EXHIBIT 10.29
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STOCK PURCHASE AGREEMENT
Dated as of April 28, 2000
among
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FRESH ENTERPRISES, INC.
and
Those Persons listed on Schedule 1 hereto
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS...................................................... 1
1.1 Defined Terms..................................................... 1
ARTICLE II. THE AUTHORIZATION AND SALE OF PREFERRED STOCK................... 5
2.1 Authorization of Preferred Stock.................................. 5
2.2 Purchase of Preferred Stock....................................... 5
2.3 Closing........................................................... 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE BUYERS................... 6
3.1 Authority......................................................... 6
3.2 No Violation...................................................... 6
3.3 Disclosure of Information......................................... 7
3.4 Investment Experience............................................. 7
3.5 Accredited Investors.............................................. 7
3.6 Exculpation Among Buyers.......................................... 7
3.7 Legends........................................................... 7
3.8 Rights of Senior Debt............................................. 8
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................... 8
4.1 Corporate Organization............................................ 8
4.2 Subsidiaries and Investments...................................... 8
4.3 Capital Stock..................................................... 9
4.4 Issuance of Shares................................................ 9
4.5 Authority......................................................... 9
4.6 No Violation...................................................... 10
4.7 Litigation........................................................ 10
4.8 Financial Statements.............................................. 11
4.9 No Undisclosed Liabilities........................................ 11
4.10 Absence of Certain Changes or Events.............................. 11
4.11 Insurance......................................................... 13
4.12 Employee Benefits................................................. 13
4.13 Material Contracts and Other Agreements........................... 13
4.14 Suppliers......................................................... 14
4.15 Leased Property................................................... 14
4.16 Condition and Sufficiency of Assets............................... 15
4.17 Compliance with Laws.............................................. 15
4.18 Licenses and Permits; Franchise Matters........................... 15
4.20 Title to Assets................................................... 18
4.21 Inventory......................................................... 18
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4.22 Accounts and Notes Receivable ................................... 19
4.23 Taxes............................................................ 19
4.24 Environmental Laws and Regulations............................... 20
4.25 Board of Directors Approval...................................... 21
4.26 No Agreements to Sell the Company................................ 22
4.27 Related Party Transactions....................................... 22
4.28 No Finders or Brokers............................................ 22
4.29 Labor Matters.................................................... 22
4.30 Full Disclosure.................................................. 23
ARTICLE V. CONDITIONS PRECEDENT............................................ 23
5.1 Conditions to the Obligations of the Company..................... 23
5.2 Conditions to the Obligations of the Buyers...................... 23
ARTICLE VI. POST CLOSING................................................... 24
6.1 Survival of Representations and Warranties....................... 24
ARTICLE VII. MISCELLANEOUS................................................. 25
7.1 Notices.......................................................... 25
7.2 Headings; Agreement.............................................. 25
7.3 Publicity........................................................ 26
7.4 Entire Agreement................................................. 26
7.5 Amendment........................................................ 26
7.6 Assignment....................................................... 26
7.7 Expenses......................................................... 26
7.8 Severability..................................................... 26
7.9 Counterparts..................................................... 26
7.10 Governing Law.................................................... 26
7.11 Cumulative Remedies.............................................. 27
7.12 Third Party Beneficiaries........................................ 27
7.13 Limitation of Liability.......................................... 27
7.14 Arbitration...................................................... 27
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT (this "Agreement") dated as of April 28, 2000
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among Fresh Enterprises, Inc., a California corporation (the "Company") and
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those Persons listed on Schedule 1 hereto (collectively, the "Buyers" and
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individually a "Buyer").
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms
"Accounts Payable" shall mean accounts payable and accrued liabilities of
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the Company and its Subsidiaries, including taxes payable, but excluding the
current portion of Funded Debt and deferred revenues.
"Affiliate" shall have the meaning set forth for such term in the
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Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder. Without limiting the foregoing, all directors and officers of a
Person that is a corporation shall be deemed Affiliates of such Person for all
purposes hereunder.
"Aggregate Series B Purchase Price" shall have the meaning set forth for
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such term in Section 2.2.
"Balance Sheet" shall have the meaning set forth for such term in Section
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4.9.
"Benefit Plans" shall have the meaning set forth for such term in Section
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412.
"Board" shall mean the board of directors of the Company.
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"Breach" shall mean, and a breach of a representation, warranty, covenant,
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obligation or other provision of this Agreement or any Transaction Document will
be deemed to have occurred if there is or has been, any inaccuracy in or breach
of, or any failure to perform or comply with, such representation, warranty,
covenant, obligation or other provision.
"Buyers" shall have the meaning set forth for such term in the preamble of
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this Agreement.
"Xxxxxxxxx" shall mean, collectively, Xxxxxxxxx Partners IV, L.P.,
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Xxxxxxxxx Partners IV Offshore, L.P., Xxxxxxxxx Partners IV Special Purpose,
L.P. and their respective assigns and Affiliates.
"Xxxxxxxxx-Baja, L.L.C." shall mean Xxxxxxxxx-Baja Partners, L.L.C.
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"CGCL" shall mean the General Corporation Law of the State of California.
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"Closing" shall have the meaning set forth for such term in Section 2.3.
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"Closing Date" shall have the meaning set forth for such term in Section
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2.3.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
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successor law.
"Commercially Reasonable Efforts" shall mean the efforts that a reasonable
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Person desirous of achieving a result would use in similar circumstances to
ensure that such result is achieved as expeditiously and effectively as
possible. Notwithstanding the foregoing, an obligation to use Commercially
Reasonable Efforts under this Agreement does not require the Person subject to
that obligation to make any payments or pay other consideration to third parties
from whom Consents are required to be obtained hereunder in exchange for receipt
of such Consents; provided, however, that such payments or consideration shall
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exclude any payments or consideration which are otherwise required to be paid to
such parties.
"Common Stock" shall have the meaning set forth for such term in Section
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2.2.
"Company Contracts" shall have the meaning set forth for such term in
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Section 4.13.
"Company Stores" shall have the meaning set forth for such term in Section
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4.18.
"Company Taxes" shall have the meaning set forth for such term in Section
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4.23.
"Consent" shall mean any approval, consent, ratification, waiver, or other
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authorization (including any Governmental Authorization).
"Contract" shall mean any agreement, contract, obligation, promise or
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undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Disposed Businesses" shall have the meaning set forth for such term in
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Section 4.13.
"Encumbrance" shall mean any charge, claim, condition, equitable interest,
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lien, option, pledge, security interest, right of first refusal or restriction
of any kind, including any restriction on use, voting, transfer, receipt of
income or exercise of any other attribute of ownership, which in each case is
not created by or arising under the Stockholders' Agreement.
"ERISA" shall have the meaning set forth for such term in Section 4.12.
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"Financial Statements" shall have the meaning set forth for such term in
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Section 4.8.
"Franchise Agreements" shall have the meaning set forth for such term in
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Section 4.18.
"Franchise Laws" shall have the meaning set forth for such term in Section
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4.18.
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"FTC" shall have the meaning set forth for such term in Section 4.18.
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"GAAP" shall mean United States generally accepted accounting principles
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and practices.
"Governmental Authorization" shall mean any approval, Consent, license,
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permit, waiver or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body" shall mean any:
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(a) nation, state, county, city, town, village, district or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, official or entity and any court or
other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature.
"Hazardous Material" shall have the meaning set forth for such term in
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Section 4.24.
"Knowledge" shall mean and an individual will be deemed to have "Knowledge"
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of a particular fact or other matter if such individual is actually aware of
such fact or other matter; provided that, such individual shall be required to
make a reasonable investigation of the circumstances related thereto, including
making due inquiry of other Persons who should be aware of such fact or other
matter.
"Knowledge of the Company" or other similar phrases shall mean and include
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the Knowledge (provided that the Company's duty of inquiry shall be limited to
inquiry of officers, directors, employees and agents of the Company) of Xxxxx X.
Xxxxxxxx, Xxxx Xxxxxxxxxx, and Xxxxxx Xxxxx, who are respectively, the Chairman,
President and Chief Executive Officer, and Chief Financial Officer of the
Company.
"Leased Property" shall have the meaning set forth for such term in Section
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4.15.
"Leases" shall have the meaning set forth for such term in Section 4.15.
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"Legal Requirement" shall mean any federal, state, local, municipal or
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other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute or treaty, including, without limitation, any
applicable franchise, building, zoning, health, environmental, sanitation,
safety, labor relations, immigration or other law, ordinance or regulation.
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"Liability" shall mean any direct or indirect liability, indebtedness,
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obligation, commitment, expense, claim, deficiency, deferred income, guaranty or
endorsement of or by any Person of any type, whether known, unknown, accrued,
absolute, contingent, matured or unmatured.
