SERIES D CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
LA SALSA HOLDING CO., a Delaware corporation
January 12, 1996
TABLE OF CONTENTS
Exhibit A Amended and Restated Certificate of Incorporation
Exhibit B Form of Series D Convertible Preferred Stock Warrant
Exhibit C Fourth Amended and Restated Restricted Stock Agreement
Exhibit D Fourth Amended and Restated Registration Rights Agreement
Exhibit E Opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx
Schedule 1.1 Schedule of Investors
Schedule 2 Schedule of Exceptions
Schedule 2.4(c) Schedule of Shareholders
Schedule 2.13 Patents and Trademarks
SERIES D CONVERTIBLE PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
THIS SERIES D CONVERTIBLE PREFERRED STOCK AND WARRANT PURCHASE
AGREEMENT is made as of the 12th day of January, 1996, by and among La Salsa
Holding Co., a Delaware corporation (the "Company"), and each of the Investors
listed on Schedule 1.1 hereto (each of which is herein referred as an
"Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
Purchase and Sale of Stock and Warrants
Sale and Issuance of Stock
The Company has adopted and filed with the Secretary of State of Delaware
the Amended and Restated Certificate of Incorporation in the form attached
hereto as Exhibit A (the "Restated Certificate").
Subject to the terms and conditions of this Agreement, each Investor
agrees, severally, to purchase at the Closing and the Company agrees to sell and
issue to each Investor at the Closing, that number of shares of the Company's
Series D Convertible Preferred Stock set forth opposite each Investor's name on
Schedule 1.1 hereto for the purchase price set forth thereon.
Sale and Issuance of Warrants
Subject to the terms and conditions of this Agreement, each Investor
agrees, severally, to purchase at the Closing and the Company agrees to sell and
issue to each Investor at the Closing, a warrant, in the form attached hereto as
Exhibit B (a "Warrant"), to purchase that number of shares of the Company's
Series D Convertible Preferred Stock set forth opposite such Investor's name on
Schedule 1.1 hereto (the "Warrant Shares") at an exercise price of $1.50 per
share for the purchase price set forth opposite such Investor's name on Schedule
1.1 hereto.
Closing
The purchase and sale of the Series D Convertible Preferred Stock and the
Warrants shall take place at the offices of Xxxxxxx, Phleger & Xxxxxxxx, Two
Embarcadero Place, 2200 Geng Road, Palo Alto, California, by mail or facsimile
transmission, or by deposit in and release from escrow of this Agreement and the
consideration, instruments and documents contemplated hereby, on the date hereof
or at such other time and place and in such other manner as the Company and each
of the Investors mutually agree upon orally or in writing (which time and place
are designated as the "Closing"). At the Closing the Company shall deliver to
each Investor certificates representing the Series D Convertible Preferred Stock
which such Investor is purchasing andan executed Warrant representing the
warrant such Investor is purchasing against payment of the purchase price
therefor by check, wire transfer, cancellation of indebtedness, or any
combination thereof. In the event that payment by an Investor is made, in whole
or in part, by cancellation of indebtedness, then such Investor shall surrender
to the Company for cancellation at the Closing any evidence of such indebtedness
or shall execute an instrument of cancellation in form and substance acceptable
to the Company.
Representations and Warranties of the Company
Except as otherwise set forth in the applicable section of Schedule 2
hereto, the Company hereby represents and warrants to each Investor that:
Organization, Good Standing and Qualification
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. La Salsa Franchise, Inc.
("Franchise") is a wholly owned subsidiary of the Company duly organized,
validly existing and in good standing under the laws of the State of California
(Franchise hereinafter shall be referred to as the "Subsidiary"). Each of the
Company and the Subsidiary is qualified to do business as a foreign corporation
in every other jurisdiction in which the failure to so qualify would have a
material adverse effect on the business of the Company or the Subsidiary. Each
of the Company and the Subsidiary has the requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted and as proposed to be conducted. The Company has
previously delivered to the Investors true and accurate copies of the Company's
and the Subsidiary's respective Restated Certificate (or Articles) of
Incorporation, as amended, and Bylaws, as presently in effect.
Corporate Power
The Company has all requisite legal and corporate power and authority to
enter into this Agreement and to sell the shares of Series D Convertible
Preferred Stock pursuant to Section 1, and to carry out and perform its other
obligations under the terms of this Agreement.
Subsidiaries and Affiliates
Except for the Subsidiary, the Company does not own or control, directly or
indirectly, any other interest or investment in any corporation, partnership,
association or other form of business entity.
Capitalization
The authorized capital of the Company consists of:
Class A Common Stock. 33,300,000 shares of $.001 par value Class A Common
Stock, of which 135,666 shares are issued and outstanding as of the Closing.
Class B Common Stock. 1,000,000 shares of $.001 par value Class B Common
Stock (collectively with the Class A Common Stock, the "Common Stock"), none of
which are issued and outstanding as of the Closing. Preferred Stock. 29,300,000
shares of $.01 par value Preferred Stock (the "Preferred Stock"), of which
10,200,000 have been designated Series A Convertible Preferred Stock, 10,100,000
of which are issued and outstanding as of the Closing, 4,800,000 have been
designated Series B Convertible Preferred Stock, 4,633,333 of which are issued
and outstanding as of the Closing, 1,500,000 have been designated Series C
Convertible Preferred Stock, 1,333,333 of which are issued and outstanding as of
the Closing, and 12,800,000 have been designated Series D Convertible Preferred
Stock, 3,137,092 of which are issued and outstanding as of the Closing. The
rights, privileges and preferences of all of the Series A, B, C and D
Convertible Preferred Stock are as stated in the Restated Certificate.
All such issued and outstanding shares referred to in Sections 2.4(a),
2.4(b) and 2.4(c) above are duly authorized and validly issued, are fully paid
and nonassessable, are owned beneficially and of record by the shareholders and
in the amounts set forth in Schedule 2.4(c)(1) ("Schedule of Shareholders")
attached hereto, and have been offered, issued, sold and delivered by the
Company in compliance with applicable federal and state securities laws.
Except for (i) the warrant dated February 20, 1993, initially to purchase
100,000 shares of Common Stock issued to Foothill Capital Corporation (the
"Foothill Warrant"), (ii) the option to purchase 41,000 shares of Common Stock
issued to Xxxx Xxxxxxxx, (iii) the option to purchase 20,000 shares of Common
Stock issued to Xxxxxxxx Xxxxxx ,(iv) currently outstanding options to purchase
2,455,737 shares of Common Stock granted to employees pursuant to the Stock
Option Plan for Executive and Key Employees of La Salsa Holding Co. (the "Option
Plan"), (v) the conversion privileges of the Series A, B, C and D Convertible
Preferred Stock and (vi) the rights provided in Section 8 of that certain Fourth
Amended and Restated Restricted Stock Agreement of even date herewith, by and
among the Company and certain of its stockholders, the form of which is attached
hereto as Exhibit C (the "Restricted Stock Agreement"), there are not
outstanding any options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
shares of its capital stock. In addition to the aforementioned options, the
Company has reserved an additional 276,417 shares of its Common Stock for
purchase upon exercise of options to be granted in the future under the Option
Plan.
