Noodles & Company
NOODLES & Co (Form: 8-K, Received: 02/09/2017 16:12:59)

 
 
 
 
 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 7, 2017

NOODLES & COMPANY

(Exact name of registrant as specified in its charter)



 
 
 
 
 
 
 
Delaware
001-35987
84-1303469
(State or Other Jurisdiction of
(Commission File Number)
(I.R.S. Employer
Incorporation)
 
Identification No.)
 
 
 
 
 
520 Zang Street, Suite D, Broomfield, CO
80021
 
 
(Address of Principal Executive Offices)
(Zip Code)
 
 
 
 
 

Registrant’s Telephone Number, Including Area Code: (720) 214-1900

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
      ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
      ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
      ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
      ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 
 
 





EXPLANATORY NOTE
In a special meeting held on February 7, 2017, the board of directors (the “Board”) of Noodles & Company, a Delaware corporation (“we” or “us”), authorized and approved, upon the recommendation of a special committee composed of independent, disinterested members of the Board, advised by Morris, Nichols, Arsht & Tunnell LLP, as independent legal advisor, and Jefferies LLC, as independent financial advisor (the “Special Committee”), the following corporate actions:
(i) a private placement sale to Catterton-Noodles, LLC (“ L Catterton” or the “Purchaser”), of, in return for aggregate gross proceeds to us of $18.5 million, an aggregate of 18,500 shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “preferred stock”), at a purchase price of $1,000 per share, plus warrants exercisable beginning six months following their issuance for the purchase of 1,913,793 shares of Class A Common Stock at a price per share of $4.35, which is equal to the closing bid price of our Class A Common Stock on February 7, 2017 (the “warrants”); and
(ii) an agreement with the lenders under our credit agreement to amend our credit agreement, which amendment increases our flexibility under the credit agreement.
In addition, the Board authorized and approved strategic initiatives intended to improve our revenue and earnings by closing underperforming restaurants.
Item 1.01. Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On February 8, 2017, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with L Catterton, pursuant to which we agreed, in return for aggregate gross proceeds to us of $18.5 million, to sell to L Catterton an aggregate of 18,500 shares of preferred stock convertible into 4,252,873 shares of our Class A Common Stock, par value $0.01 per share (our “Class A Common Stock” and, together with our Class B Common Stock, par value $0.01 per share, our “common stock”), at a price per share of $1,000 (the “purchase price”) plus warrants exercisable for five years beginning six months following their issuance (the “warrants”) for the purchase of 1,913,793 shares of our Class A Common Stock, at a price per share of $4.35 (such transactions, collectively, the “private placement”). The proceeds will be used, in conjunction with cash flow from our operations and the proceeds received from any other measures that may be taken to address our capital needs, to satisfy the Restaurant Closing Liabilities (as defined below), to satisfy the Data Breach Liabilities (as defined below), and to fund, in part, certain capital expenditures related to business initiatives in our restaurants. Any remaining proceeds are expected to be used for general corporate purposes. The funding of the private placement occurred today, February 9, 2017 (the “Issue Date”).
Each share of preferred stock is convertible at the holder’s option, subject to certain terms and conditions described below, at a conversion price of $4.35, which is equal to the closing bid price for our Class A Common Stock on February 7, 2017, and is subject to adjustment for dividends, certain distributions, stock splits, combinations, reclassifications, recapitalizations and similar events.
In connection with the private placement, we entered into a letter agreement (the “Letter Agreement”) with Argentia Private Investments Inc. (“Argentia”) that provides we will indemnify Argentia in limited circumstances for certain losses incurred by Argentia or its affiliates that arise out of the private placement, for which transaction Argentia provided its consent pursuant to the terms of our stockholders agreement.  The Letter Agreement, among other things, also provides for the registration of shares of Class A Common Stock (including shares of Class A Common Stock into which shares of Class B Common Stock may be converted) held by Argentia, by us on terms substantially similar to the registration rights that we agreed to provide to L Catterton in the Securities Purchase Agreement.  A copy of the Letter Agreement is attached hereto as Exhibit 10.3 and is incorporated by reference in this Item 1.01 in its entirety. The description of the Letter Agreement is a summary only and is qualified in its entirety by the terms of the Letter Agreement.

L Catterton and Argentia beneficially own, in the aggregate, shares representing approximately 51.6% of our outstanding voting power, and, assuming the conversion of the preferred stock into shares of Class A Common Stock, would beneficially own, in the aggregate, shares representing approximately 58.3% of our outstanding voting power. Persons associated with L Catterton and Argentia currently serve on our Board. Under a stockholders agreement dated as of July 2, 2013, as previously disclosed, L Catterton and Argentia have agreed to elect each other’s director nominees and to not take certain actions affecting us without the consent of the other. Accordingly, L Catterton and Argentia have significant influence over all matters presented to our stockholders for approval, including election and removal of our directors and change in control transactions.
This Current Report on Form 8-K is not an offer to sell or a solicitation of offers to buy preferred stock, warrants or our Class A Common Stock. None of the shares of preferred stock, warrants or shares of our Class A Common Stock issuable upon conversion or exercise of the preferred stock and warrants have been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent an effective registration statement or an exemption from the registration requirements under applicable federal and state securities laws.
This description of the Securities Purchase Agreement is qualified in its entirety by reference to the Securities Purchase Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated by reference in this Item 1.01 in its entirety.



The Securities Purchase Agreement contains a number of representations and warranties that we and the Purchaser have made to each other that are customary in such transactions. Moreover, representations and warranties are frequently utilized in agreements as a means of allocating risks, both known and unknown, rather than to make affirmative factual claims or statements. These representations and warranties are made as of specific dates and are subject to important exceptions and limitations, including a contractual standard of materiality different from that generally applicable under federal securities laws. Accordingly, persons not party to the Securities Purchase Agreement should not rely on the agreement for any characterization of factual information about us or the Purchaser.
Preferred Stock

The following summary of the terms of the preferred stock is qualified in its entirety by reference to the Certificate of Designations of Series A Convertible Preferred Stock of Noodles & Company, filed on February 9, 2017 with the Secretary of State of the State of Delaware (the “Certificate of Designations”), a copy of which is attached to this Current Report on Form 8-K as Exhibit 4.1 and is incorporated by reference in this Item 1.01 in its entirety.

Dividends . The preferred stock will accrue dividends beginning on the earlier of (i) the date that is the six-month anniversary of the Issue Date and (ii) the date on which we complete specified equity offerings generating aggregate gross proceeds to us of at least $50.0 million. If we complete specified equity offerings generating aggregate gross proceeds to us of at least $50.0 million (including proceeds from the private placement and other equity offerings) prior to the six-month anniversary of the Issue Date, then (i) if the volume-weighted average price per share of our Class A Common Stock for the prior 30-day period is greater than the conversion price, we may elect, and we currently intend, to convert the preferred stock into Class A Common Stock at the then-applicable conversion price, or (ii) if the volume-weighted average price per share of our Class A Common Stock for the prior 30-day period is equal to or less than the conversion price, dividends on the preferred stock will stop accruing.  In addition, the preferred stock is also entitled to participate in cash and in-kind distributions to holders of shares of our common stock on an as-converted basis. The preferred stock dividend rate is 8.0% per annum and will increase by 0.5% per month beginning on the date that is the six-month anniversary of the Issue Date, up to a maximum of 18.0% per annum. Dividends on the preferred stock will be payable only in cash, when, as, and if declared by the Board, out of legally available funds and if, after such payment, we would be in compliance with the covenants under our outstanding indebtedness for borrowed money.

Conversion at the Option of the Holder . Each share of preferred stock may be converted by the holder into Class A Common Stock at any time based on the then applicable conversion price, subject to certain limitations.

Redemption . Redemption of the preferred stock may occur (a) following the 15-month anniversary of the Issue Date, at our election, if the volume-weighted average price per share of our Class A Common Stock for the prior 30-day period is equal to or less than the conversion price, (b) following the 15-month anniversary of the Issue Date, at the direction of the holders of a majority of the preferred stock, (c) upon a change of control (as defined in the Certificate of Designations), unless waived by the holders of a majority of the preferred stock, and (d) at any time, at our election in connection with a conversion of the preferred stock, if L Catterton would have beneficial ownership of more than 45.0% of our common stock. Any redemption is subject to certain conditions, including that after such redemption we are in compliance with the covenants under our indebtedness for borrowed money.

Liquidation Preference . In the event of our liquidation, dissolution or winding up, the holders of preferred stock will be entitled to receive per share the greater of (i) the purchase price, plus any accrued and unpaid dividends (the “accumulated liquidation preference”), and (ii) the value that would be received if the share of preferred stock were converted into Class A Common Stock immediately prior to the liquidation, dissolution or winding up.

Participation Rights . Subject to certain limitations, the Purchaser will be entitled to participate, on a pro rata basis in accordance with its ownership percentage, determined on an as converted basis, in issuances by us of equity and equity linked securities.

Voting Rights . Holders of the preferred stock will be entitled to vote on an as-converted basis, subject to certain limitations on such holders’ voting power, with holders of our common stock on all matters submitted to a vote of holders of our common stock for all purposes. In addition, we have agreed that without the consent of the holders of a majority of the preferred stock, we will not materially and adversely alter or change the rights, preferences or privileges of the preferred stock, create securities that have an equal or senior liquidation preference to the preferred stock, or issue any additional preferred stock.

Information Rights . Subject to maintaining certain ownership thresholds, the Purchaser will be entitled to certain information about us and our subsidiaries.

Warrants

The following summary of terms of the warrants is qualified in its entirety by reference to the Form of Warrant to Purchase Class A Common Stock, a copy of which is attached to this Current Report on Form 8-K as Exhibit 4.2 and is incorporated by reference in this Item 1.01 in its entirety.

Exercise Price . The exercise price of the warrants is $4.35 per share, which is equal to the closing bid price of our Class A Common Stock on February 7, 2017, and is subject to customary anti-dilution adjustment provisions.



 
Exercisability . The warrants will be exercisable for five years, starting six months after issuance.
 
Redemption . Upon a change of control (as defined in the warrants), holders of the warrants are entitled to cause us to redeem the warrants, at their fair value, based on the Black-Scholes method of valuation, for cash or Class A Common Stock.
Credit Agreement Amendment

On February 8, 2017, we amended our Amended and Restated Credit Agreement, dated as of November 22, 2013, by entering into Amendment No. 5 to the Amended and Restated Credit Agreement, as borrower, with the guarantors signatory thereto, Bank of America, N.A., as administrative agent, and the lenders signatory thereto (the “Amendment”). The Amendment modifies some of the changes made to our credit agreement in the previously disclosed Amendment No. 4, dated as of November 4, 2016. Among other things, the Amendment (i) restores our ability to request an increase in the maximum commitment amount under the credit facility by up to $15.0 million, (ii) suspends quarterly amortization payments of $2.5 million until the end of the second fiscal quarter of 2018, (iii) increases the interest rate margin applicable at total lease adjusted leverage levels at and above 4.25:1.00 and from the period of the date of Amendment to the delivery of the first following quarterly compliance certificate, and (iv) makes certain other changes. The Consolidated EBITDA definition, as revised, will permit certain costs to be added back into the Consolidated EBITDA calculation, including costs associated with the Restaurant Closing Liabilities (as defined in Item 2.05 below) and liabilities associated with the data security incident that occurred in 2016 (as described in greater detail in Item 8.01 of the Current Report on Form 8-K that we filed concurrently herewith). In addition, the Amendment provides that upon the completion of one or more equity issuances for an aggregate gross purchase amount of at least $45.0 million (including the $18.5 million of preferred stock and warrants issued to L Catterton pursuant to the private placement), (i) the required $2.5 million quarterly amortization payment will be eliminated and (ii) increased capital expenditure amounts related to restaurant growth will be permitted. The Amendment also revises certain financial covenant levels.

A copy of the Amendment is attached hereto as Exhibit 10.2 and is incorporated by reference in this Item 1.01 in its entirety. The description of the Amendment is a summary only and is qualified in its entirety by the terms of the Amendment.

The discussion in Item 3.03 of this Current Report on Form 8-K is incorporated by reference in this Item 1.01 in its entirety.

Item 2.02 Results of Operations and Financial Condition.

The discussion of the non-cash impairment charge in Item 2.06 of this Current Report on Form 8-K is incorporated by reference in this Item 2.02.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The discussion of the Credit Agreement Amendment in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03 in its entirety.
Item 2.05. Costs Associated with Exit or Disposal Activities.

On February 7, 2017, our board of directors determined to close approximately 55 underperforming restaurants in the first and second quarters of 2017. Our financial performance has been adversely impacted by these restaurants, many of which were opened in the last two to three years in newer markets where brand awareness of our restaurants is not as strong and where it has been more difficult to adequately staff our restaurants. Our board of directors has determined that it would be beneficial to close these restaurants in order to eliminate the negative cash flow resulting from their continued operation and to permit us to increase our focus on the remaining restaurants in our restaurant portfolio.
We expect to use the net proceeds of the private placement, in conjunction with cash from our operations and the proceeds from any other measures we have taken or will take to address our capital needs, in part, to satisfy liabilities to landlords resulting from the termination of our leases for such restaurants, the fees of our real estate advisor and brokers related to such terminations and other costs of closing restaurants, such as severance for terminated employees (“Restaurant Closing Liabilities”). We currently anticipate that the Restaurant Closing Liabilities will total $24.0 million to $29.0 million, which will include (i) $23.0 million to $28.0 million relating to the termination of leases, including related fees and expenses, to be paid out over the next 12 to 18 months, and (ii) approximately $1.0 million relating to severance for terminated employees. However, it is possible that the Restaurant Closing Liabilities will exceed such amounts, in which case the amount of the net proceeds from the private placement, cash from our operations and the proceeds from any other measures that we will take, that will be available for other purposes may be less than anticipated, or we may need to borrow under our credit facility to fund such liabilities. We expect to take charges for the Restaurant Closing Liabilities aggregating between $17.5 million to $19.5 million, at the time such restaurants are closed, subject to adjustment as lease terminations occur. Our actual results may differ from these expectations, which remain subject to our execution of the restaurant closures described above and other developments that may arise in the future.
In addition to the private placement, we intend to take further measures to address our capital needs and anticipate making further announcements in this respect in the future.
Item 2.06. Material Impairments.




We currently anticipate taking a non-cash impairment charge during the fiscal quarter ended on January 3, 2017, that will range from $30.5 million to $31.5 million relating to restaurants we intend to close but that were not previously impaired, and to certain other restaurants. We do not currently anticipate that such charge will result in future cash expenditures. Our actual results may differ from these expectations, which remain subject to our execution of the restaurant closures described above and other developments that may arise in the future.

The information in Item 2.05 of this Current Report on Form 8-K is incorporated by reference in this Item 2.06 in its entirety.
Item 3.02. Unregistered Sales of Equity Securities.

The issuance and sale of the shares of preferred stock and warrants described in Item 1.01 of this Current Report on Form 8-K, and the eventual issuance and sale of shares of Class A Common Stock underlying such preferred stock and warrants issuable upon conversion or exercise, respectively, were issued and sold pursuant to the Securities Purchase Agreement in the private placement are made without registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving a public offering. The preferred stock, the warrants or the shares of Class A Common Stock issuable upon conversion or exercise, as applicable, may not be re-offered or sold in the United States absent an effective registration statement or an exemption from the registration requirements under applicable federal and state securities laws. The discussion of the Securities Purchase Agreement in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.02 in its entirety.
Item 3.03. Material Modification to Rights of Security Holders.
The filing of the Certificate of Designations and the issuance of the preferred stock affect the holders of our common stock to the extent provided for in the Certificate of Designations. The information in Items 1.01 and 5.03 of this Current Report on Form 8-K is incorporated by reference in this Item 3.03 in its entirety.
Pursuant to the Amended and Restated Stockholders Agreement, dated as of July 2, 2013, by and among Noodles & Company, Argentia Private Investments Inc. (“Argentia”) and L Catterton (the “Stockholders Agreement”), each of L Catterton and Argentia have obligations under the Stockholders Agreement to cause us not to issue more than $50.0 million of equity securities, create any new class or series of equity securities or amend our certificate of incorporation in a manner adverse to either party. Each of L Catterton and Argentia authorized and approved, and waived any right or obligation to prevent or prohibit, the transactions contemplated by the Securities Purchase Agreement (including the creation of the preferred stock, the filing of the Certificate of Designations, the issuance of the preferred stock, warrants and the common stock issuable upon conversion of the preferred stock as provided in the Certificate of Designations or exercise of warrants as provided in the Form of Warrant to Purchase Class A Common Stock).

Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The discussion of the Securities Purchase Agreement in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 5.03 in its entirety. To create the preferred stock issuable under the Securities Purchase Agreement, we amended our certificate of incorporation by filing a Certificate of Designations on February 9, 2017, which is attached as Exhibit 4.1 and incorporated by reference in this Item 5.03 in its entirety.
Item 9.01. Financial Statements and Exhibits.
(d)     Exhibits.

 
 
 
 
Exhibit No.
 
Description
 
4.1
 
Certificate of Designations
 
4.2
 
Form of Warrant to Purchase Class A Common Stock
 
10.1
 
Securities Purchase Agreement, dated as of February 8, 2017, by and between Noodles & Company and Catterton-Noodles, LLC
 
10.2
 
Amendment No. 5 to the Amended and Restated Credit Agreement, dated as of February 8, 2017, by and among Noodles & Company, each of the Guarantors signatory thereto, Bank of America, N.A., as administrative agent and the lenders signatory thereto
 
10.3
 
Letter Agreement, dated as of February 8, 2017, by and between Noodles & Company and Argentia Private Investments Inc.
 
 
 
 
 
 
 




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
 
 
 
 
Noodles & Company
 
 
 
 
By:
/s/ DAVE BOENNIGHAUSEN
 
Name:
Dave Boennighausen
 
Title:
Chief Financial Officer and Interim Chief Executive Officer

DATED: February 9, 2017
 
 
 
 
 






EXHIBIT INDEX


 
 
 
 
Exhibit No.
 
Description
4.1
 
Certificate of Designations
 
4.2
 
Form of Warrant to Purchase Class A Common Stock
 
10.1
 
Securities Purchase Agreement, dated as of February 8, 2017, by and between Noodles & Company and Catterton-Noodles, LLC
 
10.2
 
Amendment No. 5 to the Amended and Restated Credit Agreement, dated as of February 8, 2017, by and among Noodles & Company, each of the Guarantors signatory thereto, Bank of America, N.A., as administrative agent and the lenders signatory thereto
 
10.3
 
Letter Agreement, dated as of February 8, 2017, by and between Noodles & Company and Argentia Private Investments Inc.

 





Exhibit 4.1



CERTIFICATE OF DESIGNATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
NOODLES & COMPANY
The undersigned, Paul Strasen, Executive Vice President, General Counsel and Secretary of Noodles & Company (the “ Company ”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “ DGCL ”), does hereby certify, in accordance with Sections 103 and 151 of the DGCL, that the following resolutions were duly adopted by its Board of Directors (the “ Board ”) on February 7, 2017:
WHEREAS, the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time, the “ Certificate of Incorporation ”), authorizes 1,000,000 shares of preferred stock, par value $0.01 per share (the “ Preferred Stock ”), issuable from time to time in one or more series;
WHEREAS, the Certificate of Incorporation authorizes the Board to provide by resolution for the issuance of the shares of Preferred Stock in one or more series, and to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, privileges, preferences, and relative participating, optional or other rights, if any, of the shares of each such series and the qualifications, limitations or restrictions thereof;
WHEREAS, the Board desires, pursuant to its authority as aforesaid, to designate a new series of Preferred Stock, set the number of shares constituting such series, and the voting powers, designations, preferences and relative, participating, optional, or other special rights, and the qualifications, limitations, and restrictions thereof.
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby designates a new series of Preferred Stock, consisting of the number of shares set forth herein, with the voting powers, designations, preferences and relative, participating, optional, or other special rights, and the qualifications, limitations, and restrictions relating to such series as follows:
Article I. NUMBER; DESIGNATION; RANK.
Section 1.1      This series of convertible preferred stock is designated as the “Series A Convertible Preferred Stock” (the “ Series A Preferred Stock “). The number of shares constituting the Series A Preferred Stock is 50,000 shares, par value $0.01 per share. Such number of shares may be increased or decreased by resolution of the Board, provided, however, that no such decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of such shares then outstanding.
Section 1.2      Except as otherwise provided herein with respect to a Rights Offering Dividend, the Series A Preferred Stock ranks, with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution, or winding-




up of the Company or otherwise senior in preference and priority to the Common Stock and each other class or series of Capital Stock of the Company, except for any class or series of Capital Stock hereafter issued in compliance with the terms hereof and the terms of which expressly provide that it will rank senior to or on parity with the Series A Preferred Stock with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution, or winding-up of the Company, or otherwise (collectively with the Common Stock, the “ Junior Securities ”).
ARTICLE II.      DIVIDENDS.
Section 2.1      Dividend Accruals . From and after the earlier of the six-month anniversary of the Issue Date and the date the Mandatory Conversion Condition is satisfied (the “ Dividend Commencement Date ”), dividends (“ Preferred Dividends ”) shall accrue on a daily basis at the Dividend Rate per annum on the Accrued Liquidation Preference (calculated as of the beginning of the relevant Dividend Period) (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Preferred Shares), whether or not declared; provided, however, that such Preferred Dividends shall be payable only (i) in cash, (ii) when, as, and if declared by the Board, (iii) out of funds legally available therefor and (iv) if, after such payment, the Company would be in compliance with the covenants under its indebtedness for borrowed money existing on the date of such payment; provided, further, that from and after the date on which the Mandatory Conversion Condition is satisfied (or waived by the Majority Holders) and the Thirty-Day VWAP is equal to or less than the Conversion Price, Preferred Dividends will cease to accrue. Dividends paid on the Preferred Shares in an amount less than the total amount of the Preferred Dividends at the time accrued on such shares shall be allocated pro rata on a share-by-share basis among all such Preferred Shares at the time outstanding. The Board may fix a record date for the determination of holders of Preferred Shares entitled to receive payment of a dividend declared thereon, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such payment.
Section 2.2      Dividend Blocker . Except with respect to a Rights Offering Dividend or dividends on shares of any class of Common Stock payable in shares of any class of Common Stock, the Company shall not declare, pay or set aside any dividends on Junior Securities if at such time there are any accrued and unpaid Preferred Dividends with respect to completed Dividend Periods.
Section 2.3      Participating Dividends . Except with respect to a Specified Rights Offering Dividend, if the Company declares, makes or pays any dividend or distribution in respect of all or substantially all holders of Common Stock, other than a dividend or distribution to which Section 5.5(a)(i) or (ii) applies (a “ Common Dividend ”), each Holder shall first receive a dividend (in addition to the dividends provided for by Section 2.1) in respect of each Preferred Share held thereby, in an amount equal to the product of (x) the amount of such Common Dividend paid per share of Common Stock, multiplied by (y) the number of shares of Class A Common Stock (or Reference Property, to the extent applicable) issuable if such Preferred Share had been converted into shares of Common Stock immediately prior to the record date for such Common Dividend (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has not been exercised) (such amount per

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share of Preferred Stock, the “ Participating Dividend ”). Participating Dividends shall be payable to Holders on the record date for such Common Dividend at the same time and in the same manner as the Common Dividend triggering such Participating Dividend is paid.
ARTICLE III.      LIQUIDATION PREFERENCE.
Section 3.1      Upon any liquidation, dissolution or winding-up of the Company, the holders of Preferred Shares then outstanding shall be entitled to receive and to be paid out of the assets of the Company legally available for distribution to the Company’s stockholders, before any distribution or payment may be made to a holder of any Junior Securities, an amount per share equal to the greater of (i) the Accrued Liquidation Preference plus the amount of any current dividends accrued and unpaid in the then-current Dividend Period and (ii) an amount equal to the amount the Holders of Preferred Shares would have received upon such liquidation, dissolution or winding-up of the Company had all such Holders converted such Preferred Shares into Class A Common Stock (or Reference Property, to the extent applicable) immediately prior thereto (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has not been exercised) (the “ Participating Liquidation Preference ,” and such greater amount, the “ Liquidation Preference “), and no more.
Section 3.2      Subject to the following sentences, the Liquidation Preference shall be paid in cash. If upon any liquidation, dissolution or winding up of the Company, the cash legally available for distribution to the Company’s stockholders is insufficient to pay the Holders the full Liquidation Preference and the holders of all Parity Securities the full cash liquidation preferences to which they are entitled, the Holders and the holders of such Parity Securities will share the cash legally available for distribution to the Company’s stockholders ratably in proportion to the full respective amounts of cash to which they are entitled. If upon any such liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the Company’s stockholders are insufficient to pay the Holders the full Liquidation Preference and the holders of all Parity Securities the full liquidation preferences to which they are entitled, the Holders and the holders of such Parity Securities will share ratably in any such distribution of the assets of the Company in proportion to the full respective amounts to which they are entitled.
Section 3.3      After payment to the Holders of the full Liquidation Preference to which they are entitled, the Holders as such will have no right or claim to any of the assets of the Company.
Section 3.4      No holder of Junior Securities shall receive any assets upon any liquidation, dissolution or winding-up of the Company unless the entire Liquidation Preference in respect of the Preferred Shares has been paid.
Section 3.5      The amount deemed paid or distributed to the holders of Capital Stock of the Company upon any such liquidation, dissolution or winding up of the Company shall be (i) in the case of cash, the amount of cash paid and (ii) in the case of any other assets, the value of such other assets as determined in good faith by the Board.

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ARTICLE IV.      VOTING RIGHTS.
Section 4.1      Voting Rights .
(a)      The Holders shall be entitled to vote on all matters on which the holders of shares of Class A Common Stock are entitled to vote and, except as otherwise provided herein, in the Certificate of Incorporation (including, for the avoidance of doubt, in any certificate of designations), or by law, the Holders shall vote together with the holders of shares of Common Stock and any other shares of Capital Stock of the Company entitled to vote thereon as a single class. As of any record date or other determination date, each Holder shall be entitled to a number of votes equal to the number of votes such Holder would have had if all Preferred Shares held by such Holder on such date had been converted into shares of Common Stock immediately prior thereto (assuming any applicable Voting Trigger Redemption Option has been exercised in full).
(b)      In the event that any Holder would be required to file any Notification and Report Form pursuant to the HSR Act as a result of any increase in the number of shares of Class A Common Stock issuable upon conversion of the Preferred Shares, the voting rights of such Holder pursuant to this Section 4.1 shall not be increased as a result of such events unless and until such Holder and the Company shall have made their respective filings under the HSR Act and the applicable waiting period shall have expired or been terminated in connection with such filings. The Company shall make all required filings and reasonably cooperate with and assist such Holder in connection with the making of such filing and obtaining the expiration or termination of such waiting period and shall be reimbursed by such Holder for any reasonable and documented out-of-pocket costs incurred by the Company in connection with such filings and cooperation.
Section 4.2      Approval Rights . In addition to the voting rights provided for by Section 4.1 and any voting rights to which the Holders may be entitled to under law, for so long as any Preferred Shares are outstanding, the Company may not, directly or indirectly, take any of the following actions (including by means of merger, consolidation or otherwise) without the prior written consent of the Majority Holders:
(a)      materially and adversely alter or change the rights, preferences or privileges of the Preferred Shares;
(b)      create (by reclassification or otherwise) any Senior Securities or Parity Securities; or
(c)      issue, or authorize for issuance, any new Preferred Shares that were not issued on the Issue Date;
provided, that in each case, the foregoing consent shall not be required with respect to the declaration and payment of Preferred Dividends in Preferred Shares or in connection with any Qualified Equity Offerings.

