ASSET PURCHASE AGREEMENT

Exhibit 10.1

EXECUTION VERSION

ASSET PURCHASE AGREEMENT

BY AND AMONG

RUTH’S CHRIS STEAK HOUSE, INC.

THOMAS J. MORAN, Jr.,

individually

AND

PRIME STEAK – CHICAGO, INC.,

a Louisiana Corporation;

PRIME STEAK – TROY, L.L.C.,

a Louisiana Limited Liability Company;

PRIME STEAK – JACKSONVILLE, L.L.C.,

a Louisiana Limited Liability Company;

PRIME STEAK – NORTHBROOK, L.L.C.,

a Louisiana Limited Liability Company;

PRIME STEAK – PONTE VEDRA, L.L.C.,

a Louisiana Limited Liability Company;

PRIME STEAK – DETROIT, INC.,

a Louisiana Corporation;

T.J. MORAN AND ASSOCIATES, INC.,

a Louisiana Corporation;

PRIME STEAK – MEMPHIS, INC.,

a Tennessee Corporation

and

BEKMET, INC.,

a Tennessee Corporation

AND

CAPITAL CITY RESTAURANTS, INC.,

a Louisiana Corporation,

as Intervenor

TABLE OF CONTENTS

 

 

i

 

ii

 

iii

Exhibits

 

 

iv

Schedules

 

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) made this 24th day of April, 2006, by and among Ruth’s Chris Steak House, Inc. (“RCSH”), a Delaware corporation, and, if applicable, one or more affiliates to whom it may assign its purchase rights before closing including, without limitation, RCSH Operations, L.L.C., a Louisiana limited liability company (“RCSH LLC”) and RCSH Operations, Inc., a California corporation (“RCSH Inc.”) (collectively, RCSH, its assignees, RCSH LLC and RCSH Inc. being referred to hereinafter as the “Purchaser”); THOMAS J. MORAN, Jr., individually and as the sole equity owner in each corporate Seller and as the 99% membership owner in each limited liability company Seller (“Moran” and as a “Seller”); and the following entities (each also a “Seller” and collectively with Moran the “Sellers”): PRIME STEAK – CHICAGO, INC., a Louisiana Corporation; PRIME STEAK – TROY, L.L.C., a Louisiana Limited Liability Company; PRIME STEAK – JACKSONVILLE, L.L.C., a Louisiana Limited Liability Company; PRIME STEAK – NORTHBROOK, L.L.C., a Louisiana Limited Liability Company; PRIME STEAK – PONTE VEDRA, L.L.C., a Louisiana Limited Liability Company; PRIME STEAK – DETROIT, INC., a Louisiana Corporation; T.J. MORAN AND ASSOCIATES, INC., a Louisiana Corporation; PRIME STEAK – MEMPHIS, INC., a Tennessee Corporation and BEKMET, INC., a Tennessee Corporation. Also appearing herein, as Intervenor, is CAPITAL CITY RESTAURANTS, INC., a Louisiana Corporation.

W I T N E S S E T H:

WHEREAS, Moran and some or all of the Sellers listed on Exhibit “A” have previously acquired franchise rights relating to the ownership, operation and development of one or more Ruth’s Chris Steak House franchise restaurants in Florida, Illinois, Michigan and Tennessee (the foregoing right of each Seller being referred to hereinafter as “such Seller’s Franchise Rights” or “its Franchise Rights”) (a) pursuant to the document s set forth on Schedule 2.1(a)-3 beside its name as amended, supplemented or otherwise modified from time to time and (b) pursuant to any other agreements, side letters or settlements or other grants of such franchise rights however evidenced (with respect to each Seller, “such Seller’s Franchise Agreement” or “its Franchise Agreement” and with respect to all Sellers, collectively, the “Franchise Agreements”);

WHEREAS, each Seller (other than Moran, who owns a 100% interest in each of the corporate Sellers and a 99% membership interest in each of the limited liability company Sellers and T.J. Moran and Associates, Inc., which owns a 1% interest in each of the limited liability company Sellers) currently owns and operates a Ruth’s Chris Steak House franchised restaurant pursuant to such Seller’s Franchise Agreement or may have a contingent right to own and operate a Ruth’s Chris Steak House franchised restaurant (with respect to each Seller, “such Seller’s Business” or “its Business” and with respect to all Sellers, collectively, the “Business”) in the location specified beside its name on Schedule 2.1(a)-3 ;

 

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WHEREAS, each Seller desires to sell to Purchaser and Purchaser desires to purchase from each Seller such Seller’s Assets (as hereinafter defined);

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

ARTICLE I

DEFINITIONS

For the purpose of this Agreement the following terms shall have the following meanings:

“Affiliate” means, when used with respect to a specific Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified.

“Closing” means the consummation of the transactions contemplated by this Agreement on the terms and conditions set forth herein whether on or before the Initial Closing Date or during the Escrow Period.

“Closing Date” means with respect to each Seller’s Assets (as defined in Section 2.1) the date on which the parties agree that the Closing will occur, but in no event later than the close of business on or before the date that is 60 days following the date of this Agreement unless (a) such date is extended in writing by the mutual agreement of the parties or (b) if the lessor of any Seller has failed to execute either the estoppel certificate or has not otherwise consented to the Assignment of Leases in the form attached hereto or in such other form as is reasonably acceptable to the Purchaser within such 60 day period then the period for Closing shall automatically be extended to the close of business on the date that is 120 days following the date of this Agreement. In the event of an Escrowed Closing pursuant to Section 12.1 hereof, then (i) the “Closing Date” for the sale of each Escrowed Location shall be extended in accordance therewith and shall mean the date the Closing conditions set out in Section 12.2 are satisfied with respect thereto and (ii) the term “Closing Date” as used in this Agreement shall mean, collectively, the Initial Closing Date and the Closing Date for each Escrowed Location. “Closing Documents” has the meaning provided in Section 9.2.

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

“Escrowed Closing” means the closing of certain of the Assets, the Escrow Documents and an allocated portion of the Purchase Price in escrow pursuant to the terms of Section 12.1 hereof.

 

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“Escrow Documents” means any of the Closing Documents or other agreements executed on the Initial Closing Date and relating specifically to an Escrowed Location.

“Escrowed Location” shall mean any of the restaurant locations and related assets constituting part of the Assets that become subject to the Escrowed Closing.

“Escrow Period” shall mean the period commencing on the day immediately following the Initial Closing Date and ending on the 150 ^th day from the date of this Agreement.

“Employee Benefit Plan” means that term as defined by Section 3(3) of the ERISA, or any other bonus, profit sharing, pension, retirement compensation, deferred compensation, stock option, stock purchase, fringe benefit, severance, post-retirement, scholarship, disability, sick leave, vacation, individual employment, commission, bonus, payroll practice, retention, severance, or other plan, agreement, policy, trust fund or arrangement for the benefit of current or former directors or employees of any Seller and any of Seller’s current or former Affiliates or ERISA Affiliates or any other persons currently or formerly performing services for any Seller and any of Seller’s current or former Affiliates or ERISA Affiliates, and/or beneficiaries of any such persons.

“Environmental Law” means any and all applicable laws, rules, regulations, codes, ordinances and agreements issued, promulgated or entered into by any Governmental Authority relating in any way to the environment, the preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

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

“ERISA Affiliate” means any person that, together with any Seller, would be or was at any time treated as a single employer under Section 414 of the Code or Section 4001 of ERISA and any general partnership of which Seller is or has been a general partner.

“Final Closing Date” means the date the last Escrowed Location, the related Escrowed Documents and the allocated portion of the Purchase Price are released from escrow.

“Franchise Rights” means any and all rights relating to the ownership, operation and development of one or more Ruth’s Chris Steak House franchise restaurants pursuant to the Franchise Agreements.

 

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“Governmental Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision.

“Hazardous Materials” means all explosive or radioactive substances or wastes, hazardous or toxic substances or wastes, and other pollutants of any nature, including without limitation those relating to grease traps and hood vent and smoke emissions from any stove, oven, boiler or other cooking device, regulated pursuant to any Environmental Law.

“Initial Closing Date” means the Closing Date occurring within 120 days after the date of this Agreement.

