Exhibit 10.3

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of May 1, 2020, by and
among BJ’s Restaurants, Inc., a California corporation (the “Company”), and
SC 2018 Trust LLC, a Delaware limited liability company (the “Buyer”).

WHEREAS:

A.    The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.

B.    The Buyer wishes to purchase, and the Company wishes to sell at the
Closing (as defined below), upon the terms and conditions stated in this
Agreement, 375,000 shares of common stock, no par value per share, of the
Company (the “Common Stock” and such shares, the “Common Shares”).

C.    As a condition precedent to the Closing, the parties hereto will execute
and deliver, among other things, (i) a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the “Registration Rights
Agreement”), (ii) an Investor Rights Agreement, substantially in the form
attached hereto as Exhibit B (the “Investor Rights Agreement”), and (iii) a
Common Stock Purchase Warrant, substantially in the form attached hereto as
Exhibit C (the “Warrant Agreement”).

D.    The shares of Common Stock issuable pursuant to this Agreement are
referred to herein as the “Purchased Shares”.

E.    The shares of Common Stock issuable pursuant to this Agreement and the
shares of Common Stock issuable pursuant to the Warrant Agreement collectively
are referred to herein as the “Securities”.

NOW, THEREFORE, the Company and each Buyer hereby agree as follows:

1.    PURCHASE AND SALE OF PURCHASED SHARES.

(a)    Purchase of the Common Stock. Subject to the satisfaction (or waiver) of
the conditions set forth in Sections 5 and 6 below, the Company shall issue and
sell to the Buyer free and clear of any Liens (other than Liens incurred by the
Buyer, restrictions arising under applicable securities laws, or restrictions
imposed by the Transaction Documents), and the Buyer agrees to purchase from the
Company on the Closing Date (as defined below), 375,000 Purchased Shares (the
“Closing”).

(b)    Closing Date. The date, time and place of the Closing (the “Closing
Date”) shall be on May 5, 2020 after notice of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 5 and 6 below, remotely by
electronic exchange of Closing documentation upon mutual agreement among the
Company and the Buyer (or such other date, time and place as is mutually agreed
to by the Company and the Buyer).

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(c)    Purchase Price. The Buyer shall pay $20.00 for each Purchased Share to be
purchased by the Buyer at the Closing (the “Purchase Price”). The aggregate
Purchase Price paid by the Buyer shall be $7,500,000 (the “Aggregate Purchase
Price”).

(d)    Form of Payment. On the Closing Date, subject to the receipt of evidence
of issuance of the Purchased Shares referred to in Section 6(a)(1), (i) the
Buyer shall pay the Aggregate Purchase Price to the Company for the Purchased
Shares at the Closing, by wire transfer of immediately available funds in
accordance with the Company’s written wire instructions and (ii) the Company
shall issue to the Buyer in book-entry form 375,000 Common Shares.

2.    BUYER’S REPRESENTATIONS AND WARRANTIES. The Buyer represents and warrants
that:

(a)    Organization and Qualification. The Buyer is duly organized and validly
existing and in good standing under the laws of the jurisdiction in which it is
formed, and has the requisite power and authorization to own its properties and
to carry on its business as now being conducted and as presently proposed to be
conducted. The Buyer is duly qualified as a foreign entity to do business and is
in good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not, individually or in the aggregate, reasonably be expected to have a
Buyer Material Adverse Effect. As used in this Agreement, “Buyer Material
Adverse Effect” means any change, effect, event, occurrence or development that
would prevent, materially delay, or materially impair the Buyer’s ability to
consummate any of the transactions contemplated hereby or under any of the other
Transaction Documents.

(b)    Consents. The Buyer is not required to obtain any consent, authorization
or order of, or make any filing or registration with any court, governmental
agency or any regulatory or self-regulatory agency or any other Person (as
defined below), other than the filing with the SEC of a Schedule 13D and any
required amendments with respect to the Purchased Shares, in order for it to
execute, deliver or perform any of its obligations under or contemplated by this
Agreement, and the Buyer is unaware of any facts or circumstances that might
prevent the Buyer from obtaining or effecting any of the consent, registration,
application or filings pursuant to the preceding sentence.

(c)    Sufficient Funds. At the Closing, the Buyer will have available funds
necessary to consummate the purchase of the Purchased Shares and pay to the
Company the Aggregate Purchase Price, as contemplated by Section 1(c).

(d)    No Public Sale or Distribution. The Buyer is acquiring the applicable
Purchased Shares for its own account and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act. The Buyer does not presently
have any agreement or understanding, directly or indirectly, with any Person (as
defined below) to distribute any of the Securities. For purposes of

 

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this Agreement, “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and any governmental entity or any department or
agency thereof.

(e)    Accredited Investor Status. The Buyer is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D. The Buyer (i) has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of its prospective investment with respect to the
Securities and (ii) can bear the economic risk of (A) an investment in the
Securities indefinitely and (B) a total loss in respect of such investment.

(f)    Reliance on Exemptions. The Buyer understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities. Prior to the Closing, the Buyer is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby and the Buyer is
not a “beneficial owner” of more than 10% of the shares of Common Stock (as
defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”)).

(g)    Information. The Buyer and its advisors, if any, have been furnished with
or have had full access to all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities that have been requested by the Buyer. The Buyer and its advisors, if
any, have been afforded the opportunity to ask questions of the Company or its
representatives. The Buyer has sought such accounting, legal and tax advice as
it has considered necessary to make an informed investment decision with respect
to its acquisition of the Securities.

(h)    No Governmental Review. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

(i)    Transfer or Resale. The Buyer acknowledges that: (i) the Securities have
not been and are not being registered under the 1933 Act or any state securities
laws, (ii) the Buyer cannot sell, transfer, or otherwise dispose of any of the
Securities, except in compliance with the Transaction Documents and the
registration requirements or exemption provisions of the 1933 Act and any other
applicable securities laws; and (iii) neither the Company nor any other Person
is under any obligation to register the Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any
exemption thereunder (except pursuant to the Registration Rights Agreement).

(j)    Brokers; Finders. No broker, investment banker, financial advisor or
other Person is entitled to any broker’s, finder’s, financial advisors or other
similar fee or commission,

 

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or the reimbursement of expenses in connection therewith, in connection with the
transactions contemplated by the Transaction Documents based upon arrangements
made by or on behalf of the Buyer.

(k)    Authorization; Validity; Enforcement. The Buyer has the requisite power
and authority to enter into and perform its obligations under the Transaction
Documents. The execution and delivery of this Agreement and the other
Transaction Documents by the Buyer and the consummation by the Buyer of the
transactions contemplated hereby and thereby have been, or when executed will
be, duly authorized by the Buyer. This Agreement and the other Transaction
Documents have been duly and validly authorized, executed and delivered on
behalf of the Buyer and shall constitute the legal, valid and binding
obligations of the Buyer enforceable against the Buyer in accordance with their
respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies.

