Exhibit 10.19
CONTINGENT VALUE RIGHTS
As of October 13, 1998, BUCA, Inc. ("BUCA") sold to Centre Capital
Investors II, L.P. contingent value rights to receive shares of BUCA's capital
stock in accordance with the terms of the attached contingent value rights
agreement. BUCA also sold contingent value rights to the Purchasers listed
below. Their agreements are substantially identical to the attached copy, except
for the material details set forth in the following Schedule.
SCHEDULE OF DIFFERENCES
BETWEEN ATTACHED COPY AND SUBSTANTIALLY IDENTICAL COPIES
CVR Number of
Purchaser No. CVRs Date CVRs Granted
Attached Copy: Centre Capital Investors II, L.P. 1 300,515 October 13, 1998
Sub. Iden. Copy: Centre Capital Tax-Exempt Investors II, 2 97,793 October 13, 1998
L.P.
Sub. Iden. Copy: Centre Capital Offshore Investors II, L.P. 3 65,390 October 13, 1998
Sub. Iden. Copy: Centre Parallel Management Partners, L.P. 4 4,607 October 13, 1998
Sub. Iden. Copy: Centre Partners Coinvestment, L.P. 5 50,944 October 13, 1998
Sub. Iden. Copy: State Board of Administration of Florida 6 456,360 October 13, 1998
Sub. Iden. Copy: Norwest Equity Partners V, L.P. 7 424,203 October 13, 1998
Sub. Iden. Copy: Northwood Capital Partners LLC 8 9,756 October 13, 1998
Sub. Iden. Copy: Northwood Ventures 9 87,805 October 13, 1998
Sub. Iden. Copy: Regent Capital Equity Partners, L.P. 10 72,659 October 13, 1998
Sub. Iden. Copy: Xxxxxx-SBIC, L.P. 11 59,170 October 13, 1998
Sub. Iden. Copy: Xxxxxx Technology Ventures II, L.P. 12 9,823 October 13, 1998
Sub. Iden. Copy: Centre Capital Investors II, L.P. 13 300,515 December 23, 1998
Sub. Iden. Copy: Centre Capital Tax-Exempt Investors II, 14 97,793 December 23, 1998
L.P.
Sub. Iden. Copy: Centre Capital Offshore Investors II, L.P. 15 65,390 December 23, 1998
Sub. Iden. Copy: Centre Parallel Management Partners, L.P. 16 4,607 December 23, 1998
Sub. Iden. Copy: Centre Partners Coinvestment, L.P. 17 50,944 December 23, 1998
Sub. Iden. Copy: State Board of Administration of Florida 18 456,360 December 23, 1998
Exhibit 10.19
VOID AFTER 5:00 P.M. MINNEAPOLIS TIME, ON OCTOBER 12, 2005
CVR No. 1 300,515 CVRs
BUCA, INC.
CONTINGENT VALUE RIGHTS TO RECEIVE SHARES OF CAPITAL STOCK
THE SECURITIES EVIDENCED HEREBY MAY NOT BE TRANSFERRED WITHOUT (i) THE OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY BE
LAWFULLY MADE WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES ACT OF 1933 AND
ALL APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.
THIS CERTIFIES THAT, FOR VALUE RECEIVED, Centre Capital Investors II, L.P.,
or registered assigns, is the registered holder of the number of Contingent
Value Rights ("CVRs") set forth above. Each CVR entitles the holder thereof to
receive from BUCA, Inc., a Minnesota corporation ("BUCA" or the "Company"),
subject to the terms and conditions set forth hereinafter, shares of BUCA's
Series C Preferred Stock, par value $.01 per share ("Series C Preferred Stock")
or shares of BUCA's Common Stock, par value $.01 per share ("Common Stock") as
follows:
In the event that on or prior to October 12, 2001, BUCA has not either
effected a Qualified Public Offering (as defined in the Articles of
Incorporation described in the Securities Purchase Agreement referred to below)
or had a Publicly Traded Security (as defined in the Articles of Incorporation)
with an average closing price on the principal securities exchange or market on
which such security is traded (hereinafter, the "Closing Price") of at least
$12.00 per share for a period of at least 120 consecutive trading days, then,
the holder of this CVR Certificate shall be entitled to receive on October 12,
2001 (the "Payment Date"), the cumulative Settlement Amounts of additional
Series C Preferred Shares obtained by the following formula which will be
computed as of the last day of each March, June, September and December,
commencing December 31, 1998 (each a "Quarterly End Date") for the period
commencing on October 13, 1998, where:
(i) X represents the number of shares of Series C Preferred Stock or
Common Stock issued upon conversion thereof ("Conversion Stock") held
by the holder (including any Series C Preferred Stock, Conversion
Stock or Common Stock issuable in respect of any prior Quarterly End
Date(s)), and
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(ii) Y represents the result obtained by dividing $12.00 by the Market
Value, as hereinafter defined, and
(iii) the Settlement Amount, is determined as follows:
(X multiplied by (Y multiplied by .25)) minus (X multiplied by .25).
