EXHIBIT A 0191279.02
STOCK EXCHANGE AGREEMENT
This STOCK EXCHANGE AGREEMENT (this "Agreement") is made as
of the 24th day of March, 1999 by and between ELMER'S
RESTAURANTS, INC., an Oregon corporation (the "Exchanging
Corporation"), GRASS VALLEY LTD., INC., an Oregon corporation
(the "Exchanged Corporation"), and each shareholder of the
Exchanged Corporation listed on the attached Exhibit A
(individually, a "shareholder of the Exchanged Corporation" and
collectively, the "shareholders of the Exchanged Corporation").
Recitals:
A. The shareholders of the Exchanged Corporation
previously granted certain option rights to a predecessor in
interest of the Exchanging Corporation. The Exchanging
Corporation now desires to exercise those rights.
B. The Exchanging Corporation and the shareholders of the
Exchanged Corporation desire to consummate an exchange of all of
the outstanding shares of the Exchanged Corporation for certain
of the shares of the Exchanging Corporation and certain other
consideration on the terms and conditions contained in this
Agreement.
Agreements:
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Share Exchange. The Exchanging Corporation shall exchange
shares of the common stock of the Exchanging Corporation and
certain other consideration for all of the outstanding shares of
the Exchanged Corporation held by the shareholders of the
Exchanged Corporation.
2. Manner and Basis of Exchanging Shares. For each share of
the Exchanged Corporation owned by a shareholder of the Exchanged
Corporation, the shareholder of the Exchanged Corporation shall
receive shares of common stock of the Exchanging Corporation
valued at $5,230 (based on the average last quoted price in the
"Wall Street Journal" of shares of the Exchanging Corporation's
common stock during the thirty (30) trading days immediately
preceding the Closing Date (defined in Section 3)). On the
Closing Date, the shareholders of the Exchanged Corporation shall
transfer all of the shares in the Exchanged Corporation to the
Exchanging Corporation, and the Exchanging Corporation within ten
(10) days following the Closing Date shall issue to each such
shareholder a stock certificate representing shares of the
Exchanging Corporation in accordance with the preceding sentence.
On the Closing Date, the Exchanging Corporation shall also
deliver to the shareholders of the Exchanged Corporation funds in
the amount of $110,000.
3. Closing. The Exchanging Corporation shall designate a date
(the "Closing Date") that is no later than four months following
the date of this Agreement. On the Closing Date, the
Page 1 STOCK EXCHANGE AGREEMENT
following actions shall occur at the offices of the Exchanging
Corporation in Portland, Oregon (or at such other location as the
parties may designate):
3.1 The Exchanged Corporation shall deliver to the Exchanging
Corporation resolutions of the Board of Directors and
shareholders of the Exchanged Corporation approving the
transactions contemplated by this Agreement.
3.2 The Exchanging Corporation shall deliver to the Exchanged
Corporation resolutions of the Board of Directors of the
Exchanging Corporation approving the transactions contemplated by
this Agreement.
3.3 The Exchanging Corporation and the Exchanged Corporation and
the shareholders of the Exchanged Corporation shall each execute
and deliver a certificate confirming to the other that their
representations and warranties contained in this Agreement are
true and correct as if made on and as of the Closing Date.
3.4 Certificates evidencing shares of the Exchanged Corporation
shall be surrendered. Certificates evidencing shares of the
Exchanging Corporation shall be delivered in accordance with
Section 2 above within ten (10) days following the Closing Date.
3.5 The Exchanging Corporation shall deliver to the shareholders
of the Exchanged Corporation funds in the amount set forth in
Section 2 above.
3.6 The parties shall take such other actions and execute and
deliver such other documents as may be reasonably required in
order to close the transactions contemplated by this Agreement,
including, without limitation, execution by the shareholders of
the Exchanged Corporation of investor questionnaires or similar
instruments relating to the fact that the shares of the
Exchanging Corporation to be issued to the shareholders of the
Exchanged Corporation will not be registered under applicable
securities laws.
