EXHIBIT 10.23

 

STOCK PURCHASE AGREEMENT

 

by and among

 

CALIFORNIA PIZZA KITCHEN, INC.,

a Delaware corporation

 

and

 

RICHARD L. ROSENFIELD,

LARRY S. FLAX, OR HIS SUCCESSORS IN TRUST, AS TRUSTEE OF THE LARRY S.

FLAX REVOCABLE TRUST DATED 6-18-02, AS MAY BE AMENDED FROM TIME TO

TIME,

CLINT B. COLEMAN

and

GERALDINE WISE

 

Dated as of April 25, 2005

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TABLE OF CONTENTS

 

Article I. PURCHASE AND SALE OF SECURITIES

   2

1.1

  

Purchase and Sale of Securities

   2

1.2

  

Liquor License

   2

1.3

  

Share Purchase Price

   2

1.4

  

Option Purchase

   2

1.5

  

Closing Costs and Expenses

   2

1.6

  

Transactions to be Effected at the Closing

   3

Article II. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE SELLING
SHAREHOLDERS

   3

2.1

  

Several Representations and Warranties of the Sellers

   3

2.2

  

Joint and Several Representations and Warranties of the Selling Shareholders

   4

Article III. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

   7

3.1

  

Organization and Good Standing

   7

3.2

  

Absence of Conflicts

   7

3.3

  

Corporate Power and Authority

   8

3.4

  

Brokers’ Fees

   8

Article IV. GENERAL PROVISIONS

   8

4.1

  

Survival of Representations, Warranties and Covenants

   8

4.2

  

Indemnification

   8

4.3

  

Complete Agreement

   11

4.4

  

Further Action

   11

4.5

  

Notices

   11

4.6

  

Publicity

   13

4.7

  

Remedies

   13

4.8

  

Waiver of Trial by Jury

   13

4.9

  

Attorneys’ Fees

   13

4.10

  

Construction of Agreement

   13

4.11

  

Severability

   14

4.12

  

Assignment; Successors and Assigns

   14

4.13

  

Time of Essence

   14

4.14

  

No Obligations to Third Parties

   14

4.15

  

Governing Law

   14

EXHIBITS     

Exhibit A

  

Ownership of Securities

    

Exhibit B

  

Landlord Consent

    

 

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THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of the 25th day of
April, 2005 (the “Closing Date”) by and among Richard L. Rosenfield, an
individual (“Rosenfield”), Larry S. Flax, or his successors in trust, as Trustee
of the Larry S. Flax Revocable Trust dated 6-18-02, as may be amended from time
to time (“Flax” and, together with Rosenfield, the “Selling Shareholders”),
Clint B. Coleman, an individual (“Coleman”), and Geraldine Wise, an individual
(“Wise” and, together with Coleman, the “Optionholders”), and California Pizza
Kitchen, Inc., a Delaware corporation (“Purchaser”).

 

R E C I T A L S

 

WHEREAS, LA Food Show, Inc., a California corporation (the “Company”) has issued
and has outstanding 2,000,000 shares of Series A 8% Convertible Preferred Stock
(“Series A Preferred Stock”), 2,000,000 shares of common stock (“Common Stock”)
and options to purchase 60,000 shares of Common Stock (the “Options”);

 

WHEREAS, Purchaser is the record and beneficial owner of 1,000,000 shares of
Series A Preferred Stock;

 

WHEREAS, Rosenfield is the record and beneficial owner of 500,000 shares of
Series A Preferred Stock and 1,000,000 shares of Common Stock (the “Rosenfield
Shares”) and Flax is the record and beneficial owner of 500,000 shares of Series
A Preferred Stock and 1,000,000 shares of Common Stock (the “Flax Shares” and,
together with the Rosenfield Shares, the “Shares”);

 

WHEREAS, Coleman holds an Option to purchase 40,000 shares of Common Stock and
Wise holds an Option to purchase 20,000 shares of Common Stock (the shares
issuable upon exercise of the Options are referred to herein as the “Option
Shares”);

 

WHEREAS, the Company owns and operates an LA Food Show restaurant (the
“Restaurant”) located in the Manhattan Village Shopping Center in Manhattan
Beach, California on premises leased by the Company (the “Real Property”), and
conducts other business necessary or convenient to the foregoing (collectively,
the “Business”);

 

WHEREAS, pursuant to an Employee Leasing Agreement dated as of September 28,
2003 between Purchaser and Seller (the “Employee Leasing Agreement”), Purchaser
leases restaurant operating personnel to the Company and also provides
administrative and support services to the Company;

 

WHEREAS, Purchaser desires to purchase from the Selling Shareholders and the
Optionholders (collectively, the “Sellers”), and the Sellers desire to sell to
Purchaser, the Shares and the Options (collectively, the “Securities”); and

 

WHEREAS, Purchaser and Sellers desire to make certain representations,
warranties, covenants and agreements in connection with the sale of the
Securities.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and

 

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sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:

 

ARTICLE I.