“Knowledge” or similar terms used in this Agreement with respect to a Seller means: the extent of the knowledge, as of the Closing Date, of (i) Thomas J. Moran, Jr., (ii) Stan Harris or (iii) any individual who is serving or has at any time since January 1, 2004, served as the chief executive officer, the chief financial officer, the chief operating officer, the chief accounting officer, the chief legal officer, general counsel, regional manager and with respect to Section 4.6 and 4.7 hereof, the general manager of a corporate or limited liability company Seller. For purposes of this definition, an individual shall be deemed to have “knowledge” of a particular fact, circumstance or other matter if (x) such individual is or at any time was actually aware of such fact, circumstance or other matter, or (y) a prudent individual could reasonably be expected to discover or otherwise become aware of such fact, circumstance or other matter within the scope and performance of the relevant individual’s duties.

“Leased Premises” means, with respect to each Seller, the land and improvements leased or subleased by such Seller pursuant to the Real Property Leases (as hereinafter defined) executed by such Seller for the purpose of operating and conducting its Business.

“Liens” means any lien, mortgage, pledge, negative pledge, assessment, security interest, lease, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale contract, title retention contract or any option, right of first refusal or similar preferential right of acquisition or other agreement to grant any of the foregoing.

“Material Adverse Effect” means on or before the Initial Closing Date any change in or effect on the Business or Assets of the Sellers that individually or together with any other change or effect has an adverse impact upon the Business, Assets, operations, properties (excluding intangible properties), condition (financial or otherwise), liabilities, prospects or regulatory status of the Sellers in excess of $370,000 in the aggregate.

 

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

“WARN Act” means the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. §2101 et. seq .

ARTICLE II

PURCHASE AND SALE OF ASSETS

2.1 Purchased Assets . Subject to and upon the terms and conditions set forth herein (including, without limitation Section 12.1 hereof), at the Closing each Seller shall convey, sell, assign, transfer and deliver to Purchaser and Purchaser shall purchase, acquire and accept all of such Seller’s right, title and interest in and to all of such Seller’s tangible and intangible assets used, held for use or in any way relating to its Business other than the Excluded Assets (as hereinafter defined) (each Seller’s assets being collectively referred to hereinafter as “such Seller’s Assets” or “its Assets”, and all of the Sellers’ assets being collectively referred to hereinafter as the “Assets”), including without limitation:

(a) The rights and benefits accruing to such Seller as lessee under any immovable (real) property lease and/or sublease relating to such Seller’s Business, each of which is listed on Schedule 2.1(a)-1 , together with any leases which may be executed on the immovable (real) property listed on Schedule 2.1(a)-2 (each a “Real Property Lease” and collectively the “Real Property Leases”) and all options or rights to purchase or otherwise acquire the immovable (real) property that is, or may hereafter become, subject to the Real Property Leases or that is, or may hereafter become, contiguous to such immovable (real) property;

(b) All leasehold improvements, fixtures, constructions, component parts and other immovable (real) property owned by such Seller and located on the Leased Premises, including without limitation those items listed on Schedule 2.1(b) (collectively, the “Leasehold Improvements”) and all architectural plans and mechanical drawings related to the Leasehold Improvements;

(c) All easements, servitudes, privileges, rights-of-way and other real rights of such Seller pertaining to or accruing to the benefit of the Leased Premises, including without limitation those items listed on Schedule 2.1(c) (collectively, the Easements”);

(d) All machinery (including without limitation all computer hardware used in connection with the operation and maintenance of its Business), kitchen and other appliances, equipment, furniture, vehicles, smallwares, utensils, glassware, table cloths, spare parts, tools, supplies, and other corporeal (tangible), movable (personal) property located on the Leased Premises or otherwise relating to such Seller’s Business, including without limitation those items listed and described on Schedule 2.1(d) (collectively, the “Equipment”);

(e) The rights and benefits accruing to such Seller as lessee under any leases and/or subleases for equipment, machinery, appliances or other corporeal (tangible), movable

 

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(personal) property used in the operation of its Business (each an “Equipment Lease” and collectively the “Equipment Leases”), each of which is listed on Schedule 2.1(e) ;

(f) All of such Seller’s inventory, including without limitation all perishable and non-perishable meats, fish, poultry, vegetables, and other foodstuffs, beverages, including without limitation all liquor, beer and wine (to the extent the transfer of liquor, beer and wine is not prohibited by applicable law), paper goods, condiments and other items held for sale or consumption in connection with such Seller’s Business (the “Inventory”);

(g) Such Seller’s Business as a going concern, its Franchise Rights, all of the rights and benefits (but not its obligations or liabilities) under its Franchise Agreements, all intellectual property of such Seller, including without limitation, all trademarks, service marks, rights to computer software, trade secrets (including, without limitation, recipes) and trade names (whether acquired from Purchaser, an Affiliated franchisor or otherwise), (including without limitation all of the Seller’s right to do or develop business as a Ruth’s Chris Steak House restaurant), including without limitation the trade names listed on Schedule 2.1(g) , goodwill and other intangible assets (collectively, “Intellectual Property”) but expressly excluding the “Ruth’s Chris Steak House” franchise for the Baton Rouge, LA location and the other restaurant interests of Moran in “Ninfa’s Mexican Restaurant”, “T.J. Ribs”, “Ruffino’s” and “Montana’s Rib and Chop House”;

(h) All claims and rights of such Seller under all agreements, contracts, software license agreements, purchase and sale orders and other executory contracts and commitments of such Seller arising from or relating to its Business, including without limitation and those listed on Schedule 2.1(h) (each an “Assigned Contract” and collectively the “Assigned Contracts”) and all accrued or prepaid advertising rights;

(i) All licenses, permits, consents, use agreements, approvals, authorizations and certificates of any Governmental Authority to the extent they relate to such Seller’s Business (collectively, the “Licenses”), in each case to the extent transferable by the Seller, including without limitation those listed on Schedule 2.1(i) ;

(j) All files, operating manuals and correspondence pertaining to the Equipment; all customer and potential customer lists; mailing lists; all files pertaining to current and potential vendors and suppliers; all price lists; all advertising materials; and copies, certified by an officer of such Seller, of all other financial records, business books, records, ledgers, files, documents, business plans, budgets, financial statements, correspondence, creative materials, advertising and promotional materials, corporate policy documents, menus, training manuals, recipes, recipe manuals, and/or any other corporate manuals relating to its Business (collectively, the “Books and Records”);

(k) All of such Seller’s right, title and interest in and any right to lease the property identified on Schedule 2.1(a)-2 ;

(l) All of such Seller’s right, title and interest in and to its telephone numbers and the directory advertising for such telephone numbers, to the extent assignable;

 

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(m) Except as provided in Section 2.2(c), all claims, security and other deposits, prepayments, prepaid expenses, refunds, causes of action, choses in action, rights of recovery, warranty rights, rights of set off, and rights of recoupment of such Seller (including any such item relating to the payment of taxes other than income taxes) and all federal, state and local franchise and property tax credits (“Claims”); and

(n) Each Seller’s normal operating level of cash contained in such Seller’s working cash banks, which shall be not less than $1,000 per restaurant (the “Working Cash”).

2.2 Excluded Assets . Notwithstanding anything in Section 2.1 hereof to the contrary, the term “Assets” shall exclude the following (“Excluded Assets”):

(a) The corporate minute books and stock ledgers of each Seller;

(b) All assets related to any pension, profit sharing, stock bonus, stock option, thrift or other retirement plan; medical, hospitalization, dental, life, disability, vacation or other insurance or benefit plan; employee stock ownership, deferred compensation, stock ownership, stock purchase, bonus, benefit or other incentive plan; severance plan; or other similar plan relating to each Seller or its employees;

(c) All claims and rights of each Seller under all accounts receivable and credit card company payments relating to such Seller’s Business prior to Closing and all deposits and security in respect of any Real Property Leases;

(d) Except for Working Cash, any other cash on hand, cash in each Seller’s bank accounts and escrow accounts and cash equivalents;

(e) Personal memorabilia owned by Moran on display in the various restaurants and as appearing on Schedule 2.2(e) other than any pictures or memorabilia directly depicting Ruth Fertel or directly related to Ruth Fertel or Purchaser;

(f) Sellers’ or Moran’s interests in “Ninfa’s Mexican Restaurant”, “T.J. Ribs”, “Ruffino’s” and “Montana’s Rib and Chop House” restaurants;

(g) That certain life insurance policy on the life of Thomas J. Moran, Jr., owned by Bekmet, Inc.; and

(h) The co-operative apartment in Chicago, Illinois at 1120 North Lakeshore Drive, Chicago, Illinois 60611.

