**EXHIBIT 10.11**

 

NEITHER THISWARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NO SALE, TRANSFER OR OTHER DISPOSITION OFTHIS WARRANT OR SAID SHARES MAY BE EFFECTED WITHOUT (i) AN EFFECTIVEREGISTRATION STATEMENT RELATED THERETO, OR (ii) AN OPINION OF COUNSEL,REASONABLY SATISFACTORY TO COUNSEL TO THE COMPANY, THAT AN EXEMPTION FROMREGISTRATION UNDER SAID ACT IS AVAILABLE.

 

 

| Warrant |   |                   |   | No. of              |
|---------|--------|------------------------|--------|---------------------|
| No. 101 |   | STOCK PURCHASE WARRANT |   | Shares  76,000 |

 

To Subscribe for and Purchase Common Stock of

 

BOSTON RESTAURANT ASSOCIATES, INC.

 

THIS CERTIFIESthat, for value received, Commerce Bank and Trust Company of Boston, MA(together with any subsequent transferees of all or any portion of thisWarrant, the “Holder”), is entitled, upon the terms and subject to theconditions hereinafter set forth, to subscribe for and purchase from BostonRestaurant Associates, Inc., Inc., a Delaware corporation (hereinafter calledthe “Company”), at the price set forth in Section 2, up to 76,000 fully paidand nonassessable shares of the Company’s common stock, $.01 par value pershare, subject to adjustment as set forth in Section 6 (the “Shares”),

 

1.             Definitions.  As used herein the following term shall havethe following meaning:

 

“Act”means the Securities Act of 1933 as amended, or a similar Federal statute andthe rules and regulations of the Commission issued under that Act, as they eachmay, from time to time, be in effect.

 

“Commission”means the Securities and Exchange Commission, or any other Federal agency atthe time administering the securities laws of the United States.

 

“RegistrationStatement” means a registration statement (other than a registrationstatement on Form S-8 solely with respect to employee benefit plans, or on FormS-4 solely with respect to Rule 145 transactions, or a registration statementfor an exchange offer solely to the Company’s stockholders, or any successorform or forms used for the purposes specified by such forms) filed by theCompany with the Commission under the Act for a public offering and sale ofsecurities of the Company.

 

“Shares”means the 76,000 shares of the Company’s Common Stock issued or issuable to theHolder upon the exercise of this Warrant (or such other number as adjustedpursuant to Section 6 hereof) and any other shares of Common Stock of theCompany issued with respect to such shares

 

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(because of stock splits, stockdividends, reclassifications, recapitalizations, mergers, consolidations, orsimilar events); provided, however, that any shares subject to this Warrantpreviously sold by the Holder to the public pursuant to a registered publicoffering or Rule 144 under the Act shall cease to be within the definition of“Shares” as used herein.

 

2.             Purchase Rights.  The purchase rights represented by thisWarrant entitle the holder to purchase Shares at an exercise price of $0.50 pershare.  The Warrant is exercisable bythe Holder, in whole or in part, at any time and from time to time, commencingon the first anniversary of the date hereof and ending at 5:00 p.m. on thesixth anniversary of the date hereof. ..  Notwithstanding the precedingsentence, the Warrant may be exercised prior to the first anniversary of thedate hereof: (i) in the event that there is an Event of Default under the LoanAgreement between the Company and Commerce Bank & Trust Company dated April30, 2002, as amended; (ii) in the event of a transaction or related series oftransactions which result in (A) a sale of substantially all of the assets ofthe Company other than in the ordinary course of business, or (B) a merger ofthe Company with another corporation or other entity in which the Company isnot the surviving entity or in which it is the surviving entity but formerstockholders of the Company end up with less than a majority of the voting andeconomic interest in the surviving entity; or (ii) in the event of arecapitalization of the capital structure of the Company (but not a simplestock split, reverse stock split or stock dividend).

3.             Exercise of Warrant.  Subject to Section 2 above, the purchaserights represented by this Warrant may be exercised, in whole or in part andfrom time to time, by the surrender of this Warrant and the duly executedNotice of Exercise (the form of which is attached as Exhibit A) at theprincipal office of the Company and by the payment to the Company, by check, ofan amount equal to the then applicable Warrant Exercise Price per sharemultiplied by the number of Shares then being purchased.  Upon exercise, the Holder shall be entitledto receive, as promptly as possible, one or more certificates issued in theHolder’s name or in such name or names as the Holder may direct for the numberof Shares so purchased.  The Shares sopurchased shall be deemed to be issued as of the close of business on the dateon which this Warrant shall have been exercised.

