NEITHER THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID
SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO, OR (ii) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY
TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER
SAID ACT IS AVAILABLE.
Warrant No. of
No.____ STOCK PURCHASE WARRANT Shares __________
To Subscribe for and Purchase Common Stock of
BOSTON RESTAURANT ASSOCIATES, INC.
THIS CERTIFIES that, for value received, ________________ (together with
any subsequent transferees of all or any portion of this Warrant, the "Holder"),
is entitled, upon the terms and subject to the conditions hereinafter set forth,
to subscribe for and purchase from Boston Restaurant Associates, Inc., a
Delaware corporation (hereinafter called the "Company"), at the price
hereinafter set forth in Section 2, up to ________ fully paid and nonassessable
shares of the Company's common stock, $.01 par value per share, subject to
adjustment as set forth in Section 6 (the "Shares").
1. Definitions. As used herein the following term shall have the
following meaning:
"Act" means the Securities Act of 1933 as amended, or a similar Federal
statute and the rules and regulations of the Commission issued under that Act,
as they each may, from time to time, be in effect.
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the securities laws of the United
States.
"Registration Statement" means a registration statement (other than a
registration statement on Form S-8 solely with respect to employee benefit
plans, or on Form S-4 solely with respect to Rule 145 transactions, or any
successor form or forms used for the purposes specified by such forms) filed by
the Company with the Commission under the Act for a public offering and sale of
securities of the Company.
"Shares" means the ____________ shares of the Company's Common Stock
issued or issuable to the Holder upon the exercise of this Warrant (or such
other number as adjusted pursuant to Section 6 hereof) and any other shares of
Common Stock of the Company issued with respect to such shares (because of stock
splits, stock dividends, reclassifications,
recapitalizations, mergers, consolidations, or similar events); provided,
however, that any shares subject to this Warrant previously sold by the Holder
to the public pursuant to a registered public offering or Rule 144 under the Act
shall cease to be within the definition of "Shares" as used herein.
2. Purchase Rights. The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time and from time to time
commencing on the date hereof and ending at 5:00 p.m. on the tenth anniversary
of the date hereof at an exercise price of $3.00per share.
3. Exercise of Warrant. Subject to Section 2 above, the purchase rights
represented by this Warrant may be exercised, in whole or in part and from time
to time, by the surrender of this Warrant and the duly executed Notice of
Exercise (the form of which is attached as Exhibit A) at the principal office of
the Company and by the payment to the Company, by check, of an amount equal to
the then applicable Warrant Exercise Price per share multiplied by the number of
Shares then being purchased. Upon exercise, the Holder shall be entitled to
receive, as promptly as possible, a certificate or certificates, issued in the
Holder's name or in such name or names as the Holder may direct, for the number
of Shares so purchased. The Shares so purchased shall be deemed to be issued as
of the close of business on the date on which this Warrant shall have been
exercised.
4. Shares to be Issued; Reservation of Shares. The Company covenants
that the Shares that may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon issuance, be fully paid and
nonassessable, and free from all liens and charges with respect to the issue
thereof. During the period within which the purchase rights represented by the
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issuance upon exercise of the purchase rights
represented by this Warrant, a sufficient number of shares of its Common Stock
to provide for the exercise of the right represented by this Warrant.
5. No Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant. In lieu thereof, a cash payment shall be made equal to
such fraction multiplied by the fair market value of such shares of Common
Stock, as determined in good faith by the Company's Board of Directors.
6. Adjustments of Warrant Purchase Price and Number of Shares. If there
shall be any change in the Common Stock of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in the corporate structure of the Company, appropriate adjustments
shall be made by the Board of Directors of the Company (or if the Company is not
the surviving corporation in any such transaction, the Board of Directors of the
surviving corporation) in the aggregate number and kind of shares subject to
this Warrant, and the number and kind of shares and the price per share then
applicable to shares covered by the unexercised portion of this Warrant.
