Amended and Restated Securities Purchase Agreement


Exhibit 10.53.2


AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT


AMONG


BRIAZZ, INC.,


AND THE PARTIES LISTED ON SCHEDULE A


DATED JANUARY 15, 2004








-i-




 



  
  	
      
      1.      Purchase and
      Sale of Securities.
	
      
      2
	


1.1


      	
      Sale and Issuance of the Notes and Series G Stock.	
      2
	


1.2


      	
      Grant of a Security Interest.	
      
      2
	


1.3


      	
      Registration Rights Agreement.	
      
      2
	


1.4


      	
      Closing.	
      
      2
	
      2.      Representations and Warranties of the
      Company.	
      3
	


2.1


      	
      Incorporation and Corporate Power.	
      3
	


2.2


      	
      Execution, Delivery; Valid and Binding Agreement.	
      
      3
	


2.3


      	
      Approval of the Agreement.	
      3
	


2.4


      	
      No Conflict.	
      
      3
	


2.5


      	
      Valid Issuance.	
      
      4
	


2.6


      	
      No Breach.	
      
      4
	


2.7


      	
      Governmental Authorities; Consents.	
      4
	


2.8


      	
      Subsidiaries.	
      
      4
	


2.9


      	
      Capital Stock.	
      
      4
	


2.10


      	
      Registration Rights.	
      
      5
	


2.11


      	
      SEC Filings; Financial Statements.	
      
      5
	


2.12


      	
      Absence of Undisclosed Liabilities.	
      
      5
	


2.13


      	
      Tax Matters.	
      
      6
	


2.14


      	
      Compliance with Laws; Permits.	
      
      7
	


2.15


      	
      Brokerage.	
      
      7
	


2.16


      	
      Disclosure.	
      
      7
	


2.17


      	
      Prior Representations.	
      
      8
	
      3.       Representations and Warranties by
      the Purchasers.	
      
      8
	


3.1


      	
      Investment Intent; Authority.	
      8
	


3.2


      	
      No Breach; Consents.	
      8
	


3.3


      	
      Securities Not Registered.	
      
      8
	


3.4


      	
      No Transfer.	
      
      9
	


3.5


      	
      Accredited Investor.	
      9
	


3.6


      	
      Access to Information.	
      
      9
	


3.7


      	
      Knowledge and Experience.	
      
      9
	


3.8


      	
      Brokerage.	
      
      9
	
      4.       Payment of the Notes.	
      
      9
	


4.1


      	
      Optional Prepayments.	
      9
	


4.2


      	
      Option to Call for Prepayments.	
      10
	


4.3


      	
      Repayment of the Notes.	
      10
	


4.4


      	
      Registered Form.	
      
      11
	


4.5


      	
      Taxes.	
      
      11
	
      5.Administrative Agent.	
      11
	


5.1


      	
      Appointment and Authorization of Administrative Agent.	
      
      11
	


5.2


      	
      Delegation of Duties.	
      11
	


5.3


      	
      Liability of Administrative Agent.	
      11


  



-ii-





  
  	


5.4


      	
      Reliance by Administrative Agent.	
      12
	


5.5


      	
      Notice of Default.	
      
      12
	


5.6


      	
      Indemnification of Administrative Agent.	
      12
	


5.7


      	
      Administrative Agent in its Individual Capacity.	
      13
	


5.8


      	
      Successor Administrative Agent.	
      13
	


5.9


      	
      Administrative Agent May File Proofs of Claim.	
      
      13
	


5.10


      	
      Collateral Matters.	
      
      14
	


5.11


      	
      Plan of Reorganization.	
      
      14
	
      6.      Event of Default.	
      14
	


6.1


      	
      Payment Default.	
      
      14
	


6.2


      	
      Covenant Default.	
      
      15
	


6.3


      	
      Voluntary Bankruptcy or Insolvency Proceeding.	
      15
	


6.4


      	
      Involuntary Bankruptcy or Insolvency Proceeding.	
      
      15
	
      7.      Rights of the Purchasers upon Default.	
      
      15
	


7.1


      	
      Purchaser or Administrative Agent May Accelerate Notes.	
      
      15
	


7.2


      	
      Automatic Acceleration of Notes.	
      15
	
      8.     Company Covenants.	
      16
	


8.1


      	
      Indemnification and Directors' and Officers' Insurance.	
      
      16
	


8.2


      	
      Taxes.	
      
      16
	


8.3


      	
      Dedicated Use of Proceeds.	
      16
	
      9.     Conditions to the Obligations of the
      Purchasers.	
      
      16
	


9.1


      	
      Representations and Warranties.	
      17
	


9.2


      	
      Compliance.	
      
      17
	


9.3


      	
      Consents.	
      
      17
	


9.4


      	
      Board Authorization.	
      
      17
	


9.5


      	
      Deliveries by the Company.	
      
      17
	


9.6


      	
      Due Diligence.	
      
      18
	


9.7


      	
      Laurus Documents.	
      
      18
	
      10.    Conditions to Obligations of the Company.	
      18
	


10.1


      	
      Representations and Warranties.	
      
      18
	


10.2


      	
      Deliveries by the Purchaser.	
      
      18
	


10.3


      	
      Consents.	
      
      18
	


10.4


      	
      Compliance.	
      
      18
	
      11.    Indemnification.	
      
      19
	


11.1


      	
      Survival of Representations and Warranties.	
      19
	


11.2


      	
      Indemnification by the Company.	
      
      19
	


11.3


      	
      Indemnification by the Purchasers.	
      
      19
	


11.4


      	
      Indemnification.	
      
      20
	


11.5


      	
      Limits on Indemnification.	
      
      21
	
      12.    Termination.	
      
      21
	


12.1


      	
      Termination.	
      
      21
	


12.2


      	
      Effect of Termination.	
      
      21
	
      13.    Miscellaneous.	
      
      22
	


13.1


      	
      Waivers, Amendments and Termination.	
      
      22
	


13.2


      	
      Press Releases and Announcements.	
      
      22
	


13.3


      	
      Legal Fees and Expenses.	
      
      22
	


13.4


      	
      Entire Agreement.	
      
      22
	


13.5


      	
      Governing Law.	
      
      22
	


13.6


      	
      Notices, etc.	
      
      22
	


13.7


      	
      Validity.	
      
      23
	


13.8


      	
      Counterparts.	
      
      23
	


13.9


      	
      Severability.	
      
      23
	


13.10


      	
      Assignment.	
      
      23
	


13.11


      	
      No Third Party Beneficiaries.	
      
      23
	


13.12


      	
      Waiver of Jury Trial.	
      
      23


  


 -iii-




 


AMENDED AND RESTATED


SECURITIES PURCHASE AGREEMENT


This Amended and Restated Securities Purchase Agreement, dated as of January 15, 2004
(this “Agreement”) is entered into by and among BRIAZZ, INC., a Washington corporation (the “Company”), and
the parties (each, a  “Purchaser” and collectively, the “Purchasers”) listed on the Schedule of
Investors attached hereto as Schedule A (the “Schedule of Investors”), and Deutsche Bank London Ag, acting
through DB Advisors LLC, a limited liability corporation (“DB”), in its capacity as Administrative Agent with respect
to the Notes, and amends and restates the Securities Purchase Agreement dated December 10, 2003 (the “December
Agreement”) by and among the Company, DB and Victor D. Alhadeff.


