EXHIBIT 10.12
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE HEREUNDER HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES, OR DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE
WITH RULE 144 UNDER THE ACT.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA OR
ANY OTHER STATE AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF
ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SUCH SECURITIES IS EXEMPT FROM QUALIFICATION BY
SECTION 25110, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE OR SUCH
PROVISIONS OF THE CORPORATIONS CODE OF ANY SUCH OTHER STATE. THE RIGHTS OF THE
HOLDER OF THIS WARRANT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.
THIS WARRANT IS NOT TRANSFERABLE OR ASSIGNABLE IN ANY MANNER AND NO INTEREST IN
THIS WARRANT MAY BE PLEDGED OR OTHERWISE ENCUMBERED BY FSC CORP. WITHOUT THE
EXPRESS WRITTEN CONSENT OF THE COMPANY, WHICH MAY BE GIVEN OR WITHHELD BY THE
COMPANY IN ITS SOLE DISCRETION.
Warrant to Purchase
up to 45,000 Shares of
Series D Preferred Stock
(Subject to Adjustment)
XXXXX'X RESTAURANTS, INC.
SERIES D PREFERRED STOCK PURCHASE WARRANT
May 11, 1998
XXXXX'X RESTAURANTS, INC., a Delaware corporation (the "COMPANY"),
hereby certifies that for value received, FSC Corp., a Massachusetts securities
holding corporation ("FSC CORP.") is entitled, subject to the terms and
conditions set forth below to purchase from the Company shares of Series D
Preferred Stock of the Company, subject to adjustment as provided herein.
As used herein the following terms shall have the following respective
meanings:
(a) The term "COMMON STOCK" shall mean the Common Stock of the
Company, and any other securities or property of the Company or of any other
person (corporate or otherwise) which FSC Corp. at any time shall be entitled to
receive upon the conversion of the Preferred Stock issuable upon the exercise of
this Warrant in lieu of or in addition to such Common Stock, or which at any
time shall be issuable in exchange for or in replacement of such Common Stock.
(b) The term "SERIES D PREFERRED STOCK" shall mean the Series D
Preferred Stock of the Company, and any other securities or property of the
Company or of any other person (corporate or otherwise) which FSC Corp. at any
time shall be entitled to receive upon the exercise of this Warrant in lieu of
or in addition to such Series D Preferred Stock, or which at any time shall be
issuable in exchange for or in replacement of such Series D Preferred Stock.
(c) The term "WARRANT SHARES" shall mean the shares of Series D
Preferred Stock issuable upon the exercise of this Warrant.
1. LOAN AGREEMENT. This Warrant is issued in connection with that
certain Revolving Credit and Term Loan Agreement dated May 11, 1998 (the "Loan
Agreement") by and between the Company and BankBoston, N.A., a national banking
association.
2. EXERCISE OF WARRANT. The terms and conditions upon which this
Warrant may be exercised, and the Series D Preferred Stock covered hereby may be
purchased, are as follows:
2.1 TERM. Subject to the terms hereof, this Warrant may be exercised
at any time after the date hereof, or from time to time, in whole or in part;
provided, however, that in no event may this Warrant be exercised later than
5:00 p.m. (Pacific Time) on the earlier of (i) the business day immediately
preceding the date of the closing of an acquisition of all or substantially all
of the Company's outstanding stock or assets by an unrelated entity, by merger
or otherwise (an "Acquisition") or (ii) December 31, 2002 (the "EXPIRATION
DATE"). The Exercise Price and the number of shares of Series D Preferred Stock
of the Company issuable upon exercise of this Warrant are subject to adjustment
as provided in Section 4 below. The Company shall notify FSC Corp. in writing,
in accordance with the notice requirements of Section 9.3 of this Warrant, at
least 20 days prior to the occurrence of the events described in sections (i)
and (ii) above. If the Company sends such notice less than 20 days prior to the
occurrence of such events, FSC Corp.'s right to exercise this Warrant shall be
extended for a period of 20 days after the date of notice, after which time FSC
Corp.'s rights under this Warrant shall terminate.