"Material Adverse Effect" or "Material Adverse Change" shall mean any
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significant adverse effect or change in the condition (financial or other),
business, results of operations, liabilities or operations of any party or on
the ability of such party to consummate the Transactions, or any event or
condition which would reasonably be expected to, with the passage of time,
constitute a "Material Adverse Effect" or "Material Adverse Change"; provided,
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however, that a Material Adverse Change shall not include changes, generally, in
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economic conditions or the restaurant industry.
"Order" shall mean any award, decision, injunction, judgment, order,
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ruling, subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body or by any arbitrator.
"Organizational Documents" shall mean (a) the articles or certificate of
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incorporation, all certificates of determination and designation, and the bylaws
of a corporation; (b) the partnership agreement and any statement of partnership
of a general partnership; (c) the limited partnership agreement and the
certificate or articles of limited partnership of a limited partnership; (d) the
operating agreement, limited liability company agreement and the certificate or
articles of organization or formation of a limited liability company; (e) any
charter or similar document adopted or filed in connection with the creation,
formation or organization of a Person; and (f) any amendment to any of the
foregoing.
"Person" shall mean any individual, corporation (including any non-profit
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corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Governmental Body.
"Proceeding" shall mean any action, arbitration, audit, hearing,
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investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.
"Proprietary Rights" shall have the meaning set forth for such term in
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Section 4.19.
"RCRA" shall have the meaning set forth for such term in Section 4.24.
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"Real Property" shall have the meaning set forth for such term in Section
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4.24.
"Registration Rights Agreement" shall mean that certain Registration Rights
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Agreement between the Company and certain of its shareholders dated November 24,
1998, as amended to date.
"Representative" shall mean any officer, director, principal, stockholder,
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partner, attorney, accountant, adviser, agent, employee or other representative.
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"Required Permits" shall have the meaning set forth for such term in
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Section 5.24.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
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rules and regulations promulgated thereunder or any successor law.
"Senior Credit Facility" shall mean the Credit Agreement, dated November
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24, 1998, among Fresh Enterprises, Inc., as Borrower, Subsidiaries of the
Borrower now or hereafter party hereto, as Guarantors, and Imperial Bank, as
Bank.
"Series A Shares" shall mean the 2,727,941 shares of Series A Convertible
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Preferred Stock of the Company.
"Series B Shares" shall have the meaning set forth for such term in Section
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2.2.
"Series B Stock" shall have the meaning set forth for such term in Section
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2.1.
"Shareholders' Agreement" shall mean that certain Shareholders' Agreement
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dated November 24, 1998, between the Company and the holders of the capital
stock of the Company, as amended to date.
"Subsidiary" shall have the meaning set forth for such term in Section 4.2.
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"Threatened" shall describe any claim, Proceeding, dispute, action or other
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matter if any demand, notice or statement has been received or deemed to be
received (orally or in writing) with respect to such claim, Proceeding, dispute,
action or other matter.
"Transaction Documents" shall mean this Agreement, the Shareholders
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Agreement and the Registration Rights Agreement.
"Transactions" shall mean the transactions contemplated by the Transaction
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Documents.
ARTICLE II.
THE AUTHORIZATION AND SALE OF PREFERRED STOCK
2.1 Authorization of Preferred Stock.. Prior to the Closing, the Company
will file with the California Secretary of State a Certificate of Determination
of Preferences of Series B Convertible Preferred Stock setting forth the rights,
powers, preferences, qualifications, limitations and restrictions of the
Company's Series B Convertible Preferred Stock ("Series B Stock") with the terms
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set forth on Exhibit A attached hereto, with such certificate in form and
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substance satisfactory to the Buyers (the "Certificate").
2.2 Purchase of Preferred Stock. Subject to the terms and conditions of
this Agreement, the Buyers agree to purchase from the Company and the Company
agrees to sell to the Buyers at the Closing, 2,153,507 shares (the "Series B
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Shares") of Series B Stock of the Company free and clear of all Encumbrances.
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Each of the Buyers shall purchase the Series B Shares listed opposite such
Buyer's name on Exhibit B attached hereto. The purchase price for
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each Series B Share shall be an amount equal to $7.28, constituting an aggregate
purchase price of $15,677,530.96 (the "Aggregate Series B Purchase Price").
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2.3 Closing. The closing of the sale to and purchase by the Buyers of the
Preferred Shares referred to in Section 2.2 hereof (the "Closing") shall occur
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at the offices of Paul, Hastings, Xxxxxxxx & Xxxxxx, 000 Xxxxx Xxxxxx Xxxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx at 10:00 a.m. Washington time on April 28, 2000 or at
such other date, place or time of day as the Buyers and the Company shall agree
to in writing (the "Closing Date"). At the Closing, (i) the Company shall
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deliver to each Buyer certificates evidencing the Series B Shares being
purchased by such Buyer, free and clear of any Encumbrances of any nature
whatsoever registered in such Buyer's name, and (ii) each Buyer shall deliver to
the Company the portion of the Purchase Price listed next to such Buyer's name
on Exhibit B hereto, by check or wire transfer of immediately available funds
or, in the case of Xxxxxxx Xxxxxxxxxx, by a promissory note in a form acceptable
to the Company or any combination thereof.
2.4 Delayed Closing. Notwithstanding the preceding Sections 2.2 and 2.3,
Xxxxxxxxx-Baja, L.L.C. may purchase its Series B Shares hereunder at any time
acceptable to the Company (the "Delayed Closing") up to 30 days from the Closing
Date (such date being the "Subsequent Closing Date"). If Xxxxxxxxx-Baja, L.L.C.
does not purchase its Series B Shares by the Subsequent Closing Date, then
Xxxxxxxxx shall purchase the Series B Shares allocated to Xxxxxxxxx-Baja, L.L.C.
on Exhibit B hereto on the Subsequent Closing Date. On the Subsequent Closing
Date (i) the Company shall deliver to Xxxxxxxxx-Baja, L.L.C. (or Xxxxxxxxx, as
applicable) certificates evidencing the Series B Shares being purchased by such
Buyer, free and clear of any Encumbrances of any nature whatsoever registered in
such Buyer's name, and (ii) Xxxxxxxxx-Baja, L.L.C. (or Xxxxxxxxx, as applicable)
shall deliver to the Company the portion of the Purchase Price listed next to
such Xxxxxxxxx-Baja, L.L.C.'s name on Exhibit B hereto, by check or wire
transfer of immediately available funds.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE BUYERS
Each Buyer severally represents and warrants to the Company as follows:
3.1 Authority. Such Buyer has full power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement. The
execution, delivery and performance by such Buyer of this Agreement and the
consummation of the Transactions have been duly authorized by all necessary
action on the part of such Buyer. No other action on the part of such Buyer is
necessary to authorize the execution and delivery of this Agreement by such
Buyer or the performance by such Buyer of its obligations hereunder. Each of the
Transaction Documents have been duly executed and delivered by such Buyer and
constitutes a legal, valid and binding agreement of such Buyer, enforceable
against such Buyer in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors' rights generally and subject to general equitable principles
(regardless of whether such enforceability is considered in a Proceeding in
equity or at law).
3.2 No Violation. Neither the execution and delivery of the Transaction
Documents by such Buyer nor the consummation of the Transactions will (a)
violate any
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provision of any Legal Requirement or Order applicable to such Buyer (b) require
the Consent or any filing with any Person or Governmental Body, except as
permitted by Section 500 et seq. of the CGCL, (c) violate, result (with or
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without notice or the passage of time, or both) in a Breach of, or give rise to
the right to terminate, accelerate or cancel any obligation under, or require
the payment of any fee, or constitute (with or without notice or the passage of
time, or both) a default under, any of the terms or provisions of (i) the
Organizational Documents of such Buyer, or (ii) any indenture, mortgage, lien,
Order, judgment, ordinance, regulation, decree, license, permit or other
Contract or instrument to which such Buyer is subject or bound (d) result in the
creation of any Encumbrance upon any property of such Buyer which could have,
individually or in the aggregate, a Material Adverse Effect on such Buyer, or
(e) with respect to such Buyer, result in a termination, loss or adverse
modification of any license, permit, certificate or Contract granted to or
otherwise held by such Buyer except (in the case of clauses (a) and (c)(ii)) for
such violations, Breaches and defaults which could not have, individually or in
the aggregate, a Material Adverse Effect on such Buyer or to interfere in any
material way with the consummation of the Transactions.
3.3 Disclosure of Information. Such Buyer has conducted and shall continue
to conduct due diligence. Notwithstanding the foregoing, nothing in this Section
3.3 shall, or shall be deemed to, modify, waive, qualify or in any way negate
the representations and warranties of the Company set forth herein or otherwise
release the Sellers from their indemnification obligations under Article VIII
herein.
3.4 Investment Experience. Such Buyer is an investor in securities of
companies in the development stage, is able to bear the economic risk of this
investment, and has such knowledge and experience in financial and business
matters that such Buyer is capable of evaluating the merits and risks of the
investment in the securities to be purchased hereunder.
