ex101to8k06898_07092008.htm


    Exhibit
10.1

     

    PURCHASE
AGREEMENT

     

    This
PURCHASE AGREEMENT (this “Agreement”)
is made and entered into as of July 9, 2008, among John K. H. Linnartz (the
“Seller”),
Western Mustang Holdings LLC, a Delaware limited liability company (the “Purchaser”)
and Western Sizzlin Corporation, a Delaware corporation and the sole member of
the Purchaser (the “Parent”).

     

    W I T N E S S E T
H:

     

    WHEREAS, pursuant to the
Limited Partnership Agreement (the “Original
Partnership Agreement”), made and entered into on November 7, 2002,
between Mustang Capital Management, LLC, a Texas limited liability company
(“General
Partner”), and the Seller (the “Original
Partners”), the Original Partners formed Mustang Capital Advisors, LP, a
Texas limited partnership (“Advisors”);

     

    WHEREAS, the Seller is the
owner and holder of a 99% limited partnership interest in the
Advisors;

     

    WHEREAS, pursuant to the
Limited Liability Company Regulations, dated as of November 7, 2002 (the “Original LLC
Regulations”), the Seller formed the General Partner and is the sole
member thereof;

     

    WHEREAS, because the Seller is
the sole member of the General Partner and also thus the sole partner of the
Partner, Advisors is a disregarded entity for federal income tax purposes, and
for such purposes is instead considered a sole proprietorship of the Seller,
rather than a partnership;

     

    WHEREAS, Advisors serves as
investment manager to, and is the general partner of, each of Mustang Capital
Partners I, LP and Mustang Capital Partners II, LP, each a Texas limited
partnership (each a “Fund” and
collectively, the “Funds”);

     

    WHEREAS, the Seller is selling
and assigning to the Purchaser, and the Purchaser is purchasing from the Seller,
on the terms and subject to the conditions set forth in this Agreement, a 50.5%
partnership interest in Advisors and a 51% membership interest in the General
Partner (such interests in Advisors and the General Partner, collectively, the
“Purchased
Interests”);

     

    WHEREAS, such sale and
assignment shall be in accordance with “Situation 1” of Rev. Rul.
99-5;

     

    WHEREAS, notwithstanding
references in this Agreement to the “Original
Partners,” upon such sale and assignment, the Purchaser will become, for
federal income tax purposes, the only other partner of Advisors and the only
other member of the General Partner, and both Advisors and the General Partner
will thus thereafter be considered partnerships for federal income tax
purposes;

     

    WHEREAS, on the date hereof,
the Original Partners and the Purchaser will enter into the Amended and Restated
Limited Partnership Agreement of Advisors (the “Amended
Partnership Agreement”), in substantially the form of Exhibit
A hereto, which will amend and restate the Original Partnership Agreement
in its entirety; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    WHEREAS, on the date hereof,
the Seller and the Purchaser will enter into the Amended and Restated Limited
Liability Company Regulations of the General Partner (the “Amended LLC
Regulations” and, together with the Amended Partnership Agreement, the
“Amended
Organizational Documents”), in substantially the form of Exhibit
B hereto, which will amend and restate the Original LLC Regulations in
their entirety;

     

    NOW, THEREFORE, in
consideration of the premises and the mutual benefits to be derived from this
Agreement and the Amended Organizational Documents and of the respective
representations, warranties, agreements, indemnities, and promises contained
herein, the parties, intending to be legally bound, agree as
follows:

     

    
      	
              SECTION
      1.

            	
              DEFINITIONS;
      INTERPRETATIONS

            


    

     

    1.1.           Definitions.  Capitalized
terms used in this Agreement that are defined in the Amended Partnership
Agreement or the Amended LLC Regulations, as the case may be, and not otherwise
defined herein shall have the respective meanings set forth in the Amended
Partnership Agreement or the Amended LLC Regulations, as the case may
be.  As used in this Agreement, the following terms shall have the
following meanings:

     

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

     

    “Control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management and/or affairs of a Person,
whether through the ownership of stock, as trustee or executor, by contract or
credit arrangement or otherwise, including, without limitation, the ownership,
directly or indirectly, of securities having the power to elect a majority of
the board of directors or similar body governing the affairs of such
Person.

     

    “Encumbrance”
means any security interest, pledge, mortgage, lien (including environmental and
tax liens), charge, encumbrance, adverse claim, preferential arrangement, or
restriction of any kind, including, without limitation, any restriction on the
use, voting, transfer, receipt of income, or other exercise of any attributes of
ownership; provided, however, that neither
margin debt of Mustang Capital Partners I, LP nor margin debt of the Managed
Accounts incurred in the ordinary course of business of Mustang Capital Partners
I, LP or Advisors, as the case may be, shall be considered an “Encumbrance”
for purposes of this Agreement.

     

    “Estimated June
30 Balance Sheet” means the estimated unaudited consolidated balance
sheet of Advisors as of June 30, 2008, being delivered by the Seller to the
Purchaser pursuant to Section 2.3(a)(vi).

     

    “GAAP”
means United States generally accepted accounting principles and practices in
effect from time to time applied consistently throughout the periods
involved.

     

    “Governmental
Entity means any federal, state or local governmental authority, court,
administrative or regulatory agency or commission.

     

    “Investment”
means singularly, any, and collectively, all, securities in which Advisors,
through the Managed Accounts, or in which the Funds, have invested as of June
30, 2008.

     

    
      
         

      

      
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    “Investment
List” means a list by Fund and Managed Account, as applicable, of each
Investment, and the aggregate amount invested by such Fund or through such
Managed Account in such Investment as of June 30, 2008.

     

    “Managed
Accounts” means all managed accounts of Advisors as of June 30,
2008.

     

    “Material Adverse
Effect” means, with respect to any Person, any circumstance, change,
event, transaction, loss, failure, effect, or other occurrence, which is
materially adverse to the business, operations, prospects, properties, or
conditions of such Person.

     

    “Organizational
Documents” shall mean with respect to any entity the certificate or
articles of incorporation, by-laws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement and any other organizational document of such entity.

     

    “Person”
means any individual, corporation, unincorporated organization, company, limited
liability company, partnership (limited or general), joint venture, association,
trust or other entity.

     

    “Side Pocket
Investments” means, except for shares of Trinity Bank, National
Association, Fort Worth, TX, owned by the Funds, Investments that were as of
June 30, 2008 not either (a) listed on a national securities exchange, or (b)
traded in the over-the-counter markets.

     

    “Tax” means
any and all fees (including without limitation documentation, recording,
license, and registration fees), taxes (including without limitation net income,
alternative, unitary, alternative minimum, minimum franchise, value added, ad
valorem, income, receipts, capital, excise, sales, use, leasing, fuel, excess
profits, turnover, occupational, property (personal and real, tangible and
intangible), transfer, recording and stamp taxes, levies, imposts, duties,
charges, fees assessments, or withholdings of any nature whatsoever, general or
special, ordinary or extraordinary, and any transaction privilege or similar
taxes) imposed by or on behalf of a governmental authority, together with any
and all penalties, fines, additions to tax and interest thereon.