2.2 NUMBER OF SHARES. This Warrant may be exercised for the number
of shares of Series D Preferred Stock set forth below.
2.2.1 CLOSING OF LOAN AGREEMENT. Upon the closing of the
Loan Agreement, this Warrant will be exercisable for 25,000 shares of Series D
Preferred Stock.
2.2.2 $5,000,001 BORROWED UNDER LOAN AGREEMENT. In the event
that the Company borrows an aggregate of at least $5,000,001 under the Loan
Agreement, then this Warrant will be exercisable for an additional 10,000 shares
of Series D Preferred Stock (the "5M Shares") in excess of the Warrant Shares
referenced in Sections 2.2.1
2
2.2.3 $7,500,001 BORROWED UNDER LOAN AGREEMENT. In the event
that the Company borrows an aggregate of at least $7,500,001 or more under the
Loan Agreement, then this Warrant will be exercisable for an additional 10,000
shares of Series D Preferred Stock (the "7.5M Shares") in excess of the Warrant
Shares referenced in Sections 2.2.1 and 2.2.2.
2.3 PURCHASE PRICE. The per share purchase price for the shares of
stock to be issued upon exercise of this Warrant (the "Exercise Price") shall be
$7.19454, subject to adjustment as provided herein; PROVIDED, HOWEVER, in the
event that the Company's EBITDA for the fiscal year ending December 27, 1998 is
greater than or equal to $3,176,000, the Exercise Price for the 5M Shares and
7.5M Shares, if any, to be issued upon exercise of this Warrant shall be $10.00
per share, subject to adjustment as provided herein.
3. METHOD OF EXERCISE.
3.1 EXERCISE OF WARRANT; PARTIAL EXERCISE. This Warrant may be
exercised in full or in part by FSC Corp. by surrender of this Warrant, together
with the form of subscription attached hereto as EXHIBIT A duly executed by FSC
Corp., to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, of
the Exercise Price of the Warrant Shares to be purchased hereunder. For any
partial exercise hereof, FSC Corp. shall designate in a subscription in the form
of EXHIBIT A attached hereto delivered to the Company the number of Warrant
Shares that it wishes to purchase. On any such partial exercise, the Company at
its expense shall forthwith issue and deliver to FSC Corp. a new warrant of like
tenor, in the name of FSC Corp., which shall be exercisable for such number of
Warrant Shares represented by this Warrant which have not been purchased upon
such exercise.
3.2 NET ISSUANCE.
3.2.1 RIGHT TO CONVERT. In addition to and without limiting
the rights of FSC Corp. under the terms of this Warrant, FSC Corp. shall have
the right to convert this Warrant or any portion thereof (the "Conversion
Right") into shares of Series D Preferred Stock as provided in this Section 3.2
at any time or from time to time prior to the Expiration Date.
Upon exercise of the Conversion Right with respect to a particular number of
shares subject to the Warrant (the "Converted Warrant Shares"), the Company
shall deliver to FSC Corp. (without payment by FSC Corp. of any exercise price
or any cash or other consideration) that number of shares of fully paid and
nonassessable Series D Preferred Stock computed using the following formula:
X = Y (A - B)
-------
A
Where: X = the number of shares of Series D Preferred Stock to
be delivered to FSC Corp.
Y = the number of Converted Warrant Shares
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A = the per share fair market value of the Series D
Preferred Stock on the Conversion Date (as defined
below)
B = the Exercise Price of the Warrant (as adjusted to
the Conversion Date)
The Conversion Right may only be exercised with respect to a whole number of
shares subject to the Warrant. No fractional shares shall be issuable upon
exercise of the Conversion Right, and if the number of shares to be issued
determined in accordance with the foregoing formula is other than a whole
number, the Company shall pay to FSC Corp. an amount in cash equal to the fair
market value of the resulting fractional share on the Conversion Date (as
defined below). Shares issued pursuant to the Conversion Right shall be treated
as if they were issued upon the exercise of the Warrant.