3.5 Accredited Investors. Such Buyer is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Securities Act.
Such Buyer is purchasing the Series B Shares pursuant to this Agreement for
investment for such Buyer's own account and not with a view to, or for resale in
connection with, any distribution thereof, within the meaning of Section 2(11)
of the Securities Act.
3.6 Exculpation Among Buyers. Each Buyer acknowledges that in making its
decision to invest in the Company, it is not relying on any other Buyer or upon
any person, firm or company, other than the Company and its officers, employees
and/or directors. Each Buyer agrees that no other Buyer, nor the partners,
employees, officers or controlling persons of any other Buyer shall be liable
for any actions taken by such Buyer, or omitted to be taken by such Buyer, in
connection with such investment.
3.7 Legends. Such Buyer understands that the certificates evidencing the
securities to be purchased hereunder will bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR
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HYPOTHECATED EXCEPT IN COMPLIANCE WITH THE ACT AND ALL APPLICABLE STATE
SECURITIES LAWS."
3.8 Rights of Senior Debt. Each Buyer understands and acknowledges that
the Company is prohibited from paying any dividends or other distributions on,
and from redeeming, repurchasing or otherwise acquiring for value, the Series B
Shares, the Series A Shares and any other outstanding shares of the Company's
capital stock, without the consent of Imperial Bank, the Company's senior lender
under the Credit Agreement dated as of November 24, 1998, and its successors and
assigns thereunder or under any extension, renewal, refunding or refinancing
thereof (the "Senior Debt"). Each Buyer further understands and acknowledges
that the Company's obligations to redeem the Series B Shares and the Series A
Shares shall be subject to (i) the prior payment in full of the Senior Debt or
(ii) obtaining the requisite consent of the lenders under the Senior Debt.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Buyers that the following
representations and warranties are, as of the date hereof, true and correct:
4.1 Corporate Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of California,
with all requisite corporate power and authority to own, operate and lease its
properties and assets that it now purports to own, operate or lease, to carry on
its business as it is now being conducted, and to perform its obligations under
the Transaction Documents. Except as set forth on Schedule 4.1, the Company is
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duly qualified to do business and is in good standing under the laws of each
state or other jurisdiction in which either the nature of the activities
conducted by it or the ownership, operation or leasing of the properties and
assets owned, operated or leased by it requires such qualification and good
standing, except where the failure to be so qualified or in good standing would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. Schedule 4.1 contains a list of jurisdictions in
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which the Company is qualified to do business.
4.2 Subsidiaries and Investments. Except as set forth on Schedule 4.2, the
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Company does not own, directly or indirectly, any stock, partnership interest,
joint venture interest or other security, investment or interest in any other
corporation, partnership, association, joint venture, organization or other
entity. Each of the entities set forth in Schedule 4.2 (each a "Subsidiary" and,
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collectively, the "Subsidiaries") is duly organized, validly existing and in
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good standing under laws of its organization or existence with all requisite
corporate power and authority to own, operate and lease its properties and
assets that it now purports to own, operate or lease, to carry on its business
as it is now being conducted, and to perform its obligations under the
Transaction Documents to which it is a party. Each Subsidiary is duly qualified
to do business under the laws of each state or other jurisdiction in which
either the nature of the activities conducted by it or the ownership, operation
or leasing of the properties and assets owned, operated or leased by it requires
such qualification and good standing, except where the
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failure to be so qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
such Subsidiary.
4.3 Capital Stock. As of the date hereof the authorized capital stock of
the Company consists and will consist in its entirety of (a) 15,000,000 shares
of Common Stock, 1,520,224.50 of which are issued and outstanding, 13,479,775.50
of which are authorized but unissued and none of which is held by the Company as
treasury shares, and (b) 15,000,000 shares of preferred stock, 2,727,941 of
which are designated as Series A Preferred Stock, 2,727,941 of which shares are
issued and outstanding. Immediately following the Closing, (i) the authorized
capital stock of the Company will consist in its entirety of (x) 15,000,000
shares of Common Stock, 1,520,224.50 of which will be issued and outstanding,
and (y) 15,000,000 shares of preferred stock, 2,727,941 of which are designated
as Series A Preferred Stock, 2,727,941 of which shares are issued and
outstanding, and 2,153,507 of which are designated as Series B Stock, 2,153,507
of which shares are issued and outstanding. No other class or series of
preferred stock has been authorized by the Company. All of the outstanding
shares of capital stock of the Company and its Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable. All of the
outstanding shares of capital stock of the Company and its Subsidiaries were
issued in compliance with the Securities Act and all Legal Requirements. Other
than the Shareholders' Agreement, there are no Contracts with respect to the
voting, issuance, redemption, repurchase, acquisition, sale or transfer of the
capital stock or other securities of the Company, or any securities convertible
into or exchangeable for shares of capital stock or other securities of the
Company to which the Company is a party. Except as set forth on Schedule 4.3,
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the Company has not granted any preemptive rights, registration rights,
subscriptions, calls, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or unissued
capital stock or other securities of the Company, or any securities convertible
into or exchangeable for shares of such capital stock or other securities of the
Company, and there are no statutory obligations of the Company to repurchase,
redeem or otherwise acquire or sell, issue or otherwise transfer any shares of
such capital stock. Schedule 4.3 sets forth the record ownership of Common
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Stock, including the identity of each shareholder of the Company and the number
of shares of Common Stock held by such shareholder.
4.4 Issuance of Shares. The Series B Shares to be issued at the Closing
will have been duly authorized, validly issued, fully paid and non-assessable
and will be free and clear of all Encumbrances.
4.5 Authority. The Company has full corporate power and authority to
execute and deliver the Transaction Documents and to perform its obligations
under such Transaction Documents. The execution, delivery and performance of the
Transaction Documents and the consummation of the Transactions have been duly
authorized by the Board, and no other corporate proceedings on the part of the
Company, its Subsidiaries or their shareholders are necessary to authorize the
execution and delivery by the Company of the Transaction Documents or to
consummate the Transactions, except those which have already been obtained. This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting creditors' rights generally
and subject to general
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equitable principles (regardless of whether such enforceability is considered in
a Proceeding in equity or at law). Each of the other Transaction Documents to be
executed by the Company will be duly executed and delivered by the Company on or
prior to the Closing Date and, upon such execution and delivery (assuming due
execution and delivery by the other party or parties thereto), will constitute a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except where such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization, or similar laws
affecting creditors' rights generally and subject to general equitable
principles (regardless of whether such enforceability is considered in a
Proceeding in equity or at law). The holders of the capital stock of the Company
will have the rights, preferences and privileges set forth in the Company's
Organizational Documents.
4.6 No Violation. Neither the execution and delivery of this Agreement and
the other Transaction Documents by the Company nor the consummation of the
Transactions will (a) violate any provision of any Legal Requirement or Order
applicable to the Company or any Subsidiary, (b) require the Consent of or any
filing with any Person or Governmental Body, except (i) as permitted by Section
500 et seq. of the CGCL, (ii) those that have been received or made prior to the
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date hereof or (iii) the filing of a Form D with the Securities and Exchange
Commission and a notice of transaction under Section 25102(f) with the
California Secretary of State, (c) violate, result (with or without notice or
the passage of time, or both) in a Breach of, or give rise to the right to
terminate, accelerate or cancel any obligation under, or require the payment of
any fee, or constitute (with or without notice or the passage of time, or both)
a default under, any of the terms or provisions of (i) the Organizational
Documents of the Company or any Subsidiary, or (ii) any indenture, mortgage,
lien, lease, Order, judgment, ordinance, regulation, decree, license, permit,
franchise or other Contract or instrument to which the Company or any Subsidiary
is subject or bound, (d) result in the creation of any Encumbrance upon any
property of the Company or any Subsidiary which would have, individually or in
the aggregate, a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole, or (e) except as set forth on Schedule 4.6, result in a
------------
termination, loss or adverse modification of any license, permit, certificate,
franchise or Contract granted to or otherwise held by the Company or any
Subsidiary, except (in the case of clauses (a), (b), (c)(ii) and (e)) for such
terminations, losses, Breaches, accelerations, cancellations or modifications
which would not have, individually or in the aggregate, a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole or interfere in any
material way with the consummation of the Transactions.
4.7 Litigation. Except as set forth on Schedule 4.7, there is no
------------
Proceeding pending or, to the Knowledge of the Company, Threatened against the
Company or any Subsidiaries or any of their respective assets or property before
any court or Governmental Body or arbitrator, which would have, individually or
in the aggregate, a Material Adverse Effect, nor, to the Knowledge of the
Company, is there any basis for any of the foregoing. There is no Proceeding
pending or, to the Knowledge of the Company, Threatened, against the Company or
any Subsidiaries challenging the validity, timing or propriety of the
Transactions. None of the Company or any Subsidiaries or any of their assets or
property is subject to any Order, judgment, injunction or decree, which would
have, individually or in the aggregate, a Material Adverse Effect on the Company
or any Subsidiary.