4. Actions Prior to Closing Date. During the period prior to
the Closing Date, the Exchanged Corporation and the shareholders
of the Exchanged Corporation agree to take (or to cause the
Exchanged Corporation to take) the following actions:
4.1 To own and operate its assets and properties in the ordinary
course of business in accordance with past practice;
4.2 To maintain all licenses and permits applicable to its
assets and properties in full force and effect and to comply will
all laws, rules, regulations, and ordinances applicable to its
assets and properties;
4.3 To refrain from transferring, encumbering, pledging,
assigning, or otherwise disposing of its assets and properties
(or engaging in negotiations or discussions regarding the same)
or entering into additional contracts or commitments except in
the ordinary course of business in accordance with past practice
(provided that it may dispose of items of equipment which are
replaced with items of comparable value);
Page 2 STOCK EXCHANGE AGREEMENT
4.4
To provide such financial information relating to the
performance of its assets and properties as the Exchanging
Corporation may reasonably request from time to time and to grant
reasonable access to its assets and properties and the minute
book, stock ledger, and corporate books and records of the
Exchanged Corporation to representatives of the Exchanging
Corporation from time to time;
4.5 To refrain from transferring the Exchanged Shares (defined
in Section 5.2) (or engaging in negotiations or discussions
regarding the same) other than pursuant to this Agreement,
amending the Exchanged Corporation's Articles of Incorporation or
Bylaws, or in any other manner altering the capital structure of
the Exchanged Corporation, whether by issuing additional shares
of capital stock of the Exchanged Corporation or options,
warrants, or other securities convertible into or exchangeable
for shares of capital stock of the Exchanged Corporation,
redeeming shares of capital stock of the Exchanged Corporation,
or otherwise; and
4.6 To cause the Exchanged Corporation to maintain a current
ratio of not less than 1:1 and to refrain from incurring
additional indebtedness other than trade payables incurred in the
ordinary course of business. In the event the Exchanged
Corporation's current ratio exceeds 1:1 on the Closing Date, the
Exchanging Corporation and the Exchanged Corporation shall
cooperate to determine the amount of the excess, and the
Exchanging Corporation agrees to compensate the shareholders of
the Exchanged Corporation for the amount so determined within
sixty (60) days following the Closing Date.
5. Representations and Warranties of the Exchanged Corporation.
As a material inducement to the Exchanging Corporation to enter
into this Agreement, each of the shareholders of the Exchanged
Corporation, jointly and severally, hereby represents and
warrants to, and covenants and agrees with, the Exchanging
Corporation as follows:
5.1 The Exchanged Corporation is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Oregon. The Exchanged Corporation does not own,
directly or indirectly, any interest or investment (whether
equity or debt) in any corporation, partnership, business, trust,
or other entity. The Exchanged Corporation has full corporate
power and authority and all governmental licenses,
authorizations, consents, and approvals required to carry on the
business it now conducts and to own the assets and properties it
now owns. Neither the ownership of its properties nor the nature
of its business requires the Exchanged Corporation to be
qualified in any jurisdiction other than the state of its
incorporation.
5.2 The authorized capital stock of the Exchanged Corporation
consists of 200 shares of common stock, of which 200 shares are
outstanding. The outstanding shares of the Exchanged Corporation
(the "Exchanged Shares") are duly authorized and validly issued
and are fully paid, nonassessable, and without par value. The
Exchanged Corporation has not authorized or issued, or committed
to issue (a) any capital stock or other securities not set forth
in this Section 5.2 or (b) any options, warrants, or other rights
to acquire or convert any obligations into, any shares of capital
stock or other securities of the Exchanged Corporation.
Page 3 STOCK EXCHANGE AGREEMENT
5.3
The shareholders of the Exchanged Corporation
identified on Exhibit A have, and on the Closing Date shall have,
good and marketable title to the Exchanged Shares in the amounts
set forth opposite their names, free and clear of liens, claims,
encumbrances, restrictions, options, and security interests of
any kind (collectively, "Liens").
5.4 The Exchanged Corporation and each of the shareholders of
the Exchanged Corporation has full right, power, and authority,
without the consent or authorization of any third party (other
than those identified on Schedule 5.4), to execute, deliver, and
perform its obligations under this Agreement, which constitutes
its legal, valid and binding obligation, enforceable in
accordance with its terms, except that (a) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium,
or other similar laws now or hereafter in effect relating to
creditors' rights and (b) injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding may be brought. Neither
the Exchanged Corporation nor its agents or representatives have
engaged any broker or finder in connection with the transactions
contemplated by this Agreement.
