EXHIBIT 1
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED STOCK PURCHASE AGREEMENT dated April 20, 2005
is between XXXX XXXXXXXXX ("Purchaser"), an individual resident of Nevada, and
XXXX X. XXXXX, XX. ("Xxxxx or Seller"), an individual resident of Kentucky (this
"Agreement").
RECITALS:
A. Seller is the beneficial owner of 1,689,296 shares (the "Xxxxx
Shares") of common stock, $0.001 par value, of Main Street Restaurant Group,
Inc. (the "Common Stock"), a publicly-traded Delaware corporation (the
"Company"). In addition, Xxxxx holds options granted to him by the Company (the
"Options") to purchase 1,200,000 additional shares of Common Stock (the "Option
Shares").
B. Purchaser desires to purchase from Seller, and Seller desires to
sell to the Purchaser, the Xxxxx Shares, and enter into an agreement regarding
the Option Shares on the terms and conditions set forth in this Agreement.
C. This Agreement amends, restates and supercedes the Stock Purchase
Agreement dated April 12, 2005 executed by Seller and Purchaser.
AGREEMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. PURCHASE OF SHARES. Purchaser agrees to purchase, and Seller agrees
to sell to Purchaser, in accordance with the terms of this Agreement, the Xxxxx
Shares, at a purchase price of approximately $3.1203 per share (the "Purchase
Price").
2. PURCHASE PRICE AND MANNER OF PAYMENT; PLEDGE AGREEMENT. At the
Closing (as defined in Section 4 hereof), the Purchase Price of the Xxxxx Shares
shall be paid to the Seller at as follows:
2.1 $2,750,000 shall be paid to the Seller by wire transfer of
immediately available funds to such account as the Seller shall designate not
less than two business days prior to the Closing Date (as defined in Section 4
hereof);
2.2 $370,000 shall be paid by delivery at the Closing of an
unsecured promissory note made by the Purchaser to the order of the Seller in
the form annexed hereto as Exhibit A (the "Unsecured Note"). The Unsecured Note
shall be payable in equal monthly installments, each in the amount of
$93,465.54, during the period commencing on May 20, 2005 and continuing monthly
thereafter to and including August 20, 2005; and
2.3 $2,151,491.39 shall be paid by delivery at the Closing of
a secured promissory note made by the Purchaser to the order of the Seller in
the form annexed hereto as Exhibit B (the "Secured Note"). The Secured Note
shall be payable over a term of 32 months, pursuant to a five year amortization
schedule with interest computed thereon at the rate of 5% per annum, in 31
payments, each in the amount of $43,874.80, to be paid during the period
commencing on September 20, 2005 and continuing monthly thereafter to and
including March 20, 2008, and a final payment to be made on April 20, 2008 in
the amount of $1,043,952.46.
3. DELIVERY AND PLEDGE OF THE XXXXX SHARES.
3.1 Upon receipt from Purchaser of the $2,750,000 payment to
be made pursuant to Section 2.1 hereof, the Unsecured Note, the Secured Note and
the Pledge Agreement (as defined in Section 3.2 hereof), the Seller shall
deliver to the escrow agent identified below at the Closing certificates
representing the Xxxxx Shares (the "Xxxxx Shares Certificates") to which there
shall be attached blank stock powers duly executed by the Seller and bearing the
signature guaranty of a bank or brokerage firm (the "Xxxxx Stock Xxxxxx").
Simultaneously therewith, the Seller and the Purchaser shall deliver joint
written instructions to the Escrow Agent to deliver the Xxxxx Shares
Certificates and Xxxxx Stock Xxxxxx to the Company's stock transfer agent,
together with instructions to re-issue one certificate evidencing the
Purchaser's ownership of the Xxxxx Shares (the "Purchaser's Xxxxx Shares
Certificate").
3.2 In order to secure the payment of all sums due and owing
under the Secured Note, the Purchaser shall pledge the Xxxxx Shares to the
Seller by entering into and executing a pledge agreement with Seller and U.S.
Bank, N.A. (the "Escrow Agent") as escrow agent. Such pledge agreement shall be
substantially in the form annexed hereto as Exhibit C (the "Pledge Agreement").
