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EXHIBIT 4.7
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made this 15th day of July, 1997 by XXXXXX ENTERPRISES
INC., a Florida corporation (the "Company"), in favor of UNIQUE RESTAURANT
CONCEPTS, LTD., a Florida limited partner ship (the "Holder").
RECITAL:
The Company and the Holder (among others) entered into a Funding Agreement on
July 1, 1997, a copy of which is attached hereto (the "Funding Agreement"). As
partial compensation thereunder the Company agreed to grant the Holder an
option to purchase restricted shares of the Company's common stock.
NOW THEREFORE for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company has agreed, among other things,
to grant to the Holder the Option (as herein defined).
1. Grant. The Company hereby grants to the Holder the right to purchase one
hundred fifty thousand (150,000) newly-issued shares (the "Shares") of the
Company's common stock, $0.01 par value (the "Common Stock"), exercisable at
any time and from time to time through December 31, 1999 (the "Option"). Such
number of shares is subject to adjustment pursuant to Section 7 hereinbel ow.
2. Exercise Price. The exercise price per Share for which all or any of the
Shares may be purchased pursuant to the terms of the Option is two dollars and
fifty cents ($2.50) (the "Exercise Price"). The Exercise Price is subject to
adjustment pursuant to Section 7 hereinbelow.
3. Exercise. Commencing on the date that any shares of the Company's Common
Stock shall have been registered under the Securities Act of 1933, the Option
may be exercised by the Holder as to all or in increments of ten thousand
(10,000) Shares upon delivery of written notice of intent to exercise in the
form at tached hereto as Exhibit "A" to the Company at the following address:
000 Xxxxxxxx Xxxxxx #000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, or such other address
as the Company shall designate in a written notice to the Holder, together with
a check payable to the Company for the aggregate Exercise Price of the Shares
so purchased. Alternatively, the Exercise Price may be paid (a) by the surren
der by the Holder to the Company of any promissory notes or other obligations
issued or owed by the Company, with all such notes and obligations so
surrendered being credited against the Exercise Price in an amount equal to
the principal amount thereof plus accrued interest to the date of surrender,
(b) through delivery by the Holder to the Company of other securities issued by
the Company with such securities being credited against the Exer-
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cise Price in an amount equal to the fair market value thereof, as determined
in good faith by the Board of Directors of the Company, (c) by any combination
of the foregoing, or (d) by a reduction in the number of Shares issuable
hereunder in an amount equal to the quotient obtained by dividing (i) the
Exercise Price by (ii) the amount obtained by subtracting the Exercise Price
from the fair market value of the Common Stock, as determined in accordance
with Section 6(d) hereof, on the last trading day prior to the date of such
exercise of the Option. If this Option is exercised in part, the Company shall,
upon such exercise, execute and deliver to the Holder a new certificate for
this Option (dated the date hereof) evidencing the balance of the Shares for
which this Option remains exercisable. The Company shall promptly respond to an
inquiry by the Holder as to the fair market value of any securities the Holder
may wish to deliver to the Company pursuant to clause (b) or (c) above. Upon
exercise of the Option as aforesaid, the Company shall, as promptly as
practicable, and in any event within twenty (20) days thereafter, execute and
deliver to the Holder a certificate or certificates for the total number of
whole Shares for which the Option is being exercised. The Company covenants and
agrees that it shall pay when due any and all state and federal issue taxes
which may be payable in respect of the issuance of any Shares upon exercise of
the Option.
4. Covenants and Conditions. The above provisions are subject to the
following:
(a) Neither the Option nor the Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws (the "Blue Sky Laws"). The Option has been acquired for
investment purposes and not with a view to distribution or resale and may not
be pledged, hypothecated, sold, made subject to a security interest, or
otherwise transferred without (i) an effective registration statement under the
Securities Act and applicable Blue Sky Laws, or (ii) an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to the Company and
its counsel, that registration is not required under the Securities Act or
under any applicable Blue Sky Laws. Transfer of the Shares issued upon the
exercise of the Option shall be restricted in any event until March 31, 1999
and (ii) otherwise in the same manner and to the same extent as the Option, and
the certificates representing such Shares shall bear substantially the
following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFI CATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED UNTIL (I)
MARCH 31, 1999 AND (II) A REGISTRATION STATEMENT UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAW SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR
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(III) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION
UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED IN
CONNECTION WITH THE PROPOSED TRANSFER.