(l)    No Conflicts. The execution, delivery and performance by the Buyer of
this Agreement and the other Transaction Documents and the consummation by the
Buyer of the transactions contemplated hereby and thereby will not (i) result in
a violation of the organizational documents of the Buyer or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Buyer is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
foreign, federal and state securities laws and regulations and applicable laws
of any foreign, federal, and other state laws) applicable to the Buyer or by
which any property or asset of the Buyer is bound or affected, in each case
other than as would not, individually or in the aggregate, reasonably be
expected to have a Buyer Material Adverse Effect.

(m)    No Other Company Representations or Warranties. The Buyer acknowledges
and agrees that neither the Company nor any of its Subsidiaries makes or has
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3 and in
any certificate or other Transaction Document delivered by the Company in
connection with this Agreement. In connection with the due diligence
investigation of the Company by the Buyer and its representatives, the Buyer and
its representatives have received and may continue to receive from the Company
and its representatives certain estimates, projections, forecasts and other
forward-looking information, as well as certain business plan information
containing such information, regarding the Company and its Subsidiaries and
their respective businesses and operations. The Buyer hereby acknowledges that
there are uncertainties inherent in attempting to make such estimates,
projections, forecasts and other forward-looking statements, as well as in such
business plans, with which the Buyer is familiar, that the Buyer is making its
own evaluation of the adequacy and accuracy of all estimates, projections,
forecasts and other forward-looking information, as well as such business plans,
so furnished to the Buyer (including the reasonableness of the assumptions
underlying such estimates, projections, forecasts, forward-looking information
or business plans), and that except for the representations and warranties made
by the Company in Section 3 and in any certificate or other Transaction Document
delivered by the Company in connection with this Agreement, the Buyer will have
no claim against the Company or any of its Subsidiaries, or any of their
respective

 

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representatives, with respect thereto. Notwithstanding anything to the contrary
herein, nothing in this Agreement shall limit the right of the Buyer or any of
its Affiliates to rely on the representations, warranties, covenants and
agreements expressly set forth in this Agreement and in any certificate or other
Transaction Document delivered by the Company in connection with this Agreement,
nor will anything in this Agreement operate to limit any claim by the Buyer or
any of its Affiliates for actual and intentional fraud. As used in this
Agreement, “Affiliate” of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person as of the date which, or at any time during the period
for which, the determination of affiliation is being made; provided that, with
respect to Buyer, an Affiliate shall expressly include any Affiliate of Ron
Shaich or any Affiliate of Act III Holdings, LLC. For purposes of this
definition, “control,” when used with respect to any Person, has the meaning
specified in Rule 12b-2 under the Exchange Act; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Buyer that except as (A) disclosed
(to the extent that the relevance of any such disclosure with respect to any
section of this Agreement is reasonably apparent on its face) in SEC Documents
filed or furnished after December 31, 2019 and prior to the date hereof and
other than any disclosures (x) in any risk factors section (to the extent such
disclosure is predictive or forward-looking in nature), (y) in any
“forward-looking statements” section or (z) in any other sections to the extent
such disclosures are similarly predictive or forward-looking in nature, or
(B) set forth in the confidential disclosure letter delivered by the Company to
the Buyer prior to the execution of this Agreement (the “Company Disclosure
Letter”) (it being understood that any information, item or matter set forth on
one section or subsection of the Company Disclosure Letter shall be deemed
disclosure with respect to, and shall be deemed to apply to and qualify, the
section or subsection of this Agreement to which it corresponds in number and
each other section or subsection of this Agreement to the extent that it is
reasonably apparent on its face that such information, item or matter is
relevant to such other section or subsection):

(a)    Organization and Qualification. Each of the Company and each of its
Subsidiaries are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authority to own their properties and to carry on their
business as now being conducted and as presently proposed to be conducted. Each
of the Company and its Subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

As used in this Agreement, “Subsidiary” means any company, partnership, limited
liability company, joint venture, joint stock company, trust, unincorporated
organization or other entity for which the Company directly or indirectly owns
(a) at least 50% of the ordinary voting power (or, in the case of a partnership,
more than 50% of the general partnership interests) or (b) sufficient voting
rights to elect at least a majority of the board of directors or other governing
body. As used in this Agreement, “Material Adverse Effect” means any change,
effect, event,

 

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occurrence or development that has a material adverse effect on the business,
operations, results of operations, capital, properties, assets, liabilities or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, provided, that, none of the following shall be deemed either alone or
in combination to constitute, and none of the following shall be taken into
account in determining whether there has been, a Material Adverse Effect:
(A) changes generally affecting the industry in which the Company or its
Subsidiaries operate; (B) general changes in the economic or business conditions
or securities, credit, financial or other capital markets of the U.S. or any
other region outside of the U.S. (including changes generally in prevailing
interest rates, currency exchange rates, credit markets and price levels or
trading volumes) in which the Company or its Subsidiaries operate;
(C) earthquakes, fires, floods, hurricanes, tornadoes, pandemics, or similar
catastrophes or acts of god or weather conditions, and any state or federal
government orders or other actions in response thereto, (D) political
conditions, including acts of terrorism, war, sabotage, national or
international calamity, military action or any other similar event or any
change, escalation or worsening thereof after the date hereof (other than
cyberattacks targeting the Company or its Subsidiaries); (E) any change in GAAP
(as defined in Section 3(h)) or any change in laws of general applicability (or
interpretation or enforcement thereof) after the date hereof; (F) the execution
of this Agreement or the public disclosure of this Agreement or the transactions
contemplated hereby (including the impact thereof on the relationships,
contractual or otherwise, of the Company or any of its Subsidiaries with
employees, labor unions (if any), financing sources, customers, suppliers, or
partners that the Company can reasonably establish resulted from the execution
or the public disclosure of this Agreement or the transactions contemplated
hereby); (G) any failure to meet internal or published projections, forecasts or
revenue or earning predictions for any period; (H) a decline in the trading
price or trading volume of the Company’s common stock; provided that the
underlying causes of such decline, change or failure, may be considered in
determining whether there was a Material Adverse Effect; and (I) any actions
taken, or failure to take any action, in each case, to which the Buyers have
expressly given advance written approval or consent, that is affirmatively
required by this Agreement or requested by a Buyer; provided that a material
adverse effect described in any of the foregoing clauses (A) through (E) may be
taken into account to the extent the Company and its Subsidiaries are
disproportionately affected thereby relative to other companies in the
industries in which the Company and its Subsidiaries operate. As used in this
Agreement, “knowledge” means, with respect to the Company, the actual knowledge
of Gregory Trojan, Gregory Levin and Kendra Miller, in each case, after
reasonable inquiry of such person’s direct reports.