RECITALS


WHEREAS, the Company previously entered into that certain Securities Purchase Agreement,
dated May 28, 2003, as amended on August 1, 2003 ("August Agreement") with certain investors (the “August Purchasers”),
whereby the Company issued non-convertible secured promissory notes (the “August Notes”) and shares of Series F
Convertible Preferred Stock;


WHEREAS, the Company intends to offer and sell up to $2.8 million in non-convertible
secured promissory notes (the “Notes”) and shares of Series G Convertible Preferred Stock (the “Series G
Stock”) convertible into a certain number of shares of the Company’s common stock, no par value;


WHEREAS, the Company sold Notes and shares of Series G Stock to DB and Victor D. Alhadeff
pursuant to the December Agreement;


WHEREAS, the Company, DB and Victor D. Alhadeff wish to amend and restate the December
Agreement to extend the duration of the offering, correct certain typographical errors in the Schedule of Investors and provide for
additional Purchasers to purchase Notes and shares of Series G Stock; and


WHEREAS, the additional Purchasers are willing to purchase from the Company and the
Company is willing to sell to Purchasers the Notes and Series G Stock on the terms and conditions set forth in this Agreement, and
the Company is willing to grant the Purchasers (i) the security interest set forth in the security agreement, as amended on
December 10, 2003, and (ii) the registration rights set forth in the registration rights agreement (the “Registration Rights
Agreement”) as amended on December 10, 2003 (this Agreement, the Notes, the Security Agreement and the Registration Rights
Agreement are collectively referred to herein as the “Transaction Documents”).


AGREEMENT


NOW THEREFORE, in consideration of the foregoing, and the representations, warranties and
conditions set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:


-1-



1.       
Purchase and Sale of Securities


1.1        Sale and Issuance of the Notes and Series G Stock.



(a)        Notes.  Subject to the terms and conditions of this Agreement, each Purchaser agrees to purchase and the Company
agrees to sell and issue to each Purchaser at the Closing (as defined below) a Note in the face amount of U.S. dollars set forth
opposite each such Purchaser’s name on the Schedule of Investors.  The Notes issued to the Purchasers pursuant to this
Agreement shall be substantially in the form of Exhibit A-1 or Exhibit A-2, as applicable, to this
Agreement.


(b)        Series G Stock.  Subject to the terms and conditions of this Agreement, in connection with each Purchaser’s
purchase of a Note at the Closing, each such Purchaser shall receive and the Company agrees to issue to such Purchaser at the
Closing, the number of shares of Series G Stock set forth opposite each such Purchaser’s name on the Schedule of
Investors. 


(c)        Purchase Price.  The purchase price (the “Purchase Price”) of the Notes and Series G Stock to be paid
by each Purchaser is set forth opposite each such Purchaser’s name on the Schedule of Investors under the heading
“Amount and Form of Payment of Purchase Price.”


(d)        Individual Sale.  The Company’s agreement with each of the Purchasers is a separate agreement, and the sale
to each of the Purchasers is a separate sale.


(e)        Allocation.  Each Purchaser shall allocate its purchase price for the Notes and Series G Stock in accordance with
Exhibit C.


1.2       Grant of a Security Interest.
  In connection with the Closing (as defined below), the Company shall have (a)
executed and delivered the Security Agreement, substantially in the form attached hereto as Exhibit D,
and (b) taken all other actions reasonably requested by the Purchasers
necessary to perfect Purchasers’ security interest in the Company’s assets, in
accordance with the terms of the Security
Agreement.  In connection with the Closing (as defined below), the
Purchasers shall have executed and delivered the Security Agreement.


1.3       Registration Rights
Agreement.  In connection with the Closing (as defined below), the Company and the Purchasers
shall have executed and delivered the Registration Rights Agreement, substantially in the form attached hereto as Exhibit
E.


1.4       Closing.  Subject to the terms and conditions of this Agreement, the first closing will be
held at the offices of Dorsey & Whitney LLP at 1420 Fifth Avenue, Suite 3400, Seattle, WA 98101 on or prior to December 11,
2003 (the “Initial Closing”).  One or more additional closings may occur (each such event, including the Initial
Closing, a “Closing”), provided that no closing shall occur more than six months after the Initial Closing.  The
date upon which the Closing occurs shall be referred to hereinafter as the respective “Closing Date.”  At the
Closing, on the terms and subject to the conditions hereof each Purchaser shall pay to the Company, by cashier’s check or
wire transfer of immediately available funds the Purchase Price for the securities as specified in Section 1.1(c) above and on the
Schedule of Investors, and in exchange for and upon receipt or confirmation of each such payment, the Company will issue and
deliver the Notes and Series G Stock to the Purchasers.


-2-



2.        Representations and Warranties of the Company


The 
Company hereby represents and warrants
to Purchasers that, except as set forth in the corresponding paragraph of the
Disclosure Schedule delivered by the Company to Purchasers on the date hereof
(the “Disclosure Schedule”) (which Disclosure Schedule sets forth the exceptions
to the representations and warranties contained in this Section 2):


2.1       
Incorporation and Corporate
Power.  The Company is a corporation duly organized and validly existing under the laws of
the State of Washington, has all requisite corporate power and authority to carry on its business as presently conducted and,
subject to approval of this Agreement by the Company’s shareholders, has the requisite corporate power and authority to
execute and deliver the Transaction Documents and to perform its obligations hereunder and thereunder.  The Company is duly
qualified or licensed to do business and is in good standing as a foreign corporation in all material jurisdictions where such
qualification or licensing is required.  The Company has all requisite corporate power and authority and all authorizations,
licenses, permits and certifications necessary to own and operate its properties and to carry on its business as now conducted and
presently proposed to be conducted.  The copies of the Company’s Articles of Incorporation and Bylaws, as amended to
date (the “Charter Documents”), which have been furnished by the Company to Purchasers prior to the date hereof reflect
all amendments made thereto and are correct and complete as of the date
hereof.


2.2       
Execution, Delivery; Valid and Binding Agreement.  The execution, delivery and performance of the Transaction Documents by the Company
and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite
corporate action, and no other corporate proceedings on its part are necessary to authorize the execution, delivery and performance
of this Agreement, other than the approval of this Agreement and related transactions by the shareholders of the Company. 
This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights or by general
principles of equity.


2.3       
Approval of the Agreement.  The Board of Directors has, by resolutions duly adopted at a meeting on October 29,
2003, November 25, 2003 and January ___, 2004, approved the Transaction Documents and the transactions contemplated hereby and
thereby, including the issuance of the Notes, Series G Stock and Conversion Shares.  None of the resolutions described in this
Section 2.3 has been amended or otherwise modified in any respect since the date of adoption thereof and all such resolutions
remain in full force and effect.


2.4       
No Conflict.  Except as set forth on Schedule 2.4 of the Disclosure Schedule, the execution,
delivery and performance of this Agreement and the Transaction Documents by the Company do not and will not (a) violate,
conflict with or result in the material breach of any provision of the Charter Documents of the Company, (b) conflict with or
violate (or cause an event which could have a material adverse effect as a result of) any material Law (as defined below), or
(c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result in the creation of any encumbrance on any of the Notes, Series G
Stock or Conversion Shares or any of the material assets of the Company pursuant to, any material note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Company
is a party or by which any of the shares of the Company or any of such assets or properties is bound or affected.


-3-



2.5       
Valid Issuance.  The Notes, the Series G Stock and the Conversion Shares (together, the
“Securities”), when issued in compliance with the provisions of the Transaction Documents and the Charter Documents,
will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances; provided,
however, that the Securities may be subject to restrictions on transfer imposed (i) by the Transaction Documents, (ii) under
applicable state and/or federal securities laws as set forth on the certificates or instruments representing such securities, and
(iii) as may be required by future changes in such laws.


2.6       
No Breach. 
The Company is not in violation or default of any material provisions of its
Charter Documents.  The Company is in material compliance in all respects
with all applicable material statutes, laws, regulations and executive orders of
the United States of America and all states, foreign countries or other
governmental bodies and agencies having jurisdiction over the Company’s assets,
business or properties (“Law”).


