Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
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`ESTTA Tracking number:
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`ESTTA1096962
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`Filing date:
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`11/21/2020
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`Proceeding
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`91252969
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`Party
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`Correspondence
`Address
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`Submission
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`Filer's Name
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`Filer's email
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`Signature
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`Date
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`Attachments
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`Plaintiff
`Patxi's Limited
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`EDMUND J FERDINAND III
`FERRDINAND IP LLC
`1221 POST ROAD EAST, SUITE 302
`WESTPORT, CT 06880
`UNITED STATES
`Primary Email: jferdinand@24iplg.com
`Secondary Email(s): lauras@24iplg.com
`203-557-4224
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`Testimony For Plaintiff
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`Edmund J. Ferdinand, III
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`jferdinand@FIPLawGroup.com, lauras@FIPLawGroup.com
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`/ejf/
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`11/21/2020
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`Testimonial Declaration of Michael Nakhleh.pdf(119879 bytes )
`Exhibit A .pdf(251307 bytes )
`Exhibit B Yelp Reviews.pdf(766375 bytes )
`Exhibit C California NEW Menu - 2019.01.16 - 8_Page_1.2.pdf(1521225 bytes )
`Exhibit D.pdf(1349811 bytes )
`Exhibiit E .pdf(2167253 bytes )
`CERTIFICATE OF SERVICE.pdf(91061 bytes )
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`

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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`
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`In the Matter of Application Serial No. 88/533,955
`For the Mark PATXI’S
`Published in the Official Gazette on November 19, 2019
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`: Opposition No.: 91/252969
`Patxi’s Limited,
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`Opposer,
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`v.
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`Johnny K. Wang,
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`Applicant.
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`TESTIMONIAL DECLARATION OF MICHAEL NAKHLEH
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`MICHAEL NAKHLEH, pursuant to 28 U.S.C. § 1746, declares as follows:
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`1.
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`I am the principal shareholder and President of Opposer, Patxi’s Limited. I am a
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`resident of the State of California. I make this declaration upon personal knowledge and declare
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`that all information contained herein and all documents attached hereto are true, complete and
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`correct. I submit this declaration as trial testimony in the matter on behalf of Opposer.
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`2.
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`Opposer is the successor in interest to all right, title and interest in and to the
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`trademark PATXI’S that has been used widely and continuously since 2004 in connection with
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`popular restaurants known for deep-dish pizza and other items in California, Colorado and
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`Washington.
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`3.
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`Opposer acquired all right title and interest in and to the PATXI’S trademark by
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`virtue of an Asset Purchase Agreement effective September 21, 2018 (Exhibit A). Hence,
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`Opposer has standing to bring and maintain this action.
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`4.
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`Patxis was started in 2004 in Palo Alto. The founder Mr. Patxi had a vision to
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`start a deep dish Chicago style pizza brand in California but put a healthy twist to it. The
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`company uses the freshest ingredients and everything is farm fresh to table. Patxi's was one of
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`the first brands to start this trend.
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`5.
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`The company kept growing. Opening a new location a year. In 2014, the company
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`was firmly in the San Francisco Bay area with 11 locations. The company decided to expand into
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`other states opening in Washington and opening 3 more locations in Colorado. Opposer
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`purchased the company in 2018 with a vision to grow the company even further. When Opposer
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`took over the brand they immediately started expanding. They opened a location in the
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`prominent LA Live/Staples Center where the Los Angeles Lakers play, 3 more locations were
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`opened in San Diego, and another location in Porter Ranch. The company has 6 more in
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`development. Opposer also started growing the brand buy starting a franchise system. The
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`franchise system was an instant success as well. Over 20 franchises were sold in less than 12
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`months. The goal of the company is to expand nationwide and to have 100 locations by the end
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`of 2025.
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`6.
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`Attached hereto as Exhibit B are pages from Yelp.com showing customer reviews
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`dating back to 2005.
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`7.