 

PURCHASE AND SALE OF SECURITIES

 

1.1 Purchase and Sale of Securities. Subject to the terms and conditions set
forth herein, each Seller hereby sells to Purchaser and Purchaser hereby
purchases from each Seller, free and clear of all liens, mortgages, charges,
security interests, claims, options, voting trusts, proxies or other
restrictions or encumbrances of any kind or nature whatsoever (collectively,
“Liens”), other than the Permitted Encumbrances (as hereinafter defined), all of
such Seller’s right, title and interest in and to the Securities set forth
opposite such Seller’s name on Exhibit A to this Agreement.

 

1.2 Liquor License. In connection with Purchaser’s purchase of the Securities,
the Sellers shall execute as necessary (and shall cause the Company and any
necessary third parties to execute) any and all documents and filings and take
any and all other actions which are required for the license transfer request,
and as a result of the transactions contemplated hereby in order to permit the
Company to continue to hold and operate under a liquor license issued by the
California Department of Alcoholic Beverage Control (the “ABC”).

 

1.3 Share Purchase Price. Subject to the terms and conditions of this Agreement,
the aggregate purchase price to be paid by Purchaser to the Selling Shareholders
for the Shares shall be Five Million Nine Hundred Eighty-Three Thousand Eight
Hundred Forty Dollars ($5,938,840) (the “Purchase Price”), with 50% of the
Purchase Price payable to Rosenfield as consideration for the Rosenfield Shares,
and 50% of the Purchase Price payable to Flax as consideration for the Flax
Shares. The Purchase Price shall be payable in United States Dollars.

 

1.4 Option Purchase. At the closing of the transactions contemplated by this
Agreement (the “Closing”), the Optionholders shall sell the Options to Purchaser
for consideration equal to Twenty Thousand Dollars ($20,000) in the case of
Wise, and Forty Thousand Dollars ($40,000) in the case of Coleman (the “Option
Consideration”). Purchaser shall withhold from the Option Consideration paid to
each Optionholder all FICA taxes and other amounts required to be withheld by
Purchaser pursuant to applicable provisions of the Internal Revenue Code (the
“IRC”) and regulations promulgated thereunder. Purchaser shall report the Option
Consideration payable to or for the benefit of each Optionholder on such
Optionholder’s 2005 Form W-2. The Sixty Thousand Dollars ($60,000) in Option
Consideration set forth above, together with all taxes and other amounts
required to be paid in respect thereof by Purchaser, is referred to herein as
the “Aggregate Option Consideration.”

 

1.5 Closing Costs and Expenses. Except as otherwise provided in this Agreement,
Purchaser, on the one hand, and the Selling Shareholders, on the other hand,
shall each pay their own legal and accounting fees and expenses (and, in the
case of the Selling Shareholders, the legal and accounting fees and expenses of
the Optionholders).

 

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1.6 Transactions to be Effected at the Closing. At the Closing:

 

(i) each Seller shall deliver to Purchaser stock certificates or option
agreements representing the Securities set forth opposite such Seller’s name on
Exhibit A hereto (if any), duly endorsed in blank in proper form for transfer,
with appropriate transfer stamps, if any, affixed;

 

(ii) Purchaser shall deliver to the Selling Shareholders an amount in cash equal
to the Purchase Price as provided in Section 1.3;

 

(iii) Purchaser shall deliver to the Optionholders an amount in cash equal to
the Option Consideration, less applicable withholdings as provided in Section
1.4; and

 

(iv) The Selling Shareholders shall provide Purchaser with a true and correct
copy of the request for consent delivered by the Company to the landlord under
that certain Shopping Center Lease, dated August 28, 2002, between Madison
Manhattan Village, LLC and the Company (the “Lease”), relating to the Real
Property, which consent from such landlord is required pursuant to Section 17.1
of the Lease (and which may not be withheld by such landlord pursuant to Section
17.1 of the Lease) and shall be in the form attached as Exhibit B to this
Agreement (the “Consent”).

 

ARTICLE II.

 

REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND THE SELLING SHAREHOLDERS

 

2.1 Several Representations and Warranties of the Sellers. As an inducement for
Purchaser to enter into this Agreement and to consummate the transactions
contemplated hereby, each Seller, severally and not jointly, hereby represents
and warrants to Purchaser as follows:

 

(a) Authority

 

(i) Such Seller has full power and authority to execute, deliver and perform all
the terms and provisions of this Agreement, the other agreements between the
parties referred to herein and each instrument and certificate delivered by such
Seller pursuant to this Agreement, to consummate the transactions contemplated
hereby and thereby, and to perform such Seller’s obligations hereunder and
thereunder.

 

(ii) This Agreement, the other agreements between the parties referred to herein
and each instrument and certificate delivered by such Seller pursuant hereto,
each constitutes the legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its respective terms, except
as such obligation and enforceability are limited by bankruptcy, insolvency and
other similar laws of general application affecting the enforcement of
creditors’ rights and by equitable principles.

 

(iii) Such Seller is not subject to any restriction of any kind or character
which (i) prohibits such Seller from entering into this Agreement, the other
agreements between the parties referred to herein or any instrument or
certificate delivered by such

 

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Seller pursuant hereto or (ii) would prevent or impede such Seller’s performance
of or compliance with all or any part of this Agreement, the other agreements
between the parties referred to herein or any instrument and certificate
delivered by such Seller pursuant hereto or the consummation of the transactions
contemplated hereby or thereby.