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ARTICLE V.      CONVERSION; VOTING TRIGGER REDEMPTION.
Section 5.1      Conversion Privilege .
(a)      General . Subject to the provisions of this Article V and Section 6.3 hereof, each Holder shall be entitled to convert, at any time and from time to time, at the option and election of such Holder, any or all outstanding Preferred Shares held by such Holder into such number of shares of Class A Common Stock (or Reference Property) as set out in Section 5.3.
(b)      Deliveries Required for Holder Conversion . Such conversion right shall be exercised by the surrender of the certificate or certificates for such Preferred Shares to be converted (the “ Converted Shares ”) to the Company (or a transfer agent on behalf of the Company, as applicable) (or, if the Holder whose shares are to be converted (the “ Converting Holder ”) alleges that such certificate has or certificates have been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Company or such transfer agent to indemnify the Company against any claim that may be made against the Company on account of the alleged loss, theft or destruction of such certificate) at the office of the Company’s transfer agent for the Series A Preferred Stock (or at the principal office of the Company, if the Company serves as its own transfer agent), together with (x) written notice (a “ Holder Conversion Notice ”) that such Holder elects to convert all or part of the Preferred Shares represented by such certificates as specified therein, which notice shall specify the name or names (with address) in which a certificate or certificates for shares of Class A Common Stock (or Reference Property) to be issued in a conversion (the “ Conversion Shares ”) are to be issued and a statement setting forth the amount of each class or series of Capital Stock of the Company Beneficially Owned by such Converting Holder, (y) a written instrument or instructions of transfer or other documents and endorsements reasonably acceptable to the transfer agent or the Company, as applicable (if reasonably required by the transfer agent or the Company, as applicable), and (z) funds for any stock transfer, documentary, stamp or similar taxes, if payable by the Holder pursuant to Section 5.4(b).
Section 5.2      Conversion at the Option of the Company . On or after the date on which the Mandatory Conversion Condition is satisfied (or waived by the Majority Holders) and if the Thirty-Day VWAP is greater than the Conversion Price, the Company shall have the right, at its option, to cause all outstanding Preferred Shares to be automatically converted (without any further action by the Holder and whether or not the certificates representing the Preferred Shares are surrendered), in whole but not in part, into such number of Conversion Shares as set out in Section 5.3. The Company may exercise its option under this Section 5.2 by providing the Holders with a notice (the “ Company Conversion Notice ”), which Company Conversion Notice shall specify that the Company is exercising the option contemplated by this Section 5.2 and the Conversion Date on which the Company expects such conversion to occur (which Conversion Date shall be not less than four (4) Business Days following the date such Company Conversion Notice is provided to the Holders); provided that, once delivered, such notice shall be irrevocable, unless the Company obtains the written consent of the Majority Holders. For the avoidance of doubt, (x) the Holders shall continue to have the right to convert their Preferred Shares pursuant to Section 5.1 until and through the Conversion Date contemplated in this Section 5.2 and (y) if any Preferred Shares are converted pursuant to Section 5.1, such Preferred Shares shall no longer be converted pursuant to this Section

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5.2 and the Company Conversion Notice delivered to the Holders pursuant to this Section 5.2 shall automatically terminate with respect to such Preferred Shares. Notwithstanding the foregoing, any notice delivered by the Company under this Section 5.2 in accordance with Section 8.6 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such Holder of Preferred Shares actually receives such notice, and neither the failure of a Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the conversion of the Preferred Shares as set forth in this Section 5.2.
Section 5.3      Amounts Received Upon Conversion .
(a)      Conversion Amount . Subject to subsection (b) hereof, upon a conversion of the Preferred Shares in accordance with this Article V, the Converting Holder shall receive in respect of each Converted Share a number of Conversion Shares equal to the amount (the “ Conversion Amount ”) determined by dividing (i) the Purchase Price by (ii) the Conversion Price in effect at the time of conversion.
(b)      Voting Trigger Redemption . Notwithstanding anything to the contrary in this Article V, if the Board determines that a Converting Holder would, upon conversion, be the Beneficial Owner of 45% or more of the Total Current Voting Power (the “ Voting Trigger ”) (assuming for this purpose that all of such Converting Holder’s Convertible Securities (including Preferred Shares) and Option Securities (including Warrants) have converted into, or been exercised for, Class A Common Stock (or Reference Property, to the extent applicable)), then the Company may elect to redeem from such Converting Holder (a “ Voting Trigger Redemption ”), out of funds legally available therefor, up to such number of Preferred Shares that would otherwise convert into Conversion Shares as would be necessary so that, following such conversion, the Voting Trigger would not occur (the “ Voting Trigger Redemption Option ”). The redemption price for such shares (the “ Voting Trigger Redemption Price ”) shall be equal to (i) the number of Conversion Shares into which such shares redeemed would otherwise have converted into but for this Section 5.3(b) times (ii) the Conversion Price determined on the date the Voting Trigger Redemption Option Notice is sent. Within five (5) Business Days of receipt of a Holder Conversion Notice, or at any time on or after delivery of a Company Conversion Notice, the Company shall send to the Converting Holder a notice (a “ Voting Trigger Redemption Option Notice ”) stating whether the Voting Trigger Redemption Option is applicable and, if the Voting Trigger Redemption Option is applicable, whether the Company will exercise the Voting Trigger Redemption Option. If the Company exercises the Voting Trigger Redemption Option, the Voting Trigger Redemption Option Notice shall include: (A) the number of Preferred Shares to be redeemed pursuant to the Voting Trigger Redemption, (B) the date for such Voting Trigger Redemption (the “ Voting Trigger Redemption Date ”), which date shall not be less than three calendar days after delivery of the Voting Trigger Redemption Notice nor more than ninety (90) calendar days after delivery of the Voting Trigger Redemption Notice, and (C) a statement that payment in connection with the Voting Trigger Redemption will be made to the Converting Holder within five (5) Business Days of the Voting Trigger Redemption Date to the account specified by such Converting Holder to the Company in writing. The Voting Trigger Redemption Notice may be included by the Company in any Company Conversion Notice. Any Voting Trigger Redemption Notice delivered by the Company under this Section 5.3(b) in accordance with

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Section 8.6 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such Converting Holder actually receives such notice, and neither the failure of a Converting Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the Voting Trigger Redemption.
(c)      Fractional Shares . No fractional shares of Class A Common Stock (or fractional shares in respect of Reference Property, to the extent applicable) will be issued upon conversion of the Preferred Shares. In lieu of fractional shares, the Company shall pay cash in respect of each fractional share equal to such fractional amount multiplied by the Thirty Day VWAP as of the closing of business on the Business Day immediately preceding the Conversion Date. If more than one Preferred Share is being converted at one time by the same Holder, then the number of full shares issuable upon conversion will be calculated on the basis of the aggregate number of Preferred Shares converted by such Holder at such time.
(d)      HSR Compliance . Notwithstanding the foregoing, in the event any Holder would be required to file any Notification and Report Form pursuant to the HSR Act as a result of the conversion of any Preferred Shares into the property described above in this Section 5.3, at the option of such Holder upon written notice to the Company, the effectiveness of such conversion shall be delayed (only to the extent necessary to avoid a violation of the HSR Act), until such Holder shall have made such filing under the HSR Act and the applicable waiting period shall have expired or been terminated; provided, however, that in such circumstances such Holder shall use commercially reasonable efforts to make such filing and obtain the expiration or termination of such waiting period as promptly as reasonably practical and the Company shall make all required filings and reasonably cooperate with and assist such Holder in connection with the making of such filing and obtaining the expiration or termination of such waiting period and shall be reimbursed by such Holder for any reasonable and documented out-of-pocket costs incurred by the Company in connection with such filings and cooperation. Notwithstanding the foregoing, if the conversion of any Preferred Share is delayed pursuant to the preceding sentence at a time when the Company desires to exercise its right to convert Preferred Shares pursuant to Section 5.2 in connection with the automatic conversion of the Preferred Shares, from and after the date of the conversion contemplated by Section 5.2, such Preferred Shares not then converted shall have no rights, powers, preferences or privileges other than the rights provided by this paragraph and the right to convert into the property described in this Section 5.3 if and when such Holder shall have made such filing under the HSR Act and the waiting period in connection with such filing under the HSR Act shall have expired or been terminated and the right to receive cash dividends and distributions made pursuant to Section 2.3.
Section 5.4      Mechanics of Conversion .
(a)      On and after the Conversion Date, the Preferred Shares so converted (which, for the avoidance of doubt, do not include Preferred Shares subject to a Voting Trigger Redemption) shall cease to be outstanding, dividends and distributions on such shares shall cease to accrue or be due, and all rights in respect of such Preferred Shares shall terminate, other than the right to receive, upon compliance with this Article V, the amounts due upon conversion.

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(b)      The Converting Holder shall pay any documentary, stamp, or similar issue or transfer tax due on the issue of Conversion Shares in the name of any Person other than the Converting Holder or due upon the issuance of a new certificate for any Preferred Shares not converted in the name of any Person other than the Converting Holder.
(c)      For the purpose of effecting the conversion of Preferred Shares, the Company shall at all times reserve and keep available, free from any preemptive rights, out of its treasury or authorized but unissued shares of Class A Common Stock (or Reference Property, to the extent applicable) the full number of shares of Class A Common Stock (or Reference Property, to the extent applicable) deliverable upon the conversion of all outstanding Preferred Shares after taking into account any adjustments to the Conversion Price from time to time pursuant to the terms of this Section 5 and assuming for the purposes of this calculation that all outstanding Preferred Shares are held by one holder and that any applicable Voting Trigger Redemption Option has been exercised in full.
(d)      All shares of Class A Common Stock (or Reference Property, to the extent applicable) issued upon conversion of the Preferred Shares will, upon issuance by the Company, be duly and validly issued, fully paid, and nonassessable.
Section 5.5      Adjustments to Conversion Price .
(a)      The Conversion Price shall be subject to the following adjustments:
(i)      Adjustments for Stock Splits and Combinations . If the Company shall at any time or from time to time after the Issue Date effect a subdivision of any class of outstanding Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Class A Common Stock issuable on conversion of each Preferred Share shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Company shall at any time or from time to time after the Issue Date combine the outstanding shares of any class of the outstanding Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Class A Common Stock issuable on conversion of each Preferred Share shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.
(ii)      Common Stock Dividends or Distributions . If the Company at any time from and after the Issue Date issues shares of Common Stock as a dividend or distribution on all or substantially all shares of one or more classes of Common Stock, the Conversion Price will be adjusted based on the following formula:

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CODIMAGE.JPG
where,
CP 0 =    the Conversion Price in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution;
CP 1 =    the Conversion Price in effect immediately after the open of business on the Ex-Date for such dividend or distribution;
OS 0 =    the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Date for such dividend or distribution; and
OS 1 =    the number of shares of Common Stock outstanding immediately after such dividend or distribution.
Any adjustment made under this Section 5.5(a)(ii) shall become effective immediately after the open of business on the Ex-Date for such dividend or distribution. If any dividend or distribution of the type described in this Section 5.5(a)(ii) is declared but not so paid or made, the Conversion Price shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared or announced. Notwithstanding the foregoing, no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has not been exercised). Notwithstanding anything in this Section 5.5 to the contrary, if a Conversion Price adjustment becomes effective pursuant to this clause (ii) of Section 5.5(a) on any Ex-Date, and a Converting Holder that converts its Preferred Shares on or after such Ex-Date and on or prior to the related record date would be treated as the record holder of shares of Common Stock as of the related Conversion Date based on an adjusted Conversion Price for such Ex-Date and participate on an adjusted basis in the related dividend, distribution or other event giving rise to such adjustment, then, notwithstanding the foregoing Conversion Price adjustment provisions, the Conversion Price adjustment relating to such Ex-Date will not be made for such converting Holder. Instead, such Holder will be treated as if such Holder were the record owner of the shares of Common Stock on an un-adjusted basis and participate in the related dividend, distribution, or other event giving rise to such adjustment.
(b)      Notwithstanding anything in this Section 5.5 to the contrary, no adjustment under Section 5.5(a) need be made to the Conversion Price unless such adjustment would require a decrease of at least 1% of the Conversion Price then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, if any,

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which, together with any adjustment or adjustments so carried forward, shall amount to a decrease of at least 1% of such Conversion Price; provided that, on the date of any conversion of the Preferred Shares pursuant to Section 5, adjustments to the Conversion Price will be made with respect to any such adjustment carried forward that has not been taken into account before such date.
(c)      No Adjustments Below Par Value . Notwithstanding any other provision of this Certificate of Designations, the Conversion Price shall not be reduced below the par value per share of Class A Common Stock.
(d)      Reference Property . Subject to the provisions of Section 6.1, in the case of any recapitalization, reclassification, or change of the Class A Common Stock (other than changes resulting from a subdivision, combination or reclassification described in Section 5.5(a)(i)), or consolidation or merger involving the Company, in each case as a result of which the Class A Common Stock (but not the Series A Preferred Stock) would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any of the foregoing, a “ Reference Transaction ”), then, at the effective time of the Reference Transaction, the right to convert each Preferred Share will be changed into a right to convert such Preferred Share into the kind and amount of shares of stock, other securities, or other property or assets (including cash or any combination thereof) (the “ Reference Property ”) that a Holder would have received in respect of the Class A Common Stock issuable upon conversion of such Preferred Shares (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has been exercised) immediately prior to such Reference Transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions of this Certificate of Designation with respect to the rights and interests thereafter of the holders of Series A Preferred Stock, to the end that the provisions set forth in this Certificate of Designations shall thereafter be applicable, as nearly as reasonably may be, in relation to such Reference Property. In the event that holders of Class A Common Stock have the opportunity to elect the form of consideration to be received in the Reference Transaction, the Company shall make adequate provision whereby the Holders shall have a reasonable opportunity to determine the form of consideration into which all of the Preferred Shares, treated as a single class, shall be convertible from and after the effective time of the Reference Transaction. Any such election shall be made by the Majority Holders. Any such determination by the Holders shall be subject to any limitations to which all holders of Class A Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in the Reference Transaction, and shall be conducted in such a manner as to be completed at approximately the same time as the time elections are made by holders of Class A Common Stock. The provisions of this Section 5.5(e) and any equivalent thereof in any such securities similarly shall apply to successive Reference Transactions.
(e)      Rules of Calculation; Treasury Stock . All calculations will be made to the nearest one-hundredth of a cent or to the nearest one-ten thousandth of a share. Except as explicitly provided herein, the number of outstanding shares of Class A Common Stock, Class B Common Stock and, to the extent applicable, Reference Property will be calculated on the basis of the number of issued and outstanding shares not including shares held in the treasury of the Company.

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(f)      No Duplication . If any action would require adjustment of the Conversion Price pursuant to more than one of the provisions described in this Article V in a manner such that such adjustments are duplicative, only one adjustment (which shall be the adjustment most favorable to the Holders) shall be made.
(g)      Notice of Record Date . In the event of:
(i)      any event described in Section 5.5(a)(i) or (ii);
(ii)      any Reference Transaction to which Section 5.5(d) applies;
(iii)      the dissolution, liquidation, or winding-up of the Company; or
(iv)      any other event constituting a Change of Control,
the Company shall mail to the Holders at their last addresses as shown on the records of the Company, at least twenty (20) days prior to the record date specified in (i) below or twenty (20) days prior to the date specified in (ii) below, as applicable, a notice stating:
(i)      the record date for the dividend, other distribution, stock split, or combination or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be entitled to such dividend, other distribution, stock split, or combination; or
(ii)      the date on which such reclassification, change, dissolution, liquidation, winding-up, or other event constituting a Reference Transaction or Change of Control is estimated to become effective or otherwise occur, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for Reference Property, other securities or other property deliverable upon such reclassification, change, liquidation, dissolution, winding-up, Reference Transaction, or Change of Control.
(h)      Certificate of Adjustments . Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 5.5, the Company at its expense shall as promptly as reasonably practicable compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder a certificate, signed by an officer of the Company (in his or her capacity as such and not in an individual capacity), setting forth (A) the calculation of such adjustments and readjustments in reasonable detail, (B) the facts upon which such adjustment or readjustment is based, (C) the Conversion Price then in effect, and (D) the number of shares of Class A Common Stock (or Reference Property, to the extent applicable) and the amount, if any, of Capital Stock, other securities or other property (including, but not limited to, cash and evidences of indebtedness) which then would be received upon the conversion of a Preferred Share.
ARTICLE VI.      REDEMPTION.

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Section 6.1      Redemption Initiated by the Holders or by the Company .
(a)      On or after the 15-month anniversary of the Issue Date, and subject to the satisfaction of the Redemption Conditions, the Majority Holders may deliver a demand (the “ Redemption Demand ”) to the Company requiring the Company to redeem, out of funds legally available therefor, all of the outstanding Preferred Shares pursuant to this Article VI. Delivery of the Redemption Demand shall be binding on all Holders. The Company shall notify all Holders, other than Holders delivering the Redemption Demand, that a Redemption Demand has been received.
(b)      On or after the 15-month anniversary of the Issue Date, and subject to the satisfaction of the Redemption Conditions, the Company may, at its option, redeem all (but not less than all) of the outstanding Preferred Shares, out of funds legally available therefor, pursuant to this Article VI.
(c)      Unless otherwise waived by the Majority Holders, within 90 days after the effective date of a Change of Control, and subject to satisfaction or waiver by the Company of the Redemption Conditions, the Company shall redeem, out of funds legally available therefor, all outstanding Preferred Shares pursuant to this Article VI. A Redemption pursuant to this Section 6.1(c) may be initiated in advance of a Change of Control if such Redemption is conditional upon such Change of Control and a definitive agreement is in place for the Change of Control.
Section 6.2      Redemption Notice . If the Company is obligated to redeem, or elects to redeem, the Preferred Shares pursuant to this Article VI, the Company shall deliver a notice of redemption (the “ Redemption Notice ”) to the Holders specifying the date for redemption (the “ Redemption Date “), which date shall not be less than three (3) days after delivery of the Redemption Notice nor more than ninety (90) calendar days after delivery of the Redemption Notice. The Redemption Notice shall specify (A) the provision of Section 6.1 pursuant to which the redemption will occur; (B) the Redemption Date; (C) the Redemption Price; (D) that on the Redemption Date, if the Holder has not previously elected to convert Preferred Shares into Class A Common Stock, each Preferred Share shall automatically and without further action by the Holder thereof (and whether or not the certificates representing such Preferred Shares are surrendered) be redeemed for the Redemption Price; (E) that payment of the Redemption Price will be made to the Holder within five (5) business days of the Redemption Date to the account specified by such Holder to the Company in writing; (F) that the Holder’s right to elect to convert its Preferred Shares will end at 5:00 p.m. (New York City time) on the third Business Day immediately preceding the Redemption Date; and (G) the number of shares of Class A Common Stock (or, if applicable, the amount of Reference Property) and the amount of cash, if any, that a Holder would receive upon conversion of a Preferred Share if a Holder elects to convert its Preferred Shares prior to the Redemption Date. Notwithstanding the foregoing, the Redemption Notice delivered by the Company under this Section 6.2 in accordance with Section 8.6 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such Holder of Preferred Shares actually receives such notice, and neither the failure of a Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the redemption of the Preferred Shares as set forth herein.

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Section 6.3      Conversion Rights Retained . Subject to any other limitations set forth herein, each Holder shall retain the right to convert any Preferred Shares called for redemption until, and only until, 5:00 p.m. (New York City time) on the third Business Day immediately preceding any Redemption Date. Preferred Shares validly converted prior to 5:00 p.m. (New York City time) on the third Business Day immediately preceding any Redemption Date shall not be subject to redemption pursuant to this Article VI.
Section 6.4      Mechanics of Redemption .
(a)      The Company (or a redemption agent on behalf of the Company, as applicable) shall, to the extent lawful and to the extent the Redemption Conditions have been satisfied or waived, pay the applicable Redemption Price in cash on the Redemption Date or the required payment date therefor upon surrender of the certificates representing the Preferred Shares to be redeemed and receipt of any written instrument or instructions of transfer or other documents and endorsements reasonably acceptable to the redemption agent or the Company, as applicable.
(b)      Following any redemption of Preferred Shares on any Redemption Date, the Preferred Shares so redeemed will no longer be deemed to be outstanding and all rights of the Holder thereof shall cease, including the right to accrued Preferred Dividends. The foregoing notwithstanding, in the event that a Preferred Share is not redeemed by the Company when required, such Preferred Share will remain outstanding and will continue to be entitled to all of the powers, designations, preferences, and other rights (including, but not limited to, the accrual and payment of dividends and the conversion rights) as provided herein.
ARTICLE VII.      ADDITIONAL DEFINITIONS
Section 7.1      For purposes of these resolutions, the following terms shall have the following meanings:
Accrued Liquidation Preference ” means, for a Preferred Share, (i) the Purchase Price plus (ii) the amount of any accrued but unpaid Preferred Dividends existing on the most recent past Dividend Payment Date. For the avoidance of doubt, from and after August 15, 2017, the Accrued Liquidation Preference shall compound on a semi-annual basis.
Affiliate ” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. Notwithstanding the foregoing, none of the Company, its Subsidiaries or its other controlled Affiliates shall be considered Affiliates of the Catterton Investor or the PSP Investor.
Beneficial Owner ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition (including, for the avoidance of

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doubt, by conversion of the Preferred Shares and exercise of the Warrants). The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.
Business Day ” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in the State of New York are authorized or required by law or other governmental action to close.
Capital Stock ” means, with respect to any Person, any and all shares of stock, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after liabilities, of such Person.
Catterton Investor ” means Catterton-Noodles, LLC, a Delaware limited liability company, and its Affiliates.
Certificate of Designations ” means this certificate of designations for the Series A Preferred Stock, as such shall be amended from time to time.
Change of Control ” shall mean (i) the sale of all or substantially all of the assets of the Company and its Subsidiaries (taken as a whole) to any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), (ii) any take-over bid involving the Company that results in any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than the Excluded Parties, becoming the direct or indirect Beneficial Owners of a majority of the Total Voting Power of the Company not Beneficially Owned by the Excluded Parties, or (iii) (x) any merger or consolidation in which the Company is a constituent party or (y) a Subsidiary of the Company is a constituent party and the Company issues shares of its Capital Stock pursuant to such merger or consolidation, except, in the case of (x) and (y), any such merger or consolidation in which the shares of Capital Stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for Equity Securities that represent, immediately following such merger or consolidation, at least a majority of the Total Current Voting Power of the surviving or resulting Person, or if the surviving or resulting Person is a wholly owned Subsidiary of another Person immediately following such merger or consolidation, the parent of such surviving or resulting Person. For purposes of this definition, a Person shall not be deemed to have Beneficial Ownership of securities subject to a stock purchase agreement, merger agreement, or similar agreement until the consummation of the transactions contemplated by such agreement.
Class A Common Stock ” means the shares of Class A Common Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such Class A Common Stock shall be reclassified or changed.
Class B Common Stock ” means the shares of Class B Common Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such Class B Common Stock shall be reclassified or changed.

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Common Stock ” means the Class A Common Stock, the Class B Common Stock and any other Capital Stock of the Company into which such Class A Common Stock or Class B Common Stock shall be reclassified or changed.
control ” (including, with correlative meanings, the terms “controlling,” “controlled by,” and “under common control with”) with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
Conversion Date ”, with respect to any Converted Shares, shall mean the first date on which each of the following has occurred: (i) a conversion has been requested pursuant to Section 5.1 or Section 5.2 hereof, (ii) the Company or its transfer agent, as applicable, has received, or waived the requirements to provide, the certificates, notice and other documents and amounts required to be delivered or paid under Section 5.1(b) and Section 5.4(b), and (iii) the Company has sent a Redemption Option Notice.
Conversion Price ” means initially $4.35, as adjusted from time to time as provided in Section 5.
Convertible Securities ” means securities by their terms convertible into or exchangeable for Common Stock or options, warrants or rights to purchase such convertible or exchangeable securities, but excluding Option Securities.
Daily VWAP ”, with respect to any Trading Day, means the volume-weighted average price per share of Class A Common Stock (or per minimum denomination or unit size in the case of any security other than Class A Common Stock) as displayed under the heading “Bloomberg VWAP” on the Bloomberg page for the “<equity> AQR” page corresponding to the “ticker” for such Class A Common Stock or unit (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the Market Value of one share of such Class A Common Stock (or per minimum denomination or unit size in the case of any security other than Class A Common Stock)) on such Trading Day. The “volume weighted average price” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
Dividend Payment Date ” means February 15 and August 15 of each year beginning August 15, 2017; provided that, if any such Dividend Payment Date would otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be the immediately succeeding Business Day.
Dividend Period ” means a period commencing on February 15 or August 15 (other than the initial Dividend Period, which shall commence on and include the Dividend Commencement Date) and ending on and including February 14 and August 14 preceding the next Dividend Payment Date, as applicable.

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Dividend Rate ” means 8.0% per annum; provided, however, that beginning on the date that is six months after the Issue Date, the Dividend Rate shall increase by 0.5% per month up to a maximum of 18% per annum.
Equity Securities ” shall mean, with respect to any Person, (i) shares of capital stock of, or other equity or voting interest in, such Person, (ii) any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iii) options, warrants, rights or other commitments or agreements to acquire from such Person, or that obligates such Person to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iv) obligations of such Person to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, such Person and (v) the capital stock of such Person. Unless otherwise specified, “Equity Security” means an Equity Security of the Company.
Exchange ” means the NASDAQ Global Market or the NASDAQ Global Select Market on which the Class A Common stock (or Reference Property, to the extent applicable) is listed, or if the Class A Common Stock (or Reference Property, to the extent applicable) is not listed on the NASDAQ Global Market or the NASDAQ Global Select Market, The New York Stock Exchange or other principal national securities exchange on which the Class A Common Stock (or Reference Property, to the extent applicable) is listed.
Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excluded Parties ” means (x) the Catterton Investor, the PSP Investor and their respective Affiliates and (y) any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) of which any Person referred to in clause (x) of this definition is a member.
Ex-Date ” means the first date on which the Class A Common Stock trades on the applicable Exchange or in the applicable market, regular way, without the right to receive the issuance, dividend, or distribution in question from the Company or, if applicable, from the seller of the Class A Common Stock on such Exchange or market (in the form of due bills or otherwise) as determined by such Exchange or market.
Governmental Entity ” shall mean any United States or non-United States federal, state, or local government, or any agency, bureau, board, commission, department, tribunal, or instrumentality thereof or any court, tribunal, or arbitral or judicial body.
hereof ,” “ herein ,” and “ hereunder ” and words of similar import refer to this Certificate of Designations as a whole and not merely to any particular clause, provision, section, or subsection.
Holders ” means the holders of outstanding Preferred Shares as they appear in the records of the Company.

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HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder.
Issue Date ” means the date on which the Series A Preferred Stock is first issued by the Company.
Majority Holders ” means Holders owning of record more than 50% of the voting power of the issued and outstanding Preferred Shares.
Mandatory Conversion Condition ” shall be satisfied on the first date on which the Company has completed one or more Qualified Equity Offerings that, when aggregated together and added to the aggregate Purchase Price paid for all Preferred Shares issued on the Issue Date, result in aggregate gross proceeds to the Company of at least $50 million; provided, that the Mandatory Conversion Condition shall be deemed satisfied if such condition is waived by the Holders of all outstanding Preferred Shares.
Market Disruption Event ” means the occurrence or existence for more than one half hour period in the aggregate on any scheduled Trading Day for the Class A Common Stock (or Reference Property, to the extent applicable) of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the applicable Exchange or otherwise) in the Class A Common Stock (or Reference Property, to the extent applicable) or in any options, contracts, or future contracts relating to the Class A Common Stock (or Reference Property, to the extent applicable), and such suspension or limitation occurs or exists at any time before 4:00 p.m. (New York City time) on such day.
Market Value ” on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the principal Exchange on which shares of the Class A Common Stock are then listed. If the Class A Common Stock is not so listed or traded, the Market Value will be an amount reasonably determined by the Board in good faith to be the fair value of the Class A Common Stock.
Option Securities ” means options, warrants or other rights to purchase or acquire Common Stock or Convertible Securities, including subscription rights, as well as stock appreciation rights, phantom stock units and similar rights whose value is derived from the value of the Common Stock.
Parity Securities ” means any class or series of Preferred Stock or any other Capital Stock of the Company hereafter issued in compliance with the terms hereof and the terms of which expressly provide that it will rank on parity with the Series A Preferred Stock with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the Company, or otherwise.
Permitted Transfer ” means any transfer of Preferred Shares by a Holder (i) to the Catterton Investor or one of its Affiliates or (ii) to the Company or its Subsidiaries.

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Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or other entity, or any Governmental Entity, any agency or political subdivisions thereof, or other “Person” as contemplated by Section 13(d) of the Exchange Act.
Preferred Shares ” means the shares of Series A Preferred Stock.
PSP Investor ” means Argentia Private Investments Inc., a corporation incorporated pursuant to the Canada Business Corporations Act, and its Affiliates.
Purchase Price ” means $1,000 per Preferred Share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock.
Qualified Equity Offerings ” means one or more primary offerings of shares of the Company’s Capital Stock, or rights to purchase shares of the Company’s Capital Stock, closing on or before the six-month anniversary of the Issue Date, including, for the avoidance of doubt, one or more rights offerings made to the Company’s stockholders for the purchase of Capital Stock of the Company.
Redemption Conditions ” means, with respect to a redemption, purchase or other acquisition for value, that: (i) the Board has determined in good faith that, immediately after such redemption, purchase or acquisition, (a) the fair value and present fair saleable value of the Company’s assets will exceed its liabilities, (b) the Company can and will be able to pay its debts as they become due, (c) the Company’s capital and assets will not be unreasonably small for the business in which the Company is engaged, (d) the Company will be able to continue as a going concern and not be rendered insolvent and (e) the Company shall be in compliance with the covenants under its indebtedness for borrowed money after such redemption, purchase or other acquisition, and (ii) any lenders or creditors for the Company’s indebtedness for borrowed money who are entitled to consent to such redemption, purchase or other acquisition for value have provided such consent.
Redemption Price ” means an amount in cash equal to the sum, without duplication, of the Accrued Liquidation Preference and accrued and unpaid Preferred Dividends through the Redemption Date.
Securities Purchase Agreement ” means that certain Securities Purchase Agreement by and among the Company and Catterton-Noodles, LLC, dated February 8, 2017, as amended from time to time.
Senior Securities ” means any class or series of Preferred Stock or any other Capital Stock of the Company hereafter issued in compliance with the terms hereof and the terms of which expressly provide that it will rank senior in preference or priority to the Series A Preferred Stock with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the Company, or otherwise.

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Rights Offering Dividend ” means a dividend of subscription rights exercisable for a period not longer than sixty (60) days declared in connection with a Qualified Equity Offering.
Specified Rights Offering Dividend ” means a Rights Offering Dividend with respect to which the issuance of subscription rights to the Holders in the form of a Participating Dividend would cause the Rights Offering Dividend to require stockholder approval pursuant to the rules of the Exchange.
Subsidiary ” of any Person shall mean any other Person in which such Person, directly or indirectly, owns or has the power to vote or control more than 50% of the voting stock or other interests the holders of which are generally entitled to vote for the election of the board of directors or other applicable governing body of such other Person (or, in the case of a partnership, limited liability company or other similar entity, control of the general partnership, managing member or similar interests). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.
Thirty Day VWAP ” means, with respect to a security, the average of the Daily VWAP of such security for each day during a thirty (30) consecutive Trading Day period ending immediately prior to the date of determination. Unless otherwise specified, “Thirty Day VWAP” means the Thirty Day VWAP of the Class A Common Stock.
Total Current Voting Power ” shall mean, with respect to any entity, at the time of determination of Total Current Voting Power, the total number of votes which may be cast in the general election of directors of such entity (or, in the event the entity is not a corporation, the governing members, board or other similar body of such entity and, in the case of the Company, assuming all shares of Class B Common Stock have been converted into Class A Common Stock). Unless otherwise specified, “Total Current Voting Power” means Total Current Voting Power of the Company.
Trading Day ” means any day on which (i) there is no Market Disruption Event and (ii) the Exchange is open for trading or, if the Class A Common Stock (or Reference Property, to the extent applicable) is not listed, admitted for trading or quoted on an Exchange, any Business Day. A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then-standard closing time for regular trading on the relevant Exchange or trading system.
Transfer ” means, with respect to any security, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of such security or any interest therein, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law. For the avoidance of doubt, a transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of an Equity Security in any stockholder of the Company, or direct or indirect parent thereof, shall constitute a “Transfer” of securities of the Company.
Warrants ” has the meaning ascribed thereto in the Securities Purchase Agreement.