10
4.8 Financial Statements. True and complete copies of the Company's
audited consolidated financial statements for the fiscal years 1997 and 1998,
together with the report thereon of the Company's independent certified public
accountants, and the Company's unaudited consolidated financial statements for
the fiscal year ended January 3, 2000 (collectively, the "Financial Statements")
--------------------
are set forth in Schedule 4.8. The Financial Statements were prepared in
------------
accordance with GAAP, reflect all normal and customary year-end audit
adjustments and present, fairly and accurately, the financial position, results
of operations, income, expenses, assets, liabilities, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries as of the respective
dates and for the periods indicated. The Financial Statements are prepared in
accordance with the books and records of the Company and its Subsidiaries. At
the respective dates of the Financial Statements, there were no Liabilities,
commitments or obligations (absolute, accrued, contingent or otherwise) of the
Company or any Subsidiary, which in accordance with GAAP should have been shown
or reflected in such Financial Statements or the notes thereto which were not so
reflected.
4.9 No Undisclosed Liabilities. Except as set forth in Schedule 4.9,
------------
neither the Company nor any Subsidiary has any Liabilities or obligations of any
nature (whether known or unknown, with or without the passage of time, and
whether absolute, accrued, contingent or otherwise) except for Liabilities or
obligations reflected or reserved against in the audited consolidated balance
sheet of the Company and its Subsidiaries as of January 3, 2000 (the "Balance
-------
Sheet Date") and current Liabilities incurred in the ordinary course of business
----------
since such date.
4.10 Absence of Certain Changes or Events. Except as set forth in Schedule
--------
4.10, since the Balance Sheet Date, the Company and its Subsidiaries have
----
conducted their business in the ordinary course of business consistent with past
practice and there has not been any:
(a) Material Adverse Change in the financial condition, properties
assets, liabilities, business, operations or results of operations of the
Company or any Subsidiary;
(b) addition to or modification of employee benefits plans,
arrangements or practices;
(c) sale, assignment or transfer of any of the material assets of the
Company or any Subsidiary, other than in the ordinary course of business,
consistent with past practice;
(d) cancellation of any indebtedness owed to the Company or any
Subsidiary in an aggregate amount greater than $50,000, or waiver of any
rights of similar value to the Company or any Subsidiary relating to any of
its business activities or properties, other than in the ordinary course of
business;
(e) amendment, cancellation or termination of any Contract, license
or other instrument material to the Company or any Subsidiary;
11
(f) failure to repay any material obligation of the Company or any
Subsidiary when due;
(g) change in accounting methods, principles or practices by the
Company or any Subsidiary materially affecting its assets, Liabilities,
results of operations or business;
(h) material revaluation by the Company or any Subsidiary of any of
its assets, including without limitation, any material write-offs, material
increases in any reserves or any write-up of the value of inventory,
property, plant, equipment or any other asset;
(i) material damage, destruction or loss (whether or not covered by
insurance) affecting any store or office maintained by the Company or any
Subsidiary or any other material asset of the Company or any Subsidiary and
resulting in a loss in excess of $50,000;
(j) mortgage, pledge or other Encumbrance of any assets of the Company
or any Subsidiary, material singly or in the aggregate;
(k) declaration, setting aside or payment of any dividend or other
distribution or payment (whether in cash, stock or property) with respect
to the capital stock or other equity securities of the Company or any
Subsidiary or any redemption, purchase or other acquisition of any of the
securities of the Company or any Subsidiary, or any other payment to any
shareholder of the Company or any Subsidiary in its capacity as a
shareholder;
(l) issuance by the Company or any Subsidiary of, or commitment by it
to issue, any capital stock or other equity securities or obligations or
any securities convertible into or exchangeable or exercisable for capital
stock or other equity interests;
(m) indebtedness for borrowed money incurred by the Company or any
Subsidiary or any commitment to incur indebtedness for borrowed money
entered into by the Company or any Subsidiary, or any loans made or agreed
to be made by the Company or any Subsidiary other than as set forth on
Schedule 4.10;
-------------
(n) incurrence of other Liabilities involving $100,000 or more, except
in the ordinary course of business, or any increase or change in any
assumptions underlying, or methods of calculating, any bad debt,
contingency or other reserves;
(o) payment, discharge or satisfaction of any Liabilities other than
the payment, discharge or satisfaction (i) in the ordinary course of
business, consistent with past practice, of Liabilities reserved against in
the Financial Statements or of Liabilities incurred in the ordinary course,
consistent with past practice or (2) of other Liabilities involving $50,000
or less individually and $100,000 or less in the aggregate;
(p) increase in the compensation of officers or employees (including
any such increase pursuant to any bonus, pension, profit sharing or other
plan or
12
commitment) or any increase in the compensation payable or to become
payable to any officer or employee or any severance or termination pay,
except for increases as required by law;
(q) granting of any bonus, incentive compensation, service award or
other like benefit to any officer or employee except in accordance with
plans or arrangements disclosed on Schedule 4.10; or
-------------
(r) agreement, whether oral or written, by the Company or any
Subsidiary to do any of the foregoing;
(except as expressly required by this Agreement or any Transaction Document.)
------
4.11 Insurance. Schedule 4.11 contains a list of all policies of
-------------
insurance, surety bonds and letters of credit maintained by the Company or any
Subsidiary (showing as to each policy or binder, the carrier, coverage limits,
expiration dates, annual premiums, summary of loss experience since November 24,
1998, any claim exceeding $50,000 and a general description of the type of
coverage provided), which list is true, complete and accurate in all material
respects as of the date hereof. To the best of the Company's Knowledge, the
Company and each of its Subsidiaries have paid all premiums due and are not
otherwise in default with respect to their respective obligations under any such
policies. All of such policies are sufficient for (i) compliance with all Legal
Requirements and Contracts, leases and other agreements to which the Company or
any Subsidiary is a party and (ii) all risks normally insured against by a
Person conducting the same business as the business conducted by the Company and
its Subsidiaries, except, in each case, where any such insufficiencies would not
have, individually or in the aggregate, a Material Adverse Effect on the Company
or such Subsidiary. Neither the Company nor any Subsidiary has failed to give
any notice or to present any material claim under any such policy or binder in a
due and timely fashion except for such failure as would not have, individually
or in the aggregate, a Material Adverse Effect on the Company or such
Subsidiary.
4.12 Employee Benefits. For purposes of this Section 4.12, the term
"Company" shall include any Person that, together with the Company as of any
relevant measuring date under the Employee Retirement Income Security Act of
1974, as amended ("ERISA") was or is required to be treated as a single employer
-----
under Code Section 414. The Company does not sponsor or contribute to any
employee benefit plan subject to ERISA, other than as identified on Schedule
--------
4.12 hereto. None of the employee benefit plans listed on Schedule 4.12 have any
---- -------------
accumulated funding deficiency within the meaning of ERISA or any liability to
the Pension Benefit Guaranty Corporation, or any successor thereof ("PBGC")
established under ERISA in connection with any employee benefit plan (or other
class of benefit which the PBGC has elected to insure) other than an obligation
to tender premium payments to the PBGC; to the Company's Knowledge there have
been no "reportable events" or "prohibited transactions" with respect to any
such plan, as those terms are defined in Section 4043 of ERISA and Section 4975
of the Internal Revenue Code of 1986, as amended, respectively; and the Company
is otherwise in full compliance with the provisions of ERISA.
4.13 Material Contracts and Other Agreements. Schedule 4.13 discloses, as
-------------
of the date hereof, whether written or oral, together with all amendments and
modifications thereto,
13
(a) obligations (contingent or otherwise) of, or payments to, the Company or any
of its subsidiaries in excess of $50,000 which are not cancelable by the Company
on less than thirty (30) days' notice, and excluding inventory purchase orders,
(b) any agreement relating to the Proprietary Rights, (c) all employment and
consulting agreements, employee benefit, bonus, pension, profit-sharing, stock
option, stock purchase and similar plans and arrangements, and distribution and
sales representative agreements, (d) all joint venture or partnership agreements
to which the Company or any Subsidiary is a party or bound, (e) all area
development agreements, letters of commitment and franchise agreements to which
the Company or any Subsidiary is a party or bound and, (f) each collective
bargaining agreement or other Contract to or with any labor union or other
employee representative of a group of employees. The foregoing are hereinafter
referred to as the "Company Contracts." With respect to each Company Contract,
-----------------
(1) such Contract is valid, binding and enforceable against the Company or a
Subsidiary and, to the Company's Knowledge, each other party thereto in
accordance with its terms, subject in each case to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally and subject to general equitable principles (regardless of
whether such enforceability is considered in a Proceeding in equity or at law);
(2) neither the Company nor any Subsidiary, nor, to the Company's Knowledge, any
other party to such Contract is in material Breach thereof or material default
thereunder; (3) to the Knowledge of the Company, there does not exist any event
that, with the giving of notice or the lapse of time or both, would, constitute
a material Breach of or a material default under such Contract, and neither the
Company nor any Subsidiary has received or given notice of any such Breach,
default or event; and (4) there have been no waivers or releases of any of the
Company's or any Subsidiaries' material rights or remedies under any of the
Contracts.
