EXHIBIT 10.48
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of May 20, 1998, by and
between Watermarc Food Management Co., a Texas corporation (the "Company"), and
Xxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx").
WHEREAS, Bombaywala has personally guaranteed approximately $12.9 million
in debt and lease obligations of the Company (collectively referred to as
"Guarantees") and pledged many of his personal assets to partially collateralize
certain of the Guarantees;
WHEREAS, the Guarantees are important to the Company's financial survival;
WHEREAS, Bombaywala has waived and/or deferred the payment of all
compensation payable to him to date as an executive officer of the Company;
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. Bombaywala agrees to personally guarantee up to $5 million of future
indebtedness of the Company whether in leases, notes, accounts payable or
contractual obligations (or renewals of the foregoing), or any other obligations
of the Company. However, in the event of a "Change of Control" as hereafter
defined, Bombaywala shall be released from any remaining obligation to
personally guarantee up to $5 million of future indebtedness of the Company.
"Change of Control" is defined as a decrease in Bombaywala's beneficial
ownership interest in the Company to less than 51% of the outstanding shares of
the Common Stock of Company.
2. The Board of Directors of the Company has approved the issuance to Bombaywala
of Warrants to purchase 10,000,000 shares of the Company's Common Stock
(pre-reverse stock split amount) at the exercise price of $.14 per share
(pre-reverse stock split exercise price), which was the market price of the
stock when the Board of Directors first considered the proposal.
3. The issuance of the Warrants will be submitted to the independent
shareholders for ratification at a special meeting or the next annual meeting,
however the Board of Directors shall retain the right to proceed with the
issuance of the Warrants even if not ratified by a majority of the independent
shareholders.
4. The Warrants shall have a four year term from the date of issuance and shall
be set forth in a Warrant Agreement in the form attached hereto as EXHIBIT A.
5. The underlying shares ("Warrant Shares") shall be subject to a Lock-Up
Agreement in the form attached hereto as EXHIBIT B prohibiting resale thereof
for a period of two (2) years from the date of the issuance of the respective
Warrants, which shall expire sooner if a total of $5 million in debt or equity
financing is raised by the Company within the two year period.
6. Bombaywala shall have customary demand and piggyback registration rights
subject to the terms of the Lock-Up Agreement.
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7. If a reverse stock split is approved by the Company's shareholders, the
number of Warrants and Warrant Shares shall be proportionately decreased and the
exercise price for each Warrant or Warrant Share shall be proportionately
increased.
8. SEVERABILITY. In the event that any one or more of the provisions of this
Agreement shall be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
contained herein.
9. AMENDMENT; MODIFICATION. This Agreement constitutes the entire Agreement
between the Company and Bombaywala with respect to the matters set forth herein,
and no amendment or modification hereof shall be valid unless made by
supplemental written agreement, executed and approved by the Company and
Bombaywala.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without regard to applicable
choice of law principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
"COMPANY":
WATERMARC FOOD MANAGEMENT CO.
a Texas corporation
ADDRESS:
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
By: /s/ XXXXXXX XXXXXXXX
Xxxxxxx Xxxxxxxx, Secretary
XXXXXX X. XXXXXXXXXX
ADDRESS:
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxx 00000
/s/ XXXXXX X. XXXXXXXXXX
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EXHIBIT A
WARRANT AGREEMENT AND CERTIFICATE
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE SUBJECT TO
CERTAIN RESTRICTIONS, CONTAINED HEREIN, WITH RESPECT TO THEIR TRANSFER.
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
WATERMARC FOOD MANAGEMENT CO.
__________ Warrants
This Warrant Certificate certifies that XXXXXX X. XXXXXXXXXX (together
with his successors and assigns as herein provided, the "Holder") is the owner
of __________ Warrants (subject to adjustment as provided herein), each of which
represents the right to subscribe for and purchase from WATERMARC FOOD
MANAGEMENT CO., a Texas corporation (the "Company"), one share of the common
stock, par value $0.05 per share, of the Company (the common stock, including
any stock into which it may be changed, reclassified or converted, is herein
referred to as the "Common Stock") at the purchase price (the "Exercise Price")
of $_______ per share.