 

(b) Absence of Conflicts. Neither the execution and delivery by such Seller of
this Agreement or the other agreements between the parties referred to herein,
the compliance by such Seller with the terms and conditions hereof or thereof
nor the consummation by such Seller of the transactions contemplated hereby or
thereby will (a) conflict with any of the terms, conditions or provisions of the
Articles of Incorporation, Bylaws or other organizational documents of the
Company or the terms of any of the Securities, (b) violate any provision of, or
require any consent, authorization or approval under, any law or administrative
regulation or any judicial, administrative or arbitration order, award,
judgment, writ, injunction or decree applicable to such Seller, the Securities
or the Company, or any governmental permit or license issued to the Seller or
the Company (other than the license transfer request required by the ABC in
connection with the Company’s liquor license as contemplated by Section 1.2
hereof), (c) violate or be in conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under, or accelerate
or permit the acceleration of the performance required by, or require any
consent, authorization or approval (other than those which have been duly
obtained by such Seller prior to the Closing Date) under, the Lease or any other
agreement or instrument by which such Seller, the Company or the Securities are
bound, or (d) result in the creation of any Lien upon any of the Securities.

 

(c) Ownership of the Securities. Such Seller is the record and beneficial owner
of the Securities set forth opposite such Seller’s name on Exhibit A hereto,
free and clear of all Liens, other than those arising pursuant to the terms of
this Agreement or the Shareholders’ Agreement dated as of March 6, 2003 by and
among the Company, Rosenfield, Flax and Purchaser (the “Shareholders’
Agreement”) (the foregoing Liens are referred to herein as the “Permitted
Encumbrances”). Upon transfer of the Securities to Purchaser on the Closing Date
in accordance with Article I, Purchaser will receive good and marketable title
to the Securities as set forth opposite such Seller’s name on Exhibit A hereto,
free and clear of all Liens other than Permitted Encumbrances and applicable
federal and state securities laws.

 

(d) Brokers’ Fees. No broker, finder or similar agent (“Broker”) has been
employed by or on behalf of such Seller in connection with this Agreement or the
transactions contemplated hereby, and the Seller has not, jointly or
individually, entered into any agreement or understanding of any kind with any
person or entity for the payment of any brokerage commission, finder’s fee or
any similar compensation in connection with this Agreement or the transactions
contemplated hereby.

 

2.2 Joint and Several Representations and Warranties of the Selling
Shareholders. As an inducement for Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, the Selling Shareholders,
jointly and severally, hereby represent and warrant to Purchaser as follows:

 

(a) Corporate Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California, with
all requisite

 

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corporate power and authority to own, operate and lease its properties and
assets that it now purports to own, operate or lease, to carry on its business
as it is now being conducted, and to perform its obligations under this
Agreement. The Company is duly qualified to do business and is in good standing
under the laws of each state or other jurisdiction in which either the nature of
the activities conducted by it or the ownership, operation or leasing of the
properties and assets owned, operated or leased by it requires such
qualification and good standing, except where the failure to be so qualified or
in good standing would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the Company.

 

(b) Capital Stock and Title. The authorized capital stock of the Company
consists of (i) 100,000,000 shares of Common Stock, 2,000,000 of which are
issued and outstanding; and (ii) 10,000,000 shares of preferred stock, of which
2,000,000 are designated as Series A Preferred Stock, and of which 2,000,000 are
issued and outstanding. No other class or series of preferred stock has been
authorized by the Company. All of the outstanding shares of capital stock of the
Company were issued in compliance with all federal and state securities laws and
all legal requirements. All of the outstanding shares of Series A Preferred
Stock and Common Stock are duly authorized and validly issued, fully paid and
non-assessable. The Securities have not been issued in violation of, and, except
pursuant to the terms of this Agreement or the Shareholders’ Agreement, are not
subject to any purchase option, call, right of first refusal, preemptive,
subscription or similar rights under any provision of applicable law, the
Articles of Incorporation or Bylaws of the Company, or any contract, agreement
or instrument. Options to purchase 60,000 shares of Common Stock at an exercise
price of One Dollar ($1.00) per share are issued and outstanding. Except as set
forth above and except for this Agreement or the Shareholders’ Agreement, there
are no outstanding options, rights, agreements, convertible or exchangeable
securities or other commitments pursuant to which any Seller or the Company is
or may become obligated to issue, sell, purchase, return or redeem any shares of
capital stock or other securities of the Company.

 

(c) Title to Properties; Encumbrances. Other than the Lease and the leases for
equipment and other assets leased by the Company (the “Personal Property
Leases”), there are no leases or licenses pursuant to which the Company or the
Sellers lease or license from others real or personal property in connection
with the Business or the Company, and the Lease and each of the Personal
Property Leases are valid, subsisting and effective in accordance with their
respective terms. No consent from any third party is required to consummate the
transactions contemplated hereby, except consents which have been received prior
to the Closing Date and the Consent.

