Document:

EXHIBIT 4.2

 

NEITHER THIS WARRANT NOR ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT (THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH
ACT AND SUCH LAWS.

 

MAIN STREET RESTAURANT GROUP, INC.

COMMON STOCK PURCHASE WARRANT

 

	
  Name of
  holders:

  	
   

  	
  CIC MSRG LP
  (“Warrantholder”).

  
	
   

  	
   

  	
   

  
	
  Number of
  shares:

  	
   

  	
  581,395 (“Warrant
  Shares”).

  
	
   

  	
   

  	
   

  
	
  Purchase
  price per shares:

  	
   

  	
  $3.01 (“Exercise
  Price”).

  
	
   

  	
   

  	
   

  
	
  The fifth
  anniversary date of the vesting date hereof:

  	
   

  	
  November 27,
  2010 (“Expiration Date”).

  

 

This certifies that, for good and valuable consideration, Main Street
Restaurant Group, Inc., a Delaware corporation (the “Company”), grants to the Warrantholder, the right to
subscribe for and purchase from the Company validly issued, fully paid and
nonassessable Warrant Shares of the Company’s Common Stock, $0.001 par value
per share (the “Common Stock”), at the Exercise Price, at any time after
November 27, 2005 and prior to the Expiration Date, all subject to the terms,
conditions and adjustments herein set forth.

 

1.     Exercise
of Warrant.

 

1.1   Exercise of Warrant.  This Warrant may be
exercised, in whole or in part, at any time or from time to time after November
27, 2005 and prior to the Expiration Date, by surrendering to the Company at
its principal office this Warrant, with an exercise form in the form attached
hereto as Exhibit A, duly executed by the Warrantholder and accompanied
by payment of the Exercise Price for the number of shares of Common Stock
specified in such Exercise Form.

 

1.2   Delivery of Warrant Shares; Effectiveness of Exercise.

 

(a)  Delivery
of Warrant Shares. A stock certificate or certificates for the Warrant
Shares specified in the Exercise Form along with a check for the amount of cash
to be paid in lieu of fractional shares, if any, shall be delivered to the
Warrantholder within three Business Days (as defined below) after the Exercise
Date (as defined in Section 1.2(b)). 
If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the stock certificate or certificates and
cash in lieu of fractional shares, if any, deliver to the Warrantholder a new
Warrant evidencing the rights to purchase the remaining Warrant Shares, which
new Warrant shall in all other respects be identical with this Warrant.  As used herein, “Business Day” means any day other than a Saturday, Sunday or
a day on which national banks are authorized by law or executive order to close
in the State of Delaware.

 

(b)  Effectiveness
of Exercise. The exercise of this Warrant shall be deemed to have been
effective immediately prior to the close of business on the Business Day on
which this Warrant is exercised in accordance with Section 1.1 (the “Exercise
Date”). The Person (as defined below) in whose name any certificate for
shares of Common Stock shall be issuable upon such exercise shall be deemed to

 

 

be the record holder of such shares of Common Stock for all
purposes on the Exercise Date.  As used
herein, “Person” means any individual, corporation, partnership, joint
venture, association, trust, limited liability company
or other entity.

 

(c)  Limitations
on Exercise. Notwithstanding anything to the contrary herein, this Warrant
may not be exercised to the extent the issuance of the Warrant Shares upon such
exercise would constitute a violation of any applicable federal or state
securities laws or other laws or regulations.

 

1.3   Payment of Taxes. The issuance of certificates for Warrant Shares shall be
made without charge to the Warrantholder for any stock transfer or other
issuance tax in respect thereof; provided, however, that the
Warrantholder shall be required to pay any and all taxes that may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Warrantholder as reflected
upon the books of the Company.

 

2.     Transferability.

 

Nothing
herein shall prohibit the Warrantholder from selling, assigning, transferring,
gifting, exchanging or otherwise disposing of, or granting a lien, encumbrance,
pledge or other security interest in (each a “Transfer”) this Warrant.  This Section 2 shall survive the
exercise of the Warrants.

 

3.     Restrictive Legends. 

 

3.1   Warrants.  Except as otherwise permitted by this Section
3.1, this Warrant is subject to the following legend, and each Warrant
issued in substitution for any Warrant pursuant to Section 6 shall be
stamped or otherwise imprinted with a legend in substantially the following
form:

 

NEITHER THIS WARRANT NOR ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT (THE “SECURITIES”) HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH
ACT AND SUCH LAWS.

 

3.2   Warrant Shares. Except as otherwise permitted by this Section 3.2,
each stock certificate for Warrant Shares issued upon the exercise of any
Warrant and each stock certificate issued upon the direct or indirect transfer
of any such Warrant Shares shall be stamped or otherwise imprinted with a
legend in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

 

3.3   Removal of Legends.  Notwithstanding the
foregoing, the Warrantholder may require the Company to issue a Warrant or a
stock certificate for Warrant Shares, in each case without the legend required
by Section 3.1 or 3.2, as applicable, if either (a) such Warrant
or such Warrant Shares, as the case may be, have been registered for resale
under the Securities Act or (b) the Warrantholder has delivered to the Company
an opinion of legal counsel (from a firm reasonably satisfactory to the
Company), which opinion must be addressed to the Company and be reasonably
satisfactory in form and substance to the Company’s counsel, to the effect that
such registration is not required with respect to such Warrant or such Warrant
Shares, as the case may be.

 

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4.     Registration
Rights.

 

The initial Warrantholder and certain
transferees and assignees thereof are entitled to registration rights with
respect to the Warrant Shares in accordance with the terms of that certain
Registration Rights Agreement dated April 27, 2005, by and between the Company
and the Warrantholder.

 

5.     Reservation
of Shares, Etc.

 

The
Company covenants and agrees as follows:

 

(a)  All
Warrant Shares that are issued upon the exercise of this Warrant will, upon
issuance, be validly issued, fully paid and nonassessable, not subject to any
preemptive rights, and free from all taxes, liens, security interests, charges,
and other encumbrances with respect to the issuance thereof, other than taxes
in respect of any transfer occurring contemporaneously with such issue and the
restrictions on transfer contained in this Warrant.

 

(b)  During
the period within which this Warrant may be exercised, the Company will at all
times have authorized and reserved, and keep available free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.

 

(c)  The
Company will, from time to time, take all such action as may be required to
assure that the par value per share of the Warrant Shares is at all times equal
to or less than the Exercise Price, as may be adjusted.

 

6.     Loss
or Destruction of Warrant. 
Subject to the terms and conditions hereof, upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, of
such bond or indemnification as the Company may reasonably require, and, in the
case of mutilation, upon surrender and cancellation of this Warrant, the
Company will execute and deliver a new Warrant of like tenor. 

 

7.     Ownership
of Warrant. The Company may deem and treat the Person in whose name
this Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer. 

 

8.     Antidilution
Provisions.

 

8.1   Antidilution Adjustments.  The number of
Warrant Shares purchasable upon the exercise of this Warrant and the Exercise
Price shall be subject to adjustment as follows:

 

(a)  Stock
Dividends, Subdivision, Combination or Reclassification of Common Stock.  If at any time after the date of this
Warrant, the Company (i) declares a stock dividend on the Common Stock payable
in shares of its capital stock (including Common Stock), (ii) increases the
number of shares of Common Stock outstanding by a subdivision or split-up of
shares of Common Stock, (iii) decreases the number of shares of Common Stock
outstanding by a combination of shares of Common Stock, or (iv) issues any
shares of its capital stock in a reclassification of the Common Stock, then, on
the record date for such dividend or the effective date of such subdivision or
split-up, combination, or reclassification, as the case may be, the number and
kind of shares to be delivered upon exercise of this Warrant will be adjusted
so that the Warrantholder will be entitled to receive the number and kind of
shares of capital stock that such Warrantholder would have owned or been
entitled to receive upon or by reason of such event had this Warrant been
exercised immediately prior thereto, and the Exercise Price will be adjusted as
provided in Section 8.1(f).