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Section 7.2      Each of the following terms is defined in the Section set forth opposite such term:

Term
Section
Board
Preamble
Certificate of Incorporation
Recitals
Common Dividend
2.2
Company
Preamble
Conversion Amount
5.3(a)(i)
Conversion Date
5.1(c)
DGCL
Preamble
Dividend Commencement Date
2.1(a)
Junior Securities
1.2(a)
Participating Dividend
2.2
Participating Liquidation Preference
3.1
Preferred Dividend
2.1(a)
Preferred Stock
Recitals
Redemption Date
6.2
Redemption Demand
6.1(a)
Redemption Notice
6.2
Reference Property
5.5(e)
Reference Transaction
5.5(e)
Series A Preferred Stock
1.1
Special Dividend
2.1(c)
Trigger Event
5.5(b)
ARTICLE VIII.      MISCELLANEOUS.
Section 8.1      Transfer Restrictions . No Holder may Transfer any Preferred Shares except pursuant to a Permitted Transfer or as approved by the Board, subject to its exercise of reasonable discretion.
Section 8.2      Share Certificates . If any certificates representing Preferred Shares shall be mutilated, lost, stolen, or destroyed, the Company shall issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the lost, stolen, or destroyed certificate, a new Preferred Share certificate of like tenor and representing an equivalent number of Preferred Shares, but only upon receipt of evidence of such loss, theft, or destruction of such certificate and indemnity by the holder thereof, if requested, reasonably satisfactory to the Company.
Section 8.3      Status of Cancelled Shares . Preferred Shares which have been converted, redeemed, repurchased, or otherwise cancelled shall be retired and, following the filing of any certificate required by the DGCL, have the status of authorized and unissued shares of Preferred

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Stock, without designation as to series, until such shares are once more designated by the Board as part of a particular series of Preferred Stock of the Company.
Section 8.4      Severability . If any right, preference, or limitation of the Series A Preferred Stock set forth in this Certificate of Designations is invalid, unlawful, or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences, and limitations set forth in this Certificate of Designations which can be given effect without the invalid, unlawful, or unenforceable right, preference, or limitation shall, nevertheless, remain in full force and effect, and no right, preference, or limitation herein set forth shall be deemed dependent upon any other such right, preference, or limitation unless so expressed herein.
Section 8.5      Headings; Interpretation . The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof. When this Certificate of Designations refers to a specific agreement (including, for the avoidance of doubt, the Securities Purchase Agreement) or other document or a decision by any body or Person that determines the meaning or operation of a provision hereof, the Secretary of the Company shall maintain a copy of such agreement, document or decision at the principal executive offices of the Company and a copy thereof shall be provided free of charge to any stockholder who makes a request therefor. Unless otherwise expressly provided herein, a reference to any specific agreement (including, for the avoidance of doubt, the Securities Purchase Agreement) or other document shall be deemed a reference to such agreement or document as amended from time to time in accordance with the terms of such agreement or document.
Section 8.6      Notices . All notices or communications in respect of Preferred Stock shall be in writing and shall be deemed delivered (a) three (3) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) one (1) Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, (c) on the date of delivery if delivered personally, or (d) if by facsimile, upon written confirmation of receipt by facsimile. Notwithstanding the foregoing, if Preferred Stock is issued in book-entry form through The Depository Trust Company or any similar facility, such notices may be given to the beneficial holders of Preferred Stock in any manner permitted by such facility.
Section 8.7      Other Rights . The shares of Preferred Stock shall not have any rights, preferences, privileges, or voting powers or relative, participating, optional, or other special rights, or qualifications, limitations, or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided by applicable law and regulation.
Section 8.8     Waiver . The terms of this Certificate of Designations may be waived upon the written consent of the Majority Holders and the Board.
[Rest of page intentionally left blank.]

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IN WITNESS WHEREOF , the Company has caused this Certificate of Designations to be executed by a duly authorized officer of the Company as of February 9, 2017.

NOODLES & COMPANY ,
A Delaware corporation

By: /s/ PAUL STRASEN
Name: Paul Strasen
Title: Executive Vice President, General Counsel & Secretary

[SIGNATURE PAGE TO CERTIFICATE OF DESIGNATIONS ]
Exhibit 4.2


NOODLES & COMPANY
WARRANT TO PURCHASE CLASS A COMMON STOCK
Warrant No.: 1    
Number of Shares of Class A Common Stock: 1,913,793
Date of Issuance: February 9, 2017 (“ Issuance Date ”)
Noodles & Company, a company organized under the laws of the State of Delaware (the “ Company ”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Catterton-Noodles, LLC, a limited liability company organized under the laws of the State of Delaware, the registered holder hereof or its permitted assigns (the “ Holder ”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after August 9, 2017 (the “ Initial Exercisability Date ”), but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), a maximum of 1,913,793 fully paid non-assessable shares of Class A Common Stock, subject to adjustment as provided herein (the “ Warrant Shares ”). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Class A Common Stock (including any Warrants to Purchase Class A Common Stock issued in exchange, transfer or replacement hereof, this “ Warrant ”), shall have the meanings set forth in Section 14. This Warrant is issued pursuant to the Securities Purchase Agreement, dated as of February 8, 2017 (the “ Securities Purchase Agreement ”).
1. EXERCISE OF WARRANT.
(a)      Mechanics of Exercise . Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date and on or before the Expiration Date, in whole or in part, by delivery to the Company (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “ Exercise Notice ”), of the Holder's election to exercise this Warrant. Within two (2) Trading Days following the delivery of the Exercise Notice, the Holder shall make payment to the Company (i) of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “ Aggregate Exercise Price ”) in cash by wire transfer of immediately available funds; provided , however , that if the Holder is subject to HSR Act Restrictions (as defined in Section 1(g) below), the Purchase Price shall be paid to the Company within five (5) Business Days of the termination of all HSR Act Restrictions or, (ii) if the provisions of Section 1(c) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(c)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder provided that the Holder confirms it has not transferred the Warrant or any interest in it, nor shall any ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first (1 st ) Trading Day following the date on which the Company

 
 
 



has received the applicable Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder and the Company's transfer agent (the “ Transfer Agent ”). Subject to Section 1(e), so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2 nd ) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i) the third (3 rd ) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2 nd ) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the second (2 nd ) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (such earlier date, the “ Share Delivery Date ”), the Company shall (X) if the Warrant Shares to be delivered are “restricted securities” within the meaning of Rule 144 under the Securities Act (“ Restricted Securities ”), deliver such securities, at the Holder’s option, by book-entry or issue a certificate representing such Warrant Shares and (Y) if the Warrant Shares are not Restricted Securities, then (I) if the Transfer Agent is participating in The Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system, or (II) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same day processing. Subject to Section 1(e), upon delivery of the Exercise Notice and payment of the Aggregate Exercise Price, the Holder shall be deemed for all corporate purposes to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised (the “ Exercise Date ”), irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. However, if the Holder is subject to HSR Act filing requirements (a) the Exercise Date shall be deemed to be the date immediately following the date of the expiration of all HSR Act Restrictions and (b) for the purposes of Section 1(c), the Fair Market Value of one Warrant Share shall be determined as of the date of the Exercise Notice. If this Warrant is physically delivered to the Company in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 6(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) which may be

 
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payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination; provided , however , that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.
(b)      Exercise Price . For purposes of this Warrant, “ Exercise Price ” means $4.35 per share, subject to adjustment as provided herein.
(c)      Cashless Exercise . Notwithstanding anything contained herein to the contrary, at any time when the Fair Market Value (as defined below) equals or exceeds the Exercise Price, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment of the Aggregate Exercise Price otherwise contemplated to be made to the Company upon such exercise, elect instead to receive upon such exercise the “Net Number” of shares of Class A Common Stock determined according to the following formula (a “ Cashless Exercise ”):
Net Number = (A x B) - (A x C)
B
For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant is then being exercised.
B= The Fair Market Value of one Warrant Share (as adjusted to the date of such calculation).
C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
For purposes of this Warrant, the term “Fair Market Value” of a Warrant Share as of a particular date shall mean:
(1)      If the Class A Common Stock is traded on an Exchange, the Fair Market Value shall be deemed to be the average of the Daily VWAP on such Exchange over the five (5) Trading Days ending immediately prior to (but not including) the applicable date of valuation;
(2)      If the Class A Common Stock is actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the Daily VWAP over the 30‑day period ending immediately prior to (but not including) the applicable date of valuation;

 
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(3)      If there is no active public market for the Class A Common Stock but there is an active public market for a class or series of Capital Stock of the Company into which the Class A Common Stock is convertible, then if such class or series of Capital Stock is:
(A)      traded on an Exchange, the Fair Market Value shall be deemed to be the average of the Daily VWAP of a share of such class or series of Capital Stock of the Company on such exchange or market over the five (5) Trading Days ending immediately prior to (but not including) the applicable date of valuation multiplied by the number of shares of such class or series of Capital Stock into which one share of the Class A Common Stock is convertible, or
(B)      actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the Daily VWAP for a share of such class or series of Capital Stock of the Company over the 30‑day period ending immediately prior to (but not including) the applicable date of valuation multiplied by the number of shares of such class or series of Capital Stock into which one share of the Class A Common Stock is convertible; or
(4)      If there is no active public market for the Class A Common Stock or any other class or series of Capital Stock of the Company into which the Class A Common Stock is convertible, the Fair Market Value shall be the highest price per share which the Company could obtain on the date of calculation from a willing buyer (not a current employee or director) for shares of Class A Common Stock sold by the Company, from authorized but unissued shares, as reasonably determined in good faith by the Board of Directors of the Company (the “ Board ”).
If Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended (the “ 1933 Act ”), the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 1(c).

(d)      Disputes . In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 10.
(e)      Voting Trigger Repurchase . Notwithstanding anything to the contrary in this Section 1, if the Board determines that an exercising Holder would, upon exercise, be the Beneficial Owner of 45% or more of the Total Current Voting Power (the “ Voting Trigger ”) (assuming for this purpose that all of such exercising Holder’s Option Securities (including Warrants) and Convertible Securities (including Preferred Shares) have converted into, or been exercised for, Class A Common Stock (or Reference Property, to the extent applicable)), then the Company may elect to repurchase from such exercising Holder (a “ Voting Trigger Repurchase ”), out of funds legally available therefor, up to such number of Warrants that would otherwise be exercised for Warrant Shares as would be necessary so that, following such repurchase, the Voting Trigger would not occur (the “ Voting Trigger Repurchase Option ”). The repurchase price for such Warrants shall be equal to (i) the number of Warrant Shares for which such repurchased Warrants

 
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would otherwise have been exercised for, times (ii) the Fair Market Value minus the Exercise Price, each as determined on the date the Voting Trigger Repurchase Option Notice (as defined below) is sent. Within five (5) Business Days of receipt of an Exercise Notice, the Company shall send to the exercising Holder a notice (a “Voting Trigger Repurchase Option Notice”) stating whether the Voting Trigger Repurchase Option is applicable and, if the Voting Trigger Repurchase Option is applicable, whether the Company will exercise the Voting Trigger Repurchase Option. If the Company exercises the Voting Trigger Repurchase Option, the Voting Trigger Repurchase Option Notice shall include: (A) the number of Warrants to be repurchased pursuant to the Voting Trigger Repurchase, (B) the date for such Voting Trigger Repurchase (the “ Voting Trigger Repurchase Date ”), which date shall not be less than three calendar days after delivery of the Voting Trigger Repurchase Notice nor more than ninety (90) calendar days after delivery of the Voting Trigger Repurchase Notice, and (C) a statement that payment in connection with the Voting Trigger Repurchase will be made to the exercising Holder within five (5) Business Days of the Voting Trigger Repurchase Date to the account specified by such exercising Holder to the Company in writing. Any Voting Trigger Repurchase Notice delivered by the Company under this Section 1(e) in accordance with Section 7 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such exercising Holder actually receives such notice, and neither the failure of an exercising Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the Voting Trigger Repurchase.
(f)      Required Reserve Amount .  So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Class A Common Stock at least equal to 100% of the maximum number of shares of Class A Common Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Class A Common Stock under the Warrants then outstanding (without regard to any limitations on exercise) (the “ Required Reserve Amount ”).
(g)      HSR Act . The Company hereby acknowledges that exercise of this Warrant by the Holder may subject the Company and/or the Holder to the filing requirements under the HSR Act and that the Holder may be prevented from exercising this Warrant until the expiration or early termination of all waiting periods imposed by the HSR Act (“ HSR Act Restrictions ”). If on or before the Expiration Date the Holder has delivered the Exercise Notice to the Company and the Holder has not been able to complete the exercise of this Warrant prior to the Expiration Date because of HSR Act Restrictions, the Holder shall be entitled to complete the process of exercising this Warrant as noted in the Exercise Notice delivered prior to the Expiration Date in accordance with the procedures set forth herein notwithstanding the fact that completion of such exercise would take place after the Expiration Date, as applicable.
(h)      Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Class A Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount, then the Company shall promptly take all action reasonably necessary to increase the Company’s authorized shares of Class A Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.

 
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2.           ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES .
(a)      The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(1)      Adjustments for Stock Splits and Combinations . If the Company shall at any time or from time to time after the Issuance Date effect a subdivision of any class of outstanding Common Stock, the Exercise Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Class A Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Company shall at any time or from time to time after the Issuance Date combine the outstanding shares of any class of the outstanding Common Stock, the Exercise Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Class A Common Stock issuable upon the exercise of each Warrant shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.
(2)      Common Stock Dividends or Distributions . If the Company at any time from and after the Issuance Date issues shares of Common Stock as a dividend or distribution on all or substantially all shares of one or more classes of Common Stock, the Exercise Price will be adjusted based on the following formula:
EP 1  = EP 0 x
OS 0
 
 
 
 
OS 1
 
 
 

where,
    
EP 0 =    the Exercise Price in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution;

EP 1 =    the Exercise Price in effect immediately after the open of business on the Ex-Date for such dividend or distribution;

OS 0 =    the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Date for such dividend or distribution; and

OS 1 =    the number of shares of Common Stock outstanding immediately after such dividend or distribution.

Any adjustment made under this Section 2(a)(2) shall become effective immediately after the open of business on the Ex-Date for such dividend or distribution. If any dividend or distribution of the type described in this Section 2(a)(2) is declared but not so paid or made, the Exercise Price shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend

 
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or distribution, to the Exercise Price that would then be in effect if such dividend or distribution had not been declared or announced. Notwithstanding the foregoing, no such adjustment shall be made if the holders of Warrants simultaneously receive a dividend or other distribution of shares of Class A Common Stock in a number equal to the number of shares of Class A Common Stock as they would have received if all outstanding Warrants had been exercised on the date of such event. Notwithstanding anything in this Section 2 to the contrary, if an Exercise Price adjustment becomes effective pursuant to this clause (2) of Section 2(a) on any Ex-Date, and an exercising Holder that exercises its Warrants on or after such Ex-Date and on or prior to the related record date would be treated as the record holder of shares of Class A Common Stock as of the related Exercise Date based on an adjusted Exercise Price for such Ex-Date and participate on an adjusted basis in the related dividend, distribution or other event giving rise to such adjustment, then, notwithstanding the foregoing Exercise Price adjustment provisions, the Exercise Price adjustment relating to such Ex-Date will not be made for such exercising Holder. Instead, such Holder will be treated as if such Holder were the record owner of the shares of Class A Common Stock on an un-adjusted basis and participate in the related dividend, distribution, or other event giving rise to such adjustment.

(b)      Notwithstanding anything in this Section 2 to the contrary, no adjustment under Section 2(a) need be made to the Exercise Price unless such adjustment would require a decrease or an increase of at least 1% of the Exercise Price then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, if any, which, together with any adjustment or adjustments so carried forward, shall amount to a decrease or an increase of at least 1% of such Exercise Price; provided that, on the date of any exercise of the Warrant pursuant to Section 2, adjustments to the Exercise Price will be made with respect to any such adjustment carried forward that has not been taken into account before such date.
(c)      No Adjustments Below Par Value . Notwithstanding any other provision of this Warrant, the Exercise Price shall not be reduced below the par value per share of Class A Common Stock.
(d)      Reference Property . In the case of any recapitalization, reclassification, or change of the Class A Common Stock (other than changes resulting from a subdivision, combination or reclassification described in Section 2(a)(1) or a Fundamental Transaction), in each case as a result of which the Class A Common Stock (but not the Warrants) would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any of the foregoing, a “ Reference Transaction ”), then, at the effective time of the Reference Transaction, the right to exercise each Warrant will be changed into a right to exercise such Warrant Share for the kind and amount of shares of stock, other securities, or other property or assets (including cash or any combination thereof) (the “ Reference Property ”) that a Holder would have received in respect of the Class A Common Stock issuable upon exercise of such Warrants immediately prior to such Reference Transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions of this Warrant with respect to the rights and interests thereafter of the Holder, to the end that the provisions set forth in this Warrant shall thereafter be applicable, as nearly as reasonably may be, in relation to such Reference Property. In the event that holders of Class A Common Stock

 
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have the opportunity to elect the form of consideration to be received in the Reference Transaction, the Company shall make adequate provision whereby the Holders shall have a reasonable opportunity to determine the form of consideration for which all of the Warrants, treated as a single class, shall be exercisable from and after the effective time of the Reference Transaction. Any such election shall be made by the Majority Holders. Any such determination by the Holders shall be subject to any limitations to which all holders of Class A Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in the Reference Transaction, and shall be conducted in such a manner as to be completed at approximately the same time as the time elections are made by holders of Class A Common Stock. The provisions of this Section 2(d) and any equivalent thereof in any such securities similarly shall apply to successive Reference Transactions.
(e)      Rules of Calculation; Treasury Stock . All calculations will be made to the nearest one-hundredth of a cent or to the nearest one-ten thousandth of a share. Except as explicitly provided herein, the number of outstanding shares of Common Stock and, to the extent applicable, Reference Property will be calculated on the basis of the number of issued and outstanding shares not including shares held in the treasury of the Company.
(f)      No Duplication . If any action would require adjustment of the Exercise Price pursuant to more than one of the provisions described in this Section 2 in a manner such that such adjustments are duplicative, only one adjustment (which shall be the adjustment most favorable to the Holder) shall be made.
(g)      Notice of Record Date . In the event of (x) any event described in Section 2(a)(1) or (2), (y) any Reference Transaction to which Section 2(d) applies, or (z) the dissolution, liquidation, or winding-up of the Company, the Company shall mail to the Holder at its last address as shown on the records of the Company, at least twenty (20) days prior to the record date specified in (1) below or twenty (20) days prior to the date specified in (2) below, as applicable, a notice stating:
(1)      the record date for the dividend, other distribution, stock split, or combination or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be entitled to such dividend, other distribution, stock split, or combination; or:
(2)      the date on which such reclassification, change, dissolution, liquidation, winding-up, or other event constituting a Reference Transaction is estimated to become effective or otherwise occur, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for Reference Property, other securities or other property deliverable upon such reclassification, change, liquidation, dissolution, winding-up or Reference Transaction.
(h)      Certificate of Adjustments . Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 2, the Company at its expense shall as promptly as reasonably practicable compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate, signed by an officer of the Company (in his or her capacity as such and not in an individual capacity), setting forth (A) the calculation of such

 
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adjustments and readjustments in reasonable detail, (B) the facts upon which such adjustment or readjustment is based, (C) the Exercise Price then in effect, and (D) the number of shares of Class A Common Stock (or Reference Property, to the extent applicable) and the amount, if any, of Capital Stock, other securities or other property (including, but not limited to, cash and evidences of indebtedness) which then would be received upon the exercise of a Warrant
3.           FUNDAMENTAL TRANSACTIONS .
(a)      The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of Capital Stock equivalent to the shares of Class A Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of Capital Stock (but taking into account the relative value of the shares of Class A Common Stock pursuant to such Fundamental Transaction and the value of such shares of Capital Stock, such adjustments to the number of shares of Capital Stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction).
(b)      Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Class A Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.
(c)      In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Class A Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Class A Common Stock (a “ Corporate Event ”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an

 
9
 



exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Class A Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) (collectively, the “ Corporate Event Consideration ”) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(d)      Notwithstanding the foregoing, in the event of a Change of Control, then at the request of the Holder delivered before the 30th day after such Change of Control, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within ten (10) Business Days after such request (or, if later, on the effective date of the Change of Control), an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the effective date of such Change of Control, payable at the option of the Company in either (x) Class A Common Stock (or corresponding Corporate Event Consideration, as applicable) valued at the value of the consideration received by the shareholders in such Change of Control or (y) cash.
4.      NONCIRCUMVENTION . The Company hereby covenants and agrees that the Company will not, by amendment of its Amended and Restated Certificate of Incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Class A Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Class A Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Class A Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Class A Common Stock as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
5.      WARRANT HOLDER NOT DEEMED A STOCKHOLDER . Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of Capital Stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger,

 
10
 



conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
6.      REISSUANCE OF WARRANTS .
(a)      Transfer of Warrant .
(1)      If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 6(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 6(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(2)      In addition, the Holder acknowledges that this Warrant and the Warrant Shares have not been registered under the 1933 Act and agrees not to sell, offer for sale, pledge, hypothecate, distribute, transfer or otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise in the absence of (a) an effective registration statement under the 1933 Act as to this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable U.S. federal or state securities law then in effect or (b) if reasonably requested by the Company, an opinion of counsel (which may be counsel for the Company), reasonably satisfactory to the Company, that such registration and qualification are not required. Each certificate or other instrument for Warrant Shares issued upon the exercise of this Warrant pursuant to Section 1(a), or in the case of uncertificated shares, the ledger entry reflecting the issuance of such Warrant Shares, shall bear a legend substantially to the foregoing effect.
(b)      Lost, Stolen or Mutilated Warrant . Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 6(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)      Exchangeable for Multiple Warrants . This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 6(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent

 
11
 



the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender.
(d)      Issuance of New Warrants . Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 6(a) or Section 6(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Class A Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
7.           NOTICES . Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing, by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile, and will be deemed given (a) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (b) if delivered by nationally recognized overnight carrier, one (1) Business Day after so mailed, (c) on the date of transmission, if delivered by electronic mail to each of the email addresses specified in Section 7 prior to 5:00 p.m. (New York time) on a Trading Day, (d) the next Trading Day after the date of transmission, if delivered by electronic mail to each of the email addresses specified in Section 7 on a day that is not a Trading Day or later than 5:00 p.m. (New York time) on any Trading Day and (e) if delivered by facsimile, upon electronic confirmation of receipt of such facsimile, and will be delivered and addressed as follows:
(a)      if to the Company, addressed as follows:
Noodles & Company
520 Zang Street, Suite D
Broomfield, Colorado 80021
Attention:     General Counsel
Facsimile:    (720) 214-1921
with copies (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP
200 Park, 47
th Floor
New York, NY 10166
Attention:    Andrew Fabens
Facsimile:    212-351-4035

 
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(b)      if to the Holder, to:
Catterton-Noodles, LLC
c/o Catterton Partners
599 West Putnam Avenue
Greenwich, CT 06830
Attention:    Andrew Taub
Facsimile:    203-629-4903
with copies (which shall not constitute notice) to:

Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attention:    Stuart Bressman
Facsimile:    212-969-2900


 
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The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
8.           AMENDMENT AND WAIVER . Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Majority Holders.
9.           GOVERNING LAW; JURISDICTION; JURY TRIAL . This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 7 above or such other address as the Company subsequently delivers to the Holder and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 
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10.           DISPUTE RESOLUTION . In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
11.           REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF . The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
12.           RESERVED.
13.           SEVERABILITY; CONSTRUCTION; HEADINGS .    If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The

 
15
 



headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
14.      CERTAIN DEFINITIONS . For purposes of this Warrant, the following terms shall have the following meanings:
(a)      Affiliate ” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. Notwithstanding the foregoing, none of the Company, its Subsidiaries or its other controlled Affiliates shall be considered Affiliates of the Catterton Investor.
(b)      Beneficial Owner ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition (including, for the avoidance of doubt, by exercise of the Warrants and conversion of any Preferred Shares). The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.
(c)      Black Scholes Value ” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day immediately following the first public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the lesser of 100% and the 100-day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, (iii) the underlying price per share used in such calculation shall be the highest Daily VWAP during the five (5) Trading Days prior to the closing of the Fundamental Transaction, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(d)      Bloomberg ” means Bloomberg Financial Markets.
(e)      Business Day ” means any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in the State of New York are authorized or required by law or other governmental action to close.
(f)      Capital Stock ” means, with respect to any Person, any and all shares of stock, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets after liabilities, of such Person.

 
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(g)      Catterton Investor ” means Catterton-Noodles, LLC, a Delaware limited liability company, and its Affiliates.
(h)      Change of Control ” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification of the Class A Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respect, the holders of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (iii) a merger in connection with a bona fide acquisition by the Company of any Person in which (x) the gross consideration paid, directly or indirectly, by the Company in such acquisition is not greater than 20% of the Company’s market capitalization as calculated on the date of the consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority of the board of directors of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transaction that, directly or indirectly, results in the Company or the Successor Entity not having Common Stock or common stock, as applicable, registered under the Exchange Act and listed on an Eligible Exchange shall be deemed a Change of Control.
(i)      “Class A Common Stock” means the Company’s Class A Common Stock, par value $0.01 per share.
(j)      “Class B Common Stock” means the Company’s Class B Common Stock, par value $0.01 per share.
(k)      Closing Date ” has the meaning provided to such term in the Securities Purchase Agreement.
(l)      Common Stock ” means (i) the Class A Common Stock, (ii) the Class B Common Stock and (iii) any Capital Stock into which the Class A Common Stock or the Class B Common Stock shall have been changed or any Capital Stock resulting from a reclassification of such Class A Common Stock or Class B Common Stock.
(m)      Convertible Securities ” means securities by their terms convertible into or exchangeable for Common Stock or options, warrants or rights to purchase such convertible or exchangeable securities, but excluding Option Securities.
(n)      Daily VWAP ”, with respect to any Trading Day, means the volume-weighted average price per share of Class A Common Stock (or per minimum denomination or unit size in the case of any security other than Class A Common Stock) as displayed under the heading “Bloomberg VWAP” on the Bloomberg page for the “<equity> AQR” page corresponding to the “ticker” for such Class A Common Stock or unit (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average

 
17
 



price is unavailable, the market value of one share of such Class A Common Stock (or per minimum denomination or unit size in the case of any security other than Class A Common Stock)) on such Trading Day. The “volume weighted average price” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
(o)      Eligible Exchange ” means the NASDAQ Global Select Market, NASDAQ Global Market, NASDAQ Capital Market, the New York Stock Exchange or the NYSE MKT.
(p)      Exchange ” means the NASDAQ Global Market or the NASDAQ Global Select Market on which the Class A Common stock (or Reference Property, to the extent applicable) is listed, or if the Class A Common Stock (or Reference Property, to the extent applicable) is not listed on the NASDAQ Global Market or the NASDAQ Global Select Market, The New York Stock Exchange or other principal national securities exchange on which the Class A Common Stock (or Reference Property, to the extent applicable) is listed.
(q)      Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(r)      Expiration Date ” means the date sixty (60) months after the Initial Exercisability Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Exchange (a “ Holiday ”), the next day that is not a Holiday.
(s)      Ex-Date ” means the first date on which the Class A Common Stock trades on the applicable Exchange or in the applicable market, regular way, without the right to receive the issuance, dividend, or distribution in question from the Company or, if applicable, from the seller of the Class A Common Stock on such Exchange or market (in the form of due bills or otherwise) as determined by such Exchange or market.
(t)      Fundamental Transaction ” means:
(1)      that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions,
(A)      consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity;
(B)      sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X under the Exchange Act) to one or more Subject Entities;
(C)      make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the

 
18
 



outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock;
(D)      consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the outstanding shares of Common Stock; or
(E)      reorganize, recapitalize or reclassify its shares of Common Stock,
(2)      that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock not held by all such Subject Entities as of the Closing Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock without approval of the stockholders of the Company; or
(3)      directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this

 
19
 



definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(u)      Governmental Entity ” shall mean any United States or non-United States federal, state, or local government, or any agency, bureau, board, commission, department, tribunal, or instrumentality thereof or any court, tribunal, or arbitral or judicial body.
(v)      Group ” means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
(w)      HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder.
(x)      Majority Holders ” means Holders owning of record more than 50% of the Warrants initially issued on the Closing Date and remaining outstanding.
(y)      Market Disruption Event ” means the occurrence or existence for more than one half hour period in the aggregate on any scheduled Trading Day for the Class A Common Stock (or Reference Property, to the extent applicable) of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the applicable Exchange or otherwise) in the Class A Common Stock (or Reference Property, to the extent applicable) or in any options, contracts, or future contracts relating to the Class A Common Stock (or Reference Property, to the extent applicable), and such suspension or limitation occurs or exists at any time before 4:00 p.m. (New York City time) on such day.
(z)      Option Securities ” means options, warrants or other rights to purchase or acquire Common Stock or Convertible Securities, including subscription rights, as well as stock appreciation rights, phantom stock units and similar rights whose value is derived from the value of the Common Stock.
(aa)      Parent Entity ” of a Person means an entity that, directly or indirectly, controls the applicable Person, including such entity whose common stock or equivalent equity security is quoted or listed on an Exchange (or, if so elected by the Holder, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person or such entity designated by the Holder or in the absence of such designation, such Person or entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(bb)      Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or other entity, or any Governmental Entity, any agency or political subdivisions thereof, or other “Person” as contemplated by Section 13(d) of the Exchange Act.
(cc)      Preferred Shares ” shares of the Company’s Series A Preferred Stock, par value $0.01 per share.