     

    “Tax
Return” shall mean any return, declaration, report, claim for refund, or
information return or statement or other form relating to Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.

     

    1.2.           Interpretations.  Except
as otherwise expressly provided herein, the following rules of interpretation
apply to this Agreement: (i) the singular includes the plural and the plural
includes the singular except when the context otherwise requires; (ii) “include”
and “including” are not limiting; (iii) a reference to any agreement or contract
includes exhibits, schedules, and permitted supplements and amendments thereto;
(iv) a reference to a law includes any amendment or modification to such law and
any rules or regulations issued thereunder, (v) a reference to a Person includes
such Person's permitted successors and assigns; and (vi) unless the context
otherwise requires, a reference in this Agreement to a Section or Paragraph is
to the respective Section or Paragraph of this Agreement.

     

    
      
         

      

      
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              SECTION
      2.

            	
              SALE
      AND PURCHASE OF PURCHASED INTERESTS

            


    

     

    2.1.           Sale and Purchase of
Purchased Interests.

     

    (a)           Upon
the terms and subject to the conditions set forth in this Agreement, at the
Closing (as defined below), the Seller shall sell, assign, and transfer to the
Purchaser, free and clear of all Encumbrances, and the Purchaser shall purchase
from the Seller, the Purchased Interests for the aggregate consideration set
forth in Section 2.1(b) below.

     

    (b)           The
aggregate consideration to be paid by the Purchaser to the Seller at the Closing
(the “Total
Consideration”) shall consist of the following: (i) three hundred
thousand dollars ($300,000) (the “Cash
Consideration”) and (ii) 54,563 shares of common stock, par value $.01
per share, of the Parent (the “Parent Common
Stock”).  The parties agree that the Total Consideration shall
be $1,050,241 (based on a price per share of $13.75, which represents the
closing price of the Parent Common Stock on the Nasdaq Capital Market on July 7,
2008.

     

    (c)           After
giving effect to the sale and purchase under this Section 2.1 and the Closing,
the Purchaser shall be (i) a substituted Limited Partner in Advisors pursuant to
the terms of the Amended Partnership Agreement, with the Purchaser holding a
50.5% Partnership Percentage, the Seller holding a 48.5% Partnership Percentage
and the General Partner holding a 1% Partnership Percentage and (ii) a Member in
the General Partner pursuant to the terms of the Amended LLC Regulations, with
the Purchaser holding a 51% Membership Percentage and the Seller holding a 49%
Membership Percentage.

     

    2.2.           Closing.  The
purchase and sale of the Purchased Interests shall take place at 10:00 a.m. on
the date of execution and delivery of this Agreement, at the offices of Olshan
Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East 55th
Street, New York, New York 10022, or at such other time and place or such other
manner, including by electronic means, as the Seller and the Purchaser shall
mutually agree (the “Closing”).  The
date on which the Closing takes place is referred to herein as the “Closing
Date.”  At the Closing, the parties to this Agreement shall
take the following actions and make the following deliveries, which deliveries
and actions shall be deemed to have occurred simultaneously and to constitute
the Closing hereunder:

     

    (a)           The
Purchaser shall pay the Seller the Cash Consideration by wire transfer in
immediately available funds to a bank account designated by the Seller in
writing prior to the Closing Date; and

     

    (b)           The
Purchaser shall deliver (i) to its transfer agent an irrevocable letter of
instruction directing it to issue and deliver to the Seller a share certificate
representing the Parent Common Stock and (ii) to the Seller, a copy of such
irrevocable letter of instruction; and

     

    (c)           The
General Partner, the Seller and the Purchaser shall execute and deliver the
Amended Organizational Documents.

     

    2.3.           Conditions
to Closing.  Prior to Closing, the indicated Persons below
shall have taken or cause to have been taken, the following actions, and shall
have delivered, or caused to have been delivered, the following
documents:

     

    
      
         

      

      
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    (a)           The
Seller, acting as the sole member of the General Partner, shall
have:

     

    (i)           distributed
to himself, as the owner of all limited and general partnership interests in
Advisors, all management fees on Managed Accounts that were earned for the
period beginning January 1, 2008 and ending on the Closing Date, to the extent
same have not previously been distributed to the Seller;

     

    (ii)           distributed
to himself all monies in the General Partner’s bank account at Banc of America
as of June 30, 2008, except for at least $200 retained in such account as of
such date, and all monies in Advisors’ bank account at Banc of America
Securities as of June 30, 2008, except for at least $10,000 retained in such
account as of such date;

     

    (iii)           instructed
Bank of America Securities in writing to distribute to the partners of the
Funds, their pro rata share of the aggregate shares of Western Sizzlin common
stock, par value $.01 per share, held by the Funds as of July 2,
2008;

     

    (iv)           delivered
to the Purchaser a copy of the Organizational Documents of Advisors, the General
Partner and each Fund, each as amended to date;

     

    (v)           delivered
to Purchaser the Investment List;

     

    (vi)           delivered
to the Purchaser the Estimated June 30 Balance Sheet; and

     

    (vii)           delivered
to the Purchaser all consents required in connection with the transactions
described in this Agreement.

     

    (b)           The
Purchaser shall have delivered to the Seller a copy of the Organizational
Documents of the Purchaser.

     

    
      	
              SECTION
      3.

            	
              REPRESENTATIONS
      AND WARRANTIES OF SELLER

            


    

     

    As
inducement to the Purchaser and the Parent to enter into this Agreement, the
Seller represents and warrants to the Purchaser and the Parent that, as of the
Closing Date (except to the extent any representation or warranty is made as of
another date, which is hereby made as of such other date):

     

    3.1.           Organization and
Authority.

     

    (a)           Advisors
and each of the Funds is a limited partnership duly formed, validly existing,
and in good standing under the laws of the State of Texas, and has all requisite
power and authority to own, operate, or lease its properties and assets and to
carry on its business as it is currently conducted as of the Closing Date, and
is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary.

     

    (b)           The
General Partner is a limited liability company duly organized, validly existing,
and in good standing under the laws of the State of Texas, and has all requisite
power and authority to own, operate, or lease its properties and assets and to
carry on its business as it is currently conducted, and is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary.

     

    
      
         

      

      
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    (c)           The
Seller has furnished to the Purchaser a complete and correct copy of the
Organizational Documents of Advisors, the General Partner and each of the Funds,
each as amended to date, each of which is in full force and
effect.  Except as described on Schedule
3.1(c), none of Advisors, the General Partner or either Fund is in
violation of any of the material provisions of its Organizational
Documents.

     

    (d)           This
Agreement has been duly executed and delivered by the Seller and (assuming due
execution, and delivery by the Purchaser and the Parent), constitutes the legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting or relating to creditor’s rights
generally and general equitable principles.

     

    3.2.           Subsidiaries.

     

    (a)           Other
than the Funds, there are no corporations, partnerships, joint ventures,
associations, or other entities in which Advisors owns, of record or
beneficially, any direct or indirect equity or other interest or any right
(contingent or otherwise) to acquire the same, or in which Advisors otherwise
participates.

