EXHIBIT 10.13
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 16 day of June,
1998, by and among the Company (the "Company"), and the investors listed on
Schedule A hereto, each of which is herein referred to as an "Investor."
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 SALE OF SERIES D PREFERRED STOCK.
(a) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally and not jointly, to purchase at the Closing
(as hereinafter defined) and the Company agrees to sell to each Investor at
the Closing that number of shares of ▇▇▇▇▇'▇ Restaurants, Inc.'s (the
"Company") Series D Preferred Stock (the "Series D Preferred Stock") set
forth opposite each Investor's name on SCHEDULE A hereto for the purchase
price set forth thereon.
1.2 CLOSING. The purchase and sale of the Series D Preferred
Stock shall take place at the offices of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., on
June 16, 1998, or at such other time and place as the Company and Investors
mutually agree upon orally or in writing (which time and place are designated
as the "Closing"). At the Closing, the Company shall deliver to each
Investor a certificate representing the shares of Series D Preferred Stock
that such Investor is purchasing against payment of the purchase price
therefor by check or by wire transfer to the Company's designated bank
account.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Investor as of the date of the Closing as
follows:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted. The Company is duly
qualified to transact business and is in good standing in each jurisdiction
in which the failure so to qualify would have a material adverse effect on
its business, prospects, properties or financial condition. The Company is
the successor to all of the business, assets, properties, rights, permits,
licenses, approvals, liabilities, and obligations of ▇▇▇▇▇'▇ Restaurants,
Inc., a California corporation.
2.2 CAPITALIZATION AND VOTING RIGHTS.
(a) The authorized capital of the Company consists, or will
consist prior to the Closing, of:
(i) PREFERRED STOCK. 5,383,637 shares of Preferred
Stock, $0.001 par value per share (the "Preferred Stock"), of which (a)
1,973,395 shares have been designated Series A Preferred Stock, all of which
are currently issued and outstanding; (b) 1,092,007 shares of which have been
designated Series B Preferred Stock, all of which are currently issued and
outstanding; (c) 793,640 shares of which have been designated Series C
Preferred Stock, all of which are currently issued or outstanding; and (d)
1,524,595 shares of which have been designated Series D Preferred Stock,
1,403,843 of which are currently issued or outstanding and 48,648 of which
may be sold pursuant to this Agreement. The rights, privileges and
preferences of the Series D Preferred Stock are as stated in the Company's
Amended and Restated Certificate of Incorporation (the "Restated
Certificate") previously delivered to the Investors.
(ii) COMMON STOCK. 7,298,725 shares of common stock,
$0.001 par value per share ("Common Stock"), of which 1,014,282 shares are
issued and outstanding.
(b) The outstanding shares of Common Stock have been issued
in accordance with the registration or qualification provisions of the Act
(as defined below) and any applicable state securities laws or pursuant to a
valid exemption therefrom.
(c) Except for (A) the conversion privileges of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock
and the Series D Preferred Stock to be issued under this Agreement, (B) the
rights provided in paragraph 2.4 of the Amended and Restated Investors'
Rights Agreement, dated November 19, 1997, as amended (the "Investors' Rights
Agreement"), (C) currently authorized options to purchase 475,000 shares of
Common Stock of which 320,432 (14,282 of which have been exercised) have been
granted to employees, (D) warrants to purchase 50,000 shares of Common Stock
issued to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc. and (E) warrants to purchase up to 72,104
shares of Series D Preferred Stock issued to various entities, there are not
outstanding any options, warrants, rights (including conversion or preemptive
rights and rights of first refusal) or agreements for the purchase or
acquisition from the Company of any shares of its capital stock. The Company
is not a party or subject to any agreement or understanding, and, to the
Company's knowledge, there is no agreement or understanding between any
persons and/or entities, which affects or relates to the voting or giving of
written consents with respect to any security or by a director of the Company.
2.3 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and any other
agreement to which the Company is a party, the execution and delivery of
which is contemplated hereby (collectively, the "Ancillary Agreements"), the
performance of all obligations of the Company hereunder and thereunder and
the authorization, issuance (or reservation for issuance) and delivery of the
Series D Preferred Stock being sold hereunder and the Common Stock issuable
upon conversion of the Series D Preferred Stock has been taken or will be
taken prior to the Closing, and this Agreement and any Ancillary Agreements
constitute valid and legally binding obligations of the Company, enforceable
in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally
and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
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2.4 Valid Issuance of Preferred and Common Stock.
(a) The Series D Preferred Stock which is being purchased by
the Investors hereunder, when issued, sold and delivered in accordance with
the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and, based in part upon the
representations of the Investors in this Agreement, will be issued in
compliance with all applicable federal and state securities laws. The shares
of Series D Preferred Stock are being issued free of restrictions on transfer
other than restrictions on transfer set forth in this Agreement, the
Investors' Rights Agreement, the Amended and Restated Stock Restriction
Agreement, dated November 19, 1997, as amended, or any Ancillary Agreement
and other than pursuant to federal or state securities laws. The Common
Stock issuable upon conversion of the Series D Preferred Stock purchased
under this Agreement has been duly and validly reserved for issuance and,
upon issuance in accordance with the terms of the Restated Certificate, shall
be duly and validly issued, fully paid and nonassessable, and issued in
compliance with all applicable securities laws, as then in effect, of the
United States and each of the states whose securities laws govern the
issuance of any of the Series D Preferred Stock hereunder.
