and Buyer will make an offer of employment, on an
at-will basis, to such employees, on the terms and subject to the conditions
specified by Buyer, but commensurate in terms of salary and benefits to those
currently being received by each employee (the employees who are actually
employed by Buyer are referred to collectively as the “Transferred Employees”);
provided, however, that, Buyer shall not be required to offer employment to all
employees or offer the same employee benefits to the Transferred Employees that
may be offered or provided to such employees as of the Effective Time. Buyer and
Seller acknowledge and agree that it is their intent that any WARN and state
equivalent duty and obligation to such employees, arising out of or following
the consummation of this Agreement, is that of Seller.

 

(b)          The transfer to Buyer of such Transferred Employees shall be
conditioned upon the closing of the transactions contemplated by this Agreement,
and upon such reasonable conditions as Buyer may include in its employment
letter to such employee. Only upon the satisfaction of all such conditions shall
an employee become a Transferred Employee, and until such time (i) the employee
shall not be eligible for compensation from, or to participate in any benefit
plans of, Buyer, and (ii) Buyer shall have no liability with respect to any
employee of Seller.

 

 

 

 

(c)          Seller shall be responsible for payment of all final wages and all
paid time off benefits, including vacation pay accrued by Transferred Employees
up to the Effective Time. Seller will pay out all wages, and accrued but unused
vacation pay, to Transferred Employees after the Effective Time in accordance
with Applicable Law.

 

(d)          Seller shall be responsible for payment of all accrued and payable
bonuses for all Transferred Employees to whom Seller has agreed to pay such
bonuses.

 

(e)          Seller shall be responsible for providing COBRA and other notices
and documentation to the employees of Seller as required by Seller’s employee
benefit plans and Applicable Law; provided that Buyer will reimburse the
Transferred Employees for the COBRA cost until covered by any employee benefits
provided by Buyer to the Transferred Employees.

 

3.6           Leased Vehicles and Catering Trucks.

 

At Closing, Seller shall cooperate with Buyer and facilitate the assignment of
any vehicle and catering truck leases that Buyer chooses to assume after Buyer
has completed its due diligence review of the vehicles, catering trucks and
leases.

 

ARTICLE IV
Representations and Warranties of Seller

 

Seller represents and warrants, including those matters reflected in a
disclosure schedule attached to this Agreement (the “Disclosure Schedule”),
which disclosures shall qualify the representations and warranties of Seller,
that as of the date of this Agreement and as of the Effective Time:

 

4.1           Organization. Seller is a California corporation, duly organized,
validly existing, and in good standing under the laws of California. Seller is
qualified and in good standing as a foreign corporation under the laws of each
jurisdiction in which the failure to be so qualified and in good standing would
have a Material Adverse Change on the assets, financial condition, operations or
business of Seller.

 

4.2           Power and Authority; Authorization. Seller has all requisite power
and authority to enter into, and perform its obligations under, this Agreement
and related agreements. The execution, delivery and performance of this
Agreement by Seller have been or will be duly authorized prior to the Closing
Date.

 

4.3           Enforceability. This Agreement constitutes a valid and legally
binding obligation of Seller enforceable in accordance with the terms hereof,
except as may be limited by principles of bankruptcy and creditors’ rights in
general.

 

 

 

 

4.4           No Consents or Approvals. Except as set forth on Section 4.4 of
the Disclosure Schedule, no consent, approval, or authorization of, or
declaration, filing, or registration with, any federal, state or other
governmental or regulatory authority, or any other persons is required to be
made or obtained by Seller in connection with the execution, delivery, and
performance of this Agreement and related agreements and the consummation of the
transactions contemplated by this Agreement, other than applicable state
franchise filings (all of which have been made). Except as set forth on Section
4.4 of the Disclosure Schedule, Seller has obtained all consents required to be
obtained from landlords in connection with the Subleases as provided in the
applicable Prime Leases.

 

4.5           Agreement Will Not Cause Breach or Violation. Neither the
execution, delivery nor performance of this Agreement or related agreements or
the consummation of the transactions contemplated by this Agreement will result
in or constitute (a) a conflict or breach under Seller’s organizational
documents, (b) a default or an event that, with notice or lapse of time or both,
would be a default, breach or violation of the Assumed Contracts or any other
material lease, license, promissory note, conditional sales contract,
commitment, indenture, mortgage, deed of trust or other agreement, instrument or
arrangement to which Seller is a party or by which the Stores or Purchased
Assets are bound or affected, or (c) the creation or imposition of any Lien on
the Purchased Assets or the Stores.

 

4.6           Financial Statements.

 

(a)          Seller has previously furnished Buyer with, and attached as Section
4.6 of the Disclosure Schedule are, true and complete copies of unaudited profit
and loss statements for each of the Stores for Seller’s Fiscal Years 2011, 2012,
2013 and 2014 and will furnish monthly, updated statements through the Closing
Date (the “Actual Financials”), adjusted pursuant to the Confidential
Information Memorandums dated December, 2014 (the “Confidential Information
Memorandums”) for all of the Stores. The Actual Financials are true, complete,
and correct in all material respects, and present fairly and accurately the
results of operations of each of the Stores for the periods indicated. The books
and records of Seller relating to the Stores fully and fairly reflect all
transactions, properties, assets and liabilities of the Stores.

 

(b)          Since March 31, 2015: (i) the Stores have been operated in a manner
consistent with Seller’s ordinary course of business, (ii) there has been no
Material Adverse Change in the assets, financial condition, operations or
business of the Stores from that which is reflected in the profit and loss
statements, (iii) the Stores have not incurred any material obligation or
liability except in the normal course of business, and (iv) the Stores have not
experienced any Material Adverse Change in its relationships with customers
and/or suppliers.

 

 

 

 

4.7           Title; Condition of Purchased Assets and Marketable Inventory.

 

(a)          Section 4.7 of the Disclosure Schedule completely and accurately
lists all of the Fixed Assets owned by, in the possession of, or used by Seller
in connection with the Stores. At Closing, Seller is or shall: (i) be the sole
owner, beneficially and of record, of all of the Purchased Assets, the Change
Fund, and the Marketable Inventory; and (ii) has or shall have, and will convey
good and marketable title to all of the Purchased Assets, the Change Fund, and
Marketable Inventory, whether real, personal, mixed, tangible or intangible. The
Purchased Assets, the Change Fund, along with the Marketable Inventory that
shall be in the Stores on the Closing Date, constitute all the assets and
interests in assets that are used in the operation of each of the Stores and are
sufficient to operate each of the Stores in a manner consistent with Seller’s
operation of the Stores in the ordinary course of business for such Store and in
compliance with the FDD. At Closing, all of the Purchased Assets, the Change
Fund, and Marketable Inventory are or will be free and clear of restrictions on,
or conditions to, transfer or assignment, and are or will be free and clear of
mortgages, liens, pledges, charges, encumbrances, equities, claims, easements,
rights of way, covenants, conditions or restrictions (“Liens”), and at the
Closing, Seller shall transfer and assign to Buyer the Purchased Assets, the
Change Fund, and Marketable Inventory free and clear of any and all Liens.