3.2.2 METHOD OF EXERCISE. The Conversion Right may be
exercised by FSC Corp. by the surrender of the Warrant at the principal office
of the Company together with a written statement specifying that FSC Corp.
thereby intends to exercise the Conversion Right and indicating the total number
of shares under the Warrant that FSC Corp. is exercising through the Conversion
Right. Such conversion shall be effective upon receipt by the Company of the
Warrant together with the aforesaid written statement, or on such later date as
is specified therein (the "Conversion Date"). Certificates for the shares
issuable upon exercise of the Conversion Right and, if applicable, a new warrant
evidencing the balance of the shares remaining subject to the Warrant, shall be
issued as of the Conversion Date and shall be delivered to FSC Corp. promptly
following the Conversion Date.
3.2.3 DETERMINATION OF FAIR MARKET VALUE. For purposes of
this Section 3.2, fair market value of a share of Series D Preferred Stock on
the Conversion Date shall mean:
(i) If the Conversion Right is exercised in connection with the
Company's initial public offering pursuant to a registration statement
(a "Public Offering"), and if the Company's Registration Statement
relating to such Public Offering has been declared effective by the
Securities and Exchange Commission, the initial "Price to Public"
specified in the final prospectus with respect to such offering times
the number of shares of Common Stock into which each Converted Warrant
Share is then convertible.
(ii) If the Conversion Right is exercised in connection with an
Acquisition, the effective per share consideration to be received in
an Acquisition by holders of the Common Stock, which price shall be as
specified in the agreement entered into with respect to such
Acquisition and determined assuming receipt of the aggregate exercise
price of all outstanding warrants to purchase equity securities of the
Company (the "Outstanding Warrants"), or if no such price is set forth
in the agreement concerning the Acquisition, than as determined in
good faith by the Company's Board of Directors upon a review of
relevant factors, including the aggregate exercise price of all
Outstanding Warrants.
4
(iii) If the Conversion Right is not exercised in connection with an
Acquisition or in connection with and contingent upon a Public
Offering, then as follows:
(A) If such type of security is traded on a securities
exchange, the fair market value shall be deemed to be the average of
the closing prices of such type of security on such exchange over the
30-day period ending five business days prior to the Conversion Date;
(B) If such type of security is traded over-the-counter,
the fair market value shall be deemed to be the average of the closing
bid prices of such type of security over the 30-day period ending five
business days prior to the Conversion Date; and
(C) If there is no public market for such type of security,
then fair market value shall be determined by mutual agreement of FSC
Corp. and the Company, and if FSC Corp. and the Company are unable to
so agree, by an investment banker of national reputation selected by
the Company and reasonably acceptable to FSC Corp.. All fees and
expenses for such investment banker shall be paid for by FSC Corp..
3.3 WHEN EXERCISE EFFECTIVE. The exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
business day on which this Warrant and any other items necessary for the
effective exercise of this Warrant are surrendered to the Company as provided in
this Section 3, and at such time the person in whose name any certificate for
shares of Series D Preferred Stock are issuable upon such exercise, as provided
in Section 3.3, shall be deemed to be the record holder of such Series D
Preferred Stock for all purposes.
3.4 DELIVERY ON EXERCISE. As soon as practicable after the
exercise of this Warrant in full or in part, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to FSC Corp., or as FSC Corp. may direct, a
certificate or certificates for the number of fully paid and nonassessable full
shares of Series D Preferred Stock to which FSC Corp. shall be entitled on such
exercise.