 

(b)  Reorganization,
Etc.  If at any time after the date
of this Warrant any consolidation of the Company with or merger of the Company
with or into any other Person (other than a merger or consolidation in which
the Company is the surviving or continuing corporation and which does not
result in any reclassification of, or change (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in outstanding shares of Common Stock)
or any sale, lease, or other transfer of all or substantially all of the assets
of the Company

 

3

 

to any other Person (each a “Reorganization
Event”), will be effected in such a way that the holders of Common Stock
shall be entitled to receive stock, other securities or assets (whether such
stock, other securities, or assets are issued or distributed by the Company or
another Person) with respect to or in exchange for Common Stock, then, with
respect to any unexercised Warrant, the Board of Directors of the Company or
any surviving or acquiring corporation or entity (the “Relevant Entity”)
must take such action as is equitable and appropriate to substitute a new
warrant for such Warrant or to assume such Warrant in order to make such new or
assumed warrant as nearly as may be practicable, equivalent to the old Warrant
(the “Reorganization Action”).

 

(c)  Extraordinary Distributions.  If at any time after the date of this Warrant
the Company shall distribute to all holders of its Common Stock (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation and the Common Stock is
not changed or exchanged) cash, evidences of indebtedness, securities or other
assets (excluding (i) ordinary course cash dividends and (ii) dividends payable
in shares of capital stock for which adjustment is made under Section 8.1(a))
or rights, options or warrants to subscribe for or purchase securities of the
Company, then the number of shares of Common Stock to be delivered to such
Warrantholder upon exercise of this Warrant will be increased so that the
Warrantholder thereafter will be entitled to receive the number of shares of
Common Stock determined by multiplying the number of shares such Warrantholder
would have been entitled to receive immediately before such record date by a
fraction, the numerator of which is the Current Market Price (as defined below)
per share of the Common Stock and the denominator of which is the Current
Market Price per share of Common Stock on such record date minus the then fair
market value (as reasonably determined by the Board of Directors of the Company
in good faith) of the portion of the cash, evidences of indebtedness,
securities or other assets so distributed or of such rights or warrants
applicable to one share of Common Stock (provided that such denominator shall
in no event be less than the par value of the Warrant Shares; and the Exercise
Price will be adjusted as provided in Section 8.1(f).

 

As used
herein, “Current Market Price” means, with respect to each share of
Common Stock as of any date, the average of the daily Closing Prices (as
defined below) per share of Common Stock for the 10 consecutive trading days
immediately prior to such date; provided that if on any such date the
shares of Common Stock are not listed or admitted for trading on any national
securities exchange or quoted by the National Association of Securities
Dealers, Inc. Automated Quotation System (“Nasdaq”) or a similar service
if Nasdaq is no longer reporting such information, the Current Market Price for
a share of Common Stock shall be the fair market value of such share as
determined in good faith by the Board of Directors of the Company or, if
requested by the Warrantholder, an independent financial expert from a
nationally recognized investment banking firm (an “Independent Financial
Expert”) selected jointly by the Board of Directors and such
Warrantholder.  If the Company and the
Warrantholder are unable to agree upon an Independent Financial Expert within
15 days after the request by the Warrantholder, each of the Company and the
Warrantholder shall select an Independent Financial Expert within five days
following the expiration of such 15-day period and these two Independent
Financial Experts must select a third Independent Financial Expert and the
determination of the fair market value of a share of Common Stock by such third
Independent Financial Expert will be final and binding on the Company and the
Warrantholder. If either the Company or the Warrantholder fails to select an
Independent Financial Expert within such five-day period, then the fair market
value of a share of Common Stock will be determined by the Independent
Financial Expert selected by the other party. The fees and expenses of any of
the Independent Financial Experts retained in accordance with the foregoing
will be borne by the Company.  “Closing
Price” of the Common Stock as of any day, means (a) the average of the
closing bid and asked prices, in either case as reported on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or (b) if the Common Stock is not listed or admitted to trading on any
national securities exchange, the average of the highest reported bid and
lowest reported asked quotation for the Common Stock, in either case reported
on Nasdaq, or a similar service if Nasdaq is no longer reporting such
information.

 

4

 

(d)  Pro
Rata Repurchases.  If at any time
after the date of this Warrant, the Company or any subsidiary thereof makes any
purchase of shares of Common Stock, whether for cash, shares of capital stock
of the Company, other securities of the Company, evidences of indebtedness of
the Company or any other Person, or any other property (including, without
limitation, shares of capital stock, other securities, or evidences of
indebtedness of a subsidiary of the Company), or any combination thereof, which
purchase is subject to Section 13(e) of the Securities Exchange Act of 1934, as
amended, or is made pursuant to an offer made available to all holders of
Common Stock (a “Pro Rata Repurchase”), then the number of shares of
Common Stock to be delivered to such Warrantholder upon exercise of this
Warrant will be increased so that the Warrantholder thereafter is entitled to
receive the number of shares of Common Stock determined by multiplying the
number of shares of Common Stock such Warrantholder would have been entitled to
receive immediately before such Pro Rata Repurchase by a fraction (which in no
event will be less than one), (i) the numerator of which will be the product of
(A) the number of shares of Common Stock outstanding immediately before such
Pro Rata Repurchase minus the number of shares of Common Stock repurchased in
such Pro Rata Repurchase, and (B) the Current Market Price of the Common Stock
as of the day immediately preceding the first public announcement by the
Company of the intent to effect such Pro Rata Repurchase, and (ii) the
denominator of which will be (A) the product of (x) the number of shares of
Common Stock outstanding immediately before such Pro Rata Repurchase, and (y)
the Current Market Price of the Common Stock as of the day immediately
preceding the first public announcement by the Company of the intent to effect
such Pro Rata Repurchase, minus (B) the aggregate purchase price of the Pro
Rata Repurchase (provided that such denominator shall never be less than the
par value of the Warrant Shares).

 

(e)  Fractional
Shares.  No fractional shares of
Common Stock or scrip will be issued to any Warrantholder in connection with
the exercise of this Warrant.  Instead of
any fractional shares of Common Stock that would otherwise be issuable to such
Warrantholder, the Company will pay to such Warrantholder a cash adjustment in
respect of such fractional interest in an amount equal to that fractional
interest of the then Current Market Price per share of Common Stock.

 

(f)  Carryover.  Notwithstanding any other provision of this Section
8.1, no adjustment shall be made to the number of shares of Common Stock to
be delivered to the Warrantholder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares to be so delivered, but any
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment that together with any adjustments
so carried forward shall amount to 1% or more of the number of shares to be so
delivered.

 

(g)  Exercise
Price Adjustment.  Whenever the
number of Warrant Shares purchasable upon the exercise of the Warrant is
adjusted as provided pursuant to this Section 8.1, the Exercise Price
per share payable upon the exercise of this Warrant will be adjusted by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction, (i) the number of which will be the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to such
adjustment, and (ii) the denominator of which will be the number of Warrant
Shares purchasable immediately thereafter; provided, however,
that the Exercise Price for each Warrant Share shall in no event be less than
the par value of such Warrant Share.

 

(h)  Multiple
Adjustments. If any action or transaction would require adjustment of the
number of shares of Common Stock to be delivered to the Warrantholder upon
exercise of this Warrant pursuant to more than one subsection of this Section
8.1, only one adjustment will be made and each such adjustment will be the
amount of adjustment that has the highest absolute value.

 

8.2   Notice of Adjustment. Whenever the number of Warrant Shares or the Exercise
Price of such Warrant Shares is adjusted, as herein provided, the Company must
promptly mail by overnight courier or by first class mail, postage prepaid, to
the Warrantholder, notice of such adjustment or adjustments setting forth the
number of Warrant Shares and the Exercise Price of such Warrant Shares after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.

