INVESTORS’ RIGHTS AGREEMENT STANDSTILL AND EXTENSION AGREEMENT
Exhibit
10.9
STANDSTILL
AND EXTENSION AGREEMENT
This
Investors’ Rights Agreement Standstill and Extension Agreement (“Agreement”) is
made as of May 7, 2007 (the “Effective Date”), by and between Xxxxx’x
Restaurants, Inc., a Delaware corporation, (“Rubio’s” or the “Company”), and
Xxxxx Xxxxx (the “Investor”).
RECITALS
X. Xxxxx’x
and the Investor are parties to that certain Amended and Restated Investors’
Rights Agreement, dated as of November 19, 1997, as amended on December 31,
1997
and in May 1998 (the “Rights Agreement”), wherein Rubio’s granted to the
Investor certain registration rights.
B. On
July
28, 2005, the parties hereto entered into an Investors’ Rights Agreement
Standstill and Extension Agreement (the “2005 Extension Agreement”) which
provided, among other things, for an extension of the expiration date applicable
to the Investor’s registration rights and superseded an Investors’ Rights
Agreement Standstill and Extension Agreement dated March 12, 2004 (collectively,
with the 2005 Extension Agreement the “Original Extension
Agreements”).
C. Given
the
current state of market conditions, the trading range of Rubio’s common stock
and the current operating performance of the Company, the Investor desires
to
obtain a further extension of, and modification of its registration
rights.
D. The
Company is willing to grant to Investor a further extension of its registration
rights through June 30, 2009 and a modification of such registration rights
in
exchange for the Investor agreeing not to exercise any demand registration
rights on or before June 30, 2007.
AGREEMENT
NOW,
THEREFORE, the parties hereto agree as follows:
1. Amendments
to Rights Agreement.
(a) Section
1.4(a) of the Rights Agreement be deleted and replaced with the
following:
“(a) Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for up to one hundred eighty (180) days.”
(b) Clauses
(4), (5) and (6) of Section 1.12 (b) of the Rights Agreement be deleted and
replaced with the following:
“(4)
if
the Company has already effected four (4) registrations on Form S-3 pursuant
to
this Section 1.12 and the Holder is eligible to resale its Registrable
Securities pursuant to Rule 144(k) of the Act.; or (5) in any particular
jurisdiction in which the Company would be required to qualify to do
business.”
(c) The
following shall be added to Section 1.12 as new Section 1.12(d):
“(d) If
the
Company’s Board of Directors determines that it would be detrimental to the
Company and its stockholders for resales of Registrable Securities to be made
pursuant to an effective Form S-3 registration statement due to the existence
of
a material event or development or potential material event or development
involving the Company which the Company would be obligated to disclose in the
registration statement (or in filings or documents incorporated by reference
in
such registration statement), which disclosure would be premature or otherwise
inadvisable at such time or which the Board of Directors believes would have
a
material adverse effect on the Company and its stockholders or would make the
successful consummation by the Company of a material transaction significantly
less likely, the Company will have the right to suspend the use of the
registration statement for a period of not more than ninety (90) days, provided,
however, that the Company may not exercise its right to suspend a registration
statement under this Section 1.12(d) more than twice in any twelve (12)-month
period. The Company will promptly notify the Holders of any decision by its
Board of Directors to suspend a registration statement pursuant to this Section
1.12(d).”
(d) Section
1.16(a) of the Rights Agreement be deleted and replaced with the
following:
“(a) The
right
of any Holder to request registration or inclusion in registration pursuant
to
Section 1.2, 1.3 or 1.12 shall terminate on the first such date after this
Amendment as (i) all shares of Registrable Securities held or entitled to be
held upon conversion by such Holder may be sold under Rule 144 during any ninety
(90)-day period and (ii) the Holder thereof holds less than one percent (1%)
of
the Company’s outstanding Common Stock.”