 

4.             Shares to be Issued; Reservationof Shares. The Company covenants that the Shares that are issued upon theexercise of the purchase rights represented by this Warrant and payment of theexercise price will, upon issuance, be fully paid and nonassessable, and freefrom all liens and charges with respect to the issue thereof.  During the period within which the purchaserights represented by the Warrant may be exercised, the Company will at alltimes have authorized and reserved, for the purpose of issuance upon exerciseof the purchase rights represented by this Warrant, a sufficient number ofshares of its Common Stock to provide for the exercise of the right representedby this Warrant.

 

5.             No Fractional Shares.  No fractional shares shall be issued uponthe exercise of this Warrant.  In lieuthereof, a cash payment shall be made equal to such fraction multiplied by thefair market value of such shares of Common Stock, as determined in good faithby the Company’s Board of Directors.

 

6.             Adjustments of Warrant PurchasePrice and Number of Shares.  Ifthere shall be any change in the Common Stock of the Company through merger,consolidation, reorganization, recapitalization,

 

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stock dividend, stock split orother change in the corporate structure of the Company, appropriate adjustmentsshall be made by the Board of Directors of the Company (or if the Company isnot the surviving corporation in any such transaction, the board of directorsof the surviving corporation) in the aggregate number and kind of sharessubject to this Warrant, and the number and kind of shares and the price pershare then applicable to shares covered by the unexercised portion of thisWarrant.

 

7.             Piggyback Registration Rights.  The Company agrees as follows:

 

(a)           If the Company shall determine toregister any shares of its Common Stock under the Act at any time and inconnection therewith the Company may lawfully register any of the Shares (otherthan pursuant to a registration statement excluded from the definition of aRegistration Statement in Section 1), the Company will promptly give writtennotice thereof to the Holder.  Upon the writtenrequest of the Holder within 30 days after receipt of any such notice from theCompany, the Company will, except as herein provided, cause all of the Shareswhich the Holder has requested to be registered to be included in suchRegistration Statement, all to the extent requisite to permit the sale or otherdisposition of the Shares.  Howevernothing herein shall prevent the Company from at any time abandoning ordelaying any registration.

 

(b)           If any shares registered pursuant tothis Section shall be included in an underwritten public offering in whole orin part, the Company may require that the Shares requested for inclusionhereunder be included in the underwriting on the same terms and conditions asthe securities otherwise being sold through the underwriters.  If and in the event that the managingunderwriter of such public offering shall be of the opinion that inclusion ofall of the Shares would adversely affect the marketing of the securities to besold by the Company therein,  then thenumber of Shares otherwise to be included in the underwritten public offeringmay be reduced on a pro rata basis with the shares proposed to be included insuch offering by any other selling shareholder (exclusive of the Company).

 

(c)           The Holder hereof may not exercisethe rights granted in this Section to effect the registration of the Sharesunder the Act prior to the first anniversary hereof.

 

(d)           Anything herein to the contrarynotwithstanding, the Company shall not be obligated to provide the foregoingso-called “piggyback” registration rights on more than two occasions.

 

8.             Registration Procedures.  If and whenever the Company is required bythe provisions of Section 7 to effect the registration of the Shares under theAct, the Company will:

 

(a)           prepare and file with the Commissiona Registration Statement with respect to such securities, and use its bestefforts to cause such Registration Statement to become and remain effective forsuch period as may be reasonably necessary to effect the sale of suchsecurities, not to exceed three months;

 

(b)           prepare and file with the Commissionsuch amendments to such Registration Statement and supplements to theprospectus contained therein as may be necessary to keep such RegistrationStatement effective for such period as may be reasonably necessary to effectthe sale of such Shares, not to exceed three months; provided, however, that inthe event any amendment or

 

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supplement to a RegistrationStatement is required to be filed pursuant to paragraph (g) of this Section 8,and such filing results in the suspension of the effectiveness of suchRegistration Statement, such three month period shall be extended by the periodduring which the effectiveness of such Registration Statement has beensuspended.