Purchaser shall execute and deliver the Pledge Agreement to the Seller and the
Escrow Agent at the Closing, together with a blank stock power duly executed by
the Purchaser and bearing the signature guaranty of a bank or brokerage firm
(the "Purchaser's Stock Power"). Upon receipt of the Purchaser's Xxxxx Shares
Certificate from the Company's transfer agent, the Escrow Agent shall affix the
Purchaser's Stock Power thereto, and shall hold and distribute same in
accordance with the terms of the Pledge Agreement.
3.3 In the event that the Closing shall occur prior to any
meeting of the stockholders of the Company, but after the record date
established for such meeting, the Seller shall (a) deliver to the Purchaser, not
less than ten business days prior to such meeting, copies of all proxy materials
that Seller shall receive with respect to the meeting; (b) appear (in his
capacity as a stockholder of the Company) at the meeting or otherwise cause the
Xxxxx Shares to be present thereat for purposes of establishing a quorum; and
(c) vote the Xxxxx Shares, in person or by proxy, at the meeting in accordance
with the Purchaser's written directions (which Purchaser shall deliver to the
Seller not later than three business days prior to such meeting). If the Seller
is the beneficial owner, but not the record holder, of any of the Xxxxx Shares,
he agrees to take all actions necessary to cause the record holder and any
nominees to vote all of the Xxxxx Shares held by such record holder in
accordance with the directions given to the Seller by the Purchaser.
4. CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on such date when all of the
conditions set forth in Section 10 hereof shall have been satisfied or waived
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(such date the "Closing Date") at the offices of Arent Fox PLLC, 0000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or on at such other location as the parties
shall mutually agree upon. All actions taken at the Closing shall be deemed to
have been taken simultaneously at the time the last of any such actions is taken
or completed. Purchaser shall give notice to the Seller of the satisfaction or
waiver of the condition set forth in Section 10 of this Agreement (the "Share
Acquisition Condition") not later than 5:00 PM on the date when the Share
Acquisition Condition has been satisfied or waived (the "Condition Satisfaction
Notice"). The Closing shall take place two business days after the date on which
the Condition Satisfaction Notice is given, or on such other date that shall be
mutually acceptable to the parties, but not later than April 29, 2005.
5. OPTION SHARES.
5.1 CONVERSION OF OPTIONS. In the events that (a) the Company
requests Seller to agree to convert any of the Options into other securities of
the Company, or makes an offer which, if accepted by Seller, would result in the
conversion of any of the Options into other securities of the Company (the
"Converted Shares"); and (b) the Seller agrees to do so, then, subject to the
conditions set forth in Section 5.2.4 hereof, the option granted by the Seller
to the Purchaser pursuant to the provisions of Section 5.2.2 shall apply to the
Converted Shares in the same manner, and to the same extent, that such
provisions would have applied to the Option Shares.
5.2 EXERCISE OF OPTIONS OR RECEIPT OF CONVERTED SHARES BY
SELLER. In the event that Seller exercises any of the Options, or receives any
Converted Shares upon conversion of any of the Options, the following terms and
conditions shall apply with respect thereto:
5.2.1 On each occasion when Seller exercises any of
the Options or receives any Converted Shares, he shall give written notice to
Purchaser (each, an "Exercise-Conversion Notice") specifying the date when the
Option was exercised or the Converted Shares were received (each, a "Share
Acquisition Date") and the number of Option Shares purchased or Converted Shares
received in connection therewith.
5.2.2 Purchaser shall have the right and option to
purchase not less than all of the Option Shares purchased or Converted Shares
received, as specified in each Exercise-Conversion Notice during the last to
occur of: (a) the 90 day period commencing on the date when Purchaser receives
such Exercise-Conversion Notice; or (b) the period commencing on the date when
Purchaser receives such Exercise-Conversion Notice and ending 90 days after the
date when the conditions set forth in Section 5.2.4 shall have been fully
satisfied or waived by the Company (each, an "Option Exercise Period"). The
purchase price to be paid upon Purchaser's exercise of such option shall be
$3.1203 per share. Payment of such purchase price shall be made in cash at a
closing to be held not more than 10 days after the date upon which Purchaser
gives written notice of exercise of such option to Seller. At such closing,
Seller, upon receipt of the purchase price in cash or by wire transfer to an
account designated by Purchaser, shall deliver to Purchaser the certificates
evidencing the Option Shares or Converted Shares so purchased, to which there
shall be attached blank stock powers duly executed by the Seller and bearing the
signature guaranty of a bank or brokerage firm.