The Holder agrees to execute such other documents and instruments as counsel
for the Company reasonably deems necessary to effect the compliance of the
issuance of the Option and any Shares issued upon exercise of the Option with
applicable federal and state securities laws.
(b) The Company covenants and agrees that all Shares which may be issued
upon exercise of the Option shall, upon issuance and payment therefor, be
legally and validly issued and outstanding, fully paid and nonassessable, free
from all taxes, liens, charges and preemptive rights, if any, with respect
thereto or to the issuance thereof. The Company shall at all times reserve and
keep available for issuance upon the exercise of the Option such number of
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of the Option.
5. Transfer of Option. The Option may not be transferred, in whole or in
part, except to an entity controlled by the owners of the Holder.
6. Adjustment Upon Changes In Capitalization.
(a) If all or any portion of the Option shall be exercised subsequent to
any stock split, stock dividend, recapitalization, combination of shares of the
Company, or other similar event occurring after the date hereof, then the
Holder exercising the Option shall receive, for the aggregate price paid upon
the exercise, the aggregate number and class of shares which the Holder would
have received if the Option had been exercised immediately prior to such stock
split, stock dividend, recapitalization, combination of shares, or other
similar event. If any adjustment under this Section 7(a) would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares subject to the Option shall be the next higher number of shares,
rounding all fractions upward. Whenever there shall be an adjustment pursuant
to this Section 7(a), the Company shall forthwith notify the Holder of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
(b) If all or any portion of the Option shall be exercised subsequent to
any merger, consolidation, exchange of shares, separation, reorganization or
liquidation of the Company or other similar event occurring after the date
hereof, as a result of which shares of Common Stock shall be changed into the
same or a different number of shares of the same or another class or clas-
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ses of securities of the Company or another entity, then the Holder exercising
the Option shall receive, for the aggregate price paid upon such exercise, the
aggregate number and class of shares which the Holder would have received if
the Option had been exercised immediately prior to such merger, consolidation,
exchange of shares, separation, reorganization or liquidation, or other similar
event. If any adjustment under this Section 7(b) would create a fractional
share of Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares subject to
this Option shall be the next higher number of shares, rounding all fractions
upward. Whenever there shall be an adjustment pursuant to this Section 7(b),
the Company shall forthwith notify the Holder of such adjustment, setting forth
in reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated.
7. Registration Rights.
(a) In the event the Company proposes to file a registration statement
under the Securities Act which relates to a current offering of securities of
the Company (except in connection with an offering on Form S-8 or S-4 or any
other inappropriate form), such registration statement (and the prospectus
included therein) shall also, at the written request to the Company by Holder,
relate to and meet the requirements of the Securities Act with respect to any
public offering of the Shares so as to permit the public sale by the Holder of
all or some portion of the Shares as designated by the Holder. The Company
shall give written notice to the Holder of its intention to file a
registration statement under the Securities Act relating to a current offering
of securities of the Company not less than fifteen (15) days prior to the
filing of such registration statement. Any written request of the Holder to
include the Shares held by the Holder shall be given to the Company not less
than five (5) days prior to the date specified in the notice as the date on
which such registration statement is intended to be filed with the Securities
and Exchange Commission. Neither the delivery of such notice by the Company
nor of such request by the Holder shall obligate the Company to file such
registration statement and notwithstanding the filing of such registration
statement, the Company may, at any time prior to the effective date thereof,
determine to withdraw such registration statement and not offer the securities
intended to be offered by the Company to which the registration statement
relate, without liability to the Holder on account thereof.
(b) In the event the Holder elects to include the Shares in a registration
statement in accordance with subsection (a) of this Section 8, the Company
shall:
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(i) Supply to the Holder a reasonable number of copies of the
preliminary, final and other prospectus in conformity with the requirements of
the Securities Act and the rules and regulations promulgated thereunder and
such other documents as the Holder shall reasonably request;
(ii) Use its best efforts to cause the Shares to be registered,
qualified or exempted under the securities laws of such reasonable number and
selection of states selected by the Holder and do any and all other acts and
things which may be necessary or advisable to enable the Holder to consummate
the proposed sale or other disposition of the Shares in such states; provided,
however, that in no event shall the Company be obligated, in connection
therewith, to qualify to do business or to file a general consent to service of
process in any jurisdiction where it shall not then be qualified;
(iii) Keep effective for a period of ninety (90) days after the
initial effectiveness thereof all such registration statements, and cooperate
in taking such action as may be neces sary to keep effective such other
registrations, qualifications or exemptions, and do any and all other acts and
things for such period, not to exceed such ninety (90) days, as may be
necessary to permit the public sale or other disposition of such Shares by the
Holder; and
(iv) Pay all costs of the registration statement and the public
offering and such other registrations, qualifications or exemptions, exclusive
of (A) brokers or sales commissions on the sale of the Shares; and (B) any
legal fees incurred by the Holder in connection with the registration statement
or public offering.