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`Attached hereto as Exhibit C is a SuperBowl menu featuring the Patxi’s brand
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`from January 2019.
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`8.
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`Attached hereto as Exhibit D is a marketing plan for the Patxi’s brand for 2020.
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`9.
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`Attached hereto as Exhibit E are in-store ads featuring the Patxi’s brand.
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`10.
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`As a result of the widespread use in interstate commerce by Opposer and its
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`franchisees of the aforesaid PATXI’S trademark in connection with popular restaurants and the
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`advertisement and promotion of the brand, the PATXI’S trademark has acquired extensive
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`goodwill, has developed a high degree of distinctiveness, and is well-known and recognized as
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`identifying high quality restaurant services which have their origin with or have been authorized
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`by Opposer.
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`11.
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`Opposer’s predecessors in interest were the owner of two U.S. Federal
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`Registration for the PATXI’s trademark, namely Registration No. 4,233,418 for the PATXI’s
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`logo design mark and Registration No. 4,225,363 for the PATXI’s word mark, each of them for
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`use in connection with restaurant services. Each of them went abandoned inadvertently in 2019
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`after Opposer acquired all right, title and interest in and to the operations and intellectual
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`property of Patxi’s.
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`12.
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`Immediately upon learning that the prior registrations had inadvertently gone
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`abandoned, Opposer filed U.S. Trademark Application Serial No. 88/573,008 for the mark
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`PATXI’S in International Class 043 for use in connection with “restaurant services”. The PTO
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`Examining Attorney issued an Office Action on November 8, 2019 which included a refusal to
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`register the mark, in part, because of the prior-filed Application of Applicant.
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`13.
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`As set forth herein, Opposer has prior and superior trademark rights as against
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`Applicant for the PATXI’S trademark.
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`14.
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`Applicant’s PATXI’S mark falsely suggests a connection with the identity of
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`Opposer’s PATXI’S trademark.
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`15.
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`Applicant’s PATXI’S mark is identical to Opposer’s PATXI’S trademark in
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`appearance, sound and commercial impression. Moreover, the adoption of Applicant’s mark was
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`obviously selected to draw an association with Opposer’s renowned PATXI’S trademark and to
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`trade on the goodwill and strong commercial recognition Opposer has gained over the years with
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`its PATXI’S trademark used in connection with restaurant services.
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`16.
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`Applicant intends to use its PATXI’S trademark in connection with the exact
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`same type of restaurant services used in connection with Opposer’s PATXI’S trademarks. As
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`such, consumers are likely to believe mistakenly that Applicant’s PATXI’S restaurants are the
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`same as, from the same source as, or otherwise affiliated with Opposer’s PATXI’S restaurants
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`and/or that Applicant’s restaurants are provided by, sponsored by, approved by, licensed by,
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`affiliated with or in some other way legitimately connected to Opposer’s authorized PATXI’S
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`restaurants.
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`17.
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`By reason of the foregoing, Opposer believes that it would be damaged by the
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`registration of Applicant’s PATXI’S trademark.
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`I hereby declare that the foregoing is true and correct under the penalty of perjury.
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`Executed:
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`November 21, 2020
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`_____________________________________
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`MICHAEL NAKHLEH
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`70265878_19
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`Execution Version
`CONFIDENTIAL
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`ASSET PURCHASE AGREEMENT
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`BY AND AMONG
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`PATXI’S OPCO, LLC,
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`LAYERS, LLC,
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`PATXI’S LIMITED,
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`And
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`MEDITERRANEAN CUISINE OPERATING COMPANY, LLC
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`DATED AS OF SEPTEMBER 21, 2018
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`This document is not intended to create nor will it be deemed to create
`a legally binding or enforceable offer or agreement of any type or nature,
`unless and until agreed and executed by the parties.