The Warrants represented by this Warrant Certificate are subject to the
following provisions, terms and conditions:
ARTICLE I
EXERCISE OF WARRANTS
1.1 METHOD OF EXERCISE. The Warrants may only be exercised by the Holder
in whole or in part by surrender of this Warrant Certificate at the office of
the Company (or such other office or agency of the Company as may be designated
by notice in writing to the Holder at the address of such Holder appearing on
the books of the Company) with the appropriate form attached hereto duly
completed, at any time within the period beginning on the date hereof and
expiring at 5:00 p.m. Houston, Texas time, on _________, 2002 (the "Exercise
Period") and by payment to the Company by certified check or bank draft of the
Exercise Price for such shares. The Company agrees that the shares of Common
Stock so purchased shall be and are deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business on the
date on which the Warrant Certificate shall have been surrendered and payment
made for such shares of Common Stock. Certificates representing the shares of
Common Stock so purchased shall be delivered to the Holder promptly.
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1.2 FRACTIONAL SHARES. Instead of any fractional shares of Common Stock
which would otherwise be issuable upon exercise of this Warrant, no shares will
be issued for less than one-half a share and the Company shall issue a
certificate for the next higher number of whole shares of Common Stock for any
fraction of a share which is one-half or greater.
ARTICLE II.
WARRANT OFFICE: TRANSFER
2.1 WARRANT OFFICE. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's office at 00000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
and may subsequently be such other office of the Company or of any transfer
agent of the Common Stock in the continental United States as to which written
notice has previously been given to the holder of this Warrant. The Company
shall maintain, at the Warrant Office, a register for the Warrant, in which the
Company shall record the name and address of the person in whose name the
Warrants have been issued, as well as the name and address of each permitted
assignee of the rights of the registered owner hereof.
2.2 OWNERSHIP OF WARRANT. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article II.
2.3 RESTRICTIONS ON EXERCISE AND TRANSFER OF WARRANTS. The Company agrees
to maintain at the Warrant Office books for the registration and transfer of
this Warrant. Subject to the restrictions on transfer of Warrants in this
Section 2.3, the Company, from time to time, shall register the transfer of this
Warrant in such books upon surrender of this Warrant at the Warrant Office
properly endorsed or accompanied by appropriate instruments of transfer and
written instructions for transfer satisfactory to the Company. Upon any such
transfer, a new Warrant shall be issued to the transferee and the surrendered
Warrant shall be canceled by the Company. The Company shall pay all taxes,
(other than securities transfer taxes) and all other expenses and charges
payable in connection with the transfer of Warrants pursuant to this Section
2.3.
a. RESTRICTIONS IN GENERAL. Notwithstanding any provisions contained
in this Warrant to the contrary, THIS WARRANT SHALL NOT BE EXERCISABLE OR
TRANSFERABLE EXCEPT TO (I) ENTITIES OR PERSONS UNDER COMMON CONTROL WITH, OR WHO
ARE CONTROLLED BY, HOLDER OR PERSONS WHO CONTROL HOLDER, OR (II) WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY, WHICH MAY BE WITHHELD IN THE COMPANY'S SOLE
DISCRETION. THE RELATED SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT (THE "WARRANT SHARES") SHALL NOT BE TRANSFERABLE EXCEPT UPON THE
CONDITIONS SPECIFIED IN THE LOCK-UP AGREEMENT attached hereto as Exhibit 1 and
incorporated herein by reference, and as specified in this Article 2.3, which
conditions are intended, among other things, to insure compliance with the
provisions of the Securities Act of 1933 as amended (the "Securities Act") in
respect of the exercise or transfer of this Warrant or transfer of such Warrant
Shares. The registered holder of this Warrant agrees that it will neither (i)
transfer this Warrant prior to delivery to the Company of the opinion of counsel
referred to in, and to the effect described in, Article 2.3(b), (ii) exercise
this Warrant prior to delivery to the Company of the opinion of counsel referred
to in, and to the effect described in, Article 2.3(b), or until registration of
the related Warrant Shares under the Securities Act and any applicable state
securities or blue sky laws have become effective, nor (iii) transfer such
Warrant Shares prior to delivery to the Company of the opinion of counsel
referred to in, and to the effect described in, Article 2.3.(b), or until
registration of such Warrant Shares under the Securities Act and any applicable
state securities or blue sky laws have become effective.