However, in no event shall the Settlement Amount for any quarter
exceed 1.25% of X and the Settlement Amount for any partial quarter
shall be proportionately reduced.
For purposes of computing the Settlement Amount, if the Common Stock
is publicly traded, "Market Value" shall be the average Closing Price
for the 120 trading days immediately preceding the date of
determination of Market Value (or such lesser number of days that the
Common Stock shall have been publicly traded). In the absence of a
publicly traded market, the amount "Y" in (ii) above shall be obtained
by dividing $18.00 by the Market Value, provided that in such case
"Market Value" will equal the per share price of the most recent
issuance of preferred stock of BUCA in an arms-length transaction for
aggregate consideration of at least $5,000,000); provided, however,
that, in the absence of a publicly traded market, in no event shall
the Market Value be at a price per share that is less than the per
share price of the most recent issuance of Common Stock of BUCA in an
arms-length transaction for aggregate consideration of at least
$5,000,000.
Additionally, from and after October 13, 2001 and until October 12, 2005,
such holder will continue to be entitled to receive a Settlement Amount on a
quarterly basis on each subsequent Quarterly End Date, until the second
Quarterly End Date following the earlier of the date a Qualified Public Offering
has been effected or BUCA has a Publicly Traded Security with an average Closing
Price of at least $12.00 per share for at least 120 consecutive trading days.
Notwithstanding the foregoing, in the event that as of the Payment Date or
any Quarterly End Date, the Common Stock is traded on a national securities
exchange, the NASDAQ National Market or the NASDAQ Small Cap Market, then in
lieu of shares of Series C Preferred Stock on the applicable payment date, at
the option of BUCA, BUCA shall issue an equivalent number of shares of Common
Stock.
In the event that on or prior to October 12, 2001 BUCA shall sell, lease,
license or otherwise dispose of all or substantially all of its assets, or any
asset or assets which have a material effect upon the business or financial
condition of the corporation, or shall consolidate with or merge into any other
corporation or entity, or permit any other corporation or entity to
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consolidate or merge into BUCA, or enter into a plan of exchange with any other
corporation or entity (except for a merger or consolidation of any wholly-owned
subsidiary with or into BUCA), then the CVRs granted hereby shall be cancelled.
In the event of any stock dividend payable in shares of Common Stock, any
increase in the number of shares of Common Stock by a subdivision or split-up of
shares of Common Stock or any decrease in the number of shares of Common Stock
by a combination of the outstanding shares of Common Stock or any capital
reorganization or reclassification of the Common Stock, the provisions hereof
with respect to the computation of the Settlement Amount and the number of
shares of capital stock issuable hereunder, shall be subject to equitable
adjustment to effectuate the purposes hereof.
REFERENCE IS MADE TO THE PROVISIONS OF THIS CVR CERTIFICATE SET FORTH ON
THE REVERSE SIDE HEREOF, AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH ON THE FRONT OF THIS CERTIFICATE.
This CVR Certificate shall be governed by and construed in accordance with
the laws of the State of Minnesota.
This CVR Certificate is being issued pursuant to the terms of and is
entitled to the benefits of the Securities Purchase Agreement dated as of
October 13, 1998, as amended (the "Securities Purchase Agreement") among BUCA
and the Purchasers party thereto.
IN WITNESS WHEREOF, BUCA has caused this CVR Certificate to be executed by
its duly authorized officer.
BUCA, INC.
By /s/ Xxxx X. Xxxxx
---------------------------
Title CFO
-----------------------
Dated: December 23, 1998
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[REVERSE SIDE]
The holder of this CVR Certificate shall not, by virtue hereof, be entitled
to any of the rights of a stockholder of BUCA, either at law or in equity, and
the rights of the holder are limited to those expressed herein.