 

5

 

8.3   Notices of Corporate Action.  So long as this Warrant has not been
exercised in full, in the event of

 

(a)  any action that would trigger an adjustment to the number of
shares of Common Stock to be delivered to the Warrantholder upon exercise of
this Warrant,

 

(b)  any consolidation or merger involving the Company and any
other party or any transfer of all or substantially all the assets of the
Company to any other party, or

 

(c)  any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,

 

the Company must deliver, by overnight
courier or by first class mail, postage prepaid, to the Warrantholder a notice
specifying (i) the date or expected date on which any such record is to be
taken for the purpose of a dividend, distribution or right and the amount and
character of any such dividend, distribution or right and (ii) the date or
expected date on which a reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation, or winding-up is to take place and
the time, if any such time is to be fixed, as of which the holders of record of
Common Stock (or other securities) will be entitled to exchange their shares of
Common Stock (or other securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice must be delivered at least 20 days prior to the date therein specified
in the case of any date referred to in the foregoing clauses (i) and (ii).

 

8.4   Effect of Failure to Notify.  Failure to file any certificate or notice or
to mail any notice, or any defect in any certificate or notice, pursuant to Section
8.3 will not affect the legality or validity of the adjustment to the
Exercise Price, the number of shares purchasable upon exercise of this Warrant,
or any transaction giving rise thereto.

 

9.     Amendments.  Any provision of this Warrant may be amended
and the observance thereof waived only with the written consent of the Company
and the Warrantholder.

 

10.  Expiration
of the Warrant.  The obligations
of the Company pursuant to this Warrant will terminate on the Expiration Date. 

 

11.  Miscellaneous.

 

11.1                 Entire Agreement. This Warrant constitutes the
entire agreement between the Company and the Warrantholder with respect to the
Warrants.

 

11.2                 Binding Effect; Benefits. This Warrant will inure to the
benefit of and is binding upon the Company and the Warrantholder and their
respective heirs, successors and assigns, as the case may be.  Nothing in this Warrant, expressed or
implied, is intended to or shall confer on any Person other than the Company and
the Warrantholder, or their respective heirs, successors or assigns, as the
case may be, any rights, remedies, obligations or liabilities under or by
reason of this Warrant.

 

11.3                 Section and Other Headings.  The section and other headings contained in
this Warrant are for reference purposes only and will not be deemed to be a
part of this Warrant or to affect the meaning or interpretation of this
Warrant.

 

11.4                 Notices. All notices and other
communications required or permitted hereunder must be in writing and must be
delivered personally, telecopied or sent by certified, registered, or express
mail, postage prepaid.  Any such notice
will be deemed given when so delivered personally, telecopied, or sent by
certified, registered or express mail, as follows: (a) if to the Company,
addressed to: Main Street Restaurant Group, Inc., 5050 North 40th Street, Suite 200, Phoenix, Arizona 85018, Attention: Chief
Financial Officer, Telecopy: (602) 852-9076; or (b) if to the Warrantholder,
addressed to: CIC MSRG LP, 500 Crescent Court, Suite 250, Dallas, Texas 75201,
Telecopy: (214) 880-4491.  Any party may
by notice given in accordance with this Section 11.4 designate another
address or person for receipt of notices hereunder.

 

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11.5                 Severability. Any term or provision of this
Warrant that is invalid or unenforceable in any jurisdiction will, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the terms and
provisions of this Warrant or affecting the validity or enforceability of any
of the terms or provisions of this Warrant in any other jurisdiction.

 

11.6                 Governing Law.  This Warrant is deemed to be a contract made
under the laws of the State of Delaware and for all purposes will be governed
by and construed in accordance with the laws of such State applicable to such
agreements made and to be performed entirely within such State.

 

11.7                 Certain Remedies. The Warrantholder will be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions of this
Warrant in any court of the United States or any court of any state having
jurisdiction, this being in addition to any other remedy to which the
Warrantholder may be entitled at law or in equity.

 

11.8                 No Rights or Liabilities as
Stockholder.  Nothing contained in this Warrant will be
deemed to confer upon the Warrantholder any rights as a stockholder of the
Company or as imposing any liabilities on the Warrantholder to purchase any
securities whether such liabilities are asserted by the Company or by creditors
or stockholders of the Company or otherwise.

 

11.9                 Further Assurances.  Each of the Company and the Warrantholder
must do and perform all such further acts and things and execute and deliver
all such certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Agreement.

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.

 

 

	
   

  	
  MAIN STREET
  RESTAURANT GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William
  G. Shrader

  	
   

  
	
   

  	
  Its:

  	
  President
  and CEO

  	
   

  
	
   

  	
   

  
	
  Dated: April
  27, 2005

  	
   

  

 

7

 

EXHIBIT A

EXERCISE FORM

 

(To be executed upon exercise of this Warrant)

 

The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase                                
of the Warrant Shares and herewith tenders payment for such Warrant Shares to
the order of Main Street Restaurant Group, Inc., in the amount of $               in
accordance with the terms of this Warrant. 
The undersigned requests that a certificate for such Warrant Shares be
registered in the name of the undersigned and that such
certificates be delivered to the undersigned’s address below.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street
  Address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City)
  (State) (Zip Code)EXHIBIT 4.3

 

REGISTRATION RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS AGREEMENT, dated as of April 27, 2005, is entered into
by and between MAIN STREET RESTAURANT GROUP, INC., a Delaware corporation (the “Company”), and CIC MSRG LP,
a Delaware limited partnership (the “Purchaser”). 

 

RECITALS:

 

A.            The Company desires to issue and sell
2,325,581 shares of its Common Stock (“Shares”) and warrants to purchase up to 581,395 shares of its Common Stock (“Warrant Shares”) to the Purchaser as set forth in the Securities
Purchase Agreement dated as of April 27, 2005 entered into by and between the
Company and the Purchaser (the “Securities
Purchase Agreement”);

 

B.            It is a condition precedent to the
consummation of the transactions contemplated by the Securities Purchase
Agreement that the Company provide for the rights set forth in this Agreement;
and

 

C.            Certain terms used in this Agreement are
defined in ARTICLE I hereof.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
and agreements hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound, the parties hereto hereby agree as follows:

 

ARTICLE
I

 

DEFINITIONS

 

“Affiliate” means any Person that directly or indirectly controls, or is under
control with, or is controlled by such Person. 
As used in this definition, “control” (including with its correlative
meanings, “controlled by” and “under common control with”) shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise).

 

“Business Day” means any day excluding Saturday, Sunday or any other day which is a
legal holiday under the laws of the State of Delaware or is a day on which
banking institutions therein located are authorized or required by law or other
governmental action to close.

 

“Closing Date” has the meaning ascribed to such term in the Securities Purchase
Agreement.

 

“Common Stock” means the common stock, par value $0.001 per share, of the Company.

 

“Company” has the meaning
set forth in the preamble.

 

“Designated Holder” means the Purchaser and any transferee or
transferees of Registrable Securities that have not ceased to be Registrable
Securities, provided the registration rights conferred by this Agreement have
been transferred to such transferee or transferees in compliance with this
Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Indemnified Party” has the meaning set forth in Section 2.7.

 

 

“Indemnifying Party” has the meaning set forth in Section 2.7.

 

“Losses” has the meaning set forth in Section 2.7.

 

“Majority Holders” means holders of a majority of the
Registrable Securities.

 

“Non-Registration
Event” has the
meaning set forth in Section 2.1(a).

 

“Non-Registration
Event Penalty Payment” has the meaning set forth in Section 2.1(a).

 

“Person”  means any individual, company, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental body or other entity.

 

“Piggyback
Registration” has
the meaning set forth in Section 2.2.

 

“Purchaser” has the meaning
set forth in the preamble.

 

“Registrable Securities” means, subject to the immediately following
sentence, (i) the Shares and the Warrant Shares underlying the warrants
acquired by the Purchaser from the Company pursuant to the Securities Purchase
Agreement, (ii) any shares of Common Stock issued as a Non-Registration Event
Penalty Payment, (iii) any shares of Common Stock or other securities issued or
issuable, directly or indirectly, with respect to the securities referred to in
clauses (i) or (ii) by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization, and (iv) any other security issued as a dividend or other
distribution with respect to, in exchange for or in replacement of the
securities referred to in the preceding clauses.  As to any particular shares of Common Stock
constituting Registrable Securities, such shares of Common Stock will cease to
be Registrable Securities if they (x) have been effectively registered under
the Securities Act and disposed of in accordance with a Registration Statement
covering them, (y) have been sold to the public pursuant to Rule 144 (or by similar
provision under the Securities Act), or (z) are eligible for resale under Rule
144(k) (or by similar provision under the Securities Act) without any
limitation on the amount of securities that may be sold under paragraph (e)
thereof.

