EXHIBIT 10.9
FUNDING AGREEMENT
This Funding Agreement (the "Agreement") is dated as of February 18,
1998 among Country Star Restaurants, Inc., a Delaware corporation, with an
office at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000
("Borrower") and Xxx X. Xxxxx, M.D., P.C., M.P.P.P., 0 Xxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000 ("Lender").
WHEREAS, Borrower has previously entered into a Loan and Security
Agreement dated as of February 12, 1997 among Borrower, Cameron Capital Ltd.
("Cameron") as agent for Lenders under the Loan and Security Agreement and other
lenders to Borrower from time to time hereafter;
WHEREAS, Cameron has previously assigned its rights as agent under the
Loan and Security Agreement to Xxx X. Xxxxx ("Agent") pursuant to that certain
Purchase and Assignment Agreement and Agency and Intercreditor Agreement, both
dated as of February 12, 1997, among Cameron, Borrower and Agent;
WHEREAS, Lender desires to make an advance to Borrower pursuant to and
in accordance with the terms and conditions of the Loan and Security Agreement
as modified by this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. LINE OF CREDIT ADVANCE. Lender hereby agrees to make, and
Borrower hereby agrees to accept, a line of credit advance in
the amount of $1,300,000 (the "Advance") to be made by Lender
to Borrower
on February 18, 1998 by wire transfer of immediately available
funds from Lender to Borrower. The Advance from Lender to
Borrower shall for all purposes be treated as a "Line of Credit
Loan" within the meaning of Section 2.2 of the Loan and
Security Agreement, except as otherwise provided herein. Lender
hereby consents to being bound by and subject to the Loan and
Security Agreement as a "lender" thereunder.
2. WARRANTS. Pursuant to the terms of the Loan and Security
Agreement, Borrower hereby issues to Lender a warrant to
acquire 43,333 of its shares of Common Stock for an exercise
price of $6.25, and subject to all of the other terms and
conditions of the Warrant Agreement annexed hereto as Exhibit
A.
3. WAIVER OF WAITING PERIOD FOR CONVERSION. Notwithstanding
anything to the contrary set forth in the Loan and Security
Agreement, Lender may convert all or a portion of the principal
amount of the Advance and interest thereon into Common Stock of
the Company, in accordance with the terms and conditions of the
Loan and Security Agreement and the Convertible Note annexed
hereto as Exhibit B, issued by Borrower to Lender to evidence
payment terms of the Advance.
4. CHANGE OF CONTROL. Notwithstanding anything
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to the contrary in the Loan and Security Agreement, the entire
amount of indebtedness owed by Borrower to Lender, including
all accrued interest and penalties thereon, shall be
immediately due and payable without notice or any other
condition in the event of a "change of control" of Borrower.
For the purposes of this paragraph, a change of control shall
include any merger or consolidation of Borrower, any sale of
all or substantially all of the assets of Borrower, or any
change in the majority of the members of the Board of Directors
then serving Borrower, unless Lender approves in writing of
such change within three (3) days after such change has
occurred.
5. MISCELLANEOUS. Except as specifically provided herein, the
terms of the Advance to Borrower shall be governed by the Loan
and Security Agreement and the Convertible Note issued to
Lender.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and date first above written.
COUNTRY STAR RESTAURANTS, INC.
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx, President
XXX X. XXXXX, M.D., P.C., M.P.P.P.
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx, Trustee
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