 

(b)          Subject to Sections 12.2 and 12.3, Buyer agrees to accept the
Purchased Assets and the Stores in “AS-IS” condition, with all faults, known or
unknown, patent or latent.

 

4.8           Stores; Leased Real Property. Section 4.8 of the Disclosure
Schedule contains a true, accurate and complete list of all of the Prime Leases,
the Stores, and the Leased Properties. The Stores have been continuously open
and operated consistent with the normal course of business from the date of this
Agreement until the Effective Time. The Stores comply with all requirements set
forth in the Franchise Agreement. The Prime Leases (a) are valid and in full
force and effect, and (b) to Seller’s knowledge, are not the subject of any
default by Seller or landlord or event which with notice or lapse of time, or
both, would constitute a default. Seller has provided to Buyer a true, correct
and complete copy of the Prime Leases. Seller does not occupy or use the
premises where any Store is located in violation of any law, regulation, decree
or other restriction.

 

4.9           Tax Matters. Within the times and in the manner prescribed by law,
Seller has filed all federal, state and local tax returns required by law and
has paid all taxes (including, without limitation, sales taxes), assessments and
penalties due and payable. There are no present disputes, nor is there any
reason to believe a dispute may result, as to taxes of any nature payable by
Seller with respect to any Store or the Purchased Assets.

 

4.10         Compliance with Laws. Seller has to his knowledge, complied, and is
in full compliance, in all material respects, with all applicable federal and
state franchise laws and all applicable federal, state and local statutes, laws
and regulations (including, without limitation, any applicable building, zoning,
health, employment, environmental protection or other law, ordinance or
regulation) affecting the Stores or the Purchased Assets, and the operation of
the Stores has not been cited for any violation of any such law or regulation.
Seller has in full force and effect all licenses, permits and other
authorizations required for the conduct and operation of the Stores presently
constituted; and Seller has not received notice of any default or violation in
respect of or under any of the foregoing. Seller has not received any
non-compliance orders, warning letters, notices of violation, claims, suits,
actions, proceedings, judgments, penalties, fines or judicial or administrative
investigations of any nature pending or threatened against or involving the
Stores, the business, operations, or property of the Stores, or the Purchased
Assets.

 

4.11         Litigation, Etc. There is no pending, or, to the knowledge of
Seller, any threatened suit, action, arbitration or legal, administrative or
other proceeding, or governmental investigation or claims against, or affecting,
the Purchased Assets or any of the Stores. To the knowledge of Seller, there is
no basis for any claim against Seller relating to, or which could have a
Material Adverse Change on the Purchased Assets or any of the Stores.

 

 

 

 

4.12         Employees. Seller is not a party to or bound by any collective
bargaining agreement, employment agreement, consulting agreement or other
commitment for the employment or retention of any employees or independent
contractors who work at the Stores or are otherwise employed by Seller in
connection with the business conducted at the Stores. Seller has not had any
material labor difficulty at any of the Stores in the past two (2) years.

 

4.13         Employee Benefits. Seller does not maintain and is not required to
make any contributions to any pension, profit-sharing, retirement, deferred
compensation or other such plan or arrangement for the benefit of employees who
work at any of the Stores or are otherwise employed by Seller in connection with
the business conducted by the Stores, except for 401(k) matching contributions
from paychecks through the Closing Date, and except for health plan coverage for
certain General Manager employees as described in Section 12.2. Subject to the
foregoing, Seller has made all required payments, contributions and filings
under or in respect of any such plans or arrangements, and there has not
occurred any act, omission, event or condition such as would give rise to any
liability of Seller or the Stores thereunder other than the obligations to make
normal payments and contributions thereunder.

 

4.14         Finder’s or Broker’s Fees. Seller has not engaged a broker or
financial advisor to assist Seller in connection with this transaction except
for Peak Franchise Capital. Seller is solely responsible for all fees to be paid
to Peak Franchise Capital.

 

4.15         Full Disclosure. None of the representations and warranties made by
Seller or made in any certificate or memorandum furnished or to be furnished by
Seller or on Seller’s behalf, contains or will contain any untrue statement of a
material fact, or omits to state a material fact necessary to make the
statements made, in the light of the circumstances under which they were made,
not misleading. Certain of the representations and warranties of Seller are made
“to Seller’s knowledge” or refer to what is “known” to Seller or of what Seller
is “aware.” The parties hereto agree that the meaning of such expressions shall
with respect to Seller in all cases be understood as comprising the actual
knowledge and belief of the corporate officers of Seller without any type of
additional investigation thereof.

 

4.16         Seller’s Representation and Warranties. Seller’s representations
and warranties shall all survive the Closing through the period during which
claims for indemnification may be made pursuant to Section 11.1 (at which time
each such representation and warranty shall terminate as applicable).

 

ARTICLE V
Representations and Warranties of BuyeR

 

Buyer hereby represents and warrants as of the date of this Agreement as of the
Effective Time that:

 

5.1           Organization. Buyer is a limited liability company duly organized,
validly existing, and in good standing under the laws of the jurisdiction in
which it was organized.

 

 

 

 

5.2           Power and Authority; Authorization. Buyer is a limited liability
company with the power and authority to enter into, and perform its obligations
under, this Agreement and related agreements. The execution and delivery of this
Agreement by Buyer has been duly authorized by all necessary action on the part
of Buyer and neither the execution, delivery nor performance of this Agreement
or related agreements or the consummation of the transactions contemplated by
this Agreement will result in or constitute a conflict or breach under Buyer’s
organizational documents.

 

5.3           Enforceability. This Agreement constitutes a valid and legally
binding obligation of Buyer, enforceable in accordance with the terms hereof,
except as may be limited by principles of bankruptcy and creditors rights in
general.