Authorization
All corporate action on the part of the Company, its officers, directors
and stockholders necessary for the authorization, execution and delivery of this
Agreement, the Warrants, that certain Third Amended and Restated Registration
Rights Agreement of even date herewith, by and among the Company and certain of
its stockholders, the form of which is attached hereto as Exhibit D (the "Rights
Agreement"), and the Restricted Stock Agreement, the performance of all
obligations of the Company hereunder and thereunder and the authorization,
issuance and delivery of the Series D Convertible Preferred Stock being sold
hereunder, the Warrant Shares issuable upon exercise of the Warrants and
theCommon Stock issuable upon conversion of the Series D Convertible Preferred
Stock being sold hereunder and the Warrant Shares has been taken or will be
taken prior to the Closing. This Agreement, the Warrants and the Rights
Agreement, when executed and delivered by the Company, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies and (iii) to the extent the indemnification provisions contained in the
Rights Agreement may be limited by applicable federal or state securities laws.
Valid Issuance of Stock
The Series D Convertible Preferred Stock being purchased by the Investors
hereunder, when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, and the Warrant Shares, upon exercise of
the Warrants in accordance with the terms thereof for the consideration
expressed therein, will be duly and validly issued, fully paid and
nonassessable, shall be free of any liens, claims, encumbrances or other rights
of third parties (collectively "Liens") other than those set forth herein, in
the Warrants or in the Restricted Stock Agreement, and will have been issued
free and clear of any preemptive rights, rights of first refusal or redemption
rights of any person. The Common Stock issuable upon conversion of such stock
and the Warrant Shares has been duly and validly reserved, and neither it nor
the issuance thereof is subject to any preemptive rights or rights of first
refusal or redemption rights, and, upon issuance, it will be validly issued,
fully paid and nonassessable.
Compliance with Laws and Other Instruments
The business and operations of each of the Company and Subsidiary have been
and are being conducted in all material respects in accordance with all
applicable federal, state and local statutes, rules, regulations, ordinances,
and orders of any governmental authority, including without limitation, all
federal and state statutes and regulations applicable to franchises and all
immigration laws or regulations, including the Immigration Reform and Control
Act of 1986, as amended and the regulations promulgated thereunder. Further,
neither the Company nor the Subsidiary is presently charged with or, to the
Company's knowledge, under governmental investigation with respect to, any
actual or alleged violation of any of the foregoing and is not presently the
subject of any pending or threatened adverse proceeding by any regulatory
authority having jurisdiction over its business, properties or operations.
The execution, delivery and performance by the Company of this Agreement,
the Warrants, the Rights Agreement and the Restricted Stock Agreement:
will not require from the Board of Directors or stockholders of the Company
any consent or approval except as have been obtained;
will not require any authorization, consent, approval, license, exemption
of or filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality of government other than as
provided by applicable securities laws;
will not cause the Company or Subsidiary to violate or contravene (i) any
provision of law presently in effect, (ii) any rule or regulation presently in
effect of any agency or government, domestic or foreign, (iii) any order, writ,
judgment, injunction, decree, determination or awa presently in effect or (iv)
any provision of the respective Restated Certificate or Articles of
Incorporation or Bylaws of the Company or the Subsidiary;
will not violate or be in conflict with, result in a material breach of or
constitute (with or without notice or lapse of time or both) a default under,
any material indenture, loan or credit agreement, note agreement, deed of trust,
mortgage, security agreement or other material agreement, lease, instrument,
commitment or arrangement to which the Company or the Subsidiary is a party or
by which the Company or the Subsidiary or any of its material properties, assets
or rights is bound or affected (including, without limitation, any stockholders
agreement or registration rights agreement in effect prior to the date hereof);
will not result in the creation or imposition of any Lien; and
will not result in the termination of any license, certificate, permit,
franchise or right held by the Company or the Subsidiary.
No Brokers or Finders
No person or other entity ("Person") has, or as a result of the
transactions contemplated herein will have, any right or valid claim against the
Company, or the Subsidiary or, to the Company's knowledge, any Investor for any
commission, fee or other compensation as a finder or broker, or in any similar
capacity. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible.
The Company agrees to indemnify and hold harmless each Investor from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
Financial Statements
The Company has delivered to each Investor (a) the Company's consolidated
unaudited balance sheet (the "Balance Sheet") as of October 31, 1995 (the
"Balance Sheet Date") and the unaudited statements of income for the
ten-monthperiod then ended and (b) the Company's audited balance sheet and
profit and loss statement as of December 31, 1994, together with the related
opinion of Deloitte and Touche LLP, independent certified public accountants.
These financial statements present fairly the financial condition of the
Company and the Subsidiary at the Balance Sheet Date and other dates therein
specified and the results of their operations for the periods therein specified,
and have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior accounting periods.
Changes
Except as disclosed on Schedule 2 hereto, since the Balance Sheet Date,
neither the Company nor the Subsidiary has:
discharged or satisfied any material Liens other than those securing
current liabilities in the ordinary course of business consistent with past
practice;
paid any material obligation or liability other than current liabilities in
the usual and ordinary course of business;
mortgaged, pledged, or subjected to or suffered any Liens on any of its
material assets, tangible or intangible;
sold, transferred or leased any of its material assets except in the usual
and ordinary course of business;
cancelled or compromised any material debt or claim, or waived or released
any material right;
suffered any material physical damage, destruction or loss (whether or not
covered by insurance);
entered into any material transaction other than in the usual and ordinary
course of business except for this Agreement;
encountered any labor difficulties or labor union organizing activities;
declared or paid any dividends on or made any other distributions with
respect to, or purchased or redeemed, any of its outstanding capital stock;
made any change in the accounting principles, methods or practices followed
by it or depreciation or amortization policies or rates theretofore adopted;
made any loans to its employees, officers, or directors in excess of $1,000
other than travel advances made in the ordinary course of business;
made any extraordinary increases in the compensation of any of its
employees, officers, or directors;
suffered or caused any other event or condition of any character that has
materially and adversely affected its business or prospects; or
entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.