4.14 Suppliers. The Company and each of its Subsidiaries has a good
business relationship with each of its suppliers. None of the Company's or its
Subsidiaries' suppliers has canceled or otherwise terminated, or threatened in
writing to cancel or otherwise terminate, its relationship with the Company or
any Subsidiary or, since the Balance Sheet Date, decreased materially, or
threatened to decrease or limit materially, its services, supplies or materials
to the Company or any Subsidiary except to the extent such cancellation,
decrease, termination or limitation would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
any Subsidiary.
4.15 Leased Property. Neither the Company nor any Subsidiary owns or,
since their respective inceptions, has owned, any real property or any interest
in any real property, other than leasehold interests. For purpose of this
Agreement, "Leased Property" shall mean all real property leased or otherwise
---------------
operated or occupied (other than as an owner) in whole or in part by the Company
or any Subsidiary. Schedule 4.15 sets forth a list of (a) all leases and
-------------
subleases under which the Company or any Subsidiary is the lessor, lessee,
operator or occupant of any real property, and (b) all material options granted
by or to the Company or any Subsidiary or any contractual obligations on the
part of the Company or any Subsidiary to purchase, acquire, sell or dispose of
any interest in real property. The Company and its Subsidiaries have good and
valid leasehold title to all Leased Property, free and clear of all Encumbrances
other than Encumbrances created by the Leases or the Senior Credit Facility.
Each lease, sublease or other agreement (collectively, the "Leases") set forth
------
on Schedule 4.15 (or required to be set forth on Schedule 4.15) is in full force
------------- -------------
and effect; all rents and additional rents due to date on each such Lease have
been paid in full; and, to the Company's Knowledge, except as set forth on
Schedule
--------
14
4.15, the Company's and the Subsidiaries' lessors are not in default thereunder
----
in any material respect and except as set forth on Schedule 4.15, there exists
-------------
no event of default or event, occurrence, condition or act (including the
transactions contemplated hereby) which, with the giving of notice, the lapse of
time or the happening of any further event or condition not within the control
of the Company or a Subsidiary, would become a material default under such
Lease, or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company or any Subsidiary. The
Company and its Subsidiaries have not violated any of the terms or conditions
under any such Lease in any material respect.
4.16 Condition and Sufficiency of Assets. The plant, offices,
structures, and equipment of the Company whether constituting the Company Stores
or otherwise are in good condition and repair in the ordinary course of business
and are reasonably fit and suitable for the purposes for which they are being
used and conform in all respects with all applicable Legal Requirements, except
to the extent such noncompliance would not reasonably be expected to have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole.
4.17 Compliance with Laws. Except as set forth on Schedule 4.17, (i)
-------------
the Company and its Subsidiaries are in compliance with each Legal Requirement
applicable to it or to the conduct or operation of its business or the ownership
or use of any of its assets, including, without limitation, any applicable
franchise, building, zoning, health, environmental, sanitation, safety, labor
relations, immigration or other law, ordinance or regulation except to the
extent such noncompliance would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company or any Subsidiary;
(ii) no event has occurred or circumstance exists that may result in a violation
of, or failure on the part of the Company or any Subsidiary to comply with, any
Legal Requirement or give rise to any obligation of the Company or any
Subsidiary to undertake, or bear all or any portion of the cost of, any remedial
action of any nature except to the extent such event or circumstance would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company or any Subsidiary; and (iii) neither the Company
nor any Subsidiary has received any notice regarding the foregoing.
4.18 Licenses and Permits; Franchise Matters.
(a) Licenses and Permits. Except as set forth on Schedule 4.18(a)
-------------------- ----------------
and Schedule 4.18(d), the Company and each Subsidiary has all governmental
----------------
or regulatory licenses, permits and Governmental Authorizations (all of
which are in full force and effect) necessary to conduct its business as it
is now being conducted, except for such governmental or regulatory
licenses, permits and Governmental Authorizations the absence of which
would not have, individually or in the aggregate, a Material Adverse Effect
on the Company or such Subsidiary, and none of such governmental or
regulatory licenses, permits and Governmental Authorizations will be
impaired as a result of the Transactions, except for such impairments which
would not have, individually or in the aggregate, a Material Adverse Effect
on the Company or such Subsidiary. Except as set forth on Schedule 4.18(a)
----------------
and Schedule 4.18(d), the Company and each of its Subsidiaries is, and at
----------------
all times since November 24, 1998 has been, in full compliance with all of
the terms and requirements of each Governmental Authorization held by it
except to the extent that such noncompliance would not reasonably be
expected to lead to
15
the loss or revocation of such Governmental Authorization or to result in a
Material Adverse Effect on the Company and its Subsidiaries taken as a
whole. Neither the Company nor any Subsidiary has received any notice to
the effect that, (i) any actual or potential withdrawal, suspension,
cancellation or modification to any Governmental Authorization of the
Company or a Subsidiary is Threatened or (ii) it is not in compliance with,
or it is in violation of, any such governmental or regulatory licenses,
permits and Governmental Authorizations in a manner that would have,
individually or in the aggregate, a Material Adverse Effect, and there are
not currently existing circumstances that are likely to result in a failure
of the Company or any Subsidiary to comply with, or in a violation by the
Company or any Subsidiary of, any such governmental or regulatory licenses,
permits or Governmental Authorizations that would have, individually or in
the aggregate, a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole.
(b) Franchise and Area Development Agreements. Schedule 4.18(b)
----------------------------------------- ----------------
accurately identifies all current franchise agreements and area development
agreements (the "Franchise Agreements"), by name of franchisee, date of
--------------------
agreement, expiration date, location of store, and exclusive territory, and
since November 24, 1998, no other current Contracts, agreements or
understandings exist, whether oral or written, between the Company or any
Subsidiary and any third party granting the right, or any option or right
of first refusal, to operate a restaurant business under the name "Baja
Fresh" or any related marks. Except as set forth in Schedule 4.18(b) and
----------------
Schedule 4.18(d), the Franchise Agreements listed on Schedule 4.18(b)
---------------- ----------------
represent the complete terms and provisions of all current agreements with
franchisees, and no written or, to the Knowledge of the Company, oral
modifications of or supplements to those written agreements have been
entered into since November 24, 1998. Except as set forth in Schedule
--------
4.18(b) and Schedule 4.18(d), each of the Franchise Agreements is in full
------- ----------------
force and effect and is enforceable against the Company and the franchisee
party to such Franchise Agreement in accordance with its terms subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws affecting creditors' rights generally and subject to general equitable
principles (regardless of whether such enforceability is considered in a
Proceeding in equity or at law) and no notices of or demands for rescission
or early termination have been delivered thereunder by any party. Except as
set forth in Schedule 4.18(b) and Schedule 4.18(d), there are no material
---------------- ----------------
Breaches by the Company, any Subsidiary or to the Knowledge of the Company
any franchisee of any of the Franchise Agreements, which Breaches remain
uncured. Each franchisee is no more than 30 days past due in its financial
obligations to the Company and its Subsidiaries, including without
limitation, payments due for royalties and product purchases, except as set
forth in Schedule 4.18(b) and Schedule 4.18(d). Except as set forth in
---------------- ----------------
Schedule 4.18(b) and Schedule 4.18(d), there are no assertions or claims,
---------------- ----------------
whether oral or in writing, or, as of the date hereof or as of the Closing
Date, to the Knowledge of the Company, any basis for any claims by any
franchisee of material Breaches of any of the Franchise Agreements by the
Company or any Subsidiary which remain uncured. Except as set forth in
Schedule 4.18(b) and Schedule 4.18(d), to the Knowledge of the Company
---------------- ----------------
there is no basis for any demand by any franchisee for rescission of any
Franchise Agreement no franchisee is entitled to any credit, set off or
reduction in any payment required to be made pursuant to the terms of any
Franchise Agreement, or in any
16
other payment(s) owed to the Company or any Subsidiary, and no event has
occurred which would give any franchisee a defense to its obligation to pay
fees, or to perform its other obligations under its Franchise Agreement,
and no franchisee has any claims, counterclaims or offsets against the
Company or any Subsidiary. The Transactions do not require the prior
Consent of or notice to any franchisee, or grant any franchisee the right
to terminate any Franchise Agreement. There are no contractual limitations
or prohibitions upon the Company or any Subsidiary from operating "Baja
Fresh Mexican Grill" restaurants or selling franchises in any city, state,
territory or country except as expressly set forth in the Franchise
Agreements. Schedule 4.18(b) also separately lists by location all
----------------
restaurants owned or leased by the Company, any Subsidiary, or any
Affiliate thereof (the "Company Stores") indicating which of the Company
--------------
Stores are open and operating. Schedule 4.18(b) also lists all stores other
----------------
than Company Stores which are currently open and operating.