2.3 No Liens . The Assets will be transferred and sold to Purchaser at Closing free and clear of all Liens except for those Liens disclosed on Schedule 2.3 ; provided that such Liens disclosed on Schedule 2.3 are terminated on or prior to the Closing Date.

2.4 Assumed Liabilities .

(a) Except as otherwise provided in this Agreement, subject to and in accordance with the terms and provisions of this Agreement, at the Closing, Purchaser will

 

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assume the payment and performance obligations of each Seller that accrue following the Closing Date for such Seller’s Assets under all contracts, customer orders, leases, licenses and purchase orders relating to such Seller’s Business and listed on Schedule 2.4(a) to this Agreement (collectively, the “Assumed Liabilities”). Purchaser shall not be liable for amounts outstanding under any contracts listed on Schedule 2.4(a) which (a) have accrued prior to the Closing Date for such Seller’s Assets or (b) relate to business other than Seller’s Business.

(b) Except for the Assumed Liabilities and Purchaser’s pro rata portion of any Shared Liabilities (as hereinafter defined), it is expressly understood and agreed that Purchaser will not be liable for any obligations, liabilities, contracts, debts, claims, costs, expenses, agreements or understandings of any kind or nature whatsoever arising from, attributable or related to any Seller or the operation of its Business or the ownership or use of such Seller’s Assets or any Leased Premises, including without limitation (i) any such liability arising from events or occurrences prior to the Closing of such Seller’s Assets, (ii) any such liability arising out of the employment, terms or conditions of employment, or termination of employment of any Person, or the failure to employ any Person, (iii) any such liability for any period of time for federal, state or local taxes, penalties or interest (including without limitation any property or sales tax liability, penalty or interest) and (iv) any such liability for expenses, debts or obligations incurred within or outside the ordinary course of business. Anything to the contrary contained herein notwithstanding, Purchaser shall neither assume nor have any obligations or liabilities whatsoever in respect of any environmental matter, any immigration matter or any employment matter including, without limitation, severance, the Worker Adjustment and Retraining Act, income tax withholding, payroll and/or unemployment tax, workers’ compensation, salary or consulting fees, pension, profit-sharing, accrued, earned or unused vacation or sick leave, health insurance or any other employee or employee benefit liabilities in respect of any employees, consultants or independent contractors or any Employee Benefit Plan, including, without limitation any contribution, tax, lien, penalty, cost, interest, claim, loss, action, suit, damage, cost assessment, withdrawal liability, liability to the Pension Benefit Guaranty Corporation (the “PBGC”), liability under Section 412 of the Internal Revenue Code, as amended (the “Code”) or Section 102 (a)(2) of ERISA or other similar liability or expense of any Seller and Purchaser shall not become a party to any Employee Benefit Plan as a result of any of the transactions contemplated by this Agreement.

2.5 Shared Liabilities . The following liabilities and obligations relating to the Business and the Assets (the “Shared Liabilities”) shall be shared between Purchaser and each Seller as follows:

(a) Utility charges that relate to billing periods beginning before the Closing Date for such Seller’s Assets and ending after the Closing Date for such Seller’s Assets, shall be allocated on the basis of measured utility usage before and after such Closing Date (if meter or other measured service readings are made at such time) or otherwise on the basis of the proportional number of calendar days in the relevant billing period before and after such Closing Date;

(b) Rentals and other fees, charges and costs, including without limitation common area maintenance fees and administrative fees payable under the Real Property Leases and Equipment Leases that relate to lease periods beginning before and ending after the Closing

 

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Date of such Seller’s Assets shall be allocated between the parties on the basis of the proportional number of calendar days in the relevant lease period before and after such Closing Date; and

(c) Ad valorem property, real estate and similar taxes shall be allocated on the basis of the proportional number of calendar days in the relevant tax year before and after the Closing Date of such Seller’s Assets. Such taxes shall be based on the 2005 assessment for the purpose of calculating the Purchase Price under Section 3.3(a), provided, that the Sellers shall indemnify Purchaser to the extent that Sellers’ actual pro rated 2006 assessed taxes are greater than the estimate.

2.6 Payment of Liabilities . If any party pays all or any portion of any liabilities for which another party is entirely or partially responsible hereunder (including without limitation any Shared Liabilities), the responsible party will promptly (but in no event later than 30 days after demand by the paying party) reimburse the paying party for its portion of that payment, provided that any demand for reimbursement shall be accompanied by appropriate evidence of payment thereof.

ARTICLE III

PURCHASE PRICE

3.1 Purchase Price . As consideration for the Assets, the Business and the execution of the Noncompetition Agreements by Moran, Purchaser will pay on the Initial Closing Date an amount equal to THIRTY-SEVEN MILLION AND NO/100 DOLLARS ($37,000,000.00) as such amount may be adjusted pursuant to Section 3.2 (as adjusted, the “Purchase Price”), less any amount required to be escrowed under Section 12.1, to be distributed among and paid by wire transfer of same day funds to each respective Seller according to Schedule 12.1 attached hereto. Each Seller will provide Purchaser with a receipt for its portion of the Purchase Price in form and substance satisfactory to Purchaser.

3.2 Adjustments to Purchase Price . The Purchase Price shall be decreased as follows:

(a) by any amounts representing any Seller’s portion of the Shared Liabilities if unpaid at or prior to Closing, in which case Purchaser will assume responsibility for paying such amounts to the payee; or

(b) by an aggregate amount representing the total of all adverse impacts of any change in or effect on the Business or Assets of the Sellers from the Balance Sheet Date through the Closing Date unless the total of such amounts does not exceed $50,000.

Each Seller’s portion of the Purchase Price set forth on Schedule 3.3 will be reduced or increased as appropriate, by the amount allocated to such Seller in connection with an adjustment to Purchase Price made under this Section 3.2.

3.3 Allocation of the Purchase Price Among the Assets . The Purchase Price shall be allocated, for tax purposes, among each item or class of the Assets pursuant to a Schedule 3.3 to be agreed upon by Purchaser and Sellers on or before the Initial Closing Date. Seller and Purchaser shall prepare and file any notice or other filings required pursuant to Section 1060 of

 

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the Code, and any such notices or filings will be prepared based on the allocation set forth on Schedule 3.3 . Purchaser agrees to send to the Seller any forms required to be filed with respect to this transaction prior to filing such form with the Internal Revenue Service.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

In order to induce Purchaser to enter into this Agreement and consummate the transactions contemplated hereby, each Seller represents and warrants to Purchaser as follows, each of which warranties and representations is material to and is relied upon by Purchaser:

4.1 Capacity . Moran is a competent, major domiciled in Palm Beach County, State of Florida.

4.2 Organization . Each corporate or limited liability company Seller (a) is duly organized, validly existing and in good standing under the laws of the state of its incorporation or organization as set forth in Schedule 4.2 , (b) has all requisite power to carry on its Business as it is now being conducted and to own and operate its Assets, and (c) is duly qualified to transact business and is, or by the Closing Date of such Seller’s Assets will be, in good standing in all states reflected on Schedule 4.2 beside its name, which are the only states in which the ownership or leasing of such Seller’s property or the conduct of its Business make such qualifications necessary.

4.3 Requisite Power and Authority . Such Seller has the requisite power and authority to execute and deliver this Agreement and each of the Closing Documents (as hereinafter defined) to which such Seller is or will be a party and to consummate the transactions contemplated hereby and thereby. All action of such Seller, including without limitation any vote or written consent of its shareholders or members, as appropriate, necessary to authorize the execution, delivery and performance of this Agreement, including without limitation those documents, instruments, and certificates set forth in Sections 7.6 and 9.2 has been duly taken or, prior to the Closing, will have been taken, and this Agreement has been duly executed and delivered by such Seller. This Agreement is a valid and binding agreement, enforceable against such Seller in accordance with its terms.