5.5 All taxes, licensing fees, and other governmental fees,
assessments, and charges pertaining to the ownership and
operation of the assets and properties of the Exchanged
Corporation have been paid in full. The assets and properties of
the Exchanged Corporation have been owned and operated in
compliance in all material respects with all applicable laws,
rules, regulations, ordinances, and governmental authorizations
and permits. There is no action, suit, inquiry, proceeding, or
investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to
the best knowledge of the Exchanged Corporation, threatened,
against or involving or arising in connection with the Exchanged
Corporation or their assets or properties, other than those that
are reasonably expected by the Exchanged Corporation to be
resolved without a material adverse effect on the Exchanged
Corporation. The shareholders of the Exchanged Corporation are
not aware of any facts which would form the basis for any
material claim against the Exchanged Corporation.
5.6 There are no contracts, agreements, leases, or other
commitments relating to the ownership and operation of the assets
and properties of the Exchanged Corporation other than those
identified on Schedule 5.6 (the "Contracts"). Except to the
extent described on Schedule 5.6, the Contracts are freely
assignable to the Exchanging Corporation. The Exchanged
Corporation has previously provided the Exchanging Corporation
with true and correct copies of the Contracts, all of which are
unamended and in full force and effect and none of which is in
default by either party. The execution, delivery, and
performance by the Exchanged Corporation of this Agreement does
not (a) conflict with, result in a breach of violation of, or
constitute a default under, the Contracts, (b) constitute a
violation of any judgment, order, or decree applicable to the
Exchanged Corporation or any of their assets or properties, or
(c) result in the creation of any Lien on any of its assets or
properties.
5.7 The Exchanged Corporation has not received written
notification from any governmental authority stating that any
real property owned or leased by the Exchanged Corporation or the
Subsidiary (the "Real Property") or any part thereof is
(a) targeted for clean-up or remediation of Hazardous Substances
(hereinafter defined) or (b) not otherwise in
Page 4 STOCK EXCHANGE AGREEMENT
compliance with applicable Environmental Laws (hereinafter
defined). To the best knowledge of the Exchanged Corporation,
there are no Hazardous Substances on, in, or under the Real
Property or any part thereof which are in violation of applicable
Environmental Laws, and there are no underground storage tanks on
or under the Real Property. The Exchanged Corporation has not
used the Real Property to store or dispose of any Hazardous
Substances. The Exchanged Corporation, and, to the best
knowledge of the Exchanged Corporation, all previous owners and
operators of the Real Property, have owned and operated the Real
Property in compliance with all applicable Environmental Laws.
The term "Hazardous Substance" means any substance or material
defined or designated as hazardous or toxic (or by any similar
term) under any Environmental Law, including petroleum products
and friable materials containing more than one percent (1%)
asbestos by weight. The term "Environmental Law" means any
federal, state, or local law, ordinance, rule, or regulation
relating to pollution or protection of the environment or actual
or threatened releases, discharges, or emissions, into the
environment, including the so-called Comprehensive Environmental
Response, Compensation, and Liability Act; Resource Conservation
and Recovery Act; the Superfund Amendments and Reauthorization
Act; Federal Water Pollution Control Act; Clean Air Act; and all
comparable state statutes.
5.8 The financial information provided by the shareholders of
the Exchanged Corporation and the Exchanged Corporation relating
to the assets, properties, and business of the Exchanged
Corporation is true and complete. The Exchanged Corporation has
no indebtedness outstanding other than trade payables incurred in
the ordinary course of business. There are no attachments,
executions, assignments for the benefit of creditors, or
proceedings in bankruptcy, or under any other debtor relief laws
contemplated by or pending or, to the best knowledge of the
shareholders of the Exchanged Corporation, threatened against the
shareholders of the Exchanged Corporation, the Exchanged
Corporation, or the assets, properties, or business of the
Exchanged Corporation. Except as and to the extent reflected or
reserved against in the latest balance sheet for the Exchanged
Corporation provided to the Exchanging Corporation (or its
predecessor in interest) by the shareholders of the Exchanged
Corporation or the Exchanged Corporation, and except for
liabilities arising in the ordinary course of business since the
date of such balance sheet, the Exchanged Corporation does not
have any accrued or contingent liability arising out of any
transaction or state of facts existing prior to the date hereof
(or the Closing Date, as applicable) that could reasonably be
expected to require the Exchanged Corporation to pay more than
$5,000.