(c) Franchise Law Compliance. Schedule 4.18(c) accurately sets
------------------------ ----------------
forth each state in which the Company and its Subsidiaries are currently
registered or with whom the Company or any Subsidiary has filed for an
exemption from registration to sell franchises, the effective date and
expiration date of each such registration. Neither the Company nor any of
its Subsidiaries has voluntarily or involuntarily ceased to be registered
to sell franchises in any state and the Company has no Knowledge of any
fact or circumstance which would preclude or inhibit the Company or any
Subsidiary from filing and receiving approval of an application to offer
and sell franchises in any state in which the Company or such Subsidiary is
not presently registered to do so. Except as disclosed in that certain
Notice of Violation filed with and approved in form by the California
Department of Corporations in December 1996, except as set forth on
Schedule 4.18(c) neither the Company nor any Subsidiary has committed any
material violation of any Legal Requirement of the Federal Trade Commission
("FTC") or of any state relating to the offer, sale, assignment, renewal,
---
termination or rights of succession, of franchises, business opportunities
and seller assisted marketing plans ("Franchise Laws"). Except as set forth
--------------
on Schedule 4.18(c), there is no pending, unresolved claim or assertion of
any violation by the Company or any Subsidiary of any Franchise Laws,
neither the Company nor any Subsidiary has received notice from any
Governmental Body or private party alleging any such violation, and neither
the Company nor any Subsidiary has any Knowledge of any basis for any such
claim of violation. Except as set forth on Schedule 4.18(c), there
currently exist no escrow or impound conditions or requirements imposed
upon the sale of franchises by the Company or any Subsidiary in any
jurisdiction. Except as set forth on Schedule 4.18(c), there are no pending
or currently effective stop orders, administrative Proceedings, notices of
investigation, injunctions, Orders or restitution, rescission notices, or
other orders, actions or decrees by any state or federal agency, or by any
state or federal court, whether civil or criminal, against the Company or
any Subsidiary. There is currently no litigation or arbitration between the
Company or any Subsidiary and any franchisee or ex-franchisee thereof .
4.19 Intellectual Property.
(a) Trademarks. The Company and its Subsidiaries own all
----------
trademarks, service marks, copyrights, and trade dress (collectively,
"Proprietary
-----------
17
Rights") which are used in the business of the Company and its Subsidiaries
------
or that of its franchisees, including without limitation, the "Baja Fresh"
and "Baja Fresh Mexican Grill" service xxxx. None of the Company and its
Subsidiaries has, and prior to Closing shall not have, sold, assigned,
transferred, conveyed, or otherwise disposed of or agreed to sell, assign,
transfer, convey, or otherwise dispose of any of the Proprietary Rights,
except for licenses granted to franchisees pursuant to the Franchise
Agreements, for fair consideration in the ordinary course of business
consistent with prior practices. Except as set forth on Schedule 4.19 to
-------------
the Company's Knowledge, there have been no Threatened to be filed
oppositions to or requests for cancellation of any of the registrations or
applications. The Company has promptly taken and will promptly take
appropriate action to protect its Proprietary Rights when it becomes aware
of uses by third parties of any Proprietary Rights which infringe any of
the Proprietary Rights. Except as set forth in Schedule 4.19, no claims
-------------
have been asserted or, to the Knowledge of the Company, Threatened against
the Company or any Subsidiary by any third party alleging that any of the
Proprietary Rights infringe any rights or marks held by such third party,
or asserting palming-off, dilution or unfair competition, unjust
enrichment, or similar claims, and the Company has no Knowledge of any
basis for any such claim. None of the Proprietary Rights will cease to be
valid and in full force and effect by reason of the execution, delivery and
performance of this Agreement or the consummation of the Transactions.
(b) Franchise Trade Secrets. The Company or a Subsidiary owns all
-----------------------
trade secrets which are used in the business of the Company and its
Subsidiaries, and has not and prior to Closing shall not have sold,
assigned, transferred, conveyed, or otherwise disposed of or agreed to
sell, assign, transfer, convey, or otherwise dispose of any of the trade
secrets, except for licenses granted to franchisees pursuant to the
Franchise Agreements, for fair consideration in the ordinary course of
business consistent with prior practices. All reasonable precautions have
been taken and will be taken prior to Closing, by the Company to protect
such trade secrets from usage by or disclosure to any unauthorized Person.
4.20 Title to Assets. The Company and each of its Subsidiaries owns or
leases all tangible personal property necessary for the conduct of its business
as presently conducted. Each such asset has been maintained in accordance with
ordinary industry practice, is in good operating condition and is usable in the
ordinary course of business, other than where any such failures individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company or such Subsidiary. The Company and each of its
Subsidiaries have good and valid leasehold title to all leased tangible personal
property leased by them from third parties, free and clear of all liens,
security interests and other Encumbrances except for such imperfections of title
which individually or in the aggregate would not reasonably be expected to cause
a Material Adverse Effect on the Company or such Subsidiary and except for
Encumbrances arising under documents listed on Schedule 4.20.
-------------
4.21 Inventory. The value at which the inventory of the Company is
carried on the Company's Balance Sheet (attached hereto as part of Schedule 4.8)
------------
reflects the customary inventory valuation policy of the Company and is in
accordance with GAAP consistently applied. The current inventory of the Company
and its Subsidiaries consists of items of a
18
quantity and quality which are usable and saleable in the ordinary course of
business except to the extent deviations in such quality or quantity could not
have, individually or in the aggregate, a Material Adverse Effect on the Company
and its Subsidiaries taken as a whole.
4.22 Accounts and Notes Receivable. With the exception of the accounts
receivable included on Schedule 4.22, all accounts receivable of the Company are
-------------
collectible at the aggregate recorded amounts thereof, net of any applicable
reserves for doubtful accounts, which reserves are adequate and were calculated
consistent with past practices. There are no refunds, rebates, discounts or
other adjustments payable with respect to accounts receivables except in the
ordinary course of business consistent with past practices.
4.23 Taxes.
(a) Subject to subsection (b) hereof and except as set forth in
Schedule 4.23, since November 24, 1998:
-------------
(i) The Company and each Subsidiary has paid all federal,
state, local and foreign income, alternative, add-on, gross receipts,
franchise, payroll, F.I.C.A., unemployment, withholding, real
property, personal property, admissions, gains, replacement, sales,
use, excise, payroll, disability and other taxes imposed on the
Company or such Subsidiary or with respect to any of its properties,
or otherwise payable by it, including interest, penalties and other
additions, if any, in respect thereof (collectively, "Company Taxes"),
-------------
which were due and payable on or prior to the Closing Date.
(ii) Without limiting the foregoing representations in any
way, (i) the Company and each Subsidiary has collected all sales, use
and value added taxes required to be collected, and has remitted, or
will remit on a timely basis, such amounts to the appropriate
Governmental Bodies and has furnished properly completed exemption
certificates for all exempt transactions and (ii) the Company and each
Subsidiary has properly withheld income and social security or other
similar taxes and paid payroll taxes with respect to all Persons
properly characterized as employees for federal, state or local tax
purposes.
(iii) The Company and each Subsidiary has timely filed all
returns, reports and other filings related to Company Taxes which it
is required to file and has paid all the amounts shown to be due
thereon. All such returns, reports and filings are true and correct
and complete. Neither the Company nor any Subsidiary is required to
file returns, reports or filings in any state or local or foreign
jurisdiction for any tax period except in those state, local or
foreign jurisdictions in which it has filed.
(iv) No audit, examination, action or Proceeding is pending
or, to the Knowledge of the Company, Threatened by any Governmental
Body with respect to the possible assessment or collection from the
Company or any Subsidiary of any Company Taxes, no unresolved claim
for assessment or
19
collection of any Company Taxes has been asserted against the Company
or any Subsidiary, and all resolved assessments of Company Taxes have
been paid.
(v) There are no liens for Company Taxes (other than for
current Company Taxes not yet due and payable) upon the assets of the
Company or any Subsidiary.
(vi) Neither the Company nor any Subsidiary is a party to
or bound by any tax sharing, tax indemnity or tax allocation agreement
or other similar arrangement.
(vii) Neither the Company nor any Subsidiary has taken any
action that would require an adjustment pursuant to Section 481 of the
Code by reason of a change in accounting method or otherwise.
(viii) Neither the Company nor any Subsidiary has filed a
consent under Section 341(f)(1) of the Code or agreed to have the
provisions of Section 341(f)(2) of the Code apply to any disposition
of "subsection (f) assets" as such term is defined in Section
341(f)(4) of the Code.
(ix) Neither the Company nor any Subsidiary has made any
payments, is obligated to make any payments or is a party to any
agreement or agreements that, individually or collectively, provide
for the payment by the Company of any amount (i) that is not
deductible under Section 162(a)(1) or 404 of the Code or (ii) that is
an "excess parachute payment" pursuant to Section 280G of the Code.
(x) Neither the Company nor any Subsidiary has agreed to
any extension of any applicable statute of limitations for the
imposition of any Company Tax.