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7. Demand Registration. If at any one time after the date of this Stock
Purchase Warrant the Company receives a written request executed by the
Holder(s) of at least sixty percent (60%) of the conversion shares underlying
the series of Stock Purchase Warrants of which this Warrant is a part (the
"Electing Holders") to file a Registration Statement under the Act for a public
offering of such Shares, the Company will promptly, and in any case not later
than 75 days after receipt of the registration request, cause a Registration
Statement to be filed with the Commission with respect to the number of Shares
specified in the request and will use its reasonable best efforts to cause such
Registration Statement to become effective. Prior to or simultaneously with the
effectiveness of such Registration Statement, the Electing Holders shall have
fully exercised all of the Stock Purchase Warrants held by them and all of the
conversion shares underlying such Stock Purchase Warrants shall be included in
such public offering. The Company will not be required to cause more than one
Registration Statement to be filed pursuant to this Section 7.
8. Piggyback Registration Rights. The Company agrees as follows:
(a) If the Company shall determine to register any shares of its Common
Stock under the Act at any time and in connection therewith the Company may
lawfully register any of the Shares, (other than pursuant to a registration
statement on Form X-0, X-0 or any comparable form or filed in connection with an
exchange offering of securities solely to the Company's existing shareholders)
the Company will promptly give written notice thereof to the Holder. Upon the
written request of the Holder within 30 days after receipt of any such notice
from the Company, the Company will, except as herein provided, cause all of the
Shares which the Holder has requested to be registered to be included in such
Registration Statement, all to the extent requisite to permit the sale or other
disposition of the Shares. However nothing herein shall prevent the Company from
at any time abandoning or delaying any registration.
(b) If any shares registered pursuant to this Section 8 shall be
included in an underwritten public offering in whole or in part, the Company may
require that the Shares requested for inclusion hereunder be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. If and in the event that the managing underwriter
of such public offering shall be of the opinion that inclusion of all of the
Shares would adversely affect the marketing of the securities to be sold by the
Company therein, then the number of Shares otherwise to be included in the
underwritten public offering may be reduced on a pro rata basis with the shares
proposed to be included in such offering by any other selling shareholder
(exclusive of the Company).
(c) The Holder hereof may not exercise the rights granted in this
Section 8 to effect the registration of the Shares under the Act prior to the
third anniversary hereof.
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(d) Anything herein to the contrary notwithstanding, the Company shall
not be obligated to provide the foregoing so-called "piggyback" registration
rights on more than two occasions.
9. Registration Procedures. If and whenever the Company is required by
the provisions of Section 7 or 8 to effect the registration of the Shares under
the Act, the Company will:
(a) prepare and file with the Commission a Registration Statement with
respect to such securities, and use its best efforts to cause such Registration
Statement to become and remain effective for such period as may be reasonably
necessary to effect the sale of such securities, not to exceed nine months;
(b) prepare and file with the Commission such amendments to such
Registration Statement and supplements to the prospectus contained therein as
may be necessary to keep such Registration Statement effective for such period
as may be reasonably necessary to effect the sale of such Shares, not to exceed
nine months; provided, however, that in the event any amendment or supplement to
a Registration Statement is required to be filed pursuant to paragraph (g) of
this Section 9, and such filing results in the suspension of the effectiveness
of such Registration Statement, such nine month period shall be extended by the
period during which the effectiveness of such Registration Statement has been
suspended;
(c) furnish to the Holder participating in such registration and to the
underwriters of the securities being registered such reasonable number of copies
of the Registration Statement, preliminary prospectus, final prospectus and such
other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(d) use its reasonable efforts to register or qualify the securities
covered by such Registration Statement under the state securities or blue sky
laws of such jurisdictions as the Holder may reasonably request within 20 days
following the original filing of such Registration Statement, except that the
Company shall not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(e) notify the Holder promptly after it shall receive notice thereof, of
the time when such Registration Statement has become effective or a supplement
to any prospectus forming a part of such registration statement has been filed;
(f) notify the Holder promptly of any request by the Commission for the
amending or supplementing of such Registration Statement or prospectus or for
additional information;
(g) prepare and promptly file with the Commission and promptly notify
the Holder of the filing of such amendment or supplement to such Registration
Statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus
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relating to such securities is required to be delivered under the Act, any event
shall have occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading;
(h) advise the Holder promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such Registration Statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; and
(i) furnish on the effective date of the Registration Statement to the
Holder and any underwriters, at the closing provided for in the underwriting
agreement, an opinion of counsel for the Company and a letter from the
independent certified public accountants for the Company, in form and substance
customary for similar offerings.
10. Unregisterable Shares. Notwithstanding anything to the contrary
contained herein, the registration rights contained herein (both demand and
"piggyback") shall not apply to any Shares which may be sold without restriction
pursuant to Rule 144(k) of the Act.