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5.2.3 VOTING OF OPTION SHARES OR CONVERTED SHARES. In
the events that (i) the date when the Purchaser pays for any Option Shares or
Converted Shares shall occur prior to any meeting of the stockholders of the
Company, but after the record date established for such meeting; and (ii) the
Seller shall be the record owner of such Option Shares or Converted Shares on
such record date, then Seller shall:
(a) deliver to the Purchaser, not less than
ten business days prior to such meeting, copies of all proxy materials that
Seller shall receive with respect to the meeting;
(b) appear (in his capacity as a stockholder
of the Company) at the meeting or otherwise cause the Option Shares or Converted
Shares to be present thereat for purposes of establishing a quorum; and
(c) vote the Option Shares or Converted
Shares, in person or by proxy, at the meeting in accordance with the Purchaser's
written directions (which Purchaser shall deliver to the Seller not later than
three business days prior to such meeting).
5.2.4 LIMITATIONS ON PURCHASER'S OPTION TO PURCHASE
CONVERTED SHARES. Anything elsewhere contained in this Agreement to the contrary
notwithstanding, Purchaser shall not be entitled to purchase any Converted
Shares and, in the case of clause (a) below, the option provided for in Section
5.2.2 shall be deemed not to exist until such condition is satisfied, unless and
until each of the following conditions has been satisfied or waived by the
Company:
(a) the grant of the option provided for in
Section 5.2.2 by the Seller and the exercise thereof by the Purchaser shall not
constitute a violation of any restrictions on or applicable to the Converted
Shares; and
(b) all restrictions that would prevent the
Seller from selling the Converted Shares shall have lapsed.
5.2.5 SURVIVAL. The provisions of this Section 5
shall survive the closing of this Agreement, and shall remain in effect until 90
days after (a) the date when Seller shall receive all of the Converted Shares
that he shall be entitled to receive if he elects to convert his Options into
Converted Shares; or (b) if Seller does not elect to convert his Options into
Converted Shares, the date of expiration of the last to expire of all of the
Options held by Seller.
6. FURTHER ASSURANCES. From and after the date of this Agreement, the
parties agree to take all appropriate action and to execute any documents or
instruments of any kind that may be reasonably requested by a party or necessary
or appropriate to facilitate consummation of the transactions contemplated
hereby.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller
represents and warrants to, and covenants with Purchaser, as follows:
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7.1 AUTHORITY; BINDING EFFECT. Seller has full power, capacity
and authority to execute and deliver this Agreement. Upon execution, this
Agreement will constitute a valid and binding agreement of Seller, enforceable
against Seller in accordance with its terms.
7.2 TITLE. Seller is the sole, record and beneficial owner of
the Xxxxx Shares and the Options, with full right, power and authority to sell
and deliver the Xxxxx Shares to Purchaser in accordance with this Agreement. The
Xxxxx Shares will be transferred by Seller to Purchaser free and clear of any
liens, charges, equities, proxies, voting agreements, encumbrances, claims or
any restrictions on transferability, but subject to such restrictions on resale
or retransfer by the Purchaser as may be applicable pursuant to federal and
state securities laws.
7.3 OWNERSHIP. The Xxxxx Shares and the Options constitute,
respectively, all of the shares of capital stock, and all other securities, of
the Company beneficially owned by Seller as of the date of this Agreement.
7.4 NO CONFLICT. The execution, delivery and performance of
this Agreement by Seller will not result in a violation of, or constitute a
default under, any will, trust, agreement or other instrument to which Seller is
a party or is bound or otherwise affecting the Xxxxx Shares.
7.5 RESIGNATION BY SELLER. The Seller shall tender to the
Company, not later than 10:00 AM on the Closing Date, his written resignation,
effective immediately, from all positions he holds as an executive of the
Company, and as a member of the Company's Board of Directors.
7.6 COMPLIANCE WITH LAWS. Assuming the validity of the
representations made by Seller pursuant to Section 8.3 hereof, the sale of the
Xxxxx Shares to Purchaser hereunder is exempt from the registration requirements
of the federal securities laws.
8. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to Seller as follows:
8.1 AUTHORITY; BINDING EFFECT. Purchaser has full power,
capacity and authority to execute and deliver this Agreement. Upon execution,
this Agreement will constitute a valid and binding agreement of Purchaser,
enforceable against him in accordance with its terms.
8.2 NO CONFLICT. The execution, delivery and performance of
this Agreement by Purchaser will not result in a violation of, or constitute a
default under, any will, trust, agreement or other instrument to which Purchaser
is a part or is bound.
8.3 INVESTMENT INTENT; ACCESS TO INFORMATION.
8.3.1 Purchaser has been provided with, or has access
to, information about the Company sufficient to enable him to make an investment
decision with respect to the Xxxxx Shares.
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8.3.2 Purchaser is acquiring the Xxxxx Shares for his
own account for investment, and not with a view to, or for sale in connection
with, any distribution, and Purchaser does not intend to sell or otherwise
dispose of the Xxxxx Shares at any particular time.
8.3.3 Purchaser (a) has such knowledge and experience
in financial and business matters that he is capable of evaluating the merits
and risks of an investment in the Xxxxx Shares; and (b) is a "sophisticated
investor" as such term is interpreted under the Securities Act of 1933, as
amended (the "Securities Act").
8.3.4 The Xxxxx Shares have not been offered to
Purchaser by means of a public solicitation and Purchaser is not aware of any
such solicitation
8.3.5 Purchaser has been informed that (a) the Xxxxx
Shares have not been registered for resale under the Securities Act or any or
any applicable state securities law and may not be transferred or otherwise
disposed of unless the Xxxxx Shares are subsequently registered under the
Securities Act and any applicable state securities law or an exemption therefrom
is available, such exemption being supported by an opinion reasonably acceptable
to the Company's counsel; and (b) a legend to the foregoing effect may be placed
upon any and all certificates evidencing Purchaser's ownership of the Xxxxx
Shares.
8.3.6 Purchaser is aware that Seller is a member of
the Board of Directors of the Company and that, in such capacity, Seller has had
access to non-public information concerning the Company including, but not
limited to, operating results, financing options, expansion plans, management
plans, budgets and discussions of potential transactions. Purchaser confirms
that, in connection with the discussions that he has had with Seller regarding
the transactions contemplated herein and hereby, Purchaser has not received any
non-public information concerning the Company from the Seller, or any employee,
agent or representative of the Seller.
9. MUTUAL COVENANTS. Purchaser and Seller hereby covenant to, and agree
with, one another that they have not (a) entered into any agreements,
arrangements or understandings with one another; or (b) made any plans with, or
proposals to, one another with respect to a combined effort or undertaking by
both of them acting together to:
9.1 acquire any of the Company' securities, or to dispose of
any securities of the Company, other than the sale of the Xxxxx Shares and the
conferral of an option to purchase the Option Shares by Seller to Purchaser
pursuant to the provisions of this Agreement;
9.2 engage in an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Company or any of its
subsidiaries;
9.3 participate in a transaction involving a sale or transfer
of a material amount of assets of the Company or any of its subsidiaries;
9.4 effect any change in the present Board of Directors or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the Company's Board;
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9.5 effect material change in the present capitalization or
dividend policy of the Company;
9.6 effect any other material change in the Company's business
or corporate structure;
9.7 effect any changes in the Company's charter, bylaws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person;
9.8 cause any class of the Company's securities to be delisted
from a national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
9.9 cause any class of equity securities of the Company to
become eligible for termination of registration pursuant to Section 12(g)(4) of
the Act; or
9.10 effect any action similar to any of those enumerated
above.
10. CLOSING CONDITION. The Purchaser shall have no obligation to
purchase any of the Xxxxx Shares or any of the Option Shares unless and until
the Purchaser shall have acquired beneficial ownership of not less than 500,000
shares of Common Stock, exclusive of any of the Xxxxx Shares and any of the
Option Shares.
11. INDEMNIFICATION.
11.1 BY SELLER. Seller agrees to indemnify in full Purchaser
and to hold Purchaser harmless from and against any loss, liability, deficiency,
damage, expense or cost (including reasonable legal expenses), incurred or
threatened (collectively, "Losses"), which Purchaser may suffer, sustain or
become subject to, as a result of (i) any misrepresentation in any of the
representations and warranties of Seller contained in this Agreement, (ii) any
breach of, or failure to perform, any agreement of Seller contained in this
Agreement, or (iii) any "Claims" or threatened Claims against Purchaser arising
out of (i) or (ii) above.