 

(d) Litigation. The Selling Shareholders have no notice of any legal action,
suit, arbitration or other legal, administrative or governmental investigation,
inquiry or proceeding (whether federal, state, local or foreign) (each, an
“Action”) and to the knowledge of the Selling Shareholders, there is no pending
or threatened Action against or affecting the Sellers, the Company, the Real
Property, the Securities or the transactions contemplated hereby.

 

(e) Income and Other Taxes. To the knowledge of the Selling Shareholders, the
Company has timely paid all Taxes that derive from or are related to the
Company’s activities prior to the Closing Date, and all such payments were made
when due. For purposes of this Agreement, the term “Taxes” means any federal,
state, local, or foreign income, payroll,

 

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franchise, property, sales, excise or other tax, tariff, duty, assessment or
governmental charge of any nature whatsoever, including any interest, penalty or
addition thereon or thereto, imposed, assessed, charged or levied by any
governmental authority.

 

(f) Permits, Licenses, Etc. The Company possesses, and is operating in
compliance with, all zoning and other franchises, licenses, permits (including
conditional use and other similar permits), certificates, authorizations, rights
and other approvals of governmental bodies, agencies and instrumentalities
thereof necessary to conduct the Business as currently conducted and as proposed
to be conducted (the “Permits”) and the operation of the Restaurant on the Real
Property is in compliance with all zoning and other similar laws (without being
in compliance as a “permitted, non-conforming use”).

 

(g) Employees and Labor Matters. The Company has no employees. All personnel
engaged in operating the Business are furnished to the Company by Purchaser
pursuant to the Employee Leasing Agreement.

 

(h) Notices. The Company has all consents, authorizations and approvals of any
court, arbitrator or any other natural person, corporation, business trust,
association, partnership, limited liability company, joint venture, governmental
entity or any other entity (each a “Person”) necessary to conduct the Business
as it is now being conducted, except for such governmental or regulatory
licenses, permits and authorizations the absence of which would not have,
individually or in the aggregate, a materially adverse effect on the Company,
and none of such governmental or regulatory licenses, permits and authorizations
will be impaired as a result of the consummation of the transactions
contemplated by this Agreement, except for such impairments which would not
have, individually or in the aggregate, a material adverse effect on the Company
or the Business.

 

(i) Contracts. Except for the Personal Property Leases, the Lease, and certain
material contracts previously identified to Purchaser (the “Material
Contracts”), there is no contract, agreement, lease, permit, commitment,
arrangement or other instrument to which the Company is a party which is
necessary or convenient to operate the Business as presently conducted or that
otherwise affects the Company in any material way. There has not been any
default in any obligation to be performed by the Company (or, to the best of the
Sellers’ knowledge, any third party) under any Lease, Personal Property Lease or
Material Contract, and the Company has not waived any right thereunder or with
respect thereto. Each of the Lease, Personal Property Leases and Material
Contract is in full force and effect and has not been modified by the parties
thereto through any agreement, understanding or course of conduct.

 

(j) Intellectual Property. The Company is the sole and exclusive owner of all
trademarks, trade names, service marks, assumed names, patents and corporate
names relating to the Company, in each case free and clear of all Liens, and is
listed in the records of the appropriate agency as the sole and exclusive owner
of record of each such registration, grant and application listed thereon. The
Company has full right to use (without payment) all intellectual property used
in the conduct of the Business.

 

(k) Disclosure. No representation or warranty by the Sellers contained in this
Agreement or any other document, exhibit or schedule delivered in connection
herewith, and no

 

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statement contained in this Agreement or any other document, exhibit or schedule
delivered in connection herewith, contains any untrue statement of material fact
or omits or will omit to state any material fact necessary, in light of the
circumstances under which it was made, to make the statements herein and therein
not misleading.

 

(l) Brokers’ Fees. No Broker has been employed by or on behalf of the Selling
Shareholders or the Company in connection with this Agreement or the
transactions contemplated hereby, and the Selling Shareholders and the Company
have not entered into any agreement or understanding of any kind with any person
or entity for the payment of any brokerage commission, finder’s fee or any
similar compensation in connection with this Agreement or the transactions
contemplated hereby.

 

(m) Title to Assets. Except for assets held pursuant to the Personal Property
Leases and the Lease, the Company is the record, legal, and beneficial owner of,
and has good and marketable title to, all of the assets utilized in the
operation of the Business, free and clear of all Liens.

 

ARTICLE III.

 

REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER

 

Purchaser hereby represents, warrants and covenants to the Sellers as follows:

 

3.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Purchaser has full corporate power and authority to execute, deliver and carry
out all the terms and provisions of this Agreement and the other agreements
between the parties referred to herein, to consummate the transactions
contemplated hereby and thereby and to perform its obligations under hereunder
and thereunder.

 

3.2 Absence of Conflicts. Neither the execution and delivery of this Agreement
by Purchaser or the other agreements between the parties referred to herein, the
compliance by Purchaser with the terms and conditions hereof or thereof nor the
consummation by Purchaser of the transactions contemplated hereby or thereby
will (a) conflict with any of the terms, conditions or provisions of the
Certificate of Incorporation, Bylaws or other organizational documents of
Purchaser, (b) violate any provision of, or require any consent, authorization
or approval under, any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to, or any governmental permit or license issued to, Purchaser, or
(c) violate or be in conflict with or result in a breach of or constitute (with
or without notice or lapse of time or both) a default under, or accelerate or
permit the acceleration of the performance required by, or require any consent,
authorization or approval (other than those which have been duly obtained by
Purchaser prior to the Closing Date) under any agreement or instrument by which
Purchaser is bound.

