STOCK SALE AGREEMENT
EXHIBIT
1
THIS
STOCK SALE AGREEMENT (the “Agreement”) is made and entered into as of
December 1, 2009 by and between (1) Xxxxxxx X. Xxxxx (“Buyer”), and
(2) each of The D3
Family Fund, L.P., the D3
Family Bulldog Fund, L.P. and The DIII Offshore Fund,
L.P. (each a “Seller”).
RECITALS
A.
Buyer desires to purchase from each Seller, at a price of $2.00 in
cash (the “Per Share Price”) for each share (a “Subject Share”) of the Common
Stock of Mexican Restaurants, Inc., a Texas corporation (the “Company”) to be
sold hereunder, the number of Subject Shares set forth before next to each
Seller’s name:
The D3 Family Fund,
L.P.: 236,267 Subject Shares
The D3 Family Bulldog
Fund: 686,698 Subject Shares
The DIII Offshore Fund,
L.P.: 269,991 Subject Shares
B.
Each Seller desires to sell such Seller’s
Subject Shares to Buyer at the Per Share Price.
C.
This Agreement sets forth the terms and conditions of the sale of
each Seller’s Subject Shares to Buyer, and Buyer’s purchase of such Subject
Shares from each Seller, at the Per Share Price.
AGREEMENT
Buyer and
each Seller hereby agree as follows:
1.
Purchase and Sale of
Shares.
(a)
Purchase and
Sale. Subject to the terms and conditions of this Agreement,
at the Closing (as hereinafter defined) each Seller shall sell and transfer to
Buyer, and Buyer shall purchase from each Seller, all of such Seller’s Subject
Shares for the Per Share Price. The aggregate amount to be paid by
Buyer to each Seller for such Seller’s Subject Shares shall be as
follows:
The D3 Family Fund,
L.P.: $472,534
The D3 Family Bulldog
Fund: $1,373,396
The DIII Offshore Fund,
L.P.: $539,982
(b)
Closing. The
closing of the purchase and sale (the “Transaction”) of all the Subject Shares
(the “Closing”) shall take place at such time as Buyer and Sellers
(collectively, the “Parties”) shall collectively agree.
(c) Delivery. Subject
to the terms and conditions of this Agreement, at the Closing, each Seller shall
sell, assign and convey such Seller’s Subject Shares, by delivering an
authorization letter to Seller’s broker to deliver such Seller’s Subject Shares
electronically to the brokerage account identified by Buyer prior to the
Closing, against Buyer’s payment to such Seller of the aggregate purchase price
for such Seller’s Subject Shares (as set forth in Section 1.1) by wire
transfer of immediately available funds to the bank account identified by such
Seller prior to the Closing. Notwithstanding the foregoing, Buyer and
the applicable Seller acknowledge that 100,000 of the Subject Shares
beneficially owned by one of the Sellers are represented by a physical
certificate issued in the name of such Seller’s broker and bearing a restricted
legend. Delivery of such Subject Shares shall be by physical delivery
of such certificate together with a duly executed assignment separate from
certificate in a form to be agreed between Buyer and such Seller.
2.
Representation and
Warranties.
(a) Representation and
Warranties of Each Seller. Each Seller hereby represents and
warrants to Buyer as follows (which representations and warranties shall survive
the Closing):
(i)
Such Seller has the full right, power and authority to
enter into and perform Seller’s obligations under this Agreement. All
corporate action on the part of such Seller necessary for the execution of this
Agreement and the performance of such Seller’s obligations hereunder has been
taken or will be taken prior to the Closing.
(ii)
No consent, approval or authorization of or designation,
declaration or filing with any third party or any governmental authority is
required on the part of such Seller in connection with the valid execution and
delivery of this Agreement or the performance of such Seller’s obligations
hereunder.
(iii) Such
Seller has the full right, power and authority to sell and transfer such
Seller’s Subject Shares hereunder.
(iv) Such
Seller owns such Seller’s Subject Shares, free and clear of any lien,
encumbrance, option, charge, equitable interest or restriction, other than any
applicable restrictions on transfer under applicable state and federal
securities laws. Upon payment of the aggregate purchase price for
such Seller’s Subject Shares at the Closing, Buyer will acquire all of such
Seller’s Subject Shares, free and clear of any lien, encumbrance, option,
charge, equitable interest or restriction; provided, however, that such Seller’s
Subject Shares will remain subject to any applicable restrictions on transfer
under applicable state and federal securities laws.
(v) Such
Seller (i) a highly sophisticated investor which, in securities matters, is
able to make determinations with respect to securities based upon the advice and
abilities of its general partner, and (ii) has sufficient information
concerning the Company, its business, financial condition and prospects to reach
an informed and knowledgeable decision to sell such Seller’s Subject Shares
hereunder.
(vi) The
Sellers’ respective Subject Shares, in the aggregate, comprise all of the shares
of the Company's Common Stock beneficially owned, for purposes of
Section 13(d) of the Securities Exchange Act of 1934, and the rules and
regulations promulgated thereunder by the Securities and Exchange Commission),
by each Seller and any other person under the common control of the same general
partner as each Seller except for 17,500 shares that are the subject of options
issued by the Company and owned by one of the Sellers.