 

5.4           No Consents or Approvals. No consent, approval, or authorization
of, or declaration, filing, or registration with, any federal, state or other
governmental or regulatory authority, or any other persons is required to be
made or obtained by Buyer in connection with the execution, delivery, and
performance of this Agreement and related agreements, and the consummation of
the transactions contemplated by this Agreement, in each case, which have not
been obtained by the Closing Date.

 

5.5           Non-contravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, shall
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Buyer is subject, or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument,
or other arrangement to which Buyer is a party or by which it is bound or to
which any of its assets are subject. Buyer does not need to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the parties to consummate the
transactions contemplated by this Agreement.

 

5.6           Finder’s or Broker’s Fees. Buyer has not engaged a broker or
finder in connection with any transaction contemplated by this Agreement, and no
broker or other person is entitled to any commission or finder’s fee from Buyer
in connection with any of these transactions as a result of any actions by
Buyer.

 

5.7           Representations of Seller. Buyer acknowledges that neither Seller
nor any representative of Seller has made any representations or statements of
projected or forecasted sales, profits or earnings of the Stores, and Buyer
acknowledges that future sales, profits and earnings at the Stores may be more
or less than past sales, profits and earnings. In making its decision to enter
into this Agreement and the transaction documents related to this Agreement,
except as otherwise provided in this Agreement, Buyer has not relied on any
information provided by Seller or any other third party; provided that nothing
in this Agreement shall disclaim or require Buyer to waive reliance on any
representation that Seller made in the FDD. Buyer has inspected and reviewed,
including in the context of what may be required pursuant to applicable law,
regulation or code, a majority of the Fixed Assets in the possession of, or used
by Seller in connection with the Stores. In addition, effective as of the
Closing Date, Buyer acknowledges that it has read, reviewed with appropriate
counsel and advisors, Seller’s FDD and the Confidential Information Memorandum.

 

 

 

 

ARTICLE VI
Seller’s Obligations Before Closing

 

6.1           Buyer’s Access to Premises and Information. Buyer and its counsel,
accountants and other representatives shall have full access during normal
business hours to all properties, books, accounts, reports, records, contracts,
employees and documents of Seller relating to the Stores, provided Buyer shall
permit Seller to be present during such access, upon reasonable request of
Seller. Seller shall furnish, or cause to be furnished, to Buyer and its
representatives all data, reports and information concerning the business,
finances and properties of Seller relating to the Stores that may reasonably be
requested.

 

6.2           Conduct of Business in Normal Course. Seller shall, from and after
the date of this Agreement and through the Closing Date, with respect to each of
the Stores, (i) carry on its business solely in the usual and ordinary course
and as diligently as heretofore conducted, including, without limitation,
maintenance of inventory levels consistent with past practices in the ordinary
course of business; (ii) use reasonable efforts to preserve and maintain its
business organization intact, to retain its employees and to maintain its
relationships with suppliers, customers and others so that such relationships
will be preserved on and after the Closing Date; (iii) repair and maintain all
Fixed Assets of each of the Stores in accordance with its usual and ordinary
repair and maintenance standards and maintain the Fixed Assets through the
Closing Date in substantially the same condition as they were at the time of the
Inspections, normal wear and tear excepted; (iv) consult with Buyer regarding
all significant developments, transactions and proposals relating to the
business or operations or any of the Purchased Assets or liabilities of Seller;
(v) not end, terminate or change in any material respect any lease, contract,
undertaking or other commitment and shall not knowingly do any act, or omit to
do any act, or permit an act or omission to act, which will cause a material
breach of any such lease, contract, undertaking or other commitment; and (vi)
not grant any general increase in the rates of pay of any of its hourly-paid
employees, grant any increase in the salaries or other compensation of any of
the employees described in Section 3.5(a) hereof; or grant any increase in the
pension, retirement or other employment benefits of any character of, or grant
any new benefits to, such employees.

 

ARTICLE VII
Buyer’s Obligations Before Closing

 

7.1           Cooperation in Securing Consents of Third Parties. Buyer shall use
reasonable efforts to assist Seller in obtaining the consents listed on Section
4.4 of the Disclosure Schedule of all necessary persons and agencies to the
assignment and transfer to Buyer of any and all properties, assets and
agreements, to be assigned and transferred under the terms of this Agreement,
but Buyer shall not, in order to obtain such consents or otherwise, be required
to give consideration, assume or guarantee any obligations of Seller, whether
relating to Seller’s operation of the Stores, ownership of the Purchased Assets
or otherwise.

 

 

 

 

7.2 Initial Financing Contingency. Buyer shall use commercially reasonable
efforts to deliver to Seller within thirty (30) days of the execution of this
Agreement a fully-executed commitment letter or non-binding term sheet from a
bank or other financial institution (“Debt Commitment Letter”) to provide debt
financing to Buyer (“Initial Financing Contingency Requirement”). Such debt
financing, when taken together with committed equity financing and/or other
sources of funds, will need to be sufficient for Buyer to consummate the
transactions contemplated by this Agreement. If Buyer has been unable to deliver
such Debt Commitment Letter or pull together committed equity financing and/or
other sources of funds within the time period specified above, despite its
commercially reasonable efforts to do so, such time period may be extended by
Seller or Buyer for an additional period as is commercially reasonable for Buyer
to deliver such Debt Commitment Letter or pull together committed equity
financing and/or other sources of funds, not to exceed fifteen (15) business
days. If Buyer is unable to deliver the Debt Commitment Letter or pull together
committed equity financing and/or other sources of funds within such additional
period of time, this Agreement shall terminate and Buyer shall have no further
obligations under this Agreement.

 

7.3           Further Assurances with Respect to Financing. Buyer shall use
commercially reasonable efforts to obtain financing in an amount at least equal
to the amount set forth in the Debt Commitment Letter, including the execution
of definitive agreements for the financing contemplated by the Debt Commitment
Letter and equity financing upon terms and conditions acceptable to Buyer in its
sole discretion, on or prior to the Closing Date. The definitive agreements for
such debt and equity financing (along with any other documents pursuant to which
Buyer intends to obtain the financing contemplated hereby) are collectively
referred to herein as the “Financing Agreements.” Without limiting the
generality of the foregoing, in the event that at any time it may be reasonably
likely that funds will not be made available under the Debt Commitment Letter or
the Financing Agreements so as to enable Buyer to proceed with the Closing in a
timely manner, Buyer shall promptly notify Seller. If Buyer is unable to obtain
financing as contemplated in this Section, this Agreement shall terminate and
Buyer shall have no further obligations under this Agreement.