 

“Registration Request” has the meaning set forth in Section
2.1(a).

 

“Registration Statement” means a registration statement (including
the prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such registration statement) on Form S-3 (or, if the Company is
not eligible to use Form S-3, such other appropriate registration form of the
SEC pursuant to which the Company is eligible to register the resale of Registrable
Securities) filed by the Company under the Securities Act that registers the
resale of any of the Registrable Securities pursuant to the provisions of this
Agreement and permits or facilitates the resale of all the Registrable
Securities in the manner (including the manner of sale) reasonably requested by
the Designated Holders, including the offer and sale of the Registrable
Securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.

 

“Representatives” has the meaning set forth in Section 2.7.

 

“Required Filing Date” has the meaning set forth in Section
2.1(a).

 

“Required Registration Statement” has the meaning set forth in Section
2.1(a).

 

“SEC” means the United States Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

 

2

 

“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Securities Purchase Agreement” has the meaning set forth in the recitals.

 

“Shares” has the meaning set forth in the recitals.

 

“Warrant Shares” has the meaning set forth in the recitals.

 

ARTICLE
II

 

REGISTRATION
RIGHTS

 

2.1  Demand
Registration.

 

(a)  Upon the written request of the Designated Holder,
requesting that the Company effect a registration of Registrable Securities
under the Securities Act, specifying the number of shares of Registrable
Securities to be registered (which may be all or any portion of at least 25% of
the Shares), and specifying the intended method of disposition thereof (a “Registration
Request”), the
Company shall use its best efforts to prepare and as promptly as possible after
the date hereof, but in any event, not later than 30 days after the
Registration Request (or, if such 30th day is not a Business Day, by the first
Business Day thereafter) (the “Required Filing Date”),
file a Registration Statement with the SEC (the “Required Registration Statement”) and cause the Required Registration Statement to be
declared effective under the Securities Act within 60 days after the
Registration Request (or, if such 60th day is not a Business Day, by the first
Business Day thereafter). 
Notwithstanding the foregoing sentence, if the Required Registration
Statement is subjected to a full review by the SEC, the Company will use its
best efforts to cause the Required Registration Statement to be declared
effective under the Securities Act within 120 days after Registration Request
(or, if such 120th day is not a Business Day, by the first Business Day
thereafter).  The Company agrees to
include in the Required Registration Statement all information regarding the
Designated Holders and the intended methods of distribution which the
Designated Holders shall reasonably request.

 

The failure
of the Company to file a Required Registration Statement prior to the Required
Filing Date, or to cause the Required Registration Statement to become
effective within the applicable 60- or 120-day period specified in the
preceding paragraph, shall be deemed to be a “Non-Registration Event.”  The Company and the Purchaser
agree that the Purchaser will suffer damages if a Non-Registration Event
occurs, and that it would not be feasible to ascertain the extent of such
damages with precision.  Accordingly, if
a Non-Registration Event should occur, then for each 30-day period after the
occurrence of such Non-Registration Event and before the Required Registration
Statement becomes effective, the Company shall pay the Purchaser, as liquidated
damages, an amount equal to 1.0% of the aggregate Purchase Price (as such tern
is defined in the Securities Purchase Agreement) paid by the Purchaser for the
Securities (as such term is defined in the Securities Purchase Agreement), with
such payment being pro-rated for any period of less than 30 days after the
occurrence of the Non-Registration Event and before the Required Registration
Statement becomes effective.  Each such
payment is hereinafter referred to as a “Non-Registration
Event Penalty Payment.”  The Non-Registration Event Penalty Payment shall be due and payable on
the day immediately following the last day of the applicable 30-day period or
portion thereof.  Notwithstanding
the foregoing, in no event shall the Company be obligated to pay more than one
Non-Registration Event Penalty Payment to the Purchaser in respect of a
substantively concurrent failure to perform; i.e., if a Non-Registration Event
Penalty Payment is accruing due to failure to file a Required Registration
Statement prior to the Required Filing Date, a separate Non-Registration Event
Penalty Payment shall not be due for a contemporaneous failure to cause the
Registration

 

3

 

Statement to become effective in
accordance with the periods specified in the preceding paragraph.  The Company, at its sole discretion, may pay
the Non-Registration Event Penalty Payment in cash or in shares of Common
Stock.  If the Company elects to pay the
Non-Registration Event Penalty Payment to the Purchaser in shares of Common
Stock, it shall deliver a number of unregistered, legended shares of its Common
Stock equal to, (i) 1.0% of the aggregate Purchase Price, divided by (ii) the
lower (x) $2.15, or (y) the closing price of the Common Stock on the trading
day immediately preceding the date the Non-Registration Event Penalty Payment
is due. 

 

(b)  Upon receipt of the Registration Request, the Company will
promptly give written notice of such Registration Request to all Designated
Holders, and thereupon the Company will use its best efforts to effect as
expeditiously as possible the registration under the Securities Act of the
following:  

 

(i)            the Registrable
Securities specified for registration in the Registration Request in accordance
with the intended method of disposition stated in such request; 

 

(ii)           any Registrable Securities
that other holders of which have requested in writing to have registered, if
such request is made within 30 days after the giving of such written notice by
the Company to the Designated Holders (which request shall specify the intended
method of disposition of such Registrable Securities); and

 

(iii)          all
shares of Common Stock that the Company or Persons entitled to exercise “piggy-back”
registration rights pursuant to contractual commitments of the Company may
elect to register in connection with the offering of Registrable Securities
pursuant to this Section 2.1; 

 

all to the extent
required to permit the disposition (in accordance with the intended method of
disposition specified in the Registration Request) of the Registrable
Securities and the additional shares of Common Stock, if any, that are the
subject of such registration, as provided above; provided, that, the provisions
of this Section 2.1 shall not require the Company to effect more than
two registrations of Registrable Securities. 
The Purchaser shall automatically be deemed to have made the first
permitted Registration Request on the Closing Date of the Securities Purchase
Agreement.

 

(c)  The
registrations under this Section 2.1 shall be on an appropriate
Registration Statement that permits the disposition of such Registrable
Securities in accordance with the intended methods of distribution specified in
the Registration Request.  The Company
agrees to include in any Required Registration Statement all information
regarding the Designated Holders and the intended methods of distribution which
Designated Holders of Registrable Securities being registered shall reasonably
request.

 

(d)  A registration requested pursuant to this Section 2.1
shall not be deemed to have been effected (i) unless a Registration Statement
with respect thereto has become effective; provided, however, that a
Registration Statement that does not become effective after the Company has
filed a Registration Statement with respect thereto solely by reason of the
Majority Holders’ refusal to proceed with the registration (other than a
refusal to proceed based upon the advice of counsel relating to a matter with
respect to the Company) shall be deemed to have been effected by the Company at
the request of the Majority Holders unless the Designated Holders electing to
have Registrable Securities registered pursuant to such Registration Statement
shall have elected to pay all fees and expenses otherwise payable by the
Company in connection with such registration pursuant to Section 2.6,
(ii) if, after it has become effective, such registration is withdrawn by the
Company (other than at the request of the Majority Holders) or interfered with
by any stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason prior to the expiration of the
period specified in Section 2.1(g) below, or (iii) if the conditions to
closing

 

4

 

specified in any purchase agreement or
underwriting agreement entered into in connection with such registration are
not satisfied, other than due solely to some act or omission by the Designated
Holders electing to have Registrable Securities registered pursuant to such
Registration Statement.

 

(e)  If a
requested registration pursuant to this Section 2.1 involves an
underwritten offering, the underwriter or underwriters thereof shall be
selected by the holders of a majority (by number of shares) of the Registrable
Securities requested to be included in such Registration Statement and shall be
reasonably acceptable to the Company.  If
counsel for the Designated Holders selling Registrable Securities provides an
opinion to such underwriters, then the Designated Holders will provide a copy
of such opinion to the Company.