2.7       
Governmental Authorities;
Consents.  Other than, if required, filings or qualifications under federal securities law or
applicable state securities laws, which filings or qualifications, if required, will be timely filed or obtained by the Company,
the Company is not required to submit any notice, report or other filing with any governmental authority in connection with the
execution or delivery by it of the Transaction Documents or the consummation of the transactions contemplated hereby or
thereby.  Except as set forth in Schedule 2.7 of the Disclosure Schedule, no approval or authorization of any governmental or
regulatory authority or any other party or person (except the approval of the Agreement) is required to be obtained by the Company
in connection with its execution, delivery and performance of the Transaction Documents or the transactions contemplated hereby or
thereby.


2.8       
Subsidiaries.  The Company does not presently own or control, directly or indirectly, any interest
in any other corporation, association, or other business entity.  The Company is not a participant in any joint venture,
partnership, or similar arrangement.


2.9       
Capital Stock.  As of the date hereof, the capitalization of the Company consists of a total of
250,000,000 authorized Shares, 5,990,916 of which Shares are issued and outstanding, and 50,000,000 shares of Preferred Stock, of
which 8,118,841 shares of Series F Stock and 1,281,224 shares of Series G Stock are issued and outstanding.  Of the 33,000
shares of Series A Preferred Stock, 34,450 shares of Series B Preferred Stock, 30,000,000 shares of Series C Preferred Stock, 100
shares of Series D preferred stock and 25 shares of Series E preferred stock no shares are issued and outstanding.  All of the
outstanding shares of capital stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with
all applicable federal and state securities laws.  Except for (A) 13,235,543 Shares reserved for future issuance pursuant to
the Company’s stock incentive plans and agreements, of which 6,673,583 shares are the subject of currently outstanding option
grants, (B) Shares reserved for issuance pursuant to the convertible secured note and warrant, each dated June 18, 2002, and the
warrant dated December 3, 2002 issued by the Company to Laurus, (C) 930,404 Shares reserved for issuance pursuant to other
outstanding warrants, (D) Shares of Series F Stock which may be issued pursuant to Section 8.9 of the Securities Purchase Agreement
dated May 28, 2003, (D) Shares reserved for issuance pursuant to Series F Stock and Series G Stock, there are no other outstanding
shares of capital stock or outstanding rights of first refusal, preemptive rights or other rights, options, warrants, conversion
rights, subscriptions, obligations or other agreements either directly or indirectly for the purchase or acquisition from the
Company of any shares of its capital stock.  The common stock constitutes the only class of equity securities of the Company
registered or required to be registered under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).


-4-



2.10      
Registration Rights.  Except as set forth in Schedule 2.10 of the Disclosure Schedule or as contemplated
by this Agreement or the Registration Rights Agreement, there are no contracts, commitments, agreements, arrangements,
understandings or undertakings of any kind to which the Company is a party, or by which the Company is bound granting to any person
the right to require the Company to (i) file a registration statement under the Securities Act of 1933, as amended (the
“Securities Act”), with respect to any securities of the Company or requiring the Company to include such securities
with the Conversion Shares registered pursuant to any registration statement, or (ii) to purchase or offer to purchase any
securities of the Company. 


2.11       
SEC Filings; Financial
Statements.  The Company has filed all required forms, reports and documents required under
Section 13(a) of the Exchange Act (the “Company SEC Reports”) with the Securities and Exchange Commission (the
“SEC”) since January 1, 2002, each of which complied at the time of filing in all material respects of the Exchange
Act, each law as in effect on the dates such forms, reports and documents were filed.  None of such Company SEC Reports,
including any financial statements or schedules included or incorporated by reference therein, contained when filed any untrue
statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or
necessary in order to make the statements therein in light of the circumstances under which they were made not misleading, except
to the extent superseded by a Company SEC Report filed subsequently and prior to the date hereof.  The audited financial
statements of the Company included in the Company SEC Reports fairly present, in conformity in all material respects with generally
accepted accounting principles applied on a consistent basis (except as may be indicated in the notes thereto), the consolidated
financial position of the Company and its consolidated subsidiaries as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then ended.  The Company's financial statements are prepared in
conformity with U.S. generally accepted accounting principles (“GAAP”) (subject, in the case of interim financial
statements, to the absence of footnote disclosures and other presentation items and normal, recurring, year-end
adjustments).


-5-



2.12       Absence of Undisclosed
Liabilities.  Except as reflected in the Company’s most recent balance sheet filed with and
as part of the Company SEC Reports (the “Latest Balance Sheet”), the Company has no liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, and regardless of when
asserted) arising out of transactions or events heretofore entered into, or any action or inaction, or any state of facts existing,
with respect to or based upon transactions or events heretofore occurring, except (i) liabilities which have arisen after the date
of the Latest Balance Sheet in the ordinary course of business (none of which is a material uninsured liability for breach of
contract, breach of warranty, tort, infringement, claim or lawsuit or would be otherwise material), or (ii) as otherwise set forth
in Schedule 2.12 of the Disclosure Schedule. Reserves are reflected on the Latest Balance Sheet against all liabilities of the
Company in amounts that have been established on a basis consistent with the past practices of the Company and in accordance with
GAAP.


2.13       Tax
Matters. The Company and any affiliated, combined or unitary group of which the Company is or was a member, as the case may be (each, a
“Tax Affiliate” and, collectively, the “Tax Affiliates”), has:  (i) timely filed (or has had timely
filed on behalf of the Company or any Tax Affiliate) all returns, declarations, reports, estimates, information returns, and
statements (“Returns”) required to be filed or sent by it in respect of any “Taxes” (as defined in
subsection (f) below) or required to be filed or sent by it by a taxing authority having jurisdiction, which Returns are true,
correct and complete in all material respects; (ii) timely and properly paid (or has had paid on its behalf) all Taxes shown to be
due and payable on such Returns or otherwise; and (iii) established on the Latest Balance Sheet, in accordance with GAAP, reserves
that are adequate for the payment of any Taxes not yet due and payable.


(b)        There are no liens for Taxes upon any assets of the Company or of any Tax Affiliate, except liens for Taxes not yet due and
payable.


(c)        No deficiency for any Taxes has been proposed, asserted or assessed against the Company or the Tax Affiliates that has not been
resolved and paid in full except as disclosed on Schedule 2.13(c).  No waiver, extension or comparable consent given by the
Company or the Tax Affiliates regarding the application of the statute of limitations with respect to any Taxes or Returns is
outstanding, nor is any request for any such waiver or consent pending.  No adjustment relating to any Returns has been
proposed formally or informally by any taxing authority and, to the best knowledge of the Company and Tax Affiliates, no basis
exists for any such adjustment.  There are no pending or, to the best knowledge of the Company and the Tax Affiliates,
threatened actions or proceedings for the assessment or collection of Taxes.


(d)        Neither the Company nor any Tax Affiliate has requested any extension of time within which to file any Return, which Return has
not since been filed.


(e)        Neither the Company nor any Tax Affiliate has any income reportable for a period ending after the Closing Date but attributable
to a transaction occurring in or a change in accounting method made for a period ending on or prior to the Closing Date that
resulted in a deferred reporting of income from such transaction or from such change in accounting method (other than a deferred
intercompany transaction).  The Company and any Tax Affiliate has timely withheld, collected and paid over to the proper
taxing authorities all Taxes required to have been withheld by the Company and any Tax Affiliate. 


-6-



(f)        For purposes of this Agreement, the term “Taxes” means all taxes, charges, fees, levies, or other assessments,
including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, social security, unemployment, excise, estimated, severance, stamp, occupation,
property, or other taxes, customs duties, fees, assessments, or charges of any kind whatsoever, including, without limitation, all
interest and penalties thereon, and additions to tax or additional amounts imposed by any taxing authority, domestic or foreign,
upon the Company or any Tax Affiliate.