     

    (b)           Other
than Advisors, there are no corporations, partnerships, joint ventures,
associations, or other entities in which the General Partner owns, of record or
beneficially, any direct or indirect equity or other interest or any right
(contingent or otherwise) to acquire the same, or in which the General Partner
otherwise participates.

     

    3.3.           Partners;
Members.

     

    (a)           Prior
to giving effect to the transactions to occur at Closing, the Original Partners
were, and have been since the formation of the Funds, the only Partners of
Advisors, with the Seller owning a 99% Partnership Percentage as the sole
Limited Partner and the General Partner owning a 1% Partnership Percentage as
the sole General Partner, and each of the Original Partners owns, and has owned
since the formation of the Funds, his or its respective interests in Advisors
free and clear of any Encumbrance.  Prior to giving effect to the
transactions to occur at Closing, the Seller was, and has been since the
formation of the General Partner, the only Member of the General Partner, and
the Seller owns, and has owned since the formation of the General Partner, his
interest in the General Partner free and clear of any
Encumbrance.  After giving effect to the consummation of the
transactions contemplated by this Agreement and the Amended Organizational
Documents:

     

    (i)           the
Purchaser will own a 50.5% Partnership Percentage as a Limited Partner, the
Seller will own a 48.5% Partnership Percentage as a Limited Partner and the
General Partner will own a 1% Partnership Percentage as the General Partner,
free and clear of any Encumbrance (other than any Encumbrance created by or
through the Amended Partnership Agreement),

     

    
      
         

      

      
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    (ii)           the
Purchaser, the Seller and the General Partner will be the only Partners of
Advisors,

     

    (iii)           the
Purchaser will own a 51% Membership Percentage in the General Partner and the
Seller will own a 49% Membership Percentage in the General Partner, free and
clear of any Encumbrance (other than any Encumbrance created by or through the
Amended LLC Regulations) and

     

    (iv)           the
Purchaser and the Seller will be the only Members of the General
Partner.

     

    (b)           Except
as provided in this Agreement and the Amended Partnership Agreement, no Original
Partner, Affiliate of an Original Partner has, and Advisors has not, granted any
Person any right or has entered into any agreement or understanding (whether by
option, warrant, call, commitment, conversion, plan or otherwise), fixed or
contingent, with respect to the acquisition, purchase, sale, transfer,
assignment, creation, or issuance of any interest in Advisors.  Except
as provided in this Agreement and the Amended LLC Regulations, no Member or
Affiliate of a Member has, and the General Partner has not, granted any Person
any right or has entered into any agreement or understanding (whether by option,
warrant, call, commitment, conversion, plan or otherwise), fixed or contingent,
with respect to the acquisition, purchase, sale, transfer, assignment, creation,
or issuance of any interest in the General Partner.

     

    3.4.           Partnership
Property.  Advisors, the General Partner and each of the Funds
has good, valid, and marketable title to all the properties, interests in
properties and assets owned, licensed or leased by it, free and clear of any
Encumbrance other than (i) Encumbrances for current taxes not yet due and
payable or being contested in good faith by appropriate proceedings, and (ii)
imperfections of title, easements, pledges, charges, and Encumbrances that do
not materially interfere with its ability to use such property for the purposes
for which such property is intended to be used.

     

    3.5.           Partnership
Records.  The books and records of Advisors, the General
Partner and each Fund are complete and reflect all material actions and
transactions of each such entity.

     

    3.6.           Activities.  Neither
Advisors, the General Partner nor either Fund has engaged in any business or
activity of any kind, other than the business and activities permitted by the
Organizational Documents of Advisors, the General Partner or such Fund, as the
case may be.

     

    3.7.           Investments.

     

    (a)           The
Investment List is complete and reflects the Investments at the following fair
market values as of June 30, 2008 or such other date prior to June 30, 2008
referenced below:

     

    (i)           for
Investments in securities that are freely tradeable and were as of June 30, 2008
both listed on a national securities exchange, and traded on such date, at the
last sales price on such date;

     

    (ii)           for
Investments in securities that are freely tradeable and were as of June 30,
2008 listed on a national securities exchange, but which were not
traded on such date: and (x) held by the Funds, at the last bid
price prior to such date, and (y) held in the Managed Accounts, at the
mid-point between the last bid price and the last offer price prior to such
date;

     

    
      
         

      

      
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    (iii)           for
Investments in securities traded in the over-the-counter market,
and:  (x) held by the Funds, at the last bid price on or prior to such
date, and (y) held in the Managed Accounts, at the mid-point between the
last bid price and the last offer price on or prior to such date;
and

     

    (iv)           
for Side Pocket Investments, at the values listed on the Investment List, as
determined by Advisors in accordance with the Amended and Restated Limited
Partnership Agreements of the Funds, as amended to date.

     

    All of
the Investments are owned by the applicable Funds or through the Managed
Accounts, directly or indirectly, free and clear of any Encumbrances (other than
any restrictions on transfer that may exist under the Securities Act or any
state securities laws).

    


    (b)           Advisors’
ownership interests in each Investment have been duly authorized and validly
issued, and are fully paid, non-assessable (except to the extent of any margin
debt incurred in the ordinary course of business) and free of preemptive
rights.

     

    3.8.           Partnership SEC
Documents.  Each of Advisors, the General Partner and the Funds
has filed all forms, reports and documents with the United States Securities and
Exchange Commission (the “SEC”)
required to be filed by it prior to the date of this Agreement (together with
the amendments and supplements to such filings filed prior to the date of this
Agreement, the “Advisors
SEC
Documents”).  Each Advisors SEC Document, as of its filing date
(or if amended, as of the date of its last amendment) complied as to form in all
material respects with the applicable requirements of the Securities Act, the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Investment Company Act of 1940, as amended (the “Investment
Company Act”) and the Investment Advisers Act of 1940, as amended (the
“Advisers
Act”), as the case may be.

     

    3.9.           Financial Statements;
Liabilities.

     

    (a)           The
Seller has delivered to Purchaser complete copies of the (i) audited
consolidated statements of financial condition, statements of income, statement
of changes in partners’ capital and statement of cash flows of Advisors as of
and for the each years ended December 31, 2006 and 2007 and the (ii) audited
consolidated statement of financial condition, statements of operations,
statement of changes in partners’ capital and statement of cash flows of each of
the Funds as of and for the year ended December 31, 2007 (the audited
consolidated statements of financial condition, statements of income, changes in
partners’ capital and statements cash flows of Advisors and each of the Funds as
of and for the year ended December 31, 2007, the “2007 Advisors’
Financial Statements,” and all financial statements described above,
collectively, the “Advisors’
Financial Statements”).  The Advisors’ Financial Statements
fairly present the financial condition and results of operations of Advisors and
the Funds as of the dates and for the periods indicated therein in accordance
with GAAP.

     

    
      
         

      

      
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    (b)           Except
as (and to the extent) set forth in the 2007 Advisors’ Financial Statements, as
of December 31, 2007, neither Advisors nor either Fund had any liability or
obligation that would be required to be reflected on a balance sheet prepared in
accordance with GAAP.  Since December 31, 2007, neither Advisors nor
either Fund has become subject to any such liability or obligation that would be
required to be reflected on a balance sheet prepared in accordance with GAAP,
other than (x) liabilities or obligations incurred after December 31, 2007, in
the ordinary course of business consistent with past practices and (y) as
reflected in the Estimated June 30 Balance Sheet.