 
20
 



(dd)      PSP Investor ” means Argentia Private Investments Inc., a corporation incorporated pursuant to the Canada Business Corporations Act, and its Affiliates.
(ee)      “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, for the Exchange with respect to the Class A Common Stock that is in effect on the date of receipt of an applicable Exercise Notice.
(ff)      Subject Entity ” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group; provided, that the term “Subject Entity” shall exclude (i) the Catterton Investor, the PSP Investor and their respective Affiliates and (ii) any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) of which any Person referred to in clause (i) of this definition is a member.
(gg)      Subsidiary ” of any Person shall mean any other Person in which such Person, directly or indirectly, owns or has the power to vote or control more than 50% of the voting stock or other interests the holders of which are generally entitled to vote for the election of the board of directors or other applicable governing body of such other Person (or, in the case of a partnership, limited liability company or other similar entity, control of the general partnership, managing member or similar interests). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.
(hh)      Successor Entity ” means one or more Person or Persons (or, if so elected by the Holder, the Company or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(ii)      Thirty Day VWAP ” means, with respect to a security, the average of the Daily VWAP of such security for each day during a thirty (30) consecutive Trading Day period ending immediately prior to the date of determination. Unless otherwise specified, “Thirty Day VWAP” means the Thirty Day VWAP of the Class A Common Stock.
(jj)      Total Current Voting Power ” shall mean, with respect to any entity, at the time of determination of Total Current Voting Power, the total number of votes which may be cast in the general election of directors of such entity (or, in the event the entity is not a corporation, the governing members, board or other similar body of such entity and, in the case of the Company, assuming all shares of Class B Common Stock have been converted into Class A Common Stock). Unless otherwise specified, “Total Current Voting Power” means Total Current Voting Power of the Company.
(kk)      Trading Day ” means any day on which (i) there is no Market Disruption Event and (ii) the Exchange is open for trading or, if the Class A Common Stock (or Reference Property, to the extent applicable) is not listed, admitted for trading or quoted on an Exchange, any Business Day. A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then-standard closing time for regular trading on the relevant Exchange or trading system.

 
21
 



(ll)      Transaction Documents ” means any agreement entered into by and between the Company and the Holder, as applicable.
[Signature Page Follows]


 
22
 



IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Class A Common Stock to be duly executed as of the Issuance Date set out above.


Noodles & Company


By:___________________________
Name:    
Title:    


 
 
 



EXHIBIT A

EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE CLASS A COMMON STOCK

NOODLES & COMPANY
The undersigned holder hereby exercises the right to purchase _________________ shares of Class A Common Stock (“ Warrant Shares ”) of Noodles & Company, a company organized under the laws of the State of Delaware (the “ Company ”), evidenced by the attached Warrant to Purchase Class A Common Stock (the “ Warrant ”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:

____________    a “ Cash Exercise” with respect to _________________ Warrant Shares; and/or

____________    a “Cashless Exercise” with respect to _______________ Warrant Shares.

2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

3. Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.



Date: _______________ __, ______


                    
Name of Registered Holder


By:                     
Name:
Title:


 
 
 



ACKNOWLEDGMENT


The Company hereby acknowledges this Exercise Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of Class A Common Stock on or prior to the applicable Share Delivery Date.

Noodles & Company



By:________________________________
Name:
Title:









 
 
 


Exhibit 10.1



SECURITIES PURCHASE AGREEMENT
by and among
NOODLES & COMPANY
and
CATTERTON-NOODLES, LLC
February 8, 2017






This Securities Purchase Agreement contains a number of representations and warranties which the Company and the Purchaser have made to each other. Such representations and warranties were made as of the date of the Securities Purchase Agreement. Information concerning the subject matter of the representations and warranties may have changed since the date of the Securities Purchase Agreement, which subsequent information may or may not be fully reflected in the public disclosures of the Company. Moreover, representations and warranties are frequently utilized in Securities Purchase Agreements as a means of allocating risks, both known and unknown, rather than to make affirmative factual claims or statements.
Accordingly, ONLY THE PARTIES TO THIS AGREEMENT SHOULD RELY ON THE REPRESENTATIONS AND WARRANTIES AS CURRENT CHARACTERIZATIONS OF FACTUAL INFORMATION ABOUT THE COMPANY OR THE PURCHASER.





TABLE OF CONTENTS

 
 
 
Page
SECURITIES PURCHASE AGREEMENT
1
 
 
 
1.
Definitions
1
 
 
 
2.
Authorization, Purchase and Sale of the Securities
8
 
2.1
Authorization, Purchase and Sale
8
 
2.2
Closing
9
 
 
 
 
3.
Representations and Warranties of the Company
9
 
3.1
Organization and Power
9
 
3.2
Capitalization
10
 
3.3
Authorization
10
 
3.4
No Conflict
11
 
3.5
Consents
12
 
3.6
SEC Reports; Financial Statements
12
 
3.7
Litigation
13
 
3.8
Absence of Certain Changes; No Undisclosed Events or Liabilities
13
 
3.9
Nasdaq
14
 
3.10
Investment Company Act
14
 
3.11
Anti-Takeover Statutes
14
 
3.12
No Other Representations and Warranties
14
 
3.13
Acknowledgment Regarding Purchaser’s Purchase of Securities
14
 
 
 
 
4.
Representations and Warranties of the Purchaser
14
 
4.1
Organization
15
 
4.2
Authorization and Power
15
 
4.3
No Conflict
15
 
4.4
Consents
15
 
4.5
Brokers
16
 
4.6
Purchase Entirely for Own Account
16
 
4.7
Investor Status
16
 
4.8
Securities Not Registered
16
 
4.9
Financing
16
 
4.10
Equity Securities of the Company and its Subsidiaries
17
 
4.11
Non-Reliance
17
 
 
 
 
5.
Covenants
17
 
5.1
Regulatory Approval
17
 
5.2
Shares of Class A Common Stock Issuable Upon Conversion or Exercise
18
 
5.3
Commercially Reasonable Efforts; Further Assurances; Notification
18

i


 
 
 
Page
 
 
 
 
 
5.4
Strategic Alternatives
19
 
5.5
Equity Participation Rights
19
 
5.6
Press Release; Form 8-K.
21
 
5.7
Information Rights
21
 
5.8
Reporting Status
21
 
5.9
Approval under Shareholder Agreement; Waiver of Piggyback Registration Rights
21
 
5.10
Registration Rights
22
 
5.11
Qualified Equity Offerings
24
 
 
 
 
6.
Conditions Precedent
24
 
6.1
Conditions to the Obligation of the Purchaser to Consummate the Closing
24
 
6.2
Conditions to the Obligation of the Company to Consummate the Closing
25
 
 
 
 
7.
Transfer Restrictions
26
 
 
 
 
8.
Legends; Securities Act Compliance
26
 
 
 
 
9.
Indemnification; Survival
27
 
9.1
Company Indemnification
27
 
9.2
Survival of Representations and Warranties
27
 
9.3
Purchaser Indemnification
28
 
9.4
Limitations
28
 
9.5
Procedures
28
 
9.6
Additional Limitations
29
 
9.7
Exclusive Remedies
29
 
 
 
 
10.
Termination
29
 
10.1
Conditions of Termination
29
 
10.2
Effect of Termination
29
 
 
 
 
11.
Miscellaneous Provisions
30
 
11.1
Interpretation
30
 
11.2
Notices
30
 
11.3
Severability
31
 
11.4
Governing Law; Jurisdiction; WAIVER OF JURY TRIAL
31
 
11.5
Specific Performance
32
 
11.6
Delays or Omissions; Waiver
32
 
11.7
Fees; Expenses
32
 
11.8
Assignment
33
 
11.9
No Third Party Beneficiaries
33
 
11.10
Counterparts
33
 
11.11
Entire Agreement; Amendments
33
 
11.12
No Personal Liability of Directors, Officers, Owners, Etc
34

ii


 
 
 
Page
 
 
 
 
 
11.13
Placement Agent
34
Annexes
Annex A    Securities and Purchaser
Exhibits

Exhibit A
Form of Certificate of Designations
Exhibit B
Form of Warrant Agreement
Exhibit C    Form of Credit Agreement Amendment


iii


INDEX OF DEFINED TERMS

Term
Section
Aggregate Purchase Price
2.1
Agreement
Preamble
Amended and Restated Certificate of Incorporation
3.11
Antitrust Regulatory Requirements
5.1(a)
Basket Amount
9.4
Board Resolutions
3.3(b)
Capitalization Date
3.2(a)
Certificate of Designations
Recitals
Change
1
Closing
2.2(a)
Closing Date
2.2(a)
Company
Preamble
Company Financial Statements
3.6(c)
Company Indemnified Parties
9.3
Company Indemnified Party
9.3
Consent
3.5
DGCL
Recitals
Disclosure Schedule
3
Draft Form 8-Ks
3.6(a)
Event Payments
5.10(d)
Form S-3
5.10(a)
GAAP
3.6(c)
Indemnified Party
9.5
Indemnifying Party
9.5
Jefferies
11.13(a)
Law
3.4
Lien
3.4
New York Court
11.4(b)
Participation Rights
5.5(b)
Preferred Stock
3.2(a)
Purchaser
Preamble
Purchaser Adverse Effect
4.3
Purchaser Consent
4.11
Purchaser Indemnified Party
9.1
Registration Default
5.10(d)
Registration Default Period
5.10(d)
Registration Rights Agreement
5.9
Registration Statement
5.10(e)
Restriction Termination Date
5.10(e)
Rule 144
4.8(a)
SEC Restrictions
5.10(e)
Securities Exercise Notice
5.5(b)(ii)
Securities Participation Amount
5.5(a)

iv


Term
Section
Securities Participation Right
5.5(a)
Securities Participation Rights Notice
5.5(b)(i)
Series A Preferred Stock
Recitals
Share
2.1
Shares
2.1
Special Committee Resolutions
3.3(b)
Survival Period
9.2
Valid Business Reason
5.10(c)
Warrant
2.1
Warrant Agreement
2.2(b)(ii)
Warrants
2.1


v


SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this “ Agreement ”), dated February 8, 2017, by and among Noodles & Company, a Delaware corporation (the “ Company ”) and Catterton-Noodles, LLC, a Delaware limited liability company (the “ Purchaser ”).
WHEREAS, the Company has authorized the issuance and sale of 18,500 shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company (the “ Series A Preferred Stock ”), the rights, preferences and privileges of which are to be set forth in a Certificate of Designations, in the form attached hereto as Exhibit A (the “ Certificate of Designations ”), which shares of Series A Preferred Stock shall be convertible in certain circumstances into authorized but unissued shares of Class A Common Stock (as defined below);
WHEREAS, the Company has authorized the issuance and sale to the Purchaser of warrants for the purchase of shares of Class A Common Stock;
WHEREAS, subject to the terms and conditions set forth herein, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company, the Securities (as defined below);
WHEREAS, (i) the Board (as defined below) and the Special Committee (as defined below) has determined that it is in the best interests of the Company and its stockholders, including the Unaffiliated Stockholders (as defined below) and declared it advisable, to enter into this Agreement and the other Transaction Agreements (as defined below) to which the Company is a party providing for the transactions contemplated hereby and thereby in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”), upon the terms and subject to the conditions set forth herein, and (ii) the Special Committee has recommended that the Board approve, and the Board has approved, the execution, delivery and performance of this Agreement and the other Transaction Agreements to which the Company is a party and the consummation of the transactions contemplated hereby and thereby in accordance with the DGCL upon the terms and conditions contained herein and therein; and
WHEREAS, the Purchaser has approved the execution, delivery and performance of this Agreement and the other Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby in accordance with applicable law upon the terms and conditions contained herein and therein.
NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants herein contained, the parties hereto agree as follows:
1. Definitions . As used in this Agreement, the following terms shall have the following respective meanings:
Adverse Disclosure ” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the principal executive officer or principal financial officer of the Company, after consulting with counsel to the Company, (i) would be required to be made in a Form S-3 or prospectus included therein in order for the Form

1



S-3 or prospectus, as applicable, not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Form S-3 were not being filed or used for offers and sales, and (iii) the Company has a bona fide material business purpose for not making such information public.
Affiliate ” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. Notwithstanding the foregoing, none of the Company, its Subsidiaries or its other controlled Affiliates shall be considered Affiliates of the Purchaser.
Aggregate Purchase Price ” shall have the meaning set forth in the Section 2.1 .
Agreement shall have the meaning set forth in the preamble.
Antitrust Laws ” means the HSR Act and any foreign antitrust Laws.
Antitrust Regulatory Requirements ” shall have the meaning set forth in Section 5.1(a).
Basket Amount ” shall have the meaning set forth in Section 9.4 .
Beneficially Own ,” “ Beneficially Owned ,” or “ Beneficial Ownership ” shall have the meaning set forth in Rule 13d‑3 of the rules and regulations promulgated under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. For the avoidance of doubt, prior to conversion of the Shares into Conversion Shares or the exercise of the Warrants for Warrant Shares, holders of Shares and Warrants shall be deemed to have Beneficial Ownership of all shares of Common Stock issuable upon the conversion of such Securities, notwithstanding any conditions, restrictions or limitations on such conversion. The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.
Board ” shall mean the Board of Directors of the Company.
Business Day ” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in the State of New York are authorized or required by Law or other governmental action to close.
Capital Stock ” means, with respect to any Person, any and all shares of stock, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after liabilities, of such Person.

2



Capitalization Date shall have the meaning set forth in Section 3.2(a) .
Certificate of Designations ” shall have the meaning set forth in the recitals.
Class A Common Stock ” means the shares of Class A Common Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such Class A Common Stock shall be reclassified or changed.
Class B Common Stock ” means the shares of Class B Common Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such Class B Common Stock shall be reclassified or changed.
Closing shall have the meaning set forth in Section 2.2(a) .
Closing Date shall have the meaning set forth in Section 2.2(a) .
Common Stock ” means the Class A Common Stock, the Class B Common Stock and any other Capital Stock of the Company into which such Class A Common Stock or Class B Common Stock shall be reclassified or changed.
Company shall have the meaning set forth in the preamble.
Company Financial Statements shall have the meaning set forth in Section 3.6(c) .
Company Indemnified Party ” shall have the meaning set forth in Section 9.3 .
Company Stock Plans ” shall mean the Noodles & Company Amended and Restated 2010 Stock Incentive Plan, the Noodles & Company Compensation Plan for Non-Employee Directors and any successors thereto approved by the Board.
Consent shall have the meaning set forth in Section 3.5 .
control ” (including the terms “ controlling ” “ controlled by ” and “ under common control with ”) with respect to any Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
Conversion Shares ” shall mean the shares of Class A Common Stock issuable upon the conversion of the Series A Preferred Stock as provided for in the Certificate of Designations.
DGCL ” shall have the meaning set forth in the recitals.
Director ” means any member of the Board.
Equity Participation Amount shall have the meaning set forth in Section 5.5(a) .
Equity Participation Right shall have the meaning set forth in Section 5.5(a) .

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Equity Securities ” shall mean, with respect to any Person, (i) shares of capital stock of, or other equity or voting interest in, such Person, (ii)  any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iii) options, warrants, rights or other commitments or agreements to acquire from such Person, or that obligates such Person to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iv) obligations of such Person to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, such Person and (v) the capital stock of such Person.
Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.
Form S-3 ” shall have the meaning set forth in Section 5.10(a) .
GAAP ” shall have the meaning set forth in Section 3.6(c) .
Governmental Entity ” shall mean any United States or non-United States federal, state or local government, or any agency, bureau, board, commission, department, tribunal or instrumentality thereof or any court, tribunal, or arbitral or judicial body.
HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and all of the rules and regulations promulgated thereunder.
Indemnified Party ” shall have the meaning set forth in Section 9.5 .
Indemnifying Party ” shall have the meaning set forth in Section 9.5 .
Issue Date ” means the date on which the Shares are first issued by the Company.
Law shall have the meaning set forth in Section 3.4 .
Lien shall have the meaning set forth in Section 3.4 .
Losses ” shall mean any and all actions, causes of action, suits, claims, liabilities, losses, damages, penalties, judgments, costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses), it being agreed that Losses may include any losses that any Person deciding any dispute in respect thereof (whether a court, jury or other Person) may determine are recoverable, including if so determined to be recoverable, losses that represent diminution in value.
Material Adverse Effect ” shall mean any fact, circumstance, event, change, effect, occurrence or development (each, a “ Change ”) that, individually or in the aggregate with all other Changes, has a material adverse effect on or with respect to the business, business prospects, operations, assets (including intangible assets), liabilities, results of operation or

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financial condition of the Company and its Subsidiaries taken as a whole, provided , however , that a Material Adverse Effect shall not include any Change (by itself or when aggregated or taken together with any and all other Changes) (i) generally affecting the industries in which the Company and its Subsidiaries operate or economic conditions in the United States (including changes in the capital or financial markets generally); (ii) resulting from any outbreak or escalation of hostilities or acts of war or terrorism, political instability or other national or international calamity, crisis or emergency, or any governmental or other response to any of the foregoing, in each case whether or not involving the United States; (iii) resulting from changes (or proposed changes) in Law or GAAP (or authoritative interpretations thereof); (iv) resulting from changes in the market price or trading volume of the Company’s securities; (v) acts of God (including earthquakes, storms, fires, floods and natural catastrophes); (vi) effects relating to or arising from the announcement of the execution of this Agreement or the transactions contemplated hereby or the identity of the Purchaser or Purchaser’s Affiliates, including the loss of any customers, suppliers or employees; (vii) effects resulting from compliance with the terms and conditions of this Agreement or any other Transaction Agreement to which the Company is a party by the Company or any of its Subsidiaries or from acts or omissions consented to in writing by the Purchaser; (viii) the seasonality of the business of the Company or any of its Subsidiaries; or (ix) any breach of this Agreement by the Purchaser, except to the extent that, with respect to clauses (i), (ii) and (iii), the impact of such Changes is disproportionately adverse to the Company and its Subsidiaries, taken as a whole, relative to other participants in the industries in which the Company or its Subsidiaries operate.
New York Court ” shall have the meaning set forth in Section 11.4(b) .
Nasdaq ” means the NASDAQ Global Select Market (or its successor); provided, that if the Company moves the principal listing of its Common Stock to the NASDAQ Global Market, NASDAQ Capital Market or The New York Stock Exchange (or any of their respective successors), “Nasdaq” shall be deemed to refer to such exchange.
Offered Equity Securities shall have the meaning set forth in Section 5.5(a) .
Participation Exercise Notice ” shall have the meaning set forth in Section 5.5(b)(ii) .
Participation Rights Fraction ” shall mean, as of any date, a fraction (i) the numerator of which is the number of Conversion Shares previously issued or in the future issuable upon conversion of the Shares into Class A Common Stock (assuming, for such purposes, that any restrictions or limitations on conversion of the Series A Preferred Stock have been waived or satisfied and that any applicable Voting Trigger Redemption Option (as defined in the Certificate of Designations) has not been exercised), and (ii) the denominator of which is the number of shares of Common Stock then outstanding on a fully-diluted basis, as of such date (assuming, for such purposes, that any restrictions or limitations on conversion of the Series A Preferred Stock have been waived or satisfied and that any applicable Voting Trigger Redemption Option (as defined in the Certificate of Designations) has not been exercised). For the avoidance of doubt, the numerator for purposes of the “Participation Rights Fraction” shall not include additional shares of Series A Preferred Stock issued to the Purchaser after the Closing or Conversion Shares underlying such additional shares.

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Participation Rights Notice ” shall have the meaning set forth in Section 5.5(b)(i) .
Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government, any agency or political subdivisions thereof or other “Person” as contemplated by Section 13(d) of the Exchange Act.
Preferred Stock shall have the meaning set forth in Section 3.2(a) .
PSP ” means Argentia Private Investments Inc.
Purchaser shall have the meaning set forth in the preamble.
Purchaser Adverse Effect ” shall have the meaning set forth in the Section 4.3 .
Purchaser Consent ” shall have the meaning set forth in the Section 4.11 .
Purchaser Indemnified Party shall have the meaning set forth in Section 9.1 .
Qualified Equity Offering ” has the meaning set forth in the Certificate of Designations.
Qualified Financing Date ” means the date of the last closing of a Qualified Equity Offering.
Registration Default ” shall have the meaning set forth in Section 5.10(d) .
Registration Default Period ” shall have the meaning set forth in Section 5.10(d) .
Registration Expenses ” shall mean all fees and expenses incurred in connection with a registration of Registrable Securities, including: (i) all registration, listing, qualification and filing fees (including FINRA filing fees); (ii) fees and expenses of compliance with state securities or "blue sky" laws; (iii) printing and copying expenses; (iv) messenger and delivery expenses; (v) fees and disbursements of counsel for the Company; (vi) fees and disbursements of independent public accountants, including the expenses of any audit or "cold comfort" letter, and fees and expenses of other persons, including special experts, retained by the Company; (vii) all internal expenses of the Company (including all salaries and expenses of officers and employees performing legal or accounting duties).
Registrable Securities ” means (i) the Conversion Shares, (ii) the Warrant Shares, (iii) any outstanding shares of Class A Common Stock held by the Purchaser, (iv) shares of Class A Common Stock issued or issuable upon the exercise, conversion or exchange of any other Equity Security held by the Purchaser as of the Qualified Financing Date, and (v) any other Equity Security of the Company issued or issuable with respect to any such share of the Class A Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization, in each case to the extent not freely transferable;  provided however , that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (A) a registration statement under the

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Securities Act with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement; (B) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding or cease to be held by the Purchaser or one of its Affiliates; (D) such securities may be sold without restriction in accordance with Rule 144; or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
Representatives ” means, with respect to any Person, such Person’s Affiliates and their respective directors, officers, employees, managers, trustees, principals, stockholders, members, general or limited partners, agents and other representatives.
Rule 144 ” shall have the meaning set forth in Section 4.8(a) .
SEC ” shall mean the U.S. Securities and Exchange Commission.
SEC Report s ” shall have the meaning set forth in Section 3.6(a).
Securities ” shall mean the Shares, Conversion Shares, the Warrants and the Warrant Shares.
Securities Act ” shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.
Series A Preferred Stock ” shall have the meaning set forth in the recitals.
Shares shall have the meaning set forth in Section 2.1 .
Special Committee ” means the Special Committee of disinterested members of the Board established, among other things, to evaluate the Company’s alternatives with respect to the Company’s anticipated liquidity demands, including, but not limited to, a transaction to raise equity capital.
Stockholders Agreement ” means the Amended and Restated Stockholders Agreement, dated as of July 2, 2013, among Noodles & Company, L Catterton-Noodles, LLC and PSP, as the same may be amended from time to time.
Subsidiary ” of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust or other form of legal entity (whether incorporated or unincorporated) of which (or in which) more than 50% of (i) the Total Current Voting Power; (ii) the interest in the capital or profits of such partnership, joint venture or limited liability company; or (iii) the beneficial interest in such trust or estate; is, directly or indirectly, owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such

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Person’s other Subsidiaries. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.
Survival Period ” shall have the meaning set forth in Section 9.2 .
Taxes ” shall mean any and all taxes, levies, fees, imposts, duties and charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto) imposed by any Governmental Entity, including, without limitation, taxes imposed on, or measured by, income, franchise, profits or gross receipts, and any ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs or duties.
Total Current Voting Power ” shall mean, with respect to any entity, at the time of determination of Total Current Voting Power, the total number of votes which may be cast in the general election of directors of such entity (or, in the event the entity is not a corporation, the governing members, board or other similar body of such entity).
Transaction Agreements ” shall mean this Agreement, the Certificate of Designations and the Warrant Agreement.
Transfer ” means, with respect to any security, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of such security or any interest therein, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law. For the avoidance of doubt, a transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of an Equity Security in any stockholder of the Company, or direct or indirect parent thereof, shall constitute a “Transfer” of securities of the Company for purposes of this Agreement.
Unaffiliated Stockholders ” means stockholders other than the Purchaser and any members of management of the Company.
Voting Stock ” shall mean securities of any class or kind ordinarily having the power to vote generally for the election of (x) in the case of the Company, the Directors of the Company or its successor (including the Class A Common Stock) or (y) in the case of any Subsidiary, the directors of any Subsidiary of the Company.
Warrant Shares ” shall mean the shares of Class A Common Stock issuable upon the exercise of the Warrant.
2.      Authorization, Purchase and Sale of the Securities .
2.1      Authorization, Purchase and Sale . Subject to and upon the terms and conditions of this Agreement, the Company will issue and sell to the Purchaser, and the Purchaser will purchase from the Company, at the Closing, (a) the number of shares of Series A

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Preferred Stock (each, a “ Share ” and collectively, the “ Shares ”) set forth next to the Purchaser’s name on Annex A and (b) warrants to purchase the number of shares of Class A Common Stock (each, a “ Warrant ” and collectively, the “ Warrants ”) set forth next to the Purchaser’s name on Annex A . The purchase price per Share shall be $1,000 and the aggregate purchase price (the “ Aggregate Purchase Price ”) for the Securities shall be the amount set forth on Annex A . The conversion price for each Share initially shall be $4.35 and the exercise price for each Warrant initially shall be $4.35, each subject to adjustment, as provided in the Certificate of Designations and the Warrant Agreement, respectively.
2.2      Closing .
(a)      The closing of the purchase and sale of the Securities (the “ Closing ”) shall take place at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York immediately following the satisfaction or waiver of each of the conditions set forth in Section 6 (other than those conditions which, by their terms, are to be satisfied or waived at the Closing), or at such other place or such other date as agreed to by the parties hereto (the “ Closing Date ”).
(b)      At the Closing:
(i)      the Company shall deliver, at the Purchaser’s option, one or more certificates representing the Shares or other evidence that the Shares have been issued in book-entry form;
(ii)      the Company and Purchaser shall execute and deliver a Warrant Agreement in the form attached hereto as Exhibit B (the “ Warrant Agreement ”); and
(iii)      the Purchaser shall deliver, or cause to be delivered, to the Company an amount equal to the Aggregate Purchase Price set forth next to the Purchaser’s name on Annex A by wire transfer of immediately available funds to an account that the Company shall designate at least one (1) Business Day prior to the Closing Date.
3.      Representations and Warranties of the Company . Except as disclosed in the SEC Filings, filed and publicly available prior to the date of this Agreement and only as and to the extent disclosed therein (but excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements that are similarly forward-looking), the Company hereby represents and warrants to the Purchaser as follows:
3.1      Organization and Power .
(a)      The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as it is presently being conducted and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires

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such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.
(b)      Each Subsidiary is validly existing as a corporation, limited liability company or limited partnership, as applicable in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable, has the power and authority (corporate or otherwise) to own its property and to conduct its business as it is presently being conducted and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.
3.2      Capitalization .
(a)      As of the date of this Agreement, the authorized shares of capital stock of the Company consist of 150,000,000 shares of Class A Common Stock, 30,000,000 shares of Class B Common Stock and 1,000,000 shares of preferred stock, par value $0.01 per share (“ Preferred Stock ”). As of the close of business on February 6, 2017 (the “ Capitalization Date ”), (i) 26,350,369 shares of Class A Common Stock were issued and outstanding, (ii) 1,522,098 shares of Class B Common Stock were issued and outstanding, (iii) 6,611,062, shares of Class A Common Stock were reserved for issuance under the Company Stock Plans (including for outstanding and future awards), (iv) warrants are outstanding for the purchase of 28,850 shares of Class B Common Stock and (v) zero shares of Preferred Stock were issued and outstanding. All outstanding shares of Common Stock are validly issued, fully paid, nonassessable and free of preemptive or similar rights. Since the Capitalization Date, the Company has not sold or issued or repurchased, redeemed or otherwise acquired any shares of the Company’s capital stock (other than issuances pursuant to the vesting of any “share award” that had been granted under any Company Stock Plan, or repurchases, redemptions or other acquisitions pursuant to agreements contemplated by a Company Stock Plan).
(b)      Except as set forth in this Section 3.2 , as of the date of this Agreement, there are no outstanding Equity Securities of the Company and no other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any Equity Securities of the Company. There are no outstanding agreements of any kind which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities of the Company.
(c)      Upon the filing of the Certificate of Designations with the Secretary of State of the State of Delaware, (i) the Series A Preferred Stock will be duly authorized and (ii) a sufficient number of Conversion Shares will have been duly authorized and validly reserved for issuance upon conversion of the Shares in accordance with the Certificate of Designations. When the Conversion Shares are issued in accordance with the provisions of this Agreement and the Certificate of Designations, all such Conversion Shares will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive or similar rights except as set forth in the Transaction Agreements.

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(d)      Upon delivery of the Warrant Agreement, a sufficient number of Warrant Shares will have been duly authorized and validly reserved for issuance upon exercise of the Warrants in accordance with the Warrant Agreement. When the Warrant Shares are issued in accordance with the provisions of this Agreement and the Warrant Agreement, all such Warrant Shares will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive or similar rights except as set forth in the Transaction Agreements.
3.3      Authorization .
(a)      The Company has all requisite corporate power to enter into each of the Transaction Agreements to which it is a party and to consummate the transactions contemplated by each of the Transaction Agreements to which it is a party and to carry out and perform its obligations thereunder. All corporate action on the part of the Company, its officers and directors necessary for the authorization of the Securities and the authorization, execution, delivery and performance of the Transaction Agreements to which the Company is a party has been taken. The execution, delivery and performance of the Transaction Agreements to which the Company is a party by the Company, the issuance of the Shares and Warrants, the issuance of the Class A Common Stock upon conversion of the Shares, and the issuance of the Class A Common Stock upon exercise of the Warrants, in each case in accordance with this Agreement and their terms, and the consummation of the other transactions contemplated herein do not require any approval of the Company’s stockholders. Upon their respective execution by the Company and the Purchaser and assuming that they constitute legal and binding agreements of the Purchaser party thereto, each of the Transaction Agreements to which the Company is a party will constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally, and (ii) is subject to general principles of equity (regardless of whether considered in a proceeding in equity or at Law).
(b)      The Special Committee has adopted resolutions (the “ Special Committee Resolutions ”) recommending to the Board that the Board approve the execution, delivery and performance by the Company of the Transaction Agreements to which the Company is a party, the issuance of the Shares and Warrants, the issuance of the Conversion Shares upon conversion of the Shares and the issuance of the Warrant Shares upon exercise of the Warrants, in each case in accordance with this Agreement and their terms, and the consummation of the other transactions contemplated herein. The Board has adopted resolutions (the “ Board Resolutions ”) approving the execution, delivery and performance by the Company of the Transaction Agreements to which the Company is a party, the issuance of the Shares and Warrants, the issuance of the Conversion Shares upon conversion of the Shares and the issuance of the Warrant Shares upon exercise of the Warrants, in each case in accordance with this Agreement and their terms, and the consummation of the other transactions contemplated herein. The Special Committee Resolutions and the Board Resolutions have not been withdrawn or modified.