 

7.4           Certain Agreements. The parties anticipate that Seller will at its
sole cost and expense discontinue the Security Services previously provided to
Seller by Diebold-Alarm alarm company. Buyer agrees that it shall assume sole
responsibility for contracting for the security services it deems necessary for
the Stores following the Closing Date. Buyer further agrees that effective
immediately following the Closing Date for each of the Stores, Buyer shall be
solely responsible for all service and termination fees in connection with
internet services provided by Earthlink for no less than the duration of
Seller's existing contracts therefor (dates having been previously provided to
Buyer).

 

ARTICLE VIII
Conditions Precedent To Buyer’s Performance

 

8.1           Buyer’s Closing Conditions. The obligations of Buyer to purchase
the Purchased Assets under this Agreement are subject to the satisfaction, at or
before the Closing, of all the conditions set out below. Buyer may waive any or
all of these conditions in whole or in part without prior notice.

 

(a)          All representations and warranties by Seller in this Agreement, or
in any written statement that shall be delivered to Buyer in connection with
this Agreement, shall be true in all material respects on, and as of, the
Closing Date as though made at that time.

 

 

 

 

(b)          Seller shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by Seller in all material respects, on or before the Closing
Date including all deliveries set forth in Section 10.2.

 

(c)          Seller shall have completed and delivered final versions of the
Disclosure Schedule and all Exhibits hereto, including all exhibits to
agreements attached hereto as Exhibits, all of which shall be satisfactory to
Buyer in its sole discretion.

 

(d)          Seller shall have delivered a certificate certifying the
satisfaction of the conditions set forth in Sections 8.1(a), (b) and (c) above.

 

(e)          The parties have performed immediately prior to Closing, in the
manner set forth in Section 3.1(b), an inventory of the Marketable Inventory and
counting and verification of the Change Fund.

 

(f)          The financing conditions precedent set forth in Sections 7.2 and
7.3 shall have been completed as provided in those Sections.

 

(g)          Buyer shall have completed all due diligence regarding the Stores
and the results of all due diligence shall be acceptable to Buyer in its sole
discretion.

 

ARTICLE IX
Conditions Precedent To Seller’s Performance

 

9.1           Seller’s Conditions. The obligations of Seller to sell the
Purchased Assets under this Agreement are subject to the satisfaction, at or
before the Closing, of all the conditions set out below. Seller may waive any or
all of these conditions in whole or in part without prior notice.

 

(a)          All representations and warranties by Buyer in this Agreement, or
in any written statement that shall be delivered to Seller under this Agreement,
shall be true in all material respects on and as of the Closing Date as though
made at that time.

 

(b)          Buyer shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement, including the
execution by all required parties of the Franchise Agreement(s) and the
Subleases to be performed or complied with by Buyer in all material respects on
or before the Closing Date including all deliveries set forth in Section 10.3.

 

(c)          Buyer shall have delivered a certificate certifying the
satisfaction of the conditions set forth in Sections 9.1(a) and (b) above.

 

(d)          To the extent possible, Seller shall have removed its proprietary
information from the Stores including, without limitation, erasing computer hard
drives, removing credit card merchant information, removing human resources
manuals, and the like, except to the extent such information is required to
operate the Stores, in which case it shall not be removed. Seller shall bear the
costs of all such removals.

 

 

 

 

(e)          Buyer shall have delivered to Seller personal financial statements
of David Peacock. Such personal financial statement shall be held in confidence
and used solely for (i) Seller’s due diligence in conjunction with this
transaction, and (ii) upon notice to Buyer, to provide to owners of properties
being subleased pursuant to the Sublease Agreement where the property owner’s
approval is required and such property owners have specifically requested copies
of the personal financial statement.

 

(f)          Buyer has completed all training required under the Franchise
Agreements.

 

(g)          Seller shall have received consent from Wells Fargo to dispose of
the Purchased Assets.

 

ARTICLE X
The Closing

 

10.1        Time and Place. The parties shall undertake reasonable good faith
commercial efforts to effect the transfer of the Purchased Assets by Seller to
Buyer (the “Closing”) on May 19, 2015 (the “Closing Date”), with the Closing to
be deemed effective as of 11:59 p.m., Pacific Daylight Time, on the Closing Date
(the “Effective Time”), it being acknowledged and agreed that the a May 19, 2015
Closing Date is ambitious and that Closing may not occur until later and the
parties agree to extend the Closing Date as necessary, subject to the last
sentence of this Section 10.1. The obligations of the Parties to close or effect
the transactions contemplated by this Agreement will be subject to satisfaction,
unless duly waived, of the applicable conditions set forth in this Agreement,
and, subject to the parties’ termination rights expressly set forth herein, if
any said condition is not satisfied or waived, the Closing Date shall be
extended until satisfaction of such condition. Notwithstanding the foregoing, if
the Closing has not occurred on or before June 30, 2015 (the “Walkaway Date”),
then Seller and Buyer shall each have the right at any time after the Walkaway
Date, but prior to Closing, to terminate this Agreement pursuant to Section
13.1.

 

10.2        Seller’s Obligations at Closing. At the Closing, Seller shall
deliver or cause to be delivered to Buyer:

 

(a)          Instruments of assignment and transfer of all the Purchased Assets
and Marketable Inventory, including titles for any vehicles and related
documents required by the Department of Revenue or Department of Motor Vehicles;

 

(b)          The executed Subleases and Side Agreements, Franchise Agreements,
Escrow Agreement, Addendums to Franchise Agreements;

 

(c)          Keys to all Stores and passwords necessary to log-in to any
computer or cashier systems therein; and

 

(d)          An estoppel certificate completed and signed by the landlord under
each Prime Lease, in a form to be provided by Buyer and acceptable to Seller.
The Parties acknowledge that not all Prime Leases require the landlord to
execute the estoppel certificate contemplated herein and Seller’s use of
commercially reasonable efforts to obtain such estoppel certificates shall
satisfy this obligation.

 

 

 

 

Simultaneously with the consummation of the transfer, Seller shall put Buyer
into full possession and enjoyment of all the Purchased Assets, the Stores, the
Change Fund and Marketable Inventory.

 

10.3        Buyer’s Obligations at Closing. At the Closing, Buyer shall deliver
or cause to be delivered to Seller:

 

(a)          The Purchase Price pursuant to Section 3.1(c), by wire transfer of
immediately available funds to accounts designated by Seller and the Escrow
Agent; and

 

(b)          The executed Subleases and Side Agreements, Franchise Agreements,
Escrow Agreement, Addendums to Franchise Agreements, and Letter of Credit.