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`TABLE OF CONTENTS
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`PAGE
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`ARTICLE I CERTAIN DEFINITIONS ......................................................................................... 1
`Section 1.1. Certain Definitions ...................................................................................... 1
`
`ARTICLE II PURCHASE AND SALE OF THE ASSETS ........................................................... 7
`Section 2.1. Description of the Assets ............................................................................ 7
`Section 2.2. Excluded Assets .......................................................................................... 8
`Section 2.3. Assumed Liabilities .................................................................................... 8
`Section 2.4. Purchase Price ............................................................................................. 9
`Section 2.5. Escrow......................................................................................................... 9
`Section 2.6. Net Working Capital Calculation................................................................ 9
`Section 2.7. Allocation of Purchase Price ..................................................................... 11
`Section 2.8. Closing ...................................................................................................... 11
`Section 2.9. Closing Deliveries and Payments ............................................................. 12
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`ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE Seller PARTIES ........... 12
`Section 3.1. Organization and Qualification ................................................................. 12
`Section 3.2. Authority ................................................................................................... 12
`Section 3.3. Consents and Approvals; No Violations ................................................... 13
`Section 3.4. Financial Statements ................................................................................. 13
`Section 3.5. Permitted Liens ......................................................................................... 13
`Section 3.6. Disclosures ................................................................................................ 14
`Section 3.7. Exclusivity of Representations and Warranties ........................................ 14
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`ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER ................................. 14
`Section 4.1. Organization and Qualification ................................................................. 14
`Section 4.2. Authorization ............................................................................................ 14
`Section 4.3. Consents and Approvals; No Violations ................................................... 15
`Section 4.4. Available Funds; Solvency ....................................................................... 15
`Section 4.5.
`Investigation; No Additional Representations, Etc ................................... 15
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`ARTICLE V COVENANTS......................................................................................................... 16
`Section 5.1. No Public Disclosure ................................................................................ 16
`Section 5.2. Seller Party Access to Information; Books and Records .......................... 16
`Section 5.3. Consents and Approvals; California Bulk Sales Laws ............................. 16
`Section 5.4. Further Assurances.................................................................................... 17
`Section 5.5. Closing Holdback; Non-Recourse ............................................................ 17
`Section 5.6. Guaranteed Obligations ............................................................................ 18
`Section 5.7. Dividends .................................................................................................. 19
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`ARTICLE VI CONDITIONS to closing ...................................................................................... 19
`Section 6.1. Conditions to Each Party’s Obligations to Close ...................................... 19
`Section 6.2. Conditions to the Obligations of Buyer .................................................... 19
`Section 6.3. Conditions to the Obligations of the Seller Parties ................................... 20
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`Section 6.4. Frustration of Closing Conditions ............................................................. 20
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`ARTICLE VII TERMINATION .................................................................................................. 20
`Section 7.1. Termination ............................................................................................... 20
`Section 7.2. Effect of Termination ................................................................................ 21
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`ARTICLE VIII Tax MATTERS ................................................................................................... 21
`Section 8.1. Cooperation and Exchange of Information ............................................... 21
`Section 8.2. Transfer Taxes .......................................................................................... 21
`Section 8.3. Bulk Sales Law ......................................................................................... 21
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`ARTICLE IX MISCELLANEOUS .............................................................................................. 21
`Section 9.1. Entire Agreement; Assignment ................................................................. 21
`Section 9.2. Notices ...................................................................................................... 22
`Section 9.3. Governing Law ......................................................................................... 23
`Section 9.4. Fees and Expenses .................................................................................... 23
`Section 9.5. Exhibits and Schedules ............................................................................. 23
`Section 9.6. No Third Party Beneficiaries .................................................................... 23
`Section 9.7. Severability ............................................................................................... 23
`Section 9.8. Amendment; Waiver ................................................................................. 24
`Section 9.9. Counterparts; Facsimile Signatures .......................................................... 24
`Section 9.10. Specific Performance ................................................................................ 24
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`EXHIBITS:
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`Exhibit A: Form of Escrow Agreement
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`PURCHASE AGREEMENT
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`THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of September
`21, 2018 is made by and among Patxi’s Opco, LLC, a Delaware limited liability company
`(“Opco”), Layers, LLC, a California limited liability company (“Layers”, and together with
`Opco,
`the “Seller Parties”), Patxi’s Limited, a Wyoming corporation (“Buyer”) and
`Mediterranean Cuisine Operating Company, LLC, a Delaware limited liability company
`(“Guarantor”). The Seller Parties and Buyer are referred to herein collectively as the “Parties”
`and individually as a “Party”. Capitalized terms used but not otherwise defined herein have the
`meanings ascribed to such terms in ARTICLE I.
