Amendment No. 2 to Amended and Restated Securities Holders Agreement by and among Acapulco Acquisition Corp. and Investors

Exhibit 10.5

AMENDMENT NO. 2 TO AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT

        AMENDMENT NO. 2 (the "Amendment"), to the Amended and Restated Securities Holders Agreement, dated as of June 28, 2000, by and among Acapulco Acquisition Corp. ("Acquisition Corp."), Bruckmann, Rosser, Sherrill & Co., L.P., Furman Selz Investors II, L.P. and the other investors party thereto, as amended (the "Securities Holders Agreement"), is made as of this 23^rd day of September, 2002.

Background

        A.    Acquisition Corp. has requested that the Securities Holders Agreement be amended upon the terms and conditions contained herein.

        B.    Defined terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Securities Holders Agreement.

Terms

ARTICLE I AMENDMENTS

        1.1.  Section 3.4(c) of the Securities Holders Agreement is hereby amended in its entirety to read as follows:

"3.4(c)    Notwithstanding the foregoing, no Investor shall be entitled to purchase Maintenance Securities as contemplated by this Section 3.4 (and no Section 3.4 Notice shall be required) in connection with (i) the grant or exercise of options to purchase Common Stock Equivalents, or the issuance of shares of Common Stock Equivalents, to employees, officers and directors of Acquisition Corp. or any of its subsidiaries pursuant to any employee benefit plan, incentive award program or other employee compensation arrangement, plan or program so long as the number of such Common Stock Equivalents do not exceed 17.5% of the number of shares of Common Stock (on a fully diluted basis) immediately following the Closing, (ii) the issuance of Section 3.4 Preferred Stock or Common Stock Equivalents upon the conversion, exercise or exchange of, or as required by the terms of, outstanding securities (other than securities issued in violation of this Agreement), in accordance with their original terms (including, without limitation, the issuance of shares of Common Stock upon the exercise of any Warrants), (iii) the issuance of Section 3.4 Preferred Stock or Common Stock Equivalents pursuant to any stock split, stock dividend or other similar stock recapitalization, (iv) any underwritten public offering and (v) the issuance of Common Stock Equivalents to any person other than BRS, FSI or any of their respective Affiliates that represent, in the aggregate on a fully diluted basis, less than 15% of the Common Stock outstanding on a fully diluted basis immediately following the Closing. Notwithstanding the foregoing, Canterbury Mezzanine II, Blackstone Partners and Blackstone Holdings shall not be entitled to purchase Maintenance Securities as contemplated by this Section 3.4 in connection with the issuance of Common Stock Equivalents if the antidilution provisions set forth in Section 12 of their respective Warrant Agreements adjust the terms of the Warrants as a result of the issuance of such Common Stock Equivalents."

        1.2.  Exhibit A to the Securities Holders Agreement is hereby amended in its entirety and replaced with Exhibit A hereto.

        1.3.  Section 1.1 of the Amendment shall become effective upon its execution by (i) the Investors described in Section 6.1 (i), (ii), (iii), (iv), (v) and (vi) of the Securities Holders Agreement and (ii) the Investors holding a majority of the outstanding shares of Common Stock on a fully diluted basis (as such term is used in Section 6.1 of the Securities Holders Agreement).

        1.4.  Section 1.2 of the Amendment shall become effective upon the issuance and sale to Frederick Wolfe of 325 shares of Series C 15% Cumulative Compounding Participating Preferred Stock, par value

$0.001, pursuant to a Restricted Stock Agreement, dated as of the date hereof, by and between Acquisition Corp. and Frederick Wolfe.

ARTICLE II WAIVER

        2.1.  Each Investor hereby waives notice contemplated by Section 3.4 of the Securities Holders Agreement in connection with the proposed issuance to Frederick Wolfe to acquire options of 13,000 shares of Common Stock.

ARTICLE III MISCELLANEOUS

        3.1.  The validity, performance, construction and effect of this Amendment shall be governed by and construed in accordance with the internal law of New York, without giving effect to principles of conflicts of law, except to the extent that Delaware law shall be mandatorily applicable. Each party hereto, for itself and its successors and assigns, irrevocably agrees that any suit, action or proceeding arising out of or relating to this Amendment shall be instituted only in the United States District Court for the Southern District of New York, United States of America or in the absence of jurisdiction, the Supreme Court of New York located in New York City and generally and unconditionally accepts and irrevocably submits to the exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any final judgment rendered thereby from which no appeal has been taken or is available in connection with this Amendment. Each party, for itself and its successors and assigns, irrevocably waives any objection it may have now or hereafter to the laying of the venue of any such suit, action or proceeding, including, without limitation, any objection based on the grounds of forum non conveniens, in the aforesaid courts. Each party for itself and its successors and assigns, irrevocably agrees that all process in any such proceedings in any such court may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 6.6 of the Securities Holders Agreement or at such other address of which the other parties shall have been notified in accordance with the provisions of Section 6.6 of the Securities Holders Agreement, such service being hereby acknowledged by the parties to be effective and binding service in every respect. Nothing shall affect the right to serve process in any other manner permitted by law.

        3.2.  In the event that any provision of this Amendment or the application of any provision hereof is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, the remainder of this Amendment shall not be affected except to the extent necessary to delete such illegal, invalid or unenforceable provision unless that provision held invalid shall substantially impair the benefits of the remaining portions of this Amendment.

        3.3.  Except as expressly amended hereby, the Securities Holders Agreement is and shall remain in full force and effect, and no amendment in respect of any term or condition of the Securities Holders Agreement shall be deemed to be an amendment in respect of any other term or condition contained in the Securities Holders Agreement.

        3.4.  This Amendment may be executed in two or more counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same instrument.

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        IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first written above.

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