Every holder of this CVR Certificate, by accepting the same, consents and
agrees with BUCA and with every other holder of a CVR Certificate that:
(a) This CVR Certificate is transferable on the registry books of BUCA
only upon the terms and conditions set forth herein;
(b) BUCA may deem and treat the person in whose name this CVR
Certificate is registered as the absolute owner hereof (notwithstanding any
notation of ownership or other writing hereon made by anyone other than
BUCA) for all purposes whatsoever and BUCA shall not be affected by any
notice to the contrary; and
(c) this CVR Certificate and the CVRs, and the obligations of BUCA
hereunder, may be waived, amended, modified, supplemented or released, in
whole or in part, with the consent of BUCA and the holders of not less than
66 2/3% of the then outstanding CVRs.
BUCA shall maintain books for the registration and registration of transfer
of the CVR Certificates.
No fractional shares of Series C Preferred Stock or Common Stock shall be
issued to any holder of CVRs in respect of the CVRs. Instead of any fractional
shares of Series C Preferred Stock or Common Stock that would otherwise be
issuable to any such holder, BUCA will pay to such holder a cash adjustment in
respect of such fractional interest in an amount equal to the fair market value
thereof as determined by two-thirds of the members of the Board of Directors of
BUCA.
BUCA will pay all documentary stamp taxes attributable to the original
issuance of the CVRs and shares of capital stock of BUCA ("BUCA Shares")
issuable hereunder; provided, however, that BUCA shall not be required to (a)
pay any tax which may be payable in respect of any transfer involving any
transfer and delivery of CVR Certificates or the issuance or delivery of
certificates for BUCA Shares in a name other than that of the registered holder
of the CVR Certificate as of the applicable payment date, or (b) issue or
deliver any certificate for BUCA Shares upon any applicable payment date until
any such tax required to be paid under clause (a) shall have been paid, all such
tax being payable by the holder of such CVR at the time
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of surrender.
In case any CVR Certificate shall be mutilated, lost, stolen or destroyed,
BUCA shall issue a new CVR Certificate of like tenor and evidencing the number
of CVRs evidenced by the CVR Certificate so mutilated, lost, stolen or
destroyed, but only upon receipt of evidence satisfactory to BUCA of such
mutilation, loss, theft or destruction of such CVR Certificate and indemnity, if
requested, also satisfactory to it.
BUCA shall at all times reserve for issuance and delivery pursuant to the
CVRs such number of BUCA Shares from time to time issuable pursuant to the CVRs.
All such shares shall be duly authorized and, when issued, shall be validly
issued, fully paid and nonassessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights.
CVRs may be exchanged or transferred, at the option of the holder, upon
surrender of CVR Certificates to BUCA or its transfer agent for other CVR
Certificates of different denominations, entitling the holder or holders thereof
to receive in the aggregate the same payments. Subject to the preceding
sentence, a CVR Certificate may be divided or combined with other CVR
Certificates that carry the same rights upon presentation thereof at the office
of BUCA or its transfer agent, together with written notice specifying the names
and denominations in which new CVR Certificates are to be issued and signed by
the holder thereof.
CVRs may be assigned or transferred, at the option of the holder, upon
surrender of CVR Certificates to BUCA or its transfer agent, accompanied (if so
required by BUCA) by a written instrument or instruments of transfer in form
satisfactory to BUCA, duly executed by the registered holder or by a duly
authorized representative or attorney. Upon any such registration of transfer, a
new CVR Certificate shall be issued to the transferee of the surrendered CVR
Certificate.
THE SECURITIES EVIDENCED HEREBY MAY NOT BE TRANSFERRED WITHOUT (i) THE
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY
BE LAWFULLY MADE WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES ACT OF 1933
AND ALL APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.
Any transfer, exchange or assignment of CVRs shall be without charge (other
than the cost of any transfer tax) to the holder and any new CVR Certificate
issued pursuant hereto shall be dated the date of such transfer, exchange or
assignment.
All covenants and provisions of this Agreement by or for the benefit of
BUCA or the holders of the CVRs shall bind and inure to the benefit of their
respective successors, assigns,
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heirs and personal representatives.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM as tenants in common
TEN ENT as tenants by the entireties
JT TEN as joint with right of survivorship and not as
tenants in common
COM PROP as community property
UNIF GIFT MIN ACT Custodian
----------------- -----------------
(Cust) (Minor)
under Uniform Gifts to Minors Act
---------------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
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