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EXHIBIT 10.9
FUNDING AGREEMENT
FUNDING AGREEMENT made this ___ day of July, 1997 by and among XXXXXX
ENTERPRISES INC., a Florida corporation ("SEI"), MAX'S BEACH GRILL, LTD., a
Florida limited partnership ("Beach Place"), UNIQUE BRICKELL LTD., a Florida
limited partnership ("Las Olas"), UNIQUE WESTON LTD., a Florida limited
partnership ("Weston"), XXXXXX XXX, UNIQUE RESTAURANT CONCEPTS, INC., a Florida
corporation ("URCI"), and UNIQUE RESTAURANT CONCEPTS, LTD., a Florida limited
partnership ("URCL").
RECITALS:
A. SEI is in the process of registering shares of its common stock with the
Securities and Exchange Commission (the "S.E.C.") for purposes of effecting an
initial public offering (the "I.P.O.") to raise at least four million dollars
($4,000,000).
B. Each of Beach Place, Las Olas and Weston owns a restaurant that replicates
the Max's Grille concept originated by the Max's Grille in Xxxxxx Park, Boca
Raton, Florida and which is named Max's Grille (or a derivative thereof). Beach
Place's restaurant has recently opened and the other two are being developed.
The principals of such companies are actively searching for another site for a
fourth new restaurant, also to replicate the Max's Grille concept, ownership of
which shall reside in a distinct entity. (Beach Place, Las Olas, Weston and such
distinct entity are sometimes collectively referred to herein as the "Grille
Companies".)
C. SEI has agreed to devote three million dollars ($3,000,000) of the I.P.O.
proceeds to fund the construction expenses incurred by the Grille Companies in
exchange for a fifty percent (50%) equity interest in each of the Grille
Companies, in accordance with the following.
NOW, THEREFORE, based on the foregoing and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. As soon as possible following the execution hereof, the Grille Companies
shall deliver to SEI subscription agreements in form reasonably satisfactory to
SEI's counsel describing the subscription by SEI for a fifty percent (50%)
equity interest in each of the Grille Companies with protection against
dilution. To enable SEI to conduct due diligence with respect to such
subscriptions, the Grille Companies shall simultaneously furnish SEI's counsel
with copies of their Articles of Limited Partnership and Agreements of Limited
Partnership, and the Articles of Incorporation, Bylaws, Subscription Agreements,
issued stock certificates, and minutes of meetings of directors and shareholders
and written consents in lieu thereof of their respective corporate general
partners, and other items requested by such counsel.
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SEI's counsel shall expeditiously review the documentation and work diligently
to reach agreement on all issues arising thereunder so that a closing may occur.
Once two million dollars ($2,000,000) in net proceeds of the I.P.O. have been
delivered to SEI, SEI shall establish an escrow account and deposit such sum
therein earmarked as the Grille Companies Construction Fund. A closing then
shall be set for a mutually convenient time to take place at the office of SEI's
counsel in West Palm Beach, Florida at which the Grille Companies Construction
Fund shall be exchanged for certificates evidencing the above-described equity
interests. At such closing and for so long thereafter as Max and his designees
comprise a majority of the Board of Directors of SEI as contemplated by Section
2 below, designees of SEI who are acceptable to the Grille Companies shall be
appointed to serve on each of the Grille Companies' corporate general partners'
Boards of Directors such that such designees represent the majority of directors
in each case. SEI shall relinquish control of the Grille Companies' Board of
Directors immediately following any event which results in Max and his designees
no longer comprising a majority of SEI's Board of Directors.
2. At the closing referenced above, the directors of SEI shall appoint such
designees of Max who are reasonably acceptable to them to the SEI Board of
Directors such that such designees represent the majority of directors of SEI.
Xxxxxx X. Xxxxxxxx, Xxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxxx, by execution of the
attached Joinder, shall agree to vote their shares of the capital stock of SEI
and to take such other action as required to accomplish the foregoing.
3. The Grille Companies agree to use the subscription funds to cover the
expenses of construction and opening of their Max's Grille restaurants. The
parties recognize that construction and opening expenses will vary for each
restaurant as will the timing of incurrence and therefore the Grille Companies
agree that they shall appoint and entrust Max to disburse the subscription funds
in the manner he deems most equitable and in the collective best interests of
the Grille Companies.
4. URCI shall manage each of the Grille Companies for so long as SEI owns an
equity interest therein for a fee less than that historically charged by URCI
for management, calculated to cover the additional administrative expenses
incurred by URCI.