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`WHEREAS, the Seller Parties are engaged in the operation of the Restaurants (as defined
`below);
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`WHEREAS, the Seller Parties desire to assign, transfer and convey to Buyer and Buyer
`desires to accept from the Seller Parties substantially all of the assets and assume certain
`specified liabilities of the Seller Parties related to the operation of the Restaurants on the terms
`and subject to the conditions described below in this Agreement;
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`WHEREAS, on the date hereof, simultaneous with the execution of this Agreement by
`the Parties, the Parties desire to enter into the MSA (as defined below), to provide for the
`operation of the Restaurants by Buyer during the period between the date hereof and the Closing
`Date;
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`WHEREAS, the Seller Parties have determined that the Contemplated Transactions
`(defined below) upon the terms and conditions set forth in this Agreement are in the best
`interests of each of the Seller Parties, and approved and declared advisable this Agreement and
`the Contemplated Transactions; and
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`WHEREAS, the board of directors of Buyer has approved and adopted this Agreement
`and the Contemplated Transactions.
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`NOW, THEREFORE, in consideration of the premises and mutual promises herein made,
`and in consideration of the representations, warranties and covenants herein contained, the
`Parties hereby agree as follows:
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`ARTICLE I
`CERTAIN DEFINITIONS
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`Section 1.1. Certain Definitions. As used in this Agreement, the following terms have
`the respective meanings set forth below.
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`“Accounting Firm” has the meaning set forth in Section 2.6(b).
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`“Action” means any cause of action, suit, litigation, arbitration, investigation, audit or
`other legal proceeding by or otherwise involving any Governmental Entity or other Person.
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` “Agreement” has the meaning set forth in the Recitals.
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`“Assigned Contracts” has the meaning set forth in Section 2.1(c).
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`“Assigned Permits” has the meaning set forth in Section 2.1(g).
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`“Assumed Liabilities” has the meaning set forth in Section 2.3.
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`“Books and Records” has the meaning set forth in Section 2.1(h).
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`“Bulk Sales Law Escrow Account” means the account with the Escrow Agent into which
`the Bulk Sales Law Escrow Amount is deposited.
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`“Bulk Sales Law Escrow Amount” means Thirty-Two Thousand Five Hundred Dollars
`($32,500).
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`“Business Day” means a day, other than a Saturday or Sunday, on which commercial
`banks in San Francisco, CA are open for the general transaction of business.
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`“Buyer” has the meaning set forth in the Recitals.
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`“Claim of Notice” has the meaning set forth in Section 5.5.
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`“Closing” has the meaning set forth in Section 2.8.
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`“Closing Date” has the meaning set forth in Section 2.8.
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`“Closing Holdback” means two hundred and fifty thousand dollars ($250,000).
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`“Closing Holdback Escrow Account” means the account with the Escrow Agent into
`which the Closing Holdback is deposited.
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`“Code” shall mean the federal Internal Revenue Code of 1986, as amended and as in
`effect as of the date hereof and, unless otherwise specified, the relevant Treasury Regulations
`promulgated thereunder.
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`“Contract” means, with respect to any Person, any contract, agreement, deed, mortgage,
`lease, sublease, license, sublicense or other commitment, promise, undertaking, obligation,
`arrangement, instrument or understanding, whether written or oral, to which or by which such
`Person is a party or otherwise subject or bound or to which or by which any property, business,
`operation or right of such Person is subject or bound.