5.9 Within the times and in the manner prescribed by law, the
Exchanged Corporation has filed all federal, state, and local tax
returns required by law and has paid all taxes, assessments, and
penalties due and payable. There are no present disputes about
taxes of any nature payable by the Exchanged Corporation and no
federal or other tax return has been audited.
5.10 The Exchanged Corporation has good and marketable title to
all of its assets free and clear of all liens, charges, and
encumbrances, claims, easements, rights of way, covenants,
conditions, or restrictions. The locations at which
substantially all of the operating assets of the Exchanged
Corporation are located are listed on Schedule 5.10. All real
property and tangible personal property of the Exchanged
Corporation that is necessary to the operation of
Page 5 STOCK EXCHANGE AGREEMENT
its business is in good operating condition and repair in all
material respects, ordinary wear and tear excepted. No
shareholder of the Exchanged Corporation; nor any officer,
director, or employee of the Exchanged Corporation, nor any
spouse, child, or other relative of any of these persons, owns or
has any interest, directly or indirectly, in any of the real or
personal property owned by or leased to the Exchanged
Corporation.
5.11 The Exchanged Corporation holds all necessary licenses or
other rights necessary for the operation of its business as now
conducted by it, and each such license or right is presently
valid and effective.
5.12 No representation or warranty made or given by the
shareholders of the Exchanged Corporation to the Exchanging
Corporation in connection with the transactions contemplated by
this Agreement contains any untrue statement of material fact or
omits to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the
statements herein or therein not misleading.
6. Representations and Warranties of the Exchanging
Corporation. The Exchanging Corporation hereby represents and
warrants to the Exchanged Corporation and the shareholders of the
Exchanged Corporation as follows:
6.1 The Exchanging Corporation has full right, power, and
authority, without the consent or authorization of any third
party (other than those identified on Schedule 6.1), to execute,
deliver, and perform its obligations under this Agreement, which
constitutes the legal, valid, and binding obligation of the
Exchanging Corporation, enforceable in accordance with its terms,
except that (a) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now
or hereafter in effect relating to creditors' rights and
(b) injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before
which any proceeding may be brought. The Exchanging Corporation
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Oregon. Neither the
Exchanging Corporation nor any of its agents or representatives
has engaged any broker or finder in connection with the
transactions contemplated by this Agreement.
6.2 The execution, delivery, and performance by the Exchanging
Corporation of this Agreement does not constitute a violation of,
or constitute a default under, any agreement, instrument, or
commitment to which the Exchanging Corporation is a party or by
which the Exchanging Corporation is bound.
6.3 Upon the issuance thereof, the shares to be delivered to the
shareholders of the Exchanged Corporation pursuant to Section 2
above shall duly be authorized, validly issued, and fully paid.
7. Conditions to Obligations of Exchanging Corporation. The
obligations of the Exchanging Corporation to consummate the
transactions contemplated by this Agreement are subject to
satisfaction of or compliance with each of the following
conditions:
Page 6 STOCK EXCHANGE AGREEMENT
7.1
No suit, action, investigation, inquiry, or other
proceeding by any governmental authority or other person or
entity shall have been instituted which questions or challenges
the validity or legality of the transactions contemplated by this
Agreement.
7.2 All approvals, consents, and authorizations shown on
Schedule 6.1 shall have been obtained.
7.3 Subject to any changes that have been waived in writing by
the Exchanging Corporation, (a) the representations and
warranties of the shareholders of the Exchanged Corporation set
forth in this Agreement shall have been and shall be true and
correct in all material respects on the Closing Date as though
made on and as of the Closing Date and (b) neither the Exchanged
Corporation nor its shareholders shall have violated in any
material respect any covenant or agreement by them in this
Agreement and shall have performed in all material respects all
obligations to be performed by them under this Agreement prior to
or as of the Closing Date.
8. Conditions to Obligations of Exchanged Corporation. The
obligations of the Exchanged Corporation and its shareholders to
consummate the transactions contemplated by this Agreement are
subject to satisfaction of or compliance with each of the
following conditions:
8.1 No suit, action, investigation, inquiry, or other proceeding
by any governmental authority or other person or entity shall
have been instituted which questions or challenges the validity
or legality of the transactions contemplated by this Agreement.