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3.4      No Conflict . Subject to the accuracy of the representations made by the Purchaser in Section 4 , the execution, delivery and performance by the Company of the Transaction Agreements to which the Company is a party, the issuance of the Shares and Warrants, the issuance of the Conversion Shares upon conversion of the Shares, the issuance of the Class A Common Stock upon exercise of the Warrants and the consummation of the other transactions contemplated hereby and by the other Transaction Agreements to which the Company is a party will not (i) conflict with or result in any violation of any provision of the certificate of incorporation or bylaws of the Company, or, upon its filing with the Secretary of State of the State of Delaware, the Certificate of Designations, (ii) subject to the matters referred to in Section 3.5 , result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation, modification or acceleration of any obligation or to the loss of any benefit under any mortgage, material contract, purchase or sale order, instrument, permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind (each, a “ Lien ”) upon any of the properties, assets or rights of the Company or any of its Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or to prevent or materially delay or hinder the ability of the Company to perform its obligations under the Transaction Agreements, or (iii) subject to the matters referred to in Section 3.5 conflict with or violate any applicable material law, statute, code, ordinance, rule, regulation, or agency requirement of or undertaking to or agreement with any Governmental Entity or Nasdaq, including common law (collectively, “ Laws ” and each, a “ Law ”) or any judgment, order, injunction or decree issued by any Governmental Entity.
3.5      Consents . No consent, approval, order, or authorization of, or filing or registration with, or notification to (any of the foregoing being a “ Consent ”), any Governmental Entity or Nasdaq is required on the part of the Company or its Subsidiaries in connection with (a) the execution, delivery or performance of the Transaction Agreements to which the Company is a party and the consummation of the transactions contemplated hereby and thereby, (b) the issuance of the Shares and Warrants in accordance with this Agreement, (c) the issuance of the Class A Common Stock upon conversion of the Shares in accordance with the Certificate of Designations or (d) the issuance of the Class A Common Stock upon exercise of the Warrant in accordance with the Warrant Agreement; other than (i) the filing of the Certificate of Designations with the Secretary of State of the State of Delaware, (ii) the expiration or termination of any applicable waiting periods under the Antitrust Laws with respect to performance under the Transaction Agreements, or the consummation of transactions, in each case occurring after the Closing, (iii) those to be obtained, in connection with the registration of the Conversion Shares and Warrant Shares under the Securities Act and any related filings and approvals under applicable state securities laws, (iv) such filings as may be required under any applicable requirements of the Exchange Act or the rules of the Nasdaq, and (v) such Consents the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or to prevent or materially delay or hinder the ability of the Company to perform its obligations under the Transaction Agreements.

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3.6      SEC Reports; Financial Statements .
(a)      The Company has filed all reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials (together with any materials filed by the Company under the Exchange Act, whether or not required), collectively referred to herein as the “ SEC Reports ”). No event or circumstance has occurred within the four Business Days prior to the date of this Agreement that requires the filing of a Form 8-K, except such as have been described in the draft Form 8-Ks to be filed upon announcement of this Agreement (copies of which have been provided to the Purchaser) (the “ Draft Form 8-Ks ”) or as have already been reported pursuant to Form 8‑K.
(b)      As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(c)      The historical financial statements of the Company and its Subsidiaries included in the SEC Filings, together with the related notes (the “ Company Financial Statements ”), present fairly in all material respects the consolidated financial position of the Company (including its Subsidiaries), as of and at the dates indicated and the results of its operations and cash flows for the periods specified on the basis stated therein. Such financial statements comply as to form with the applicable accounting requirements of the Securities Act and have been prepared in conformity with generally accepted accounting principles (“ GAAP ”) applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto.
(d)      Except as set forth in the SEC Filings, the Company’s principal executive officer and its principal financial officer have (i) devised and maintained a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and preparation of financial statements in accordance with GAAP, and have evaluated such system at the times required by the Exchange Act and in any event no less frequently than at reasonable intervals and (ii) disclosed to the Company’s management, auditors and the audit committee of the Board (x) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’s or any of its Subsidiaries’ ability to record, process, summarize and report financial information. Except as set forth in the SEC Filings, the Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company and its Subsidiaries required to be included in the Company’s periodic reports under the Exchange Act is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, and such disclosure controls and procedures are sufficient to ensure that the

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Company’s principal executive officer and its principal financial officer are made aware of such material information required to be included in the Company’s periodic reports required under the Exchange Act. There are no outstanding loans made by the Company or any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the Exchange Act) or director of the Company.
(e)    The Company is eligible to register the resale of the Conversion Shares and Warrant Shares by the Purchaser using Form S-3 promulgated under the Securities Act.
3.7      Litigation . There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company or any of its Subsidiaries is a party or to which any of the properties of the Company or any of its Subsidiaries is subject other than (i) proceedings accurately described in all material respects in the SEC Filings and (ii) proceedings that would not reasonably be expected to have a Material Adverse Effect. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Securities Act.
3.8      Absence of Certain Changes; No Undisclosed Events or Liabilities . Except as set forth in the SEC Filings or as disclosed in the Draft Form 8-Ks, since September 30, 2016, the business of the Company and its Subsidiaries has been conducted in the ordinary course of business consistent with past practices and there has not been any Change which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Draft Form 8-Ks, no event, liability, development or circumstance has occurred or exists, or, as of the date hereof, is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.
3.9      Nasdaq . Shares of the Class A Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed on the Nasdaq Global Select Market, and there is no action pending by the Company or any other Person to terminate the registration of the Class A Common Stock under the Exchange Act or to delist the Class A Common Stock from the Nasdaq Global Select Market, nor has the Company received any notification that the SEC or the Nasdaq Global Select Market is currently contemplating terminating such registration or listing. The Company has outlined with the Nasdaq Global Select Market its strategy for compliance with the Nasdaq listing requirements, and the Company has received no notification from the Nasdaq that such plan for compliance has been rejected by Nasdaq. The Company has described the proposed sale of the Securities to Nasdaq, and Nasdaq has raised no objection to such sale.
3.10      Investment Company Act . The Company is not, nor immediately after the Company’s receipt of the Aggregate Purchase Price from the Purchaser, will the Company

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be, an “investment company” within the meaning of, and required to be registered under, the Investment Company Act of 1940, as amended.
3.11      Anti-Takeover Statutes . The Company has elected in its amended and restated certificate of incorporation (the “ Amended and Restated Certificate of Incorporation ”) not to be governed by Section 203 of the DGCL.
3.12      No Other Representations and Warranties . Except for the representations and warranties contained in Section 3, the Company makes no other representation or warranty, express or implied, written or oral, and hereby, to the maximum extent permitted by applicable Law, disclaims any such representation or warranty, whether by the Company or any other Person, with respect to the Company or with respect to any other information (including, without limitation, pro forma financial information, financial projections or other forward-looking statements) provided to or made available to the Purchaser in connection with the transactions contemplated hereby.
3.13      Acknowledgment Regarding Purchaser’s Purchase of Securities . The Company acknowledges that no Purchaser is acting as a financial advisor of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby.
4.      Representations and Warranties of the Purchaser . The Purchaser represents and warrants to the Company as follows:
4.1      Organization . The Purchaser is a legal entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization.
4.2      Authorization and Power . The Purchaser has all requisite entity power to enter into this Agreement and the other Transaction Agreements to which it is a party and to consummate the transactions contemplated by the Transaction Agreements to which it is a party and to carry out and perform its obligations thereunder. All corporate or member action on the part of the Purchaser or the holders of the capital stock or other equity interests of the Purchaser necessary for the authorization, execution, delivery and performance of the Transaction Agreements to which it is a party has been taken. Upon their respective execution by the Purchaser and the other parties thereto and assuming that they constitute legal and binding agreements of the Company, each of the Transaction Agreements to which the Purchaser is a party will constitute its legal, valid and binding obligation, enforceable against the Purchaser in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity (regardless of whether considered in a proceeding in equity or at Law).
4.3      No Conflict . The execution, delivery and performance of the Transaction Agreements by the Purchaser, the issuance of the Shares and Warrants in accordance with this Agreement, the issuance of the Class A Common Stock upon conversion of the Shares in accordance with the Certificate of Designations, the issuance of the Class A Common Stock upon exercise of the Warrants in accordance with the Warrant Agreement and the consummation

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of the other transactions contemplated hereby will not (i) conflict with or result in any violation of any provision of the certificate of incorporation or by-laws or other equivalent organizational document of the Purchaser, (ii) result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or require consent under, any material contract binding upon the Purchaser or (iii) subject to the matters referred to in Section 4.4 , conflict with or violate any applicable Laws or any judgment, order, injunction or decree issued by any Governmental Entity, except in the case of each of clauses (i), (ii) and (iii) as would not, individually or in the aggregate, be reasonably expected to materially delay or hinder the ability of the Purchaser to perform its obligations under the Transaction Agreements (with respect to the Purchaser, a “ Purchaser Adverse Effect ”).
4.4      Consents . No Consent of any Governmental Entity is required on the part of the Purchaser in connection with (a) the execution, delivery or performance of the Transaction Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby, (b) the issuance of the Shares and Warrants in accordance with this Agreement, (c) the issuance of the Class A Common Stock upon conversion of the Shares in accordance with the Certificate of Designations and (d) the issuance of the Class A Common Stock upon exercise of the Warrants in accordance with the Warrant Agreement, other than (i) the expiration or termination of any applicable waiting periods under the Antitrust Laws with respect to the performance under the Transaction Agreements, or consummation of transactions, in each case occurring after the Closing, (ii) those to be obtained, in connection with the registration of the Conversion Shares and Warrant Shares under the Securities Act and any related filings and approvals under applicable state securities Laws, (iii) such filings and approvals as may be required by any federal or state securities Laws, including compliance with any applicable requirements of the Exchange Act, and (iv) such Consents the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Purchaser Adverse Effect.
4.5      Brokers . The Purchaser has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement whose fees the Company would be required to pay.
4.6      Purchase Entirely for Own Account . The Purchaser is acquiring the Securities for its own account solely for the purpose of investment, not as nominee or agent, and not with a view to, or for sale in connection with, any distribution of the Securities in violation of the Securities Act, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same, in violation of the Securities Act. The Purchaser has no present agreement, undertaking, arrangement, obligation or commitment providing for the disposition of the Securities.
4.7      Investor Status . The Purchaser certifies and represents to the Company that it is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Purchaser’s financial condition is such that it is able to bear the risk of holding the Securities for an indefinite period of time and the risk of loss of its entire investment. The Purchaser has been afforded the opportunity to receive information from, and to ask questions of and receive answers from the management of, the Company concerning this

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investment so as to allow it to make an informed investment decision prior to its investment and has sufficient knowledge and experience in investing in companies similar to the Company so as to be able to evaluate the risks and merits of its investment in the Company.
4.8      Securities Not Registered .
(a)      The Purchaser understands that none of the Securities have been approved or disapproved by the SEC or by any state securities commission nor have the Securities been registered under the Securities Act, by reason of their issuance by the Company in a transaction exempt from the registration requirements of the Securities Act, and that the Securities must continue to be held by the Purchaser unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration. The Purchaser understands that the exemptions from registration afforded by Rule 144 under the Securities Act (“ Rule 144 ”) (the provisions of which are known to it) depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.
(b)      The Securities shall be subject to the restrictions contained herein.
(c)      It is understood that the Securities, and any securities issued in respect thereof or in exchange therefor, may bear one or all of the legends set forth in Section 8 .
4.9      Financing . The Purchaser has, or by the Closing will have, an amount of cash sufficient to enable it to consummate the transactions contemplated hereunder on the terms and conditions set forth in this Agreement.
4.10      Equity Securities of the Company and its Subsidiaries . Except as previously disclosed on Schedule 13G, neither the Purchaser nor any of its Affiliates Beneficially Owns any Equity Securities of the Company or any of its Subsidiaries.
4.11      Non-Reliance . Neither Purchaser, nor any of its Representatives, has relied on any representations, warranties, promises statements or other inducements (including with respect to the accuracy and completeness of information) except for the representations and warranties of the Company expressly set forth in Article III. Neither the Company nor any other Person will have or be subject to any liability or indemnification obligation to the Purchaser or any other Person resulting from any other express or implied representation or warranty with respect to the Company, unless any such information is expressly included in a representation or warranty contained in Section 3.
5.      Covenants .
5.1      Regulatory Approval .
(a)      The Company and the Purchaser acknowledges that one or more filings under the Antitrust Laws may be necessary with respect to the performance or consummation of the other transactions contemplated by this Agreement, including the conversion of the Series A Preferred Stock into shares of Common Stock or the exercise of the

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Warrants (the “ Antitrust Regulatory Requirements ”). To the extent a filing or notification is required under the Antitrust Regulatory Requirements with respect to the Purchaser, the Company and the Purchaser shall, respectively, (i) promptly file with the U.S. Federal Trade Commission, the U.S. Department of Justice and/or any other Governmental Entity all forms, applications, notifications and other documents necessary to be filed by such party pursuant to the Antitrust Regulatory Requirements (provided that a filing required under the HSR Act shall be only made by the Company on a prompt basis following notice to the Company by the Purchaser that such a filing is required), in connection with the issuance of the Securities and/or otherwise in connection with the transactions contemplated by this Agreement and the other Transaction Agreements and (ii) cooperate with each other in promptly producing such additional information as those authorities may reasonably require from such party to comply with the Antitrust Laws.
(b)      The Purchaser shall promptly inform the Company (and vice versa) of any material communication from the U.S. Federal Trade Commission, the U.S. Department of Justice or any other Governmental Entity regarding any of the transactions contemplated by this Agreement relating to the Purchaser. If the Purchaser or the Company or any Affiliate thereof receives a request for additional information or documentation from any such Governmental Entity with respect to the transactions contemplated by this Agreement relating to the Purchaser, then such party will endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and, if permitted by applicable Law, after consultation with the other party, an appropriate response in compliance with such request; provided, however, the foregoing shall not require any party to disclose or otherwise provide (i) personal financial information, including, but not limited to, any individual tax return or statement of net worth, or any other information that is of a personal or private nature, about any individual who is an employee, officer, director, general partner or limited partner (including the identity of any such limited partner) of such party or any of its Affiliates, or (ii) information that is either confidential or constitutes a trade secret of such party.
5.2      Shares of Class A Common Stock Issuable Upon Conversion or Exercise . The Company will at all times have reserved and available for issuance such number of shares of Class A Common Stock as shall be from time to time sufficient to permit the conversion in full of the outstanding Shares and the exercise in full of the outstanding Warrants.
5.3      Commercially Reasonable Efforts; Further Assurances; Notification .
(a)      Upon the terms and subject to the conditions set forth in this Agreement, the Purchaser and the Company each shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties or parties hereto in doing, all things reasonably necessary, proper or advisable under applicable Law to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the other Transaction Agreements, including using commercially reasonable efforts to: (i) cause the conditions to the Closing set forth in Section 6 to be satisfied; (ii) obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Entities and make all necessary registrations, declarations and filings with Governmental Entities; and (iii) execute or

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deliver any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement and the other Transaction Agreements.
(b)      Each party agrees to cooperate with each other and their respective officers, employees, attorneys, accountants and other agents, and, generally, do such other reasonable acts and things in good faith as may be reasonably necessary to effectuate the transactions contemplated by this Agreement and the other Transaction Agreements, subject to the terms and conditions hereof and thereof and compliance with applicable Law, including taking reasonable action to facilitate the filing of any document or the taking of reasonable action to assist the other parties hereto in complying with the terms hereof and thereof.
5.4      Strategic Alternatives Committee. If, at any time, the Company has received a Redemption Demand (as defined in Section 6.1(a) of the Certificate of Designations) and shall not have initiated a redemption of the Shares within 20 days of receipt thereof, the Company agrees that it will promptly appoint a special committee of the Board comprised of non-management independent directors to evaluate strategic alternatives for the Company and enable such committee to retain such financial, legal and other advisers as it may deem necessary or appropriate to carry out its purpose. To the fullest extent permitted by Law and subject to the Purchaser’s agreement to keep such information confidential, for so long as the Company is required to maintain such special committee, such special committee will keep the Purchaser apprised of material actions that it decides to take, except to the extent the Company is party to confidentiality agreements with third parties that prohibit the sharing of such information with the Purchaser.
5.5      Equity Participation Rights .
(a)      For so long as the Purchaser (along with its Affiliates) owns a number of Shares equal to or greater than 50% of the Shares issued to the Purchaser on the Issue Date, the Company shall not issue, or agree to issue, any Equity Securities of the Company (the “ Offered Equity Securities ”) to any Person unless the Company offers the Purchaser the right (the “ Equity Participation Right ”) to purchase in the aggregate up to such number of securities (the “ Equity Participation Amount ”) equal to the product of (x) the total number of such offered Equity Securities of the Company multiplied by (y) the Purchaser’s Participation Rights Fraction, at the same price per security (payable in cash, except to the extent that the consideration for such issuance is an exchange of Series A Preferred Stock) and otherwise upon the same terms and conditions as those offered to such Person in accordance with the procedures set forth in this Section 5.5; provided that the Equity Participation Rights in this Section 5.5(a) shall not be applicable to the issuance of the following Equity Securities of the Company: (i) Equity Securities issued upon a stock split or other subdivision of or a stock dividend made to all holders on a pro rata basis of, any Equity Securities of the Company; (ii) an issuance of Equity Securities or equity linked securities pursuant to any director, officer or employee compensation arrangements approved by the Board or the compensation committee thereof; (iii) a conversion of shares of one class of Capital Stock of the Company existing on the date hereof into shares of another class of Capital Stock of the Company existing on the date hereof in accordance with the terms of such securities; (iv) offerings in which the Company distributes to

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all or substantially all holders of its Common Stock any rights, options, or warrants entitling them, for a period of no longer than 60 days to purchase or subscribe for shares of any classes of Common Stock, and any shares of Common Stock issued pursuant to such rights, options or warrants; (v) an offering of Equity Securities that cannot, after good faith effort, be structured to give effect to the Equity Participation Rights absent stockholder approval under Nasdaq rules, unless such approval has been received; 1 (vi) an issuance of Equity Securities to the sellers of a business being acquired by the Company on an arm’s-length basis, or in the case of a merger, the stockholders of the target company, and the employees or officers of any target company in connection with a bona fide merger, business combination transaction or acquisition of stock or assets; (vii) an issuance of Equity Securities of the Company that is incidental to and is issued as part of a debt financing from a bank, institutional lender or similar financial institution and (viii) a Qualified Equity Offering that is a marketed offering of Class A Common Stock with gross proceeds up to $40.0 million ($46.0 million inclusive of any overallotment option). In no event will any accretions to the face amount of, or payments in kind with respect to, any Preferred Stock, Option Securities (as defined in the Certificate of Designations) or Convertible Securities (as defined in the Certificate of Designations) of the Company outstanding on the Closing Date or otherwise permitted to be issued, or not prohibited, by the Certificate of Designations be subject to the Equity Participation Rights.
(b)      Equity Participation Rights Process .
(i)      The Company shall send a written notice (the “ Participation Rights Notice ”) to the Purchaser stating the number of Offered Equity Securities of the Company to be offered, a description of the terms of such Offered Equity Securities of the Company if not Common Stock, the price and terms on which it proposes to offer such Offered Equity Securities (including a description of any non-cash consideration sufficiently detailed to permit a valuation thereof), and a reference to the Equity Participation Rights hereunder.
(ii)      Within five (5) Business Days after the delivery of the Participation Rights Notice, the Purchaser may elect by written notice to the Company (the “ Participation Exercise Notice ”) to purchase up to its Equity Participation Amount, at the price and on the terms specified in the Participation Rights Notice (or, if such price includes non-cash consideration, an amount of cash equal to the fair market value of such non-cash consideration as determined in good faith by the Board, except to the extent that the consideration for such issuance is an exchange of Series A Preferred Stock of such Offered Equity Securities. A Participation Exercise Notice shall constitute a binding agreement of the Purchaser to purchase the portion of the Equity Participation Amount of the Offered Equity Securities so specified at the price and other terms set forth in the Participation Rights Notice. Assuming delivery of the Participation Rights Notice in accordance with the terms hereof, the failure of the Purchaser to respond within such five (5) Business Day period shall be deemed a waiver of the Purchaser’s rights under this Section 5.5 with respect to the offering described in the applicable Participation Rights Notice. Notwithstanding anything to the contrary herein, at any time prior to the issuance of the applicable portion of the Equity Participation Amount (whether or not a Participation Exercise Notice shall have been delivered) of such Offered Equity Securities, the Company may
 
1 Per term sheet & discussions on practical limits on participation rights.

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elect (in its sole discretion), upon written notice to the Purchaser, not to issue such Offered Equity Securities and rescind, in such event, the applicable Participation Rights Notice without liability to any Person hereunder.
(iii)      The closing of the purchase of securities by the Purchaser pursuant to this Section 5.5(b) shall not prohibit or delay the issuance of the Offered Equity Securities, but shall occur as promptly as practicable following delivery of the Participation Exercise Notice to the Company by the Purchaser; provided that such closing shall be subject to, and shall not be required to occur earlier than, the closing of the Offered Equity Securities to Persons other than the Purchaser. The issuance of the Offered Equity Securities to the Purchaser pursuant to this Section 5.5(c) shall also be subject to the receipt of any necessary regulatory approvals (including the Nasdaq), the expiration of any required waiting periods and applicable Law.
(iv)      Notwithstanding anything to the contrary contained in this Agreement, in the event the Purchaser would be required to file any Notification and Report Form pursuant to the HSR Act as a result of the purchase of securities pursuant to this Section 5.5 , the closing of such purchase shall be delayed (in whole, or at the option of the Purchaser, only to the extent necessary to avoid a violation of the HSR Act), until the Purchaser shall have made such filing under the HSR Act and the Purchaser shall have received early termination clearance in respect thereof or the waiting period in connection with such filing under the HSR Act shall have expired. In such circumstances the Purchaser shall use commercially reasonable efforts to make such filing and obtain such clearance or expiration of such waiting period as promptly as reasonably practical and the Company shall use commercially reasonable efforts to make all required filings and reasonably cooperate with and assist such holder in connection with the making of such filing and obtaining such clearance or expiration of such waiting period.
5.6      Press Release; Form 8-K . The Company shall, on or before 9:30 a.m., New York time, on the first (1st) Business Day after the date of this Agreement, issue a press release (the “ Press Release ”) reasonably acceptable to the Purchaser disclosing all the material terms of the transactions contemplated by the Transaction Documents. The Company shall, promptly following the date hereof (but in any event within the time period required by the rules and regulations of the SEC), file a Current Report on Form 8-K, disclosing the material terms of the transactions contemplated hereby.

5.7      Information Rights . For so long as the Purchaser (along with its respective Affiliates) owns a number of Shares equal to or greater than 50% of the Shares issued to the Purchaser on the Issue Date, the Company shall provide to each the Purchaser a copy of: (i) each unaudited monthly management report regarding the Company and/or any Subsidiary of the Company prepared for the Company, including an unaudited consolidated balance sheet and income statement, promptly following the preparation thereof; (ii) the Company's annual strategic plan and budget; and (iii) all periodic reports required to be provided pursuant to the Company's credit facilities. Upon notice from the Purchaser that it no longer wants to receive such information, the Company will promptly cease providing it. For the avoidance of doubt, such information shall be subject to the confidentiality obligations set forth in Section 4.3 of the Stockholders’ Agreement.

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5.8      Reporting Status . Until the date on which the Purchaser shall have sold all of the Registrable Securities or there are no longer any Registrable Securities (the “Reporting Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would no longer require or otherwise permit such termination. The Company shall take all actions necessary to maintain its eligibility to register the Registrable Securities for resale by the Purchaser on Form S-3.
5.9      Approval under Shareholder Agreement; Waiver of Piggyback Registration Rights . Pursuant to the Stockholders Agreement, the Company may not, and the Purchaser has obligations to, among other things, cause the Company not to, issue more than $50 million of equity securities, create any new class or series of equity securities, or amend the certificate of incorporation of the Company in a manner adverse to the Purchaser. The Purchaser authorizes and approves under the Stockholders Agreement, and waives any right or obligation to prevent or prohibit under the Stockholders Agreement, the issuance of the Securities and the transactions contemplated by the Transaction Agreements, including the establishment of the Series A Preferred Stock, the filing of the Certificate of Designations, the issuance of the Shares, Warrants, Conversion Shares and Warrant Shares, the issuance of equity securities in any Qualified Equity Offerings or pursuant to rights issued in connection with such Qualified Equity Offerings, and the creation and exercise of the Equity Participation Rights provided by this Agreement. For the avoidance of doubt, the preceding sentence shall not act as a written consent or similar approval by the Purchaser in its capacity as a stockholder of the Company. Pursuant to Section 2.2 of the Registration Rights Agreement, dated December 27, 2010, among the Company (the “ Registration Rights Agreement ”), the Purchaser and certain other stockholders of the Company, the Company has obligations to notify the Purchaser of registered equity offerings and, subject to certain limitations, register the Purchaser’s registrable securities. The Purchaser hereby acknowledges that the Company may conduct Qualified Equity Offerings and waives with respect to the Qualified Equity Offerings any right or obligation to such notice or registration or to prevent or consent such offerings.
5.10      Registration Rights .
(a)      Within 30 days of the Qualified Financing Date, unless otherwise agreed by the Company and the Purchaser, the Company shall file a Form S-3 or any similar short-form registration statement that may be available at such time (as amended or supplemented and including any replacements thereof, the “ Form S-3 ”) (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance with the Securities Act and the Exchange Act) to register the resale of the Registrable Securities. The Company shall cause such Form S-3 to become effective as soon thereafter as reasonably practicable but in any event within 90 days of the Qualified Financing Date. After effectiveness of the Form S-3, the Company shall prepare and file with the SEC such amendments and post-effective amendments to the Form S-3, such supplements to the prospectus in such Form S-3, and such replacement registration statements on Form S-3, as may be reasonably requested by the Purchaser or as may

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be required by the rules, regulations or instructions applicable to Form S-3 or by the Securities Act or rules and regulations thereunder to keep the Form S-3 effective until all Registrable Securities registered thereunder have ceased to be Registrable Securities.
(b)      The Registration Expenses for the Form S-3 shall be borne by the Company. In addition, the Company shall pay, with respect to each registration, the reasonable fees and disbursements of one counsel for the Purchaser. It is acknowledged by the Purchaser that it shall be responsible for all commissions, discounts or brokerage fees in respect of Registrable Securities sold by it.
(c)      If, in the judgment of outside counsel to the Company, the filing, initial effectiveness or continued use of the Form S-3 would require disclosure of information not otherwise then required by law to be publicly disclosed and, in the good faith judgment of the board of directors of the Company, such disclosure is reasonably likely to adversely affect any material financing, acquisition, corporate reorganization or merger or other material transaction or event involving the Company or otherwise have a material adverse effect on the Company (a “ Valid Business Reason ”), the Company may postpone or withdraw a filing of a Form S-3, or delay use of an effective Form S-3 until such Valid Business Reason no longer exists, but in no event shall the Company avail itself of such right for more than 20 consecutive days at any one time or 40 days, in the aggregate, in any period of 365 consecutive days; and the Company shall give notice to the Purchaser of its determination to postpone or withdraw a registration statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof. In the event the Company exercises its rights under the preceding sentence, the Purchaser agrees to suspend, immediately upon its receipt of the notice referred to above, its use of the prospectus relating to the Form S-3 in connection with any sale or offer to sell Registrable Securities.
(d)      In the event that (i) the Company has not filed the Form S-3 on or before the date on which such Form S-3 is required to be filed pursuant to Section 5.10(a), or (ii) such Form S-3 has not become effective or been declared effective by the SEC on or before the date on which such Form S-3 is required to become or be declared effective pursuant to Section 5.10(a) or (iii) the Form S-3 is filed and declared effective but (A) shall thereafter be withdrawn by the Company, (B) shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such Form S-3 (except as specifically permitted herein, including, with respect to any Form S-3, during any applicable suspension period in accordance with the last sentence of Section 5.10(c) or if no Registrable Securities exist) without being succeeded by an additional Form S-3 filed and declared effective within 60 days after the predecessor Form S-3 ceased to be effective or (C) shall be suspended for a Valid Business Purposes for a number of days in excess of the periods specified in Section 5.10(d) (each such event referred to in clauses (i) through (iii), a “ Registration Default ” and each period during which a Registration Default has occurred and is continuing, a “ Registration Default Period ”), then, as liquidated damages for such Registration Default, the Company will pay (such payments, “ Event Payments ”) to the Purchaser 1.0% of the Aggregate Purchase Price paid by the Purchaser with respect to the Registrable Securities for which a Registration Default has occurred for every 30 days (or pro rata for any portion thereof) until the Registration Default Period terminates; provided that the liquidated damages paid to the Purchaser, from time to time,

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may not in the aggregate exceed 10% of the Aggregate Purchase Price paid by the Purchaser under this Agreement.
(e)      If at any time the SEC takes the position that the offering of some or all of the Registrable Securities in a registration statement filed pursuant to this Section 5.10 (a “ Registration Statement ”) is not eligible to be made on a delayed or continuous basis under the provisions of Rule 415 under the Securities Act or requires the Purchaser to be named as an “underwriter,” the Company shall use its best efforts to persuade the SEC that the offering contemplated by the Registration Statement is a valid secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 and that the Purchaser is not an “underwriter.” In the event that the SEC refuses to alter its position, the Company shall (i) remove from the Registration Statement such portion of the Registrable Securities (the “ Cut Back Securities ”) and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Securities as the SEC may require to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “ SEC Restrictions ”); provided, however , that the Company shall not agree to name the Purchaser as an “underwriter” in such Registration Statement without the prior written consent of the Purchaser. Any cut-back imposed on the Purchaser pursuant to this Section 5.10(e) shall be applied first to any of the Registrable Securities the Purchaser shall designate, unless the SEC Restrictions otherwise require or provide or the Purchaser otherwise agrees. No Event Payments shall accrue as to any Cut Back Securities until such date as the Company is able to effect the registration of such Cut Back Securities in accordance with any SEC Restrictions applicable to such Cut Back Securities (such date, the “ Restriction Termination Date ”). From and after the Restriction Termination Date applicable to any Cut Back Securities, all of the provisions of this Section 5.11 (including the Company’s obligations with respect to the filing of a Registration Statement and its obligations to use commercially reasonable efforts to have such Registration Statement declared effective within the time periods set forth herein and the liquidated damages provisions in Section 5.11(d) relating thereto) shall again be applicable to such Cut Back Securities; provided, however, that (i) the Filing Deadline for the Form S-3 including such Cut Back Securities shall be ten (10) Business Days after such Restriction Termination Date, and (ii) the Required Effectiveness Date with respect to such Cut Back Securities shall be the 90th day immediately after the Restriction Termination Date.
(f)      Notwithstanding the foregoing, during any period in which Form S-3 is not available for the registration and resale of Registrable Securities, the Company shall register the Registrable Securities on another appropriate form in accordance with the Securities Act and the Exchange Act).
5.11      Qualified Equity Offerings . The Company shall use its commercially reasonable efforts to conduct one or more Qualified Equity Offerings on or before the six-month anniversary of the Issuer Date generating in the aggregate at least $31.5 million of gross proceeds.