 

(f)  If a requested registration pursuant to this Section 2.1
involves an underwritten offering, and if the managing underwriter advises the
Company in writing (with a copy to each Designated Holder of Registrable
Securities requesting registration) that, in its opinion, the number of
securities requested to be included in such registration (including securities
of the Company and other securities that are subject to “piggy-back”
registration rights and that are not Registrable Securities) exceeds the number
that can be sold in such offering within a price range reasonably acceptable to
the Company and to the holders of a majority (by number of shares) of the
Registrable Securities requested to be included in such Registration Statement,
the Company will include in such registration, to the extent of the number that
the Company is so advised can be sold in such offering, (i) first, the
Registrable Securities that have been requested to be included in such
registration by the Designated Holders pursuant to this Agreement (pro rata
based on the amount of Registrable Securities sought to be registered by each
such Designated Holder), (ii) second, provided that no securities sought to be
included by the Designated Holders have been excluded from such registration,
the securities of other persons entitled to exercise “piggy-back” registration
rights pursuant to contractual commitments of the Company (pro rata based on
the amount of securities sought to be registered by such persons) and (iii)
third, securities the Company proposes to register.

 

(g)  The Company shall use its best efforts to keep any
Registration Statement filed pursuant to this Section 2.1 continuously
effective (i) for a period of two years after the Registration Statement first
becomes effective, plus the number of days during which such Registration
Statement was not effective or usable pursuant to Section 2.3(b), 2.4(e),
or 2.4(i); (ii) if such Registration Statement is related to an
underwritten offering, for such period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in connection with
sales of Registrable Securities by an underwriter or dealer, or (iii) for such
shorter period as will terminate when all of the Registrable Securities covered
by such Registration Statement have been disposed of in accordance with such
Registration Statement or have otherwise ceased to be Registrable Securities.  In the event the Company shall give any
notice pursuant to Section 2.4(e) or 2.4(i), the additional time
period mentioned in Section 2.1(g)(i) during which the Registration
Statement filed pursuant to this Section 2.1 is to remain effective
shall be extended by the number of days during the period from and including
the date of the giving of such notice pursuant to Section 2.4(e) or 2.4(i)
to and including the date when each seller of a Registrable Security covered by
such Registration Statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 2.4(e) or, if no
supplemental or amended prospectus is required, the date each seller of a
Registrable Security covered by such Registration Statement has been notified
that the stop order or other order suspending the effectiveness of such
Registration Statement in any jurisdiction has been withdrawn.

 

2.2  Piggyback
Registration

 

(a)  Whenever the Company proposes to register any of its
securities under the Securities Act (other than pursuant to a registration
pursuant to Section 2.1 or a registration on Form S-4 or S-8 or any
successor or similar forms) and the registration form to be used may be used
for the registration

 

5

 

of Registrable Securities, whether or
not for sale for its own account, the Company will give prompt written notice
(but in no event less than 25 days before the anticipated date of the filing
the Registration Statement with respect to such registration) to all Designated
Holders, and such notice shall describe the proposed registration and
distribution and offer to all Designate Holders the opportunity to register the
number of Registrable Securities as each such Designated Holder may request.  The Company will include in such Registration
Statement all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days after the
Designated Holders’ receipt of the Company’s notice (a “Piggyback Registration”).

 

(b)  The Company
shall use its best efforts to cause the managing underwriter or underwriters of
a proposed underwritten offering to permit the Registrable Securities requested
to be included in a Piggyback Registration to be included on the same terms and
conditions as any similar securities of the Company or any other security
holder included therein and to permit the sale or other disposition of such
Registrable Securities in accordance with the intended method of distribution
thereof.

 

(c)  Any Designated Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any Registration
Statement pursuant to this Section 2.2 by giving written notice to the
Company of its request to withdraw; provided, that in the event of such
withdrawal (other than pursuant to Section 2.2(e) hereof), the Company
shall not be required to reimburse such holder for the fees and expenses
referred to in Section 2.6 hereof incurred by such Designated Holder
prior to such withdrawal, unless such withdrawal was due to a material adverse
change to the Company or, based upon the advice of counsel, otherwise relating
to a matter with respect to the Company. 
The Company may withdraw a Piggyback Registration at any time prior to
the time it becomes effective.

 

(d)  If (i) a
Piggyback Registration involves an underwritten offering of the securities
being registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment basis) by or through one or more underwriters
of recognized standing under underwriting terms appropriate for such a
transaction, and (ii) the managing underwriter of such underwritten offering
shall in writing inform the Company and Designated Holders requesting such
registration of its belief that the distribution of all or a specified number
of such Registrable Securities concurrently with the securities being
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such writing to state
the basis of such belief and the approximate number of such Registrable
Securities which may be distributed without such effect), then the Company will
be required to include in such registration only the amount of securities which
it is so advised should be included in such registration.  In such event: (x) in cases initially
involving the registration for sale of securities for the Company’s own
account, securities shall be registered in such offering in the following order
of priority: (i) first, the securities which the Company proposes to register,
(ii) second, Registrable Securities and securities which have been requested to
be included in such registration by Persons entitled to exercise “piggy-back”
registration rights pursuant to contractual commitments of the Company (pro
rata based on the amount of securities sought to be registered by Designated
Holders and such other Persons); and (y) in cases not initially involving the
registration for sale of securities for the Company’s own account, securities
shall be registered in such offering in the following order of priority: (i)
first, the securities of any Person whose exercise of a “demand” registration
right pursuant to a contractual commitment of the Company is the basis for the
registration, (ii) second, Registrable Securities and securities that have
been requested to be included in such registration by Persons entitled to
exercise “piggy-back” registration rights pursuant to contractual commitments
of the Company (pro rata based on the amount of securities sought to be
registered by Designated Holders and such other Persons), (iii) third, the
securities which the Company proposes to register.

 

6

 

(e)  If, as a
result of the proration provisions of this Section 2.2, any Designated
Holders shall not be entitled to include in a Piggyback Registration all the
Registrable Securities that such Designated Holders has requested to be
included, such holder may elect to withdraw his request to include Registrable
Securities in such registration.

 

2.3  Holdback
Agreements.

 

(a)  To the extent
not inconsistent with applicable law, in connection with a public offering of
securities of the Company, upon the request of the Company or the underwriter,
in the case of an underwritten public offering of the Company’s securities,
each Designated Holder who beneficially owns (as defined in Rule 13d-3 under
the Exchange Act) at least 5% of the outstanding capital stock of the Company
will not effect any public sale or distribution (other than those included in
the registration statement being filed with respect to such public offering) of
any securities of the Company, or any securities, options or rights convertible
into or exchangeable or exercisable for such securities during the 14 days
prior to and the 90-day period beginning on such effective date, unless (in the
case of an underwritten public offering) the managing underwriters otherwise
agree to a shorter period of time. 
Notwithstanding the foregoing, no Designated Holder shall be required to
enter into any such “lock up” agreement unless and until all of the Company’s
executive officers and directors execute substantially similar “lock up”
agreements and the Company uses commercially reasonable efforts to cause each
holder of more than 5% of its outstanding capital stock to execute
substantially similar “lock up” agreements. 
Neither the Company nor the underwriter shall amend, terminate or waive
a “lock up” agreement unless each “lock up” agreement with a Designated Holder
is also amended or waived in a similar manner or terminated, as the case may
be.

 

(b)  The Company shall have the right at any time, to delay the
filing of a Registration Statement or to require that the Designated Holders of
Registrable Securities to suspend further open market offers and sales of
Registrable Securities pursuant to a Registration Statement filed hereunder (i)
for a period not to exceed an aggregate of 60 days in any 12-month period for
valid business reasons (not including avoidance of their obligations hereunder)
to avoid legally required premature public disclosure of a pending material
corporate transaction, including pending acquisitions or divestitures of
assets, mergers and combinations and similar events; and (ii) upon the
occurrence of any of the events specified in Section 2.4(e) or 2.4(i).  The Company will give the Designated Holders
notice of any such suspension and will use its best efforts to minimize the
length of such suspension.