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`“Contemplated Transactions” means the transactions contemplated by this Agreement
`and the Escrow Agreement that are anticipated to be consummated at the Closing and the
`payment of fees and expenses relating to such transactions.
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`“Dispute Notice” has the meaning set forth in Section 2.6(b).
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`“Escrow Agent” shall mean Capital City Escrow, Inc., in its capacity as escrow agent.
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`“Escrow Agreement” shall mean the Escrow Agreement to be entered into by and among
`Buyer, the Escrow Agent and the Seller Parties, in the form attached hereto as Exhibit A.
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`“Excluded Assets” has the meaning set forth in Section 2.2.
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`“Excluded Contracts” has the meaning set forth in Section 2.2(b).
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`“Estimated Net Working Capital” has the meaning set forth in Section 2.6(a).
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`“Financial Statements” has the meaning set forth in Section 3.4.
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`“GAAP” means United States generally accepted accounting principles as applied by the
`Seller Parties on a consistent basis.
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`“Governing Documents” means the legal document(s) by which any Person (other than
`an individual) establishes its legal existence or which govern its internal affairs.
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`“Governmental Entity” means any United States (a) federal, state, local, municipal, or
`other government, (b) governmental or quasi-governmental entity of any nature (including any
`governmental agency, branch, department, official, or entity and any court or other tribunal) or
`(c) body exercising, or entitled to exercise any administrative, executive, judicial, legislative,
`police, regulatory, or Taxing Authority or power of any nature, including any arbitral tribunal.
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`“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation,
`ruling, decision, verdict, determination or award made, issued or entered by or with any
`Governmental Entity.
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` “Intellectual Property” means all patents, patent applications, trademarks and service
`marks (and all goodwill associated therewith and all registrations and applications therefor),
`trade names, copyrights (and all registrations and applications therefor), Internet domain names,
`software, trade secrets, and know-how, in each case, to the extent protectable by applicable Law.
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`“Intellectual Property Assets” means all Intellectual Property that is owned by the Seller
`Parties and used in the operation of the Restaurants as currently operated.
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`“Intellectual Property Licenses” means all licenses, sublicenses and other agreements by
`or through which other Persons grant the Seller Parties’ exclusive or non-exclusive rights or
`interests in or to any Intellectual Property that is used in the operation of the Restaurants as
`currently operated.
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`“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution,
`treaty, common law, judgment, decree, other requirement or rule of law of any Governmental
`Entity, including any Governmental Order or any Permit granted under any of the foregoing.
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`“Layers” has the meaning set forth in the Recitals.
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`“Leases” means, with respect to each Restaurant, the lease agreement listed opposite the
`address of such Restaurant on Schedule 1.1(a).
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`“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge.
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`“Liquor License” means the Permits held or used by either Seller Party in connection
`with the sale and service of alcoholic beverages that are listed on Schedule 1.1(b).
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`“Material Adverse Effect” means a material adverse effect upon the Restaurants,
`Purchased Assets or financial condition or results of operations of the Seller Parties, taken as a
`whole; provided, however, that any adverse change, event or effect arising from or related to the
`following shall not be taken into account in determining whether a Material Adverse Effect has
`occurred (a) conditions affecting the United States economy generally, (b) any national or
`international political or social conditions, including the engagement by the United States in
`hostilities, whether or not pursuant to the declaration of a national emergency or war, or the
`occurrence of any military or terrorist attack upon the United States, or any of its territories,
`possessions, or diplomatic or consular offices or upon any military installation, equipment or
`personnel of the United States, (c) financial, banking or securities markets (including any
`disruption thereof and any decline in the price of any security or any market index), (d) changes
`in GAAP, (e) changes in any applicable Law or other binding directives issued by any
`Governmental Entity, (f) any existing event or occurrence or circumstance of which Buyer has
`knowledge as of the date hereof, (g) any change that is generally applicable to the industries or
`markets in which the Seller Parties operates, (h) the announcement of the transactions
`contemplated by this Agreement or the identity of or any actions taken by or at the direction of
`Buyer, (i) any failure by the Seller Parties to meet any internal or published projections, forecasts
`or revenue or earnings predictions for any period ending on or after the date of this Agreement,
`(j) the taking of any action contemplated by this Agreement, including the completion of the
`Contemplated Transactions and (k) any adverse change in or effect on the operation of the
`Restaurants that is cured prior to the Closing.