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6.      Conditions Precedent .
6.1      Conditions to the Obligation of the Purchaser to Consummate the Closing . The obligations of the Purchaser to consummate the transactions to be consummated at the Closing, and to purchase and pay for the Securities pursuant to this Agreement, are subject to the satisfaction of the following conditions precedent:
(a)      the Company shall have filed with the Secretary of State of the State of Delaware the Certificate of Designations;
(b)      the Company shall have executed and delivered this Agreement;
(c)      the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects both when made and as of the Closing Date (except in the case of representations and warranties that are made as of a specified date within such sections, such representations and warranties shall be true and correct as of such specified date);
(d)      Gibson, Dunn & Crutcher LLP, counsel to the Company, shall have provided the Purchaser with its legal opinion, in form and substance reasonably satisfactory to the Purchaser;
(e)      the Company shall have delivered to the Purchaser a certified copy of the Amended and Restated Certificate of Incorporation and the Certificate of Designations as certified by the Delaware Secretary of State at or prior to the Closing Date;
(f)      the Company shall have delivered to the Purchaser a certificate, in form acceptable to the Purchaser, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions adopted by the Special Committee and the Board in connection with the Transactions contemplated hereby, (ii) the Certificate of Incorporation of the Company and (iii) the bylaws of the Company, each as in effect at the Closing;
(g)      PSP shall have provided a waiver under the Stockholders Agreement and Registration Rights Agreement substantially to the same effect as Section 5.9 ;
(h)      the consummation of the Closing shall not have been enjoined or prohibited by applicable Law and no proceeding by any Governmental Entity or stockholder challenging the transactions contemplated by the Transactions Agreements shall have been initiated or threatened; and
(i)      the Company shall have entered into an amendment to its credit facility on substantially the terms set forth in Exhibit C .
6.2      Conditions to the Obligation of the Company to Consummate the Closing . The obligation of the Company to consummate the transactions to be consummated at

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the Closing, and to issue and sell to the Purchaser the Securities pursuant to this Agreement, is subject to the satisfaction of the following conditions precedent:
(a)      the Certificate of Designations shall have been duly filed with and accepted by the Secretary of State of the State of Delaware;
(b)      the Purchaser shall have executed and delivered this Agreement;
(c)      the representations and warranties of the Purchaser contained in this Agreement shall be true and correct in all material respects both when made and as of the Closing Date (except in the case of representations and warranties that are made as of a specified date within such sections, such representations and warranties shall be true and correct as of such specified date); and
(d)      PSP shall have provided a waiver under the Stockholders Agreement and Registration Rights Agreement substantially to the same effect as Section 5.9; and
(e)      the consummation of the Closing shall not have been enjoined or prohibited by applicable Law and no proceeding by any Governmental Entity challenging the transactions contemplated by the Transactions Agreements shall have been initiated or threatened.
7.      Transfer Restrictions . The Purchaser agrees not to (a) Transfer the Shares, except in accordance with the terms of the Certificate of Designations or (b) Transfer the Warrants, except in accordance with the terms of the Warrant Agreement. Any purported transfer of Shares in violation of the Certificate of Designations or Warrants in violation of the Warrant Agreement shall be void ab initio and neither the Company nor the Purchaser shall recognize the same, and the Company shall not record such purported Transfer on its books or treat the purported transferee as the owner of any such Securities for any purpose.
8.      Legends; Securities Act Compliance . The Shares, Conversion Shares and Warrants Shares, any certificate representing the Warrants and the notice sent to any stockholder of the Company of Shares in book-entry form will bear a legend conspicuously thereon or statement (as applicable) to the following effect:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE SAID ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAWS OR SUCH OFFER, SALE, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION UNDER SUCH ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAWS.

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“THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT BY AND AMONG NOODLES & COMPANY AND CATTERTON-NOODLES, LLC, DATED AS OF FEBRUARY 8, 2017, AND THE [CERTIFICATE OF DESIGNATIONS OF SERIES A SERIES A CONVERTIBLE PREFERRED STOCK OF NOODLES & COMPANY / WARRANT AGREEMENT BY AND AMONG NOODLES & COMPANY AND CATTERTON-NOODLES, LLC, DATED AS OF FEBRUARY 8, 2017], THE TERMS OF EACH ARE HEREBY INCORPORATED BY REFERENCE AND A COPY OF EACH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF NOODLES & COMPANY, AND EACH MAY BE OBTAINED BY THE REGISTERED HOLDER OF THIS SECURITY UPON REQUEST AND WITHOUT CHARGE FROM NOODLES & COMPANY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.”
9.      Indemnification; Survival .
9.1      Company Indemnification . The Company shall defend, indemnify, exonerate and hold free and harmless the Purchaser and its Affiliates and their respective directors, officers, partners, members and employees (each, a “ Purchaser Indemnified Party ” and, collectively, the “ Purchaser Indemnified Parties ”) from and against any and all Losses actually incurred by such Indemnified Parties that arise out of, or result from: (a) any inaccuracy in or breach of the Company’s representations or warranties in this Agreement, (b) the Company’s breach of its agreements or covenants in this Agreement, (c) any untrue or alleged untrue statement of a material fact contained in any Registration Statement filed pursuant to Section 5.10, any prospectus or in any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except insofar as any such Loss arises out of or is based upon any untrue statement or alleged untrue statement made in reliance upon and in conformity with written information provided by or on behalf of the Purchaser specifically for inclusion in such registration statement, prospectus, amendment or supplement thereto, and (d) any cause of action, suit, proceeding or claim brought or made against such Purchaser Indemnified Party by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves such Purchaser Indemnified Party that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Purchaser Indemnified Party in connection with this Agreement, or (D) the status of such Purchaser Indemnified Party or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief), with respect to clauses (A) and (D) if, and only if, (i) such Purchaser Indemnified Parties have been successful on the merits or otherwise in defense of any such

27


action, suit, proceeding or claim or (ii) a settlement, compromise or consent is reached on any such action, suit, proceeding or claim that is approved by a majority of the Board who are independent of the Purchaser and its Affiliates and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of such Purchaser Indemnified Parties. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Losses which is permissible under applicable law. Notwithstanding the foregoing, the sole remedy for breach of the provisions set forth in Section 5.10 shall be the Event Payments.
9.2      Survival of Representations and Warranties . The representations and warranties contained herein shall survive until 5:00 p.m. EDT on the 18-month anniversary of the Closing, other than the representations and warranties set forth in Sections 3.1 , 3.2 , 3.3 , 3.4 , 3.5 , 4.1 , 4.2 and 4.3 , which shall survive indefinitely (the “ Survival Period ”). For the avoidance of doubt, all other covenants, agreements and obligations contained in this Agreement shall survive indefinitely (unless a different period is specifically provided for pursuant to the provisions of this Agreement expressly relating thereto).
9.3      Purchaser Indemnification . The Purchaser shall defend, indemnify, exonerate and hold free and harmless the Company and its Affiliates and their respective directors, officers and employees (each a “ Company Indemnified Party ” and collectively, the “ Company Indemnified Parties ”) from and against any and all Losses actually incurred by such Company Indemnified Parties that arise out of, or result from: (a) any inaccuracy in or breach of the Purchaser’s representations or warranties in this Agreement or (b) the Purchaser’s breach of its agreements or covenants in this Agreement.
9.4      Limitations . Notwithstanding anything in this Agreement to the contrary, (a) no indemnification claims for Losses shall be asserted by the Purchaser Indemnified Parties under Section 9.1 or by the Company Indemnified Parties under Section 9.3 unless and until the aggregate amount of Losses that would otherwise be payable under Section 9.1 or Section 9.3 , as applicable, exceeds $100,000 (the “ Basket Amount ”), whereupon the Purchaser Indemnified Party or Company Indemnified Party, as applicable, shall be entitled to receive only amounts for Losses in excess of the Basket Amount, (b) the aggregate liability of the Company for Losses under Section 9.1 shall in no event exceed the Aggregate Purchase Price and (c) the aggregate liability of the Purchaser for Losses under Section 9.3 shall in no event exceed two percent of the Aggregate Purchase Price.
9.5      Procedures . A party entitled to indemnification hereunder (each, an “ Indemnified Party ”) shall give written notice to the party from whom indemnification is sought (the “ Indemnifying Party ”) of any claim with respect to which it seeks indemnification promptly after the discovery by such Indemnified Party of any matters giving rise to a claim for indemnification hereunder; provided, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 9 unless and to the extent that the Indemnifying Party shall have been materially prejudiced by the failure of such Indemnified Party to so notify such party. Such notice shall describe in reasonable detail such claim. In case any action, suit, claim or proceeding which may cause an

28


Indemnified Party to incur indemnifiable Losses is brought against an Indemnified Party, the Indemnifying Party shall be entitled to assume and conduct the defense thereof, with counsel reasonably satisfactory to the Indemnified Party unless (a) such claim seeks remedies, in addition to or other than, monetary damages that are reasonably likely to be awarded, (b) such claim involves a criminal proceeding or (c) counsel to the Indemnified Party advises such Indemnifying Party in writing that such claim involves a conflict of interest that would reasonably be expected to make it inappropriate for the same counsel to represent both the Indemnifying Party and the Indemnified Party. If any one of the foregoing clauses (a) through (c) applies, the Indemnified Party shall be entitled to retain its own counsel at the cost and expense of the Indemnifying Party (except that the Indemnifying Party shall only be liable for the legal fees and expenses of one law firm for all Indemnified Parties, taken together with respect to any single action or group of related actions, other than local counsel). If the Indemnifying Party assumes the defense of any claim, the Indemnified Party shall nevertheless be entitled to hire, at its own expense, separate counsel and participate in the defense thereof; provided, that all Indemnified Parties shall thereafter deliver to the Indemnifying Party copies of all notices and documents (including court papers) received by the Indemnified Party relating to the claim, and each Indemnified Party shall reasonably cooperate in the defense or prosecution of such claim. Such reasonable cooperation shall include the retention and (upon the Indemnifying Party’s reasonable request) the provision to the Indemnifying Party of records and information that are reasonably relevant to such claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Indemnifying Party shall not be liable for any settlement of any action, suit, claim or proceeding effected without its prior written consent (not to be unreasonably withheld, conditioned or delayed). The Indemnifying Party further agrees that it will not, without the Indemnified Party’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), settle or compromise any claim or consent to entry of any judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in respect of which indemnification has been sought or may sought be hereunder unless such settlement or compromise includes an unconditional release of such Indemnified Party from all liability arising out of such action, suit, claim or proceeding and is solely for monetary damages. The indemnification required by this Section 9 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, within thirty (30) days after bills are received or Losses are incurred.
9.6      Additional Limitations . Notwithstanding anything contained herein to the contrary, “Losses” shall not include punitive damages, except to the extent payable by an Indemnified Party to a third party. No party hereto shall be obligated to indemnify any other Person with respect to any representation, warranty, covenant or condition specifically waived in writing by any other party on or prior to the Closing.
9.7      Exclusive Remedies . Notwithstanding anything to the contrary herein, the provisions of Section 5.10(d) , Section 9 and Section 11.5 shall be the sole and exclusive remedies of the parties under this Agreement following the Closing for any and all claims (other than claims arising from fraud, criminal activity or willful misconduct on the part of a party hereto in connection with the transactions contemplated by this Agreement) for breaches or alleged breaches of any representations or warranties, covenants or agreements of the parties

29


contained in this Agreement. For the avoidance of doubt, this Section 9 shall not prevent the parties from obtaining specific performance or other non-monetary remedies at in equity or at Law pursuant to Section 11.5 of this Agreement and shall not limit other remedies that may expressly be available to the parties under any of the Transaction Agreements (other than this Agreement).
10.      Termination .
10.1      Conditions of Termination . Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before the Closing by either the Company, on the one hand, or the Purchaser, on the other hand, if any of the conditions to Closing shall have become permanently incapable of fulfillment and shall not have been waived in writing by the other parties.
10.2      Effect of Termination . In the event of any termination pursuant to Section 10.1 hereof, this Agreement shall become null and void and have no further effect, with no liability on the part of the Company or the Purchaser, or their directors, partners, members, employees, affiliates, officers, stockholders or agents or other representatives, with respect to this Agreement, except (a) for the terms of this Section 10.2 , Section 9 (Indemnification; Survival) and Section 11 (Miscellaneous Provisions), which shall survive the termination of this Agreement, and (b) that nothing in this Section 10 shall relieve any party or parties hereto, as applicable, from liability or damages incurred or suffered by any other party resulting from any intentional (x) breach of any representation or warranty of such first party or (y) failure of such first party to perform a covenant thereof. As used in the foregoing sentence, “intentional” shall mean an act or omission by such party which such party actually knew, or reasonably should have known, would constitute a breach of this Agreement by such party.
11.      Miscellaneous Provisions .
11.1      Interpretation . The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and subsection references are to this Agreement unless otherwise specified. The headings in this Agreement are included for convenience of reference only and will not limit or otherwise affect the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, will be deemed to refer to the date set forth in the first paragraph of this Agreement. The meanings given to terms defined herein will be equally applicable to both the singular and plural forms of such terms. All matters to be agreed to by any party hereto must be agreed to in writing by such party unless otherwise indicated herein. Except as specified otherwise herein, references to agreements, policies, standards, guidelines or instruments, or to statutes or regulations, are to such agreements, policies, standards, guidelines or instruments, or statutes or regulations, as amended or supplemented from time to time (or to successors thereto). All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person, unless otherwise indicated or the context otherwise requires.

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The parties hereto agree that they have been represented by counsel during the negotiation and execution of the Transaction Agreements and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
11.2      Notices . All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed delivered (a) three (3) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid (b) one (1) Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, (c) on the date of delivery if delivered personally, or (d) if by facsimile, upon written confirmation of receipt by facsimile, in each case to the intended recipient as set forth below:
(a)      if to the Company, addressed as follows:
Noodles & Company
520 Zang Street, Suite D
Broomfield, Colorado 80021
Attention:     General Counsel
Facsimile:    (720) 214-1921
with copies (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP
200 Park, 47 th Floor
New York, NY 10166
Attention:    Andrew Fabens
Facsimile:    212-351-4035
(b)      if to the Purchaser, to:
Catterton-Noodles LLC
c/o Catterton Partners
599 West Putnam Avenue
Greenwich, CT 06830
Attention:    Andrew Taub
Facsimile:    203-629-4903
with copies (which shall not constitute notice) to:

Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attention:    Stuart Bressman
Facsimile:    212-969-2900

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Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 11.2 .
11.3      Severability . In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
11.4      Governing Law; Jurisdiction; WAIVER OF JURY TRIAL .
(a)      This Agreement shall be governed by and construed in accordance with the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.
(b)      Each of the parties hereto irrevocably (i) agrees that any legal suit, action or proceeding brought by any party hereto arising out of or based upon this Agreement may be instituted in any United States federal court located in the Borough of Manhattan in The City of New York (a “ New York Court ”), (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding and (iii) submits to the non-exclusive jurisdiction of a New York Court in any such suit, action or proceeding.
(c)      EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PURCHASER OR THE COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
11.5      Specific Performance . The parties hereto agree that the obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that irreparable damages for which money damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that the parties shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled, at law or in equity; and the parties hereto further agree to waive any requirement for the securing or posting of any bond or other security in connection with the obtaining of any such injunctive or other equitable relief. Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as

32


provided herein on the basis that (x) either party has an adequate remedy at law or (y) an award of specific performance is not an appropriate remedy for any reason at law or equity.
11.6      Delays or Omissions; Waiver . No delay or omission to exercise any right, power, or remedy accruing to a party upon any breach or default of another party under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement. Any agreement on the part of a party or parties hereto to any waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party or parties, as applicable. Any delay in exercising any right under this Agreement shall not constitute a waiver of such right.
11.7      Fees; Expenses .
(a)      The Company shall reimburse the Purchaser for the reasonable and documented out-of-pocket expenses of the Purchaser in connection with the Transaction Agreements and the transactions contemplated hereby and thereby. Except as set forth in Section 5.10(b) and this Section 11.7 , all fees and expenses incurred in connection with the Transaction Agreements and the transactions contemplated hereby and thereby shall be paid by the party or parties, as applicable, incurring such expenses whether or not the transactions contemplated hereby and thereby are consummated.
(b)      The Company shall pay any and all documentary, stamp or similar issue or transfer Tax payable in connection with this Agreement, the issuance of the Shares and Warrants at Closing and the issuance of the Conversion Shares and Warrant Shares, except that the Company may require the converting holder of Shares or the exercising holder of Warrants to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer Tax payable in connection therewith as a result of the name of the holder of the Conversion Shares or Warrant Shares, as applicable, issued upon such exchange or registration of transfer being different from the name of the converting or exercising holder of the Shares or Warrants surrendered.
11.8      Assignment . None of the parties may assign its rights or obligations under this Agreement without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties to this Agreement and their respective successors and permitted assigns. Any purported assignment other than in compliance with the terms hereof shall be void ab initio.
11.9      No Third Party Beneficiaries . Except for Section 9 (with respect to which all Indemnified Parties shall be third party beneficiaries), this Agreement does not create any rights, claims or benefits inuring to any Person that is not a party hereto nor create or

33


establish any third party beneficiary hereto; provided, that Jefferies LLC is an intended third party beneficiary of Section 11.13 of this Agreement. Without limiting the foregoing, the representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties hereto. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, Persons other than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
11.10      Counterparts . This Agreement may be executed and delivered (including by facsimile or electronic transmission) in any number of counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed an original, but all of which taken together shall constitute a single instrument.
11.11      Entire Agreement; Amendments . This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Annexes and Exhibits hereto, constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersede all prior agreements, negotiations, understandings, representations and statements respecting the subject matter hereof, whether written or oral. No modification, alteration, waiver or change in any of the terms of this Agreement shall be valid or binding upon the parties hereto unless made in writing and duly executed by the Company and the Purchaser.
11.12      No Personal Liability of Directors, Officers, Owners, Etc . No director, officer, employee, incorporator, stockholder, managing member, member, general partner, limited partner, principal or other agent of any of the Purchaser or the Company shall have any liability for any obligations of the Purchaser or the Company, as applicable, under this Agreement or for any claim based on, in respect of, or by reason of, the respective obligations of the Purchaser or the Company, as applicable, under this Agreement. Each party hereby waives and releases all such liability. This waiver and release is a material inducement to each party’s entry into this Agreement.
11.13      Placement Agent .
(a)      The Purchaser agrees and acknowledges that (i) Jefferies, its affiliates and its representatives have not made, and will not make any representations or warranties with respect to the Company or the offer and sale of the Shares, and the Purchaser will not rely on any statements made by Jefferies, orally or in writing, to the contrary; (ii) it will be responsible for conducting its own due diligence investigation with respect to the Company and the offer and sale of the Shares, (iii) it will be purchasing Shares based on the results of its own due diligence investigation of the Company, (iv) it has negotiated the offer and sale of the Shares directly with the Company, and Jefferies will not be responsible for the ultimate success of any such investment and (v) the decision to invest in the Company will involve a significant degree of risk, including a risk of total loss of such investment. The Purchaser further represents and warrants to Jefferies that it, including any fund or funds that it manages or advises that

34


participates in the offer and sale of the Shares, is permitted under its constitutive documents (including, without limitation, all limited partnership agreements, charters, bylaws, limited liability company agreements, all applicable side letters with investors, and similar documents) to make investments of the type contemplated by this Agreement. In light of the foregoing, to the fullest extent permitted by law, the Purchaser and the Company release Jefferies, its employees, officers, representatives and affiliates from any liability with respect to such Purchaser’s participation in the offer and sale of the Shares including, but not limited to, any improper payment made in accordance with the information provided by the Company, except to the extent such liability arises out of or is based on any action of or failure to act by Jefferies that is determined, by a final, non-appealable judgment by a court, to have resulted primarily and directly from Jefferies' gross negligence or willful misconduct. This Section 11.13 shall survive any termination of this Agreement.
(b)      The parties agree and acknowledge that Jefferies may rely on the representations and warranties of the Company and the Purchaser contained in this Agreement as if such representations and warranties were made directly to Jefferies.
(c)      The Company agrees for the express benefit of Jefferies, that: (1) neither Jefferies, nor any of its affiliates or any of its representatives has any duties or obligations other than those specifically set forth herein or in the engagement letter, dated as of December 15, 2016, between the Company and Jefferies; and (2) Jefferies, its affiliates and its representatives shall be entitled to rely on, and shall be protected in acting upon, any certificate, instrument, opinion, notice, letter or any other document or security delivered to any of them by or on behalf of the Company.
[ Remainder of the Page Intentionally Left Blank ]


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
COMPANY:
NOODLES & COMPANY,
a Delaware corporation
By:
/s/ PAUL STRASEN     
Name: Paul Strasen
Title: Executive Vice President, General
Counsel & Secretary






CATTERTON-NOODLES, LLC
By: CP6 Management, L.L.C.
Its: Manager
By:
/s/ SCOTT A. DAHNKE     
Name: Scott A. Dahnke
Title: Managing Member






Annex A

Purchaser
Preferred Stock Shares
Warrants
Aggregate Purchase Price
Catterton-Noodles, LLC
18,500
1,913,793
$18,500,000





Exhibit A
Form of Certificate of Designations

[see attached]




CERTIFICATE OF DESIGNATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
NOODLES & COMPANY
The undersigned, Paul Strasen, Executive Vice President, General Counsel and Secretary of Noodles & Company (the “ Company ”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “ DGCL ”), does hereby certify, in accordance with Sections 103 and 151 of the DGCL, that the following resolutions were duly adopted by its Board of Directors (the “ Board ”) on February 7, 2017:
WHEREAS, the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time, the “ Certificate of Incorporation ”), authorizes 1,000,000 shares of preferred stock, par value $0.01 per share (the “ Preferred Stock ”), issuable from time to time in one or more series;
WHEREAS, the Certificate of Incorporation authorizes the Board to provide by resolution for the issuance of the shares of Preferred Stock in one or more series, and to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, privileges, preferences, and relative participating, optional or other rights, if any, of the shares of each such series and the qualifications, limitations or restrictions thereof;
WHEREAS, the Board desires, pursuant to its authority as aforesaid, to designate a new series of Preferred Stock, set the number of shares constituting such series, and the voting powers, designations, preferences and relative, participating, optional, or other special rights, and the qualifications, limitations, and restrictions thereof.
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby designates a new series of Preferred Stock, consisting of the number of shares set forth herein, with the voting powers, designations, preferences and relative, participating, optional, or other special rights, and the qualifications, limitations, and restrictions relating to such series as follows:
Article I. NUMBER; DESIGNATION; RANK.
Section 1.1      This series of convertible preferred stock is designated as the “Series A Convertible Preferred Stock” (the “ Series A Preferred Stock “). The number of shares constituting the Series A Preferred Stock is 50,000 shares, par value $0.01 per share. Such number of shares may be increased or decreased by resolution of the Board, provided, however, that no such decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of such shares then outstanding.
Section 1.2      Except as otherwise provided herein with respect to a Rights Offering Dividend, the Series A Preferred Stock ranks, with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution, or winding-up of the Company or otherwise senior in preference and priority to the Common Stock and each



other class or series of Capital Stock of the Company, except for any class or series of Capital Stock hereafter issued in compliance with the terms hereof and the terms of which expressly provide that it will rank senior to or on parity with the Series A Preferred Stock with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution, or winding-up of the Company, or otherwise (collectively with the Common Stock, the “ Junior Securities ”).
ARTICLE II.      DIVIDENDS.
Section 2.1      Dividend Accruals . From and after the earlier of the six-month anniversary of the Issue Date and the date the Mandatory Conversion Condition is satisfied (the “ Dividend Commencement Date ”), dividends (“ Preferred Dividends ”) shall accrue on a daily basis at the Dividend Rate per annum on the Accrued Liquidation Preference (calculated as of the beginning of the relevant Dividend Period) (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Preferred Shares), whether or not declared; provided, however, that such Preferred Dividends shall be payable only (i) in cash, (ii) when, as, and if declared by the Board, (iii) out of funds legally available therefor and (iv) if, after such payment, the Company would be in compliance with the covenants under its indebtedness for borrowed money existing on the date of such payment; provided, further, that from and after the date on which the Mandatory Conversion Condition is satisfied (or waived by the Majority Holders) and the Thirty-Day VWAP is equal to or less than the Conversion Price, Preferred Dividends will cease to accrue. Dividends paid on the Preferred Shares in an amount less than the total amount of the Preferred Dividends at the time accrued on such shares shall be allocated pro rata on a share-by-share basis among all such Preferred Shares at the time outstanding. The Board may fix a record date for the determination of holders of Preferred Shares entitled to receive payment of a dividend declared thereon, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such payment.
Section 2.2      Dividend Blocker . Except with respect to a Rights Offering Dividend or dividends on shares of any class of Common Stock payable in shares of any class of Common Stock, the Company shall not declare, pay or set aside any dividends on Junior Securities if at such time there are any accrued and unpaid Preferred Dividends with respect to completed Dividend Periods.
Section 2.3      Participating Dividends . Except with respect to a Specified Rights Offering Dividend, if the Company declares, makes or pays any dividend or distribution in respect of all or substantially all holders of Common Stock, other than a dividend or distribution to which Section 5.5(a)(i) or (ii) applies (a “ Common Dividend ”), each Holder shall first receive a dividend (in addition to the dividends provided for by Section 2.1) in respect of each Preferred Share held thereby, in an amount equal to the product of (x) the amount of such Common Dividend paid per share of Common Stock, multiplied by (y) the number of shares of Class A Common Stock (or Reference Property, to the extent applicable) issuable if such Preferred Share had been converted into shares of Common Stock immediately prior to the record date for such Common Dividend (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has not been exercised) (such amount per share of Preferred Stock, the “ Participating Dividend ”). Participating Dividends shall be payable to

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Holders on the record date for such Common Dividend at the same time and in the same manner as the Common Dividend triggering such Participating Dividend is paid.
ARTICLE III.      LIQUIDATION PREFERENCE.
Section 3.1      Upon any liquidation, dissolution or winding-up of the Company, the holders of Preferred Shares then outstanding shall be entitled to receive and to be paid out of the assets of the Company legally available for distribution to the Company’s stockholders, before any distribution or payment may be made to a holder of any Junior Securities, an amount per share equal to the greater of (i) the Accrued Liquidation Preference plus the amount of any current dividends accrued and unpaid in the then-current Dividend Period and (ii) an amount equal to the amount the Holders of Preferred Shares would have received upon such liquidation, dissolution or winding-up of the Company had all such Holders converted such Preferred Shares into Class A Common Stock (or Reference Property, to the extent applicable) immediately prior thereto (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has not been exercised) (the “ Participating Liquidation Preference ,” and such greater amount, the “ Liquidation Preference “), and no more.
Section 3.2      Subject to the following sentences, the Liquidation Preference shall be paid in cash. If upon any liquidation, dissolution or winding up of the Company, the cash legally available for distribution to the Company’s stockholders is insufficient to pay the Holders the full Liquidation Preference and the holders of all Parity Securities the full cash liquidation preferences to which they are entitled, the Holders and the holders of such Parity Securities will share the cash legally available for distribution to the Company’s stockholders ratably in proportion to the full respective amounts of cash to which they are entitled. If upon any such liquidation, dissolution or winding up of the Company, the assets of the Company legally available for distribution to the Company’s stockholders are insufficient to pay the Holders the full Liquidation Preference and the holders of all Parity Securities the full liquidation preferences to which they are entitled, the Holders and the holders of such Parity Securities will share ratably in any such distribution of the assets of the Company in proportion to the full respective amounts to which they are entitled.
Section 3.3      After payment to the Holders of the full Liquidation Preference to which they are entitled, the Holders as such will have no right or claim to any of the assets of the Company.
Section 3.4      No holder of Junior Securities shall receive any assets upon any liquidation, dissolution or winding-up of the Company unless the entire Liquidation Preference in respect of the Preferred Shares has been paid.
Section 3.5      The amount deemed paid or distributed to the holders of Capital Stock of the Company upon any such liquidation, dissolution or winding up of the Company shall be (i) in the case of cash, the amount of cash paid and (ii) in the case of any other assets, the value of such other assets as determined in good faith by the Board.

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ARTICLE IV.      VOTING RIGHTS.
Section 4.1      Voting Rights .
(a)      The Holders shall be entitled to vote on all matters on which the holders of shares of Class A Common Stock are entitled to vote and, except as otherwise provided herein, in the Certificate of Incorporation (including, for the avoidance of doubt, in any certificate of designations), or by law, the Holders shall vote together with the holders of shares of Common Stock and any other shares of Capital Stock of the Company entitled to vote thereon as a single class. As of any record date or other determination date, each Holder shall be entitled to a number of votes equal to the number of votes such Holder would have had if all Preferred Shares held by such Holder on such date had been converted into shares of Common Stock immediately prior thereto (assuming any applicable Voting Trigger Redemption Option has been exercised in full).
(b)      In the event that any Holder would be required to file any Notification and Report Form pursuant to the HSR Act as a result of any increase in the number of shares of Class A Common Stock issuable upon conversion of the Preferred Shares, the voting rights of such Holder pursuant to this Section 4.1 shall not be increased as a result of such events unless and until such Holder and the Company shall have made their respective filings under the HSR Act and the applicable waiting period shall have expired or been terminated in connection with such filings. The Company shall make all required filings and reasonably cooperate with and assist such Holder in connection with the making of such filing and obtaining the expiration or termination of such waiting period and shall be reimbursed by such Holder for any reasonable and documented out-of-pocket costs incurred by the Company in connection with such filings and cooperation.
Section 4.2      Approval Rights . In addition to the voting rights provided for by Section 4.1 and any voting rights to which the Holders may be entitled to under law, for so long as any Preferred Shares are outstanding, the Company may not, directly or indirectly, take any of the following actions (including by means of merger, consolidation or otherwise) without the prior written consent of the Majority Holders:
(a)      materially and adversely alter or change the rights, preferences or privileges of the Preferred Shares;
(b)      create (by reclassification or otherwise) any Senior Securities or Parity Securities; or
(c)      issue, or authorize for issuance, any new Preferred Shares that were not issued on the Issue Date;
provided, that in each case, the foregoing consent shall not be required with respect to the declaration and payment of Preferred Dividends in Preferred Shares or in connection with any Qualified Equity Offerings.