 

10.4        Cash for Each Store. Buyer and Seller shall ensure that the Change
Fund is on hand on each Store as of the Effective Time.

 

10.5        Closing Costs and Escrow Agent Fees. All closing cost and the fees
charged by the escrow agent, if any, shall be shared equally by Seller and
Buyer; provided however that each party shall be liable for their own advisors’
fees (attorneys, accountants, consultants, etc.) and any income taxes. To the
extent that the cost of such fees and expenses are known by the Closing Date,
the parties agree to adjust payments made at Closing. Any differences between
any estimated charges paid and actual charges incurred, or other costs or fees
that arise out of the transactions contemplated by this Agreement that should
have been deemed included in this Section 10.5 that are incurred post-Closing,
will be resolved pursuant to Section 3.3(c).

 

ARTICLE XI
Indemnification

 

11.1        Seller’s Indemnities.

 

(a)          Seller shall indemnify, defend and hold harmless Buyer and its
officers, agents, attorneys, employees, directors, parent entities, subsidiaries
and affiliates, including third parties that have a secured interest in the
Stores pursuant to any Financing Agreements (as defined in Section 7.3 above)
(collectively, the “Buyer Parties”) against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies, including interest, penalties and reasonable
attorneys’ fees, that Buyer and the Buyer Parties (collectively, the “Buyer
Indemnified Parties”) shall incur or suffer, that arise from, result from or
relate to (i) any breach of, or failure by Seller to perform, any of Seller’s
covenants or agreements in this Agreement, (ii) any inaccuracy or breach of, or
failure by Seller to perform, any of Seller’s representations or warranties in
this Agreement or in the Disclosure Schedule or any schedule, certificate, or
exhibit furnished or to be furnished by Seller under this Agreement, (iii) any
and all litigation pending against Seller at Closing, or (iv) any and all Seller
Liabilities.

 

(b)          Seller’s obligations to indemnify the Buyer Indemnified Parties for
claims arising under Sections 11.1(a)(i) and 11(a)(ii) shall survive the Closing
for a period of eighteen (18) months; provided that Seller’s obligations to
indemnify the Buyer Indemnified Parties for claims arising under Section
11.1(a)(iii) or Section 11.1(a)(iv) shall survive the Closing without
limitation. Seller’s, aggregate liability to Buyer Indemnified Parties for
claims arising under Sections 11.1(a)(i) and 11.1(a)(ii) shall not exceed the
Purchase Price.

 

 

 

 

(c)          Seller represents, warrants and agrees that Seller is the operating
entity for all Jamba stores; that Seller has and will maintain a sufficient
level of assets to provide for Seller’s indemnification obligations set forth in
this Section; that Seller does not have any plans to wind-up or liquidate Seller
or its assets prior to satisfying its indemnification obligations set forth in
this Section; and that Seller does not plan to and will not transfer all or
substantially all of its assets to Parent or any affiliate in order to avoid or
minimize its indemnification obligations set forth in this Section.

 

11.2        Buyer’s Indemnities. Buyer shall indemnify, defend and hold harmless
Seller and its officers, agents, attorneys, employees, directors, parent
entities, subsidiaries and affiliates (collectively, the “Seller Parties”)
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties and reasonable attorneys’ fees, that Seller and the Seller
Parties (collectively, the “Seller Indemnified Parties”) shall incur or suffer,
that arise from, result from, or relate to, (i) any breach of, or failure by
Buyer to perform, any of Buyer’s covenants or agreements in this Agreement, or
(ii) any inaccuracy or breach by, or failure by Buyer to perform, any of Buyer’s
representations or warranties in this Agreement or in any certificate executed
and delivered to Seller under or pursuant to this Agreement or the transactions
contemplated herein.

 

The indemnity obligations under this Section 11.2 shall survive Closing for a
period of eighteen months.

 

11.3        Procedure for Indemnified Claims.

 

(a)          In the case of any claim for indemnification pursuant to this
Article by any indemnitee, other than a claim covered by Section 11.3(b), the
indemnitee shall send written notice of such claim to the indemnitor, setting
forth in such notice the material facts known to the indemnitee giving rise to
such claim. Failure to give such notice shall not relieve the indemnitor of its
obligations hereunder except to the extent, and only to the extent, that the
indemnitor is actually prejudiced thereby. Promptly after the delivery of such
notice (and in any event within thirty (30) days, or such longer period as the
parties may mutually agree), the indemnitee shall meet with the indemnitor and
attempt in good faith to settle and compromise such claim. If the indemnitor
refuses to meet with the indemnitee within such thirty (30) day period, or if
the claim cannot be resolved within an additional thirty (30) day period
following such meeting (or such longer period as the parties may mutually
agree), the indemnitee may commence legal proceedings to resolve such claim.

 

(b)          If any third party shall notify any indemnitee with respect to any
matter which may give rise to a claim for indemnification against an indemnitor
pursuant to this Article, the indemnitee shall promptly notify the indemnitor in
writing; provided, however, that failure of the indemnitee to give the
indemnitor notice as provided herein shall not relieve the indemnitor of its
obligations hereunder except to the extent, and only to the extent, that the
indemnitor is actually prejudiced thereby. In the case any legal proceedings
shall be commenced against any indemnitee with respect to a third party claim,
the indemnitor shall be entitled to jointly participate with the indemnitee in
the defense of such proceeding. Whether or not the indemnitor jointly
participates in the defense of any proceeding, the indemnitee shall not admit
any liability with respect to, or settle, compromise or discharge, such
proceeding without indemnitor’s prior written consent (which consent shall not
be unreasonably withheld or delayed) to the extent the indemnitor would be
obligated to indemnify the indemnitee under this Article with respect to such
proceeding.

 

 

 

 

11.4        Exclusive Remedy. The remedies provided for in this Article are
exclusive and shall be in lieu of all other remedies, including consequential
and direct or indirect damages, for any breach of any representation, warranty,
covenant, obligation or other provision of this Agreement; provided however,
that the foregoing clause of this sentence shall not be deemed a waiver by any
party of any right to obtain in court specific performance or injunctive relief
or other equitable remedies.

 

11.5        Additional Indemnification. If the transactions contemplated by this
Agreement fail to close for any reason, Buyer shall return to Seller (or, at
Seller’s direction, destroy) all documentation, test results, surveys, financial
statements and other confidential information furnished to Buyer by or on behalf
of Seller. Buyer agrees to reimburse, indemnify and hold Seller harmless from
and against any and all damages, injuries, liabilities, claims, demands or
liens, including, without limitation, any property damage, personal injury or
claim of lien against the Stores, caused by the due diligence activities of
Buyer permitted by this Agreement (including, without limitation, reasonable
attorneys’ fees and expenses paid or incurred by Seller during litigation, if
any), which indemnity shall survive the Closing or earlier termination of this
Agreement.