 

(c)           furnish to the Holder participatingin such registration and to the underwriters of the securities being registeredsuch reasonable number of copies of the Registration Statement, preliminaryprospectus, final prospectus and such other documents as such underwriters mayreasonably request in order to facilitate the public offering of suchsecurities;

 

(d)           use its reasonable efforts toregister or qualify the securities covered by such Registration Statement underthe state securities or blue sky laws of such jurisdictions as the Holder mayreasonably request within 20 days following the original filing of suchRegistration Statement, except that the Company shall not for any purpose berequired to execute a general consent to service of process or to qualify to dobusiness as a foreign corporation in any jurisdiction wherein it is not soqualified;

 

(e)           notify the Holder promptly after itshall receive notice thereof, of the time when such Registration Statement hasbecome effective or a supplement to any prospectus forming a part of suchregistration statement has been filed;

 

(f)            notify the Holder promptly of anyrequest by the Commission for the amending or supplementing of suchRegistration Statement or prospectus or for additional information;

 

(g)           prepare and promptly file with theCommission and promptly notify the Holder of the filing of such amendment orsupplement to such Registration Statement or prospectus as may be necessary tocorrect any statements or omissions if, at the time when a prospectus relatingto such securities is required to be delivered under the Act, any event shallhave occurred as the result of which any such prospectus or any otherprospectus as then in effect would include an untrue statement of a materialfact or omit to state any material fact necessary to make the statements therein,in the light of the circumstances in which they were made, not misleading; and

 

(h)           advise the Holder, promptly after itshall receive notice or obtain knowledge thereof, of the issuance of any stoporder by the Commission suspending the effectiveness of such RegistrationStatement or the initiation or threatening of any proceeding for that purposeand promptly use its best efforts to prevent the issuance of any stop order orto obtain its withdrawal if such stop order should be issued.

 

9.             Unregisterable Shares.  Notwithstanding anything to the contrarycontained herein, the registration rights contained herein (both demand and“piggyback”) shall not apply to any Shares which may be sold withoutrestriction pursuant to Rule 144(k) of the Act.

 

10.           Expenses.  All expenses in connection with, orincidental to, the preparation and filing of any Registration Statementpursuant to Section 7 hereof, any registration or qualification undersecurities or blue sky laws of states in which the offering will be made, andany filing fee of the National Association of Securities Dealers, Inc. (“NASD”)relating to such offering, shall be borne by the Company (the “CompanyObligations”); provided, however, that the Holder shall bear

 

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its proratashare of the underwriting discount and commissions, underwriting expenseallowances and transfer taxes, all reasonable documented fees and disbursementsof Holder’s counsel, and, to the extent required by applicable state securitieslaws and NASD rules and regulations, all legal fees and disbursements and otherexpenses of complying with state securities or blue sky laws of anyjurisdictions in which the Shares to be offered are to be registered orqualified.

 

11.           Indemnification.

 

(a)           The Company will indemnify and hold harmlessthe Holder and any underwriter (as defined in the Act) for such Holder and eachperson, if any, who controls such Holder or such underwriter within the meaningof the Act, from and against, and will reimburse such Holder and each suchunderwriter and controlling person with respect to, any and all loss, damage,liability, cost and expense to which such Holder or any such underwriter orcontrolling person may become subject under the Act or otherwise, insofar assuch losses, damages, liabilities, costs or expenses are caused by any untruestatement or alleged untrue statement of any material fact contained in anyRegistration Statement, any prospectus contained therein or any amendment orsupplement thereto, or arise out of or are based upon the omission or allegedomission to state therein a material fact required to be stated therein ornecessary to make the statements therein, in light of the circumstances inwhich they were made, not misleading; provided, however, that the Company willnot be liable in any such case to the extent that any such loss, damage,liability, cost or expense arises out of or is based upon an untrue statementor alleged untrue statement or omission or alleged omission so made inconformity with information furnished by such Holder, such underwriter or suchcontrolling person in writing specifically for use in the preparation thereof.