Material Agreements of the Company
Except as disclosed on Schedule 2 hereto, neither the Company nor the
Subsidiary is a party to any written or oral:
agreement with any labor union;
agreement for the purchase of material fixed assets or for the purchase of
materials, supplies or equipment in excess of normal operating requirements;
agreement for the employment of any officer, individual employee or other
Person on a full-time basis or any agreement with any Person for consulting
services, in each case not terminable at will;
bonus, pension, profit sharing, retirement, stock purchase, stock option,
deferred compensation, medical, hospitalization or life insurance or similar
plan, contract or understanding with respect to any or all of the employees of
the Company or the Subsidiary or any other Person;
material indenture, loan or credit agreement, note agreement, deed of
trust, mortgage, security agreement, promissory note or other agreement or
instrument relating to or evidencing indebtedness for borrowed money or
subjecting any material asset or property of the Company or the Subsidiary to
any Liens or evidencing any material indebtedness;
guaranty of any material indebtedness;
any agreement to which any stockholder, officer or director of the Company
or Subsidiary, or any "affiliate" or "associate" of such persons (as such terms
are defined in the rules and regulations promulgated under the federal
Securities Act of 1933, as amended (the "Act")) is presen a party which pertains
to the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person or entity; lease or agreement
other than as described in (g) under which the Company or the Subsidiary is
lessee of or holds or operates any property, real or personal, owned by any
other Person under which payments to such Person exceed $10,000 per annum;
lease or agreement under which the Company is lessor or permits any Person
to hold or operate any material property, real or personal, owned or controlled
by the Company;
agreement obligating the Company or the Subsidiary to pay any royalty or
similar charge for the use or exploitation of any tangible or intangible
property;
covenant not to compete or other restriction on the Company's ability to
conduct its business as presently conducted; or
agreement other than those described in paragraphs (a)-(k) above that (i)
are not cancelable on 30-day notice and (ii) require future expenditures of the
Company or its Subsidiary in excess of $100,000 per annum or pursuant to which
the Company or such Subsidiary will receive in exc of $200,000 per annum.
Tax Returns and Audits
All required federal, state and local tax returns of the Company have been
prepared and duly and timely filed, and all material federal, state and local
taxes required to be paid with respect to the periods covered by such returns
have been paid, or the Company has made provision for the payment of the same.
There are no outstanding agreements by the Company for the extension of time for
the assessment of any tax. The Company is not, and has not been, delinquent in
the payment of any material tax, assessment or governmental charge. The Company
does not currently have any material tax deficiency proposed or assessed against
it, has no knowledge of any proposed liability for any tax to be imposed upon
the Company's or the Subsidiary's properties or assets for which there is not
adequate reserve in the financial statements referenced in Section 2.9, and has
not executed any waiver of any statute of limitations on the assessment or
collection of any tax or governmental charge. To the Company's best knowledge,
none of the Company's federal income tax returns nor any state income or
franchise tax returns has ever been audited by governmental authorities.
Patents, Trademarks and Other Intangible Assets
The Company and/or the Subsidiary (i) own or have the right to use all
patents, trademarks, trade dress, service marks, trade names, copyrights or
licenses and rights (collectively herein "Proprietary Rights") which are listed
as described, together with any applicable registration numbers and dates, on
Schedule 2.13, and which are all of the Proprietary Rights used in or necessary
for the conduct of their respective businesses as now conducted, or proposed to
be conducted without infringing upon or otherwise acting adverselyto the right
or claimed right of any Person under or with respect to any of the Proprietary
Rights and (ii) are not obligated or under any liability whatsoever to make any
payments by way of royalties, fees or otherwise to any owner or licensee of, or
other claimant to, any patent, trademark, service xxxx, trade name, copyright or
other intangible asset, with respect to the use thereof or in connection with
the conduct of their businesses.
The Company and the Subsidiary own and have the unrestricted right to use
all trade secrets, including know-how, inventions, designs, processes, computer
programs and technical data and information (collectively herein "intellectual
property") required for or incident to the development, manufacture, operation
and sale of all products and services sold or proposed to be sold by them, free
and clear of any right, lien, or claim of others, including without limitation
former employers of its employees; provided however, that the possibility exists
that other Persons, completely independently of the Company, the Subsidiary or
their respective employees or agents, could have developed intellectual property
similar or identical to those of the Company and the Subsidiary.
Employment Benefit Plans--ERISA
Neither the Company nor the Subsidiary maintains or makes contributions to
any pension, profit sharing or other employee pension benefit plan within the
meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). Neither the Company nor the Subsidiary has any material
liability with respect to any such plan (including, without limitation, any
unfunded past service or other liability or any accumulated funding deficiency)
or any material liability to the Pension Benefit Guaranty Corporation or under
Title IV of ERISA, with respect to a multi-employer pension benefit plan, nor
would the Company or the Subsidiary have any such liability if any such plan
were terminated or if the Company or such Subsidiary withdrew, in whole or in
part, from any multi-employer plan.
Title to Property and Encumbrances
With only such exceptions as are immaterial individually and in the
aggregate, each of the Company and the Subsidiary has good and marketable title
to all its properties and assets, including without limitation the properties
and assets used in the conduct of its business, except for properties disposed
of in the ordinary course of business since the Balance Sheet Date and except
for properties held under valid and subsisting leases that are in full force and
effect and that are not in default, subject to no Lien, except those reflected
on the Balance Sheet or the notes thereto and except for liens for taxes not yet
due and other immaterial liens arising in the ordinary course of business and
not in connection with borrowed money.
Condition of Properties
With only such exceptions as are immaterial individually and in the
aggregate, all facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by each of the Subsidiary and the Company are
in good operating condition and repair and are adequate and sufficient for the
Company's and each Subsidiary's business.
Insurance Coverage
There is in full force and effect one or more policies of insurance issued
by insurers of recognized responsibility, insuring the Company and the
Subsidiary's respective properties and businesses against such losses and risks,
and in such amounts, as are customary in the case of corporations of established
reputation engaged in the same or similar business and similarly situated.
Neither the Company nor the Subsidiary has been refused any insurance coverage
sought or applied for, and the Company has no reason to believe that it will be
unable to renew its or their existing insurance coverage upon terms at least as
favorable as those presently in effect, other than possible increases in
premiums that do not result from any act or omission of the Company or such
Subsidiary.