(xi) Neither the Company nor any Subsidiary is an "S
corporation" within the meaning of Section 1361(a) of the Code.
(b) All representations in Section 4.23(a) hereof, with respect
to state and local Company Taxes are true and correct except to the extent
any exceptions to the truth or correctness of such representations would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or any Subsidiary.
(c) All Company Taxes and related fees shall be accrued for in
the Balance Sheet and the Pre-Closing Financial Statements.
4.24 Environmental Laws and Regulations.
(a) For the purposes of this section, the following words and
phrases shall have the following meanings:
20
"Environmental Condition" means any condition relating to the
-----------------------
presence, release, threat of release, transportation, disposal, storage or
treatment of Hazardous Materials in, at, on, under or about (i) the Real
Property (as defined below), or (ii) the environment beyond the Real Property,
which Hazardous Materials migrated, emanated or originated from the Real
Property.
"Environmental Law" means any environmental or health and
-----------------
safety-related law, policy, regulation, rule, requirement, statute, ordinance,
common law decision, Order or determination of any Governmental Body or judicial
authority at the federal, state, or local level, whether existing as of the date
hereof, previously enforced or subsequently enacted.
"Hazardous Material" means any pollutant, contaminant, toxic
------------------
substance, hazardous waste, hazardous material, hazardous substance, petroleum
or petroleum product, asbestos, polychlorinated biphenyls, underground storage
tanks and the contents thereof including, without limitation, any such materials
defined in or regulated pursuant to any Environmental Law.
"Real Property" means any real property or "facility" (as defined
-------------
in the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.
("RCRA")) currently or formerly owned, operated, leased or occupied by the
Company.
(b) Except as set forth on Schedule 4.24(b), the Company and its
----------------
Subsidiaries have no Liability under, and are in compliance with, all
Environmental Laws applicable to the Company's and such Subsidiaries'
respective businesses, the Real Property and any facilities and operations
thereon, except for such Liabilities and except for such noncompliance
which would not have, individually or in the aggregate, a Material Adverse
Effect on the Company or any Subsidiary. Except as set forth on Schedule
--------
4.24(b), (i) to the Knowledge of the Company, each Real Property is in
-------
compliance with all Environmental Laws, except where the failure to so
comply would not have, individually or in the aggregate, a Material Adverse
Effect on the Company or any Subsidiary and (ii) to the Knowledge of the
Company, there are no Hazardous Materials located in, under or about any
Real Property, except for such Hazardous Materials which individually or in
the aggregate would not have a Material Adverse Effect on the Company or
any Subsidiary.
(c) (i) Neither the Company nor any Subsidiary has caused an
Environmental Condition that could, individually or in the aggregate, have
a Material Adverse Effect on the Company or such Subsidiary and (ii) to the
Company's Knowledge, there are no Environmental Conditions that could,
individually or in the aggregate, have a Material Adverse Effect on the
Company or any Subsidiary.
4.25 Board of Directors Approval. The Board has unanimously approved
the Transactions and has unanimously determined that such Transactions are fair
to and in the best interests of the Company and its shareholders. Such actions
of the Board remain in full force and effect.
21
4.26 No Agreements to Sell the Company. Except as contemplated by this
Agreement and pursuant to stock options and warrants relating to the purchase of
up to 502,124.50 and 112,500 shares of common stock of the company,
respectively, the Company does not have any legal obligation, absolute or
contingent, to any other Person to sell any capital stock or material assets or
businesses of the Company or any Subsidiary or to effect any merger,
consolidation, liquidation, dissolution, recapitalization or other
reorganization of the Company or to enter into any agreement with respect
thereto.
4.27 Related Party Transactions. Except as set forth on Schedule 4.27,
-------------
no employee, officer, or director of the Company or any Subsidiary or, to the
Knowledge of the Company, no Affiliate of any such Person, and no member of such
Person's immediate family has engaged in any transaction with or entered into
any Contract with, the Company or any Subsidiary. Except as set forth on
Schedule 4.27, no officer or director of the Company or any Subsidiary or, to
-------------
the Knowledge of the Company, no Affiliate of any such Person, and no member of
such Person's immediate family has had any interest in any property (whether
real, personal, or mixed and whether tangible or intangible), used in or
pertaining to the businesses of the Company or any Subsidiary. Except as set
forth on Schedule 4.27, no officer, or employee-director of the Company or any
-------------
Subsidiary or, to the Knowledge of the Company, no Affiliate of any such Person,
and no member of such Person's immediate family has owned (of record or as a
beneficial owner), an equity interest or any other financial or profit interest
in, a Person that has engaged in competition with the Company or any Subsidiary
with respect to any line of the products or services of the Company or such
Subsidiary in any market presently served by the Company or such Subsidiary
excluding interests in publicly traded companies of less than 1% of the
outstanding equity of such company.
4.28 No Finders or Brokers. The Company has not incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement or any of the Transactions.
4.29 Labor Matters(a) Neither the Company nor any Subsidiary is a
party to or bound by any collective bargaining agreement or other Contracts
with labor unions. The Company and each Subsidiary has complied in all
respects with all Legal Requirements, Orders or Contracts affecting
employment, nondiscrimination, immigration, collective bargaining, equal
opportunity employment, the payment of social security and similar taxes,
occupational safety and health or employees' benefits, health, safety,
welfare, wages and hours, except where the default or violation of such
Legal Requirements, Orders or Contracts could not have, individually or in
the aggregate, a Material Adverse Effect on the Company or any Subsidiary.
(b) Except as could not have, individually or in the aggregate, a
Material Adverse Effect on the Company or any Subsidiary: (i) there are no
labor disputes pending or existing, or to the Company's Knowledge,
Threatened, involving strikes, slow-downs, picketing, work stoppages,
employee grievance processes, job actions or lockouts of any employees of
the Company, (ii) there are no Proceedings against or affecting the Company
or any Subsidiary relating to the alleged violation of any Legal
Requirement pertaining to labor relations or employment matters, including
any charge, petition or complaint filed by an employee or union with the
National Labor
22
Relations Board, the Equal Employment Opportunity Commission, or any
comparable Governmental Body, and (iii) no demand for recognition
heretofore made by any labor organization is pending with respect to the
Company or any Subsidiary. No event has occurred or circumstance exists
that could provide the basis for any work stoppage or other labor dispute.
4.30 Full Disclosure. No representation or warranty by the Company
contained in this Agreement or any Transaction Document, and no statement
contained in the Schedules hereto, contains any untrue statement of material
fact or, omits to state any material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company, which the Company has not
disclosed to the Buyers in writing, which has a Material Adverse Effect on the
Company or any Subsidiary or insofar as the Company can reasonably foresee, will
have a Material Adverse Effect on the Company or any Subsidiary.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 Conditions to the Obligations of the Company. The obligations of
the Company to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) Buyer's Performance of Obligations. The Buyers shall have
----------------------------------
performed in all respects their obligations under this Agreement required
to be performed by them on or prior to the Closing Date pursuant to the
terms hereof.
(b) Accuracy of Representations and Warranties. The
------------------------------------------
representations and warranties of the Buyers contained in this Agreement
shall be true and correct in all respects at and as of the Closing Date as
if made at and as of such date, except to the extent that any such
representation or warranty is made as of a specified date in which case
such representation or warranty shall have been true and correct as of such
date.
(c) Authorization by the Buyers. Where applicable, all actions
---------------------------
necessary to authorize the execution, delivery and performance of this
Agreement by the Buyers, and the consummation of the transactions
contemplated herein, shall have been duly and validly taken.
5.2 Conditions to the Obligations of the Buyers. The obligations of
the Buyers to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) The Company's Performance of Obligations. The Company shall
----------------------------------------
have performed in all respects its obligations under this Agreement
required to be performed by it on or prior to the Closing Date pursuant to
the terms hereof.
(b) Accuracy of Representations and Warranties. The
------------------------------------------
representations and warranties of the Company contained in this Agreement
shall be true and correct in all respects at and as of the Closing Date as
if made at and as of such date, except to the
23
extent that any such representation or warranty is made as of a specified
date in which case such representation or warranty shall have been true and
correct as of such date.
(c) Authorization by the Company. All actions necessary to
----------------------------
authorize the execution, delivery and performance of this Agreement by the
Company and its shareholders, and the consummation of the transactions
contemplated herein, shall have been duly and validly taken.
(d) Consents and Regulatory Approvals. All necessary waivers,
---------------------------------
Consents and approvals of any third party or Governmental Bodies necessary
to prevent the cancellation of any material Contract, lease, permit or
license of the Company shall have been obtained by the Company and the
Company shall have obtained all waivers, estoppels, non-disturbance
agreements, Consents and approvals (including, without limitation, Consents
required under any leases and Contracts) required by the Buyers.
(e) Amendment of Articles. The Board and the shareholders of the
---------------------
Company shall have approved, and the Company shall have filed, the
Certificate with the California Secretary of State.