11. Expenses. All expenses in connection with, or incidental to, the
preparation and filing of any Registration Statement pursuant to Section 7 or 8
hereof, any registration or qualification under securities or blue sky laws of
states in which the offering will be made, and any filing fee of the National
Association of Securities Dealers, Inc. ("NASD") relating to such offering,
shall be borne by the Company (the "Company Obligations"); provided, however,
that the Holder shall bear its pro rata share of the underwriting discount and
commissions, underwriting expense allowances and transfer taxes, all reasonable
documented fees and disbursements of Holder's counsel, and, to the extent
required by applicable state securities laws and NASD rules and regulations, all
legal fees and disbursements and other expenses of complying with state
securities or blue sky laws of any jurisdictions in which the Shares to be
offered are to be registered or qualified.
12. Indemnification.
(a) The Company will indemnify and hold harmless the Holder and any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or such underwriter within the meaning of the Act, from and
against, and will reimburse such Holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such Holder or any such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
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statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished by
such Holder, such underwriter or such controlling person in writing specifically
for use in the preparation thereof.
(b) The Holder will indemnify and hold harmless the Company, its
directors and officers, any underwriter and any controlling person of such
underwriter from and against, and will reimburse the Company, underwriter or
controlling person with respect to, any and all loss, damage, liability, cost or
expense to which the Company, any underwriter or any controlling person thereof
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in any Registration Statement, any
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was so made in
reliance upon written information furnished by such Holder specifically for use
in the preparation thereof. The maximum liability for indemnification hereunder
of the Holder shall not exceed, in the aggregate, the aggregate dollar amount of
gross proceeds received by the Holder on account of the Shares which are
included in a Registration Statement pursuant to Section 7 or 8.
13. Rights and Obligations Survive Exercise and Expiration of Warrant.
The rights and obligations of the Company and the Holder set forth in Sections
7, 8, 9, 11 and 12 shall survive the exercise and expiration of this Warrant.
14. No Rights as Shareholders. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to
exercise of this Warrant and the payment for the Shares so purchased.
Notwithstanding the foregoing, the Company agrees to transmit to the Holder such
information, documents and reports as are generally distributed to holders of
the capital stock of the Company concurrently with the distribution thereof to
the shareholders. Upon valid exercise of this Warrant and payment for the Shares
so purchased in accordance with the terms of the Warrant, the Holder or the
Holder's designee, as the case may be, shall be deemed a shareholder of the
Company.
15. Legend. Each certificate representing any Warrant shall bear the
legend set out on page 1 hereof. Each certificate representing any Shares shall
bear a legend substantially in the following form, as appropriate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE
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REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933.
Such Warrant and Shares may be subject to additional restrictions on transfer
imposed under applicable state and federal securities law.
16. Right of First Refusal
(a) Voluntary Transfers. No Holder may sell, assign, pledge or otherwise
dispose of any Shares into which this Warrant is convertible, or any interest
therein now held or hereafter acquired, in a private transaction, as opposed to
a trade consummed on NASDAQ or comparable system, without first giving written
notice to the Company (the "Notice of Proposed Transfer"). The Notice of
Proposed Transfer shall include the name of the proposed transferee and all
material terms of the proposed transfer and, shall be accompanied by a copy of
the bona fide written offer to purchase such Shares upon the terms set forth in
the Notice of Proposed Transfer. The Notice of Proposed Transfer to the Company
shall be deemed for all purposes to give the Company a first right of purchase
(sometimes referred to as a right of first refusal) as provided herein. If the
Company declines or fails to exercise its first right of purchase within 10 days
after such Notice of Proposed Transfer, the Holder proposing to effectuate such
transaction may, within 30 days from the date said right terminates, transfer
the Shares to the proposed transferee upon the terms set forth in the Notice of
Proposed Transfer.
(b) First Right of Purchase. Upon receipt of the Notice of Proposed
Transfer, the Company shall have a right to purchase the Shares to which such
Notice relates at the price and in the manner specified herein before any other
action is taken to sell, assign, transfer, pledge, or otherwise dispose of the
Shares. Such right shall continue for a period of 10 days from the receipt of
the Notice of Proposed Transfer on the terms & conditions as are specified in
such Notice. If the Company elects to exercise its first right of purchase, it
shall so notify the Holder of the Shares and shall specify time and place for
tender of certificates representing such Shares.