2.14       Compliance with Laws; Permits. 


(a)        The Company is not in violation of or default under any Law applicable to it, the effect of which, individually or in the
aggregate with such other violations and defaults, could reasonably be expected to have a material adverse effect on the business
or financial condition of the Company.


(b)        Schedule 2.14 of the Disclosure Schedule sets forth a brief description of each governmental order applicable to the Company or
any of its properties or assets, and no such governmental order has or has had a material adverse effect or could affect the
legality, validity or enforceability of this Agreement, any Transaction Document or the consummation of the transactions
contemplated by this Agreement or thereby.


(c)        The Company has, in full force and effect, all licenses, permits and certificates, from federal, state, local and foreign
authorities used in and, individually or in the aggregate, material to the business or financial condition of the Company
(collectively, the “Permits”).  A true, correct and complete list of all the Permits is set forth in Schedule 2.14
of the Disclosure Schedule.  The Company has conducted its business in substantial compliance with all material terms and
conditions of the Permits.


2.15       Brokerage. 
No third party shall be entitled to receive any brokerage commissions, finder’s
fees, fees for financial advisory services or similar compensation in 
connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Company.


2.16       Disclosure.  The Company has fully provided the Purchasers with all information which the
Purchasers have requested for deciding whether to purchase the Securities.  Neither this Agreement nor any other statement or
certificate made or delivered in connection with the Agreement and the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary not to make the statements herein untrue or
misleading.  The Company is not aware of any facts pertaining to the Company  which could have a material adverse effect
on the Company and which has not been disclosed in this Agreement or the Disclosure Schedule or the Company SEC Reports.  Any
financial projections and other estimates provided to the Purchaser by the Company were based on the Company's experience in the
industry and on assumptions of fact and opinion as to future events which the Company, at the date of the issuance of such
projections or estimates, believed to be reasonable.  As of the date hereof no facts have come to the attention of the Company
that would, in its opinion, require the Company to revise or amplify in any material respect the assumptions underlying such
projections and other estimates or the conclusions derived therefrom.


-7-



2.17       Prior Representations.


If Purchaser was a party to the August Agreement, Purchaser may rely upon the
representations and warranties of the Company in paragraphs 2.4, 2.14 - 2.16, 2.18 - 2.22, 2.24 and 2.27 and 2.29, as modified by
the Disclosure Schedule to the August Agreement, as of the date such representations and warranties were made.  The parties
agree that the representations referenced in this paragraph are not being made as of the date hereof and the Company has no
obligation to update any of such representations or the corresponding disclosure schedule.


3.       
Representations and Warranties by the Purchasers.  Each Purchaser severally represents and warrants to the Company with respect to
itself only as follows:


3.1       Investment Intent; Authority. 
This Agreement is made with each Purchaser in reliance upon such Purchaser’s
representation to the Company, evidenced by
such Purchaser’s execution of this Agreement, that each such Purchaser is
acquiring the Securities for the Purchaser’s own account, not as nominee or
agent, for investment and not with a view to, or for resale in connection with,
any distribution or public offering thereof within the meaning of the Securities
Act or any state securities laws.  Each Purchaser has the full right,
power, authority and capacity to enter into and perform the Transaction
Documents and the Transaction Documents will constitute a valid and binding
obligation of such Purchaser, except as the same may be limited by bankruptcy,
insolvency, moratorium, and other laws of general application affecting the
enforcement of creditors’ rights.


3.2       
No Breach; Consents.  The execution, delivery and performance of the Transaction Documents by each
Purchaser and the consummation by each Purchaser of the transactions contemplated thereby do not conflict with or result in any
material breach of any of the provisions of, or require any authorization, consent, approval, exemption or other action by or
notice to any court or other governmental body, under the provisions of, the Articles of Incorporation or Bylaws or other
constating documents of each Purchaser, or any law, statute, rule or regulation
or order, judgment or decree to which such Purchaser is subject.  Purchaser
is not required to submit any notice, report or other filing with any
governmental authority in connection with the execution or delivery by it of the
Transaction Documents or the consummation of the transactions contemplated
thereby.


3.3       Securities Not Registered.  Each Purchaser understands and acknowledges that the offering of the Securities
will not be registered under the Securities Act or under any state securities laws on the grounds that the offering and sale of the
Securities contemplated by this Agreement are exempt from registration under the Securities Act and under any state securities
laws, and that the Company’s reliance upon such exemptions is predicated, in part, upon each Purchaser’s
representations set forth in this Agreement.  Each Purchaser acknowledges and understands that resale of the Securities may be
restricted indefinitely unless the Securities are subsequently registered under the Securities Act or an exemption from such
registration and such qualification is available.


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3.4       No Transfer.  Each Purchaser (and any Permitted Transferee) (i) acknowledges that the Notes and
Series G Stock are non-transferable without the consent of the Company, except that each Purchaser (and any Permitted Transferee)
shall be permitted to transfer any of the Notes and Series G Stock, in the case of a holder that is an entity, to its partners or
members or to an entity affiliated with such holder, partner or member, or in the case of a holder that is a natural person, for
estate planning purposes, provided that each transferee is an “accredited investor” as defined in Rule 501(a) of
Regulation D under the Securities Act and the Company receives evidence satisfactory to it (which may include an opinion of counsel
resonably satisfactory to the Company) that such transfer will not result in a violation of the Securities Act or
any state securities laws (a “Permitted Transferee”), and (ii) covenants that in
no event will it dispose of any of the Conversion Shares, except (A) in
conjunction with an effective registration statement under the Securities Act or
pursuant to a transaction not requiring registration under the Securities Act
and (B) in compliance with the applicable securities regulations and laws of any
state.  Each Purchaser acknowledges and agrees that the Notes, Series G
Stock and the Conversion Shares will contain a legend to the foregoing effect.


3.5      
Accredited
Investor.  Each Purchaser (i) is an “accredited investor” as such term is defined
in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act; and (ii) has the
ability to bear the economic risks of the prospective investment, including a complete loss of such Purchaser’s investment in
the Securities.  If the Purchaser was organized for the purpose of acquiring the Securities, each equity investor of the
Purchaser meets the requirements of parts (i) and (ii) of this subsection.


3.6       
Access to Information.  Each Purchaser 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 Securities and the business, properties,
prospects and financial condition of the Company.


3.7       
Knowledge and Experience.  Each Purchaser has such knowledge and experience in financial or business matters
that the Purchaser is capable of evaluating the merits and risks of the investment in the Securities.


3.8       Brokerage.  No third party shall be entitled to receive any brokerage commissions,
finder’s fees, fees for financial advisory services or similar compensation in connection with the transactions contemplated
by this Agreement based on any arrangement or agreement made by or on behalf of any Purchaser.


4.       Payment of the Notes.


4.1       Optional Prepayments.  The Company may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay the Notes in whole or in part without premium or penalty in accordance with each Purchaser’s
respective Pro Rata Share.  “Pro Rata Share” means, as to any Purchaser at any time, a fraction, the numerator of
which is the amount of the outstanding principal amount of the Note of such Purchaser at such time and the denominator of which is
the sum of the aggregate outstanding principal amount of (i) the Notes of all Purchasers and (ii) the August Notes of all August
Purchasers.


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4.1       Option to Call for Prepayments.  Upon the occurrence of the following events, the Company shall provide to
Administrative Agent written notice of such event and the Administrative Agent may require the Company to prepay the Notes in
accordance with each Purchaser’s respective Pro Rata Share in an aggregate amount equal to 100% of the following:


(a)        Asset Dispositions.  The Net Available Proceeds of any disposition for cash of any asset or assets by the Company
not in the ordinary course of business the combined consideration for which is $100,000 or greater (“Asset
Disposition”).  “Net Available Proceeds” shall mean the aggregate amount of all cash payments, and the fair
market value of any non-cash consideration, received by the Company directly or indirectly as consideration for such Asset
Disposition, net (x) legal, title and recording tax expenses, commission and other fees and expenses paid by the Company in
connection with such Asset Disposition, and (y) repayment by the Company of any indebtedness secured by property subject to such
Asset Disposition and (z) any federal, state and local income tax estimated to be payable by the Company as a result of such Asset
Disposition (but only to the extent that such estimated taxes are paid to the relevant federal state or local government authority
within six months of the date of such Asset Disposition.)