(b)    Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement, the Investor Rights Agreement
and the Warrant Agreement (collectively, the “Transaction Documents”) and to
consummate the transactions contemplated hereby and thereby and to reserve for
issuance and issue the Securities in accordance with the terms of the
Transaction Documents. The execution and delivery of this Agreement and the
other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Purchased Shares and the reservation for
issuance and the issuance of the Common Shares issuable upon the exercise of the
Buyer’s rights under the Warrant Agreement, have been duly authorized by the
Company’s Board of Directors (the “Board”) and (other than the filing with the
SEC of a Form D and one or more Registration Statements (as defined in the
Registration Rights Agreement) in accordance with the requirements of the
Registration Rights Agreement and other

 

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filings as may be required by state securities agencies) no further filing,
consent, or further authorization is required by the Company, the Board or its
shareholders. This Agreement and the other Transaction Documents have been (or
will be, upon execution) duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies. Assuming that Buyer is not a member of a “group” (within
the meaning of Section 13(d)(3) of the Exchange Act) acquiring more than 20% of
the Company’s outstanding common stock simultaneously with the transactions
contemplated by this Agreement, no Shareholder Approval will be required for the
issuance of the Securities. For purposes of this Agreement, “Shareholder
Approval” means (i) any approval of the shareholders of the Company necessary to
approve the issuance of the Securities under the applicable rules of the
Principal Market or (ii) a waiver of the applicability of such rules to the
Securities.

(c)    Issuance of Securities. The issuance of the Purchased Shares is duly
authorized and, upon issuance in accordance with the terms of the Transaction
Documents, shall be (i) validly issued, (ii) free from all preemptive or similar
rights, taxes, Liens, charges and other encumbrances with respect to the issue
thereof and (iii) fully paid and nonassessable with the holders being entitled
to all rights accorded to a holder of Common Stock. Upon exercise of the Buyer’s
rights under the Warrant Agreement and payment of the consideration required
upon exercise thereunder, the applicable Common Shares will be validly issued,
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, Liens, charges and other encumbrances with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common
Stock. Assuming in part the accuracy of each of the representations and
warranties of the Buyer set forth in Section 2 of this Agreement, the offer and
issuance by the Company of the Securities is exempt from registration under the
1933 Act.

(d)    No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Securities) will not (i) result in a violation of the Company’s Articles of
Incorporation (the “Articles of Incorporation”), or the Company’s Bylaws, dated
as of May 30, 2007 and in effect on the Closing Date (the “Bylaws”), or
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) in any respect under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party or result in the creation of any Lien (other than
Permitted Liens) upon any of the properties or assets of the Company or any of
its Subsidiaries, or (iii) assuming the accuracy of the representations and
warranties of Buyer under this Agreement, result in a violation of any law,
rule, regulation, order, judgment or decree (including foreign, federal and
state securities laws and regulations and the rules and regulations of The
NASDAQ Global Select Market (the “Principal Market”) and applicable laws of the
State of California and any foreign, federal, and other state laws) applicable
to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected, other than, in the
case of clause (ii) or clause (iii), as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or prevent,
materially

 

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delay or materially impair the Company’s ability to consummate any of the
transactions contemplated hereby or under any of the other Transaction
Documents. As used in this Agreement, “Lien” means any mortgage, charge, pledge,
hypothec, security interest, prior claim, encroachments, lien (statutory or
otherwise), defect of title, adverse right or claim, or encumbrance of any kind,
in each case, whether contingent or absolute and “Permitted Lien” means , in
respect of any Person, any one or more of the following, applying to such Person
or any of its Subsidiaries: (i) Liens for taxes which are not yet due or payable
or that are being contested in good faith by appropriate proceedings; (ii) Liens
of mechanics, repairmen, workers, carriers and other similar liens arising in
the ordinary course of such Person’s business relating to obligations as to
which there is no default on the part of such Person or any of its Subsidiaries,
or the validity or amount of which is being contested in good faith by
appropriate proceedings; (iii) zoning, building, entitlement and other land use
regulations promulgated by any governmental entities of competent
jurisdiction;(iv) easements, rights of way and other similar encumbrances that
do not materially interfere with the present use of or title to the property
related thereto and would not be shown or disclosed by a current and accurate
survey; (v) Liens incurred in the ordinary course of such Person’s business that
do not, individually or in the aggregate, materially impair the current use,
operation or value of the property subject thereto or the conduct of the
business of such Person and its Subsidiaries as currently conducted; and
(vi) Liens in favor of the Company’s lender pursuant to the Credit Agreement (as
defined herein).

(e)    Consents. The Company is not required to obtain any consent, approval,
authorization, permit, declaration or order of, or make any filing or
registration with (other than the filing with the SEC of a Form D and one or
more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, other filings as may be required by state
securities agencies and the listing of the Securities on the Principal Market),
any court, governmental agency or any regulatory or self-regulatory agency or
any other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents, in each case in
accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected on or prior to
the Closing Date (or in the case of the filings detailed above, will be made
after the Closing Date within the time period required by applicable Law), and
the Company and its Subsidiaries are unaware of any facts or circumstances that
might prevent the Company or any of its Subsidiaries from obtaining or effecting
any of the consent, registration, application or filings pursuant to the
preceding sentence. The Company is not in violation of the listing requirements
of the Principal Market and has no knowledge of any facts or circumstances that
would reasonably lead to delisting or suspension of the Common Stock in the
foreseeable future, except as would not, individually or in the aggregate,
reasonably be expected to prevent, materially delay or materially impair the
Company’s ability to consummate any of the transactions contemplated hereby or
under any of the other Transaction Documents.

(f)    No General Solicitation; Broker Fees. Neither the Company, nor any of its
Subsidiaries, nor, to the knowledge of the Company, any Person acting on its or
their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other
than for Persons engaged by the Buyer or its investment advisor) relating to or
arising out of the transactions contemplated hereby.

 

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(g)    No Integrated Offering. None of the Company nor its Subsidiaries, nor, to
the knowledge of the Company, 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 require
registration of the issuance of any of the Securities under the 1933 Act,
whether through integration with prior offerings or otherwise, or cause this
offering of the Securities to require the approval of the shareholders of the
Company for purposes of the 1933 Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of
the Principal Market.

(h)    SEC Documents; Financial Statements; Shell Company Status.

(i)    Since December 31, 2017, the Company has timely filed or furnished all
the SEC Documents required to be filed or furnished by it with the SEC pursuant
to Section 13(a) or 15(d) of 1934 Act. As of their respective filing or being
furnished (or if amended or supplemented, as of the date of such amendment or
supplement, or, in the case of an SEC Document that is a registration statement
filed pursuant to the 1933 Act or a proxy statement filed pursuant to the 1934
Act, on the date of effectiveness of such SEC Document or date of the applicable
meeting, respectively), the SEC Documents complied or will comply, as
applicable, with the applicable requirements of the 1933 Act, the 1934 Act and
the Sarbanes-Oxley Act of 2002, as amended (and in each case, the rules and
regulations of the SEC promulgated thereunder), in each case as in effect at
such time, and none of the SEC Documents, at the time they were filed or
furnished, or will be filed or furnished, with the SEC (or, if amended or
supplemented, the date of the filing of such amendment or supplement, with
respect to the disclosures that were so amended or supplemented or, in the case
of an SEC Document that is a registration statement filed pursuant to the 1933
Act or a proxy statement filed pursuant to the 1934 Act, on the date of
effectiveness of such SEC Document or date of the applicable meeting,
respectively), 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
or will be made, not misleading. For purposes of this Agreement, “SEC Documents”
means all reports, schedules, forms, statements and other documents required to
be filed and so filed by it with the SEC under Sections 12, 13, 14 or 15(d) of
the 1934 Act and all exhibits included therein and financial statements
(including the consolidated balance sheets and consolidated statements of
income, changes in stockholders’ equity (deficit) and cash flows), notes and
schedules thereto and documents incorporated by reference therein. The Company
is currently eligible to register securities on Form S-3.