8. Notices. The Company shall provide the Holder with a copy of any notice
that the Company is required to provide those persons holding shares of the
Common Stock on the same date such persons receive such notice.
9. Loss, Destruction, Etc. of Agreement. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
this Agreement, and in the case of any such loss, theft or destruction, upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation, upon surrender
and cancellation of the Agreement, the Company shall make and deliver a new
Agreement of like tenor in lieu of such lost, stolen, destroyed or mutilated
Agreement. Any Agreement executed and delivered under the provisions of this
Section 10 in lieu of any Agreement alleged to be lost, destroyed or stolen, or
in lieu of any mutilated Agreement, shall constitute an original contractual
obligation on the part of the Company.
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IN WITNESS WHEREOF, the Company and the Holder have executed this Stock Option
Agreement as of the date first above written.
XXXXXX ENTERPRISES INC.
By: ------------------------
Xxxxxx X. Xxxxxxxx Xx.,
Vice President
UNIQUE RESTAURANT CONCEPTS,
LTD., by Unique Restaurant
Concepts, Inc., its general
partner
By: ------------------------
Xxxxxx X. Max, President
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EXHIBIT "A" TO
STOCK OPTION AGREEMENT DATED JULY 15, 1997
NOTICE OF EXERCISE OF OPTION TO PURCHASE
SHARES OF COMMON STOCK
OF XXXXXX ENTERPRISES INC.
The undersigned does by this notice request that Xxxxxx Enterprises Inc., a
Florida corporation (the "Company"), issue to the undersigned that number of
shares of Common Stock specified below (the "Shares") at the price per Share
specified below pursuant to the exercise of the undersigned's option under the
Stock Option Agreement (the "Agreement") dated July 15, 1997 between the
undersigned and the Company.
Simultaneously herewith, the undersigned delivers to the Company the purchase
price for the Shares (i.e., that amount which is obtained by multiplying the
number of Shares for which the Option is being exercised by the price
specified), by good check or, alternatively, elects to follow the procedures
set forth in the Agreement for a cashless exercise.
The undersigned hereby represents and warrants that the undersigned is
acquiring the Shares for the undersigned's own account and not on behalf of any
other person and without any present view to making a public offering or
distribution of same and without any present intention of selling same at any
particular time or at any particular price or upon the occurrence of any
particular event or circumstance.
The undersigned acknowledges and understands that in connection with the
acquisition of the Shares by the undersigned:
1. The Company has informed the undersigned that the Shares are not registered
under the Securities Act of 1933, as amended (the "Act"), or applicable state
securities or Blue Sky law or laws, and thus the Shares may not be transferred
or otherwise disposed of until the Shares are subsequently registered under the
Act and the applicable state securities or Blue Sky law or laws or an exemption
from such registration requirements is available.
2. The undersigned has been informed that a legend referring to the
restrictions indicated herein on transferability and sale will be placed upon
the certificate(s) evidencing the Shares.
3. If the undersigned is required to file a Form 144 with the Securities and
Exchange Commission in connection with sales of the Shares pursuant to Rule 144
under the Act, the undersigned shall mail a copy of such Form to the Company at
the same time
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and each time the undersigned mails a copy to the Securities and Exchange
Commission.
A. Date of Stock Option Agreement: July 15, 1997
B. Number of Shares covered by Agreement: 150,000*
C. Number of Shares of Common Stock actually to be purchased at this time
(must be 10,000 Shares or whole multiples thereof and cannot be greater
than 150,000):________*
D. Exercise price per Share: $2.50
E. Aggregate price to be paid for Shares actually purchased (D multiplied by
C): $________
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*Subject to adjustment as described in the Agreement
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Dated:________________________
Very truly yours,
UNIQUE RESTAURANT CONCEPTS,
LTD., by Unique Restaurant
Concepts, Inc., its general
partner
By: ------------------------
Xxxxxx X. Max, President
Address:
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ACCEPTED:
XXXXXX ENTERPRISES INC.
By: --------------------
Title:--------------
Dated:-------------------
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