 

(b)           The Holder will indemnify and holdharmless the Company, its directors and officers, any underwriter and anycontrolling person of such underwriter from and against, and will reimburse theCompany, underwriter or controlling person with respect to, any and all loss,damage, liability, cost or expense to which the Company, any underwriter or anycontrolling person thereof may become subject under the Act or otherwise,insofar as such losses, damages, liabilities, costs or expenses are caused byany untrue or alleged untrue statement of any material fact contained in anyRegistration Statement, any prospectus contained therein or any amendment orsupplement thereto, or arise out of or are based upon the omission or thealleged omission to state therein a material fact required to be stated thereinor necessary to make the statements therein, in light of the circumstances inwhich they were made, not misleading, in each case to the extent, but only tothe extent, that such untrue statement or alleged untrue statement or omissionor alleged omission was so made in reliance upon written information furnishedby such Holder specifically for use in the preparation thereof.  The maximum liability for indemnificationhereunder of the Holder shall not exceed, in the aggregate, the aggregatedollar amount of gross proceeds received by the Holder on account of the Shareswhich are included in a Registration Statement pursuant to Section 7.

 

12.           Rights and Obligations SurviveExercise and Expiration of Warrant. The rights and obligations of the Company and the Holder set forth inSections 7, 8, 10 and 11 shall survive the exercise and expiration of this Warrant.

 

13.           No Rights as Shareholders.  This Warrant does not entitle the Holder toany voting rights or other rights as a shareholder of the Company prior toexercise of this Warrant and the

 

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payment for the Shares sopurchased.  Notwithstanding the foregoing,the Company agrees to transmit to the Holder such information, documents andreports as are generally distributed to holders of the capital stock of theCompany concurrently with the distribution thereof to the shareholders.  Upon valid exercise of this Warrant andpayment for the Shares so purchased in accordance with the terms of theWarrant, the Holder or the Holder’s designee, as the case may be, shall bedeemed a shareholder of the Company.

 

14.           Legend.  Each certificate representing any Warrantshall bear the legend set out on page 1 hereof.  Each certificate representing any Shares shall bear a legendsubstantially in the following form, as appropriate:

 

THE SHARESREPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH AVIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE EFFECTEDWITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OFCOUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIREDUNDER THE SECURITIES ACT OF 1933.

 

Such Warrant and Shares may besubject to additional restrictions on transfer imposed under applicable stateand federal securities law.

 

15.           Right of First Refusal.

 

(a)           Voluntary Transfers.  No Holder may sell, assign, pledge orotherwise dispose of any Shares into which this Warrant is convertible, or anyinterest therein now held or hereafter acquired, in a private transaction, asopposed to a trade consumed on NASDAQ or comparable system, without first givingwritten notice to the Company (the “Notice of Proposed Transfer”).  The Notice of Proposed Transfer shallinclude the name of the proposed transferee and all material terms of theproposed transfer and, shall be accompanied by a copy of the bona fide writtenoffer to purchase such Shares upon the terms set forth in the Notice ofProposed Transfer.  The Notice ofProposed Transfer to the Company shall be deemed for all purposes to give theCompany a first right of purchase (sometimes referred to as a right of firstrefusal) as provided herein.  If theCompany declines or fails to exercise its first right of purchase within 10days after such Notice of Proposed Transfer, the Holder proposing to effectuatesuch transaction may, within 30 days from the date said right terminates,transfer the Shares to the proposed transferee upon the terms set forth in theNotice of Proposed Transfer.

 

(b)           First Right of Purchase.  Upon receipt of the Notice of ProposedTransfer, the Company shall have a right to purchase the Shares to which suchNotice relates at the price and in the manner specified herein before any otheraction is taken to sell, assign, transfer, pledge, or otherwise dispose of theShares.  Such right shall continue for aperiod of 10 days from the receipt of the Notice of Proposed Transfer.  If the Company elects to exercise its firstright of purchase, it shall so notify the Holder of the Shares on the terms andconditions as are specified in such Notice and shall specify the time and placefor tender of certificates representing such Shares.