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(b) STATEMENT OF INTENTION TO EXERCISE; OPINION OF COUNSEL. The registered
holder of this Warrant, by its acceptance hereof, agrees that prior to any
exercise or transfer of this Warrant or any transfer of the related Warrant
Shares, said holder will deliver to the Company a statement setting forth either
said holder's intention with respect to the retention or disposition of any
Warrant Shares, or the intention of said holder's prospective transferee with
respect to its retention or disposition of this Warrant or of said Warrant
Shares (whichever is involved in such transfer), in either such case, together
with a signed copy of the opinion of said holder's counsel, or such other
counsel as shall be acceptable to the Company, as to the necessity or
non-necessity for registration under the Securities Act and any applicable state
securities or blue sky laws in connection with such exercise or such transfer.
2.4 EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all expenses,
taxes (other than transfer taxes) and other charges payable in connection with
the preparation, issuance and delivery of Warrants and related Warrant Shares
hereunder.
ARTICLE III
WARRANT ADJUSTMENT PROVISIONS
3.1 ADJUSTMENT OF WARRANT SHARES. The Number of Warrant Shares purchasable
upon exercise of this Warrant may be adjusted from time to time as set forth
below.
a. If the Company at any time pays to the holders of its Common Stock a
dividend in Common Stock, the number of Warrant Shares issuable upon the
exercise of this Warrant shall be proportionally increased, effective at
the close of business on the record date for determination of the holders
of the Common Stock entitled to the dividend.
b. If the Company at any time subdivides or combines in a larger or
smaller number of shares its outstanding shares of Common Stock, then the
number of shares of Common Stock issuable upon the exercise of this
Warrant shall be proportionally increased in the case of a subdivision and
decreased in the case of combination, effective in either case at the
close of business on the date that the subdivision or combination becomes
effective.
c. In case of any reclassification of the Common Stock, any consolidation
of the Company with, or merger of the Company into, any other entity, any
merger of any entity into the Company (other than a merger which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), any sales or transfer of all or
substantially all of the assets of the Company, or any compulsory share
exchange whereby the Common Stock is converted into other securities, cash
or other property, then provisions shall be made such that the holders of
this Warrant shall have the right thereafter, during the period that this
Warrant shall be exercisable, to exercise this Warrant and receive the
kind and amount of securities, cash and other property receivable upon
such reclassification, consolidation, merger, sale, transfer or share
exchange by holders of the Company's Common Stock. In addition to the
adjustments provided for above to the number of Warrant Shares purchasable
hereunder upon exercise of the Warrant in certain circumstances, the
Company may, in its sole discretion, provide for further adjustments to
the number of Warrant Shares purchasable hereunder and/or the Exercise
Price thereof based on additional or other facts and circumstances where
the Company determines that such an adjustment would be fair and equitable
to the holders of the Warrants.
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3.2 COSTS. The Company shall pay all documentary, stamp, transfer or other
transactional taxes attributable to the issuance or delivery of shares of Common
Stock of the Company upon exercise of this Warrant; PROVIDED, HOWEVER, that the
Company shall not be required to pay any taxes which may be payable in respect
of any transfer involved in the issuance or delivery of any certificate for such
shares in a name other than that of the holder of this Warrant in respect of
which such shares are being issued.
3.3 RESERVATIONS OF SHARES. The Company shall reserve at all times so long
as this Warrant remains outstanding, free from preemptive rights, out of its
treasury Common Stock or its authorized but unissued shares of Common Stock, or
both, solely for the purpose of effecting the exercise of this Warrant,
sufficient shares of Common Stock to provide for the exercise hereof.