11.2 BY PURCHASER. Purchaser agrees to indemnify Seller and to
hold Seller harmless against any Losses, which Seller may suffer, sustain or
become subject to, as a result of (i) any misrepresentation in any of the
representations and warranties of Purchaser contained in this Agreement, (ii)
any breach of, or failure to perform, any agreement of Purchaser contained in
this Agreement, or (iii) any Claims or threatened Claims against Seller arising
out of (i) or (ii) above.
11.3 DEFINITION OF CLAIMS. For purposes of this Agreement, the
term "Claims" means any action or proceeding, judicial or administrative,
instituted by any third party for the liability, costs or expenses which
constitute Losses. Notwithstanding the foregoing, the term "Claims" shall not
include, and the party's indemnification obligations set forth in this Section
11 shall not apply to, any claim on behalf of the Company of a derivative or
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similar nature or by any shareholder of the Company acting as such or as a buyer
or seller of securities of the Company.
12. MISCELLANEOUS.
12.1 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes any prior understanding, agreements or presentations,
written or oral, relating to the subject matter hereof.
12.2 EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original and all of which when taken together shall
constitute but one and the same instrument. Any signature delivered by a Party
by facsimile or e-mail transmission shall be deemed to be an original signature
hereto.
12.3 OPINION OF SELLER'S COUNSEL. If requested by the
Purchaser, the Seller shall cause his counsel to issue a letter addressed to the
Company, and/or the Company's stock transfer agent and/or the Purchaser stating
that, in such counsel's opinion, the Xxxxx Shares and/or the Option Shares may
be transferred to the Purchaser in the absence of any registration thereof under
the Securities Act, and also stating the factual and legal basis for such
opinion.
12.4 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule, the
validity, legality and enforceability of the other provisions of this Agreement
will not be affected or impaired thereby.
12.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives and successors and assigns.
12.6 MODIFICATIONS, AMENDMENT, WAIVER OR TERMINATION. No
provision of this Agreement may be modified, amended, waived or terminated
except by an instrument in writing signed by the Parties to this Agreement. No
course of dealing between the parties will modify, amend, waive or terminate any
provision of this Agreement or any rights or obligations of any party under or
by reason by this Agreement.
12.7 NOTICES. All notices, consents, requests, instructions,
approvals or other communications provided for herein shall be in writing and
delivered by personal delivery, overnight courier, mail, electronic facsimile or
e-mail addressed to the receiving party at the address set forth herein. All
such communications shall be effective when received.
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If to Purchaser:
Xxxx Xxxxxxxxx
00 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Tel: *************
Fax: *************
Email: ***********
If to Xxxxx:
Xxxx X. Xxxxx, Xx.
***************
***************
Tel: ***********
Fax: ***********
Either party may change the address set forth above by notice to each
other party given as provided herein.
12.8 HEADINGS. The headings and any table of contents
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
12.9 GOVERNING LAW. All matters relating to the
interpretation, construction, validity and enforcement of this Agreement shall
be governed by the internal laws of the State of Delaware, without giving effect
to any choice of laws provisions thereof.
12.10 THIRD-PARTY BENEFIT. Nothing in this Agreement, express
or implied, is intended to confer upon any other person any rights, remedies,
obligations or liabilities of any nature whatsoever.
IN WITNESS WHEREOF, the parties have entered into this Stock Purchase
Agreement as of the date first written above.
PURCHASER:
/s/ Xxxx Xxxxxxxxx
--------------------------
XXXX XXXXXXXXX
SELLER:
/s/Xxxx X. Xxxxx, Xx.
--------------------------
XXXX X. XXXXX, XX.
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EXHIBIT A
UNSECURED PROMISSORY NOTE
[See Exhibit 7 of Schedule 13D]
EXHIBIT B
SECURED PROMISSORY NOTE
[See Exhibit 8 of Schedule 13D]
EXHIBIT C
PLEDGE AGREEMENT
[See Exhibit 9 to Schedule 13D]