(b)        
Excess Cash Flow.  
Excess Cash Flow for the most recently completed fiscal year. 
“Excess Cash Flow” means, for any fiscal year, an amount equal to (i) EBITDA minus (ii) the sum of (A) the
aggregate amount of regularly scheduled payments required to be made by the Company on all items of indebtedness or liabilities
that, in accordance with GAAP, would be classified as liabilities on the balance sheet of the Company, (B) all interest,
premium payments, debt discount, fees, charges and related expenses of the Company in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest
in accordance with GAAP and not already subtracted pursuant to clause (A) above, and the portion of rent expense of the Company
with respect to such period under capital leases that is treated as interest in accordance with GAAP and (C) the amount of
capital expenditures made in respect of the normal replacements and maintenance which are properly charged to current operations,
in each case for such period.  “EBITDA” means, for any period, for the Borrower, an amount equal to net income for
such period plus (i) the following amounts as stated on the financial statements for the appropriate period to the
extent deducted in calculating such net income (A) interest charges for such period, (B) the provision for federal,
state, local and foreign income taxes payable by the Borrower for such period, (C) the amount of depreciation and amortization
expense deducted in determining such net income and (D) other expenses of the Company reducing such net income which do not
represent a cash item in such period or any future period and minus (ii) all non-cash items increasing net income for
such period.


(c)        Application of Mandatory Prepayments.  Each prepayment under this Section 4.2 shall be accompanied by
interest accrued on the amount prepaid to the date of
prepayment.


4.3       
Repayment of the Notes.  The Company shall repay the Notes in accordance with the terms of the
Notes.


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4.4       
Registered Form.  Any and all payments hereunder or under the Notes only will be payable to the
registered holder of the Notes on the books of the Company.


4.5      
Taxes.  The Company is authorized to withhold from payments hereunder or under the Notes
and to pay over to any federal, state and local government or any foreign government, any amounts required to be so withheld
pursuant to the Code or any provisions of any other federal, state or local law or any foreign law, and any such amounts withheld
shall be treated as payments hereunder or under the Notes, as applicable.


5.       Administrative Agent.


5.1       
Appointment and Authorization of Administrative Agent.  Each Purchaser hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Transaction Document
and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other
Transaction Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the
contrary contained elsewhere herein or in any other Transaction Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, nor shall the Administrative Agent have or be deemed to have
any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative
Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the
other Transaction Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative relationship between independent contracting
parties.


5.2       
Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement or any
other Transaction Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or
willful misconduct.


5.3       Liability of Administrative Agent.  Neither the Administrative Agent nor any person related or affiliated with the
Administrative Agent (“Agent-Related Person”) shall (a) be liable for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or
(b) be responsible in any manner to any Purchaser or participant for any recital, statement, representation or warranty made
by any party to this Agreement (“Loan Party”) or any affiliate thereof, contained herein or in any other Transaction
Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other Transaction Document, or for the value of or title to
any collateral, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other
Transaction Document, or for any failure of any Loan Party or any other party to any Transaction Document to perform its
obligations hereunder or thereunder.  Neither the Administrative Agent nor any Agent-Related Person shall be under any
obligation to any Purchaser or participant to ascertain or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of
any Loan Party or any affiliate thereof.


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5.4       
Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely, and shall be fully protected
and incur no liability in relying, upon any writing, communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other
document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper
person or persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants
and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or
refusing to take any action under any Transaction Document unless it shall first receive such advice or concurrence of the
Purchasers as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Purchasers
against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such
action.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Transaction Document in accordance with a request or consent of the Purchasers.


5.5       Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default (as defined herein or in the Notes) unless the Administrative Agent shall have received written
notice from a Purchaser or the Company referring to this Agreement, describing such Event of Default and stating that such notice
is a “notice of default.”  The Administrative Agent will notify the Purchasers of its receipt of any such notice
and forward a copy thereof to each Purchaser and will notify the Purchasers if it has actual knowledge that an Event of Default has
occurred.  The Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default as it shall deem advisable or in the best interest of the Purchasers.  However, if the
Administrative Agent seeks and receives the consent of the Purchasers holding a majority of the outstanding principal amount of the
Notes or acts in response to a direction by any Purchaser holding at least 5% of the outstanding principal amount of the Notes with
respect to an Event of Default, the Administrative Agent shall take such action with respect to such Event of Default as
directed.


5.6       Indemnification of Administrative Agent.  The Purchasers shall indemnify upon demand each Agent-Related Person (to the extent
not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and
hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities (as defined herein) incurred by it;
provided, however, that no Purchaser shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to
have resulted from such Agent-Related Person’s own gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of the Purchasers shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section.  The undertaking in this Section shall survive repayment of the Notes and the
resignation of the Administrative Agent.  “Indemnified Liabilities” shall mean any costs or out-of-pocket expenses
(including attorney costs) incurred by the Administrative Agent in connection with the administration or enforcement (whether
through negotiations, legal proceedings or otherwise) of the Transaction Documents or any document contemplated by or referred to
herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Company, including,
without limitation, any actual or prospective claim, liability, loss, diminution in value, damages, costs and expenses, interest,
awards, judgments and penalties, litigation, investigation or proceeding relating to any of the foregoing, (including, without
limitation, attorneys’ and consultants’ fees and expenses) (a “Loss”) whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation,
litigation or proceeding) and regardless of whether the Administrative Agent is a party thereto.


5.7       
Administrative Agent in its Individual Capacity.  With respect to its purchase of the Notes and Series G Stock, DB shall have the
same rights and powers under the Transaction Documents as any other Purchaser and may exercise such rights and powers as though it
were not the Administrative Agent, and the terms “Purchaser” and “Purchasers” include DB in its individual
capacity.


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5.8       
Successor Administrative Agent.  The Administrative Agent may resign as Administrative Agent upon 30 days’
notice to the Purchasers and the Company.  If the Administrative Agent resigns under this Agreement, the Purchasers shall
appoint from among the remaining Purchasers a successor administrative agent for the Purchasers, which successor administrative
agent shall be subject to the consent of the Company at all times other than during the existence of an Event of Default (which
consent of the Company shall not be unreasonably withheld or delayed).  If no successor administrative agent has accepted
appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Purchasers
acting collectively shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the
Purchasers appoint a successor administrative agent as provided for above.


5.9       
Administrative Agent May File Proofs
of Claim.    In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any Note shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the
Company) shall be entitled and empowered, by intervention in such proceeding or otherwise: 


(a)        to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Notes that are
owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Purchasers
and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the
Purchasers and the Administrative Agent and their respective agents and counsel and all other amounts due the Purchasers and the
Administrative Agent under Section 5.6) allowed in such judicial proceeding; and


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(b)        to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;


and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Purchaser to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Purchasers, to pay to
the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative
Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 5.6.


Nothing contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Purchaser any plan of reorganization, arrangement, adjustment or
composition affecting the Losses or the rights of any Purchaser or to authorize the Administrative Agent to vote in respect of the
claim of any Purchaser in any such proceeding.


5.10       Collateral Matters.    Subject to the limitations contained in the Security
Agreement, the Purchasers irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any
security interest on any property granted to or held by the Administrative Agent under the Security Agreement or the Notes upon
payment in full of the Notes secured by such security interest in the Collateral (as defined in the Security Agreement); and upon
request by the Administrative Agent at any time, the Purchasers will confirm in writing the Administrative Agent’s authority
to release or subordinate its interest in particular types or items of property pursuant to this Section 5.10.