3.4 VALID ISSUANCE. All shares of Common Stock which may be issued upon
exercise of this Warrant will upon issuance by the Company be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof attributable to any act or omission by the
Company, and the Company shall take no action which will cause a contrary result
(including without limitation, any action which would cause the Exercise Price
to be less than the par value, if any, of the Common Stock).
3.5 APPROVALS. If any shares of Common Stock to be reserved for the
purpose of exercise of this Warrant require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company and the holders of
this Warrant will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be.
ARTICLE IV
RESTRICTIVE LEGENDS
4.1 Each Warrant shall (unless otherwise permitted by the provisions
hereof) be stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant has not been registered under the Securities Act of 1933, as
amended, and is transferable only upon the conditions specified in the
Warrant Agreement referred to herein."
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4.2 Each certificate for Common Stock issued upon exercise of a Warrant
and each certificate for Common Stock issued to a subsequent transferee shall
(unless otherwise permitted by the provisions hereof) be stamped or otherwise
imprinted with legends in substantially the following forms:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 or any state securities act. The shares have
been acquired for investment and may not be sold, transferred, pledged or
hypothecated unless (i) they shall have been registered under the
Securities Act of 1933 and any applicable state securities act, or (ii)
the corporation shall have been furnished with an opinion of counsel,
satisfactory to counsel for the corporation, that registration is not
required under any such acts."
"The shares represented by this certificate are subject to the provisions
of a Lock-up Agreement dated as of ___________, 1998 ("Lock-up
Agreement"), which restrict the transfer of such shares, and the rights of
the holder of the shares represented by this certificate are subject to
all the terms and provisions of the Lock-up Agreement, by which such
holder, by acceptance of this certificate, agrees to be bound. A
counterpart of the Lock-up Agreement has been deposited with Watermarc
Food Management Co. at its principal office and will be provided to any
holder or transferee upon request."
ARTICLE V
REGISTRATION RIGHTS
5.1 REQUIRED REGISTRATION. The Company shall use its best efforts to
effect the registration under the Securities Act of the shares of Common Stock
issued pursuant to this Warrant Certificate upon exercise of the Warrants and
evidenced by a certificate bearing the restrictive legends set forth in Article
IV hereof (the "Restricted Stock") on a form appropriate for the registration of
the Restricted Stock in order to permit the Holder to dispose of the Restricted
Stock in accordance with its intended method of disposition and the terms of the
Lock-up Agreement.
5.2 INCIDENTAL REGISTRATION. Notwithstanding the provisions of Article 5.1
of this Agreement, if the Company at any time during the Exercise Period
proposes to register any of its Common Stock under the Securities Act (on a form
appropriate for the registration of the Restricted Stock for public offering by
the holders thereof other than a registration on Form S-8, or any successor or
similar forms or a shelf registration under Rule 415 for the sole purpose of
registering shares to be issued in connection with the acquisition of stock or
assets of another person) and there is then not an effective registration
statement covering the shares of Common Stock to be issued upon exercise of the
Warrants, it will each such time give written notice to the holder of this
Warrant and any holders of Restricted Stock (the holders of Restricted Stock are
sometimes referred to herein as the "Eligible Holders") of its intention so to
do and, upon written request from Eligible Holders given within 30 days after
receipt of any such notice (which request shall state the intended method of
disposition of such securities by such Eligible Holder), the Company will use
its best efforts to cause all or any (but not less than 1,000 shares if less
than all) Restricted Stock held by such Eligible Holder or which such Eligible
Holder is then entitled to acquire pursuant to a Warrant to be registered under
the Securities Act, all to the extent requisite to permit the sale or other
disposition (in accordance with the intended methods thereof, as aforesaid by
such Eligible Holder); provided, however, that the Company may at any time
withdraw or cease proceeding with any such registration if it shall at the same
time withdraw or cease proceeding with the registration of such other securities
originally proposed to be registered. If an offering pursuant to this Article is
to be made through underwriters, the managing underwriter may, if in its
reasonable opinion marketing factors so require, limit (pro rata according to
the market value of securities proposed to be registered by each) the number of
(or eliminate entirely from the offering all of the) securities which eligible
Holders may register pursuant to this Article.