     

    (c) The Estimated June 30 Balance Sheet
represents the Seller’s reasonable best estimate of the expected assets and
liabilities of Advisors as of such date.

     

    3.10.                     Absence of Certain
Changes.  Since December 31, 2007, except as set forth on Schedule
3.10 and except as expressly contemplated by this Agreement (a) Advisors,
the General Partner and each of the Funds has conducted its businesses only in
the ordinary course of business and (b) there has not been any Material Adverse
Effect on Advisors, the General Partner or either Fund, as the case may
be.

     

    3.11.                     Litigation and Legal
Compliance.

     

    (a)           None
of Advisors, the General Partner or either Fund is a party to any claims,
actions, suits, proceedings or investigations which would reasonably be expected
to have a Material Adverse Effect on any of them.   There are no
claims, actions, suits, proceedings or investigations pending or, to the
knowledge of Advisors, the General Partner or either Fund, threatened, against
any of them or any of their properties that challenges the validity of this
Agreement or of the transactions contemplated hereby or which seeks to prevent
the consummation of such transactions.

     

    (b)           Advisors,
the General Partner and each of the Funds are in compliance with all federal,
state and local laws, statutes, rules, regulations, ordinances, permits, orders
or writs, including without limitation the Advisers Act and the Investment
Company Act and all rules promulgated thereunder, except where the failure to
comply would not have a Material Adverse Effect.

     

    (c)           All
disclosures required to be made to investors in either Fund have been
made.

     

    (d)           All
consents required to be obtained from investors in either Fund or in the Managed
Accounts for the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereby have been
obtained.

     

    (e)           Each
of Advisors, the General Partner and the Funds has all permits, licenses,
approvals, authorizations of, and registrations with and under all laws, and
from all Governmental Entities required for Advisors, the General Partner and
the Funds to carry on their respective businesses as currently conducted, except
where the failure to have any such permit, license, approval, authorization or
registration would not have a Material Adverse Effect on Advisors, the General
Partner or either Fund, as the case may be.

     

    
      
         

      

      
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    3.12.                     Agreements.  Each
agreement, contract, lease, license, commitment, or instrument (including any
and all amendments thereto) (collectively, the “Contracts”)
to which Advisors, the General Partner or either Fund is a party, or by which
Advisors or either Fund or any of their respective properties or assets is bound
or subject, including, without limitation, all Organizational Documents of
Advisors, the General Partner and each Fund, is in full force and effect and
constitutes a legal, valid, and binding obligation of Advisors, the General
Partner or either Fund, as the case may be.  Neither Advisors, the
General Partner nor either Fund is in default or breach of (with or without the
giving of notice or the passage of time) any such Contract, except breaches or
defaults, if any, that would not have a Material Adverse Effect on Advisors, the
General Partner or either Fund, as the case may be.  To the knowledge
of the Seller, no other party is in material default or breach of any such
Contracts.

     

    3.13.                     Tax
Matters.

     

    (a)           
Advisors and the General Partner have each timely filed partnership tax returns
for all years since their respective years of formation, though neither is
considered a partnership for federal income tax purposes.  All Taxes
for which Advisors, the General Partner or either Fund may be held liable (other
than the Taxes referred to in the next sentence), have been paid or accrued
within the prescribed period or any extension thereof.  All Taxes
required to be withheld by Advisors, the General Partner or either Fund,
including, but not limited to, Taxes arising as a result of payments or
distributions (or amounts allocable) to foreign partners or foreign persons or
to employees of Advisors, the General Partner or either Fund, have been
collected and withheld, and have been either paid to the respective governmental
agencies, set aside in accounts for such purpose, or accrued, reserved against,
and entered upon the books and records of the employer.

     

    (b)           There
are no Tax liens upon any property of Advisors, the General Partner or either
Fund, except for (i) liens for current Taxes not yet due and payable, and (ii)
as would not, individually or in the aggregate, have a Material Adverse Effect
on Advisors, the General Partner or either Fund, as the case may
be.

     

    (c)           After
giving effect to the terms of this Agreement, each of Advisors and the General
Partner qualifies to be treated as a partnership for federal income tax
purposes.

     

    (d)           Neither
Advisors’ or the General Partner’s payroll, property, or receipts, or other
factors used in a particular state's apportionment or allocation formula results
in an apportionment or allocation of business income to any state other than
Texas, and neither Advisors nor the General Partner has non-business income that
is allocated, apportioned, or otherwise sourced to any state other than
Texas.

     

    3.14.                     No Violation;
Consents.  Neither the execution, delivery, and performance of
this Agreement nor the consummation by the Seller of the transactions
contemplated hereby (a) conflicts with or violates (i) any law, regulation,
order, writ, injunction, decree, determination, or award of any court, any
governmental department, board, agency or instrumentality, domestic or foreign,
or any arbitrator, applicable to the Seller, Advisors, the General Partner or
either of the Funds, except for any conflicts or violations that would not,
individually or in the aggregate, have a Material Adverse Effect on Advisors,
the General Partner or either Fund, as the case may be, (ii) the Organizational
Documents of Advisors, the General Partner or either of the Funds, or (iii) any
contract, agreement, instrument, mortgage, note, lease, or other arrangement
binding on or affecting the Seller, Advisors, the General Partner or any of the
Funds or any of their respective properties or assets, except for any conflicts
or violations that would not have a Material Adverse Effect on Advisors, the
General Partner or either Fund, as the case may be; (b) requires any consent,
authorization, or approval under any contract, agreement, instrument, mortgage,
note, lease, or other arrangement to which the Seller, Advisors, the General
Partner or any of the Funds or any of their respective properties is bound that
has not been obtained on or before the date hereof; or (c) results in the
creation or imposition of any Encumbrance upon any property or assets of the
Seller, Advisors, the General Partner or either of the Funds.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    3.15.                     Governmental
Authorizations.  The execution, delivery and performance by the
Seller of this Agreement and the consummation by the Seller of the transactions
contemplated hereby do not require any filing or registration with, notification
to, or authorization, consent or approval of, any Governmental Entity, except
for such filings, registrations, authorizations, consents or approvals (a) that
have completed, made, or obtained on or before the date of this Agreement, and
(b) the failure to so file, make, or obtain as would not have a Material Adverse
Effect on Advisors, the General Partner or either of the Funds.

     

    3.16.                     United States Securities Law
Compliance.

     

    (a)           The
Seller has neither directly nor indirectly offered the Purchased Interests for
sale, nor solicited any offer to buy the Purchased Interests, by means of any
general advertising or any other form of general solicitation. The Seller has
neither directly nor indirectly offered the Purchased Interests for sale, nor
solicited any offer to buy the Purchased Interests, in any other manner that
would require the sale of the Purchased Interests to be subject to the
registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”).

     

    (b)           The
Seller did not acquire any portion of its interest in Advisors or the General
Partner including the Purchased Interests, with a view to, or for, the resale in
connection with any distribution thereof within the meaning of the Securities
Act which would not be exempt from the registration requirements of the
Securities Act.