5.11       Plan of Reorganization.    In the event that proceedings for the appointment of a
receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or a voluntary
or involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or the
debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect are commenced, the Purchasers and
the Company agree that the Company and the Purchasers must unanimously agree upon and approve any plan of
reorganization before such plan may be submitted by any of the Purchasers, whether in a secured capacity or otherwise, or the
Company to a court of competent jurisdiction for formal approval and adoption.  None of the Company or any of the Purchasers
shall unreasonably withhold its approval of such plan of reorganization. 


6       Event of Default.  An occurrence of any of the following, unless waived by the Purchasers in writing,
shall constitute an “Event of Default” under this
Agreement and the Notes:


6.1       Payment Default.  The Company fails to pay when due any amount owing under the Notes.


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6.2       Covenant Default.  The Company shall fail to perform any obligation or violates any of the covenants,
representations or warranties, contained in this Agreement, or fail or neglect to perform, keep, or observe any other material
term, provision, condition, covenant, or agreement contained in the Transaction Documents and such failure, if subject to cure,
continues for a period of ten (10) days after written notice to the Company from the Administrative Agent.


6.3       Voluntary Bankruptcy or Insolvency Proceeding.  The Company shall (i) apply for or consent to the appoint of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit
of its or any of its creditors, (iii) be dissolved or liquidated in full or in substantial part, (iv) commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other proceeding commenced against it, or (v) take any action
for the purpose of effecting any of the foregoing.


6.4       
Involuntary Bankruptcy or Insolvency Proceeding.  Proceedings for the appointment of a receiver, trustee, liquidator or custodian of
the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be
dismissed or discharged within forty-five (45) days of commencement.


7.       Rights of the Purchasers upon Default.


7.1       
Purchaser or Administrative Agent May Accelerate Notes.  Except as
provided in Section 7.2 below, upon the occurrence or existence of any Event of
Default and at any time thereafter during the continuance of such Event of
Default, each Purchaser or the Administrative Agent on behalf of all Purchasers
may, by written notice to the Company, declare all outstanding obligations
payable by the Company hereunder to such Purchaser or all Purchasers, as the
case may be, to be immediately due and payable without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained in the Transaction Documents notwithstanding.


7.2       
Automatic Acceleration of Notes.  Upon the occurrence or existence of any Event of Default described in Sections 6.3
and 6.4 of this Agreement, as the case may be, immediately and without notice, all outstanding obligations payable by the Company
hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, anything contained in the Transaction Documents to the contrary
notwithstanding.  In addition to the foregoing remedies, upon the occurrence of any Event of Default, the Administrative Agent
and each Purchaser shall have the right to exercise any other right, power or remedy granted to it by the Transaction Documents or
otherwise permitted to it by action at law or by suit in equity.


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8.       Company Covenants.


8.1      
Indemnification and Directors' and Officers' Insurance.
From and after the Initial Closing Date, the Company will fulfill and honor in all respects the obligations of the Company
pursuant to any indemnification agreements between the Company and its directors and officers as of or prior to the date hereof (or
indemnification agreements in the Company's customary form for directors joining the Company's Board of Directors prior to the
Initial Closing Date) and any indemnification provisions under the Charter Documents as in effect immediately prior to the Initial
Closing Date.


(b)        For a period of six years after the Initial Closing Date, the Company will maintain in effect, if available, directors' and
officers' liability insurance covering those persons who, as of immediately prior to the Initial Closing Date, are covered by the
Company's directors' and officers' liability insurance policy (the "Insured Parties") on terms no less favorable to the Insured
Parties than those of the Company's present directors' and officers' liability insurance policy; provided, however, that in
no event will the Company be required to expend in excess of 150% of the annual premium currently paid by the Company for such
coverage (or such coverage as is available for 150% of such annual premium). 


(c)        The provisions of this Section 8.1 are intended to be for the benefit of, and will be enforceable by, each person entitled to
indemnification hereunder and the heirs and representatives of such person. The Company will not, and Purchasers will not permit
the Company to, merge or consolidate with any other entity unless the Company will ensure that the surviving or resulting entity
assumes the obligations imposed by this Section 8.1.


8.2       Taxes.  The Company and any Tax Affiliate shall pay, or cause to be paid, when due, all
Taxes imposed on the Company and any Tax Affiliate; provided, however, the Company and any Tax Affiliate shall not be required to
pay any such Tax so long as the validity thereof shall be actively contested in good faith by appropriate proceedings and such
Company or Tax Affiliate shall have set aside on its books adequate reserves (determined in accordance with generally accepted
accounting principles) with respect to any such Tax so contested.


8.3       Dedicated Use of Proceeds.


 The
Company shall use the proceeds of the sale of the Series G Stock and Notes to
make the payments specified on Schedule 8.3.  The remainder of the proceeds
shall be used as determined by the Board and the management of the Company.


9.       Conditions to the Obligations of the Purchasers.


Unless such
conditions are waived by the Purchasers, the obligation of each Purchaser to
purchase and pay for such Purchaser’s Note is subject to the satisfaction
in the sole judgment of the Purchasers, on or before the Closing Date, of the
following conditions:


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9.1       
Representations and Warranties.  The representations and warranties of the Company not qualified by materiality
shall be true in all material respects, and the representations and warranties of the Company qualified by materiality shall be
true and correct, on and as of the Closing Date with the same effect as though such representations and warranties had been made on
and as of the Closing Date except that any such representation or warranty made as of a specified date (other than the date hereof)
shall only need to have been true on and as of such date.


9.2       
Compliance.  The Company shall have performed and complied in all material respects 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 Date.


9.3       
Consents.  The Company shall have obtained, or caused to be obtained, each consent and
approval required in order to complete the transactions contemplated hereby, including but not limited to the consent of Laurus and
CAPCO.


9.4       Board Authorization.  This Agreement, the Transaction Documents and the transactions contemplated hereby
and thereby shall have been duly and validly authorized by the Board, and the Company shall have delivered to Purchasers evidence,
in form satisfactory to Purchasers’ counsel, of such authorization and approval.


9.4       Deliveries by the Company.  Purchasers shall have received the following:


(a)        the Notes and the Series G Stock, for each of the Purchasers, for the amounts set forth in the Schedule of
Investors for each Purchaser;


(b)        receipts for
each of the Purchasers in the amount paid by such Purchaser;


(c)        a true and complete copy, certified by the Secretary, of the resolutions duly and validly adopted by the Board
evidencing its authorization of the execution and delivery of this Agreement and the Transaction Documents and the consummation of
the transactions contemplated hereby and thereby;


(d)        a copy of (i) the Articles of Incorporation, as amended, of the Company, certified by the Secretary of State
of the State of Washington, as of a date not earlier than five business days prior to the Closing Date and accompanied by a
certificate of the Secretary of the Company, dated as of the Closing Date, stating that no amendments have been made to such
Articles of Incorporation since such date, and (ii) the Bylaws of the Company, certified by the Secretary of the Company;


(e)        valid existence or good standing certificates for the Company from the Secretary of State of the State of
Washington and from the Secretary of State in each other jurisdiction in which the properties owned or leased by the Company, or
the operation of its business in such jurisdiction, requires the Company to qualify to do business as a foreign corporation, in
each case dated as of a date not earlier than five business days prior to the Closing Date;


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(f)        a written opinion from counsel for the Company, dated the date of the Closing Date, addressed to Purchasers and
satisfactory to Purchaser’s counsel;


(g)        an executed copy of each of the Transaction Documents to the extent not provided under Section 9.5(a); and


(h)        a certificate from an officer of the Company stating that the conditions specified in Section 9 have been fulfilled.