8.2 All approvals, consents, and authorizations shown on
Schedule 5.4 shall have been obtained.
8.3 Subject to any changes that have been waived in writing by
the Exchanged Corporation, (a) the representations and warranties
of the Exchanging Corporation set forth in this Agreement shall
have been and shall be true and correct in all material respects
on the Closing Date as though made on and as of the Closing Date
and (b) the Exchanging Corporation shall not have violated in any
material respect any covenant or agreement by it in this
Agreement and shall have performed in all material respects all
obligations to be performed by it under this Agreement prior to
or as of the Closing Date.
9. Right to Termination. This Agreement may be terminated and
the proposed transactions abandoned:
9.1 At any time, by mutual consent of the parties;
9.2 At the option of the Exchanging Corporation and by notice to
the Exchanged Corporation stating the reasons for such action,
(a) in the event the closing of the transactions contemplated by
this Agreement shall not have occurred on the date designated in
Section 3 (or any other date that the parties may designate by
mutual agreement) by reason of the failure of any of the
conditions set forth in Section 7 or (b) at any time prior to the
closing of the
Page 7 STOCK EXCHANGE AGREEMENT
transactions contemplated by this Agreement, in the event of a
material breach of any of the representations, warranties or
covenants of the Exchanged Corporation or its shareholders; or
9.3 At the option of the shareholders of the Exchanged
Corporation and by notice to the Exchanging Corporation stating
the reasons for such action, (a) in the event the closing of the
transactions contemplated by this Agreement shall not have
occurred on the date designated in Section 3 (or any other date
that the parties may designate by mutual agreement) by reason of
the failure of any of the conditions set forth in Section 8 or
(b) at any time prior to the closing of the transactions
contemplated by this Agreement, in the event of a material breach
of any of the representations, warranties or covenants of the
Exchanging Corporation set forth in this Agreement.
9.4 Termination by a party pursuant to Section 9.2 or 9.3 shall
not adversely affect such party's other available rights and
remedies. The rights and remedies of the party terminating this
Agreement pursuant to Section 9.2 or 9.3, whether contained in
this Agreement or conferred pursuant to applicable law or in
equity, shall be cumulative and concurrent and may be pursued
singly, successively, or together, at the discretion of the
holder thereof.
10. Indemnification. Subject to the limitations set forth in
this Section 10 and in Section 11.6, each of the Exchanging
Corporation, on the one hand, and the shareholders of the
Exchanged Corporation, on the other, shall indemnify the other
and the other's employees, agents, officers, directors, heirs,
personal representatives, administrators, successors, permitted
assigns, and affiliates from and against any and all costs,
damages, expenses, and liabilities (including reasonable
attorneys' fees) incurred or sustained in connection with or
resulting from (a) breach of such party's representations and
warranties under this Agreement or (b) failure to perform such
party's other obligations under this Agreement; provided,
however, that the maximum liability of the Exchanging
Corporation, on the one hand, and the shareholders of the
Exchanged Corporation, on the other, under this sentence shall
not exceed $25,000. In addition, the Exchanging Corporation
agrees to indemnify the shareholders of the Exchanged Corporation
and their heirs, personal representatives, and administrators
from and against any and all costs, damages, expenses, and
liabilities (including reasonable attorneys' fees) arising from
or relating to the ownership or operation of the assets and
properties of the Exchanged Corporation on or after the Closing
Date, and shareholders of the Exchanged Corporation agree to
indemnify the Exchanging Corporation and the Exchanging
Corporation's employees, agents, officers, directors, successors,
permitted assigns, and affiliates from any and all costs,
damages, expenses, and liabilities (including reasonable
attorneys' fees) arising from or relating to the ownership or
operation of the assets and properties of the Exchanged
Corporation prior to the Closing Date; provided, however, that
the maximum liability of the Exchanging Corporation, on the one
hand, and the shareholders of the Exchanged Corporation, on the
other, under this sentence shall not exceed $25,000.