 

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3.3 Corporate Power and Authority.

 

(a) Purchaser has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement, the other agreements
between the parties referred to herein and the consummation of the transactions
contemplated hereby and thereby.

 

(b) This Agreement, each of the other agreements between the parties referred to
herein and each instrument and certificate delivered by Purchaser pursuant
hereto, each constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its respective terms, except as
such obligation and enforceability are limited by bankruptcy, insolvency and
other similar laws of general application affecting the enforcement of
creditors’ rights and by equitable principles.

 

(c) Purchaser is not subject to any restriction of any kind or character which
(i) prevents Purchaser from entering into this Agreement or the other agreements
between the parties referred to herein or (ii) would prevent or impede its
performance of or compliance with all or any part of this Agreement or the other
agreements between the parties referred to herein, or the consummation of the
transactions contemplated hereby or thereby.

 

3.4 Brokers’ Fees. No Broker has been employed by or on behalf of Purchaser in
connection with this Agreement or the transactions contemplated hereby, and
Purchaser has not entered into any agreement or understanding of any kind with
any person or entity for the payment of any brokerage commission, finder’s fee
or any similar compensation in connection with this Agreement or the
transactions contemplated hereby.

 

ARTICLE IV.

 

GENERAL PROVISIONS

 

4.1 Survival of Representations, Warranties and Covenants. The representations,
warranties, covenants and agreements of the parties hereto contained in this
Agreement or in any writing delivered pursuant to the provisions of this
Agreement or on the Closing Date shall survive any examination by or on behalf
of any party hereto and shall survive the Closing Date and the consummation of
the transactions contemplated hereby for a period of one year.

 

4.2 Indemnification.

 

(a) Each Selling Shareholder, jointly and severally, hereby covenants and agrees
to defend, indemnify and save and hold harmless Purchaser, together with its
officers, directors, employees, stockholders, agents, attorneys and other
representatives, and each person who controls Purchaser within the meaning of
the Securities Act, from and against:

 

(i) Any loss, cost, expense, liability, claim or legal damages (including,
reasonable fees and disbursements of counsel and accountants and other costs and
expenses incident to any Action and all costs of investigation) (collectively,
the “Damages”) arising out of or resulting from: (A) the failure of any Seller
to perform or observe fully any covenant, agreement or provision required to be
performed or observed by any of them pursuant to this Agreement; or (B) any
claims of third parties claiming

 

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compensation, commissions or expenses for services as a Broker or finder based
upon obligations incurred by the Company; and

 

(ii) Seventy-five percent (75%) of any Damages arising out of or resulting from:
(A) any inaccuracy in or breach of any representation, warranty, covenant or
agreement made by any Selling Shareholder in this Agreement other than those
representations, warranties, covenants, or agreements set forth in Section 2.1
of this Agreement, or (B) any actual or threatened Action arising out of or
resulting from the conduct of any Seller or the Company’s operations prior to
the Closing Date other than those “Actions and Liabilities” (as defined in the
Employee Leasing Agreement) for which Purchaser is expressly indemnifying the
Company pursuant to Section 7(b) of the Employee Leasing Agreement.

 

(b) Each Seller, severally and not jointly, hereby covenants and agrees to
defend, indemnify and save and hold harmless Purchaser, together with its
officers, directors, employees, stockholders, agents, attorneys and other
representatives, and each person who controls Purchaser within the meaning of
the Securities Act, from and against any Damages arising out of or resulting
from: (i) any inaccuracy or breach of any representation, warranty, covenant or
agreement made by such Seller in Section 2.1 of this Agreement, or (ii) any
claims of third parties claiming compensation, commissions or expenses for
services as a Broker or finder based upon obligations incurred by such Seller.

 

(c) Purchaser covenants and agrees to indemnify and save and hold harmless each
Seller, together with such Seller’s heirs, assigns, agents, attorneys and other
representatives, from and against any Damages arising out of or resulting from:
(i) any inaccuracy in or breach of any representation, warranty, covenant or
agreement made by Purchaser in this Agreement; (ii) the failure by Purchaser to
perform or observe any covenant, agreement or condition required to be performed
or observed by it pursuant to this Agreement; (iii) any claims of third parties
claiming compensation, commissions or expenses for services as a Broker or
finder based upon obligations incurred by Purchaser; or (iv) any actual or
threatened Action arising out of or resulting from the conduct of the Company or
its operations on or after the Closing Date.