(ii)    To the knowledge of the Company, (i) none of the SEC Documents filed or
furnished since December 31, 2017 is subject to any pending proceeding by or
before the SEC, and (ii) there are no outstanding or unresolved comments
received from the SEC with respect to any of the SEC Documents filed or
furnished since December 31, 2017.

(iii)    None of the Subsidiaries of the Company is subject to the reporting
requirements of Section 13a or 15d of the 1934 Act.

 

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(iv)    The Company has established and maintains disclosure controls and
procedures and a system of internal controls over financial reporting (as such
terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under
the 1934 Act) in accordance with Rule 13a-15 under the 1934 Act that are
reasonably designed to ensure that information required to be disclosed by the
Company is recorded and reported on a timely basis to the individuals
responsible for the preparation of the Company’s filings with the SEC and other
public disclosure documents. Since December 31, 2018, neither the Company nor
any of its Subsidiaries has identified or been made aware of (i) any
“significant deficiencies” or “material weaknesses” (as defined by the Public
Company Accounting Oversight Board) in the design or operation of the Company’s
internal controls over and procedures relating to financial reporting which
would reasonably be expected to adversely affect in any material respect the
Company’s ability to record, process, summarize and report financial data, in
each case which has not been publicly disclosed or (ii) any fraud, whether or
not material, that involves management or other employees who have a significant
role in the Company’s internal control over financial reporting.

(v)    As of their respective filing dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as in effect as of the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles, consistently applied, during
the periods involved (“GAAP”) (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements or (iii) as otherwise permitted by Regulation S-X and the
other rules and regulations of the SEC) and fairly present in all material
respects the financial position of the Company and its Subsidiaries as of the
dates thereof and the results of its operations for the periods then ended
(subject, in the case of unaudited statements, to notes and normal year-end
audit adjustments that are not material in amount or effect).

(vi)    Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, neither the Company nor any of its
Subsidiaries has any liabilities of any nature (whether accrued, absolute,
contingent or otherwise) that would be required under GAAP, as in effect on the
date hereof, to be reflected on a consolidated balance sheet of the Company
(including the notes thereto) except liabilities (i) reflected or reserved
against in the consolidated balance sheet (or the notes thereto) of the Company
and its Subsidiaries included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2019 (the “Balance Sheet Date”), (ii) incurred after
the Balance Sheet Date in the ordinary course of the Company’s business,
(iii) as expressly contemplated by the Transaction Documents or otherwise
incurred in connection with the transactions contemplated hereby and thereby, or
(iv) that have been discharged or paid prior to the date of this Agreement.

(vii)    Neither the Company nor any of its Subsidiaries is a party to, or has
any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar contract, agreement or arrangement (including any
contract, agreement or arrangement relating to any transaction or relationship
between or among the Company or one or more of its Subsidiaries, on the one
hand, and any other Person, including any structured finance, special purpose or
limited purpose entity or Person, on the other hand), or any “off-balance sheet
arrangements” (as defined in Item 303(a) of Regulation S-K of the 1933 Act).

 

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(viii)    The Company is not, and has not been at any time, an issuer identified
in Rule 144(i)(1).

(i)    Absence of Certain Changes. Since December 31, 2019, (a) except for the
execution and performance of this Agreement and the discussions, negotiations
and transactions related thereto, the business of the Company and its
Subsidiaries has been carried on and conducted in all material respects in the
ordinary course of business, and (b) there has not been any Material Adverse
Effect or any event, change or occurrence that would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

(j)    Compliance with Organizational Documents and Laws; Conduct of Business;
Regulatory Permits.

(i)    Neither the Company nor any of its Subsidiaries is in violation of any
term of or in default under any certificate of determination of any outstanding
series of preferred stock of the Company (if any), the Articles of Incorporation
or Bylaws or their organizational charter or memorandum of association or
articles of incorporation or articles of association or bylaws, respectively.

(ii)    Neither the Company nor any of its Subsidiaries is in violation of any
judgment, decree or order or any law, statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, and neither the Company
nor any of its Subsidiaries will conduct its business in violation of any of the
foregoing, except for possible violations which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

(iii)    The Company and its Subsidiaries possess all Licenses issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, and to the
knowledge of the Company, neither the Company nor any of its Subsidiaries has
received any written notice of proceedings, and no proceedings have been
threatened, relating to the revocation or modification of any such License. As
used in this Agreement, “License” means any license, permit, certification,
approval, registration, consent, authorization, franchise, variance or exemption
issued or granted by a governmental entity.

(iv)    Each of the facilities of the Company and its Subsidiaries is in
compliance in all material respects with the Americans with Disabilities Act of
1990, as amended, and other similar laws applicable to such facilities.

(v)    None of the Company nor any of its Subsidiaries has, during the last
three years, been cited, fined or otherwise been notified by any Person of any
(i) material failure to comply with any applicable laws related to the
preparation, holding, offering for sale and sale of food and beverages,
including any applicable laws governing food and beverage safety and handling,
nutrition labeling on menus or branding or (ii) material investigation or review
by any governmental authority regarding the foregoing.

 

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(vi)    Any and all approvals and/or filings by any federal, state or local food
or liquor authority necessary for the continued operation of any establishment
operated by the Company or any of its Subsidiaries with full food and liquor
service have been received and/or filed, as applicable, and are in full force
and effect, except where the failure to have been received and/or filed, as
applicable, or be in full force and effect, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. As of and
after the Closing Date, to the knowledge of the Company and assuming that
neither Buyer nor its Affiliates own any business engaged in the distribution or
manufacture of alcoholic beverages, no such approvals and/or filings, as
applicable, shall require the inclusion of the Buyer as a party, guarantor or
signatory to such approval or filing.