 

ARTICLE XII
POST CLOSING MATTERS

 

12.1        Post-Closing Store Access by Seller. To the extent Seller has not
completed the removal of proprietary information contemplated by Section 9.1,
Buyer will provide access to the Stores during normal business hours during the
five (5) days following the Closing Date for Seller to complete such removal.

 

12.2        Critical Deficiencies.

 

(a)          Notwithstanding that the Purchased Assets are being sold to Buyer
“AS IS, WHERE IS,” with all faults, and subject to the representations,
warranties and limitations set forth herein, Seller agrees to indemnify the
Buyer for the actual costs incurred by Buyer to cure any Critical Deficiency.
For purposes of this Agreement, “Critical Deficiency” means a (i) deficiency in
the preparation area of any Store (or other areas of a Store that are not
accessible to the general public) that Buyer reasonably assumes that, if known,
a local health department would probably determine to be of such a magnitude
that Buyer would not be permitted to open such Store for business while such
deficiency exists, or (ii) a deficiency of the store grease trap or plumbing so
that such grease trap or plumbing is not, in Buyer’s reasonable opinion,
adequate for the operation of the Store. Seller’s obligation to provide Buyer
with an indemnification due to a Critical Deficiency is conditioned upon Buyer
notifying Seller within 45 days after the Closing Date of any deficiency
described in Section 12.2(a)(i) or Section 12.2(a)(ii), and providing Seller
with back-up documentation or copies of all relevant inspections reports citing
the Critical Deficiencies.

 

 

 

 

(b)          The maximum amount of the indemnity for which Seller shall be
liable under Section 12.2 shall not exceed Three Hundred Thousand Dollars
($300,000) for all Stores combined. Seller shall have no obligation to indemnify
Buyer for lost profits or other consequential damages resulting from any
business interruption while the Critical Deficiencies are cured. Buyer
specifically acknowledges that this provision supersedes entirely all prior oral
or written discussions, agreements or understandings regarding Seller’s
responsibility for the costs to repair Critical Deficiencies. Any amounts paid
by Seller to Buyer pursuant to this Section 12.2 shall not be counted for
purposes of the last sentence of Section 11.1(b).

 

12.3        Fixed Assets Repairs and Replacements. Notwithstanding that the
Purchased Assets are being sold to Buyer “AS IS, WHERE IS,” with all faults, and
subject to the representations, warranties and limitations set forth herein, at
Closing, Buyer and Seller shall enter into the Escrow Agreement in the form
attached hereto as Exhibit 11.6. The Escrow Agreement shall provide for the
payment and reimbursement to Buyer for defects and replacements of Fixed Assets
from the Fixed Assets Escrow, which shall only include those repairs, purchases
and replacements needed so that the Stores for which Buyer does not complete a
Fixed Asset due diligence review prior to the Closing Date are operational and
able to conduct business post- Closing. Buyer shall use commercially reasonable
efforts to complete a due diligence review of the Fixed Assets at all Stores
prior to the Closing Date, and no later than 45 days following the Closing Date.
The total amount to be reimbursed to Buyer for defects and replacements of Fixed
Assets shall not exceed Two Hundred Thousand Dollars ($200,000) for all Stores
combined.

 

12.4        Letter of Credit. Buyer will maintain a renewable standby letter of
credit (the “Letter of Credit”) in favor of Seller in the amount of $3,000,000
for the first 3 years following the Closing Date and in a reduced amount of
$2,000,000 beginning 3 years following the Closing Date and lasting for the
remaining initial term of the Franchise Agreements. The Letter of Credit will
secure Buyer’s payments of (i) Continuing Royalty and Marketing Contribution
payments required by and as defined in the Franchise Agreements, and (ii) rent
payments pursuant to the Subleases. Seller will be permitted to make a draw on
the Letter of Credit in the event Buyer defaults in any of these payments and
fails to cure the default as provided in the Franchise Agreements or Subleases,
as applicable.

 

 

 

 

ARTICLE XIII
MISCELLANEOUS

 

13.1        Events of Termination. In addition to the other termination rights
set forth in this Agreement, this Agreement may be terminated, without liability
on the part of the terminating party to the other party, at any time before the
Closing Date: (i) by mutual consent of Buyer and Seller; (ii) by Buyer if any of
the conditions precedent found in Article VIII of this Agreement shall have
become incapable of fulfillment by the Closing Date through no fault of Buyer
and provided Buyer has proceeded with reasonable diligence and Buyer has not
waived the same; (iii) by Seller if any of the conditions precedent found in
Article IX of this Agreement shall have become incapable of fulfillment by the
Closing Date through no fault of Seller and have not been waived in writing by
Seller; (iv) by Buyer if there is a breach of or failure by Seller to perform in
any material respect any of the representations, warranties, commitments,
covenants or conditions under this Agreement, which breach or failure is not
cured after written notice thereof is given to Seller and prior to the Closing
Date; (v) by Seller if there is a breach of or failure by Buyer to perform in
any material respect any of the representations, warranties, commitments,
covenants or conditions under this Agreement, which breach or failure is not
cured after written notice thereof is given to the Buyer and prior to the
Closing Date; (vi) by Seller or Buyer at any time after the Walkaway Date if the
Closing has not occurred on or before such Walkaway Date; or (vii) by Buyer or
Seller upon the occurrence of a Material Adverse Change or by Buyer or Seller as
provided in Section 13.15. In the event of termination and abandonment by any
party as above provided in clauses (ii), (iii), (iv), (v), (vi) or (vii) of this
Section, written notice shall forthwith be given to the other party, which
notice shall clearly specify the reason of such party for terminating this
Agreement.