     

    3.17.                     Acquisition of Parent Common
Stock.

     

    (a)           The
Parent Common Stock is being acquired by the Seller solely for the Seller’s own
account, for investment and not with a view to any distribution thereof that
would violate the Securities Act or any state securities laws; and the Seller
will not distribute Parent Common Stock in violation of the Securities Act or
any state securities laws.

     

    (b)           The
Seller is an “accredited investor” (as that term is defined in Rule 501(a) of
Regulation D).  The Seller is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in equity securities presenting an investment decision like that
involved with respect to the Parent Common Stock.  The Seller is able
to bear the economic risk of an investment in the Parent Common
Stock.

     

    (c)           The
Seller understands that the Parent Common Stock is being offered and sold in
reliance on specific exemptions from the registration requirements of United
States federal securities laws and that the Purchaser and the Parent are relying
in part upon the truth and accuracy of, and the Seller’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Seller set forth herein in order to determine the availability of such
exemptions and the eligibility of the Seller to acquire the Parent Common
Stock.

     

    
      
         

      

      
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    (d)           The
Seller understands that: (i) the Parent Common Stock has not been and is not
being registered under the Securities Act or any state securities laws, and may
not, directly or indirectly, be offered for sale, sold, assigned, transferred or
otherwise disposed unless (A) subsequently registered thereunder, (B) the Seller
shall have delivered to the Parent an opinion of counsel reasonably acceptable
to the Parent, in a form and substance reasonably acceptable to the Parent, to
the effect that such Parent Common Stock to be sold, assigned or transferred may
be sold, assigned or transferred pursuant to an exemption from such registration
under the Securities Act or any state securities laws, or (C) pursuant to Rule
144 promulgated under the Securities Act (collectively, “Rule
144”), (ii) any sale of the Parent Common Stock made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 and further, if
Rule 144 is not applicable, any resale of the Parent Common Stock under
circumstances in which the Seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act,
and (iii) neither the Purchaser, the Parent nor any other person is under any
obligation to register the Parent Common Stock under the Securities Act or any
state securities laws or to comply with the terms and conditions of any
exemption thereunder.

     

    (e)           The
Seller understands that the stock certificate representing the Parent Common
Stock will contain a restrictive legend in substantially the following form (and
a stop-transfer order may be placed against transfer of such stock
certificates):

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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) AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.

     

    (f)           The
Seller has, in connection with its decision to receive Parent Common Stock and
enter into this Agreement and the other transactions contemplated hereby, relied
solely upon the representations and warranties of the Purchaser and the Parent
contained in this Agreement.  The Seller hereby acknowledges and
agrees that other than the representations and warranties contained in Section
4, neither the Purchaser, the Parent nor any of their respective officers,
directors, employees or representatives make or have made any representation or
warranty, express or implied, at law or in equity, with respect to the
Purchaser, the Parent or the Parent Common Stock.

     

    
      
         

      

      
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              SECTION
      4.

            	
              REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER AND THE
PARENT

            


    

     

    As an
inducement to the Seller to enter in this Agreement, each of the Purchaser and
the Parent, jointly and severally, represents, warrants and agrees to and with
the Seller that, as of the Closing Date (except to the extent any representation
or warranty is made as of another date, which is hereby made as of such other
date):

     

    4.1.           Organization. The
Purchaser is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware.  The Parent is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  Each of the Purchaser and the Parent
has full corporate or limited liability company power and authority, as the case
may be, to carry on its business as it is now being or is currently proposed to
be conducted, to own, lease and operate all of its properties and assets, and is
duly licensed or qualified to do business in each jurisdiction in which the
nature of the business conducted by it or the character or location of the
properties and assets owned, leased or operated by it makes such qualification
or licensing necessary.

     

    4.2.           Authority; No Violation;
Consents.

     

    (a)           Each
of the Purchaser and the Parent has full corporate or limited liability company
power and authority, as the case may be, to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.  The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by all requisite
corporate or limited liability company action on the part of the Purchaser and
the Parent, as the case may be, and no other proceedings on the part of the
Purchaser or the Parent are necessary to approve this Agreement or to consummate
the transactions contemplated hereby.  This Agreement has been duly
executed and delivered by each of the Purchaser and the Parent, and the officer
or other representative who executed this Agreement on behalf of and the Parent
has been duly authorized to do so.  This Agreement has been duly
executed and delivered by each of the Purchaser and the Parent and (assuming due
execution, and delivery by the Seller) constitutes the legal, valid and binding
obligation of the Purchaser and the Parent, enforceable against the Purchaser
and the Parent in accordance with its terms.

     

    (b)           Neither
the execution, delivery, and performance of this Agreement nor the consummation
by the Purchaser or the Parent of the transactions contemplated hereby (i)
conflicts with or violates (A) any law, regulation, order, writ, injunction,
decree, determination, or award of any court, any governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator,
applicable to the Purchaser or the Parent, except for any conflicts or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect on the Purchaser or the Parent, (B) the Organizational Documents
of the Purchaser or the Parent, or (C) any contract, agreement, instrument,
mortgage, note, lease, or other arrangement binding on or affecting the
Purchaser or the Parent or any of their respective properties or assets, except
for any conflicts or violations that would not have a Material Adverse Effect on
the Purchaser or the Parent; (ii) requires any consent, authorization, or
approval under any contract, agreement, instrument, mortgage, note, lease, or
other arrangement to which the Purchaser or the Parent or any of their
respective properties is bound; or (iii) results in the creation or imposition
of any Encumbrance upon any property or assets of the Purchaser or the
Parent.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (c)           Assuming
that all necessary information has been accurately provided by the Seller with
respect to such determination, no material notice to, filing with, authorization
of, exemption by, or consent or approval of, any Governmental Entity which has
not been obtained or made is necessary for the consummation by the Purchaser or
the Parent of any of the transactions contemplated by this
Agreement.

     

    4.3.           No Actions, Suits or
Proceedings. Except as set forth in the Parent SEC Documents (as defined
below), neither the Parent nor the Purchaser is a party to any claims, actions,
suits, proceedings or investigations which would reasonably be expected to have
a Material Adverse Effect on the Parent or the Purchaser, as the case may
be.  There are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of the Parent and the Purchaser,
threatened against the Parent or the Purchaser or any of their respective
subsidiaries or properties that challenges the validity or legality of this
Agreement or of the transactions contemplated hereby or which seeks to prevent
the consummation of such transactions.

     

    4.4.           Parent Common Stock.
All of the Parent Common Stock to be issued hereunder, when issued and delivered
in accordance with this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable and free of preemptive rights.  The
issuance of the Parent Common Stock has been duly authorized and approved by the
Parent’s board of directors, and does not require any further authorization or
consent of the Parent or its stockholders.

     

    4.5.           Parent SEC
Documents.

     

    (a)           The
Parent has filed all reports, proxy statements, forms and other documents,
required to be filed with the SEC pursuant to the Exchange Act since January 1,
2003 (the “Parent SEC
Documents”). As of their respective dates, and giving effect to any
amendments thereto, the Parent SEC Documents complied in all material respects
with the requirements of the Exchange Act.