(k)    Equity Capitalization. The authorized capital stock of the Company
consists of (i) 125,000,000 shares of Common Stock, no par value, of which as of
the date hereof, 18,760,619 shares are issued and outstanding, and 2,446,823
shares are reserved for issuance pursuant to the Company’s Equity Incentive Plan
and (ii) 5,000,000 shares of preferred stock, no par value per share, none of
which are issued and outstanding. All of such issued and outstanding shares are,
or upon issuance will be, validly issued, fully paid and nonassessable. As of
the Closing Date, other than the Common Stock, no other shares of capital stock
will be issued or outstanding. The Company has reserved for issuance that number
of shares of Common Stock that are issuable under the Warrant Agreement and when
issued upon exercise of the Buyer’s rights thereof in accordance with the
Warrant Agreement will be issued, fully paid and non-assessable and will not be
subject to any preemptive right or any restriction on transfer under applicable
law or contract, agreement or arrangement other than applicable federal and
state securities laws, this Agreement and the Investor Agreement. Other than as
provided in the Transaction Documents, and except for equity incentive awards
outstanding under the Company’s Equity Incentive Plan, there are no other
outstanding rights, options, warrants, preemptive rights, rights of first offer,
or similar rights for the purchase or acquisition from the Company of any
capital stock or other securities of the Company or its Subsidiaries or any
other securities or bonds, debentures, notes or other obligations convertible or
exchangeable into or exercisable for or giving any Person a right to subscribe
for any capital stock or other securities of the Company or any of its
Subsidiaries, nor are there any commitments to issue or execute any such rights,
options, warrants, preemptive rights or rights of first offer. Except as
otherwise provided in the Warrant Agreement and the Registration Rights
Agreement, there are no outstanding rights or obligations of the Company to
register with the SEC or repurchase or redeem any of its equity securities. The
rights, preferences, privileges, and restrictions of the Common Stock are as
stated in the Articles of Incorporation. The Company does not have outstanding
shareholder purchase rights or “poison pill” or any similar arrangement in
effect giving any Person the right to purchase any equity interest in the
Company upon the occurrence of certain events. As of the date hereof and as of
the Closing Date, the Company’s Common Stock is listed on the Principal Market
and no event has occurred, and the Company is not aware of any event that is
reasonably likely to occur, that would result in the Common Stock being delisted
from the Principal Market. Neither the Company nor any of its Subsidiaries have
outstanding any bonds, debentures, notes or other obligations, the holders of
which have the right to vote (or convert into or exercise for securities having
the right to vote) with the stockholders of the Company on any matter or with
the equity holders of any of the Company’s Subsidiaries on any matter,
respectively. Neither the Company nor any of its Subsidiaries is a party to any
voting agreement or similar agreement with respect to the capital stock or other
securities of the Company or any of its Subsidiaries.

 

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(l)    Indebtedness and Other Contracts. Except with respect to the covenants
contained in that certain Third Amended and Restated Credit Agreement, dated on
or about the date of this Agreement, among the Company, Bank of America, N.A.,
as Administrative Agent, JPMorgan Chase Bank, N.A., and the other lending
institutions that are parties thereto (the “Credit Agreement”), the Company is
not party to any material loan or credit agreement, indenture, debenture, note,
bond, mortgage, deed of trust, lease, sublease, License, contract or other
agreement or arrangement, and is not subject to any provision in the Articles of
Incorporation or Bylaws that, in each case, by its terms prohibits or prevents
the Company from paying dividends in form and the amounts contemplated by the
Warrant Agreement. The Company and its Subsidiaries are not in material breach
of, or default or violation under, the Credit Agreement. Other than the Credit
Agreement, the Company is not party to any material loan or credit agreement,
indenture, debenture, note, bond, mortgage, deed of trust, lease, sublease,
License, contract or other agreement or arrangement that would rank senior to or
pari passu with the Securities.

(m)    Absence of Litigation. The Company has received no written notice of any,
and there are no, actions, suits, proceedings, inquiries or investigations
before or by the Principal Market, any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries,
except as arising in the ordinary course of the Company’s business and which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or prevent, materially delay or materially impair the
Company’s ability to consummate any of the transactions contemplated hereby or
under any of the other Transaction Documents.

(n)    Employee Relations.

(i)    Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreement or employs any member of a union. Since
December 31, 2017, except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there has been no
strike, lockout, slowdown, or work stoppage pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries.

(ii)    The Company and its Subsidiaries are in compliance with all federal,
state, local and foreign laws and regulations respecting labor, employment and
employment practices and benefits, terms and conditions of employment and wages
and hours, except where failure to be in compliance would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

(iii)    Neither the Company nor any of its Subsidiaries is delinquent in any
payments to any of their respective employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
the Company or any of its Subsidiaries.

(iv)    Neither the Company nor any of its Subsidiaries has incurred any
obligation or liability under the Worker Adjustment and Retraining Notification
Act or any similar applicable Law that remains unsatisfied.

 

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(o)    Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all Liens (other than
Permitted Liens) except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Any real property and
facilities held under lease by the Company or any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(p)    Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, original works of authorship,
patents, patent rights, copyrights, inventions, Licenses, trade secrets and
other intellectual property rights and all applications and registrations
therefor (“Intellectual Property Rights”) necessary to conduct their respective
businesses as now conducted and as presently proposed to be conducted, except
where failure to own or possess such Intellectual Property Rights would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

(q)    Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined),
(ii) have obtained all Licenses 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 License, except where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply or the failure to obtain
such License would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The term “Environmental Laws” means all federal,
state, local or foreign laws relating to human health (to the extent related to
exposure to Hazardous Materials (as hereinafter defined)), pollution or
protection of the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to the handling, management, use, storage,
treatment, emission, discharge, release or threatened release of 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 codes, decrees,
injunctions, judgments, orders, or regulations issued, entered, promulgated or
approved thereunder.

(r)    Investment Company Status. Neither the Company nor any Subsidiary is an
“investment company,” and, to the Company’s knowledge, neither the Company nor
any Subsidiary is a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.

(s)    Tax Status. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Company and each
Subsidiary of the Company (i) has timely and properly made or filed all U.S.
federal, state and foreign tax returns, reports and declarations (including,
without limitation, any information returns and any required schedules or
attachments thereto) required to be filed by any jurisdiction to which it is
subject, (ii) has timely paid all taxes and other governmental assessments and
charges, except those being contested in good faith by appropriate proceedings
and for which adequate reserves have

 

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been established, and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply.

(t)    No Disqualification Events. With respect to the issuance of the
Securities, none of the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company, 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 1933 Act) connected with the Company in any
capacity at the time of sale is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act
except for items covered by Rule 506(d)(2) or (d)(3).

(u)    Illegal Payments; FCPA Violations. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect,
since December 31, 2017, none of the Company, any of its Subsidiaries or, to the
knowledge of the Company, any officer, director, employee, agent, representative
or consultant acting on behalf of the Company or any of its Subsidiaries (and
only in their capacities as such) has, in connection with the business of the
Company: (a) unlawfully offered, paid, promised to pay, or authorized the
payment of, directly or indirectly, anything of value, including money, loans,
gifts, travel, or entertainment, to any government official with the purpose of
(i) influencing any act or decision of such government official in his or her
official capacity; (ii) inducing such government official to perform or omit to
perform any activity in violation of his or her legal duties; (iii) securing any
improper advantage; or (iv) inducing such government official to influence or
affect any act or decision of such governmental entity, except, with respect to
the foregoing clauses (i) through (iv), as permitted under the U.S. Foreign
Corrupt Practices Act or other applicable law; (b) made any illegal contribution
to any political party or candidate; (c) made, offered or promised to pay any
unlawful bribe, payoff, influence payment, kickback, unlawful rebate, or other
similar unlawful payment of any nature, directly or indirectly, in connection
with the business of the Company, to any person, including any supplier or
customer; (d) knowingly established or maintained any unrecorded fund or asset
or made any false entry on any book or record of the Company or any of its
Subsidiaries for any purpose; or (e) otherwise violated the U.S. Foreign Corrupt
Practices Act of 1977, as amended, the UK Bribery Act 2010, as amended, or any
other applicable anti-corruption or anti-bribery law.