4.4 Absence of Breach . The execution and delivery by such Seller of this Agreement and the Closing Documents to which it is or will be a party, and the consummation by such Seller of the transactions contemplated thereby will not (a) result in or constitute a default, breach or violation of any of the terms, conditions or provisions of the Articles of Incorporation, Articles of Organization, Bylaws, or Operating Agreement, as the case may be, of such Seller; (b) violate any provision of, or require any consent, authorization or approval (other than those that have been obtained or will be obtained prior to Closing by such Seller) under any judicial, administrative or arbitration order, award, judgment, writ, injunction or decree applicable to, or any governmental permit or license issued to, such Seller; or (c) conflict with, result in a breach of, constitute a default or event of default (whether by notice or the lapse of time or both) under or accelerate or permit the acceleration of the performance required by such Seller, or require any consent, authorization, or approval (other than those that have been

 

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obtained or will be obtained prior to Closing by such Seller) under any material indenture, Lien, lease, instrument or other agreement, written or oral, to which such Seller is a party or by which such Seller or any of the Assets or Leased Premises of such Seller may be bound.

4.5 Ownership of Assets . Such Seller is the lawful owner of and has good and marketable title to its Assets, free and clear of all Liens, except those listed on Schedule 2.3 , and upon the Closing, Purchaser will be vested with good and marketable title to such Seller’s Assets, free and clear of and all Liens, and free of any transferee and/or successor liabilities. No other Person, including without limitation any current or former spouse(s) or Affiliates of such Seller, owns or is a part owner of any other assets, trade secrets, contracts, leases, property or other rights that are material to the conduct of such Seller’s Business and are not being transferred pursuant to this Agreement. No agreements exist to sell, assign, lease, or license, any of such Seller’s Assets except those listed and described on Schedule 4.5 . No person other than such Seller or another Seller owns, is a party to or has any interest in any of the Franchise Agreements or Franchise Rights or any other agreement or instrument with the Purchaser or any Affiliate of the Purchaser which conveys franchise rights, area development rights or other similar rights with regard to the development of Ruth’s Chris Steak House restaurants. Such Seller’s Assets constitute all of the assets and property used by such Seller in the operation of its Business.

4.6 Condition of Assets; Inventory; Warranties . To each Sellers’ Knowledge, such Seller’s Assets and the Leased Premises are in good working condition, normal wear and tear excepted, and are suitable for their intended purpose in the ordinary course of such Seller’s Business. Such Seller shall, and does hereby, assign to Purchaser, as permitted by law, all existing warranties and/or guarantees covering its Assets, including without limitation the Inventory, being transferred to Purchaser.

4.7 Compliance; Licenses and Permits . To each Sellers’ Knowledge, such Seller has in all material respects complied with all laws, ordinances, rules, regulations, orders, filings, judgments, and decrees of any Governmental Authority applicable to the operation of its Business. The Sellers have not received any notification, warning or inquiry from, or given any notification to or had any communication with, any Governmental Authority, with respect to any violation or alleged or possible violation of any law that may be applicable to Sellers, nor are any facts known to the Sellers that may reasonably be expected to give rise to any such notification, warning or inquiry. Schedule 2.1(i) sets forth all Licenses held or owned by such Seller together with name of owner, issuer, expiration date, and whether such license is freely transferable or assignable, and the party or parties whose consent is required for such transfer or assignment. Such Seller has all licenses, permits, consents, use agreements, approvals, authorizations and certifications required to conduct its Business, all of which are in good standing, valid, and effective. Other than such Seller, no Person or Affiliate of the Sellers holds any License, relating to its Business or Franchise Rights. Such Seller shall use its commercially reasonable efforts to assist Purchaser in obtaining all Licenses necessary for the ownership and operation of its Assets and Business.

 

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4.8 Contracts .

(a) Set forth on Schedule 4.8(a) is a list of all contracts and commitments of such Seller relating to the operation of its Business or its Assets (including without limitation mortgages, indentures, loan agreements, and supply contracts) and all amendments thereto, except (i) the Real Property Leases listed on Schedule 2.1 (a) –1 or 2.1(a) – 2 ; (ii) the Equipment Leases listed on Schedule 2.1(e) ; (iii) the Assigned Contracts listed on Schedule 2.1(h) ; (iv) the Easements listed on Schedule 2.1(c) ; (v) any contracts entered into in the ordinary course of business that involve an aggregate expenditure in any year of less than $5,000, provided that all of such undisclosed contracts do not involved expenditures in excess of $50,000 in the aggregate; (vi) any purchase and customer orders entered into in the ordinary course of business that in the aggregate involve expenditures of less than $5,000 annually; (vii) any contracts relating to Excluded Assets and (viii) vendor lists.

(b) Schedule 4.8(b) identifies each contract of such Seller’s Business in which (i) an officer or director of such Seller or (ii) an Affiliate of such Seller has a material interest.

(c) Each of Seller’s Equipment Leases and Assigned Contracts (i) is in full force and effect and enforceable in accordance with its terms; (ii) has not been amended except as set forth on the appropriate schedule hereto; and (iii) is not subject to any default (or any matter that with the giving of notice or lapse of time, or both, could become a default) by such Seller or, to the best of such Seller’s Knowledge, by any other party to such contract.

4.9 Trade Payables . None of the trade payables or accrued expenses of such Seller is overdue including without limitation any such amounts as may be due to an alcoholic beverage wholesaler.

4.10 Inventory . Such Seller’s Inventory consists, and as of the close of business on the business day preceding the Closing Date for such Seller’s Assets will consist, only of items that are of a quantity usable in the ordinary course of its Business and will be in amounts not significantly less than those set forth on Exhibit “A-1” and in any event sufficient to operate such Seller’s business in a manner consistent with such Seller’s usual practices. All inventory is (i) of merchantable quality, (ii) suitable for sale (under existing quality control standards) under the trademark under which the Inventory is intended to be sold, and (iii) is in compliance with all applicable regulations and standards of any Governmental Authority. All beef included in the Inventory was ordered pursuant to the specifications set forth in the Franchise Agreements and to each Sellers’ Knowledge, that is the type of Inventory on hand. As of Closing Date of such Seller’s Assets, there will be on hand Inventory levels as defined and set forth on Exhibit “A-1” .

4.11 Real Property Leases . Such Seller has delivered to the Purchaser a true, correct and complete copy of the Real Property Leases listed on Schedule 2.1(a) – 1 or 2-1 (a) – 2 (which comprises all the leases and/or subleases of immovable property to which such Seller is a party or by which it is bound), together with all amendments, addenda and supplements thereto. Schedule 2.1(a) – 1 sets forth the name and address of the lessor, the street address of the premises leased thereunder, the commencement and termination dates of such Real Property Lease, the monthly rentals payable thereunder, all options to renew, if any, and a description of and reference to the Seller’s rights, if any, to assign such Real Property Lease or terminate such Real Property Lease for any reason other than lessor’s default. Schedule 4.11 sets forth, in respect of such Seller’s Real Property Lease(s) and/or such Seller’s franchised restaurant, a

 

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detailed description of the relevant parking plans, rights and accommodations. With respect to each such Real Property Lease:

(a) The Real Property Leases are legal, valid, binding and enforceable against such Seller, and to such Seller’s Knowledge, enforceable against the lessor and any sublessors thereunder in accordance with its terms;

(b) All rentals or other monies due or required to be paid thereunder have been paid and will have been paid through the Closing Date of such Sellers’ Assets, except for routine adjustments to percentage rentals which will be paid by each Seller within fifteen (15) business days following the Closing Date of such Seller’s Assets;

(c) The Real Property Leases are assignable to Purchaser or all necessary consents to assignment have been or will be obtained prior to Closing, the estoppel certificate for each Real Property Lease will have been obtained prior to Closing and each Real Property Lease will continue to be legal, valid, binding and enforceable as written, against the lessor following the Closing;

(d) Such Seller has received no notice that the lessor or any sublessor under the Real Property Lease intends to cancel or terminate the Real Property Lease or to exercise or not exercise any option thereunder;

(e) Neither such Seller nor, to the best of such Seller’s Knowledge, any other party to a Real Property Lease is in breach or default, and no event has occurred that, with notice or lapse of time or both, would constitute a breach or default or permit termination, modification or acceleration thereunder;

(f) Neither such Seller nor, to the best of such Seller’s Knowledge, any other party to the Real Property Leases has repudiated any provision thereof;

(g) There have been and there are no disputes, oral agreement(s), temporary waivers, or forbearances in effect as to the Real Property Lease;

(h) Such Seller has good title to the leasehold interest under such Real Property Lease free and clear of all Liens, except for those Liens listed on Schedule 2.3 ;

(i) Such Seller has not assigned, pledged, transferred or conveyed any interest in the leasehold and is not aware of any such assignment, transfer or conveyance;

(j) To such Seller’s Knowledge, all facilities leased or subleased thereunder have received all approvals of governmental authorities (including licenses and permits) required in connection with the operation of its Business and have been operated and maintained in accordance with applicable laws, rules and regulations; and

(k) The Real Property Leases have not been amended or modified other than as described on Schedule 2.1(a) – 1 .