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5.3 EXPENSES: CONDITIONS PRECEDENT. Except as provided below, all expenses
incurred by the Company in connection with action taken by the Company to comply
with this Article V, including, without limitation, all registration and filing
fees, printing expenses, accounting fees, fees and disbursements of counsel and
other experts, premiums for liability insurance obtained in connection with a
registration statement filed to effect such compliance, shall be paid by the
Company; PROVIDED, HOWEVER, that all such expenses in connection with any
amendment or supplement to any registration statement filed by the Company
hereunder or the related prospectus which is required to be filed more than nine
months after the effective date of such registration statement because any
seller or sellers of securities of the Company covered thereby or any
underwriter of such securities has not effected the disposition of the
securities required to be registered shall be paid by such seller or sellers pro
rata, in the case of two or more such sellers, in accordance with the respective
market values of such securities. The Company shall not be obligated in any way
in connection with any registration pursuant to this Article V for any
underwriting discounts or commissions payable by any Eligible Holder to any
underwriter of securities to be sold by such Eligible Holder. It shall be a
condition precedent to the obligation of the Company to take any action under
Article 5.2 that the Company shall receive an undertaking satisfactory to it
from each Eligible Holder of securities registered or to be registered as herein
provided to pay all expenses required to be borne by such Eligible Holder and to
furnish or cause to be furnished to the Company specifically for use in the
preparation of the registration statement and prospectus written information
concerning the securities held by such Eligible Holder and also concerning any
underwriter of such securities and the intended method of disposition thereof as
the Company shall reasonably request and as may be required in connection with
the action to be taken by the Company hereunder.
ARTICLE VI
COVENANT OF THE COMPANY
The Company covenants and agrees that this Warrant shall be binding upon
any corporation succeeding to the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets.
ARTICLE VII
MISCELLANEOUS
7.1 ENTIRE AGREEMENT. This Warrant, contains and describes the entire
agreement between the holder hereof and the Company with respect to the shares
which can be purchased upon exercise hereof and supersedes all prior
arrangements or understanding with respect thereto.
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7.2 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Texas without regard to applicable
choice of law principles.
7.3 WAIVER AND AMENDMENT. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant must be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.
7.4 ILLEGALITY. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provisions exists, be in any way impaired.
7.5 COPY OF WARRANT. A copy of this Warrant shall be filed among the
records of the Company.
7.6 NOTICE. Any notice or other document required or permitted to be given
or delivered to the holder hereof shall be delivered at, or sent by certified or
registered mail to such holder at, the last address shown on the books of the
Company maintained at the Warrant Office for the registration of this Warrant or
at any more recent address of which the holder hereof shall have notified the
Company in writing. Any notice or other document required or permitted to be
given or delivered to the Company, other than such notice or documents required
to be delivered to the Warrant Office, shall be delivered at, or sent by
certified or registered mail to, the office of the Company at 00000 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 or such other address within the
continental United States of America as shall have been furnished by the Company
to the holder of this Warrant.
7.7 LIMITATION OF LIABILITY; NOT STOCKHOLDERS. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notices (other than as herein
expressly provided) in respect of meetings of stockholders for the election of
directors of the Company or any other right whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the purchase price of any shares of Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
7.8 EXCHANGE, LOSS, DESTRUCTION, ETC. OF WARRANT. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
this Warrant, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation upon surrender
and cancellation of this Warrant, the Company will make and deliver a new
Warrant of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant. Any Warrant issued under the provisions of this Article 7.8 in lieu of
any Warrant alleged to be lost, destroyed or stolen, or in lieu of any mutilated
Warrant, shall constitute an original contractual obligation on the part of the
Company. This Warrant shall be promptly canceled by the Company upon the
surrender hereof in connection with any exchange or replacement.