Litigation
Except as disclosed on Schedule 2 hereto, there is no legal action, suit,
arbitration or other legal, administrative or other governmental investigation,
inquiry or proceeding (whether federal, state, local or foreign) pending or
threatened against or affecting the Company, the Subsidiary or their respective
properties, assets or businesses. To the best knowledge of the Company, none of
the pending proceedings or threatened actions listed on Schedule 2 hereto might
result, either in any case or in the aggregate, in any material adverse change
in the business or financial condition of the Company and the Subsidiary taken
as a whole or any of their properties or assets or in any material impairment of
the right or ability of the Company and the Subsidiary to carry on their
business as now conducted or as proposed to be conducted, or in any material
liability on the part of the Company or the Subsidiary, and none that challenges
the validity of this Agreement, the Warrants or any action taken or to be taken
in connection herewith. The foregoing includes, without limiting its generality,
actions pending or, to the actual knowledge of the Company, threatened (or any
threat thereof) involving the prior employment of any of the Company's or the
Subsidiary's employees, or their use in connection with the Company's or such
Subsidiary's business of any information or techniques allegedly proprietary to
any of their former employers. Neither the Company nor the Subsidiary is in
default with respect to any order, writ, judgment, injunction, decree,
determination or award of any court or of any governmental agency or
instrumentality (whether federal, state, local or foreign).
Licenses
With only such exceptions as are immaterial individually and in the
aggregate, the Company and its Subsidiary possess from the appropriate agency,
commission, board and governmental body and authority, whether state, local or
federal, all licenses, permits, authorizations, approvals, franchises and rights
that are necessary for the Company and its Subsidiary to engage in the business
currently conducted and proposed to be conducted by them; and all such
certificates, licenses, permits, authorizations and rights have been lawfully
and validly issued, are in full force and effect, will not be revoked,
cancelled, withdrawn, terminated or suspended and have a term of perpetual
existence.
Employee Compliance With Prior Agreements
To the best knowledge of the Company, no employee of the Company or the
Subsidiary is in violation of any terms of any employment contract, patent or
trade secret disclosure agreement or any other contract oragreement relating to
the right of any such employee to be employed by the Company or such Subsidiary
because of the nature of the business conducted or to be conducted by the
Company or such Subsidiary. The Company is unaware of any proposed, threatened
or actual union organization activity affecting the current or prospective
operations of the Company or the Subsidiary.
Suppliers
Neither the Company nor the Subsidiary has received any notice, and the
Company does not otherwise know, that any supplier of the respective businesses
of the Company and the Subsidiary has taken or indicated an intent to take any
steps that could result in a material increase in costs, or a material
restriction of material adverse effect on the ability to acquire any item
material to the conduct of their businesses or the operation of any of the
assets or properties necessary for the conduct of such businesses.
Disclosure; Business Plan
No representation or warranty by the Company in this Agreement or in any
written statement or certificate furnished to the Investors, or any of them, in
connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements made not misleading in light of
the circumstances under which they were made. The Company has delivered to
Investors the La Salsa 1995 Operating Plan, ("The Plan"). The Plan was prepared
in good faith by the Company, on the basis of reasonable assumptions and
investigations, to describe the Company's and the Subsidiary's plans, objectives
and projected growth.
Registration Rights
Except as provided in the Foothill Warrant and in the Rights Agreement, the
Company is not obligated to register (through either demand registration or
piggyback registration) any of its presently outstanding securities or any of
its securities that may hereafter be issued pursuant to any existing agreement.
Use of Proceeds
The proceeds from the sale of the Series D Convertible Preferred Stock
shall be used for new restaurant capital expenditures, equipment and leasehold
financing, general working capital purposes and in the operation of the
Company's business.
Registration Rights Agreement
To the Company's best knowledge, the Rights Agreement will constitute a
valid and legally binding obligation of each of the parties thereto, enforceable
in accordance with its terms, except (i) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies and (ii) to the extent the indemnification provisions contained in the
Rights Agreement may be limited by applicable federal or state securities laws.
Representations and Warranties of the Investors
Each Investor, severally but not jointly, hereby represents and warrants
that:
Authorization
This Agreement, when executed and delivered by such Investor, will
constitute its valid and legally binding obligation, enforceable in accordance
with its terms.
Purchase Entirely for Own Account
This Agreement is made with such Investor in reliance upon such Investor's
representation to the Company, which by such Investor's execution of this
Agreement such Investor hereby confirms, that the Series D Convertible Preferred
Stock and Warrant to be received by such Investor (the "Securities") will be
acquired for investment for such Investor's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, such Investor further represents that such Investor does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Securities. Such Investor represents that it has full
power and authority to enter into this Agreement.
Disclosure of Information
Such Investor has made investigations that it considers necessary or
appropriate in deciding whether to purchase the Securities. Each Investor
further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Securities. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of the Investors to rely thereon.
Investment Experience
Such Investor is an investor in securities of companies in the development
stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the Securities. Such Investor also represents it is an "accredited
investor" as that term is defined in Regulation D under the Act and that, except
as disclosed in writing to the Company, it was not organized for the purpose of
acquiring the Securities.
Restricted Securities
It understands that the Securities it is purchasing are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Act, only in certain limited
circumstances. In this connection, each Investor represents that it is familiar
with Rule 144 promulgated under the Act ("Rule 144"), as presently in effect,
and understands the resale limitations imposed thereby and by the Act.
Further Limitations on Disposition
Without in any way limiting the representations set forth above, each
Investor further agrees not to make any disposition of xxxxx any portion of the
Securities unless and until the transferee has agreed in writing for the benefit
of the Company to be bound by the terms of Sections 6 and 7 of this Agreement
and:
There is then in effect a Registration Statement as defined under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement; or
(i) Such Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a reasonably detailed
statement of the circumstances surrounding the proposed disposition and (ii) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the Act.
Legends
It is understood that the certificates evidencing the Securities may bear
one or all of the following legends:
"These securities have not been registered under the Securities Act of
1933, as amended. They may not be sold, offered for sale, pledged, or
hypothecated in the absence of a registration statement in effect with respect
to the securities under such Act or an opinion of counsel reasonably
satisfactory to the Company that such registration is not required. Copies of
the agreements which cover the purchase of these securities, which restrict
their transfer and voting and which contain certain provisions binding on any
holder of these securities may be obtained by written request made by the holder
of record of this certificate to the Secretary of the Company at its principal
executive offices."
"The transfer of the shares of stock represented by this certificate is
restricted under the terms of a Fourth Amended and Restated Restricted Stock
Agreement dated January 12, 1996, a copy of which is on file at the office of
the Company."
Any legend required by the laws of the State of California and any
applicable Blue Sky laws of various states and jurisdictions.
Conditions to Investors' Obligations at Closing
The obligations of each Investor under subsection 1.1 (b) of this Agreement
are subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent in writing thereto:
Representations and Warranties
The representations and warranties of the Company contained in Section 2
shall be true on and as of the Closing with the same effect as though such
representations and warranties had been made upon and as of such Closing.
Performance
The Company shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing.
Compliance Certificate
The Investors shall have received a certificate executed by the President
of the Company, dated the Closing Date, certifying that the conditions specified
in Sections 4.1 and 4.2 have been fulfilled.