9.6       Due Diligence. 
Satisfactory completion of
Purchasers’ due diligence investigation.


9.7       Laurus Documents.  Execution by Laurus, the Company, the Purchasers and Flying Food Group, LLC of an
amendment to the existing Intercreditor Agreement reasonably acceptable to the Purchasers reflecting the relative rights among the
parties.


10.       Conditions to Obligations of the Company.


10.1       
Representations and Warranties.  The representations and warranties in Section 3 of this Agreement shall be true in
all material respects on and as of the Closing Date as to all of the Purchasers with the same effect as though such representations
and warranties had been made on and as of the Closing Date (it being understood that such representations and warranties shall be
interpreted without giving effect to any limitations or qualifications as to “materiality”).


10.2       Deliveries by the Purchaser.  At the Closing, each Purchaser shall deliver to the Company:


(a)        the purchase price amount, made in
readily available funds, as set out beside such Purchaser’s name on the Schedule of
Investors;


(b)        executed counterparts of each of the
Transaction Documents; and


(c)        the certificates and other documents
required to be delivered pursuant to this Section 10;


(d)        a certificate from an authorized representative of
each Purchaser stating that the conditions specified in Section 10 have been
fulfilled.


10.3       
Consents.  The Company shall have obtained all required waivers, consents and agreements,
including but not limited to consents from Laurus and CAPCO satisfactory to the Company, relating to the transactions contemplated
by the Transaction Documents.


10.4       
Compliance.  Each Purchaser shall have performed and complied in all material respects 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 Date.


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11.       Indemnification.


   11.1       
Survival of Representations and Warranties. The representations and warranties of the Company contained in this Agreement and the Transaction Documents shall survive the
Closing until the second anniversary of the Closing Date; provided, however, that (i) the representations and warranties made
pursuant to Sections 2.1, 2.2, 2.7, 2.8, and 2.14 shall survive indefinitely and (ii) the representations and warranties
made pursuant to Section 2.13 shall survive until the 120th day following the expiration of the applicable statute of limitations
with respect to tax liabilities.  Neither the period of survival nor the liability of the Company with respect to the
Company’s representations and warranties shall be reduced by any investigation made at any time by or on behalf of the
Purchaser.  If written notice of a claim has been given prior to the expiration of the applicable representations and
warranties by the Purchaser to the Company, then the relevant representations and warranties shall survive as to such claim, until
such claim has been finally resolved.


(b)        The representations and warranties of the Purchasers contained in this Agreement and the Transaction Documents shall survive
the Closing until the second anniversary of the Closing Date; provided, however, that the representations and warranties made
pursuant to Sections 3.1, 3.2, 3.6 and 3.7 shall survive indefinitely.  Neither the period of survival nor the liability of
the Purchasers with respect to the Purchaser’s representations and warranties shall be reduced by any investigation made at
any time by or on behalf of the Company.  If written notice of a claim has been given prior to the expiration of the
applicable representations and warranties by the Company to the Purchaser, then the relevant representations and warranties shall
survive as to such claim, until such claim has been finally resolved.


11.2       Indemnification by the Company. 


The Purchasers
and their affiliates, officers, directors, employees, agents, successors and
assigns (each a “Purchaser Indemnified Party”) shall be indemnified and held
harmless by the Company for and against any and all Losses, arising out of or
resulting from:


(a)        the breach of any
representation or warranty made by the Company contained in this Agreement and the Transaction Documents;
or


(b)        the breach of any covenant or agreement by the Company contained in the Transaction Documents.


To the extent that the Company’s undertakings set forth in this Section 11.2
may be unenforceable, the Company shall contribute the maximum amount that it is permitted to contribute under applicable Law to
the payment and satisfaction of all Losses incurred by the Purchaser Indemnified Parties.


11.3       Indemnification by the Purchasers. 


Each of the 
Purchasers, on a several and not joint
basis, hereby agrees to indemnify and hold harmless the Company and its
affiliates, officers, directors, employees, agents, successors and assigns (each
a “Company Indemnified Party”) for and against any and all Losses, arising out
of or resulting from:


-19-



(a)        the breach of any representation or warranty made by such Purchaser contained in this Agreement or the Transaction Documents;
or


(b)        the breach of any covenant or
agreement by such Purchaser contained in this Agreement or the Transaction Documents.


To the extent that any indemnification obligation of a Purchaser pursuant to this
Section 11.3 may be unenforceable under applicable Law, such Purchaser shall contribute the maximum amount that it is are
permitted to contribute in respect of such indemnification obligation under such applicable Law in satisfaction of all Losses
incurred by the Company Indemnified Parties.


11.4       Indemnification.


An Indemnified Party shall give the Indemnifying Party notice of any matter which
an Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement, within 60 days
of such determination, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to
the provisions of this Agreement in respect of which such right of indemnification is claimed or arises.  The obligations and
liabilities of the Indemnifying Party under this Section 11 with respect to Losses arising from claims of any third party
which are subject to the indemnification provided for in this Section 11 (“Third Party Claims”) shall be
governed by and be contingent upon the following additional terms and conditions:  if an Indemnified Party shall receive
notice of any Third Party Claim, the Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim within 30
days of the receipt by the Indemnified Party of such notice; provided, however, that the failure to provide such
notice shall not release the Indemnifying Party from any of its obligations under this Section 11 except to the extent that
the Indemnifying Party is materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other
obligation or liability that it may have to any Indemnified Party otherwise than under this Section 11.  If the
Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may
result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third
Party Claim at its expense and through counsel of its choice if it gives notice of its intention to do so to the Indemnified Party
within five days of the receipt of such notice from the Indemnified Party; provided, however, that if there exists or
is reasonably likely to exist a conflict of interest that would make it inappropriate in the judgment of the Indemnified Party in
its sole and absolute discretion for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the
Indemnified Party shall be entitled to retain its own counsel in each jurisdiction for which the Indemnified Party determines
counsel is required, at the expense of the Indemnifying Party.  In the event that the Indemnifying Party exercises the right
to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all
witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified
Party’s control relating thereto as is reasonably required by the Indemnifying Party.  Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party
shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying
Party’s expense, all such witnesses, records, materials and information in the Indemnifying Party’s possession or under
the Indemnifying Party’s control relating thereto as is reasonably required by the Indemnified Party.  No such Third
Party Claim may be settled by the Indemnifying Party without the prior written consent of the Indemnified Party.


-20-



11.5       
Limits on Indemnification.  Notwithstanding the provisions of this Section 11, the Indemnifying Party shall not
be liable to the Indemnified Party until the aggregate amount of all indemnifiable Losses exceeds $50,000 (the “Basket
Amount”), in which case the Indemnifying Party shall be obligated to indemnify the Indemnified Parties for the aggregate
amount of all such indemnified Losses including the Basket Amount up to the maximum amount as specified in this Section 11.5. 
The maximum amount of indemnifiable Losses which may be recovered from an Indemnified Party arising out of or resulting from the
causes set forth in Section 11.2(a) or 11.3(a), as the case may be, shall be an amount equal to the Purchase Price.


12.       Termination.


12.1       
Termination.  This Agreement may be terminated at any time prior to the Closing Date:


(a)        by the mutual consent of
Purchasers and the Company;


(b)        by any Purchaser, on the one hand, or the Company, on the other, if there has been a material misrepresentation, material
breach of warranty or material breach of covenant on the part of the other in the representations, warranties and covenants set
forth in this Agreement; or


(c)        by any Purchaser, on the one hand, or the Company, on the other, if the transactions contemplated by this Agreement have not
been consummated by December 30, 2003; provided that, no party will be entitled to terminate this
Agreement pursuant to this
Section 12.1(c) if such party’s willful breach of this Agreement has prevented the consummation of the transactions
contemplated by this Agreement.