 

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(l) Except with respect to the Real Property Leases covering the Nashville, Tennessee location and the Chicago, Illinois location, each Real Property Lease has a remaining term of at least 10 years (including any renewal options exercisable by the lessee thereunder) or, if the remaining term is less than 10 years, such Seller shall use its commercially reasonable efforts to assist the Purchaser in obtaining an extension to, or an option to extend such lease term prior to the Closing Date of such Seller’s Assets on terms and conditions reasonably satisfactory to the Purchaser.

4.12 Easements . Except for the Easements listed on Schedule 2.1(c) , such Seller does not use or benefit from any easement, servitude, privilege, or other right-of-way in connection with its Business. The Easements listed on Schedule 2.1(c) are valid and binding, and the use and benefit of such Easements are freely assignable or transferable to Purchaser by such Seller without the consent or acceptance of any other Person.

4.13 Proprietary Rights . Except for the Franchise Rights obtained by such Seller from Purchaser, such Seller (i) does not use any patents, inventions, research, trademarks, trade names, copyrights, service marks, trade formulas, secret formulas, recipes, royalty rights, design rights or other technical information in the operation of its Business, and (ii) is not bound by or a party to any option, license or agreement of any kind with respect to patents, trademarks, service marks, copyrights or pending applications therefore. Such Seller has not been informed of any claims or suits pending or threatened against it claiming an infringement of any patent, copyright, license, trademark, service mark or trade name of others in connection with its Business.

4.14 Other Property . Such corporate or limited liability company Seller owns no fee simple real estate (corporeal immovable) or titled motor vehicles, and no such property is used in connection with its Business.

4.15 Insurance . Such Seller maintains property, fire, casualty, workman’s compensation, general liability insurance and other forms of insurance relating to its Assets and the operation of its Business against risks of the kind customarily insured against and in amounts customarily insured (and, where appropriate, in amounts not less than the replacement cost of its Assets).

4.16 Financial Statements . The income statements of such Seller for the fiscal years 2003, 2004 and 2005, and the most current interim period of 2006 that each Seller has prepared (the “Income Statements”) and the balance sheets of such Seller as of January 31, 2006 (the “Balance Sheets”) (January 31, 2006 being referred to as the “Balance Sheet Date”), which have been delivered to Purchaser (collectively, the “Financial Statements”) (a) are correct and complete in all material respects, (b) reflect all transactions to which such Seller was a party during such period, and (c) present fairly the financial condition and results of operations of such Seller as of the date or dates and for the period or periods stated. There are no assets included on the Balance Sheets that are not described in Section 2.1 as being transferred pursuant to this Agreement, except for the Excluded Assets. To the best of Seller’s knowledge, no transaction or event has occurred since the Balance Sheet Date that has had or could have a Material Adverse Effect upon such Seller’s Business or Assets.

 

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4.17 No Assignments . Such Seller has not sold, assigned, transferred or otherwise disposed of, or modified, altered or replaced any of its Assets between the Balance Sheet Date and the date of this Agreement, except for Inventory sold in the ordinary course of business.

4.18 Taxes . All federal, state, county and local tax returns and reports required to be filed by such Seller in connection with the operation of its Business or the ownership, use or operation of its Assets have been filed within the time periods and in the manner prescribed by law. Such returns and reports filed for the five preceding calendar years reflect accurately all liabilities for taxes required to be paid in connection with the operation of such Seller’s Business for the periods covered thereby. All taxes and assessments (including interest and penalties) owed in connection with the operation of such Seller’s Business or the ownership, use or operation of its Assets have been paid in full, or appropriate provision for payment has been made including all estimated corporate income tax payments due and payable through the date hereof. Taxes being disputed in good faith are listed on Schedule 4.18 . Such Seller currently has no outstanding tax liability under the law of any jurisdiction that would subject Purchaser or such Seller’s Assets to the liability or withholding requirements of such jurisdiction’s law. There is no pending examination or proceeding by any authority or agency with respect to such Seller’s Business relating to the assessment or collection of any taxes.

4.19 No Violations . Such Seller has not violated any law, statute, rule or regulation of any Governmental Authority that individually or taken as a whole could have a Material Adverse Effect.

4.20 Business Names . Seller has not used any other business names or address within the last five years except as reflected on Exhibit “A” .

4.21 Brokers’ Fees and Expenses . Such Seller has not retained or utilized the services of any broker, finder or intermediary, or paid or agreed to pay any fee or commission to any person or entity for or on account of the transactions contemplated hereby, or had any communications with any person or entity that would obligate Purchaser to pay all or any portion of such fees or commissions.

4.22 Litigation . Except as set forth on Schedule 4.22 , there is no litigation, arbitration, known investigation, proceeding or controversy (including, without limitation, unsettled claims) relating to the such Seller’s Business or Assets, or to such Seller’s ability or right to sell its Assets, pending or, to Seller’s Knowledge, threatened by or against such Seller by any Person or before any Governmental Authority. Such Seller has received no notice, order, judgment, injunction or decree from any Person or of any Governmental Authority with respect to which such Seller has been named as a party or that apply to or involve its Business or Assets.

4.23 Labor Matters .

(a) Such Seller is not a party to any collective bargaining agreement or other contract or understanding with a labor union relating to employees of its Business, and to the knowledge of such Seller there are no labor union organizational efforts underway or threatened involving any of such Seller’s employees. There are no labor disputes, claims, lawsuits or grievances pending, or to such Seller’s knowledge threatened, against or otherwise affecting its

 

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Business. There are no employment contracts or employment agreements with any employees of such Seller’s Business.

(b) Schedule 4.23(b) sets forth all full-time and part-time employees of such Seller, together with each employee’s title, salary, benefits and length of employment with such Seller.

(c) Such Seller will deliver any and all necessary notices to its employees relating to the transaction contemplated by this Agreement, including without limitation any notices required by WARN.

(d) To each Sellers’ Knowledge, such Seller has at all times complied with all federal, state and local laws, rules, regulations, orders, judgments, decrees, ordinances and other statements of authority pertaining to employment, including without limitation all (i) employment eligibility verification forms, (ii) all immigration and alien employee regulations and laws, (iii) group health plans of such Seller to which Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code (such statutory provisions and predecessors thereof are referred to herein collectively as “COBRA”) applies and that cover employees of its Business, (iv) the Americans with Disabilities Act and (v) payment of withholding taxes for or on behalf of employees.

(e) The transactions contemplated by this Agreement do not violate any federal or state labor laws or regulations.

(f) The Sellers shall provide to the Purchaser complete copies of all employee files promptly upon the Purchaser’s request, including, without limitation, hourly employee files on disk and management employee files on disk or however maintained by the Sellers.

4.24 Benefit Plans and ERISA .

(a) Except as set forth on Schedule 4.24-1, Seller does not maintain or contribute to any Employee Benefit Plan that cover employees of its Business. Such schedule shall include each Sellers’ hospitalization, medical, dental, and Code Section 125 medical reimbursement plans (“Health Plans”) that applies and that covers employees of its Business.

(b) Schedule 4.24-2 attached hereto lists the name of each person who has experienced a “Qualifying Event” (as defined in COBRA) with respect to the Health Plan and is eligible for “Continuation Coverage” (as defined in COBRA) and whose maximum period for Continuation Coverage has not expired. Included in such list are the current address for each such individual, the date and type of each Qualifying Event, whether the individual has already elected Continuation Coverage and, for any individual who has not yet elected Continuation Coverage, the date on which such individual was notified of his or her rights to elect Continuation Coverage. Schedule 4.24-3 attached hereto lists the name of each person who is presently participating in the Sellers’ Health Plan.