Third Amended and Restated Registration Rights Agreement
The Company, each Investor, and the holders of a majority of "Registrable
Securities," as such term is defined in the Rights Agreement, shall have entered
into the Rights Agreement.
Fourth Amended and Restated Restricted Stock Agreement
The Company, each Investor, the holders of at least two-thirds (2/3) of the
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock,
Series C Convertible Preferred Stock and Series D Convertible Preferred Stock,
taken together as a single class, and the holders of at least two-thirds of the
outstanding shares of Series D Convertible Preferred Stock shall have entered
into the Restricted Stock Agreement.
Opinion of Company Counsel
Each Investor shall have received from Xxxxxxx, Phleger & Xxxxxxxx, counsel
for the Company, an opinion, dated as of the Closing, in the form attached
hereto as Exhibit E.
Stockholder Approval
The stockholders of La Salsa Holding Co. shall have approved the Restated
Certificate.
Due Diligence Review
The Investors shall have completed to their sole satisfaction their due
diligence review of the Company and its operations, business, assets and
financial condition.
Warrants
The Company and the Investors shall have executed the Warrants.
Conditions to the Company's Obligations at Closing
The obligations of the Company to each Investor under this Agreement are
subject to the fulfillment by that Investor on or before the Closing of each of
the following conditions:
Representations and Warranties
The representations and warranties of the Investors contained in Section 3
shall be true upon and as of the Closing with the same effect as though such
representations and warranties had been made upon and as of the Closing.
Payment of Purchase Price
Each Investor shall have delivered the purchase price for the Shares as
specified in Section 1.1(b) and the Warrants as specified in Section 1.2.
Third Amended and Restated Registration Rights Agreement
The Company, each Investor, and the holders of a majority of "Registrable
Securities," as such term is defined in the Rights Agreement, shall have entered
into the Rights Agreement.
Fourth Amended and Restated Restricted Stock Agreement
The Company, each Investor, the holders of at least two-thirds (2/3) of the
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock,
Series C Convertible Preferred Stock and Series D Convertible Preferred Stock,
taken together as a single class, and the holders of at least two-thirds of the
outstanding shares of Series D Convertible Preferred Stock shall have entered
into the Restricted Stock Agreement.
Qualifications
The consent or approval of all relevant Blue Sky authorities shall have
been obtained with respect to the offer and sale to the Investors of the
Securities or such offer and sale shall be exempt from such consent or approval
as evidenced in form reasonably satisfactory to the Company.
Warrants
The Company and the Investors shall have executed the Warrants.
Drag-Along Rights
In the event that the holders of (i) a majority of the Company's voting
capital stock and (ii) a majority of the Series A Convertible Preferred Stock,
Series B Convertible Preferred Stock, Series C Convertible Preferred Stock and
Series D Convertible Preferred Stock, voting as a sin class ((i) and (ii)
together, the "Selling Holders"), determine to accept an offer from any person
(other than a Selling Holder or any Affiliate thereof) to purchase all of the
Company's Common Stock on a fully converted basis, then each Investor, to the
extent required by the purchaser, shall sell, and shall cause any Affiliate of
it to sell, all shares of Common Stock and other securities convertible into
Common Stock (the "Drag-Along Stock") held by it or such Affiliate pursuant to
such offer to purchase (the "Drag-Along Sale"). All holders of Drag-Along Stock
shall (x) receive the same consideration per share of Drag-Along Stock, shall be
subject to the same terms and conditions of sale and shall otherwise be treated
equally or, where appropriate, pro rata based upon the number of shares of
Drag-Along Stock, as the case may be, held by each holder and (y) execute such
documents and take such actions as may be reasonably required by the selling
group representative (the "Selling Holders Representative," which initially
shall be Sienna Holdings, Inc. until the Investors are notified of the name and
address of a successor Selling Holders Representative). Any such sale by any
Investor shall be on the same terms and conditions as the proposed Drag-Along
Sale by the Selling Holders; provided, however, that each selling stockholder
shall contribute pro rata based upon the number of shares being sold by each, a
percentage of the total sa proceeds as agreed upon by the holders of a majority
of the shares being sold, to an escrow fund to be established by the Selling
Holders Representative to serve as the exclusive source of indemnification
obligations (other than representations as to unencumbered ownership of and
ability to transfer the shares being sold of any other seller in the Drag-Along
Sale, which shall be the sole responsibility of each selling stockholder) to the
purchaser in the Drag-Along Sale.
The Selling Holders participating in a Drag-Along Sale (or the Selling
Holders Representative on behalf of such Selling Holders) shall promptly provide
each Investor with written notice (the "Sale Notice") not more than 60 nor less
than 30 days prior to the date of the Drag-Along Sa (the "Sale Date"). Each Sale
Notice shall set forth: (i) the name and address of each proposed transferee or
purchaser of shares of Drag-Along Stock in the Drag-Along Sale; (ii) the form of
consideration to be paid for such shares and the terms and conditions of payment
offered by each proposed transferee or purchaser; (iii) confirmation that the
proposed purchaser or transferee has been informed of the "Drag-Along Rights"
provided for herein and has agreed to purchase shares of Drag-Along Stock in
accordance with the terms hereof; and (iv) the Sale Date.
The provisions of this Section 6 shall apply regardless of the form of
consideration received in the Drag-Along Sale. Any non-cash consideration
proposed for the Drag-Along Stock shall be limited to debt instruments and/or
freely tradeable property, and each Investor shall accept i pro rata share of
such non-cash consideration for the Drag-Along Stock based on its proportional
ownership of shares of Drag-Along Stock.
"Affiliate" of a specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person and, in the case of a person who is an
individual, shall include (i) members of such specified person's immediate
family (as defined in instruction 2 of Item 404(a) of Regulation S-K promulgated
by the Securities and Exchange Commission) and (ii) trusts whose trustee and
beneficiaries include only such specified persons or members of such person's
immediate family as determined in accordance with the foregoing clause (i). For
the purposes of this definition, "control, when used with respect to any person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
The provisions of this Section 6 shall terminate upon the closing of a firm
commitment underwritten public offering of the Common Stock pursuant to a
registration statement declared effective under the Act.
Covenants of the Company
The Company hereby covenants and agrees with the Investors as follows:
Basic Information and Access
As soon as practicable after the end of each fiscal quarter and each fiscal
year, and in any event within forty-five (45) days after each fiscal quarter and
within one hundred five (105) days after each fiscal year, the Company shall
furnish to each Investor, so long as each Investo holds shares of Series D
Convertible Preferred Stock, and subject to Section 7.3 hereof, consolidated
balance sheets of the Company and its Subsidiary as of the end of each fiscal
quarter and fiscal year, and consolidated statements of income and cash flow of
the Company and its Subsidiary for such fiscal quarter and fiscal year,
respectively, prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal quarter or fiscal year, all in
reasonable detail and, in the case of such quarterly reports, certified by the
Company's chief financial officer and accompanied by a brief narrative
description on the Company's business activities during said quarter, and, in
the case of such annual reports, certified by independent public accountants of
recognized national standing.