2.5 CONSENTS. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority or any other
person or entity on the part of the Company is required in connection with
the consummation of the transactions contemplated by this Agreement, except
for the filing pursuant to Section 25102(f) of the California Corporate
Securities Law of 1968, as amended, and the rules thereunder, which filing
will be effected within 15 days of the sale of the Series D Preferred Stock
hereunder.
2.6 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company which
questions the validity of this Agreement or any Ancillary Agreements, or the
right of the Company to enter into any of them, or to consummate the
transactions contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any material adverse changes in the
assets, financial condition, business affairs or prospects of the Company,
financially or otherwise, taken as a whole or any change in the current
equity ownership of the Company. The foregoing includes, without limitation,
any action, suit, proceeding or investigation pending or threatened involving
the prior employment of any of the Company's employees, their use in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers or negotiations by the Company with
potential investors in the Company or its proposed business.
2.7 DISCLOSURE. The Company has fully provided each Investor with
all the information that such Investor has requested for deciding whether to
purchase the Series D Preferred Stock and all information that the Company
believes is reasonably necessary to enable such Investor to make such
decision. Neither this Agreement and any Ancillary Agreements nor any other
statements or certificates made or delivered in connection herewith or
therewith contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements herein or therein not
misleading.
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3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor
hereby represents and warrants that:
3.1 AUTHORIZATION. Such Investor has full power and authority to
enter into this Agreement and such Agreement constitutes its valid and
legally binding obligation, enforceable in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series D Preferred Stock to be received by such
Investor and the Common Stock issuable upon conversion thereof (collectively,
the "Securities") will be acquired for investment for such Investor'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 such Investor has no present
intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor 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.
3.3 DISCLOSURE OF INFORMATION. Such Investor believes it has
received all the information it considers necessary or appropriate for
deciding whether to purchase the Series D Preferred Stock. Such Investor
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 the Series D Preferred Stock and the business, properties,
prospects and financial condition of the Company.
3.4 INVESTMENT EXPERIENCE. Each Investor represents that it is an
investor 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 such that it is capable of evaluating the merits and risks of the
investment in the Securities. Investor also represents that it has not been
organized for the purpose of acquiring Securities.
3.5 ACCREDITED INVESTOR. Such Investor is an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC")
Rule 501 of Regulation D, as presently in effect.
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3.6 RESTRICTED SECURITIES. Such Investor understands that the
Series D Preferred Stock it is purchasing is 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 the Series D Preferred
Stock may be resold without registration under the Securities Act of 1933, as
amended (the "Act"), only in certain limited circumstances. In this
connection, such Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed
thereby and by the Act.
3.7 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, such Investor further agrees
not to make any disposition of all or any portion of the Securities unless
and until the transferee has agreed in writing for the benefit of the Company
to be bound by this Section 3 and:
(a) There is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement or an exemption from such
registration is available; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii)
if reasonably requested by the Company, such Investor shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the
Company that such disposition will not require registration of such shares
under the Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, or any legend on certificates representing the Securities pursuant to
Section 3.8 below, no such registration statement or opinion of counsel shall
be necessary for a transfer (i) by an Investor to any person or entity that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Investor or (ii) by an
Investor which is a partnership to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to the
estate of any such partner or retired partner or the transfer by gift, will
or intestate succession of any partner to his spouse or to the siblings,
lineal descendants or ancestors of such partner or his spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he were an original Investor hereunder.
3.8 LEGENDS. It is understood that the certificates evidencing
the Series D Preferred Stock may bear one or all of the following legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
ANY STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER
THE ACT, OR PURSUANT TO RULE 144 UNDER THE ACT OR AN OPINION OF COUNSEL
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SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."
(b) Any legend required by the laws of any state.
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.
4.1 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES THAT ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA 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
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS
AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING. The obligations
of each Investor under subsection 1.1(a) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not
consent thereto:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
5.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to each Investor under this Agreement are subject
to the fulfillment on or before the Closing of each of the following
conditions by that Investor:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
6.2 PAYMENT OF PURCHASE PRICE. The Investor shall have delivered
the purchase price specified in Section 1.2.
6.3. SIDE LETTER. The Company shall use its best efforts to assure
that all parties thereto have entered into that certain side letter, dated as
of the date of the Closing, no later than June 24, 1998.
8. MISCELLANEOUS.
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8.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and
be binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
8.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
8.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
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 parties.
8.7 EXPENSES. Irrespective of whether the Closing is effected,
the Company shall pay all costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement.
8.8 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8.9 ENTIRE AGREEMENT. This Agreement and the documents referred
to herein constitute the entire agreement among the parties and no party
shall be liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
▇▇▇▇▇'▇ RESTAURANTS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇, President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
INVESTORS:
FARALLON CAPITAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
FARALLON CAPITAL INSTITUTIONAL
PARTNERS, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
FARALLON CAPITAL INSTITUTIONAL
PARTNERS II, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
FARALLON CAPITAL INSTITUTIONAL
PARTNERS III, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
RR CAPITAL PARTNERS, L.P.
By: Farallon Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Managing Member
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE A
SCHEDULE OF INVESTORS
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Name Purchase Price Number of Shares
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Farallon Capital Partners, $146,998.84 20,432
L.P.
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Farallon Capital $122,501.43 17,027
Institutional Partners, L.P.
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Farallon Capital $ 52,498.56 7,297
Institutional Partners II,
L.P.
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Farallon Capital $ 14,000.57 1,946
Institutional Partners III,
L.P.
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RR Capital Partners, L.P. $ 14,000.57 1,946
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Total: $349,999.97 48,648
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