     

    (b)           Each
of the consolidated financial statements (including, in each case, any notes
thereto) contained in the Parent SEC Documents was prepared in accordance with
GAAP (except as may be indicated in the notes thereto or, in the case of
unaudited financial statements, as permitted by Form 10-Q of the SEC) and each
fairly presents in all material respects the consolidated financial position,
results of operations and cash flows of the Parent and its consolidated
subsidiaries as at the respective dates thereof and for the respective periods
indicated therein, except as otherwise noted therein (subject, in the case of
unaudited financial statements, to normal and recurring year end adjustments
which, individually or in the aggregate, have not had, and could not reasonably
be expected to have, a Material Adverse Effect on such Parent financial
statements).

     

    (c)           Except
(i) as (and to the extent) set forth on the consolidated balance sheet of the
Parent as of December 31, 2007, or (ii) as would not have a Material Adverse
Effect on the Parent, neither the Parent nor any of its subsidiaries had as of
such date any liability or obligation (whether known or unknown, absolute or
contingent, liquidated or unliquidated) that would be required to be reflected
on a balance sheet prepared in accordance with GAAP, not (A) reflected in such
consolidated balance sheet or (B) incurred in the ordinary course of business.
Since December 31, 2007, neither the Parent nor any of its subsidiaries has
become subject to any such material liability or obligation that would be
required to be reflected on a balance sheet in accordance with GAAP, other than
(x) liabilities and obligations incurred in the ordinary course of business of a
type reflected on such consolidated balance sheet, and (y) executory obligations
under contracts which are not required to be accrued on such consolidated
balance sheet under GAAP and which have been incurred in the ordinary course of
business.

     

    
      
         

      

      
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    4.6.           Absence of Certain
Changes.  Since December 31, 2007, and except as expressly
contemplated by this Agreement (a) the Parent has conducted its businesses only
in the ordinary course of business and (b) there has not been any Material
Adverse Effect on the Parent or the Purchaser.

     

    4.7.           Compliance With Applicable
Law.

     

    (a)           Except
as set forth in the Parent SEC Documents, the operations of the Parent and the
Purchaser have been conducted in compliance in all material respects with all
federal, state and local laws, statutes, rules, regulations, ordinances,
permits, orders or writs applicable to the Parent or the Purchaser as the case
may be, and all regulations and other requirements of all Governmental Entities
having or claiming jurisdiction over the Parent or the Purchaser or any of their
respective businesses or operations. Except as set forth in the Parent SEC
Documents, since January 1, 2007, the Parent has not received any notification
of any asserted present or past failure by the Parent to comply with any
federal, state and local laws, statutes, rules, regulations, ordinances,
permits, orders or writs applicable to the Parent in any material
respect.

     

    (b)           Except
(i) for normal examinations conducted by any Governmental Entity in the ordinary
course of business of the Parent, (ii) as disclosed in the Parent SEC Documents
or (iii) as would not have a Material Adverse Effect on the Parent or the
Purchaser, no Governmental Entity has at any time during the past year initiated
or, to the Parent’s knowledge, threatened any formal or informal proceeding or
investigation into the business or operations of the Parent or its subsidiaries
or any of its or their officers, directors, employees, shareholders or partners
in their capacity as such.

     

    (c)           Except
as set forth in the Parent SEC Documents, since January 1, 2007 (or such later
date, if the Parent only became subject to the applicable provisions, rules and
regulations subsequent to January 1, 2007), the principal executive officer and
the principal financial officer of the Parent have complied in all material
respects with (i) the applicable provisions of the Sarbanes-Oxley Act of 2002
and the related rules and regulations promulgated under such Act and under the
Exchange Act and (ii) the applicable listing and corporate governance rules and
regulations of The Nasdaq Stock Market.

     

    4.8.           Investment
Purpose.  The Purchased Interests acquired by the Purchaser
hereunder will be acquired for investment for the Purchaser’s own account, not
as a nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act, and the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    4.9.           Disclosure of
Information.  Without in any way limiting the Purchaser’s or
the Parent’s rights and remedies under the Agreement, each of the Purchaser and
the Parent acknowledges that it has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment
decision with respect to the Purchased Interests.

     

    4.10.                     No Other
Representations.  The Purchaser has, in connection with its
decision to purchase the Purchased Interests and enter into this Agreement and
the other transactions contemplated hereby, relied solely upon the
representations and warranties of the Seller contained in this
Agreement.  The Purchaser hereby acknowledges and agrees that other
than the representations and warranties contained in Section 3, neither the
Seller, Partnership, either of the Funds or any of their respective officers,
directors, employees or are making or have made any representation or warranty,
express or implied, at law or in equity, with respect to the Seller, Advisors,
either of the Funds or the Purchased Interests.

     

    
      	
              SECTION
      5.

            	
              POST-CLOSING
      COVENANTS

            


    

     

    5.1           Current Public
Information.  In order to make and keep available to the Seller
the benefits of the resale of the Parent Common Stock to the public without
registration, as long as the Seller owns any shares of Parent Common Stock, the
Purchaser and the Parent shall use their best efforts to:

     

    (a)           make
and keep available adequate current public information (as such term is defined
in Rule 144) regarding the Parent;

     

    (b)           
file with the SEC in a timely manner all reports and other documents required of
the Parent under the Securities Act and the Exchange Act; and

     

    (c)           furnish
to the Seller upon written request a written statement by the Parent as to its
compliance with the reporting requirements of the Securities Act and the
Exchange Act.

     

    5.2.           Tax
Payment.  If Seller determines, in good faith based on the
advice of his tax advisor(s), that he recognizes for federal income tax purposes
any amount of ordinary income on the transactions contemplated by this
Agreement, then Purchaser shall pay to Seller 20% of any such ordinary income
that is recognized or will be recognized by Seller, up to a maximum amount of
$210,048.20 ($1,050,241 x .20) (the “Purchaser’s Tax
Payment”).  In such event, Seller shall provide written notice
to Purchaser stating the amount of such ordinary income and the amount of the
Purchaser’s Tax Payment.  Within five days of Seller’s written notice,
Purchaser shall pay to Seller Purchaser’s Tax Payment in full, in immediately
available funds to an account designated in writing by Seller.

     

    
      	
              SECTION
      6.

            	
              CERTAIN
      TAX MATTERS:

            


    

     

    6.1.           Tax
Allocation.  The Purchaser and the Seller agree that the
purchase of the transactions contemplated hereunder will constitute an
“applicable asset acquisition” governed by Section 1060 of the
Code.  The parties further agree that the Total Consideration shall be
allocated among the purchased assets based on the parties’ good faith and
reasonable determination thereof, in accordance with Section 1060 of the Code
and the regulations promulgated thereunder, and which allocation the
parties shall agree upon no later than 60 days after the Closing
Date.  The Purchaser and the Seller agree to complete IRS Form 8594
consistently with such allocation and, if requested by the other, to furnish the
other with a copy of such Form prepared in draft form no less than 45 days prior
to the filing due date of such Form.  No party shall file any return
or take a position with any taxing authority or in connection with any tax
related litigation that is inconsistent with this Section 6.1, unless required
to do so pursuant to a determination within the meaning of Section 1313(a) of
the Code.