(c) Neither the Sellers nor any ERISA Affiliate maintains, has ever maintained or become obligated to contribute to any Employee Benefit Plan that is a subject to title IV of ERISA. Sellers have not within the last five years engaged in, nor is a successor

 

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corporation to any entity that has engaged in, a transaction described in Section 4069 of ERISA. The Assets are not subject to a lien by the Pension Benefit Guaranty Corporation.

4.25 Environmental Matters .

(a) Such Seller is conducting and at all times has conducted its Business in compliance with, and has not violated in any material respects, any Environmental Law. Such Seller has no basis to believe that noncompliance exists with respect to any Environmental Law with respect to its Assets and/or its Business.

(b) No condition, circumstance or activity has existed or currently exists with respect to such Seller’s Assets and/or Business which could reasonably be expected to result in recovery by a Governmental Authority or other Person for damages or other costs, expenses or damages arising from or relating to any alleged injury or threat of injury or harm to public health, safety, or the environment.

(c) There are no outstanding orders, decrees, or judgments of any kind against such Seller or any of its Assets or Business concerning any environmental, public health, safety, land use matters or other Environmental Law including, but not limited to, the emissions discharge or release of Hazardous Materials into the environment or work place, or the management of Hazardous Materials.

(d) To the extent any chemicals or chemical products are included among such Seller’s Assets, such chemicals or chemical products are integral to and required for the conduct of such Seller’s Business and are not waste or waste materials.

4.26 Full Disclosure . To each Sellers’ Knowledge, such Seller has delivered or made available to Purchaser all of the items requested to date in connection with Purchaser’s inspection of such Seller’s Business and Assets and such items completely and accurately reflect the information requested by Purchaser. No representation or warranty by such Seller in this Agreement and no exhibit, document, statement, certificate or schedule furnished or to be furnished to Purchaser by such Seller pursuant hereto, or in connection with the transactions contemplated hereby, or any other items or materials delivered or made available in connection with the Purchaser’s inspection, contains or will contain on the Closing Date of such Seller’s Assets any untrue statement of a material fact, or omits or will omit on the Closing Date of such Seller’s Assets to state a material fact necessary to make the statements contained herein or therein not misleading, or necessary to provide adequate and complete information as to such Seller’s Assets and Business.

4.27 Shareholder/Member Approval . Each Seller shall use all reasonable efforts to obtain the shareholder, member or other equity owner approval required by Section 8.5 of this Agreement and Moran is the direct or indirect sole shareholder, member or other equity owner of each corporate or limited liability company Seller and has not granted nor is there outstanding any warrants, options or other rights to acquire any equity interest in any of the corporate or limited liability company Sellers.

 

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ARTICLE V

REPRESENTATION AND WARRANTIES OF PURCHASER

In order to induce the Sellers to enter into this Agreement and consummate the transactions contemplated hereby, Purchaser represents and warrants to each Seller as follows, each of which warranties and representations is material to and relied upon by such Seller:

5.1 Organization of Purchaser . Purchaser (a) is a corporation duly organized, validly existing and in good standing under the laws of the state of its organization, (b) has the corporate power to own its property and to carry on its business as now being conducted by it, and (c) is duly qualified to transact business and is, or by the Initial Closing Date will be, in good standing in all states reflected on Schedule 5.1 .

5.2 Requisite Power and Authority . Purchaser has full corporate power and authority to execute and deliver this Agreement and each of the Closing Documents to which Purchaser is or will be a party and to consummate the transactions contemplated hereby and thereby. All actions of Purchaser, including without limitation any vote or written consent of its board of directors, necessary to authorize the execution, delivery and performance of this Agreement and all other documents and agreements executed or to be executed by Purchaser in connection with or pursuant to this Agreement, including without limitation those documents, instruments, and certificates set forth in Section 8.3 and 9.2 have been duly taken or, prior to the Initial Closing Date, will have been taken, and this Agreement has been duly executed and delivered by Purchaser. This Agreement is a valid and binding agreement, enforceable against Purchaser in accordance with its terms.

5.3 Absence of Breach . The execution and delivery by Purchaser of this Agreement and the Closing Documents to which it is or will be a party, and the consummation by Purchaser of the transactions contemplated hereby and thereby will not (a) result in or constitute a default, breach or violation of any of the terms, conditions or provisions of the Articles of Incorporation or Bylaws of Purchaser; (b) violate any provision of, or require any consent, authorization or approval (other than those that have been obtained or will be obtained prior to the Initial Closing Date by Purchaser) under 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) conflict with, result in a breach of, constitute a default or event of default (whether by notice or the lapse of time or both) under or accelerate or permit the acceleration of the performance required by Purchaser or require any consent, authorization, or approval (other than those that have been obtained or will be obtained prior to the Initial Closing Date by Purchaser) under any material indenture, lien, lease, instrument or other agreement, written or oral, to which Purchaser is a party.

5.4 Brokers Fees and Expenses . Purchaser has not retained or utilized the services of any broker, finder, or intermediary, or paid or agreed to pay any fee or commission to any person or entity for or on account of the transactions contemplated hereby, or had any communications with any person or entity which would obligate Seller to pay any such fees or commissions.

 

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5.5 Inspection . Purchaser has been afforded an opportunity to make a complete inspection and review of the Assets and Business and Purchaser is satisfied with such inspection and review in its sole discretion.

ARTICLE VI

COVENANTS

Each Seller covenants and agrees, with respect to those provisions that apply to the Sellers, and the Purchaser covenants and agrees, with respect to those provisions that apply to the Purchaser, that from the date of this Agreement through the Closing Date for such Seller’s Assets:

6.1 Preservation of Business and Relationships; Insurance . Such Seller shall not take any action with respect to its Business or Assets except in the ordinary course of business and in a manner consistent with past practices of such Seller, and will preserve its Business intact, including using its commercially reasonable best efforts to maintain all licenses, permits, consents or approvals required by applicable law and maintain the current relationships of its Business with customers, suppliers, employees, and others having business relationships with such Seller, including without limitation maintenance of the Inventory as defined and set forth on Exhibit “A-1” . Such Seller shall also maintain its current levels for all of its insurance relating to its Assets and Business.

6.2 Prohibited Transactions . Such Seller shall not (a) sell, pledge, dispose of or encumber, or authorize or propose the sale, pledge, disposition or encumbrance of, any its Assets (other than (i) the sale of Inventory in the ordinary course of business, which shall be replenished to maintain the levels set forth in Exhibit “A-1” and (ii) the sale and/or replacement of obsolete or damaged Equipment in the ordinary course of business consistent with past practice); (b) make any significant change in its methods of management, marketing, or operating (or practices relating to trade accounts or to other payments) or make any change in its accounting methods; (c) other than in the ordinary course of business consistent with past practice, authorize any single capital expenditure in excess of $1,000 or capital expenditures in the aggregate in excess of $5,000; (d) allow any Lien or other encumbrance to be placed on any of its Assets other than purchase money liens and capital leases incurred in the ordinary course of business consistent with past practice, provided, that, such Liens are promptly disclosed to Purchaser and are either released on or before the Closing Date of such Seller’s Assets or, if not released, secure an Assumed Liability; (e) commit to take or take any action with respect to increasing the existing salary or compensation of any officer, director, consultant or independent contractor of such Seller, (f) enter into (i) any contract that provides for payments to another Person by such Seller of more than $10,000 in the aggregate other than in the ordinary course of business consistent with past practice provided, that, any such contracts that are entered into by any Seller that exceed the forgoing dollar threshold are promptly disclosed to Purchaser or (ii) other transaction in connection with the operation of its Business, of any nature whatsoever, which may have a Material Adverse Effect; (g) amend, cancel, terminate or default under any material contract or commitment of its Business, including, without limitation, any of the Real Property Leases, Equipment Leases or Assigned Contracts or (h) other than in the ordinary course of business consistent with past practice, commit to take or take any action with respect to increasing, or

 

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make or commit to make any other adjustment to, the existing salary or compensation package of any employee.