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ARTICLE V.      CONVERSION; VOTING TRIGGER REDEMPTION.
Section 5.1      Conversion Privilege .
(a)      General . Subject to the provisions of this Article V and Section 6.3 hereof, each Holder shall be entitled to convert, at any time and from time to time, at the option and election of such Holder, any or all outstanding Preferred Shares held by such Holder into such number of shares of Class A Common Stock (or Reference Property) as set out in Section 5.3.
(b)      Deliveries Required for Holder Conversion . Such conversion right shall be exercised by the surrender of the certificate or certificates for such Preferred Shares to be converted (the “ Converted Shares ”) to the Company (or a transfer agent on behalf of the Company, as applicable) (or, if the Holder whose shares are to be converted (the “ Converting Holder ”) alleges that such certificate has or certificates have been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Company or such transfer agent to indemnify the Company against any claim that may be made against the Company on account of the alleged loss, theft or destruction of such certificate) at the office of the Company’s transfer agent for the Series A Preferred Stock (or at the principal office of the Company, if the Company serves as its own transfer agent), together with (x) written notice (a “ Holder Conversion Notice ”) that such Holder elects to convert all or part of the Preferred Shares represented by such certificates as specified therein, which notice shall specify the name or names (with address) in which a certificate or certificates for shares of Class A Common Stock (or Reference Property) to be issued in a conversion (the “ Conversion Shares ”) are to be issued and a statement setting forth the amount of each class or series of Capital Stock of the Company Beneficially Owned by such Converting Holder, (y) a written instrument or instructions of transfer or other documents and endorsements reasonably acceptable to the transfer agent or the Company, as applicable (if reasonably required by the transfer agent or the Company, as applicable), and (z) funds for any stock transfer, documentary, stamp or similar taxes, if payable by the Holder pursuant to Section 5.4(b).
Section 5.2      Conversion at the Option of the Company . On or after the date on which the Mandatory Conversion Condition is satisfied (or waived by the Majority Holders) and if the Thirty-Day VWAP is greater than the Conversion Price, the Company shall have the right, at its option, to cause all outstanding Preferred Shares to be automatically converted (without any further action by the Holder and whether or not the certificates representing the Preferred Shares are surrendered), in whole but not in part, into such number of Conversion Shares as set out in Section 5.3. The Company may exercise its option under this Section 5.2 by providing the Holders with a notice (the “ Company Conversion Notice ”), which Company Conversion Notice shall specify that the Company is exercising the option contemplated by this Section 5.2 and the Conversion Date on which the Company expects such conversion to occur (which Conversion Date shall be not less than four (4) Business Days following the date such Company Conversion Notice is provided to the Holders); provided that, once delivered, such notice shall be irrevocable, unless the Company obtains the written consent of the Majority Holders. For the avoidance of doubt, (x) the Holders shall continue to have the right to convert their Preferred Shares pursuant to Section 5.1 until and through the Conversion Date contemplated in this Section 5.2 and (y) if any Preferred Shares are converted pursuant to Section 5.1, such Preferred Shares shall no longer be converted pursuant to this Section

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5.2 and the Company Conversion Notice delivered to the Holders pursuant to this Section 5.2 shall automatically terminate with respect to such Preferred Shares. Notwithstanding the foregoing, any notice delivered by the Company under this Section 5.2 in accordance with Section 8.6 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such Holder of Preferred Shares actually receives such notice, and neither the failure of a Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the conversion of the Preferred Shares as set forth in this Section 5.2.
Section 5.3      Amounts Received Upon Conversion .
(a)      Conversion Amount . Subject to subsection (b) hereof, upon a conversion of the Preferred Shares in accordance with this Article V, the Converting Holder shall receive in respect of each Converted Share a number of Conversion Shares equal to the amount (the “ Conversion Amount ”) determined by dividing (i) the Purchase Price by (ii) the Conversion Price in effect at the time of conversion.
(b)      Voting Trigger Redemption . Notwithstanding anything to the contrary in this Article V, if the Board determines that a Converting Holder would, upon conversion, be the Beneficial Owner of 45% or more of the Total Current Voting Power (the “ Voting Trigger ”) (assuming for this purpose that all of such Converting Holder’s Convertible Securities (including Preferred Shares) and Option Securities (including Warrants) have converted into, or been exercised for, Class A Common Stock (or Reference Property, to the extent applicable)), then the Company may elect to redeem from such Converting Holder (a “ Voting Trigger Redemption ”), out of funds legally available therefor, up to such number of Preferred Shares that would otherwise convert into Conversion Shares as would be necessary so that, following such conversion, the Voting Trigger would not occur (the “ Voting Trigger Redemption Option ”). The redemption price for such shares (the “ Voting Trigger Redemption Price ”) shall be equal to (i) the number of Conversion Shares into which such shares redeemed would otherwise have converted into but for this Section 5.3(b) times (ii) the Conversion Price determined on the date the Voting Trigger Redemption Option Notice is sent. Within five (5) Business Days of receipt of a Holder Conversion Notice, or at any time on or after delivery of a Company Conversion Notice, the Company shall send to the Converting Holder a notice (a “ Voting Trigger Redemption Option Notice ”) stating whether the Voting Trigger Redemption Option is applicable and, if the Voting Trigger Redemption Option is applicable, whether the Company will exercise the Voting Trigger Redemption Option. If the Company exercises the Voting Trigger Redemption Option, the Voting Trigger Redemption Option Notice shall include: (A) the number of Preferred Shares to be redeemed pursuant to the Voting Trigger Redemption, (B) the date for such Voting Trigger Redemption (the “ Voting Trigger Redemption Date ”), which date shall not be less than three calendar days after delivery of the Voting Trigger Redemption Notice nor more than ninety (90) calendar days after delivery of the Voting Trigger Redemption Notice, and (C) a statement that payment in connection with the Voting Trigger Redemption will be made to the Converting Holder within five (5) Business Days of the Voting Trigger Redemption Date to the account specified by such Converting Holder to the Company in writing. The Voting Trigger Redemption Notice may be included by the Company in any Company Conversion Notice. Any Voting Trigger Redemption Notice delivered by the Company under this Section 5.3(b) in accordance with

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Section 8.6 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such Converting Holder actually receives such notice, and neither the failure of a Converting Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the Voting Trigger Redemption.
(c)      Fractional Shares . No fractional shares of Class A Common Stock (or fractional shares in respect of Reference Property, to the extent applicable) will be issued upon conversion of the Preferred Shares. In lieu of fractional shares, the Company shall pay cash in respect of each fractional share equal to such fractional amount multiplied by the Thirty Day VWAP as of the closing of business on the Business Day immediately preceding the Conversion Date. If more than one Preferred Share is being converted at one time by the same Holder, then the number of full shares issuable upon conversion will be calculated on the basis of the aggregate number of Preferred Shares converted by such Holder at such time.
(d)      HSR Compliance . Notwithstanding the foregoing, in the event any Holder would be required to file any Notification and Report Form pursuant to the HSR Act as a result of the conversion of any Preferred Shares into the property described above in this Section 5.3, at the option of such Holder upon written notice to the Company, the effectiveness of such conversion shall be delayed (only to the extent necessary to avoid a violation of the HSR Act), until such Holder shall have made such filing under the HSR Act and the applicable waiting period shall have expired or been terminated; provided, however, that in such circumstances such Holder shall use commercially reasonable efforts to make such filing and obtain the expiration or termination of such waiting period as promptly as reasonably practical and the Company shall make all required filings and reasonably cooperate with and assist such Holder in connection with the making of such filing and obtaining the expiration or termination of such waiting period and shall be reimbursed by such Holder for any reasonable and documented out-of-pocket costs incurred by the Company in connection with such filings and cooperation. Notwithstanding the foregoing, if the conversion of any Preferred Share is delayed pursuant to the preceding sentence at a time when the Company desires to exercise its right to convert Preferred Shares pursuant to Section 5.2 in connection with the automatic conversion of the Preferred Shares, from and after the date of the conversion contemplated by Section 5.2, such Preferred Shares not then converted shall have no rights, powers, preferences or privileges other than the rights provided by this paragraph and the right to convert into the property described in this Section 5.3 if and when such Holder shall have made such filing under the HSR Act and the waiting period in connection with such filing under the HSR Act shall have expired or been terminated and the right to receive cash dividends and distributions made pursuant to Section 2.3.
Section 5.4      Mechanics of Conversion .
(a)      On and after the Conversion Date, the Preferred Shares so converted (which, for the avoidance of doubt, do not include Preferred Shares subject to a Voting Trigger Redemption) shall cease to be outstanding, dividends and distributions on such shares shall cease to accrue or be due, and all rights in respect of such Preferred Shares shall terminate, other than the right to receive, upon compliance with this Article V, the amounts due upon conversion.

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(b)      The Converting Holder shall pay any documentary, stamp, or similar issue or transfer tax due on the issue of Conversion Shares in the name of any Person other than the Converting Holder or due upon the issuance of a new certificate for any Preferred Shares not converted in the name of any Person other than the Converting Holder.
(c)      For the purpose of effecting the conversion of Preferred Shares, the Company shall at all times reserve and keep available, free from any preemptive rights, out of its treasury or authorized but unissued shares of Class A Common Stock (or Reference Property, to the extent applicable) the full number of shares of Class A Common Stock (or Reference Property, to the extent applicable) deliverable upon the conversion of all outstanding Preferred Shares after taking into account any adjustments to the Conversion Price from time to time pursuant to the terms of this Section 5 and assuming for the purposes of this calculation that all outstanding Preferred Shares are held by one holder and that any applicable Voting Trigger Redemption Option has been exercised in full.
(d)      All shares of Class A Common Stock (or Reference Property, to the extent applicable) issued upon conversion of the Preferred Shares will, upon issuance by the Company, be duly and validly issued, fully paid, and nonassessable.
Section 5.5      Adjustments to Conversion Price .
(a)      The Conversion Price shall be subject to the following adjustments:
(i)      Adjustments for Stock Splits and Combinations . If the Company shall at any time or from time to time after the Issue Date effect a subdivision of any class of outstanding Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Class A Common Stock issuable on conversion of each Preferred Share shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Company shall at any time or from time to time after the Issue Date combine the outstanding shares of any class of the outstanding Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Class A Common Stock issuable on conversion of each Preferred Share shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.
(ii)      Common Stock Dividends or Distributions . If the Company at any time from and after the Issue Date issues shares of Common Stock as a dividend or distribution on all or substantially all shares of one or more classes of Common Stock, the Conversion Price will be adjusted based on the following formula:

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CODIMAGE.JPG
where,
CP 0 =    the Conversion Price in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution;
CP 1 =    the Conversion Price in effect immediately after the open of business on the Ex-Date for such dividend or distribution;
OS 0 =    the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Date for such dividend or distribution; and
OS 1 =    the number of shares of Common Stock outstanding immediately after such dividend or distribution.
Any adjustment made under this Section 5.5(a)(ii) shall become effective immediately after the open of business on the Ex-Date for such dividend or distribution. If any dividend or distribution of the type described in this Section 5.5(a)(ii) is declared but not so paid or made, the Conversion Price shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared or announced. Notwithstanding the foregoing, no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has not been exercised). Notwithstanding anything in this Section 5.5 to the contrary, if a Conversion Price adjustment becomes effective pursuant to this clause (ii) of Section 5.5(a) on any Ex-Date, and a Converting Holder that converts its Preferred Shares on or after such Ex-Date and on or prior to the related record date would be treated as the record holder of shares of Common Stock as of the related Conversion Date based on an adjusted Conversion Price for such Ex-Date and participate on an adjusted basis in the related dividend, distribution or other event giving rise to such adjustment, then, notwithstanding the foregoing Conversion Price adjustment provisions, the Conversion Price adjustment relating to such Ex-Date will not be made for such converting Holder. Instead, such Holder will be treated as if such Holder were the record owner of the shares of Common Stock on an un-adjusted basis and participate in the related dividend, distribution, or other event giving rise to such adjustment.
(b)      Notwithstanding anything in this Section 5.5 to the contrary, no adjustment under Section 5.5(a) need be made to the Conversion Price unless such adjustment would require a decrease of at least 1% of the Conversion Price then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, if any,

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which, together with any adjustment or adjustments so carried forward, shall amount to a decrease of at least 1% of such Conversion Price; provided that, on the date of any conversion of the Preferred Shares pursuant to Section 5, adjustments to the Conversion Price will be made with respect to any such adjustment carried forward that has not been taken into account before such date.
(c)      No Adjustments Below Par Value . Notwithstanding any other provision of this Certificate of Designations, the Conversion Price shall not be reduced below the par value per share of Class A Common Stock.
(d)      Reference Property . Subject to the provisions of Section 6.1, in the case of any recapitalization, reclassification, or change of the Class A Common Stock (other than changes resulting from a subdivision, combination or reclassification described in Section 5.5(a)(i)), or consolidation or merger involving the Company, in each case as a result of which the Class A Common Stock (but not the Series A Preferred Stock) would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any of the foregoing, a “ Reference Transaction ”), then, at the effective time of the Reference Transaction, the right to convert each Preferred Share will be changed into a right to convert such Preferred Share into the kind and amount of shares of stock, other securities, or other property or assets (including cash or any combination thereof) (the “ Reference Property ”) that a Holder would have received in respect of the Class A Common Stock issuable upon conversion of such Preferred Shares (assuming, for this purpose, that any applicable Voting Trigger Redemption Option has been exercised) immediately prior to such Reference Transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions of this Certificate of Designation with respect to the rights and interests thereafter of the holders of Series A Preferred Stock, to the end that the provisions set forth in this Certificate of Designations shall thereafter be applicable, as nearly as reasonably may be, in relation to such Reference Property. In the event that holders of Class A Common Stock have the opportunity to elect the form of consideration to be received in the Reference Transaction, the Company shall make adequate provision whereby the Holders shall have a reasonable opportunity to determine the form of consideration into which all of the Preferred Shares, treated as a single class, shall be convertible from and after the effective time of the Reference Transaction. Any such election shall be made by the Majority Holders. Any such determination by the Holders shall be subject to any limitations to which all holders of Class A Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in the Reference Transaction, and shall be conducted in such a manner as to be completed at approximately the same time as the time elections are made by holders of Class A Common Stock. The provisions of this Section 5.5(e) and any equivalent thereof in any such securities similarly shall apply to successive Reference Transactions.
(e)      Rules of Calculation; Treasury Stock . All calculations will be made to the nearest one-hundredth of a cent or to the nearest one-ten thousandth of a share. Except as explicitly provided herein, the number of outstanding shares of Class A Common Stock, Class B Common Stock and, to the extent applicable, Reference Property will be calculated on the basis of the number of issued and outstanding shares not including shares held in the treasury of the Company.

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(f)      No Duplication . If any action would require adjustment of the Conversion Price pursuant to more than one of the provisions described in this Article V in a manner such that such adjustments are duplicative, only one adjustment (which shall be the adjustment most favorable to the Holders) shall be made.
(g)      Notice of Record Date . In the event of:
(i)      any event described in Section 5.5(a)(i) or (ii);
(ii)      any Reference Transaction to which Section 5.5(d) applies;
(iii)      the dissolution, liquidation, or winding-up of the Company; or
(iv)      any other event constituting a Change of Control,
the Company shall mail to the Holders at their last addresses as shown on the records of the Company, at least twenty (20) days prior to the record date specified in (i) below or twenty (20) days prior to the date specified in (ii) below, as applicable, a notice stating:
(i)      the record date for the dividend, other distribution, stock split, or combination or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be entitled to such dividend, other distribution, stock split, or combination; or
(ii)      the date on which such reclassification, change, dissolution, liquidation, winding-up, or other event constituting a Reference Transaction or Change of Control is estimated to become effective or otherwise occur, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for Reference Property, other securities or other property deliverable upon such reclassification, change, liquidation, dissolution, winding-up, Reference Transaction, or Change of Control.
(h)      Certificate of Adjustments . Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 5.5, the Company at its expense shall as promptly as reasonably practicable compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder a certificate, signed by an officer of the Company (in his or her capacity as such and not in an individual capacity), setting forth (A) the calculation of such adjustments and readjustments in reasonable detail, (B) the facts upon which such adjustment or readjustment is based, (C) the Conversion Price then in effect, and (D) the number of shares of Class A Common Stock (or Reference Property, to the extent applicable) and the amount, if any, of Capital Stock, other securities or other property (including, but not limited to, cash and evidences of indebtedness) which then would be received upon the conversion of a Preferred Share.
ARTICLE VI.      REDEMPTION.

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Section 6.1      Redemption Initiated by the Holders or by the Company .
(a)      On or after the 15-month anniversary of the Issue Date, and subject to the satisfaction of the Redemption Conditions, the Majority Holders may deliver a demand (the “ Redemption Demand ”) to the Company requiring the Company to redeem, out of funds legally available therefor, all of the outstanding Preferred Shares pursuant to this Article VI. Delivery of the Redemption Demand shall be binding on all Holders. The Company shall notify all Holders, other than Holders delivering the Redemption Demand, that a Redemption Demand has been received.
(b)      On or after the 15-month anniversary of the Issue Date, and subject to the satisfaction of the Redemption Conditions, the Company may, at its option, redeem all (but not less than all) of the outstanding Preferred Shares, out of funds legally available therefor, pursuant to this Article VI.
(c)      Unless otherwise waived by the Majority Holders, within 90 days after the effective date of a Change of Control, and subject to satisfaction or waiver by the Company of the Redemption Conditions, the Company shall redeem, out of funds legally available therefor, all outstanding Preferred Shares pursuant to this Article VI. A Redemption pursuant to this Section 6.1(c) may be initiated in advance of a Change of Control if such Redemption is conditional upon such Change of Control and a definitive agreement is in place for the Change of Control.
Section 6.2      Redemption Notice . If the Company is obligated to redeem, or elects to redeem, the Preferred Shares pursuant to this Article VI, the Company shall deliver a notice of redemption (the “ Redemption Notice ”) to the Holders specifying the date for redemption (the “ Redemption Date “), which date shall not be less than three (3) days after delivery of the Redemption Notice nor more than ninety (90) calendar days after delivery of the Redemption Notice. The Redemption Notice shall specify (A) the provision of Section 6.1 pursuant to which the redemption will occur; (B) the Redemption Date; (C) the Redemption Price; (D) that on the Redemption Date, if the Holder has not previously elected to convert Preferred Shares into Class A Common Stock, each Preferred Share shall automatically and without further action by the Holder thereof (and whether or not the certificates representing such Preferred Shares are surrendered) be redeemed for the Redemption Price; (E) that payment of the Redemption Price will be made to the Holder within five (5) business days of the Redemption Date to the account specified by such Holder to the Company in writing; (F) that the Holder’s right to elect to convert its Preferred Shares will end at 5:00 p.m. (New York City time) on the third Business Day immediately preceding the Redemption Date; and (G) the number of shares of Class A Common Stock (or, if applicable, the amount of Reference Property) and the amount of cash, if any, that a Holder would receive upon conversion of a Preferred Share if a Holder elects to convert its Preferred Shares prior to the Redemption Date. Notwithstanding the foregoing, the Redemption Notice delivered by the Company under this Section 6.2 in accordance with Section 8.6 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such Holder of Preferred Shares actually receives such notice, and neither the failure of a Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the redemption of the Preferred Shares as set forth herein.

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Section 6.3      Conversion Rights Retained . Subject to any other limitations set forth herein, each Holder shall retain the right to convert any Preferred Shares called for redemption until, and only until, 5:00 p.m. (New York City time) on the third Business Day immediately preceding any Redemption Date. Preferred Shares validly converted prior to 5:00 p.m. (New York City time) on the third Business Day immediately preceding any Redemption Date shall not be subject to redemption pursuant to this Article VI.
Section 6.4      Mechanics of Redemption .
(a)      The Company (or a redemption agent on behalf of the Company, as applicable) shall, to the extent lawful and to the extent the Redemption Conditions have been satisfied or waived, pay the applicable Redemption Price in cash on the Redemption Date or the required payment date therefor upon surrender of the certificates representing the Preferred Shares to be redeemed and receipt of any written instrument or instructions of transfer or other documents and endorsements reasonably acceptable to the redemption agent or the Company, as applicable.
(b)      Following any redemption of Preferred Shares on any Redemption Date, the Preferred Shares so redeemed will no longer be deemed to be outstanding and all rights of the Holder thereof shall cease, including the right to accrued Preferred Dividends. The foregoing notwithstanding, in the event that a Preferred Share is not redeemed by the Company when required, such Preferred Share will remain outstanding and will continue to be entitled to all of the powers, designations, preferences, and other rights (including, but not limited to, the accrual and payment of dividends and the conversion rights) as provided herein.
ARTICLE VII.      ADDITIONAL DEFINITIONS
Section 7.1      For purposes of these resolutions, the following terms shall have the following meanings:
Accrued Liquidation Preference ” means, for a Preferred Share, (i) the Purchase Price plus (ii) the amount of any accrued but unpaid Preferred Dividends existing on the most recent past Dividend Payment Date. For the avoidance of doubt, from and after August 15, 2017, the Accrued Liquidation Preference shall compound on a semi-annual basis.
Affiliate ” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. Notwithstanding the foregoing, none of the Company, its Subsidiaries or its other controlled Affiliates shall be considered Affiliates of the Catterton Investor or the PSP Investor.
Beneficial Owner ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition (including, for the avoidance of

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doubt, by conversion of the Preferred Shares and exercise of the Warrants). The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.
Business Day ” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in the State of New York are authorized or required by law or other governmental action to close.
Capital Stock ” means, with respect to any Person, any and all shares of stock, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after liabilities, of such Person.
Catterton Investor ” means Catterton-Noodles, LLC, a Delaware limited liability company, and its Affiliates.
Certificate of Designations ” means this certificate of designations for the Series A Preferred Stock, as such shall be amended from time to time.
Change of Control ” shall mean (i) the sale of all or substantially all of the assets of the Company and its Subsidiaries (taken as a whole) to any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), (ii) any take-over bid involving the Company that results in any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than the Excluded Parties, becoming the direct or indirect Beneficial Owners of a majority of the Total Voting Power of the Company not Beneficially Owned by the Excluded Parties, or (iii) (x) any merger or consolidation in which the Company is a constituent party or (y) a Subsidiary of the Company is a constituent party and the Company issues shares of its Capital Stock pursuant to such merger or consolidation, except, in the case of (x) and (y), any such merger or consolidation in which the shares of Capital Stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for Equity Securities that represent, immediately following such merger or consolidation, at least a majority of the Total Current Voting Power of the surviving or resulting Person, or if the surviving or resulting Person is a wholly owned Subsidiary of another Person immediately following such merger or consolidation, the parent of such surviving or resulting Person. For purposes of this definition, a Person shall not be deemed to have Beneficial Ownership of securities subject to a stock purchase agreement, merger agreement, or similar agreement until the consummation of the transactions contemplated by such agreement.
Class A Common Stock ” means the shares of Class A Common Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such Class A Common Stock shall be reclassified or changed.
Class B Common Stock ” means the shares of Class B Common Stock, par value $0.01 per share, of the Company or any other Capital Stock of the Company into which such Class B Common Stock shall be reclassified or changed.

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Common Stock ” means the Class A Common Stock, the Class B Common Stock and any other Capital Stock of the Company into which such Class A Common Stock or Class B Common Stock shall be reclassified or changed.
control ” (including, with correlative meanings, the terms “controlling,” “controlled by,” and “under common control with”) with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
Conversion Date ”, with respect to any Converted Shares, shall mean the first date on which each of the following has occurred: (i) a conversion has been requested pursuant to Section 5.1 or Section 5.2 hereof, (ii) the Company or its transfer agent, as applicable, has received, or waived the requirements to provide, the certificates, notice and other documents and amounts required to be delivered or paid under Section 5.1(b) and Section 5.4(b), and (iii) the Company has sent a Redemption Option Notice.
Conversion Price ” means initially $4.35, as adjusted from time to time as provided in Section 5.
Convertible Securities ” means securities by their terms convertible into or exchangeable for Common Stock or options, warrants or rights to purchase such convertible or exchangeable securities, but excluding Option Securities.
Daily VWAP ”, with respect to any Trading Day, means the volume-weighted average price per share of Class A Common Stock (or per minimum denomination or unit size in the case of any security other than Class A Common Stock) as displayed under the heading “Bloomberg VWAP” on the Bloomberg page for the “<equity> AQR” page corresponding to the “ticker” for such Class A Common Stock or unit (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the Market Value of one share of such Class A Common Stock (or per minimum denomination or unit size in the case of any security other than Class A Common Stock)) on such Trading Day. The “volume weighted average price” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
Dividend Payment Date ” means February 15 and August 15 of each year beginning August 15, 2017; provided that, if any such Dividend Payment Date would otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be the immediately succeeding Business Day.
Dividend Period ” means a period commencing on February 15 or August 15 (other than the initial Dividend Period, which shall commence on and include the Dividend Commencement Date) and ending on and including February 14 and August 14 preceding the next Dividend Payment Date, as applicable.

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Dividend Rate ” means 8.0% per annum; provided, however, that beginning on the date that is six months after the Issue Date, the Dividend Rate shall increase by 0.5% per month up to a maximum of 18% per annum.
Equity Securities ” shall mean, with respect to any Person, (i) shares of capital stock of, or other equity or voting interest in, such Person, (ii) any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iii) options, warrants, rights or other commitments or agreements to acquire from such Person, or that obligates such Person to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iv) obligations of such Person to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, such Person and (v) the capital stock of such Person. Unless otherwise specified, “Equity Security” means an Equity Security of the Company.
Exchange ” means the NASDAQ Global Market or the NASDAQ Global Select Market on which the Class A Common stock (or Reference Property, to the extent applicable) is listed, or if the Class A Common Stock (or Reference Property, to the extent applicable) is not listed on the NASDAQ Global Market or the NASDAQ Global Select Market, The New York Stock Exchange or other principal national securities exchange on which the Class A Common Stock (or Reference Property, to the extent applicable) is listed.
Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excluded Parties ” means (x) the Catterton Investor, the PSP Investor and their respective Affiliates and (y) any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) of which any Person referred to in clause (x) of this definition is a member.
Ex-Date ” means the first date on which the Class A Common Stock trades on the applicable Exchange or in the applicable market, regular way, without the right to receive the issuance, dividend, or distribution in question from the Company or, if applicable, from the seller of the Class A Common Stock on such Exchange or market (in the form of due bills or otherwise) as determined by such Exchange or market.
Governmental Entity ” shall mean any United States or non-United States federal, state, or local government, or any agency, bureau, board, commission, department, tribunal, or instrumentality thereof or any court, tribunal, or arbitral or judicial body.
hereof ,” “ herein ,” and “ hereunder ” and words of similar import refer to this Certificate of Designations as a whole and not merely to any particular clause, provision, section, or subsection.
Holders ” means the holders of outstanding Preferred Shares as they appear in the records of the Company.

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HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder.
Issue Date ” means the date on which the Series A Preferred Stock is first issued by the Company.
Majority Holders ” means Holders owning of record more than 50% of the voting power of the issued and outstanding Preferred Shares.
Mandatory Conversion Condition ” shall be satisfied on the first date on which the Company has completed one or more Qualified Equity Offerings that, when aggregated together and added to the aggregate Purchase Price paid for all Preferred Shares issued on the Issue Date, result in aggregate gross proceeds to the Company of at least $50 million; provided, that the Mandatory Conversion Condition shall be deemed satisfied if such condition is waived by the Holders of all outstanding Preferred Shares.
Market Disruption Event ” means the occurrence or existence for more than one half hour period in the aggregate on any scheduled Trading Day for the Class A Common Stock (or Reference Property, to the extent applicable) of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the applicable Exchange or otherwise) in the Class A Common Stock (or Reference Property, to the extent applicable) or in any options, contracts, or future contracts relating to the Class A Common Stock (or Reference Property, to the extent applicable), and such suspension or limitation occurs or exists at any time before 4:00 p.m. (New York City time) on such day.
Market Value ” on any date means the closing sale price per share (or if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the principal Exchange on which shares of the Class A Common Stock are then listed. If the Class A Common Stock is not so listed or traded, the Market Value will be an amount reasonably determined by the Board in good faith to be the fair value of the Class A Common Stock.
Option Securities ” means options, warrants or other rights to purchase or acquire Common Stock or Convertible Securities, including subscription rights, as well as stock appreciation rights, phantom stock units and similar rights whose value is derived from the value of the Common Stock.
Parity Securities ” means any class or series of Preferred Stock or any other Capital Stock of the Company hereafter issued in compliance with the terms hereof and the terms of which expressly provide that it will rank on parity with the Series A Preferred Stock with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the Company, or otherwise.
Permitted Transfer ” means any transfer of Preferred Shares by a Holder (i) to the Catterton Investor or one of its Affiliates or (ii) to the Company or its Subsidiaries.