     

    
      
         

      

      
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    6.2.           Protective Code Section 754
Election.   The Seller, as the sole manager of the General
Partner, agrees, if requested by Purchaser, after the Closing to cause Advisors
and the General Partner to make a protective election pursuant to Section 754 of
the Code with respect to the current taxable year (i.e., the taxable
year in which the transactions contemplated by this Agreement
occur).

     

    
      	
              SECTION
      7.

            	
              INDEMNITY.

            


    

     

    (a)           Subject
to the other terms of this Section 7, the Seller shall indemnify, defend and
hold harmless the Purchaser, the Parent and their respective shareholders,
directors, officers, employees, agents, affiliates and controlling parties
(each, a “Purchaser
Indemnified Party”) from and against any and all liability, loss or
damage, together with all reasonable costs and expenses related thereto
(including legal and accounting fees and expenses) (collectively, “Losses”),
arising from the untruth, inaccuracy or breach of any such representations,
warranties, covenants or agreements of the Seller contained in this Agreement or
the assertion of any claim relating to the foregoing (each a “Purchaser
Claim”); provided,
however, that no indemnification shall be required hereunder for the
gross negligence or willful misconduct of any Purchaser Indemnified
Party.  In case any Purchaser Claim is brought against a Purchaser
Indemnified Party, the Seller will be entitled to participate in and assume the
defense thereof with counsel reasonably satisfactory to such Purchaser
Indemnified Party, and after notice from the Seller to such Purchaser
Indemnified Party of its election to assume the defense thereof, the Seller
shall be responsible for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof, provided that if any
Purchaser Indemnified Party shall have reasonably concluded that there may be
one or more legal defenses available to such Purchaser Indemnified Party that
conflict in any material respect with those available to the Seller, or that
such Purchaser Claim involves or could have an effect upon matters beyond the
scope of the indemnity agreement provided in this Section 7(a), the Seller shall
not have the right to assume the defense of such action on behalf of such
Purchaser Indemnified Party and the Seller shall reimburse such Purchaser
Indemnified Party and any person or entity controlling such Purchaser
Indemnified Party for that portion of the reasonable fees and expenses of any
counsel retained by the Purchaser Indemnified Party that are reasonably related
to the matters covered by the indemnity agreement provided in this Section
7(a).  The Seller shall not make any settlement of any claim
indemnified against under this Section 7(a) without the written consent of the
Purchaser Indemnified Party or Parties, which consent shall not be unreasonably
withheld.

     

    (b)           The
Purchaser and the Parent shall, jointly and severally, indemnify, defend and
hold harmless the Seller and its shareholders, directors, officers, employees,
agents, affiliates and controlling parties (each, a “Seller
Indemnified Party”) from and against any and all Losses arising from the
untruth, inaccuracy or breach of any such representations, warranties, covenants
or agreements of the Purchaser or the Parent contained in this Agreement or the
assertion of any claim relating to the foregoing (each a “Seller
Claim”); provided,
however, that no indemnification shall be required hereunder for the
gross negligence or willful misconduct of any Seller Indemnified Party. In case
any Seller Claim is brought against a Seller Indemnified Party, the Purchaser
and the Parent will be entitled to participate in and assume the defense thereof
with counsel reasonably satisfactory to such Seller Indemnified Party, and after
notice from the Purchaser and the Parent to such Seller Indemnified Party of its
election to assume the defense thereof, the Purchaser and the Parent shall be
responsible for any legal or other expenses subsequently incurred by the latter
in connection with the defense thereof, provided that if any Seller Indemnified
Party shall have reasonably concluded that there may be one or more legal
defenses available to such Seller Indemnified Party that conflict in any
material respect with those available to the Purchaser or the Parent, or that
such Seller Claim involves or could have an effect upon matters beyond the scope
of the indemnity agreement provided in this Section 7(b), neither the Purchaser
nor the Parent shall have the right to assume the defense of such action on
behalf of such Seller Indemnified Party and the Purchaser and the Parent shall
reimburse such Seller Indemnified Party and any person or entity controlling
such Seller Indemnified Party for that portion of the reasonable fees and
expenses of any counsel retained by the Seller Indemnified Party that are
reasonably related to the matters covered by the indemnity agreement provided in
this Section 7(b). Neither the Purchaser nor the Parent shall make any
settlement of any claim indemnified against under this Section 7(b) without the
written consent of the Seller Indemnified Party or Parties, which consent shall
not be unreasonably withheld.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (c)           Notwithstanding
anything to the contrary in this Agreement, in no event shall there be any
liability under Section 7(a) or Section 7(b) until the aggregate amount of all
Losses suffered by the Purchaser Indemnified Party or Parties, or the Seller
Indemnified Party or Parties, respectively, arising from matters covered by the
indemnity contained in Section 7(a) or 7(b), respectively, exceeds $20,000 (the
“Basket
Amount”).   

     

    (d)           In
no event shall any Purchaser Indemnified Party or Parties be entitled to assert
a Purchaser Claim under Section 7(a), or shall a Seller Party or Parties be
entitled to assert a Seller Claim under Section 7(b), unless such claim is
submitted in compliance with the other procedures of this Section 7 on or before
(and both Seller’s and Purchaser’s representations and warranties shall survive
only until) the 12-month anniversary date of the Closing Date, except that the
representations and warranties contained in Sections 3.1, 3.3, 3.4, 3.13 and
3.14 shall survive until 60 days after the termination of the applicable statute
of limitation covering such matters, if any.  Neither Seller’s
aggregate liability under Section 7(a) (other than with respect to a Purchaser
Claim arising out of a breach of the representations and warranties contained in
Section 3.13) nor Purchaser’s aggregate liability under Section 7(b) shall
exceed an amount equal to 10% of the Total Consideration.  In
determining the amount of any Losses for which a Purchaser Indemnified Party or
Parties are entitled to indemnification under Section 7(a), or for which a
Seller Indemnified Party or Parties are entitled to indemnification under
Section 7(b), the gross amount thereof will be reduced by any insurance proceeds
actually received by such Purchaser Indemnified Party or Parties or Seller
Indemnified Party or Parties, as the case may be, with respect to such Losses
(net of any related deductibles and self-insurance amounts).  The
gross amount of any Losses for which any Purchaser Indemnified Party or Parties
are entitled to indemnification under Section 7(a) shall be reduced by an amount
equal to any portion of the Purchaser’s Tax Payment that remains unpaid at the
time Seller indemnifies such Purchaser Indemnified Party or Parties for such
Losses.

     

    
      
         

      

      
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              SECTION
      8.

            	
              MISCELLANEOUS.

            


    

     

    8.1.           Survival.  The
representations and warranties contained in this Agreement shall survive this
Agreement for the period provided in Section 7(d) above; provided, however, that
the Purchaser and the Parent’s obligations in Section 5.1 shall survive this
Agreement until the first date that the Seller no longer owns any shares of
Parent Common Stock.