(b) Representations and
Warranties of Buyer. Buyer hereby represents and warrants to
each Seller as follows (which representations and warranties shall survive the
Closing):
(i)
Buyer has the full right, power and authority to enter
into and perform Buyer’s obligations under this Agreement. All action
on the part of Buyer necessary for the execution of this Agreement and the
performance of Buyer’s obligations hereunder has been taken or will be taken
prior to the Closing.
(ii)
No consent, approval or authorization of or designation, declaration
or filing with any third party or any governmental authority is required on the
part of Buyer in connection with the valid execution and delivery of this
Agreement or the performance of Buyer’s obligations hereunder.
(iii) Buyer
(i) is capable of bearing the economic risk and burden of its investment in
the Subject Shares, (ii) has substantial experience in investing in
securities and therefore has the ability to “fend for himself” in connection
with Buyer’s investment in the Subject Shares and is able to make determinations
with respect to securities based upon Buyer’s own abilities and such advice (if
any) as Buyer chooses to obtain, (iii) has sufficient information
concerning the Company, its business, financial condition and prospects to reach
an informed and knowledgeable decision to acquire the Subject Shares, and
(iv) is purchasing the Subject Shares for Buyer’s own account and solely
for investment, with no current intention to resell or distribute the Subject
Shares other than in compliance with applicable state and federal securities
laws.
3. Related
Agreements.
(i)
Each Seller acknowledges that Buyer and its
affiliates may possess information regarding the Company that is material and
that has not been disclosed to such Seller. Each Seller agrees that
neither Buyer nor any of its affiliates shall have any liability to such Seller
in respect of, and each Seller hereby waives and releases Buyer and its
affiliates from all claims which such Seller might otherwise have with respect
to, and agrees that such Seller will not bring any claim against Buyer or any of
its affiliates in respect of, the non-disclosure to such Seller of non-public
information (if any) that may be in Buyer’s possession before or after the date
hereof.
(ii) Buyer
acknowledges that each Seller and its affiliates may possess information
regarding the Company that is material and that has not been disclosed to
Buyer. Buyer agrees that neither any Seller nor any of such Seller’s
affiliates shall have any liability to Buyer in respect of, and Buyer hereby
waives and releases each Seller and each Seller’s affiliates from all claims
which such Buyer might otherwise have with respect to, and agrees that Buyer
will not bring any claim against any Seller or any of such Seller’s affiliates
in respect of, the non-disclosure to Buyer of non-public information (if any)
that may be in such Seller’s possession before or after the date
hereof.
4. Miscellaneous.
(a) Governing
Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware as such laws are applied to agreements entered
into and to be performed entirely within the State of Delaware.
(b) Amendments. No
amendment or modification of the terms and conditions of this Agreement shall be
valid unless in writing and signed by all Parties; provided, however, that any
agreement pursuant to the terms of Section 1.2 or 1.3 of this Agreement shall
not be deemed an amendment to this Agreement.
(c) Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the transactions contemplated
hereby. This Agreement supersedes all prior agreements,
understandings, negotiations and representations between the parties with
respect to such transactions.
(d) Waiver. Any
Party’s failure to enforce any provision of this Agreement shall not in any way
be construed as a waiver of any such provision, or prevent that Party thereafter
from enforcing each and every other provision of this Agreement.
(e) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
(f) Further
Assurances. Each Party shall execute and deliver such
additional instruments, documents and other writings as may be reasonably
requested by another party, before or after the Closing, to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement; provided, however, that each
Party shall be responsible for making such filings with the Securities and
Exchange Commission as that Party determines necessary or appropriate regarding
to the execution of this Agreement and/or the Closing.
(g) Expenses. Buyer
and each Seller shall bear its own respective expenses and legal fees incurred
in connection with this Agreement and the Transaction.
(h) Several Obligations
Only. The obligations of each Seller under this Agreement
shall be solely the obligations of such Seller and no Seller shall have any
obligations under this Agreement jointly with any other Seller.
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IN
WITNESS WHEREOF, the parties have executed this Stock Sale Agreement as of the
date set forth above.
Buyer
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XXXXXXX
X. XXXXX
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/s/
Xxxxxxx X. Xxxxx
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Each Sellers
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The
D3
Family Fund, L.P.
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and
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The
D3
Family Bulldog Fund, L.P.
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The
DIII Offshore Fund, L.P.
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By
Xxxxxxxxxx Investment Management Company, Inc., its General
Partner
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By
Xxxxxxxxxx Investment Management Offshore, Inc., its General
Partner
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By: /s/
Xxxxx Xxxxxxxxxx
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By: /s/
Xxxxx Xxxxxxxxxx
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Xxxxx
Xxxxxxxxxx, President
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Xxxxx
Xxxxxxxxxx, President
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[Signature
Page to Stock Sale Agreement]