4. ADJUSTMENTS TO SERIES D PREFERRED STOCK AND EXERCISE PRICE.
The number of shares of Series D Preferred Stock (or any shares of stock or
other securities which may be) issuable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
4.1 SPLITS AND SUBDIVISIONS. In the event the Company should at
any time or from time to time fix a record date for the effectuation of a split
or subdivision of the outstanding shares of Series D Preferred Stock or the
determination of the holders of Series D Preferred Stock entitled to receive a
dividend or other distribution payable in additional shares of Series D
Preferred Stock or other securities or rights convertible into, or entitling the
holder thereof to receive directly or indirectly, additional shares of Series D
Preferred Stock ("SERIES D PREFERRED STOCK EQUIVALENTS") without payment of any
consideration by such holder for the additional shares of Series D Preferred
Stock or Series D Preferred Stock Equivalents (including the
5
additional shares of Series D Preferred Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such split,
subdivision, dividend or other distribution if no record date is fixed), the
Exercise Price shall be appropriately decreased and the number of shares of
Series D Preferred Stock issuable upon exercise of this Warrant shall be
appropriately increased in proportion to such increase in outstanding shares
of Series D Preferred Stock.
4.2 COMBINATION OF SHARES. If the number of shares of Series D
Preferred Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Series D Preferred Stock, the Exercise
Price shall be appropriately increased and the number of shares of Series D
Preferred Stock issuable upon exercise of this Warrant shall be appropriately
decreased in proportion to such decrease in outstanding shares of Series D
Preferred Stock.
4.3 ADJUSTMENTS FOR OTHER DISTRIBUTIONS. In the event the Company
shall declare a distribution payable to the holders of Series D Preferred Stock
in securities of other persons, evidences of indebtedness issued by the Company
or other persons, assets (excluding cash dividends) or options or rights not
referred to in Section 4.1, then, in each such case for the purpose of this
Section 4.3, upon exercise of this Warrant FSC Corp. shall be entitled to a
proportionate share of any such distribution as though FSC Corp. was the holder
of the number of shares of Series D Preferred Stock of the Company issuable upon
exercise of this Warrant as of the record date fixed for the determination of
the holders of Series D Preferred Stock entitled to receive such distribution.
4.4 RECLASSIFICATION OR REORGANIZATION. If the Series D Preferred
Stock (or any shares of stock or other securities which may be) issuable upon
exercise of this Warrant shall be changed into the same or different number of
shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided for in Sections 4.1, 4.2 or 4.3 above, or an
acquisition of all or substantially all of the Company's outstanding stock or
assets by an unrelated entity, by merger or otherwise, prior to which this
Warrant shall cease to be exercisable as provided above), then and in each such
event FSC Corp. shall be entitled to receive upon the exercise of this Warrant
the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification or other change, to which
a holder of the number of shares of Series D Preferred Stock (or any shares of
stock or other securities which may be) issuable upon exercise of this Warrant
would have received if this Warrant had been exercised immediately prior to such
reorganization, reclassification or other change.
4.5 NOTICE OF ADJUSTMENTS AND RECORD DATES. The Company shall
promptly notify FSC Corp. in writing of each adjustment or readjustment of the
Exercise Price and the number of shares of Series D Preferred Stock (or any
shares of stock or other securities which may be) issuable upon exercise of this
Warrant. Such notice shall state the adjustment or readjustment and show in
reasonable detail the facts on which the adjustment or readjustment is based.
In the event of any taking by the Company of a record of (a) the holders of
Series D Preferred Stock for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or (b) the holders
of the Company's outstanding capital stock for the purpose of approving any
acquisition of all or substantially all of the Company's outstanding stock or
assets by an unrelated entity, by merger or otherwise, the Company shall
6
notify FSC Corp. in writing of such record date at least twenty (20) days
prior to such record date.
4.6 NO IMPAIRMENT. The Company will not avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants that:
5.1 STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Series D Preferred Stock and Common Stock,
solely for the purpose of issuance upon the exercise of this Warrant as herein
provided, such number of shares of Series D Preferred Stock as shall then be
issuable upon the exercise of this Warrant and such number of shares of Common
Stock as shall be issuable upon conversion of such Series D Preferred Stock.