 

13.2        Notices. Except as otherwise expressly provided herein, all written
notices and reports permitted or required to be delivered by the parties
pursuant hereto shall be deemed so delivered at the time delivered by hand, or
one business day after transmission by facsimile, telegraph or other electronic
system (with confirmation copy sent by regular U.S. mail), or three (3) business
days after placement in the United States Mail by Registered or Certified Mail,
Return Receipt Requested, postage prepaid and addressed as follows:

 

To Seller: Jamba Juice Company
6475 Christie Ave
Suite 150
Emeryville, CA 94688
Attn:  SVP - Global Franchise and Development     With a copy to: Jamba Juice
Company
6475 Christie Ave
Suite 150
Emeryville, CA 94688
Attn:  Director, Legal Affairs     To Buyer:

Vitaligent, LLC

7701 Forsyth Blvd., Suite 1000
St. Louis, Missouri 63105
Attn: Dean VandeKamp

    With a copy to:

Polsinelli PC

100 S. Fourth Street

Suite 1000

St. Louis, MO 63102-1825

Attn: Andrew Hoyne, Esq.

 

Any party may change its address for purposes of this Section 13.2 by giving the
other parties written notice of the new address in the manner set forth above.

 

 

 

 

13.3        Effect of Headings. The subject headings of this Agreement are
included for convenience only and shall not affect the construction or
interpretation of any of its provisions.

 

13.4        Entire Agreement; Modification; Waiver. This Agreement and the
Disclosure Schedule, together with all Exhibits and schedules hereto or thereto
and agreements or instruments executed in connection herewith or therewith,
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties; provided that nothing in this
Agreement shall disclaim or require Buyer to waive reliance on any
representation that Seller made in the FDD. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all
the parties. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, and no waiver shall constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.

 

13.5        Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and its respective
successors and assigns. Nothing in this Agreement is intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, and no provision herein shall give any third persons any right of
subrogation or action over or against any party to this Agreement.

 

13.6        Assignment. This Agreement and the rights, interests, and
obligations hereunder shall be binding and upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by Seller without the prior written consent of
Buyer, but Buyer may at its sole discretion assign its rights and obligations
hereunder to any affiliate or any subsidiary; provided however, that any such
assignment shall not relieve Buyer of its obligations hereunder and any such
affiliate or subsidiary shall agree to be bound by the provisions of this
Agreement.

 

13.7        Signatures. The signatures of the parties to this Agreement, or to
any related document, may be delivered by facsimile or email transmission, each
of which shall be deemed an original. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

 

13.8        Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF CALIFORNIA AS APPLIED
TO CONTRACTS THAT ARE EXECUTED AND PERFORMED ENTIRELY IN CALIFORNIA. EACH PARTY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA
AND THE U.S. FEDERAL COURTS SITTING IN SAN FRANCISCO COUNTY, CALIFORNIA FOR
PURPOSES THEREOF. THE PARTIES AGREE THAT VENUE FOR ANY SUCH PROCEEDING SHALL BE
THE STATE AND FEDERAL COURTS LOCATED IN SAN FRANCISCO COUNTY, CALIFORNIA. EACH
PARTY TO THIS AGREEMENT WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE, IN ANY SUCH ACTION OR PROCEEDING, ANY CLAIM THAT (A) IT IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (B) THE ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR (C) THE VENUE OF THE ACTION OR
PROCEEDING IS IMPROPER.

 

 

 

 

13.9          Attorneys’ Fees. The prevailing party in any dispute or
controversy under or in connection with this Agreement shall be entitled to
collect its reasonable attorneys’ fees and costs from the other party.

 

13.10        Severability. If any provision of this Agreement is held invalid or
unenforceable by any arbitrator or court of final jurisdiction, it is the intent
of the parties that all other provisions of this Agreement be construed to
remain fully valid, enforceable and binding on the parties.

 

13.11        Expenses. Except as otherwise provided herein, each party shall pay
all costs and expenses incurred or to be incurred by it in negotiating and
preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement.

 

13.12         Bulk Sales. Seller and Buyer each waive compliance by the other
with any bulk sales or similar laws that may be applicable to the transactions
contemplated by this Agreement.

 

13.13         Disclosure. Seller and its parent organization shall have the
right to disclose this Agreement and related agreements in connection with any
filings or other disclosures required in connection with compliance with federal
and state securities and franchise laws, or the rules and regulations of any
applicable securities trading organization. Subject to the other provisions of
this Agreement, press releases and other publicity materials relating to the
transactions contemplated by this Agreement shall be released by the parties
only after review and with the consent of the other parties. Buyer shall not
disclose to anyone, including without limitation, any employee of Seller,
including but not limited to employees at a Store or any employee of any vendor
of Seller, without Seller’s prior consent, the existence or nature of the
transactions contemplated by this Agreement. All other terms of the
Confidentiality Agreement signed by Buyer prior to the execution of this
Agreement shall survive. This Section 13.13 does not alter or amend any
confidentiality obligations that Buyer may have or will have under the Franchise
Agreement. Buyer acknowledges and agrees that Seller’s remedy at law for any
breach of Buyer’s obligations hereunder would be inadequate, and that Seller
shall have the right to seek temporary and permanent injunctive relief in any
court proceeding to enforce this covenant regarding confidentiality. However,
nothing contained herein shall in any way affect Seller’s rights and remedies
afforded by law and/or in equity, and Seller shall retain the right to recover
such damages as it may have sustained by reason of any breach hereof.
Notwithstanding the foregoing, Seller or Buyer may disclose to any of its
current or prospective lenders, equity or other financing sources any of the
provisions of this Agreement and the documents entered into or to be entered
into in connection herewith.

 

13.14         Further Assurances. Each party, as requested by the other, shall
execute, acknowledge and deliver any further deeds, assignments, conveyances and
other assurances, documents and instruments of transfer, reasonably requested by
the other, and shall take any other action consistent with the terms of this
Agreement that may reasonably be requested by the other, for the purpose of
assigning, transferring, granting, conveying and confirming to Buyer, or
reducing to possession, any or all property to be conveyed and transferred under
this Agreement.

 

13.15         Schedules and Exhibits. The parties acknowledge that this
Agreement may be signed without certain Schedules or Exhibits agreed upon and
attached hereto. In such event, the mutual agreement of the parties to the terms
and conditions of any missing Exhibit or Schedule or any updates proposed by
Buyer or Seller to any Exhibit or Schedule attached hereto shall be a condition
precedent to the Buyer’s and Seller’s obligation to close the transactions
contemplated by this Agreement, failing which either Buyer or Seller may
terminate this Agreement as provided in Section 13.1.

 

SIGNATURE PAGE FOLLOWS

 

 

 

 

IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on the
day and year first above written.

 

“SELLER”   “BUYER”       JAMBA JUICE COMPANY   VITALIGENT, LLC a California
corporation   a Delaware limited liability company           By:     By:        
    Name:     Name:             Its:     Its:  

 

 

 

 

ANNEX 1.1
DEFINED TERMS

 

“Actual Financials” has the meaning given to it in Section 4.6(a).