 

2.4  Registration
Procedures.  The Company will use its
best efforts to effect the registration of Registrable Securities pursuant to
this Agreement in accordance with the intended methods of disposition thereof,
and pursuant thereto the Company will as expeditiously as possible:

 

(a)  within a
reasonable period of time, and not less than three days, before filing a
Registration Statement, or any amendment or supplement, the Company will
furnish to the counsel selected by the holders of a majority of such
Registrable Securities a copy of such Registration Statement, and will provided
such counsel with all correspondence with the SEC regarding the Registration
Statement and notice of the effectiveness of the Registration Statement;

 

(b)  prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to comply with the Securities Act or
otherwise keep such Registration Statement effective for the period provided
for in Section 2.1, or the periods contemplated by the Company or
the Persons requesting any Registration Statement filed pursuant to Section
2.2;

 

7

 

(c)  furnish to
each seller of Registrable Securities such number of copies of such
Registration Statement, each amendment and supplement thereto, the prospectus
included in the Registration Statement (including each preliminary prospectus),
any documents incorporated by reference therein and such other documents as
such seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;

 

(d)  use its best efforts to register or qualify such Registrable
Securities under such state securities or blue sky laws as any seller of Registrable
Securities reasonably requests and do any and all other acts and things that
may be reasonably necessary or advisable to enable such seller to consummate
the disposition in such jurisdictions of the Registrable Securities owned by
such seller and to keep each such registration or qualification (or exemption
therefrom) effective during the period that the Registration Statement is
required to be kept effective; provided, however, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph, (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent to
general service of process in any such jurisdiction);

 

(e)  notify each seller
of such Registrable Securities, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, the Company will as soon as
possible prepare and furnish to each seller the number of copies reasonably
requested by such seller of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading in
the light of the circumstances under which they were made;

 

(f)  cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be approved for trading on any automated
quotation system of a national securities association on which similar
securities of the Company are quoted;

 

(g)  provide a
transfer agent and registrar for all such Registrable Securities not later than
the effective date of such Registration Statement;

 

(h)  enter into such customary agreements (including underwriting
agreements containing customary representations and warranties by the Company
and customary indemnification and contribution provisions to and from the
underwriters) and take all other customary and appropriate actions as the
holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;

 

(i)  notify each
Designated Holder of any stop order issued or threatened by the SEC or any
order suspending or preventing the use of any related prospectus or suspending
the qualification of any securities included in such Registration Statement for
sale in any jurisdiction;

 

(j)  otherwise comply with all applicable rules and regulations
of the SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months beginning with the first day of the Company’s first full calendar
quarter after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder;

 

8

 

(k)  in the event
of the issuance of any stop order suspending the effectiveness of a
Registration Statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any securities included
in such Registration Statement for sale in any jurisdiction, the Company will
use its best efforts to promptly obtain the withdrawal of such order;

 

(l)  if requested by a Designated Holder, use its best efforts to
obtain one or more comfort letters, dated the effective date of the
Registration Statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement),
signed by the Company’s independent public accountants in customary form and
covering such matter of the type customarily covered by comfort letters as the
holders of a majority of the Registrable Securities being sold or any underwriters
selected by such holders reasonably request;

 

(m)  provide a
legal opinion of the Company’s outside counsel, dated the effective date of
such Registration Statement (and, if such registration includes an underwritten
offering, dated the date of the closing under the underwriting agreement), with
respect to the Registration Statement, each amendment and supplement thereto,
the prospectus included therein (including the preliminary prospectus) and such
other documents relating thereto in customary form and covering such matters of
the type customarily covered by legal opinions of such nature;

 

(n)  subject to execution and delivery of mutually satisfactory
confidentiality agreements, make available at reasonable times for inspection
by any seller of Registrable Securities, any managing underwriter participating
in any disposition of such Registrable Securities pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such seller
or any managing underwriter, during normal business hours of the Company at the
Company’s corporate office in Phoenix, Arizona and without unreasonable
disruption of the Company’s business or unreasonable expense to Company and for
the purpose of due diligence with respect to the Registration Statement,
legally disclosable, financial and other records and pertinent corporate
documents of the Company and its subsidiaries reasonable requested by such
persons, and cause the Company’s officers, directors, employees and independent
accountants to supply all similar information reasonably requested by any such
seller, managing underwriter, attorney, accountant or agent in connection with
the Registration Statement, as shall be reasonably necessary to enable them to
exercise their due diligence responsibility;

 

(o)  if the
Designated Holders become entitled, pursuant to an event described in clauses
(ii), (iii) or (iv) of the definition of Registrable Securities, to receive any
securities in respect of Registrable Securities that were already included in a
Registration Statement, subsequent to the date such Registration Statement is
declared effective, and the Company is unable under the securities laws to add
such Registrable Securities to the then effective Registration Statement, the
Company shall promptly file, in accordance with the procedures set forth
herein, an additional Registration Statement with respect to such newly issued
Registrable Securities and will use its best efforts to (i) cause any such
additional Registration Statement, when filed, to become effective within 60
days of the date that the need to file the Registration Statement arose, and
(ii) keep such additional Registration Statement effective during for the
period described in Section 2.1(g);

 

(p)  if requested by a Designated Holder, the Company shall (i)
as soon as practicable incorporate in a prospectus supplement or post-effective
amendment such information as a Designated Holder reasonably requests to be
included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to
be sold in such offering; (ii) as soon as practicable make all required filings
of such prospectus supplement or post-effective amendment after being notified
of the matters to be incorporated in such prospectus supplement or
post-effective

 

9

 

amendment; and (iii) as soon as
practicable, supplement or make amendments to any Registration Statement if
reasonably requested by a Designated Holder selling any Registrable Securities
pursuant to such Registration Statement;

 

(q)  cooperate
with each seller of Registrable Securities and each underwriter participating
in the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers; and

 

(r)  take all other steps reasonably necessary to effect the
registration of the. Registrable Securities contemplated hereby.

 

2.5  Conditions
Precedent to Company’s Obligations Pursuant to this Agreement.  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
each of the Designated Holders whose Registrable Securities are to be
registered pursuant to this Agreement shall furnish such Designated Holder’s
written agreement to be bound by the terms and conditions of this Agreement
prior to performance by the Company of its obligations under this
Agreement.  By executing and delivering
this Agreement, each Designated Holder represents and warrants that the
information concerning, and representations and warranties by, such Designated
Holder, including information concerning the securities of the Company held,
beneficially or of record, by such Designated Holder, furnished to the Company
pursuant to the Securities Purchase Agreement or otherwise, are true and
correct as if the same were represented and warranted on the date any
Registration Statement required pursuant to this Agreement is filed with the
SEC or the date of filing with the SEC of any amendment thereto, and each
Designated Holder covenants to immediately notify the Company in writing of any
change in any such information, representation or warranty and to refrain from
offering or disposing of any securities pursuant to any Registration Statement
until the Company has reflected such change in such Registration
Statement.  By executing and delivering
this Agreement, each Designated Holder further agrees to furnish any additional
information as the Company may reasonably request in connection with any action
to be taken by the Company pursuant to this Agreement, and to pay such
Designated Holder’s expenses which are not required to be paid by the Company
pursuant to this Agreement.