(f) Other Instruments. The Buyers shall have received such other
-----------------
duly and validly executed documents and instruments in connection with the
Closing as are reasonably requested by them.
ARTICLE VI.
POST CLOSING
6.1 Survival of Representations and Warranties. Regardless of any
investigation at any time made by or on behalf of any party, or of any
information any party may have in respect thereof, all representations and
warranties made hereunder or pursuant hereto or in connection with the
Transactions shall survive the Closing Date for a period of twenty-four (24)
months from the Closing Date; provided, however, all representations and
-------- -------
warranties with respect to Sections 4.12, 4.23 and 4.24 shall survive the
Closing Date until the close of business on the day following the expiration of
the applicable statute of limitations (giving effect to any waiver or extension
thereof); and provided further, that the representations and warranties
contained in Sections 4.3 shall survive indefinitely (each, a "Survival Date").
-------------
6.2 Directors and Officers' Insurance. The Company shall use
reasonable best efforts to maintain in force a policy of directors and officers
liability insurance reasonably satisfactory to the directors.
6.3 Audited Financial Statements. The Company shall deliver to the
Buyers no later than May 31, 2000 audited financial statements for the fiscal
year ended January 3, 2000.
6.4 Foreign Qualifications. The Company shall cause Baja Fresh
Westlake Village to become duly qualified to do business in Nevada, Arizona,
Colorado, Illinois, Maryland and the District of Columbia no later than 30 days
after the Closing Date.
24
ARTICLE VII.
MISCELLANEOUS
7.1 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been given or
made if in writing and delivered personally, sent by commercial carrier or
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses and numbers:
(a) If to the Buyers to:
Xxxxx X. Xxxx, Xx.
Xxxxxxxxx Partners IV, L.P.
c/o Catterton Partners IV Management Company, L.L.C.
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxx, Esq.
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxxxxxxx, XX 00000
(b) If to the Company, to:
Fresh Enterprises, Inc.
000 X. Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 000000
Attention: Xxxx Xxxxxxxxxx
with a copy to:
Xxxx X. Xxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx Xxxxxx 00000
Xxx Xxxxxxx, Xxxxxxxxxx
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made as
of the date actually received.
7.2 Headings; Agreement. The headings contained in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
The term "Agreement" for purposes of representations and warranties hereunder
shall be deemed to include the Exhibits hereto to be executed and delivered by a
party.
7.3 Publicity. So long as this Agreement is in effect, the Company
shall not, and shall cause their Affiliates not to, issue or cause the
publication of any press release or other
25
announcement with respect to the transactions contemplated by this Agreement or
this Agreement without the consent of the Buyers, which consent shall not be
unreasonably withheld or delayed.
7.4 Entire Agreement. This Agreement (including all the Schedules and
Exhibits hereto) and the other Transaction Documents constitute the entire
agreement among the parties and supersede all other prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
7.5 Amendment. This Agreement may be amended by an instrument in
writing signed on behalf of each of the parties hereto.
7.6 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefits of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
7.7 Expenses. Except as otherwise set forth herein each party, shall
bear their respective costs, expenses and fees incurred in connection with the
preparation, execution and performance of this Agreement and the other
Transaction Documents (including, but not limited to, amounts payable to
accountants, attorneys, consultants, finders or investment bankers in connection
with this Agreement and the Transactions). Notwithstanding the foregoing, the
Company shall pay the reasonable expenses of a single counsel to the Buyers to
be retained by Xxxxxxxxx Partners IV, L.P. in connection with the preparation,
execution and performance of this Agreement and the other Transaction Documents.
7.8 Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
7.9 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 agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart, with original
signatures, of this Agreement.
7.10 Governing Law. The validity and interpretation of this Agreement
shall be governed by the laws of the State of California without reference to
the conflict of laws principles thereof.
7.11 Cumulative Remedies. All rights and remedies of any party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or inequity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
26
7.12 Third Party Beneficiaries. This Agreement is not intended to
confer upon any other Person any rights or remedies hereunder.
7.13 Limitation of Liability. In no event shall any partner or
representative of the Buyers or of any partnership which is a partner of the
Buyers or any partner of any such partnership, or any direct or indirect
stockholder, officer, director, partner or any other such Person, be personally
liable for any such obligation of the Buyers under this Agreement. In no event
shall recourse with respect to the obligations under this Agreement of the
Buyers be had to the assets or business of any Person other than the Buyers. In
no event shall recourse with respect to the obligations under this Agreement of
the Company be had to the assets or business of any Person other than the
Company, including its Subsidiaries. In no event shall any officer, director or
shareholder (and their officers, directors, representatives and agents) of the
Company be personally liable for any obligation of the Company under this
Agreement. Any obligation of any trust shall be enforceable solely against the
assets of such trust and not against any trustee.
7.14 Arbitration. All disputes and controversies arising out
of or relating to this Agreement, or relating to a Breach hereof shall be
settled by arbitration conducted in Los Angeles, California in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then in
effect. The award rendered by the arbitrator(s) shall be final and judgment upon
the award rendered by the arbitrator(s) may be entered upon it in any court
having jurisdiction thereof or application may be made to such court for a
judicial acceptance of the award and an order of judgment. The arbitrator(s)
shall possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration. Each party shall bear its own costs and
expenses of the arbitration, subject to reimbursement as determined by the
arbitrator(s).
27
IN WITNESS WHEREOF, each of the Buyers and the Company have caused
this Recapitalization Agreement to be signed by an officer or partner thereunto
duly authorized, all as of the date first written above.
COMPANY: FRESH ENTERPRISES, INC.
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxxxxxx
----------------------------------------
Title: President & CEO
----------------------------------------
XXXXXXXXX: XXXXXXXXX PARTNERS IV, L.P.,
a Delaware limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
-----------------------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
XXXXXXXXX PARTNERS IV OFFSHORE, LP.
a Cayman limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: Managing General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
-----------------------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
S-1
XXXXXXXXX PARTNERS IV SPECIAL
PURPOSE, L.P. a Cayman limited partnership
By: Xxxxxxxxx Managing
Partner IV, L.L.C.
Its: Managing General Partner
By: CP4 Principals, L.L.C.
Its: Managing Member
By: /s/ Xxxxx X. Xxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Authorized Person
XXXXXXXXX-BAJA PARTNERS, L.L.C.,
a Delaware limited liability company
By: Xxxxxxxxx Partners IV Management
Company, L.L.C.
Its: Managing Member
By /s/ Xxxxx X. Xxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxx Xx.
Title: Authorized Person
GRUMMAN HILL: GRUMMAN HILL INVESTMENTS III, L.P.,
a Delaware limited partnership
By: Grumman Hill Group, L.L.C.
Its: General Partner
/s/ N. Xxxxxxxxx Xxxx
----------------------------------------------
Name: N. Xxxxxxxxx Xxxx
Title: Authorized Person
S-2
OAK INVESTMENT: OAK INVESTMENT PARTNERS VIII, LIMITED
PARTNERSHIP, a Delaware limited partnership
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Managing Member of
Oak Associates VIII, LLC,
The General Partner of
Oak Investment Partners VIII,
Limited Partnership
OAK VIII AFFILIATES FUND, LIMITED
PARTNERSHIP, a Delaware limited partnership
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Managing Member of
Oak Associates VIII, LLC,
The General Partner of
Oak VIII Affiliates Fund, Limited
Partnership
XXXX & XXXXX XXXXXXX LIVING TRUST
/s/ Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxxx, Trustee
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
S-3
/s/ Xxxxx Xxxxxx
--------------------------------
XXXXX XXXXXX
/s/ Xxxx Xxxxxx
--------------------------------
XXXX XXXXXX
/s/ Xxxxxxx X. XxXxxxx
--------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxx X. Xxxxxx
--------------------------------
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxxxx
--------------------------------
XXXXX X. XXXXXXXX, individually and as trustee
of the Xxxxx X. Xxxxxxxx Separate Property Trust
/s/ Xxxxxx X. Xxxxx
--------------------------------
XXXXXX X. XXXXX
/s/ Xxxx Xxxxxxxxxx
--------------------------------
XXXX XXXXXXXXXX
THE XXXXX & XXXXXX XXXX FAMILY TRUST
/s/ Xxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxx, Trustee
/s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx, Trustee
S-4
Schedule 1
----------
Xxxxxxxxx Partners IV, X.X.
Xxxxxxxxx Partners IV Offshore, X.X.
Xxxxxxxxx Partners IV Special Purpose, X.X.
Xxxxxxxxx-Baja Partners, L.L.C.
Grumman Hill Investments III, L.P.
Oak Investment Partners VIII, L.P.
Oak VIII Affiliates Fund, L.P.
Xxxx & Xxxxx Xxxxxxx Living Trust
Xxxxx Xxxxxx
Xxxxxxx X. XxXxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxx Xxxxxxxxxx
JKG Enterprise Group Money Purchase Pension Plan FBO Xxxx Xxxxxxxxxx
The Xxxxx & Xxxxxx Xxxx Family Trust