 

(c)           Transfers in Violation of Warrant.  If any transfer of Shares is made orattempted

 

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contrary to the provisions ofthis Warrant, or if Shares are not offered to the Company as required herein,the Company shall have the right to purchase said shares from the owner thereofor his transferee at any time before or after the transfer, as hereinprovided.  In the event that the Companyelects to exercise its first right of purchase, it may do so by canceling thecertificate(s) representing the Shares and depositing the purchase pricedetermined hereunder in an interest bearing bank account for the benefit ofHolder, whereupon such Shares shall be, for all purposes, cancelled and neitherthe Holder nor any transferee shall have any rights as one of its Holders withrespect to such Shares for any purpose, including without limitation dividendand voting rights, until there has been compliance with all applicableprovisions of this Warrant.  In additionto any other legal or equitable remedies which it may have, the Company mayenforce its rights by actions for specific performance (to the extent permittedby law).

 

16.           Modifications and Waivers.This Warrant may not be changed, waived, discharged or terminated except by aninstrument in writing signed by the party against which enforcement of the sameis sought.

 

17.           Notices. Any notice, requestor other document required or permitted to be given or delivered to the Holderor the Company shall be delivered, or shall be sent by certified or registeredmail, postage prepaid, to the Holder at its address shown on the books of theCompany or to the Company at the address indicated therefor on the signaturepage of this Warrant, or, if different, at the principal office of the Company.

 

18.           Loss, Theft, Destruction orMutilation of Warrant. The Company covenants with the Holder that upon itsreceipt of evidence reasonably satisfactory to the Company of the loss, theft,destruction or mutilation of this Warrant or any stock certificate and, in thecase of any such loss, theft or destruction, of an indemnity or securityreasonably satisfactory to it, and upon reimbursement to the Company of allreasonable expenses incidental thereto, and upon surrender and cancellation ofthis Warrant or stock certificate, if mutilated, the Company will make anddeliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,stolen, destroyed or mutilated Warrant or stock certificate.

 

19.           Representations and Warranties ofHolder.  By accepting this Warrant,the Holder represents and warrants that the Holder is acquiring this Warrantand the Shares for such Holder’s own account, for investment and not with aview to, or for sale in connection with, any distribution thereof or any part thereof.  Holder represents and warrants that suchHolder is (a) experienced in the evaluation of businesses similar to theCompany, (b) is able to fend for himself, herself or itself in the transactionscontemplated by this Warrant, (c) has such knowledge and experience infinancial and business matters as to be capable of evaluating the merits andrisks of an investment in the Company, (d) has the ability to bear the economicrisks of an investment in the Company, (e) has been furnished with or has had accessto such information as is specified in subparagraph (b)(2) of Rule 502promulgated under the Act and (f) has been afforded the opportunity to askquestions of and to receive answers from the Company and to obtain anyadditional information necessary to make an informed investment decision withrespect to an investment in the Company.

 

20.           Binding Effect on Successors.  This Warrant shall be binding upon anycorporation succeeding the Company by merger, consolidation or acquisition ofall or substantially all of the Company’s assets, and all of the obligations ofthe Company relating to the Shares issuable upon

 

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exercise of this Warrant shallsurvive the exercise and termination of this Warrant and all of the covenantsand agreements of the Company shall inure to the benefit of the successors andassigns of the Holder.

 

21.           Sale or Transfer of the Warrantand Shares.  Except as provided inSection 16, and except for transfers to shareholders or officers, directors ofthe Holder in accordance with applicable federal and state securities laws,neither this Warrant nor the Shares, or any of them, may be sold, transferred,pledged or otherwise conveyed, in whole or in part, by the Holder.  Any attempted conveyance by the Holder shallbe deemed void and of no effect except as provided in Section 15.

 

22.           Governing Law.  This Warrant shall be construed and enforcedin accordance with, and the rights of the parties shall be governed by, thelaws of the State of Delaware.

 

IN WITNESSWHEREOF, BOSTON RESTAURANT ASSOCIATES, INC. has caused this Warrant to beexecuted under seal by its officer thereunto duly authorized.

 

ORIGINAL ISSUANCE DATE:  February     , 2004

 

 
|   | BOSTON  RESTAURANT ASSOCIATES, INC. |
|--------|-------------------------------------|
|   |                                |
|   | By:                                 |   |   |
|   |                                | George R.  Chapdelaine |
|   |                                | President |
|   |                                |
|   |                                |
|   | COMPANY’S  ADDRESS:            |
|   |                                |
|   | 999  Broadway, Suite 400            |
|   | Saugus,  Massachusetts 01906        |

 

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