(c) Transfers in Violation of Warrant. If any transfer of Shares is made
or attempted contrary to the provisions of this Warrant, or if Shares are not
offered to the Company as required herein, the Company shall have the right to
purchase said shares from the owner thereof or his transferee at any time before
or after the transfer, as herein provided. In the event that the Company elects
to exercise its first right of purchase, it may do so by cancelling the
certificate(s) representing the Shares and depositing the purchase price
determined hereunder in an interest bearing bank account for the benefit of
Holder, whereupon such Shares shall be, for all purposes, cancelled and neither
the Holder nor any transferee shall have any rights as one of its Holders with
respect to such Shares for any purpose, including without limitation dividend
and voting rights, until there has been compliance with all applicable
provisions of this Warrant. In addition to any other legal or equitable remedies
which it may have, the Company may enforce its rights by actions for specific
performance (to the extent permitted by law).
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17. Modifications and Waivers. This Warrant may not be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
against which enforcement of the same is sought.
18. Notices. Any notice, request or other document required or permitted
to be given or delivered to the Holder or the Company shall be delivered, or
shall be sent by certified or registered mail, postage prepaid, to the Holder at
its address shown on the books of the Company or to the Company at the address
indicated therefor on the signature page of this Warrant, or, if different, at
the principal office of the Company.
19. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants with the Holder that upon its receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate and, in the case of any such loss, theft
or destruction, of an indemnity or security reasonably satisfactory to it, and
upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.
20. Representations and Warranties of Holder. By accepting this Warrant,
the Holder represents and warrants that the Holder is acquiring this Warrant and
the Shares for such Holder's own account, for investment and not with a view to,
or for sale in connection with, any distribution thereof or any part thereof.
Holder represents and warrants that such Holder is (a) experienced in the
evaluation of businesses similar to the Company, (b) is able to fend for
himself, herself or itself in the transactions contemplated by this Warrant, (c)
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Company, (d)
has the ability to bear the economic risks of an investment in the Company, (e)
has been furnished with or has had access to such information as is specified in
subparagraph (b)(2) of Rule 502 promulgated under the Act and (f) has been
afforded the opportunity to ask questions of and to receive answers from the
Company and to obtain any additional information necessary to make an informed
investment decision with respect to an investment in the Company.
21. Binding Effect on Successors. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Shares issuable upon exercise of this Warrant shall
survive the exercise and termination of this Warrant and all of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder.
22. Sale or Transfer of the Warrant and Shares. Except as provided in
Section 16, and except for transfers to shareholders or officers, directors of
the Holder in accordance with applicable federal and state securities laws,
neither this Warrant nor the Shares, or any of them, may be sold, transferred,
pledged or otherwise converyed, in whole or in part, by the Holder.
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Any attempted conveyance by the Holder shall be deemed void and of no effect
except as provided in Section 16.
23. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.
IN WITNESS WHEREOF, BOSTON RESTAURANT ASSOCIATES, INC. has caused this
Warrant to be executed under seal by its officer thereunto duly authorized.
ORIGINAL ISSUANCE DATE: December ___, 1996
BOSTON RESTAURANT ASSOCIATES, INC.
By: ____________________________
Xxxxxx X. Xxxxxxxxxxx
President
COMPANY'S ADDRESS:
000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
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EXHIBIT A
NOTICE OF EXERCISE
------------------
To: BOSTON RESTAURANT ASSOCIATES, INC.
1. The undersigned hereby elects to purchase _______ shares of Common
Stock of BOSTON RESTAURANT ASSOCIATES, INC. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name or names as are specified
below.
3. The undersigned represents that the aforesaid shares of Common Stock
are being acquired for the account of the undersigned for investment and not
with a view to, or for resale in connection with, the distribution thereof and
that the undersigned has no present intention of distributing or reselling such
shares. The undersigned further represents that such shares shall not be sold or
transferred unless either (1) they first shall have been registered under the
Securities Act of 1933, as amended, or (ii) the Company first shall have been
furnished with an opinion of legal counsel reasonably satisfactory to the
Company to the effect that such sale or transfer is exempt from the registration
requirement.
4. In the event of partial exercise, please issue an appropriate Warrant
exercisable into the remaining shares.
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(Name)
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(Address)
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(Signature)
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(Date)
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