The Company shall from time to time in accordance with applicable law increase
the authorized amount of its Series D Preferred Stock and/or Common Stock if at
any time the number of shares of Series D Preferred Stock and/or Common Stock
remaining unissued and available for issuance shall not be sufficient to permit
exercise of this Warrant and the conversion of such shares of Series D Preferred
Stock to Common Stock. The Company covenants that, upon issuance in accordance
with the terms of this Warrant, all shares of Series D Preferred Stock which
shall be so issued and any Common Stock issued upon the conversion of such
Series D Preferred Stock, shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and, without limiting the generality of the foregoing, the
Company will take all such action as may be necessary to assure that all such
shares of Series D Preferred Stock and Common Stock may be so issued without
violation of any applicable law or regulation, or of any requirements of any
national securities exchange upon which shares of capital stock of the Company
may be listed.
5.2 ISSUE TAX. The issuance of certificates for shares of Series D
Preferred Stock upon exercise of this Warrant shall be made without charge to
FSC Corp. for any issue tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of FSC Corp. of this Warrant.
5.3 CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of the shares of Series D Preferred Stock issued or
issuable upon the exercise of this Warrant in any manner which interferes with
the timely exercise of this Warrant.
7
6. REPRESENTATIONS AND WARRANTIES OF FSC CORP. FSC Corp. hereby represents
and warrants that:
6.1 AUTHORIZATION. FSC Corp. represents that it has full power and authority
to enter into this Warrant and that this Warrant constitutes a valid and
legally binding obligation of FSC Corp..
6.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Warrant is issued and sold to
FSC Corp. in reliance upon FSC Corp.'s representation to the Company, which
by FSC Corp.'s execution of this Warrant FSC Corp. hereby confirms, that this
Warrant, the Series D Preferred Stock issuable upon exercise hereof and the
Common Stock issuable upon conversion of such Series D Preferred Stock
(collectively, the "Securities") will be acquired for investment for FSC
Corp.'s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that FSC Corp. has no present
intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Warrant, FSC Corp. further
represents that FSC Corp. does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to
such person or to any third person, with respect to any of the Securities.
6.3 RELIANCE UPON FSC CORP.'S REPRESENTATIONS. FSC Corp. understands that
this Warrant is not, and any Series D Preferred Stock acquired upon the
exercise hereof and any Common Stock acquired upon the conversion of any such
Series D Preferred Stock at time of issuance may not be, registered under the
Securities Act on the ground that the sale provided for in this Warrant and
the issuance of the Series D Preferred Stock hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof or
Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act, and that the Company's reliance on such exemption is
predicated on FSC Corp.'s representations set forth herein. FSC Corp.
realizes that the basis for the exemption may not be present if,
notwithstanding such representations, FSC Corp. has in mind merely acquiring
any of the Securities for a fixed or determinable period in the future, or
for a market rise, or for sale if the market does not rise. FSC Corp. has no
such intention.
6.4 RECEIPT OF INFORMATION. FSC Corp. believes it has received all the
information it considers necessary or appropriate for deciding whether to
purchase this Warrant. FSC Corp. further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of this Warrant and the business,
properties, prospects and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such information
or could acquire it without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to it or to which it had
access.
6.5 INVESTMENT EXPERIENCE. FSC Corp. represents that it is experienced in
evaluating and investing in securities of companies in the development stage
and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment, and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in this Warrant. FSC Corp. also represents it has not been
organized for the purpose of acquiring this Warrant.
8
6.6 RESTRICTED SECURITIES. FSC Corp. understands that this Warrant and the
Securities are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations this Warrant and the Securities may be resold without
registration under the Securities Act only in certain limited circumstances.
FSC Corp. has no need for liquidity of its investment in this Warrant or the
Securities. In this connection, FSC Corp. represents that it is familiar
with Securities and Exchange Commission Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
6.7 LEGENDS. To the extent applicable, any certificates for the shares of
Series D Preferred Stock issued upon exercise of this Warrant and the shares
of Common Stock issued upon conversion of such Series D Preferred Stock shall
be endorsed with the legends set forth below, and FSC Corp. covenants that,
except to the extent such restrictions are waived by the Company, FSC Corp.
shall not dispose of any interest in any of the shares of Series D Preferred
Stock issued upon exercise of this Warrant or the shares of Common Stock
issued upon conversion of such Series D Preferred Stock without complying
with the restrictions on transfer described in the legends endorsed on such
certificates:
6.7.1 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED
UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
6.7.2 Any legend required by (i) any other agreement with the
Company to which FSC Corp. is a party or (ii) the securities laws of any state
or other governmental or regulatory agency having authority over the issuance of
the shares of Series D Preferred Stock issued upon exercise of this Warrant or
the shares of Common Stock issued upon conversion of such Series D Preferred
Stock.