The Company shall permit each Investor so long as such Investor holds
shares of Series D Convertible Preferred Stock, and subject to Section 7.3
hereof, (i) to visit and inspect at such Investor(s) expense any of the
properties of the Company or any of its Subsidiary and to discuss and their
affairs, finances and accounts with its and their officers, all upon reasonable
notice to the Company and/or its Subsidiary, at such reasonable times and as
often as may be reasonably requested; (ii) to be represented at the Company's
expense at all meetings of the Board of Directors of the Company by one person
or, if the Investors (excluding Sienna and InterWest) are not represented by a
director of the Company, two persons, in either case to be designated by a
majority of the Investors (excluding Sienna and InterWest), with respect to
which reasonable notice shall be provided to each Investor; and (iii) to discuss
the affairs, finances and accounts of the Company with its officers and consult
with and advise the officers of the Company as to the management of the Company
at all reasonable times and as often as reasonably requested, provided that the
Investors shall maintain the confidentiality of any proprietary information of
the Company thereby obtained and provided further that the Investors shall
conduct all such inspections in a manner that is not disruptive to the employees
or operations of the Company.
Additional Information
In addition, the Company shall deliver to each Investor, so long as such
Investor holds shares of Series D Convertible Preferred Stock:
as soon as practicable after the end of each fiscal month, and in any event
within thirty (30) days thereafter, consolidated balance sheets of the Company
and its Subsidiary, if any, as at the end of such month, and a consolidated
statement of income of theCompany and its Subsidiary if any, for each month and
for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles consistently applied, with such statements
certified as having been prepared in accordance with generally accepted
accounting principles consistently applied, by the chief financial officer of
the Company, and accompanied by a brief narrative description of the Company's
business activities during said month; and
no later than thirty (30) days prior to the end of any fiscal year, a
business plan and budget for the Company for the succeeding fiscal year
(commencing with the Company's 1995 fiscal year), containing information, data
and other materials typically included in a business plan and budget of a
Company similar in size and nature to the Company, inclusive without limitation,
in respect of the budget, budget date for each month of such fiscal year.
Suspension of Certain Covenants
The covenants set forth in Sections 7.1 and 7.2 shall terminate and be of
no further force or effect with respect to all Investors after the effective
date of a registration statement filed by the Company under the federal
Securities Act of 1933, as amended, covering the underwritten offer and sale of
Common Stock to the public and having aggregate net proceeds to the Company of
not less than ten million dollars ($10,000,000).
Negative Covenants
In addition to any restrictions contained in the Restated Certificate,
without the prior written consent of the holders of a majority of the then
outstanding shares of Series B, Series C and Series D Convertible Preferred
Stock, the Company shall not:
except as provided in the Restated Certificate or pursuant to the Option
Plan, redeem any shares of any class of its capital stock or cause or permit any
Employee Stock Ownership Plan as defined in 4975(e)(7) of the Internal Revenue
Code of 1986, as amended, or other employee stock ownership plan to purchase
shares of any class of its capital stock;
assume, guarantee, endorse or otherwise become directly or contingently
liable for any obligation or indebtedness other than such liabilities as
presently exist or are incurred in the ordinary course of business, including
the acquisition and/or development of Company restaurants;
sell, assign, lease or otherwise dispose of any of its assets, including
its receivables and any of the stock of any Subsidiary, other than in the
ordinary course of business, including the acquisition, disposition and/or
development of Company restaurants;
make any loan or advance to any employee of the Company or any Subsidiary
thereof except (i) the payment of salaries (which, in the case of officers,
shall be approved in advance by the Company's Board of Directors), (ii) advances
for reasonable travel expenses in connection with th Company's business, and
(iii) the acceptance of promissory notes approved in advance by the Board of
Directors given for the purchase of the Company's capital stock if otherwise
permitted by this Section 7.4; and
own, or permit any Subsidiary of the Company to own, any stock or other
securities of any corporation, partnership, association or other form of
business entity except the securities of a wholly-owned Subsidiary of the
Company or such Subsidiary.
Additional Covenants
In addition, the Company shall, or shall cause each of its Subsidiary, as
applicable, to:
promptly pay and discharge, or cause to be paid and discharged, when due
and payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, property or business of the Company or any
Subsidiary; provided, however, that any such tax, assessment, charge or levy
need not be paid if the validity thereof shall currently be contested in good
faith by appropriate proceedings and if the Company shall have set aside on its
books adequate reserves with respect thereto; and provided, further, that the
Company shall pay all such taxes, assessments, charges or levies forthwith upon
the commencement or proceedings to foreclose any lien that may have attached as
security therefor;
promptly pay or cause to be paid when due, or in conformance with customary
trade terms, all other indebtedness incident to the operations of the Company
and its Subsidiary;
keep its properties and those of its Subsidiary in good repair, working
order and condition, reasonable wear and tear excepted, and from time to time
make all needful and proper repairs, renewals, replacements, additions and
improvements thereto;
comply, and cause its Subsidiary to comply, with the provisions of all
leases to which any of them is a party or under which any of them occupies
property;
keep its assets and those of its Subsidiary that are of an insurable
character insured by reputable insurers against loss or damage by fire and
explosion in amounts customary for companies in similar businesses similarly
situated; and maintain, with financially sound and reputable insurers, insurance
against other hazards and risks and liability to persons and property to the
extent and in the manner customary for companies in similar businesses similarly
situated;
keep true records and books of account in which full, true and correct
entries will be made of all dealings or transactions in relation to its business
and affairs in accordance with generally accepted accounting principles applied
on a consistent basis;
duly observe and conform to, and cause its Subsidiary to so observe and
conform to, in all material respects, all valid requirements of governmental
authorities relating to the conduct of their businesses or to their property or
assets; and
maintain in full force and effect its corporate existence and rights and
use its best efforts to maintain in full force and effect all licenses and other
rights to use patents, processes, licenses, trademarks, service marks, trade
names or copyrights owned or possessed by it or any Subsidiary and necessary to
the conduct of its business.
Additional Sales of Series D Convertible Preferred Stock
Following the Closing, the Company shall not issue any additional shares of
Series D Convertible Preferred Stock.