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7.9 HEADINGS. The Article and other headings herein are for convenience
only and are not a part of this Warrant and shall not affect the interpretation
thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name.
Dated: ___________________, 1998
WATERMARC FOOD MANAGEMENT CO.
By: ________________________________
Xxxxxxx Xxxxxxxx
Secretary
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[FORM OF ELECTION TO PURCHASE]
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate to purchase _______ shares of Common
Stock and herewith, in accordance with the terms hereof, tenders in payment for
such shares a certified check or bank draft payable to the order of Watermarc
Food Management Co. in the amount of $_________________.
The undersigned requests that a certificate for such shares be issued in
the name of_______________________________________ and that such certificate be
delivered to__________________________________________ and if such shares shall
not include all of the shares issuable as provided in said Warrant, that a new
Warrant of like tenor and date for the balance of the shares issuable thereunder
be delivered to the undersigned.
Dated: ________________ __________________________________________________
(Signature must conform in all respects to name
of holder as specified on the face of the Warrant.)
ASSIGNMENT
For value received, ________________________________, herevy sells,
assigns and transfers unto _________________________________ the within Warrant,
together with all rights, title and interest therein and does hereby irrevocable
constitute and appoint __________________________________________ attorney, to
transfer said Warrant on the books of the Company, with full power of
substitution.
____________________________
Dated: _________________, 19___
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EXHIBIT B
LOCK-UP AGREEMENT
This agreement is entered into on this ____ day of _____________, 1998 by
and between Xxxxxx X. Xxxxxxxxxx ("Bombaywala") and Watermarc Food Management
Co. ("the Company").
WHEREAS, on May 20, 0000 Xxxxxxxxxx and the Company entered into an
Agreement whereby the Company agreed to issue to Bombaywala warrants to purchase
10,000,000 shares of the Company's Common Stock (pre-reverse stock split amount)
(the "Warrant Shares") in consideration for Bombaywala's prior personal
guarantees of approximately $12.9 million in debt and lease obligations of the
Company and his agreement to personally guarantee up to $5 million of future
indebtedness of the Company whether in leases, notes, accounts payable or
contractual obligations (or renewals of the foregoing), or any other obligations
of the Company.
It is hereby agreed to by the parties that:
1. The Warrant Shares shall not be resold, disposed of, or transferred,
directly or indirectly, by Bombaywala for a period of two (2) years from the
date of the issuance of the Warrants.
2. All certificates representing the Warrant Shares shall be imprinted on
the face or back thereof with the following statement:
"The shares represented by this certificate are subject to the
provisions of a Lock-up Agreement dated as of ________________, 1998
("Lock-up Agreement"), which restrict the transfer of such shares, and the
rights of the holder of the shares represented by this certificate are
subject to all the terms and provisions of the Lock-up Agreement, by which
such holder, by acceptance of this certificate, agrees to be bound. A
counterpart of the Lock-up Agreement has been deposited with Watermarc
Food Management Co. at its principal office and will be provided to any
holder or transferee upon request."
3. This Lock-up Agreement shall terminate upon the earliest of the
following occurrences: (i) the expiration of two (2) years from the date of the
issuance of the Warrants; or (ii) if a total of five million dollars
($5,000,000) in debt or equity financing is raised by the Company within the two
year period.
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4. This Lock-up Agreement shall be governed by and construed in accordance
with the laws of the State of Texas without regard to applicable choice of law
principles.
IN WITNESS WHEREOF, the parties hereto have executed this Lock-up
Agreement as of the date first set forth above.
"COMPANY"
WATERMARC FOOD MANAGEMENT CO.,
a Texas Corporation
ADDRESS:
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
By: ______________________________
Xxxxxxx Xxxxxxxx, Secretary
XXXXXX X. XXXXXXXXXX
ADDRESS:
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxx 00000
__________________________________
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