(v)    Economic Sanctions. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, the Company
is not in contravention of any sanction, and has not engaged in any conduct
sanctionable, under U.S. economic sanctions Laws, including applicable laws
administered and enforced by the U.S. Department of the Treasury’s Office of
Foreign Assets Control, 31 C.F.R. Part V, the Iran Sanctions Act, as amended,
the Comprehensive Iran Sanctions, Accountability and Divestment Act, as amended,
the Iran Threat Reduction and Syria Human Rights Act, as amended, the Iran
Freedom and Counter-Proliferation Act of 2012, as amended, and any executive
order issued pursuant to any of the foregoing.

(w)    No Rights Agreements; Anti-Takeover Provisions. As of the date of this
Agreement, neither the Company nor any of its Subsidiaries is party to a
stockholder rights agreement, “poison pill” or similar anti-takeover agreement
or plan. The Board has taken all

 

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necessary actions to ensure that no restrictions included in any “control share
acquisition,” “fair price,” “moratorium,” “business combination” or other state
anti-takeover law is, or as of the Closing will be, applicable to the
transactions contemplated hereby, including the Company’s issuance of shares of
the Purchased Shares and any issuance pursuant to the Warrant Agreement or the
Investor Rights Agreement.

(x)    No Other Representations or Warranties of the Buyers. The Company
acknowledges and agrees that none of the Buyer or any of its Affiliates makes or
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 2.
Notwithstanding anything to the contrary herein, nothing in this Agreement shall
limit the right of the Company or any of its Subsidiaries to rely on the
representations, warranties, covenants and agreements expressly set forth in
this Agreement, nor will anything in this Agreement operate to limit any claim
by the Company or any of its Subsidiaries for actual and intentional fraud.

4.    COVENANTS.

(a)    Form D and Blue Sky. The Company agrees to file a Form D with respect to
the Securities if required under Regulation D and shall provide a copy thereof
to any Buyer promptly upon such Buyer’s request. Following the Closing Date, the
Company shall make all filings and reports relating to the offer and sale of the
Securities required under applicable securities or “Blue Sky” laws of the states
of the United States. The Company shall provide the Buyer and its legal counsel
with a reasonable opportunity to review and comment upon drafts of all documents
to be submitted to or filed with the SEC, whether publicly or not, in connection
with the transactions contemplated hereby and by the other Transaction Documents
and give reasonable consideration to all such comments.

(b)    Reporting Status. Until the earlier of (x) a Change of Control or (y) the
date on which either (1) the Investors (as defined in the Registration Rights
Agreement) shall have sold all of the Securities and Warrants (as defined in the
Warrant Agreement) or (2) the Warrant Agreement has expired in accordance with
its terms or has been earlier terminated by the parties thereto, the Company
shall timely file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall use reasonable best efforts to maintain its
status as an issuer required to file reports under the 1934 Act even if the 1934
Act or the rules and regulations thereunder would no longer require or otherwise
permit such filing, and the Company shall use reasonable best efforts to
maintain its eligibility to register the Securities for resale by the Investors
on Form S-3. For purposes of this Agreement, “Change of Control” means, at any
time, the occurrence of any of the following events or circumstances: (i) any
“person” or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) shall (A) become the “beneficial owner” (within the meaning of
Section 13(d) of the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the total voting power represented by the
Company’s then outstanding voting securities or (B) otherwise acquire, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the Company, whether through the ability to exercise voting power,
by contract or otherwise, (ii) persons who were (A) directors of the Company on
the date hereof or (B) appointed by directors who were directors of the Company
on the date hereof or were nominated or approved by directors who were directors
of the Company on the date hereof shall cease to occupy a majority of the seats
(excluding vacant

 

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seats) on the Board, (iii) the consummation of a merger or consolidation of the
Company with or into any other Person, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent at least 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or
consolidation or (iv) any direct or indirect sale, transfer or other
disposition, in one transaction or a series of related transactions, of all or
substantially all of the assets of the Company and its subsidiaries, taken as a
whole (it being agreed that the sale, transfer or other disposition by any
Person of the Equity Interests of any subsidiary constitutes an indirect sale,
transfer or disposition of the assets of such subsidiary).

(c)    Use of Proceeds. The Company shall use the proceeds from the sale of the
Securities for general corporate purposes, including funding working capital,
the repayment of indebtedness and the payment of fees and expenses in connection
with the transactions contemplated by this Agreement and the Registration Rights
Agreement.

(d)    Fees and Expenses. Except as otherwise set forth in any of the
Transaction Documents, each party to this Agreement shall bear its own fees and
expenses in connection with the sale of the Securities to the Buyer, the Company
shall reimburse the Buyer for all reasonable and documented out-of-pocket costs
and expenses, including legal fees, expenses, other professional fees and
expenses, and all reasonable out-of-pocket due diligence expenses, in an
aggregate amount not to exceed seventy-five thousand dollars ($75,000), incurred
by the Buyer in connection with the transaction contemplated by this Agreement.

(e)    Transfer or Resale. The Buyer shall not Transfer or offer to Transfer the
Securities unless (A) such Securities are subsequently registered pursuant to
the terms of the Registration Rights Agreement, (B) such Transfer is made to the
Company or to an Affiliate of the Buyer, (C) the Buyer shall have delivered to
the Company an opinion of counsel or any other evidence reasonably satisfactory
to legal counsel of the Company, in a form reasonably acceptable to the Company,
to the effect that such Securities to be Transferred may be Transferred pursuant
to (i) Regulation S promulgated under the 1933 Act or (ii) another valid
exemption from registration under the 1933 Act or the rules and regulations of
the SEC thereunder, or (D) the Buyer provides the Company with reasonable
assurance that such Securities can be Transferred pursuant to (i) Rule 144
promulgated under the 1933 Act (“Rule 144”) or (ii) Rule 144A promulgated under
the 1933 Act (“Rule 144A”). In the case that a Buyer is permitted to Transfer
the Securities and, if applicable, provides satisfactory evidence to the Company
pursuant to the previous sentence, the Company shall, at the request of the
holder of such Securities, issue such book-entry Securities to the holder or the
applicable transferee of such Securities by electronic delivery (x) if eligible
and requested by the holder or applicable transferee, on the applicable balance
account at The Depository Trust Company, and (y) on the books of the Company or
its transfer agent. For purposes of this Agreement, “Transfer” means, with
respect to the Securities, to sell, transfer, hypothecate, assign, gift, bequest
or otherwise dispose of such Securities.