7. REPLACEMENT OF WARRANT. On receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver to FSC Corp., in lieu thereof, a new Warrant of
like tenor.
8. NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Warrant does not
entitle FSC Corp. hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
FSC Corp. to purchase the Series D Preferred Stock of the Company, and no
enumeration herein of the rights or privileges of FSC Corp., shall give rise to
any liability of FSC Corp. as a stockholder of the Company.
9
9. MISCELLANEOUS.
9.1 TRANSFER OF WARRANT. This Warrant shall not be transferable or
assignable in any manner and no interest shall be pledged or otherwise
encumbered by FSC Corp. without the express written consent of the Company,
which may be given or withheld by the Company in its sole discretion, and any
such attempted disposition of this Warrant or any portion hereof shall be of no
force or effect.
9.2 TITLES AND SUBTITLES. The titles and subtitles used in this
Warrant are for convenience only and are not to be considered in construing or
interpreting this Warrant.
9.3 NOTICES. Any notice required or permitted under this Warrant shall be
given in writing and shall be deemed effectively given to the party to be
notified upon personal delivery by hand or professional courier service, upon
delivery by facsimile transmission or five (5) days after deposit with the
United States Post Office, by registered or certified mail, postage prepaid
and addressed to the party to be notified at the address indicated for such
party on the signature page hereof, or at such other address as such party
may designate by ten (10) days' advance written notice to the other party.
9.4 ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Warrant, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and disbursements
in addition to any other relief to which such party may be entitled.
9.5 AMENDMENTS AND WAIVERS. Any term of this Warrant may be
amended and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and FSC Corp..
9.6 SEVERABILITY. If one or more provisions of this Warrant are
held to be unenforceable under applicable law, such provision shall be excluded
from this Warrant and the balance of the Warrant shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
9.7 GOVERNING LAW. This Warrant shall be governed by and construed
and enforced in accordance with the laws of the State of California, without
giving effect to its conflicts of laws principles.
9.8 ENTIRE AGREEMENT. This Warrant contains the entire agreement
between the Company and FSC Corp. with regard to the subject matter hereof, and
supersedes all prior agreements and understandings, whether written or oral,
with regard to the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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9.9 COUNTERPARTS. This Warrant may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Date: May 11, 1998 Xxxxx'x Restaurants, Inc.,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
-----------------------------
Its: President and CEO
----------------------------
Address: 0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Fax No.: (000) 000-0000
ACKNOWLEDGED AND AGREED:
FSC Corp., a Massachusetts
securities holding corporation
By: /s/ Illegible
------------------------------------
Its: Vice President
-----------------------------------
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
11
EXHIBIT A
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
To: Xxxxx'x Restaurants, Inc.
FSC Corp. hereby (a) irrevocably elects to exercise the purchase
rights represented by such Warrant for, and to purchase thereunder,
_____________________________* shares of Series D Preferred Stock of Xxxxx'x
Restaurants, Inc., and herewith makes payment of $___________ therefor, (b)
requests that the certificates for such shares be issued in the name of, and
delivered to ________________________________, whose address is _____________
________________________________________________________, and (c) reaffirms
that all of the representations and warranties of FSC Corp. contained in Section
6 of the Warrant are true and correct as of the date hereof.
Dated: _________________
FSC Corp., a Massachusetts securities holding
corporation
By: _______________________________
Its: _______________________________
Address: ___________________________
____________________________________
Fax No.: ___________________________
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* Insert here the number of shares as to which the Warrant is being exercised.
A-1