6.3 Purchaser’s Access to Premises, Employees and Information; Confidentiality .

(a) Promptly following the execution of this Agreement by all parties hereto (other than any intervenor), each Seller shall, from time to time, upon reasonable notice to and coordination with the Sellers’ representative, which for this purpose shall be Mr. Stan Harris or any other individual subsequently designated by Moran in writing, grant Purchaser and its counsel, accountants and other duly authorized representatives reasonable access during normal business hours to its Assets, Leased Premises, and all Books and Records relating to the operation of its Business, its Franchise Agreements, its Franchise Rights and its employees.

(b) Purchaser shall cause its employees, agents, representatives, counsel, accountants and financial advisors (and their counsel and accountants) to hold in confidence any and all information obtained from Seller and to refrain from disclosing such information (unless it is or becomes ascertainable from public sources or public disclosure is, in the good faith judgment of Purchaser, required by law); provided, however , that nothing contained herein shall limit the right of any such persons to disclose any such information to Purchaser or its employees, agents, representatives, counsel, accountants and financial advisors (and their counsel and accountants) for the purpose of facilitating the consummation of the transactions contemplated hereby.

(c) Purchaser’s access hereunder and any inspections pursuant thereto shall not waive or release any Seller from, or otherwise affect, any of their representations or warranties under this Agreement.

(d) Purchaser shall have access to Sellers’ employees for purposes of determining and making employment offers to such employees as set forth in Section 9.8(a).

6.4 Consents . Promptly after execution of this Agreement such Seller will apply for or otherwise seek, and use commercially reasonable efforts to obtain, all consents and approvals required for consummation of the transactions contemplated hereby, including, without limitation, (i) estoppels and consents from the lessors or any other parties under its Real Property Leases, Easements, Equipment Leases, and Assigned Contracts, (ii) those necessary to transfer or assign its Licenses to Purchaser, and (iii) any other regulatory approvals necessary to consummate the transaction. Where the consent of any third party is required in connection with the transactions contemplated by this Agreement, the Sellers will use their commercially reasonable efforts to obtain such consent on terms and conditions not less favorable than as in effect on the date hereof. Any commercially reasonable charges imposed by the lessors for such estoppels and consents shall be borne by such Seller, and such Seller shall indemnify Purchaser against any action brought against Purchaser resulting from such Seller’s failure to pay such charges.

6.5 No Negotiations . Subject to the termination provisions contained herein, from and after the date hereof, such Seller, individually and/or its officers or directors or anyone acting on behalf of Seller or such persons, shall not, directly or indirectly, solicit, engage in

 

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discussions or negotiations with, or provide any information to, any person, firm or other entity or group (other than Purchaser or its representatives) concerning any merger or sale of substantially all of its Assets or the sale of capital stock or partnership interests of such Seller, or any other similar business combination or transaction involving such Seller or any Affiliate of such Seller.

6.6 Notification of Certain Matters .

(a) Such Seller shall give prompt notice to Purchaser of the following:

(i) the occurrence or nonoccurrence of any event that would be likely to cause either (A) any representation or warranty of such Seller contained in this Agreement, or in connection with the transactions contemplated hereunder, to be untrue or inaccurate in any material respect at any time from the date hereof to the Closing Date for such Seller’s Assets, or (B) directly or indirectly, any Material Adverse Effect; or

(ii) any material failure of such Seller, or any officer, director, employee or agent thereof, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; or

(iii) any proposal together with the terms thereof, however communicated and in whatever form transmitted, regarding (A) any merger of such Seller into or with another Person, (B) any purchase or sale of any material portion of its Assets or the equity interest in such Seller, (C) any other similar business combination or transaction involving such Seller or any Affiliate of such Seller, or (D) any other indication of interest on the part of any Person with respect to any of the foregoing.

(b) Purchaser shall give prompt notice to the Sellers of the following:

(i) the occurrence or nonoccurrence of any event that would be likely to cause any representation or warranty of Purchaser contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date hereof to the Closing Date of such Seller’s Assets; or

(ii) any material failure of Purchaser, or any officer, director,

employee or agent thereof, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder.

(c) Notwithstanding the foregoing, the delivery of any notice pursuant to this Section shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

6.7 Confidential Information . Purchaser and the Sellers, until the fifth anniversary of the date of this Agreement and not withstanding the earlier termination of this Agreement, shall keep, and shall cause their Affiliates, attorneys, accountants, counsel, financial advisors and other representatives to keep, any and all Confidential Information (as defined below)

 

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confidential and not to disclose any Confidential Information to any Person other than such parties’ Affiliates, directors, managers, members, officers, employees or agents, and then only on a confidential basis; provided, however , that such parties may disclose Confidential Information (a) as required by law, rule, regulation or judicial process, including as required to be disclosed in connection with the consummation of the transactions contemplated by this Agreement, (b) to such parties’ attorneys, accountants and financial advisors who have agreed to keep the Confidential Information confidential in accordance with the terms hereof or (c) as requested or required by any Governmental Authority; and provided further that Purchaser may disclose such information to its financing sources. Purchaser may also disclose this Agreement and related Confidential Information to the creditors, customers or potential customers of the Sellers to the extent Purchaser reasonably determines that such disclosure is appropriate to facilitate the fulfillment of the conditions precedent set forth in Article 7 hereof and to the extent the Confidential Information constitutes an Asset acquired by Purchaser, as necessary to run the Business after the Initial Closing Date. For purposes of this Agreement, the term “Confidential Information” shall include all information about Purchaser and its Affiliates, on the one hand, and the Sellers and their Affiliates on the other hand, which has been furnished to the other parties or their Affiliates pursuant to or in connection with this Agreement and any of the terms, conditions or other facts with respect to the negotiations of this Agreement; provided, however , that the term “Confidential Information” shall not be deemed to include information which (x) is or becomes generally available to the public other than as a result of a disclosure by Purchaser and its Affiliates, on the one hand, or the Sellers and their Affiliates, on the other hand, not permitted by this Agreement, (y) was available to the disclosing party on a non-confidential basis prior to its disclosure by the other parties to this Agreement or (z) becomes available to the disclosing party on a non-confidential basis from a person other than the other parties to this Agreement who, to the knowledge of the disclosing party, is not otherwise bound by a confidentiality agreement with the other parties to this Agreement or is not otherwise prohibited from transmitting the relevant information to such parties.

6.8 Noncompetition . Moran will execute an agreement not to compete in the form appearing in Exhibit “E” , wherein Moran shall agree that Moran and any Affiliate of Moran shall not directly or indirectly own, lease, license (to or from any third party), operate, participate (passively or actively) consult with, invest in or lend money to a competing business similar to that of the Purchaser (i.e., a fine dining restaurant featuring prime steak as a primary menu offering) nor solicit any employees of the Purchaser or its Affiliates during the term of the “Ruth’s Chris Steak House” Baton Rouge franchise agreement with Moran and Capital City Restaurants, Inc. (as amended, supplemented or otherwise modified form time to time, the “Baton Rouge Franchise Agreement”) and for a period of two (2) years from the date of termination or expiration of the Baton Rouge Franchise Agreement. Nothing in this Agreement shall prohibit the Sellers from hiring any current employee not hired by Purchaser within thirty (30) days of the Final Closing Date or any employee of Purchaser whose employment is terminated by Purchaser for any reason. The non-competition agreement shall not prohibit Moran’s or any of his Affiliates ownership in and operation of the “Ruth’s Chris Steak House” Baton Rouge location pursuant to the Baton Rouge Franchise Agreement or Moran’s or any of his Affiliates ownership in and operation of “Ninfa’s Mexican Restaurant”, “T.J. Ribs”, “Ruffino’s” and/or “Montana’s Rib and Chop House” restaurants, provided, that, at no time during the period of the non-compete shall (i) the “Ninfa’s Mexican Restaurant”, “T.J. Ribs” restaurants, “Ruffino’s” restaurants or “Montana’s Rib and Chop House” restaurants directly or

 

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indirectly owned or operated by Moran or any of his Affiliates feature prime steak as a primary menu item or (ii) Moran or any of his Affiliates undertake any significant expansion or change the location of the existing “Ruth’s Chris Steak House” Baton Rouge restaurant.

6.9 Purchaser Guarantee . If required by the lessor of the Leased Premises of any Seller, Purchaser shall guarantee the respective Real Property Lease if the assignee of the Real Property lease for such Leased Premises is any entity other than Purchaser.