 

“Addendum to Franchise Agreement” has the meaning given to it in Section 3.2(a).

 

“Affiliates” means any person or entity that directly or indirectly controls, is
controlled by, or is under common control with, the person or entity in question
or any partner, member, manager, officer, or director of the person or entity in
question. “Control” means directly or indirectly having the power to direct or
cause the direction of management, whether through ownership, governance,
contract or otherwise.

 

“Agreement” has the meaning given to it in the Caption.

 

“Applicable Law” means and includes applicable common law and all applicable
statutes, laws, rules, regulations, ordinances, policies and procedures
established by any governmental authority, including, without limitation, those
governing the development, construction and/or operation of a Jamba Juice Store,
including, without limitation, all labor, disability, food and drug laws and
regulations, as in effect on the Closing Date hereof, and as may be enacted,
modified or amended from time to time thereafter.

 

“Assumed Contracts” has the meaning given to it in Section 2.1(ii).

 

“Bankruptcy” means any voluntary petition by or involuntary petition against
Seller or Parent shall be filed under any chapter of the United States
Bankruptcy Code or similar code of an foreign country; or any proceeding
involving Seller or Parent shall be instituted under any other law relating to
the relief of debtors and is not discharged within thirty (30) days of filing or
institution; or Seller or Parent shall be called to perform on any indebtedness
or guaranty held by any creditor or lender of Seller or Parent, whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise, and
Seller or Parent fails to perform when called upon to do so; or the insolvency
of Seller or Parent under any state insolvency act; or the appointment of a
receiver or trustee for Seller or Parent; or any other event of “bankruptcy”
with respect to Seller or Parent.

 

“Buyer” has the meaning given to it in the Caption.

 

“Buyer Indemnified Parties” has the meaning given to it in Section 11.1(a).

 

“Buyer Parties” has the meaning given to it in Section 11.1(a).

 

“Change Fund” has the meaning given to it in Section 3.1(b).

 

“Closing” has the meaning given to it in Section 10.1.

 

“Closing Date” has the meaning given to it in Section 10.1.

 

 

 

 

“Contracts” all contracts, agreements, leases, license agreements, arrangements
and/or commitments of any kind to which Seller is a party which relate to the
Store other than the Real Property Lease.

 

“Contract Interests” has the meaning given to it in Section 2.3(b).

 

“Critical Deficiency” has the meaning given to it in Section 12.3.

 

“Disclosure Schedule” has the meaning given to it in Article 4.

 

“Effective Time” has the meaning given to it in Section 10.1.

 

“Escrow Agent” has the meaning given to it in the Escrow Agreement.

 

“Escrow Agreement” has the meaning given to it in Section 12.3.

 

“Excluded Assets” has the meaning given to it in Section 2.2.

 

“FDD” means Seller’s most recent Franchise Disclosure Document updated through
the date of this Agreement.

 

“Fiscal Year” means the 51, 52 or 53 week period that ends on the Tuesday
closest to December 31 of each calendar year and begins on the following
Wednesday.

 

“Fiscal Period” is the basic fiscal weeks or months that comprise a Fiscal Year.

 

“Fixed Assets” has the meaning given to it in Section 2.1(i).

 

“Fixed Assets Escrow” has the meaning given to it in Section 3.1.

 

“Franchise Agreement” and “Franchise Agreements” have the meanings given to them
in the Recitals.

 

“General Manager” has the meaning given to it in Section 7.2.2 of the Franchise
Agreement.

 

“Initial Fee” or “Initial Fees” refers to the Initial Fee defined and described
in the Franchise Agreements.

 

“Inspections” means Buyer’s right to inspect the Store and Purchased Assets to
determine if the Fixed Assets are in satisfactory working condition.

 

“Liabilities” has the meaning given to it in Section 2.6.

 

“Leased Property” and “Leased Properties” have the meanings given to them in the
Recitals.

 

“Letter of Credit” has the meaning set forth in Section 12.4.

 

“Liens” has the meaning given to it in Section 4.7(a).

 

 

 

 

“Marketable Inventory” refers to items of tangible personal property for sale
that are of a quality that is usable and salable and meets all applicable
requirements of any applicable law.

 

“Marks” refers to certain proprietary and other property rights and interests in
and to the “JAMBA JUICE®” name and service mark, and such other trademarks,
service marks, logo types and commercial symbols as Seller may from time to time
authorize for use by either its licensees or franchisees.

 

“Material Adverse Change” means any effect or change that would be materially
adverse to the business of any of the Stores. None of the following shall be
deemed to constitute, and none of the following shall be taken into account in
determining whether there has been, a Material Adverse Change: any material
adverse change in (1) general business or economic conditions, excluding such
conditions related to the business of a Store, (2) financial, banking, or
securities markets (including any disruption thereof and any decline in the
price of any security or any market index), excluding markets and market
conditions related to Seller or Parent, (3) changes in United States generally
accepted accounting principles, (4) changes in laws, rules, regulations, orders
or other binding directives issued by any governmental entity (unless such
changes affect the smoothie industry or the ability of some or all of the Stores
to operate), or (5) the taking of any action contemplated by this Agreement and
the other agreements contemplated hereby. Material Adverse Change shall include
a Bankruptcy.

 

“Memorandum of Intent” means that certain Non-Binding Indication of Interest to
Purchase JAMBA JUICE® Store dated March 2015 delivered by Buyer to Seller.

 

“Confidential Information Memorandum” has the meaning given to it in Section
4.6(a).

 

“Parent” means Jamba, Inc., the parent company of Seller.

 

“Prime Lease” and “Prime Leases” have the meanings given to them in the
Recitals.

 

“Purchase Price” has the meaning given to it in Section 3.1(a).

 

“Purchased Assets” has the meaning given to it in Section 2.1.

 

“Seller” has the meaning given to it in the Caption.

 

“Seller Indemnified Parties” has the meaning given to it in Section 11.2.

 

“Seller Parties” has the meaning given to it in Section 11.2.

 

“Store” and “Stores” have the meanings given to them in the Recitals.

 

“Sublease(s)” have the meanings given to them in Section 2.3(a).

 

“System” shall mean the Seller’s business operating methods for a Store, as
further defined in the Franchise Agreement.

 

“Transferred Employees” has the meaning given to it in Section 3.5(a).

 

“Walkaway Date” has the meaning given to it in Section 10.1.

 

“WARN” has the meaning given to it in Section 3.5(a).