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TERMINATION OF JOINT VENTURE AGREEMENT
THIS TERMINATION OF JOINT VENTURE AGREEMENT is made and entered into this the
17th day of September, 1998, by and between REDNECK FOODS, INC ("Redneck")
and PIGS "R" US, INC. ("Pigs").
Recitals
This Joint Venture, known as "Redneck Pigs Joint Venture I," was created
pursuant to October 9, 1997, Agreement between the parties hereto
(hereinafter referred to as the "Agreement").
The conversion of the Joint Venture into a limited liability company was
contemplated in Paragraph 1(B) of the October 9, 1997, Agreement has never
been accomplished.
Pursuant to the terms of said Agreement, Redneck is now a ten (10%) percent
owner in the Joint Venture and Pigs is now a ninety (90%) percent owner
therein.
It is the purpose of this Agreement to set forth the terms by which the Joint
Venture will be terminated by Redneck acquiring from Pigs the ninety (90%)
percent interest of Pigs in the Joint Venture.
Agreements
In consideration of the mutual promises of the parties hereto and for other
good and valuable considerations, the receipt and sufficiency of which is
hereby acknowledged, Redneck and Pigs, intending to be legally bound, do
hereby agree as follows:
1. The Joint Venture between Redneck and Pigs is hereby terminated.
2. Redneck and Pigs shall jointly execute the Xxxx of Sale attached
hereto as Exhibit "1" by which the Joint Venture transfers and assigns all
property of the Joint Venture to Redneck in its individual proprietary
capacity.
3. The consideration to be payable by Redneck to Pigs for the sale
shall consist of Redneck's issuance to Pigs of 241,290 shares of the
restricted common stock of Redneck (based upon a purchase price of
$748,000.00 at $3.10 per share), said purchase price to be adjusted and
reduced for any monies due to Redneck from the Joint Venture upon termination
of the Joint Venture and unpaid by the Joint Venture as of the closing date
and any other accounts payable to the Joint Venture assumed by Redneck in
connection with termination of the Joint Venture.
4. Redneck will not assume any employee-related liabilities of the Joint
Venture, which liabilities through the termination date shall be paid and
satisfied by the Joint Venture. Redneck will also assume all utility
deposits and alcoholic beverage licenses held by the Joint Venture. Pigs
covenants and agrees to assist Redneck and take any and all actions necessary
to accomplish transfer of said utility deposits and alcoholic beverage
licenses to Redneck.
5. A certified public accounting firm located in the Orlando, Florida area
of Redneck's choice will promptly after execution of this Agreement by all
parties hereto audit the books and records of the Joint Venture since its
formation and certify to the parties the amount of Redneck common stock to be
issued to Pigs hereunder, taking into account any sums due Redneck from the
Joint Venture and any accounts payable of the Joint Venture which must be
assumed by Redneck upon termination because of insufficient cash of the Joint
Venture to pay such accounts payables.
6. The restricted Redneck stock is issued above shall be registered
with the United States Securities and Exchange Commission in connection with
the next public offering registration of Redneck, upon approval by Sovereign
Capital Advisors, L.L.C., or other underwriter/investment advisor to Redneck.
Pigs shall not be required to bear any of the expense of such registration.
Notwithstanding that said shares when so registered would be freely
transferable under applicable federal securities laws and regulations, Pigs
acknowledges that a limited trading market will exist for said stock when
registered and that the sale of a substantial portion of said stock in open-
market transactions could depress the public trading price of Redneck's
common stock. Accordingly, Pigs agrees that if Pigs desires to sell more
than ten (10%) percent of the registerable shares of Redneck owned by Pigs in
any three (3) month period (other than in privately negotiated transactions)
(a "Significant Disposition") Pigs will give Redneck twenty (20) days notice
prior to initiating a Significant Disposition. Upon receipt of such notice,
purchaser will use its best efforts to locate a purchaser for the shares
offered for sale in a privately negotiated transaction at a net price to Pigs
equal to the closing bid price of Redneck's common stock for the trading date
immediately preceding the date of such notice. If such privately negotiated
transaction is not consummated within said twenty (20) day notice period,
Pigs shall be free to sell said offered shares in open-market transactions.
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The rights and obligations of Pigs under this Paragraph 5 shall pass to the
stockholders of Pigs as to any Redneck stock distributed by Pigs to the
Stockholders thereof after termination of the Joint Venture.
7. The Options and Rights of Refusal of Pigs pursuant to Paragraph 16 of
the Joint Venture Agreement shall continue in full force and effect for a
period of five (5) years after the date hereof as provided in the Joint
Venture Agreement; provided, however, that Pigs at that time qualifies as a
licensee of Redneck under Redneck's customary franchise agreement in effect
at such time.
8. Consummation of this Agreement and termination of the Joint
Venture shall be conditioned upon Redneck entering into a new lease of the
restaurant facility presently subleased to the Joint Venture from Xxxxxx X.
Xxxxxxx, Landlord thereunder.
9. Pigs, having had day-to-day operating control of the Joint
Venture since its commencement of business, hereby warrants and represents to
Redneck that the July 31, 1998, profit and loss and balance sheet statements
of the Joint Venture as attached hereto were true and correct as of said date
and that the financial condition for the Joint Venture has not materially
adversely changed between July 31, 1998, and the termination of the Joint
Venture.
10. This Agreement shall be governed in all respects by the laws of
the State of Florida. The terms, covenants and provisions of this Agreement
shall bind and inure to the benefit of all parties hereto and their
respective heirs, executors, administrators, personal representatives and
assigns.
IN WITNESS WHEREOF, the undersigned parties have hereunto set their
respective hands and seals on behalf of the Joint Venture the day and year
first above written.
PIGS "R" US, INC.
By:
President
REDNECK FOODS, INC.
By: Xxxxx Xxxxxx, President
(Corporate Seal)
Stockholder
Stockholder
Stockholder