Indemnification
Indemnification of the Investors
The Company hereby agrees to indemnify and hold harmless the Investors
against any and all losses, liabilities, damages, demands, claims, suits,
actions, judgments, causes of action, assessments, costs, and expenses,
including, without limitation, interest, penalties, attorneys' fees, any and all
expenses incurred in investigating, preparing, and defending against any
litigation, commenced or threatened, and any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation (collectively, "Investor
Damages"), asserted against, resulting from, imposed upon, or incurred or
suffered by any of the Investors directly or indirectly, as a result of or
arising from any inaccuracy in or breach or nonfulfillment of any of the
representations, warranties, covenants, or agreements made by the Company in
this Agreement or any facts or circumstances constituting such an inaccuracy,
breach, or nonfulfillment (all of which, shall be referred to as "Identifiable
Claims").
Procedure For Indemnification with Respect to Identifiable Claims
In the event that an Investor asserts the existence of a claim giving rise
to Investor Damages, it shall give written notice to the Company. Such written
notice shall state that it is being given pursuant to this Section 8.2, specify
the nature and amount of the claim asserted and indicate the date on which such
assertion shall be deemed accepted and the amount of the claim deemed a valid
claim (such date to be established in accordance with the next sentence). If the
Company, within 30 days after the mailing of notice by such Investor, shall not
give written notice to such Investor announcing its intent to contest such
assertion of such Investor, such assertion shall be deemed accepted and the
amount of claim shall be deemed a valid claim. In the event, however, that the
Company contests the assertion of a claim by giving such writtennotice to such
Investor within said period, then the parties shall act in good faith to reach
agreement regarding such claim.
Miscellaneous
Survival of Warranties
The warranties, representations and covenants of the Company and Investors
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing and shall in no way be affected by
any investigation of the subject matter thereof made by or on behalf of the
Investors or the Company.
Successors and Assigns
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any shares of
Series D Convertible Preferred Stock sold hereunder or any Common Stock issued
upon conversion of the Series D Convertible Preferred Stock). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
Governing Law
This Agreement shall be governed by and construed under the laws of the
State of California (without regard to the application of choice of law rules),
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party hereto, and as to those matters the law
of the jurisdiction under which the respective entity derives its powers shall
govern.
Disclosure of Information
The parties agree to maintain the confidentiality of the terms and
conditions of this Agreement prior to Closing, except to the extent required by
law. No party shall disseminate (except to the parties to this Agreement) any
press release or announcement concerning the transactions contemplated by this
Agreement or the parties hereto prior to Closing, without the prior written
consent of all parties.
Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Titles and Subtitles
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
Notices
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and to the party to be notified at the
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties. A copy of any notices sent to the Company shall be sent to:
Sienna Holdings, Xxx Xxxxxx, Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000 Attn: Xxxxxx X. Xxxxx; InterWest Partners, 0000 Xxxx Xxxx Xxxx,
Xxxxxxxx 0, Xxxxx 000, Xxxxx Xxxx, XX 00000, Attn: Xx. Xxxxxxx X. Xxxxxx;
Xxxxxxx, Xxxxxxx & Xxxxxxxx, Two Embarcadero Place, 0000 Xxxx Xxxx, Xxxx Xxxx,
XX 00000, Attn: Xxxx X. Xxxxxxx, Esq.; and Noro-Xxxxxxx Partners, 0 Xxxxx
Xxxxxxx Xxxxxx, 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxx, XX 00000, Attn: Xxxx X. Xxxxx,
Xx. All notices and communications shall be deemed to have been received: (i) in
the case of personal delivery, on the date of such delivery; (ii) in the case of
telex or facsimile transmission, on the date on which the sender receives
confirmation by telex or facsimile transmission that such notice was received by
the addressee, provided that a copy of such transmission is additionally sent by
mail as set forth in (iv) below; (iii) in the case of overnight air courier, on
the second business day following the day sent, with receipt confirmed by the
courier; and (iv) in the case of mailing by first class certified or registered
mail, postage prepaid, return receipt requested, on the fifth business day
following such mailing.
Attorney's Fees; Expenses
If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the Warrants, the Rights Agreement, the Restricted
Stock Agreement or the Restated Certificate, the prevailing party shall be
entitled to reasonable attorney's fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
Amendments and Waivers
Any term of this Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and the holders of a majority of the shares of Common Stock issued or
issuable pursuant to conversion of the Series D Convertible Preferred Stock
issued pursuant to this Agreement. Any amendment or waiver effected in
accordance with this section shall be binding upon each holder of any securities
purchased under this Agreement at the time outstanding, each future holder of
all such securities, and the Company.
Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement and
the balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its term.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
THE COMPANY:
LA SALSA HOLDING CO., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
President and Chief
Executive Officer
Address: 00000 Xxxxx Xxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
THE INVESTORS:
CASUAL DINING VENTURES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx, Xx.
Title: Senior Vice President
Address: One Corporate Place
00 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
SCHEDULE 1.1
Schedule of Investors
Number of Shares Purchase Price
of Series D of Series D Number of Purchase Aggregate
Convertible Convertible Warrant Price of Purchase
Name Preferred Stock Preferred Stock Shares Warrant Price
Casual Dining
Ventures, Inc. ................... 4,166,667 $5,000,000.40 4,729,470 $4,729.47 $5,004,729.87
SCHEDULE 2.4(c)
SCHEDULE OF SHAREHOLDERS
Common Stock
Name Shares
Xxxxxxx X. Xxxxxxx ........................................ 13,333
Xxxxx Xxxxxx .............................................. 4,000
Antonio De La Xxxx ........................................ 12,000
Xxxxxx X. Xxxxxx .......................................... 6,000
Xxxxx X. Xxxxxxxxx ........................................ 6,000
Moon Xxxx Xxxxxxxxx ....................................... 9,125
Xxxxxx X. Xxxxxxx ......................................... 30,000
Xxxxxxxxx Xxxxxxxx ........................................ 5,000
Xxxxxx X. Xxxxx ........................................... 13,500
Xxxxx Xxxxxxx ............................................. 12,000
Xxxxx Xxxxxx .............................................. 10,000
Xxxxxx X. Xxxxxx .......................................... 6,000
Xxxxxx Xxxxxxxx ........................................... 2,708
Xxxxxx X. Xxxxxxxxx Inc. .................................. 6,000
-------
Total ..................................................... 135,666
=======
Series A Convertible Preferred Stock
Name Shares
Xxxxxxxx X. Xxxxxxx ........................................ 3,320
Xxxxxx Xxxxxxxx ............................................ 9,000
Crown Associates III, L.P. ................................. 33,204
Crown-Xxxxx Associates, L.P. ............................... 15,938
U.S. Trust Company of New York, ............................ 17,266
as Trustee for the Crown Trust
Bankers Trust Company, ..................................... 99,613
as Master Trustee for
Xxxxxx Aircraft Retirement Plan
InterWest Partners IV .............................. 3,182,190
Xxxxx Xxxxxxxxx ............................................ 4,500
Sienna Holdings, Inc., ..................................... 3,218,462
as Trustee for La Salsa, Inc. .............................