 

(d) In the event that any indemnified party is made a defendant in or party to
any action, suit, proceeding or claim, judicial or administrative, instituted by
any third party for Damages (any such third party action, suit, proceeding or
claim being referred to as a “Claim”), the indemnified party shall give notice
thereof as soon as practicable, and in any event within 30 days after the
indemnified party receives notice thereof (but, in all events, at least 10
business days prior to the date that an answer to such Claim is due to be
filed). The failure to give such notice shall not affect whether an indemnifying
party is liable to provide indemnification hereunder unless such failure has
resulted in the loss of material substantive rights with respect to the
indemnifying party’s ability to defend such Claim. The indemnifying party may
contest and defend such Claim so long as the indemnifying party: (i) has a
reasonable basis for concluding that such defense may be successful, (ii)
diligently contests and defends such Claim, and (iii) acknowledges in writing
that it is obligated to provide indemnification with respect to such Claim.
Notice of the intention to contest and defend shall be given by the indemnifying
party to the indemnified party within 20 days after the indemnified party
delivers notice of a Claim (but, in all events, at least 5 business days prior
to the date that an answer to such Claim is due to be

 

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filed). Such contest and defense shall be conducted by reputable attorneys
employed by the indemnifying party and approved by the indemnified party (which
approval will not be unreasonably withheld or delayed). The indemnified party
shall be entitled, at its own cost and expense (which expense shall not
constitute Damages unless the indemnified party reasonably determines that the
indemnifying party is not adequately representing or, because of a conflict of
interest, may not adequately represent, the interests of the indemnified
parties, and has provided the indemnifying party with timely notice of such
determination, and then only to the extent that such expenses are reasonable),
to participate in such contest and defense and to be represented by attorneys of
its or their own choosing. If the indemnified party elects to participate in
such defense, the indemnified party will cooperate with the indemnifying party
in the conduct of such defense. Neither the indemnified party nor the
indemnifying party may concede, settle or compromise any Claim without the
consent of the other party, which consent will not be unreasonably withheld or
delayed in light of all factors of importance to such party. Notwithstanding the
foregoing, if the indemnifying party fails to acknowledge in writing its
obligation to provide indemnification in respect of such Claim, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified party or
to diligently contest and defend such Claim, then (a) the indemnified party
alone shall be entitled to contest, defend and settle such Claim in the first
instance (in which case, all expenses incurred in connection therewith shall
constitute Damages) and, only if the indemnified party chooses not to contest,
defend or settle such Claim, the indemnifying party shall then have the right to
contest and defend such Claim; and (b) if such dispute has been finally resolved
in favor of indemnification by a court or other tribunal of competent
jurisdiction or by mutual agreement of the indemnified and indemnifying party,
the indemnifying party will, within fifteen (15) days after the date of such
resolution or agreement, pay to the indemnified party (subject to Section 4.2(f)
below) all reasonable costs, expenses, settlement amounts or other losses paid
or incurred by the indemnified person in connection with such Claim.

 

(e) In the event any indemnified party shall have a claim against any
indemnifying party that does not involve a Claim, the indemnified party shall
deliver a written notice of such claim to the indemnifying party with reasonable
promptness. The failure to give such notice shall not affect whether an
indemnifying party is liable for reimbursement unless such failure has resulted
in the loss of substantive rights with respect to the indemnifying party’s
ability to defend such claim, and then only to the extent of such loss. If the
indemnifying party notifies the indemnified party that it does not dispute the
claim described in such notice or fails to notify the indemnified party within
30 days after delivery of such notice by the indemnified party that the
indemnifying party disputes the claim described in such notice, subject to
Section 4.2(f) below, the Damages in the amount specified in the indemnified
party’s notice will be conclusively deemed a liability of the indemnifying party
and the indemnifying party shall pay the amount of such Damages to the
indemnified party on demand. Once the indemnifying party has acknowledged and
agreed or been deemed to have acknowledged and agreed to pay any claim pursuant
to this Section 4.2(e), or once any dispute under this Section 4.2(e) has been
finally resolved in favor of indemnification by a court or other tribunal of
competent jurisdiction, the indemnifying party shall (subject to Section 4.2(f)
below) pay the amount of such claim to the indemnified party within fifteen (15)
days after the date of acknowledgement or resolution, as the case may be, to
such account and in such manner as is designated in writing by the indemnified
person.

 

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(f) Notwithstanding anything to the contrary contained in this Agreement, the
Sellers shall have no liability, nor be subject to any claim or demand under
Section 4.2(a) and (b) above, to the extent that the Seller’s aggregate
liability for indemnity pursuant to this Section 4.2 exceeds the sum of the
Purchase Price plus the Option Consideration; provided, however, that such
limitations do not apply in the event of a claim based upon fraudulent
misrepresentations by any Seller or any willful or intentional breach by any
party of a representation, warranty, or covenant set forth herein.

 

(g) The right of Purchaser and the Sellers for indemnification under this
Agreement or the transactions contemplated hereby shall be subject to the
limitations set forth in this 4.2 (which liability is subject to, among other
provisions of this Agreement, the limitations on claims for indemnification set
forth in Section 4.2(f) above), and such indemnification rights shall be the
exclusive remedies of the parties subsequent to the Closing Date for breach of
any of the representations, warranties, covenants or agreements contained herein
or any right, claim, remedy or action arising from this Agreement or the
transactions contemplated hereby, except as otherwise contemplated by 4.8 with
respect to injunctive relief or in the event of a claim based upon fraudulent
misrepresentations by any party or any willful or intentional breach by any
party of a representation, warranty, or covenant set forth herein.