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`“MSA” means that certain Management Services Agreement, entered into as of the date
`hereof, by and among Buyer, Layers and Opco.
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`“Opco” has the meaning set forth in the Recitals.
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`“Ordinary Course of Business” means an action taken by any Person in the ordinary
`course of such Person’s business that is consistent with the past customs and practices of such
`Person (including past practice with respect to quantity, amount, magnitude and frequency,
`standard employment and payroll policies and past practice with respect to management of
`working capital and the making of capital expenditures) and that is taken in the ordinary course
`of the normal day-to-day operations of such Person.
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`“Net Working Capital” means the consolidated current assets of the Sellers Parties
`(excluding (x) any prepaid expenses related to or incurred in connection with the Contemplated
`Transactions, (y) cash, cash equivalents, securities and bank accounts and (z) any Tax assets)
`minus the consolidated current liabilities of the Seller Parties (excluding (x) any expenses
`incurred in connection with or related to the Contemplated Transactions and (y) any Tax
`liabilities), as of the close of business on the date immediately preceding the Closing Date.
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`“Net Working Capital Holdback” means two hundred and fifty thousand dollars
`($250,000).
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`“Net Working Capital Holdback Escrow Account” means the account with the Escrow
`Agent into which the Net Working Capital Holdback is deposited.
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`“Notice” has the meaning set forth in Section 5.3(c).
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`“Outside Date” has the meaning set forth in Section 7.1(b).
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`“Party” or “Parties” has the meaning set forth in the Recitals.
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`“Permits” means, with respect to any Person, any license, franchise, permit, consent,
`approval, right, privilege, certificate or other similar authorization issued by, or otherwise
`granted by, any Governmental Entity to which or by which such Person is subject or bound or to
`which or by which any property, business, operation or right of such Person is subject or bound.
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`“Permitted Liens” means (a) mechanic’s, materialmen’s, carriers’, repairers’ and other
`Liens arising or incurred in the Ordinary Course of Business for amounts that are not yet
`delinquent or are being contested in good faith, (b) Liens for Taxes, assessments or other
`governmental charges not yet due or payable as of the Closing Date or which are being contested
`in good faith, (c) encumbrances and restrictions on real property (including easements,
`covenants, conditions, rights of way and similar restrictions) that do not materially interfere with
`the applicable Seller Party’s present uses or occupancy of such real property, (d) Liens which
`would not reasonably be expected to be material, (e) Liens granted to any lender at the Closing in
`connection with any financing by Buyer of the Contemplated Transactions, (f) zoning, building
`codes and other land use laws regulating the use or occupancy of real property or the activities
`conducted thereon which are imposed by any Governmental Entity having jurisdiction over such
`real property and which are not violated by the current use or occupancy of such real property or
`the operation of the Restaurants or any violation of which would not have had or reasonably be
`expected to have a Material Adverse Effect, (g) matters that would be disclosed by an accurate
`survey or inspection of the real property, (h) Liens described on Schedule 1.1(c) and (i) any
`right, interest, Lien or title of a licensor, sublicensor, licensee, sublicensee, lessor or sublessor
`under any license, lease or other similar agreement or in the property being leased or licensed.
`
`“Person” means an individual, partnership, corporation, limited liability company, joint
`stock company, unincorporated organization or association, trust, joint venture, association or
`other similar entity, whether or not a legal entity.
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`“Proposed Final Closing Statement” has the meaning set forth in Section 2.6(b).
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`“Purchase Price” has the meaning set forth in Section 2.4.