6.10 Baton Rouge Franchise Rights/Purchase Option . Purchaser agrees and acknowledges that Capital City Restaurants, Inc. (“CCRI”), an Affiliate of the Seller’s and wholly owned by Moran, shall continue to own and operate a “Ruth’s Chris Steak House” franchised restaurant in Baton Rouge, LA and which is an Excluded Asset from this transaction. By intervening herein, CCRI together with Moran, grant to Purchaser the option to purchase the Baton Rouge business assets and Moran grants to Purchaser the option to purchase the improved, immovable property at and upon which the CCRI franchised business is located pursuant to the following terms and conditions:

(a) Commencing January 1, 2008 through and including December 31, 2012, Purchaser may, upon 10 days prior written notice to Moran and CCRI, exercise its purchase option and proceed to purchase the Baton Rouge business assets (as similarly defined herein) at a purchase price calculated at an amount equal to the greater of (i) $5 million (approximate amount of 2005 gross sales) or (ii) $5 million plus one-half the difference between $5 million and one times (1x) the Baton Rouge gross sales for the 12-months preceding the date of exercise. By example, if the trailing 12-months of gross sales equate to $6 million at the time Purchaser exercises its option, the purchase price is $5.5 million ($5 million plus one-half of the additional $1 million in sales). This contemplated transaction will be subject to due diligence and the same binding provisions as contained herein except as to time constraints.

(b) Also commencing January 1, 2008 through and including December 31, 2012, Purchaser may, upon 10 days prior written notice to Moran and CCRI, exercise its purchase option and proceed to purchase the improved, immovable property described on Schedule 6.10(b) at and upon which the franchised business is located for $2.6 million. This contemplated transaction will be subject to due diligence and the same binding provisions as contained herein except as to time constraints.

The purchase options described in 6.10(a) and (b) above must be exercised by Purchaser simultaneously. The purchase option described in 6.10(b) shall be evidenced by a separate written instrument in form suitable for recording in the conveyance records of East Baton Rouge Parish, Louisiana. The provisions of this Section 6.10 shall survive the Closing Date.

6.11 Real Estate Matters .

(a) Purchaser, at its sole cost and expense, may order title policy commitments (the “Commitments”) to be issued by a title company reasonably acceptable to Purchaser (the “Title Company”), accompanied by copies of all recorded documents relating to restrictions, easements, rights-of-way, and other matters affecting the Real Property Leases or the Leasehold Improvements. The Commitments will commit the Title Company to issue at the

 

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Closing, ALTA forms of Leasehold Title Insurance Policies to Purchaser, such policies to be in amounts as determined jointly by Purchaser and the Title Company and with such endorsements as are requested by Purchaser. Purchaser may also obtain one of more surveys of the Leased Premises at Purchaser’s expense (the “Surveys”). Purchaser shall promptly notify the Sellers in writing of objections to the condition of title set forth in the Commitments or on the Surveys which affect the merchantability of the Sellers’ title or the use of the Leased Premises or the Leasehold Improvements as presently utilized (the “Title Objections”).

(b) In addition to the foregoing, Purchaser shall have the right, upon reasonable notice to and coordination with the Sellers’ representative, which for this purpose shall be Mr. Stan Harris or any other individual subsequently designated by Moran in writing, to conduct and to cause its engineers, accountants, attorneys, consultants, appraisers, and other agents to conduct such other reviews, inquiries, examinations, and inspections of the Lease Premises and the Leasehold Improvements as Purchaser deems necessary or appropriate prior to the Closing Date of such Seller’s Assets (“Purchaser’s Inspections”). The Sellers shall cooperate with Purchaser in all reasonable respects in making Purchaser’s Inspections. Purchaser shall promptly notify the Sellers in writing of any objections to the condition of the Leased Premises or the Leasehold Improvements identified as a result of any of Purchaser’s Inspections which affect the merchantability of the Sellers’ title or the use of the Leased Premises or the Leasehold Improvements as presently utilized (the “Other Objections”).

(c) The Sellers may voluntarily undertake to eliminate any and all of the Title Objections and Other Objections (collectively, “Purchaser Objections”) to the satisfaction of Purchaser, but the Sellers are under no obligation to do so. If, however, the Sellers elect not to, or cannot, eliminate Purchaser’s Objections to the reasonable satisfaction of Purchaser prior to the Initial Closing Date, Purchaser may terminate this Agreement by written notice to the Sellers pursuant to Section 10.1(b). If Purchaser elects not to terminate this Agreement, and Purchaser instead elects to proceed to the Closing on the Initial Closing Date, such election shall not, except as set for the in Section 6.11(d) below, in any way release or diminish the Sellers’ obligations under Article 11 to the extent that any Losses suffered by Purchaser as a result of the matters raised in the Purchaser Objections are subject to indemnification thereunder.

(d) All title matters shown on the Commitments and the Surveys which are not the subject of Title Objections shall be deemed to be “Permitted Encumbrances.” Further, if Purchaser makes any Title Objections which the Sellers elect not to, or cannot, cure, and Purchaser elects to proceed to Closing on the Initial Closing Date, such Title Objections shall likewise be deemed “Permitted Encumbrances.”

6.12 Environmental Matters . Purchaser, at its sole cost and expense, may obtain an environmental site assessment report with respect to the Leased Premises, the Leasehold Improvements and the other Assets, which report shall be acceptable in form and substance to Purchaser in its sole discretion. Any such environmental site assessment may include physical inspections of the Leased Premises, the Leasehold Improvements, and other Assets, a review of all relevant records in the possession or custody or under the control of the Sellers, a review of relevant governmental agency records and contact with governmental agency personnel, sampling activities and any other investigatory activities of a scope satisfactory to Purchaser in its sole discretion. Purchaser shall promptly notify the Sellers in writing of any objections to the

 

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condition of the Leased Premises, the Leasehold Improvements, or other Assets identified as a result of any environmental site assessment report. Any such objection by Purchaser shall be deemed a Purchaser Objection (defined in Section 6.11(c) above) and shall be governed by the rights and obligations of the parties set forth in Section 6.11(c) above.

6.13 Inventory Assessment . Each of the Sellers will grant Purchaser access to its respective property to the extent necessary to do a physical Inventory count at each restaurant location within one (1) day of the Closing Date for such Seller’s Assets for purposes of determining the value of the Inventory.

6.14 Real Property Lease Notices . Each of the Sellers will provide the Purchaser with copies of all notices from any landlord under the Real Property Leases within three (3) business days of receipt of such notice.

6.15 Further Assurances . At any time between the execution of this Agreement and the Initial Closing Date or, in the event of an Escrowed Closing, the Final Closing Date, at Purchaser’s request and without further consideration, each Seller shall provide such materials and information and take such actions as Purchaser may reasonably deem necessary or desirable in order to more effectively consummate the transactions contemplated hereby, including, without limitation any request by Purchaser for assistance to obtain any authorizations, consents, filings, approvals, licenses and permits under Section 7.3 and otherwise to cause such Seller to fulfill its obligations under this Agreement.

ARTICLE VII

CONDITIONS TO PURCHASER’S OBLIGATIONS

In addition to all other conditions and contingencies, if any, set forth in this Agreement, the performance of Purchaser’s obligations hereunder shall on the Closing Date, at the option of Purchaser, be subject to the satisfaction of the following conditions by each Seller:

7.1 Representations and Warranties True at Closing . All of the representations and warranties made by each Seller in or pursuant to this Agreement or given on its behalf hereunder shall be true and correct on and as of the Initial Closing Date with the same effect as though such representations and warranties had been made or given on and as of the Initial Closing Date.

7.2 Obligations Performed . Each Seller shall have performed and complied with all of its obligations under this Agreement which are to be performed or complied with by it on or before the Initial Closing Date.

7.3 Authorizations, Consents, Licenses, Permits and Approvals . Subject to Article 12, as of the Initial Closing Date, all authorizations, consents, filings and approvals necessary to permit each Seller to perform the transactions contemplated hereby, and all authorizations, consents, filings, licenses, permits and approvals necessary to permit Purchaser to continue the Business of Sellers in the manner now conducted by Sellers, (a) shall have been duly obtained, made or given, (b) shall be in form and substance reasonably satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (d) shall be in full force and effect; and all terminations or expirations of waiting periods imposed by

 

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any Governmental Authority necessary for the transactions contemplated under this Agreement,