 

2.6  Fees and Expenses.  All expenses incident to the Company’s
performance of or compliance with this Agreement including, without limitation,
all registration and filing fees payable by the Company, fees and expenses of
compliance by the Company with securities or blue sky laws, printing expenses
of the Company, messenger and delivery expenses of the Company, the reasonable
fees and expenses of a single counsel retained by the Designated Holders of a
majority (by number of shares) of the Registrable Securities requested to be
included in such Registration Statement and fees and disbursements of counsel
for the Company and all independent certified public accountants of the
Company, and other Persons retained by the Company will be borne by the
Company, and the Company will pay its internal expenses (including, without
limitation, all salaries and expenses of the Company’s employees performing
legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance of the Company and the expenses
and fees for listing or approval for trading of the securities to be registered
on each securities exchange on which similar securities issued by the Company
are then listed or on any automated quotation system of a national securities
association on which similar securities of the Company are quoted.  The Company shall have no obligation to pay
any underwriting discounts or commissions attributable to the sale of
Registrable Securities or any of the expenses incurred by any Designated Holder
that are not payable by the Company, such costs to be borne by such Designated
Holder or Holders, including, without limitation, underwriting fees, discounts
and expenses, if any, applicable to any Designated Holder’s Registrable
Securities; fees and disbursements of counsel or other professionals that any
Designated Holder may choose to retain in connection with the Registration
Statement filed pursuant to this Agreement (except as otherwise provided above
or in the Securities Purchase Agreement); selling commissions or stock transfer
taxes applicable to the Registrable Securities registered on behalf of any
Designated Holder; any other expenses incurred by or on behalf of such

 

10

 

Designated Holder in connection with the offer and sale of such
Designated Holder’s Registrable Securities other than expenses that the Company
is expressly obligated to pay pursuant to this Agreement.

 

2.7  Indemnification. 

 

(a)  The Company
agrees to indemnify and hold harmless, to the fullest extent permitted by law,
each Designated Holder and its general or limited partners, officers,
directors, members, managers, employees, advisors, representatives, agents and
Affiliates (collectively, the “Representatives”)
from and against any loss, claim, damage, liability, attorney’s fees, cost or
expense and costs and expenses of investigating and defending any such claim
(collectively, the “Losses”),
joint or several, and any action in respect thereof to which such Designated
Holder or its Representatives may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced
or threatened, in respect thereto) arise out of or are based upon (i) any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, prospectus or preliminary or summary prospectus or any
amendment or supplement thereto or (ii) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Company shall advance to
and reimburse each such Designated Holder and its Representatives for any legal
or any other expenses incurred by them in connection with investigating or
defending or preparing to defend against any such Loss, action or proceeding;
provided, however, that the Company shall not be liable to any such Designated
Holder or other indemnitee in any such case to the extent that any such Loss
(or action or proceeding, whether commenced or threatened, in respect thereof)
arises out of or is based upon (x) an untrue statement or alleged untrue
statement or omission or alleged omission, made in such Registration Statement,
any such prospectus or preliminary or summary prospectus or any amendment or
supplement thereto, in reliance upon, and in conformity with, written
information prepared and furnished to the Company by such Designated Holder or
its Representatives expressly for use therein and, with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus relating to the Registration Statement, to the extent a
prospectus relating to the Registrable Securities was required to be delivered
by such Designated Holder under the Securities Act in connection with such
purchase, there was not sent or given to such person, at or prior to the
written confirmation of the sale of such Registrable Securities to such person,
a copy of the final prospectus that corrects such untrue statement or alleged
untrue statement or omission or alleged omission, if the Company had previously
furnished copies thereof to such Designated Holder, or (y) such Designated
Holder’s use of a Registration Statement or the related prospectus during a
period when a stop order has been issued in respect of such Registration
Statement or any proceedings for that purpose have been initiated or use of a
prospectus when use of such prospectus has been suspended pursuant to Section
2.3(b), 2.4(e) or 2.4(i); provided that in each case, that
such Designated Holder received prior written notice of such stop order,
initiation of proceedings or suspension from the Company.  In no event, however, shall the Company be
liable for indirect, incidental or consequential or special damages of any
kind.  In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders.

 

(b)  In connection with the filing of the Registration Statement
by the Company pursuant to this Agreement, the Designated Holders will furnish
to the Company in writing such information as the Company reasonably requests
for use in connection with such Registration Statement and the related
prospectus and, to the fullest extent permitted by law, each such Designated
Holder will indemnify and hold harmless the Company and its Representatives
from and against any Losses, severally but not jointly, and any action in
respect thereof to which the Company and its Representatives may become subject
under the Securities Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based

 

11

 

upon (i) the purchase or sale of
Registrable Securities during a suspension as set forth in Section 2.3(b),
2.4(e) or 2.4(i) in each case after such Designated Holder’s
receipt of written notice of such suspension, (ii) any untrue or alleged untrue
statement of a material fact contained in the Registration Statement,
prospectus or preliminary or summary prospectus or any amendment or supplement
thereto, or (iii) any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but, with respect to clauses (ii) and (iii) above, only to the
extent such untrue statement or omission is made in such Registration
Statement, any such prospectus or preliminary or summary prospectus or any
amendment or supplement thereto in connection with a sale of Registrable
Securities and as required under the Securities Act, in reliance upon and in
conformity with written information prepared and furnished to the Company by
such Designated Holder expressly for use therein or by failure of such
Designated Holder to deliver a copy of the Registration Statement or prospectus
or any amendments or supplements thereto, and such Designated Holder will
reimburse the Company and each Representative for any legal or any other
expenses incurred by them in connection with investigating or defending or
preparing to defend against any such Loss, action or proceeding; provided,
however, that such Designated Holder shall not be liable in any such case if,
prior to the filing of any such Registration Statement or prospectus or
amendment or supplement thereto, such Designated Holder has furnished in
writing to the Company information expressly for use in such Registration Statement
or prospectus or any amendment or supplement thereto that corrected or made not
misleading information previously furnished to the Company.  The obligation of each Designated Holder to
indemnify the Company and its Representatives shall be limited to the net
proceeds received by such Designated Holder from the sale of Registrable
Securities under such Registration Statement. 
In no event, however, shall any Designated Holder be liable for
indirect, incidental or consequential or special damages of any kind.

 

(c)  Promptly
after receipt by any Person in respect of which indemnity may be sought
pursuant to Section 2.7(a) or 2.7(b) (an “Indemnified Party”)
of notice of any claim or the commencement of any action, the Indemnified Party
shall, if a claim in respect thereof is to be made against the Person against
whom such indemnity may be sought (an “Indemnifying Party”), promptly notify the
Indemnifying Party in writing of the claim or the commencement of such action;
provided, that the failure to notify the Indemnifying Party shall not relieve
the Indemnifying Party from any liability that it may have to an Indemnified
Party under Section 2.7(a) or 2.7(b) except to the extent of any
actual prejudice resulting therefrom.  If
any such claim or action shall be brought against an Indemnified Party, and it
shall notify the Indemnifying Party thereof, the Indemnifying Party shall be
entitled to participate therein, and, to the extent it wishes, jointly with any
other similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, and provided, and for so long as, the
Indemnifying Party diligently pursues the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal
or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation;
provided, that the Indemnified Party shall have the right to employ separate
counsel to represent the Indemnified Party and its Representatives who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the Indemnified Party against the Indemnifying Party, but the fees
and expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) in the written opinion
of counsel to such Indemnified Party, representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest between them, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such claim or action or separate
but substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties.  No Indemnifying

 

12

 

Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any claim or pending
or threatened proceeding in respect of which the Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such claim or
proceeding other than the payment of monetary damages by the Indemnifying Party
on behalf of the Indemnified Party.

 

(d)  If the indemnification provided for in this Section 2.7
is unavailable to the Indemnified Parties in respect of any Losses referred to
herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Designated Holders on the
other in connection with the statements or omissions which resulted in such
Losses, as well as any other relevant equitable considerations.  The relative fault of the Company on the one
hand and of each Designated Holder on the other shall be determined by
reference to, among other things, whether any action taken, including any
untrue or alleged untrue statement of a material fact, or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

 

The Company
and the Designated Holders agree that it would not be just and equitable if
contribution pursuant to this Section 2.7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph.  The amount paid or payable by
an Indemnified Party as a result of the Losses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim.  Notwithstanding the provisions
of this Section 2.7, no Designated Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of such Designated Holder were offered to the public
exceeds the amount of any Losses that such Designated Holder has otherwise paid
by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.  Each
Designated Holder’s obligations to contribute pursuant to this Section 2.7
is several in the proportion that the proceeds of the offering received by such
Designated Holder bears to the total proceeds of the offering.  The indemnification provided by this Section
2.7 shall be a continuing right to indemnification with respect to sales of
Registrable Securities and shall survive the registration and sale of any
Registrable Securities by any Designated Holder and the expiration or
termination of this Agreement.  The
indemnity and contribution agreements contained herein are in addition to any
other liability that any Indemnifying Party might have to any Indemnified
Party.