11. General Provisions:
11.1 Binding Effect. This Agreement may not be assigned by
either of the parties without the written consent of the other
party. Subject to the foregoing restrictions, this
Page 8 STOCK EXCHANGE AGREEMENT
Agreement shall be binding upon and inure to the benefit of the
parties and their respective heirs, personal representatives,
administrators, successors, and permitted assigns.
11.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon.
11.3 Entire Agreement. This Agreement, including the schedules
and exhibits hereto (which are incorporated herein by reference),
contains the entire agreement between the Exchanging Corporation
and the Exchanged Corporation with respect to the transactions
contemplated by this Agreement and supersedes all prior and
contemporaneous agreements between them with respect to such
transactions. The parties agree that the terms of this Agreement
are confidential and will not be disclosed, other than to each
party's officers, directors, shareholders, accountants,
attorneys, and lenders, without the consent of the other, except
to the extent required under applicable law and regulations.
11.4 Amendment. This Agreement may not be modified or amended
except by the written agreement of the party entitled to the
benefit of the provision against whom enforcement is sought.
11.5 Severability. If any term or provision of this Agreement
shall to any extent be invalid or unenforceable, the remainder of
this Agreement shall not be affected thereby, and each term or
provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11.6 Survival. All representations and warranties herein, and
all covenants herein (the full performance of which is not
required to or at the Closing Date), shall survive the Closing
Date and be fully enforceable thereafter for a period of one year
following the Closing Date.
11.7 Notices. Notices under this Agreement shall be in writing
and shall be effective when actually delivered or three business
days after deposit in the United States Mails, certified, return
receipt requested, directed to the other party at the address set
forth below, or to such other address and/or person as the party
may indicate by written notice to the other party:
Page 9 STOCK EXCHANGE AGREEMENT
If to the Exchanged Xxxxxxx Xxxxxxx
Corporation or the 14450 Quaker Hill
Shareholders of the Crossroads
Exchanged Corporation: Xxxxxx Xxxx, XX 00000
If to the Exchanging Elmer's Restaurants,
Corporation Inc..
00000 XX Xxxxx Xx.
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X.
Service
11.8 Waiver. Failure of any party at any time to require
performance of any provision of this Agreement shall not limit
such party's right to enforce such provision, nor shall any
waiver of any breach of any provision of this Agreement
constitute a waiver of any succeeding breach of such provision or
a waiver of such provision itself.
11.9 Attorney's Fees. If a suit, action, or other proceeding of
any nature whatsoever (including any proceeding under the U.S.
Bankruptcy Code) is instituted to enforce or interpret any
provision of this Agreement or in connection with any dispute
hereunder, the prevailing party shall be entitled to recover such
amount as the court may adjudge reasonable as attorney's fees and
all other fees, costs, and expenses of litigation at trial or any
appeal or review, in addition to all other amounts provided by
law.
11.10 Remedies. In the event of a default under this
Agreement, the non-defaulting party shall have all rights and
remedies available under this Agreement, to the fullest extent of
applicable law and equitable principles, subject to the
limitations set forth in Section 10.
11.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which together shall constitute
one and the same agreement.
11.12 Further Assurances. From time to time, upon request
of either party, the other party shall execute, acknowledge, and
deliver such documents and undertake such actions as may be
reasonably requested in order to fulfill the transactions
contemplated by this Agreement.
11.13 Expenses. Each party shall bear all costs and
expenses incurred by such party in connection with this
transaction, including, without limitation, legal expenses.
Page 10 STOCK EXCHANGE AGREEMENT
IN WITNESS WHEREOF, the parties have entered into this
Merger Agreement as of the date first set forth above.
The Exchanged Corporation: GRASS VALLEY LTD., INC., an
Oregon corporation
By:_/s/_Gary Weeks____________
Title:_President______________
The Exchanging Corporation: ELMER'S RESTAURANTS, INC., an
Oregon corporation
By:_/s/_William Service_______
Title:_CEO____________________
The Shareholders of the Exchanged
Corporation:
__/s/_Gary Weeks______________
Xxxx Xxxxx
__/s/_Richard Buckley_________
Xxxxxxx Xxxxxxx
Page 11 STOCK EXCHANGE AGREEMENT
EXHIBIT A
Shareholders of Exchanged Corporation
Shareholder Number of
Shares
Xxxx Xxxxx 100
Xxxxxxx Xxxxxxx 100
[Schedules omitted]