12.2       Effect of Termination. 
In the event of termination of this
Agreement by any Purchaser, on the one hand, or the Company, on the other, as
provided in Section 12.1, all provisions of this Agreement shall terminate and
there shall be no liability on the part of any of Purchasers or the Company or
their respective shareholders, officers, or directors, except that Sections
8.1(b), 13.3 and 13.5 hereof shall survive indefinitely, except that parties
shall remain liable for willful breaches of this Agreement prior to the time of
such termination.


-21-



13.       Miscellaneous.


13.1       
Waivers, Amendments and Termination. 
Except as otherwise provided, any provision of this Agreement may be amended,
waived or modified only upon the written consent of the Company and each
Purchaser.


13.2       
Press Releases and Announcements.>  Prior to the Closing Date, no party hereto shall issue any press release (or make
any other public announcement) related to this Agreement or the transactions contemplated hereby or make any announcement to the
employees, customers or suppliers of the Company without prior written approval of the other party hereto, except as may be
necessary to comply with the requirements of this Agreement or applicable law.  If any such press release or public
announcement is so required, the party making such disclosure shall consult with the other party prior to making such disclosure,
and the parties shall use all reasonable efforts, acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties.


13.3       Legal Fees and Expenses.  Each party to this Agreement shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of the Transaction Documents; provided, however,
that, on the Closing Date or promptly thereafter, the Company shall reimburse all reasonable legal fees and expenditures incurred
by counsel to the Purchasers with respect to the negotiation, execution, delivery and performance of the Transaction Documents as
set forth on Schedule 8.3.


13.4       
Entire Agreement.  This Agreement and the Transaction Documents together with all exhibits attached
hereto and thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects
hereof and thereof.  This Agreement shall govern with respect to any inconsistencies between this Agreement and any other
Transaction Documents.


13.5       
Governing Law.  The Transaction Documents and all actions arising out of or in connection with the
Transaction Documents shall be governed by and construed in accordance with the laws of the State of New York, without regard to
the conflicts of law provisions of the State of New York or of any other state.  All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting in the Borough
of Manhattan of The City of New York.  The parties hereto hereby (a) submit to the exclusive jurisdiction of any state or
federal court sitting in the Borough of Manhattan of The City of New York for the purpose of any action arising out of or relating
to this Agreement brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense,
or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue
of the action is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by
any of the above-named courts.


-22-



13.6       
Notices, etc.  All notices and other communications required or permitted hereunder shall be in
writing and shall be sent via facsimile, overnight courier service or mailed by certified or registered mail, postage prepaid,
return receipt requested, addressed or sent (a) if to a Purchaser, to the address set forth on such Purchaser’s signature
page hereto, or at such other address or number as the Purchaser shall have furnished to the other parties in writing, with a copy
(which shall not constitute notice) to Shearman & Sterling, 599 Lexington Avenue, New York, NY  10022-6069,
Telecopy:  (212) 848-7179, Attention: Stephen Besen, or (b) if to the Company, at BRIAZZ, INC., 3901 - 7th Avenue South, #200,
Seattle, WA 98108, Attention: Chief Executive Officer, fax (206) 467-1970, with a copy to Dorsey & Whitney LLP, 1420 Fifth
Avenue, Suite 3400, Attention: Kimberley R. Anderson, fax (206) 903-8820 or at such other address or number as the Company shall
have furnished to the Purchasers in writing.


13.7       Validity.  If any provision of the Transaction Documents shall be judicially determined to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.


13.8       Counterparts.  This Agreement may be executed in any number of counterparts and by facsimile, each
of which may be executed by less than all of the Purchasers, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one and the same instrument.  Facsimile signatures
shall have the same force and effect as original signatures.


13.9       Severability.
  If any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full
force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected
in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this
Agreement are consummated as originally contemplated to the greatest extent possible.


13.10      Assignment.  This Agreement may not be assigned by operation of law or otherwise without the
express written consent of the Company and the other Purchasers (which consent may be granted or withheld in the sole discretion of
the Company or the Purchasers); provided, however, that each of the Purchasers may assign this Agreement or any of
its rights and obligations hereunder to one or more affiliates of such Purchaser without the consent of the Company
or the other Purchasers.


13.11     No Third Party Beneficiaries.  Except for the provisions of Section 11 and Section 8.1 relating to indemnified
parties, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any other person, including, without limitation, any union
or any current employee or former employee of the Company, any legal or equitable right, benefit or remedy of any nature
whatsoever, including, without limitation, any rights of employment for any specified period, under or by reason of this
Agreement.


-23-



13.12      Waiver of Jury Trial.  Each of the parties hereto hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under
or in connection with this Agreement or the transactions contemplated by this Agreement.  Each of the parties hereto (a)
certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other
party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other party
hereto have been induced to enter into this Agreement and the transactions contemplated by this Agreement, as applicable, by, among
other things, the mutual waivers and certifications in this Section 13.12


[Signature Page Follows]

 

 

 

 


-24-


 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the date and year first written above.


		
COMPANY:


		
BRIAZZ, INC.,

a Washington corporation



		



By:
                                                                    


Its:
                                                                    


	 

 	
 
	

 	
PURCHASERS:


	 	

DEUTSCHE BANK LONDON AG, acting

through DB ADVISORS, LLC, for itself and

as ADMINISTRATIVE
AGENT


By:                                                                     


Name:                                                                


Title:                                                                  


Address:                                                            


                                                                          


Fax:                                                                   


Attn:                                                                  





 

 

 

 


SIGNATURE PAGE TO
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT



 


	 	
Dorsey & Whitney LLP


	 	

 


By:
                                                                    


Its:
                                                                    


	 	
  
		
 


Signature:
                                                          


Victor D. Alhadeff


	 	
 
		
Flying Food Group, LLC


		
 


By:
                                                                    


Its:
                                                                    





 


 


 


SIGNATURE PAGE TO
AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT







SCHEDULE OF INVESTORS



  

	
December 2003


	
Investor Name

and Address

	
Form of Note

	
Principal Amount

of Note

	
Number of Shares

of Series G Stock

	
Amount and

Form of

Purchase Price


	
DB Advisors, LLC

	
A-1

	
$500,000

	
640,612

	
$500,000 cash


	
Victor D. Alhadeff

	
A-1

	
$500,000

	
640,612

	
repayment of

Company’s U.S.

Bank term note


	
	
January 2004


	
DB Advisors, LLC

	
A-2

	
$500,000

	
612

	
$500,000 cash


	
Flying Food Group, LLC

	
A-2

	
$500,000

	
612

	
conversion of

$500,000 A/R

under Food

Production Agreement


	
Victor D. Alhadeff

	
A-1

	
$235,000

	
301,088

	
$235,000 cash


	
Dorsey & Whitney LLP

	
A-1

	
$130,000

	
23,964

	
conversion of

$130,000 A/R

for legal

services

provided


	
DB Advisors, LLC

	
A-1

	
$365,000

	
467,646

	
$365,000 cash





  



 


 


 





 EXHIBIT A-1


FORM OF NOTE


(two year)

  




 


EXHIBIT A-2


FORM OF NOTE

(three month)




 

 

 









EXHIBIT
B


FORM OF ARTICLES OF AMENDMENT




 

 




 
EXHIBIT C


ALLOCATION OF
PURCHASE PRICE





           
The purchase price for a Note and Series G Stock  hall be allocated to the Note
and Series G Stock in the following amounts:


Series G Stock            
$____ per share


Notes              
remainder of the Purchase Price


 


 


 


 








EXHIBIT D


FORM OF SECURITY
AGREEMENT


 


 


 


 


 









EXHIBIT E


FORM OF REGISTRATION RIGHTS AGREEMENT