Howdy S. Kabrins ........................................... 64,000
Xxxxxxx Xxxxx .............................................. 82,000
Noro-Xxxxxxx Partners II, L.P. ............................. 99,613
Xxxxxxx Salsa, L.P. ........................................ 33,204
Sienna Holdings, Inc. as Nominee ........................... 41,000
Sienna Limited Partnership I ............................... 3,182,190
Xxxxx Xxxxxx ............................................... 10,000
Xxxxxx X. Xxxxxxxxx Inc. ................................... 4,500
----------
Total ...................................................... 10,100,000
==========
Series B Convertible Preferred Stock
Name Shares
Xxxxxxxx X. Xxxxxxx ......................................... 33,333
Crown Associates III, L.P. .................................. 333,333
Crown-Xxxxx Associates, L.P. ................................ 160,000
U.S. Trust Company of New York, ............................. 173,334
as Trustee for the Crown Trust
Bankers Trust Company, ...................................... 1,000,000
as Master Trustee for
Xxxxxx Aircraft Retirement Plan
InterWest Partners IV ............................... 800,000
Noro-Xxxxxxx Partners II, L.P. .............................. 1,000,000
Xxxxxxx Salsa, L.P. ......................................... 333,333
Sienna Limited Partnership I ................................ 800,000
---------
Total ....................................................... 4,633,333
=========
Series C Convertible Preferred Stock
Name Shares
Xxxxxxxx X. Xxxxxxx ......................................... 4,309
Crown Associates III, L.P. .................................. 86,187
Noro-Xxxxxxx Partners II, L.P. .............................. 129,280
Xxxxxxx Salsa, L.P. ......................................... 43,093
Bankers Trust Company, ...................................... 129,280
as Master Trustee for
Xxxxxx Aircraft Retirement Plans
Sienna Limited Partnership I ................................ 468,182
Sienna Holdings, Inc. ....................................... 4,820
InterWest Partners IV ....................................... 468,182
---------
Total ....................................................... 1,333,333
=========
Series D Convertible Preferred Stock
Name Shares
FMA High Yield Income L.P. ................................. 749,067
WSIS Flexible Income Partners L.P. ......................... 112,360
WSIS High Income L.P. ...................................... 337,080
Sienna Limited Partnership II .............................. 1,498,134
InterWest Partners IV ...................................... 337,080
Bankers Trust Company as ................................... 50,839
Master Trustee for
Xxxxxx Aircraft
Retirement Plans
Noro-Xxxxxxx Partners II, L.P. ............................. 50,839
Xxxxxxxx X. Xxxxxxx ........................................ 1,693
---------
Total ...................................................... 3,137,092
=========
SCHEDULE 2.13
REGISTERED TRADEMARKS
Xxxx Goods Reg. No. Dec. Use and/or Renewal
*DESIGN OF MAN & KNIFE Aerated water 1,522,842 1-31-89 1-31-2009
*LA SALSA Aerated water 1,517,380 12-20-88 12-20-2008
LA SALSA (California) Restaurant services 7826 3-21-79 3-21-99
*LA SALSA Restaurant services 1,257,963 11-15-83 11-15-2003
*LA SALSA & DESIGN OF
MAN WITH KNIFE Restaurant services 1,331,404 4-16-85 4-16-2005
*THE TRADITION CONTINUES Restaurant services 1,352,247 7-30-85 7-30-2005
*LA SALSA (Script) Restaurant services 1,417,032 11-11-86 11-11-2006
*DESIGN OF MAN WEARING SOMBRERO Restaurant services 1,645,652 5-21-91 5-21-97 5-21-2001
*THE ORIGINAL GOURMET BURRITO Burritos for consumption on
or off the premises 1,652,067 7-23-91 7-23-97 7-23-2001
*THE BOX Restaurant services, namely,
the sale of goods for
off-site consumption 1,678,143 3-3-92 3-3-98 3-3-2002
WE DO NOT OWN A CAN OPENER!! Restaurant services 1,733,866 11-17-92 11-17-98 11-17-2002
QUE HUEVOS THE MEXICAN
POWER BREAKFAST Restaurant services 1,735,499 11-24-92 11-24-98 11-24-2002
AN AUTHENTIC INVITATION Restaurant services 1,743,734 12-29-92 12-29-98 12-29-2002
*ENJOY THE PASSION Restaurant services 1,784,616 7-27-93 7-27-99 7-27-2003
PENDING APPLICATIONS
Xxxx Goods Reg. No. Date
*LA SALSA - FRESH MEXICAN GRILL Restaurant services 424,105 8-11-93
*FRESH MEXICAN GRILL Restaurant services 586,109 10-17-94
*LA SALSA - THE ORIGINAL TAQUERIA Restaurant services Awaiting Information
LA SALSA (Stick Logo) Restaurant services 645,397 3-13-95
LA SALSA (Red and Green Design) Restaurant services 704,220 7-21-95
CALIFORNIAN "VEGGIE" Burrito for consumption
on or off the premises 714,379 8-11-95
ALWAYS FRESH...ALWAYS FUN! Restaurant services 023,474 11-24-95
* designates registration assigned to or in the name of La Salsa Holding Co.
TRADEMARK COUNTRY LIST
REGISTRATIONS
Xxxx Country Goods No. & Date Renewable
LA SALSA Canada Paper and party items, namely, menus, posters, paper decorations,
hats, cups; restaurant services; namely, take-out food services
and bar and lounge services 399,493 6-26-92 6-26-2007
LA SALSA Japan Tea, coffee, cocoa, soft drinks, fruit juices, ice, in Japanese
Class 29 2,276,000 00-00-00 7-31-2000
LA SALSA Japan Paper napkins, other napkins, cups, other tableware, other goods
belonging to this class (Japanese Class 19) 2,269,547 9-21-90 6-21-2000
TRADEMARK COUNTRY LIST
REGISTRATIONS
Xxxx Country Goods Filing Info.
LA SALSA Australia Restaurant services 656396 3-23-95
LA SALSA Japan Restaurant services 35034/1996 4-7-95
LA SALSA Mexico Restaurant services 158658 1-15-93
LA SALSA Puerto Rico Restaurant services Awaiting filing information
SCHEDULE 2
Schedule of Exceptions
EXHIBIT A
Amended and Restated Certificate of Incorporation
EXHIBIT B
Form of Series D Convertible Preferred Stock Warrant
EXHIBIT C
Fourth Amended and Restated Restricted Stock Agreement
EXHIBIT D
Third Amended and Restated Registration Rights Agreement