(e) The
following shall be added to Section 1.2 as new Section 1.2(e):
“(e) If
the
Company’s Board of Directors determines that it would be detrimental to the
Company and its stockholders for resales of Registrable Securities to be made
pursuant to a registration statement requested pursuant to this Section 1.2
due
to the existence of a material event or development or potential material event
or development involving the Company which the Company would be obligated to
disclose in the registration statement (or in filings or documents incorporated
by reference in such registration statement), which disclosure would be
premature or otherwise inadvisable at such time or which the Board of Directors
believes would have a material adverse effect on the Company and its
stockholders or would make the successful consummation by the Company of a
material transaction significantly less likely, the Company will have the right
to suspend the use of the registration statement for a period of not more than
ninety (90) days, provided, however, that the Company may not exercise its
right
to suspend a registration statement under this Section 1.2(e) more than twice
in
any twelve (12)-month period. The Company will promptly notify the Holders
of
any decision by its Board of Directors to suspend a registration statement
pursuant to this Section 1.2(e).”
2. Extension
of Registration Rights.
Beginning on the Effective Date and extending through June 30, 2009, Rubio’s
hereby grants to the Investor the same rights, if any, held by the Investor
as
of the Effective Date under Section 1.2, 1.3, 1.4, 1.6, 1.7, 1.8, 1.9, 1.10,
1.11, 1.12 and 1.14 of the Rights Agreement, as amended by the Original
Extension Agreements and by this Agreement; provided, that in the event that
the
Company exercises its right to defer the filing of a Form S-3 registration
statement pursuant to Section 1.12(b)(3) or to suspend the use of a Form S-3
registration statement pursuant to Section 1.12(d), the Investor’s rights shall
be extended from June 30, 2009 by the number of days of any deferral and any
suspension. Such rights shall be governed by the relevant terms and conditions
as set forth in the Rights Agreement, which terms are hereby incorporated by
reference, provided that the Investor shall be considered the “Holder” as that
term is used in the Rights Agreement.
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3. Standstill.
Beginning on the Effective Date and extending through June 30, 2007, the
Investor will not exercise any demand registration rights, as described in
Sections 1.2 or 1.12 of the Rights Agreement or set forth in Section 2 hereof,
that it is entitled to, whether pursuant to this Agreement or pursuant to the
Rights Agreement.
4. Miscellaneous.
(a) Waivers
and Amendments.
Neither
this Agreement nor any provision hereof may be changed, waived, discharged,
terminated, modified or amended except upon the written consent of the Company
and the Investor.
(b) Headings.
The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.
(c) Severability.
In case
any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
(d) Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, shall be sent by confirmed facsimile or mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, and shall be deemed given when so sent in the case
of
facsimile transmission, or when so received in the case of mail or courier,
and
addressed as set forth on the signature page of this Agreement.
(e) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California as applied to contracts entered into and performed entirely
in California by California residents, without regard to conflicts of law
principles.
(f) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
parties.
(g) Successors
and Assigns.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors, assigns, heirs, executors
and
administrators of the parties hereto.
(h) Entire
Agreement.
This
Agreement supersedes the Original Extension Agreements, which hereafter shall
be
null and void in its entirety, and constitutes the full and entire understanding
and agreement between the parties with regard to the subject matter
hereof.
(i) Effect
of Amendment.
Except
as expressly modified by this Amendment, the Rights Agreement shall remain
unmodified and in full force and effect.
(j) No
Third Party Beneficiaries.
This
Agreement and all conditions and provisions hereof are and are intended to
be
for the sole and exclusive benefit of Rubio’s and the Investor and for the
benefit of no other party to the Rights Agreement (or any successors or
assigns).
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their duly authorized representatives on the day and year first above
written.
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Company:
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XXXXX’X
RESTAURANTS, INC.
a
Delaware corporation
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| By: | /s/ Xxxxxx X. Xxxxxxx | |
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Xxxxxx X. Xxxxxxx President
and Chief Executive Officer
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Address:
0000
Xxxxxx Xxxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000
Fax
No.: (000) 000-0000
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Investor:
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Xxxxx
Xxxxx
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/s/
Xxxxx Xxxxx
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Xxxxx
Xxxxx
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Address:
0000
Xxx Xxxxxxxxxx
Xxx
Xxx, XX 00000
Fax
No.: (000) 000-0000
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