(f)    Disclosure of Transactions and Other Material Information. On the date of
this Agreement or no later than 9:30 a.m. New York City local time on the
business day following the date of execution of this Agreement, the Company
shall (i) issue a press release and/or file a Current Report on Form 8-K, in
each case, reasonably acceptable to the Buyer, describing the

 

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terms of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and (ii) file a Current Report on Form 8-K reasonably
acceptable to the Buyer attaching this Agreement, the form of Investor Rights
Agreement, the form of the Warrant Agreement and the form of Registration Rights
Agreement as exhibits to such filing (which shall not include schedules or
exhibits not customarily filed with the SEC). In furtherance of the foregoing,
the Company shall provide the Buyer and its legal counsel with a reasonable
opportunity to review and comment upon drafts of all documents to be publicly
disclosed or filed with the SEC in connection with the transactions contemplated
hereby and by the other Transaction Documents and give reasonable consideration
to all such comments.

(g)    Legends.

(i)    The book-entry accounts maintained by the Company’s transfer agent
representing the Securities, except as set forth below, shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against Transfer of such Securities bearing such legend):

NEITHER THE ISSUANCE AND SALE OF THESE SECURITIES HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933.

(ii)    At the request of a holder of the Securities or a transferee pursuant to
Section 4(e), the legend set forth in Section 4(g)(i) above shall be removed
from the applicable Securities on the book-entry accounts maintained by the
Company’s transfer agent representing the Securities if such legend is not
required in order to establish compliance with any provisions of the 1933 Act.

(h)    Transfer Taxes. The Company shall pay any and all documentary, stamp and
similar issue or transfer tax incurred in connection with this Agreement.
However, in the case of the exercise of a Warrant, the Company shall not be
required to pay any tax or duty that may be payable in respect of any Transfer
involved in the issue and delivery of Common Shares issuable upon such exercise
to a beneficial owner other than the beneficial owner of the Warrant immediately
prior to such exercise, and no such issue or delivery shall be made unless and
until the person requesting such issue has paid to the Company the amount of any
such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.

(i)    Tax Treatment. No later than ninety (90) days after the Closing Date, the
Buyer shall engage a nationally recognized valuation expert reasonably
acceptable to the Company, to conduct a valuation of the Warrants as of the date
of their issuance. The Buyer shall promptly provide the Company with such
valuation once it has been prepared by such valuation

 

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expert. The Buyer and the Company shall allocate the Purchase Price in
accordance with such valuation for all U.S. tax purposes. The Buyer shall pay
any and all costs of conducting such valuation.

(j)    Reporting. The Company shall reasonably cooperate with the Buyer to
provide any information to the Buyer (or make such information available to the
Buyer) as the Buyer reasonably request that the Company has in its possession
(or any of the Company’s Subsidiaries have in their possession), for purposes of
any tax reporting, filing obligation or regulatory requirement of the Buyer in
connection with (i) the ownership by the Buyer of any interest in the Company,
(ii) any transaction between the Buyer, on the one hand, and the Company or any
of its Subsidiaries, on the other hand, and (iii) the status of any Subsidiary
of the Company for U.S. federal, state or local tax purposes as a foreign
corporation or as a “controlled foreign corporation” within the meaning of
Section 957 of the Code, including any filing obligation pursuant to Sections
6038, 6038B and 6046 of the Code. As used in this Agreement, the “Code” means
the Internal Revenue Code of 1986, as amended. The Company shall use its
commercially reasonable efforts to cause its transfer agent to respond to
reasonable requests for information (which is not otherwise publicly available)
made by the Buyer or its auditors related to the actual holdings of the Buyer,
its Permitted Transferees or its accounts.

(k)    Investment Company. So long as the Buyer holds any Securities, the
Company will not take any actions that would be reasonably likely to cause it to
be an “investment company,” or a company controlled by an “investment company”
other than the Buyer, as such terms are defined in the Investment Company Act of
1940, as amended.

(l)    NASDAQ Listing. To the extent it has not already done so, promptly
following the execution of this Agreement, the Company shall apply to cause the
Securities to be approved for listing on the Principal Market. The Company shall
use its reasonable best efforts to cause the Securities to be approved for
listing on the Principal Market, subject to official notice of issuance.

5.    CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

(a)    The obligation of the Company hereunder to issue and sell the Purchased
Shares to the Buyer at the Closing, is subject to the satisfaction, at or before
the Closing Date of each of the following conditions, provided that these
conditions are for the Company’s sole benefit and may be waived (in whole or in
part) by the Company at any time in its sole discretion by providing the Buyer
with prior written notice thereof:

(i)    The Buyer shall have executed each of the Transaction Documents and
delivered the same to the Company.

(ii)    The Buyer shall have delivered the Aggregate Purchase Price to the
Company at the Closing by wire transfer of immediately available funds pursuant
to the wire instructions provided by the Company, subject to receipt of evidence
of issuance referred to in Section 6(a)(i).

(iii)    The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date (except

 

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for representations and warranties that speak as of a specific date which shall
be true and correct as of such specified date) without giving effect to any
qualification or limitation as to “materiality,” “Buyer Material Adverse Effect”
or similar qualifier set forth therein.

(iv)    The Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer at or prior
to the Closing Date.

(v)    The Buyer shall have executed the form of representation letter in favor
of BofA Securities, Inc. in substantially the same form as Exhibit D attached
hereto.

6.    CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.

(a)    The obligation of the Buyer to purchase the Purchased Shares at the
Closing is subject to the satisfaction, at or before the Closing Date of each of
the following conditions, provided that these conditions are for the Buyer’s
sole benefit and may be waived (in whole or in part) by the Buyer at any time in
its sole discretion by providing the Company with prior written notice thereof:

(i)    The Company shall have (A) duly executed and delivered to the Buyer each
of the Transaction Documents and (B) issued to the Buyer in book-entry form
375,000 Purchased Shares at the Closing and delivered to the Buyer a copy from
the Company’s books and records evidencing such issuance.

(ii)    The Buyer shall have received the opinion of Elkins Kalt Weintraub
Reuben Gartside LLP, the Company’s outside counsel, dated as of the Closing
Date, in substantially the form of Exhibit E attached hereto.

(iii)    The Company shall have delivered to the Buyer (A) a certificate dated
as of the Closing Date and signed by its Chief Executive Officer or Chief
Financial Officer, certifying to the fulfillment of the conditions specified in
Sections 6(a)(iv), (v) and (vi), and (B) a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (I) the
resolutions consistent with Section 3(b) as adopted by the Board in a form
reasonably acceptable to the Buyer, (II) the Articles of Incorporation and
(III) the Bylaws, in the form attached hereto as Exhibit F.

(iv)    (A) The representations and warranties of the Company set forth in
Section 3 (other than the representations and warranties set forth in the first
sentence of Section 3(a), Section 3(b), Section 3(c), Section 3(f),
Section 3(g), clause (b) of Section 3(i), Section 3(k), Section 3(l),
Section 3(r) and Section 3(w)), shall be true and correct as of the date of this
Agreement and as of the Closing Date (except for representations and warranties
that speak as of a specific date which shall be true and correct as of such
specified date) without giving effect to any qualification or limitation as to
“materiality,” “Material Adverse Effect” or similar qualifier set forth therein,
except where the failure to be true and correct would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; (B) the
representations and warranties of the Company set forth in the first sentence of
Section 3(a), Section 3(b), Section 3(c), Section 3(f), Section 3(g),
Section 3(k) (other than the first sentence of Section 3(k)), Section 3(l),
Section 3(r) and Section 3(w), shall be true and correct in all material
respects as of the date of this

 

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Agreement and as of the Closing Date (except for representations and warranties
that speak as of a specific date which shall be true and correct as of such
specified date) without giving effect to any qualification or limitation as to
“materiality,” “Material Adverse Effect” or similar qualifier set forth therein;
and (C) the representations and warranties of the Company set forth in clause
(b) of Section 3(i) and the first sentence of Section 3(k), shall be true and
correct in all respects as of the date of this Agreement and as of the Closing
Date.