 

4.3 Complete Agreement. This Agreement, including the exhibits and schedules
hereto, constitutes the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, between the
parties hereto with regard to the subject matter hereof. This Agreement (a) is
not intended to confer upon any Person any rights or remedies hereunder or with
respect to the subject matter hereof except as specifically provided in this
Agreement; and (b) may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which counterparts shall together
constitute a single agreement. Facsimile signatures shall be fully binding and
effective for all purposes as if they were original signatures.

 

4.4 Further Action. Each Seller hereby agrees that, from time to time after the
Closing, at Purchaser’s request and without further consideration, such Seller
shall execute and deliver such other instrument of conveyance, assignment and
transfer and take such other action as Purchaser reasonably may require to more
effectively convey, transfer to and invest in Purchaser, and to put Purchaser in
possession of, all of the Securities. Each Seller irrevocably appoints Purchaser
as such Seller’s attorney-in-fact to execute and deliver such instruments which
are necessary or convenient to convey, transfer to and invest title in
Purchaser, and to put Purchaser in possession of, all of the Securities.

 

4.5 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been received five
business days after having been deposited in the United States mail and enclosed
in a registered or certified post-paid envelope; at the open of business on the
next succeeding business day after having been sent by overnight courier; when
scanned by telegraphic communications equipment of the sending party on a
business day, or otherwise at the open of business on the next succeeding
business day; or when personally delivered on a business day or otherwise at the
open of business on the next succeeding business day; and, in each case,
addressed to the respective parties at the

 

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addresses stated below, or to such other changed addresses that the parties may
have fixed by notice in accordance herewith.

 

If to a Seller:    Richard L. Rosenfield      6053 W. Century Boulevard, Suite
1100      Los Angeles, CA 90045-6438      Telephone:    (310) 342-5066     
Facsimile:    (310) 342-5053     

Larry S. Flax, or his successors in trust, as Trustee

of the Larry S. Flax Revocable Trust dated 6-18-02,

as may be amended from time to time

     6053 W. Century Boulevard, Suite 1100      Los Angeles, CA 90045-6438     
Telephone:    (310) 342-5055      Facsimile:    (310) 342-5053      Clint B.
Coleman      6053 W. Century Boulevard, Suite 1100      Los Angeles, CA
90045-6438      Telephone:    (310) 342-4666      Facsimile:    (310) 568-7778  
   Geraldine Wise      6053 W. Century Boulevard, Suite 1100      Los Angeles,
CA 90045-6438      Telephone:    (310) 342-5005      Facsimile:    (310)
342-5040 in each case with a copy to:    Alschuler, Grossman, Stein & Kahan     
1620 26th Street, 4th Floor, North Tower      Santa Monica, CA 90404-4060     
Attn: Robert L. Kahan, Esq.      Telephone:    (310) 255-9187      Facsimile:   
(310) 907-2187 If to Purchaser:    California Pizza Kitchen, Inc.      6053 W.
Century Boulevard, Suite 1100      Los Angeles, CA 90045-6438     

Attn: Susan M. Collyns, Chief Financial Officer

and Senior Vice President of Finance

     Telephone:    (310) 342-4620      Facsimile:    (310) 568-7720

 

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with a copy to:    Pillsbury Winthrop Shaw Pittman LLP      725 South Figueroa
Street, Suite 2800      Los Angeles, CA 90071-5406      Attn: Anna M. Graves,
Esq.      Telephone:    (213) 488-7164      Facsimile:    (213) 226-4017

 

4.6 Publicity. Without the prior consent of the Selling Shareholders, Purchaser
shall not, and without the prior written consent of Purchaser, no Seller shall,
and each party shall cause its directors, officers, stockholders, members,
employees, heirs, representatives and agents, as applicable, not to, make any
public statement or press release with respect to the transactions contemplated
by this Agreement or otherwise disclose to any Person the existence, terms,
content or effect of this Agreement; provided, however, that if a disclosure is
required by law, the party required to make such disclosure shall be permitted
to make such disclosure but shall make a good faith effort to consult with
Purchaser, in the case of any Seller, and with the Selling Shareholders, in the
case of Purchaser, before making the required disclosure.

 

4.7 Remedies. Subject to Section 4.2(g), in addition to any remedies set out in
the specific sections of this Agreement, the parties shall be entitled to any
and all legal and equitable remedies, including without limitation, injunctive
relief and specific performance, to enforce this Agreement.

 

4.8 Waiver of Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (1) ARISING UNDER THIS AGREEMENT, OR (2) IN ANY WAY CONNECTED WITH OR
RELATED TO OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

4.9 Attorneys’ Fees. If any litigation shall ensue between the parties
concerning the interpretation of or performance under this Agreement, the
prevailing party shall recover from the nonprevailing party or parties such
party’s reasonable attorneys’ and other fees as fixed by the court or the
arbitrator, as the case may be.