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Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or other entity, or any Governmental Entity, any agency or political subdivisions thereof, or other “Person” as contemplated by Section 13(d) of the Exchange Act.
Preferred Shares ” means the shares of Series A Preferred Stock.
PSP Investor ” means Argentia Private Investments Inc., a corporation incorporated pursuant to the Canada Business Corporations Act, and its Affiliates.
Purchase Price ” means $1,000 per Preferred Share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock.
Qualified Equity Offerings ” means one or more primary offerings of shares of the Company’s Capital Stock, or rights to purchase shares of the Company’s Capital Stock, closing on or before the six-month anniversary of the Issue Date, including, for the avoidance of doubt, one or more rights offerings made to the Company’s stockholders for the purchase of Capital Stock of the Company.
Redemption Conditions ” means, with respect to a redemption, purchase or other acquisition for value, that: (i) the Board has determined in good faith that, immediately after such redemption, purchase or acquisition, (a) the fair value and present fair saleable value of the Company’s assets will exceed its liabilities, (b) the Company can and will be able to pay its debts as they become due, (c) the Company’s capital and assets will not be unreasonably small for the business in which the Company is engaged, (d) the Company will be able to continue as a going concern and not be rendered insolvent and (e) the Company shall be in compliance with the covenants under its indebtedness for borrowed money after such redemption, purchase or other acquisition, and (ii) any lenders or creditors for the Company’s indebtedness for borrowed money who are entitled to consent to such redemption, purchase or other acquisition for value have provided such consent.
Redemption Price ” means an amount in cash equal to the sum, without duplication, of the Accrued Liquidation Preference and accrued and unpaid Preferred Dividends through the Redemption Date.
Securities Purchase Agreement ” means that certain Securities Purchase Agreement by and among the Company and Catterton-Noodles, LLC, dated February 8, 2017, as amended from time to time.
Senior Securities ” means any class or series of Preferred Stock or any other Capital Stock of the Company hereafter issued in compliance with the terms hereof and the terms of which expressly provide that it will rank senior in preference or priority to the Series A Preferred Stock with respect to the payment of dividends, redemption payments, rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the Company, or otherwise.

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Rights Offering Dividend ” means a dividend of subscription rights exercisable for a period not longer than sixty (60) days declared in connection with a Qualified Equity Offering.
Specified Rights Offering Dividend ” means a Rights Offering Dividend with respect to which the issuance of subscription rights to the Holders in the form of a Participating Dividend would cause the Rights Offering Dividend to require stockholder approval pursuant to the rules of the Exchange.
Subsidiary ” of any Person shall mean any other Person in which such Person, directly or indirectly, owns or has the power to vote or control more than 50% of the voting stock or other interests the holders of which are generally entitled to vote for the election of the board of directors or other applicable governing body of such other Person (or, in the case of a partnership, limited liability company or other similar entity, control of the general partnership, managing member or similar interests). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.
Thirty Day VWAP ” means, with respect to a security, the average of the Daily VWAP of such security for each day during a thirty (30) consecutive Trading Day period ending immediately prior to the date of determination. Unless otherwise specified, “Thirty Day VWAP” means the Thirty Day VWAP of the Class A Common Stock.
Total Current Voting Power ” shall mean, with respect to any entity, at the time of determination of Total Current Voting Power, the total number of votes which may be cast in the general election of directors of such entity (or, in the event the entity is not a corporation, the governing members, board or other similar body of such entity and, in the case of the Company, assuming all shares of Class B Common Stock have been converted into Class A Common Stock). Unless otherwise specified, “Total Current Voting Power” means Total Current Voting Power of the Company.
Trading Day ” means any day on which (i) there is no Market Disruption Event and (ii) the Exchange is open for trading or, if the Class A Common Stock (or Reference Property, to the extent applicable) is not listed, admitted for trading or quoted on an Exchange, any Business Day. A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then-standard closing time for regular trading on the relevant Exchange or trading system.
Transfer ” means, with respect to any security, a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of such security or any interest therein, including the grant of an option or other right, whether directly or indirectly, whether voluntarily, involuntarily or by operation of law. For the avoidance of doubt, a transfer, sale, exchange, assignment, pledge, hypothecation or other encumbrance or other disposition of an Equity Security in any stockholder of the Company, or direct or indirect parent thereof, shall constitute a “Transfer” of securities of the Company.
Warrants ” has the meaning ascribed thereto in the Securities Purchase Agreement.

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Section 7.2      Each of the following terms is defined in the Section set forth opposite such term:

Term
Section
Board
Preamble
Certificate of Incorporation
Recitals
Common Dividend
2.2
Company
Preamble
Conversion Amount
5.3(a)(i)
Conversion Date
5.1(c)
DGCL
Preamble
Dividend Commencement Date
2.1(a)
Junior Securities
1.2(a)
Participating Dividend
2.2
Participating Liquidation Preference
3.1
Preferred Dividend
2.1(a)
Preferred Stock
Recitals
Redemption Date
6.2
Redemption Demand
6.1(a)
Redemption Notice
6.2
Reference Property
5.5(e)
Reference Transaction
5.5(e)
Series A Preferred Stock
1.1
Special Dividend
2.1(c)
Trigger Event
5.5(b)
ARTICLE VIII.      MISCELLANEOUS.
Section 8.1      Transfer Restrictions . No Holder may Transfer any Preferred Shares except pursuant to a Permitted Transfer or as approved by the Board, subject to its exercise of reasonable discretion.
Section 8.2      Share Certificates . If any certificates representing Preferred Shares shall be mutilated, lost, stolen, or destroyed, the Company shall issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the lost, stolen, or destroyed certificate, a new Preferred Share certificate of like tenor and representing an equivalent number of Preferred Shares, but only upon receipt of evidence of such loss, theft, or destruction of such certificate and indemnity by the holder thereof, if requested, reasonably satisfactory to the Company.
Section 8.3      Status of Cancelled Shares . Preferred Shares which have been converted, redeemed, repurchased, or otherwise cancelled shall be retired and, following the filing of any certificate required by the DGCL, have the status of authorized and unissued shares of Preferred

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Stock, without designation as to series, until such shares are once more designated by the Board as part of a particular series of Preferred Stock of the Company.
Section 8.4      Severability . If any right, preference, or limitation of the Series A Preferred Stock set forth in this Certificate of Designations is invalid, unlawful, or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences, and limitations set forth in this Certificate of Designations which can be given effect without the invalid, unlawful, or unenforceable right, preference, or limitation shall, nevertheless, remain in full force and effect, and no right, preference, or limitation herein set forth shall be deemed dependent upon any other such right, preference, or limitation unless so expressed herein.
Section 8.5      Headings; Interpretation . The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof. When this Certificate of Designations refers to a specific agreement (including, for the avoidance of doubt, the Securities Purchase Agreement) or other document or a decision by any body or Person that determines the meaning or operation of a provision hereof, the Secretary of the Company shall maintain a copy of such agreement, document or decision at the principal executive offices of the Company and a copy thereof shall be provided free of charge to any stockholder who makes a request therefor. Unless otherwise expressly provided herein, a reference to any specific agreement (including, for the avoidance of doubt, the Securities Purchase Agreement) or other document shall be deemed a reference to such agreement or document as amended from time to time in accordance with the terms of such agreement or document.
Section 8.6      Notices . All notices or communications in respect of Preferred Stock shall be in writing and shall be deemed delivered (a) three (3) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (b) one (1) Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, (c) on the date of delivery if delivered personally, or (d) if by facsimile, upon written confirmation of receipt by facsimile. Notwithstanding the foregoing, if Preferred Stock is issued in book-entry form through The Depository Trust Company or any similar facility, such notices may be given to the beneficial holders of Preferred Stock in any manner permitted by such facility.
Section 8.7      Other Rights . The shares of Preferred Stock shall not have any rights, preferences, privileges, or voting powers or relative, participating, optional, or other special rights, or qualifications, limitations, or restrictions thereof, other than as set forth herein or in the Certificate of Incorporation or as provided by applicable law and regulation.
Section 8.8     Waiver . The terms of this Certificate of Designations may be waived upon the written consent of the Majority Holders and the Board.
[Rest of page intentionally left blank.]


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IN WITNESS WHEREOF , the Company has caused this Certificate of Designations to be executed by a duly authorized officer of the Company as of February 8, 2017.

NOODLES & COMPANY ,
A Delaware corporation

By: ________________________________
Name: Paul Strasen
Title: Executive Vice President, General Counsel & Secretary






Exhibit B
Form of Warrant Agreement

[see attached]




NOODLES & COMPANY
WARRANT TO PURCHASE CLASS A COMMON STOCK
Warrant No.: 1    
Number of Shares of Class A Common Stock: 1,913,793
Date of Issuance: February 9, 2017 (“ Issuance Date ”)
Noodles & Company, a company organized under the laws of the State of Delaware (the “ Company ”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Catterton-Noodles, LLC, a limited liability company organized under the laws of the State of Delaware, the registered holder hereof or its permitted assigns (the “ Holder ”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after August 9, 2017 (the “ Initial Exercisability Date ”), but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), a maximum of 1,913,793 fully paid non-assessable shares of Class A Common Stock, subject to adjustment as provided herein (the “ Warrant Shares ”). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Class A Common Stock (including any Warrants to Purchase Class A Common Stock issued in exchange, transfer or replacement hereof, this “ Warrant ”), shall have the meanings set forth in Section 14. This Warrant is issued pursuant to the Securities Purchase Agreement, dated as of February 8, 2017 (the “ Securities Purchase Agreement ”).
1. EXERCISE OF WARRANT.
(a)      Mechanics of Exercise . Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability Date and on or before the Expiration Date, in whole or in part, by delivery to the Company (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “ Exercise Notice ”), of the Holder's election to exercise this Warrant. Within two (2) Trading Days following the delivery of the Exercise Notice, the Holder shall make payment to the Company (i) of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “ Aggregate Exercise Price ”) in cash by wire transfer of immediately available funds; provided , however , that if the Holder is subject to HSR Act Restrictions (as defined in Section 1(g) below), the Purchase Price shall be paid to the Company within five (5) Business Days of the termination of all HSR Act Restrictions or, (ii) if the provisions of Section 1(c) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(c)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder provided that the Holder confirms it has not transferred the Warrant or any interest in it, nor shall any ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first (1 st ) Trading Day following the date on which the Company



has received the applicable Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form attached to the Exercise Notice, to the Holder and the Company's transfer agent (the “ Transfer Agent ”). Subject to Section 1(e), so long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2 nd ) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the earlier of (i) the third (3 rd ) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not deliver the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2 nd ) Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the second (2 nd ) Trading Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (such earlier date, the “ Share Delivery Date ”), the Company shall (X) if the Warrant Shares to be delivered are “restricted securities” within the meaning of Rule 144 under the Securities Act (“ Restricted Securities ”), deliver such securities, at the Holder’s option, by book-entry or issue a certificate representing such Warrant Shares and (Y) if the Warrant Shares are not Restricted Securities, then (I) if the Transfer Agent is participating in The Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit / Withdrawal At Custodian system, or (II) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same day processing. Subject to Section 1(e), upon delivery of the Exercise Notice and payment of the Aggregate Exercise Price, the Holder shall be deemed for all corporate purposes to have become the holder of record and beneficial owner of the Warrant Shares with respect to which this Warrant has been exercised (the “ Exercise Date ”), irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. However, if the Holder is subject to HSR Act filing requirements (a) the Exercise Date shall be deemed to be the date immediately following the date of the expiration of all HSR Act Restrictions and (b) for the purposes of Section 1(c), the Fair Market Value of one Warrant Share shall be determined as of the date of the Exercise Notice. If this Warrant is physically delivered to the Company in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 6(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) which may be

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payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. The Company's obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination; provided , however , that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.
(b)      Exercise Price . For purposes of this Warrant, “ Exercise Price ” means $4.35 per share, subject to adjustment as provided herein.
(c)      Cashless Exercise . Notwithstanding anything contained herein to the contrary, at any time when the Fair Market Value (as defined below) equals or exceeds the Exercise Price, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment of the Aggregate Exercise Price otherwise contemplated to be made to the Company upon such exercise, elect instead to receive upon such exercise the “Net Number” of shares of Class A Common Stock determined according to the following formula (a “ Cashless Exercise ”):
Net Number = (A x B) - (A x C)
B
For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant is then being exercised.
B= The Fair Market Value of one Warrant Share (as adjusted to the date of such calculation).
C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
For purposes of this Warrant, the term “Fair Market Value” of a Warrant Share as of a particular date shall mean:
(1)      If the Class A Common Stock is traded on an Exchange, the Fair Market Value shall be deemed to be the average of the Daily VWAP on such Exchange over the five (5) Trading Days ending immediately prior to (but not including) the applicable date of valuation;
(2)      If the Class A Common Stock is actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the Daily VWAP over the 30‑day period ending immediately prior to (but not including) the applicable date of valuation;

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(3)      If there is no active public market for the Class A Common Stock but there is an active public market for a class or series of Capital Stock of the Company into which the Class A Common Stock is convertible, then if such class or series of Capital Stock is:
(A)      traded on an Exchange, the Fair Market Value shall be deemed to be the average of the Daily VWAP of a share of such class or series of Capital Stock of the Company on such exchange or market over the five (5) Trading Days ending immediately prior to (but not including) the applicable date of valuation multiplied by the number of shares of such class or series of Capital Stock into which one share of the Class A Common Stock is convertible, or
(B)      actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the Daily VWAP for a share of such class or series of Capital Stock of the Company over the 30‑day period ending immediately prior to (but not including) the applicable date of valuation multiplied by the number of shares of such class or series of Capital Stock into which one share of the Class A Common Stock is convertible; or
(4)      If there is no active public market for the Class A Common Stock or any other class or series of Capital Stock of the Company into which the Class A Common Stock is convertible, the Fair Market Value shall be the highest price per share which the Company could obtain on the date of calculation from a willing buyer (not a current employee or director) for shares of Class A Common Stock sold by the Company, from authorized but unissued shares, as reasonably determined in good faith by the Board of Directors of the Company (the “ Board ”).
If Warrant Shares are issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended (the “ 1933 Act ”), the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 1(c).

(d)      Disputes . In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 10.
(e)      Voting Trigger Repurchase . Notwithstanding anything to the contrary in this Section 1, if the Board determines that an exercising Holder would, upon exercise, be the Beneficial Owner of 45% or more of the Total Current Voting Power (the “ Voting Trigger ”) (assuming for this purpose that all of such exercising Holder’s Option Securities (including Warrants) and Convertible Securities (including Preferred Shares) have converted into, or been exercised for, Class A Common Stock (or Reference Property, to the extent applicable)), then the Company may elect to repurchase from such exercising Holder (a “ Voting Trigger Repurchase ”), out of funds legally available therefor, up to such number of Warrants that would otherwise be exercised for Warrant Shares as would be necessary so that, following such repurchase, the Voting Trigger would not occur (the “ Voting Trigger Repurchase Option ”). The repurchase price for such Warrants shall be equal to (i) the number of Warrant Shares for which such repurchased Warrants

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would otherwise have been exercised for, times (ii) the Fair Market Value minus the Exercise Price, each as determined on the date the Voting Trigger Repurchase Option Notice (as defined below) is sent. Within five (5) Business Days of receipt of an Exercise Notice, the Company shall send to the exercising Holder a notice (a “Voting Trigger Repurchase Option Notice”) stating whether the Voting Trigger Repurchase Option is applicable and, if the Voting Trigger Repurchase Option is applicable, whether the Company will exercise the Voting Trigger Repurchase Option. If the Company exercises the Voting Trigger Repurchase Option, the Voting Trigger Repurchase Option Notice shall include: (A) the number of Warrants to be repurchased pursuant to the Voting Trigger Repurchase, (B) the date for such Voting Trigger Repurchase (the “ Voting Trigger Repurchase Date ”), which date shall not be less than three calendar days after delivery of the Voting Trigger Repurchase Notice nor more than ninety (90) calendar days after delivery of the Voting Trigger Repurchase Notice, and (C) a statement that payment in connection with the Voting Trigger Repurchase will be made to the exercising Holder within five (5) Business Days of the Voting Trigger Repurchase Date to the account specified by such exercising Holder to the Company in writing. Any Voting Trigger Repurchase Notice delivered by the Company under this Section 1(e) in accordance with Section 7 shall be conclusively presumed to have been duly given at the time set forth therein, whether or not such exercising Holder actually receives such notice, and neither the failure of an exercising Holder to actually receive such notice given as aforesaid nor any immaterial defect in such notice shall affect the validity of the proceedings for the Voting Trigger Repurchase.
(f)      Required Reserve Amount .  So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Class A Common Stock at least equal to 100% of the maximum number of shares of Class A Common Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Class A Common Stock under the Warrants then outstanding (without regard to any limitations on exercise) (the “ Required Reserve Amount ”).
(g)      HSR Act . The Company hereby acknowledges that exercise of this Warrant by the Holder may subject the Company and/or the Holder to the filing requirements under the HSR Act and that the Holder may be prevented from exercising this Warrant until the expiration or early termination of all waiting periods imposed by the HSR Act (“ HSR Act Restrictions ”). If on or before the Expiration Date the Holder has delivered the Exercise Notice to the Company and the Holder has not been able to complete the exercise of this Warrant prior to the Expiration Date because of HSR Act Restrictions, the Holder shall be entitled to complete the process of exercising this Warrant as noted in the Exercise Notice delivered prior to the Expiration Date in accordance with the procedures set forth herein notwithstanding the fact that completion of such exercise would take place after the Expiration Date, as applicable.
(h)      Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Class A Common Stock to satisfy its obligation to reserve for issuance the Required Reserve Amount, then the Company shall promptly take all action reasonably necessary to increase the Company’s authorized shares of Class A Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant then outstanding.

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2.           ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES .
(a)      The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:
(1)      Adjustments for Stock Splits and Combinations . If the Company shall at any time or from time to time after the Issuance Date effect a subdivision of any class of outstanding Common Stock, the Exercise Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Class A Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Company shall at any time or from time to time after the Issuance Date combine the outstanding shares of any class of the outstanding Common Stock, the Exercise Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Class A Common Stock issuable upon the exercise of each Warrant shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.
(2)      Common Stock Dividends or Distributions . If the Company at any time from and after the Issuance Date issues shares of Common Stock as a dividend or distribution on all or substantially all shares of one or more classes of Common Stock, the Exercise Price will be adjusted based on the following formula:
EP 1  = EP 0 x
OS 0
 
 
 
 
OS 1
 
 
 

where,
    
EP 0 =    the Exercise Price in effect immediately prior to the open of business on the Ex-Date for such dividend or distribution;

EP 1 =    the Exercise Price in effect immediately after the open of business on the Ex-Date for such dividend or distribution;

OS 0 =    the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Date for such dividend or distribution; and

OS 1 =    the number of shares of Common Stock outstanding immediately after such dividend or distribution.

Any adjustment made under this Section 2(a)(2) shall become effective immediately after the open of business on the Ex-Date for such dividend or distribution. If any dividend or distribution of the type described in this Section 2(a)(2) is declared but not so paid or made, the Exercise Price shall be immediately readjusted, effective as of the date the Board determines not to pay such dividend

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or distribution, to the Exercise Price that would then be in effect if such dividend or distribution had not been declared or announced. Notwithstanding the foregoing, no such adjustment shall be made if the holders of Warrants simultaneously receive a dividend or other distribution of shares of Class A Common Stock in a number equal to the number of shares of Class A Common Stock as they would have received if all outstanding Warrants had been exercised on the date of such event. Notwithstanding anything in this Section 2 to the contrary, if an Exercise Price adjustment becomes effective pursuant to this clause (2) of Section 2(a) on any Ex-Date, and an exercising Holder that exercises its Warrants on or after such Ex-Date and on or prior to the related record date would be treated as the record holder of shares of Class A Common Stock as of the related Exercise Date based on an adjusted Exercise Price for such Ex-Date and participate on an adjusted basis in the related dividend, distribution or other event giving rise to such adjustment, then, notwithstanding the foregoing Exercise Price adjustment provisions, the Exercise Price adjustment relating to such Ex-Date will not be made for such exercising Holder. Instead, such Holder will be treated as if such Holder were the record owner of the shares of Class A Common Stock on an un-adjusted basis and participate in the related dividend, distribution, or other event giving rise to such adjustment.

(b)      Notwithstanding anything in this Section 2 to the contrary, no adjustment under Section 2(a) need be made to the Exercise Price unless such adjustment would require a decrease or an increase of at least 1% of the Exercise Price then in effect. Any lesser adjustment shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, if any, which, together with any adjustment or adjustments so carried forward, shall amount to a decrease or an increase of at least 1% of such Exercise Price; provided that, on the date of any exercise of the Warrant pursuant to Section 2, adjustments to the Exercise Price will be made with respect to any such adjustment carried forward that has not been taken into account before such date.
(c)      No Adjustments Below Par Value . Notwithstanding any other provision of this Warrant, the Exercise Price shall not be reduced below the par value per share of Class A Common Stock.
(d)      Reference Property . In the case of any recapitalization, reclassification, or change of the Class A Common Stock (other than changes resulting from a subdivision, combination or reclassification described in Section 2(a)(1) or a Fundamental Transaction), in each case as a result of which the Class A Common Stock (but not the Warrants) would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any of the foregoing, a “ Reference Transaction ”), then, at the effective time of the Reference Transaction, the right to exercise each Warrant will be changed into a right to exercise such Warrant Share for the kind and amount of shares of stock, other securities, or other property or assets (including cash or any combination thereof) (the “ Reference Property ”) that a Holder would have received in respect of the Class A Common Stock issuable upon exercise of such Warrants immediately prior to such Reference Transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions of this Warrant with respect to the rights and interests thereafter of the Holder, to the end that the provisions set forth in this Warrant shall thereafter be applicable, as nearly as reasonably may be, in relation to such Reference Property. In the event that holders of Class A Common Stock

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have the opportunity to elect the form of consideration to be received in the Reference Transaction, the Company shall make adequate provision whereby the Holders shall have a reasonable opportunity to determine the form of consideration for which all of the Warrants, treated as a single class, shall be exercisable from and after the effective time of the Reference Transaction. Any such election shall be made by the Majority Holders. Any such determination by the Holders shall be subject to any limitations to which all holders of Class A Common Stock are subject, such as pro rata reductions applicable to any portion of the consideration payable in the Reference Transaction, and shall be conducted in such a manner as to be completed at approximately the same time as the time elections are made by holders of Class A Common Stock. The provisions of this Section 2(d) and any equivalent thereof in any such securities similarly shall apply to successive Reference Transactions.
(e)      Rules of Calculation; Treasury Stock . All calculations will be made to the nearest one-hundredth of a cent or to the nearest one-ten thousandth of a share. Except as explicitly provided herein, the number of outstanding shares of Common Stock and, to the extent applicable, Reference Property will be calculated on the basis of the number of issued and outstanding shares not including shares held in the treasury of the Company.
(f)      No Duplication . If any action would require adjustment of the Exercise Price pursuant to more than one of the provisions described in this Section 2 in a manner such that such adjustments are duplicative, only one adjustment (which shall be the adjustment most favorable to the Holder) shall be made.
(g)      Notice of Record Date . In the event of (x) any event described in Section 2(a)(1) or (2), (y) any Reference Transaction to which Section 2(d) applies, or (z) the dissolution, liquidation, or winding-up of the Company, the Company shall mail to the Holder at its last address as shown on the records of the Company, at least twenty (20) days prior to the record date specified in (1) below or twenty (20) days prior to the date specified in (2) below, as applicable, a notice stating:
(1)      the record date for the dividend, other distribution, stock split, or combination or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be entitled to such dividend, other distribution, stock split, or combination; or:
(2)      the date on which such reclassification, change, dissolution, liquidation, winding-up, or other event constituting a Reference Transaction is estimated to become effective or otherwise occur, and the date as of which it is expected that holders of Class A Common Stock of record will be entitled to exchange their shares of Class A Common Stock for Reference Property, other securities or other property deliverable upon such reclassification, change, liquidation, dissolution, winding-up or Reference Transaction.
(h)      Certificate of Adjustments . Upon the occurrence of each adjustment or readjustment of the Exercise Price pursuant to this Section 2, the Company at its expense shall as promptly as reasonably practicable compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate, signed by an officer of the Company (in his or her capacity as such and not in an individual capacity), setting forth (A) the calculation of such

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adjustments and readjustments in reasonable detail, (B) the facts upon which such adjustment or readjustment is based, (C) the Exercise Price then in effect, and (D) the number of shares of Class A Common Stock (or Reference Property, to the extent applicable) and the amount, if any, of Capital Stock, other securities or other property (including, but not limited to, cash and evidences of indebtedness) which then would be received upon the exercise of a Warrant
3.           FUNDAMENTAL TRANSACTIONS .
(a)      The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of Capital Stock equivalent to the shares of Class A Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of Capital Stock (but taking into account the relative value of the shares of Class A Common Stock pursuant to such Fundamental Transaction and the value of such shares of Capital Stock, such adjustments to the number of shares of Capital Stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction).
(b)      Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Class A Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant.
(c)      In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Class A Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Class A Common Stock (a “ Corporate Event ”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an

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exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Class A Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) (collectively, the “ Corporate Event Consideration ”) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(d)      Notwithstanding the foregoing, in the event of a Change of Control, then at the request of the Holder delivered before the 30th day after such Change of Control, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within ten (10) Business Days after such request (or, if later, on the effective date of the Change of Control), an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the effective date of such Change of Control, payable at the option of the Company in either (x) Class A Common Stock (or corresponding Corporate Event Consideration, as applicable) valued at the value of the consideration received by the shareholders in such Change of Control or (y) cash.
4.      NONCIRCUMVENTION . The Company hereby covenants and agrees that the Company will not, by amendment of its Amended and Restated Certificate of Incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Class A Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Class A Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Class A Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Class A Common Stock as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).
5.      WARRANT HOLDER NOT DEEMED A STOCKHOLDER . Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of Capital Stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger,

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conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
6.      REISSUANCE OF WARRANTS .
(a)      Transfer of Warrant .
(1)      If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 6(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 6(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(2)      In addition, the Holder acknowledges that this Warrant and the Warrant Shares have not been registered under the 1933 Act and agrees not to sell, offer for sale, pledge, hypothecate, distribute, transfer or otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise in the absence of (a) an effective registration statement under the 1933 Act as to this Warrant or such Warrant Shares and registration or qualification of this Warrant or such Warrant Shares under any applicable U.S. federal or state securities law then in effect or (b) if reasonably requested by the Company, an opinion of counsel (which may be counsel for the Company), reasonably satisfactory to the Company, that such registration and qualification are not required. Each certificate or other instrument for Warrant Shares issued upon the exercise of this Warrant pursuant to Section 1(a), or in the case of uncertificated shares, the ledger entry reflecting the issuance of such Warrant Shares, shall bear a legend substantially to the foregoing effect.
(b)      Lost, Stolen or Mutilated Warrant . Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 6(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)      Exchangeable for Multiple Warrants . This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 6(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent

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the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender.
(d)      Issuance of New Warrants . Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 6(a) or Section 6(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Class A Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
7.           NOTICES . Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in writing, by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile, and will be deemed given (a) if delivered by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (b) if delivered by nationally recognized overnight carrier, one (1) Business Day after so mailed, (c) on the date of transmission, if delivered by electronic mail to each of the email addresses specified in Section 7 prior to 5:00 p.m. (New York time) on a Trading Day, (d) the next Trading Day after the date of transmission, if delivered by electronic mail to each of the email addresses specified in Section 7 on a day that is not a Trading Day or later than 5:00 p.m. (New York time) on any Trading Day and (e) if delivered by facsimile, upon electronic confirmation of receipt of such facsimile, and will be delivered and addressed as follows:
(a)      if to the Company, addressed as follows:
Noodles & Company
520 Zang Street, Suite D
Broomfield, Colorado 80021
Attention:     General Counsel
Facsimile:    (720) 214-1921
with copies (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP
200 Park, 47
th Floor
New York, NY 10166
Attention:    Andrew Fabens
Facsimile:    212-351-4035

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(b)      if to the Holder, to:
Catterton-Noodles, LLC
c/o Catterton Partners
599 West Putnam Avenue
Greenwich, CT 06830
Attention:    Andrew Taub
Facsimile:    203-629-4903
with copies (which shall not constitute notice) to:

Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attention:    Stuart Bressman
Facsimile:    212-969-2900


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The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
8.           AMENDMENT AND WAIVER . Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Majority Holders.
9.           GOVERNING LAW; JURISDICTION; JURY TRIAL . This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 7 above or such other address as the Company subsequently delivers to the Holder and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company's obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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10.           DISPUTE RESOLUTION . In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days of receipt of the Exercise Notice or other event giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile or electronic mail (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
11.           REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF . The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
12.           RESERVED.
13.           SEVERABILITY; CONSTRUCTION; HEADINGS .    If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The

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headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
14.      CERTAIN DEFINITIONS . For purposes of this Warrant, the following terms shall have the following meanings:
(a)      Affiliate ” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. Notwithstanding the foregoing, none of the Company, its Subsidiaries or its other controlled Affiliates shall be considered Affiliates of the Catterton Investor.
(b)      Beneficial Owner ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition (including, for the avoidance of doubt, by exercise of the Warrants and conversion of any Preferred Shares). The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.
(c)      Black Scholes Value ” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day immediately following the first public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the lesser of 100% and the 100-day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental Transaction, or, if the Fundamental Transaction is not publicly announced, the date the Fundamental Transaction is consummated, (iii) the underlying price per share used in such calculation shall be the highest Daily VWAP during the five (5) Trading Days prior to the closing of the Fundamental Transaction, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
(d)      Bloomberg ” means Bloomberg Financial Markets.
(e)      Business Day ” means any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in the State of New York are authorized or required by law or other governmental action to close.
(f)      Capital Stock ” means, with respect to any Person, any and all shares of stock, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets after liabilities, of such Person.

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(g)      Catterton Investor ” means Catterton-Noodles, LLC, a Delaware limited liability company, and its Affiliates.
(h)      Change of Control ” means any Fundamental Transaction other than (i) any reorganization, recapitalization or reclassification of the Class A Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, are, in all material respect, the holders of the voting power of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, (ii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (iii) a merger in connection with a bona fide acquisition by the Company of any Person in which (x) the gross consideration paid, directly or indirectly, by the Company in such acquisition is not greater than 20% of the Company’s market capitalization as calculated on the date of the consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority of the board of directors of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transaction that, directly or indirectly, results in the Company or the Successor Entity not having Common Stock or common stock, as applicable, registered under the Exchange Act and listed on an Eligible Exchange shall be deemed a Change of Control.
(i)