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`“Purchased Assets” has the meaning set forth in Section 2.1.
`
`“Representative” means, with respect to any Person, any director, officer, employee,
`agent, manager, consultant, advisor, or other representative of such Person, including legal
`counsel, accountants, and financial advisors.
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` “Seller Parties” has the meaning set forth in the Recitals.
`
` “Seller’s Knowledge” means the actual knowledge of William Freeman, Rich Burns,
`Ryan Greene and Billy Logan.
`
` “Solvent” means, with respect to any Person, that (i) the sum of the assets, at a fair
`market valuation, of such Person and its Subsidiaries (on a consolidated basis) and of each of
`them (on a stand-alone basis) exceeds their respective liabilities, (ii) each of such Person and its
`Subsidiaries (on a consolidated basis) and each of them (on a stand-alone basis) has not incurred,
`debts or other liabilities beyond its ability to pay such debts and other liabilities as such debts
`and other liabilities mature or become due and (iii) each of such Person and its Subsidiaries (on a
`consolidated basis) and each of them (on a stand-alone basis) does not have an unreasonably
`small amount of capital for the business in which it is engaged or will be engaged.
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`“Restaurants” means the restaurants listed on Schedule 1.1(a).
`
`“Tangible Personal Property” has the meaning set forth in Section 2.1(e).
`
`“Target Net Working Capital” means nine hundred and fifty thousand Dollars
`($950,000).
`
`“Tax” means any federal, state, local or foreign income, gross receipts, franchise,
`estimated, alternative minimum, add-on minimum, sales, use, transfer, real property gains,
`registration, value added, excise, natural resources, severance, stamp, occupation, windfall
`profits, environmental (under Section 59A of the Code), customs, duties, real property, personal
`property, capital stock, social security (or similar), unemployment, disability, payroll, license,
`employee, withholding or other tax, including any interest, penalties or additions to tax in respect
`of the foregoing (whether disputed or not).
`
`“Tax Proceeding” means any audit, examination, contest, litigation or other Action with
`or against any Taxing Authority.
`
` “Tax Return” means any return, declaration, election, report, claim for refund or
`information return or statement filed or required to be filed with any Taxing Authority relating to
`Taxes, including any attachment or schedule thereto or amendment thereof.
`
`“Taxing Authority” means any Governmental Entity responsible for the administration or
`the imposition of any Tax.
`
`“Transfer Taxes” means any sales, use, stock transfer, value added, excise, real property
`transfer, transfer, stamp, registration, documentary, recording or similar duties or Taxes together
`with any interest thereon, penalties, fines, costs or additions to Tax with respect thereto incurred
`in connection with the Contemplated Transactions.
`
`“Treasury Regulations” means the regulations promulgated under the Code by the United
`States Department of the Treasury.
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`ARTICLE II
`PURCHASE AND SALE OF THE ASSETS
`
`Section 2.1. Description of the Assets. Upon the terms and subject to the conditions
`set forth in this Agreement, at the Closing, the Seller Parties shall sell, transfer and deliver to
`Buyer and Buyer shall purchase, acquire and accept, all of the Seller Parties’ right, title and
`interest in and to the following assets, properties, inventory, goodwill and rights of the Seller
`Parties’ used or usable in connection with the operation of the Restaurants as operated as of the
`Closing Date (collectively, the “Purchased Assets”), free and clear of any Liens other than
`Permitted Liens:
`
`(a)
`and cash equivalents;
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`solely to the extent physically located at any of the Restaurants, all cash
`
`(b)
`all inventory, finished goods, raw materials, work in progress, packaging,
`supplies, parts and other inventories and supplies owned and held in inventory by the Seller
`Parties’ and physically located at the Restaurants;
`
`(c)
`all rights and interests of the Seller Parties in or pursuant to all Contracts
`to which the Seller Parties are party that relate to the operation of the Restaurants, including the
`Leases and the Intellectual Property Licenses, other than the Excluded Contracts (col