 

4.10 Construction of Agreement. Any captions to, or headings of, the paragraphs
of this Agreement are solely for the convenience of the parties hereto, are not
a part of this Agreement, and shall not be used for the interpretation of this
Agreement. Where the context so requires, words used in any gender shall be
deemed to include other genders, and the singular number shall include the
plural and vice versa. The Recitals appearing at the beginning of this
Agreement, and the exhibits and schedules attached hereto, are hereby
incorporated into and are

 

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deemed to constitute a part of the operative text of this Agreement. Each party
hereto and such party’s counsel have had the full opportunity to review and
comment upon, and have reviewed and commented upon, this Agreement, and any rule
of construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in the interpretation of this Agreement or any
exhibits or schedules attached hereto. Unless otherwise expressly stated,
references to numbered or lettered Articles, Sections, Subsections, and Exhibits
herein refer to Articles, Sections, Subsections, and Exhibits of this Agreement.

 

4.11 Severability. In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision. In such event, the parties shall negotiate, in good faith, a valid,
legal and enforceable substitute provision which most nearly effects the intent
of the parties in entering into this Agreement.

 

4.12 Assignment; Successors and Assigns. Neither party may assign its rights
hereunder without the other party’s prior written consent, which consent shall
not be unreasonably withheld; provided, however, that Purchaser may assign its
rights hereunder without the Sellers’ consent to any affiliate of Purchaser.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Any
purported assignment in violation of this Section 4.12 shall be void and of no
effect.

 

4.13 Time of Essence. Time is of the essence of each and every term, condition,
obligation, and provision hereof.

 

4.14 No Obligations to Third Parties. Except as otherwise expressly provided
herein, the execution and delivery of this Agreement shall not be deemed to
confer any rights upon, nor obligate any of the parties hereto to, any person or
entity other than the parties hereto.

 

4.15 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to any
principles or statutes of conflicts of laws.

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
has caused this Agreement to be executed on its behalf by a representative duly
authorized, all as of the date first above set forth.

 

PURCHASER:

CALIFORNIA PIZZA KITCHEN, INC.,

a Delaware corporation

By:

 

/s/ Susan M. Collyns

   

Susan M. Collyns,

   

Senior Vice President, Finance and

Chief Financial Officer

SELLERS: RICHARD L. ROSENFIELD

/s/ Richard L. Rosenfield

Richard L. Rosenfield

LARRY S. FLAX, OR HIS SUCCESSORS IN TRUST, AS TRUSTEE OF THE LARRY S. FLAX
REVOCABLE TRUST DATED 6-18-02, AS MAY BE AMENDED FROM TIME TO TIME

By:

 

/s/ Larry S. Flax

   

Larry S. Flax,

Trustee

CLINT B. COLEMAN

/s/ Clint B. Coleman

Clint B. Coleman

GERALDINE WISE

/s/ Geraldine Wise

Geraldine Wise

 

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EXHIBITS

 

Exhibit A    Ownership of Securities Exhibit B    Landlord Consent

 

- 1 -

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EXHIBIT A

 

Ownership of Securities

 

Seller

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

  

Securities Owned

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

Richard L. Rosenfeld   

500,000 shares Series A Preferred Stock;

1,000,000 shares Common Stock

Larry S. Flax, or his successors in trust, as Trustee of the Larry S. Flax
Revocable Trust dated 6-18-02, as may be amended from time to time   

500,000 shares Series A Preferred Stock;

1,000,000 shares Common Stock

Geraldine Wise    Options to purchase 20,000 shares of Common Stock Clint
Coleman    Options to purchase 40,000 shares of Common Stock

 

 

A-1

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EXHIBIT B

 

Landlord Consent

 

CONSENT TO ASSIGNMENT AND ASSUMPTION OF LEASE

 

THIS CONSENT TO ASSIGNMENT (this “Consent”) is made as of April 15, 2005 by
Madison Manhattan Village, LLC (“Landlord”).

 

A. Pursuant to that certain Shopping Center Lease between Landlord and LA Food
Show, Inc. (“Tenant”), dated as of December August 28, 2002 (the “Lease”),
Tenant leases the premises located in the Shopping Center (as defined in the
Lease) at Space No. 1, North Building.

 

B. All of Tenant’s shareholders other than California Pizza Kitchen, Inc.
(“CPK”) are contemplating transferring all of their equity interests in Tenant
to CPK or a wholly-owned subsidiary of CPK (the “Stock Transfer”), which Stock
Transfer is anticipated to take place no later than April 15, 2005.

 

C. Pursuant to the Section 17.1 of the Lease: (a) the Stock Transfer is deemed
an assignment of the Lease for which Landlord’s consent is needed; (b) Tenant is
hereby requesting Landlord’s consent to the Stock Transfer; and (c) Landlord may
not withhold its consent to the Stock Transfer.

 

NOW, THEREFORE, in consideration of the foregoing, and notwithstanding anything
to the contrary set forth in the Lease, Landlord hereby consents to the Stock
Transfer as of the date hereof in accordance with Section 17.1 of the Lease.

 

CONSENTED AND AGREED:

 

LANDLORD:

Madison Manhattan Village, LLC

By:

   

Name:

   

Title:

   

 

B-1

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SCHEDULES

 

SCHEDULE

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SUBJECT

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2.5

   Personal Property Leases

 

1