 

2.8  Participation in Registrations.

 

(a)  No Person may
participate in any registration hereunder that is underwritten unless such
Person (i) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Agreement.

 

(b)  Each Person that is participating in any registration under
this Agreement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in

 

13

 

Section 2.4(e) or 2.4(i) above, such Person will forthwith
discontinue the disposition of its Registrable Securities pursuant to the
Registration Statement and all use of the Registration Statement or any prospectus
or related document until such Person’s receipt of the copies of a supplemented
or amended prospectus as contemplated by such Section 2.4(e) and, if so
directed by the Company, will deliver to the Company (at the Company’s expense)
all copies thereof, other than permanent file copies, then in such Designated
Holder’s possession of such documents at the time of receipt of such
notice.  Furthermore, each Designated
Holder agrees that if such Designated Holder uses a prospectus in connection
with the offering and sale of any of the Registrable Securities, the Designated
Holder will use only the latest version of such prospectus provided by Company.

 

ARTICLE III

 

TRANSFERS
OF CERTAIN RIGHTS

 

3.1  Transfer.  The rights granted to the Purchaser by the
Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to the
Purchaser’s Affiliates and to the partners of CIC Partners LP, to the extent
Registrable Securities are transferred or assigned to such Affiliates or
distributed to such partners, and all other rights granted to the Purchaser by
the Company hereunder may be transferred or assigned to any such transferee or
assignee of Registrable Securities; provided, in each case, that the Purchaser
must give written notice of any such transfer or assignment to the Company at
the time of, or within a reasonable time after, any such transfer or
assignment, stating the name and address of the transferee(s) or assignee(s)
and identifying the Registrable Securities with respect to which such
registration rights are being transferred or assigned.

 

3.2  Transferees.  Any permitted transferee or assignee to whom
rights under this Agreement are transferred or assigned shall, as a condition
to such transfer or assignment, deliver to the Company a written instrument by
which such transferee or assignee agrees to be bound by the obligations imposed
upon the Purchaser under this Agreement to the same extent as if such
transferee or assignee were the Purchaser hereunder.

 

3.3  Subsequent Transferees or Assignees.  A transferee or assignees to whom rights are
transferred or assigned pursuant to this ARTICLE III may not again
transfer or assign such rights to any other person or entity, other than as
provided in Section 3.1 or 3.2 above.

 

ARTICLE IV

 

MISCELLANEOUS

 

4.1  Current
Public Information.  The Company
covenants that it will use its best efforts to timely file all reports required
to be filed by it under the Exchange Act and the rules and regulations adopted
by the SEC thereunder, and will use its best efforts to take such further
action as the Purchaser may reasonably request, all to the extent required to
enable the holders of Registrable Securities to sell Registrable Securities
pursuant to Rule 144 or Rule 144A adopted by the SEC under the Securities Act
or any similar rule or regulation hereafter adopted by the SEC.  The Company shall, upon the request of a
Designated Holder, deliver to such Designated Holder a written statement as to
whether it has complied with such requirements during the 12- month period
immediately preceding the date of such request.

 

4.2  Recapitalizations, Exchanges, etc.  The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to (i) the Registrable Securities, (ii) any and all shares of
Common Stock into which the Registrable Securities are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) that may be issued in respect of, in conversion of, in exchange for
or in substitution of, the Registrable Securities and shall be

 

14

 

appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.
The Company shall cause any successor or assign (whether by merger,
consolidation, sale of assets or otherwise) to enter into a new registration
rights agreement with the Designated Holders on terms substantially the same as
this Agreement as a condition of any such transaction.

 

4.3  No Inconsistent Agreements.  The Company has not and shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Purchaser in this Agreement.  The Parties acknowledge and agree that the
Company has granted registration rights heretofore and may grant registration
rights hereafter, which are or shall be pari passu with the registration rights
of the Purchaser, and shall not be deemed to conflict with this covenant.

 

4.4  Amendments
and Waivers.  The provisions of this
Agreement may be amended and the Company may take action herein prohibited, or
omit to perform any act herein required to be performed by it, if, but only if,
the Company has obtained the written consent of the Majority Holders.

 

4.5  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid wider applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

 

4.6  Counterparts.  This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

4.7  Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy,
telex or similar writing) and shall be deemed given or made as of the date
delivered, if delivered personally or by telecopy (provided that delivery by
telecopy shall be followed by delivery of an additional copy personally, by
mail or overnight courier), one day after being delivered by overnight courier
or four business days after being mailed by registered or certified mail
(postage prepaid for the most expeditious form of delivery, return receipt
requested), to the parties at the following addresses (or to such other address
or telex or telecopy number as a party may have specified by notice given to
the other party pursuant to this provision):

 

If to the Company, to:

 

Main Street Restaurant Group, Inc.

5050 North 40th Street, Suite 200,

Phoenix, Arizona

Attention: 
Chief Financial Officer

Telephone: 
(602) 852-9000

Facsimile: 
(602) 852-9076

 

With copy to:

 

Greenberg Traurig

2375 East Camelback

Phoenix, Arizona 85016

Attention: 
Robert Kant

Telephone: 
(602) 445-8302

Facsimile: 
(602) 445-8100

If to a Purchaser, to:

 

15

 

CIC MSRG LP

500
Crescent Court, Suite 250

Dallas,
TX 75201

Attention: 
Fouad Bashour

Telephone:  (214) 880-4489

Facsimile:  (214)
880-4491

 

With copy to:

 

Haynes
and Boone, LLP

1221 McKinney, Suite 2100

Houston, Texas 
77010

Attention: 
Edward Rhyne

Telephone: (713) 547-2226

Facsimile: (713) 236-5504

 

4.8  Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflicts of laws rules or provisions.

 

4.9  Captions.  The captions, headings and arrangements used
in this Agreement are for convenience only and do not in any way limit or
amplify the terms and provisions hereof.

 

4.10  No
Prejudice.  The terms of this
Agreement shall not be construed in favor of or against any party on account of
its participation in the preparation hereof.

 

4.11  Words in Singular and Plural Form.  Words used in the singular form in this
Agreement shall be deemed to import the plural, and vice versa, as the sense
may require.

 

4.12  Remedy
for Breach.  The Company hereby
acknowledges that in the event of any breach or threatened breach by the
Company of any of the provisions of this Agreement, the Designated Holders
would have no adequate remedy at law and could suffer substantial and
irreparable damage.  Accordingly, the
Company hereby agrees that, in such event, the Designated Holders shall be
entitled, and notwithstanding any election by any Designated Holder to claim
damages, to obtain a temporary and/or permanent injunction to restrain any such
breach or threatened breach or to obtain specific performance of any such
provisions, all without prejudice to any and all other remedies which any
Designated Holders may have at law or in equity.

 

4.13  Successors and Assigns, Third Party
Beneficiaries.  This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto, each assignee of the Designated Holders permitted pursuant
to ARTICLE III and their respective permitted successors and assigns and
executors, administrators and heirs. 
Designated Holders are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Designated Holders.

 

4.14  Entire
Agreement.  This Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter hereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.

 

4.15  Attorneys’
Fees.  In the event of any action or
suit based upon or arising out of any actual or alleged breach by any party of
any representation, warranty, covenant or agreement in this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys’ fees
and expenses of such action or suit from the other party in addition to any
other relief ordered by any court.

 

16

 

IN WITNESS WHEREOF, the
parties hereto have caused this Registration Rights Agreement to be duly executed
as of the date and year first written above.

 

	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  MAIN STREET RESTAURANT GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William G.
  Shrader

  	
   

  
	
   

  	
  Title:

  	
  President and
  CEO

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  CIC MSRG LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marshall B.
  Payne

  	
   

  
	
   

  	
  Title:

  	
  President of CIC
  Partners GP LLC,

  	
   

  
	
   

  	
   

  	
  General Partner
  of CIC MSRG LP

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