     

    8.2.           Successors and
Assigns.  Neither this Agreement nor any of the rights,
interests or obligations provided by this Agreement may be assigned by any of
the parties (whether by operation of law or otherwise) without the prior written
consent of the other parties except that the Purchaser shall be entitled to
assign its rights and obligations hereunder to any person or entity controlling,
controlled by or under common control with the Purchaser without the consent of
any other party hereto.  Subject to the preceding sentence, this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.

     

    8.3.           Amendment.  No
amendment, modification, or waiver of any provision of this Agreement, or
consent to any departure from the terms of this Agreement by any party hereto
shall be effective unless the same shall be in writing and signed by all the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

     

    8.4.           Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.

     

    8.5.           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all such counterparts taken together will constitute one
and the same Agreement, and a photostatic or facsimile copy of an executed
counterpart hereof shall be given the same effect as the original.

     

    8.6.           Descriptive
Headings.  The descriptive headings of this Agreement are
inserted for convenience only and will not constitute a part of this
Agreement.

     

    8.7.           Notices.  Any
notice, request, instruction or other document to be given hereunder will be in
writing and delivered personally or sent by registered or certified mail
(postage prepaid) or by facsimile, according to the instructions set forth
below.  Such notices will be deemed given: at the time delivered by
hand, if personally delivered; three business days after being sent by
registered or certified mail; and at the time when receipt is confirmed by the
receiving facsimile machine if sent by facsimile:

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      
        	 	
                if
      to the Purchaser

              	 
      
	 	
                or
      the Parent, to:

              	 
      
	 	 
      	
                c/o
      Western Sizzlin Corporation

                416
      South Jefferson Street

                Suite
      600

                Roanoke,
      Virginia 24011

                Attention:
      Robyn B. Mabe

                Facsimile:
      (540) 345-0831

              
	 	
                with
      copies to:

              	 
      
	 	 
      	
                Olshan
      Grundman Frome Rosenzweig& Wolosky LLP

                Park
      Avenue Tower

                65
      East 55th Street

                New
      York, New York 10022

                Attention:  Steven
      Wolosky

                Facsimile:  (212)
      451-2222

              
	 	
                if
      to the Seller, to:

              	 
      
	 	 
      	
                c/o
      Mustang Capital Management, LLC

                1506
      McDuffie Street

                Houston,
      Texas 77019

                Attention:
      John K. H. Linnartz

                Facsimile:
      (713) 630-0315

              
	 	
                with
      copies to:

              	 
      
	 	 
      	 
      
	 	 
      	
                Jackson
      Walker L.L.P.

                1401
      McKinney

                Suite
      1900

                Houston,
      Texas 77010

                Attention:  Douglas
      A. Paisley

                Facsimile:  (713)
      308-4144

              


      

       

    

    or to
such other address or to the attention of such other party that the recipient
party has specified by prior written notice to the sending party in accordance
with the preceding.

     

    8.8.           Entire
Agreement.  This Agreement, and the other documents referred to
herein collectively constitute the entire agreement among the parties and
supersede any prior and contemporaneous understandings, agreements or
representations by or among the parties, written or oral that may have related
in any way to the subject matter hereof.

     

    8.9.           Consent to
Jurisdiction.  Each of the parties to this Agreement consents
to submit to the personal jurisdiction of any state or federal court sitting in
the State of Texas, in any action or proceeding arising out of or relating to
this Agreement, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any
action or proceeding arising out of or relating to this agreement in any other
court.  Each of the parties to this Agreement agrees not to assert in
any action or proceeding arising out of relating to this agreement that the
venue is improper, and waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect
thereto.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    8.10.                     Waiver of Jury
Trial.  To the fullest extent permitted by law, each of the
parties hereto hereby waives its respective right to, and agrees not to elect, a
trial by jury with respect to any issue arising out of this
Agreement.

     

    8.11.                     Governing
Law.  This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
law or rule that would cause the laws of any jurisdiction other than the State
of Delaware to be applied.

     

    8.12.                     Publicity.  The
parties hereto may publicize this transaction promptly after the Closing by
publishing a press release mutually acceptable to the parties.  The
Parent shall have the right to make such disclosures concerning this Agreement
as it determines in its sole discretion to be appropriate or necessary to comply
with applicable law.

     

    


    


    


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remainder of this page is intentionally left blank.]

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

       

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

     

    


     

    
      	 
      	
              
                /s/
      John K. H. Linnartz

              

            
	 
      	
              JOHN
      K. H. LINNARTZ

            
	 
      	 
      
	 
      	 
      
	 
      	
              WESTERN
      MUSTANG HOLDINGS LLC

            
	 
      	 
      
	 
      	
              By:

            	
              
                /s/
      Sardar Biglari

              

            
	 
      	 
      	
              Name:

            	
              Sardar
      Biglari

            
	 
      	 
      	
              Title:

            	
              Chief
      Executive Officer

            
	 
      	 
      
	 
      	
              WESTERN
      SIZZLIN CORPORATION

            
	 
      	 
      
	 
      	
              By:

            	
              
                /s/
      Sardar Biglari

              

            
	 
      	 
      	
              Name:

            	
              Sardar
      Biglari

            
	 
      	 
      	
              Title:

            	
              Chief
      Executive Officer

            


    

    
 

    
      
         

      

      
        22

        
          

        

      

      
         

      

       

    

    SCHEDULE
3.1(c)

    VIOLATIONS
OF ORGANIZATIONAL DOCUMENTS

     

    


     

    Articles
IV and V of the Original Partnership Agreement contain federal income tax
allocation and capital account provisions.  Advisors has complied with
such provisions and filed a Form 1065 for each calendar year or portion of a
fiscal year of its existence.  However, as the Seller is the owner of
the sole limited partnership interest of Advisors and the sole member of the
General Partner, he is the sole partner of Advisors.  Thus Advisors is
a disregarded entity for federal income tax purposes, and for such purposes is
instead considered a sole proprietorship of the Seller, rather than a
partnership.  The Seller may therefore after the Closing Date file
amended tax returns, which would cause him not to have complied for the
pre-Closing periods involved with the federal income tax and capital account
provisions of the Original Partnership Agreement.

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    SCHEDULE
3.10

    CERTAIN
CHANGES

     

    
      	
               
      

            	
              1.

            	
              On
      June 13, 2008, Mustang Capital Partners I, LP and Mustang Capital Partners
      II, LP made distributions to Advisors in the amount of $200,000 and
      $50,000, respectively, and then Advisors made a distribution to Seller in
      the amount of $250,000.

            


    

     

    
      	
               
      

            	
              2.

            	
              On
      July 3, 2008, Mustang Capital Partners I, LP and Mustang Capital Partners
      II, LP made distributions to Advisors in the amount of $286,785 and
      $61,960, respectively, and then Advisors made a distribution to Seller in
      the amount of $348,745.

            


    

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    EXHIBIT
A


     

    FORM
OF AMENDED AND RESTATED

    LIMITED
PARTNERSHIP AGREEMENT

     

    (attached)

     

    
      
         

      

      
        A-i

        
          

        

      

      
         

      

       

    

    EXHIBIT
B

     

    FORM
OF AMENDED AND RESTATED

    LIMITED
LIABILITY COMPANY REGULATIONS

     

    (attached)

     

    


    
      
         

      

      
        B-i