(v)    The Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date.

(vi)    The Common Stock, including the Securities (I) shall be approved and
designated for quotation or listed on the Principal Market, subject to official
notice of issuance, and (II) shall not be suspended, in each case, on the
Closing Date, by the SEC or the Principal Market from trading on the Principal
Market nor shall suspension by the SEC or the Principal Market have been
threatened, as of the Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.

(vii)    The Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the sale of the Securities.

(viii)    The Company and its Subsidiaries shall have returned all loan proceeds
received by the Company and certain of its Subsidiaries under the Paycheck
Protection Program under the CARES Act.

7.    TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before five (5) business days following the date hereof
due to the Company’s or such Buyer’s failure to satisfy the conditions set forth
in Sections 5 and 6 above (and the nonbreaching party’s failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date by delivering a written notice to that effect to each
other party to this Agreement and without liability of any party to any other
party. None of the Parties may rely, as a basis for terminating this Agreement
or not consummating the transactions contemplated hereby, on the failure of any
condition set forth in Section 5 or Section 6, as the case may be, to be
satisfied, if such failure was caused by such party’s failure to perform any of
its obligations under this Agreement.

8.    MISCELLANEOUS.

(a)    Specific Performance. The Buyer, on the one hand, and the Company, on the
other hand, acknowledges and agrees that irreparable injury to the other party
hereto would occur in the event any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached and
that such injury would not be adequately compensable by the remedies available
at law (including the payment of money damages). It is accordingly agreed that
the Buyer, on the one hand, and the Company, on the other hand (in each

 

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case, the “Moving Party”), shall each be entitled to specific enforcement of,
and injunctive relief to prevent any violation of, the terms hereof, and the
other party hereto will not take action, directly or indirectly, in opposition
to the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity. This Section 8(a) is not the exclusive
remedy for any violation of this Agreement.

(b)    Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of California. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in Los Angeles County, California, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such 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 manner permitted by law. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

(c)    Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which 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; provided that a facsimile or .pdf signature shall
be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
or .pdf signature.

(d)    Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

(e)    Severability. If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of

 

22

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the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or
unenforceable provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or unenforceable
provision(s).

(f)    Entire Agreement; Amendment and Waiver. This Agreement and the other
Transaction Documents supersede all other prior or contemporaneous negotiations,
writings and understandings between the Buyer, the Company, their Affiliates and
Persons acting on their behalf with respect to the matters discussed herein, and
this Agreement, the other Transaction Documents, and the instruments referenced
herein and therein constitute the full and entire understanding and agreement of
the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to any
such matters. Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Buyer; provided that the conditions to each of the respective parties’
obligations to consummate the transactions contemplated by this Agreement are
for the sole benefit of such party and may be waived by such party in whole or
in part to the extent permitted by applicable law; provided, however, that any
such waiver shall only be effective if made in a written instrument duly
executed and delivered by the party against whom the waiver is to be effective.
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. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.

(g)    Notices. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement or any of the other
Transaction Documents must be in writing and will be deemed to have been
delivered: (i) upon receipt, when delivered personally; (ii) upon delivery, when
sent by electronic mail; or (iii) one business day after deposit with an
overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and e-mail addresses for such communications
shall be:

 

If to the Company:   

BJ’s Restaurants, Inc.

7755 Center Avenue

Huntington Beach, California 92647

Attention:        Greg Levin

E-mail:              glevin@bjsrestaurants.com

with a copy (for informational purposes only) to:   

 

Elkins Kalt Weintraub Reuben LLC

10345 W. Olympic Blvd.

Los Angeles, CA 90064

Attention:        Robert Steinberg, Esq.

E-mail:              rsteinberg@elkinskalt.com

 

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If to the Buyer:   

SC 2018 Trust LLC

23 Prescott St.

Brookline, MA 02446

Attention:        Ron Shaich

E-mail:              ronshaich@act3holdings.com

with a copy (for informational purposes only) to:   

 

Sullivan & Cromwell LLP

125 Broad St.

New York, NY 10004

Attention:        Frank Aquila

                         Audra D. Cohen

E-mail:              aquilaf@sullcrom.com

                         cohena@sullcrom.com

or to such other address and/or e-mail address and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s e-mail containing the time, date, and recipient e-mail
address or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by e-mail or receipt from an overnight
courier service in accordance with clause (i), (ii), or (iii) above,
respectively.

(h)    Successors and Assigns. The terms and conditions of this Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors, heirs, and permitted assigns. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Buyer. The Buyer shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Company, except
to an Affiliate of the Buyer.

(i)    No Third Party Beneficiaries. This Agreement is intended solely for the
benefit of the parties hereto and their respective successors, heirs and
permitted assigns, and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person.

(j)    Survival. Unless this Agreement is terminated pursuant to Section 8, the
representations and warranties of the Company contained in Section 3 shall
survive the Closing until the twelve (12) month anniversary of the Closing;
provided, however that the representations and warranties of the Company in
Sections 3(a) through (g), (k), (r) and (t) will survive until the expiration of
the applicable statute of limitations. The covenants and agreements of the
parties set forth in Section 4 and this Section 9 shall survive the Closing in
accordance with their terms.

(k)    Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as any other
party may reasonably request in

 

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order to carry out the intent and accomplish the purposes of this Agreement and
the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby.

(l)    Interpretation.

(i)    When a reference is made in this Agreement to an Article, Section,
Schedule or Exhibit, such reference shall be to an Article, Section, Schedule or
Exhibit of this Agreement unless otherwise indicated.

(ii)    Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”

(iii)    The words “hereof,” “herein,” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole (including all of the Schedules and Exhibits) and not to any
particular provision of this Agreement.

(iv)    Unless otherwise specified in this Agreement, the term “dollars” and the
symbol “$” mean U.S. dollars for purposes of this Agreement and all amounts in
this Agreement shall be paid in U.S. dollars.

(v)    The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term.

(vi)    Any agreement, instrument or statute defined or referred to in this
Agreement means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes.

(vii)    Each of the parties has participated in the drafting and negotiation of
this Agreement. If an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if it is drafted by each of the parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any of the provisions of this Agreement.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

BJ’S RESTAURANTS, INC. By:  

/s/ Gregory S. Levin

  Name:         Gregory S. Levin   Title:   President, Chief Financial Officer
and Secretary

[Signature Page to Securities Purchase Agreement]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

SC 2018 TRUST LLC By:  

/s/ Gad Liwerant

  Name:         Gad Liwerant   Title:   Manager

[Signature Page to Securities Purchase Agreement]