5. In the event the I.P.O. has not resulted in net proceeds to SEI of at least
two million dollars ($2,000,000) by September 30, 1997 thereby enabling funding
of the Grille Companies Construction Fund, this Agreement shall terminate
without further action.
6. SEI shall grant URCL an option exercisable through December 31, 1999 to
purchase one hundred fifty thousand (150,000) shares of SEI common stock for an
exercise price of two dollars and fif-
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ty cents ($2.50) per share. Said option shall be evidenced by a Stock Option
Agreement containing incidental registration rights in the form attached hereto.
7. In the event that the Grille Companies, Max, URCL or URCI willfully fails or
refuses to comply with its respective obligations hereunder and as a result
thereof SEI must amend its registration statement as filed to delete this
transaction therefrom, then such parties, jointly and severally, shall reimburse
SEI, as liquidated damages, for SEI's extraordinary legal, accounting, printing,
underwriting and filing fees incurred in the I.P.O. as a result of such action
or inaction. All such parties agree that such liquidated damages would be just
compensation for such action and/or inaction.
8. Neither Max, URCI or URCL (the "URC Parties") shall be obligated actively to
participate in SEI's I.P.O. activities, except that (a) the URC Parties shall
promptly provide information reasonably requested by SEI for inclusion in the
registration statement, which information need not include financial data except
as required by the S.E.C. with respect to the Grille Companies and, to the
extent accounting or other expenses are incurred in connection therewith, same
shall be paid for by SEI, and (b) Max shall make a presentation regarding the
Max's Grille concept and expansion plans for same at a dinner meeting at Max's
Grille in Boca Raton to be sponsored by SEI after the registration statement is
filed and to which only securities brokers and dealers, not investors, shall be
invited.
9. This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof and supersedes any conflicting prior or
contemporaneous agreements. This Agreement may not be orally modified and no
modification of any provision hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced.
10. The parties hereto acknowledge that following the closing described in
Section 1 above, it would be impossible to determine the amount of damage that
would result from the breach by any of them of the provisions of this Agreement
and that the remedy at law for breach of any of such provisions would likely be
inadequate and accordingly agree that the non-breaching parties shall, in
addition to any other rights or remedies they may have, be entitled to seek such
equitable and injunctive relief as may be available from any court of competent
jurisdiction to compel specific performance of or restrain any of the other
parties from violating any of such provisions. In connection with any action or
proceeding for injunctive relief, each of the parties hereto hereby waives the
claim or defense that a remedy at law alone is adequate and agrees to the
maximum extent permitted by law to have each provision of this Agreement
specifically enforced against it, without the necessity of posting bond or other
security
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against it, and consents to the entry of injunctive relief against it enjoining
or restraining any breach or threatened breach of this Agreement.
11. All expenses incurred by any party in enforcing its rights hereunder in
litigation or preparatory thereto shall be paid by the breaching parties, which
shall be jointly and severally responsible therefor.
12. Each of the parties hereto is sophisticated and has had the opportunity to
be represented by counsel in the negotiation and preparation hereof.
Accordingly, each party hereto acknowledges that presumptions relating to the
interpretation of contractual provisions against the drafter thereof are not
applicable to this Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the date
first above written.
XXXXXX ENTERPRISES INC.
By:
----------------------------
Name:
-----------------------
Title:
----------------------
MAX'S BEACH GRILL, LTD. by
Max's Beach Grill, Inc., its
general partner
By:
----------------------------
Name:
-----------------------
Title:
----------------------
UNIQUE BRICKELL LTD., by Uni-
que Brickell, Inc., its gener-
al partner
By:
----------------------------
Name:
-----------------------
Title:
----------------------
UNIQUE WESTON LTD., by Unique
Weston, Inc., its general
partner
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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-------------------------------
XXXXXX XXX
UNIQUE RESTAURANT CONCEPTS,
LTD., by Unique Restaurants,
Inc., its general partner
By:
----------------------------
Name:
-----------------------
Title:
----------------------
UNIQUE RESTAURANT CONCEPTS,
INC.
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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AMENDMENT
FOR VALUE RECEIVED, XXXXXX ENTERPRISES INC., a Florida corporation ("SEI"),
MAX'S BEACH GRILL, LTD., a Florida limited partnership ("Beach Place"), UNIQUE
BRICKELL LTD., a Florida limited partnership ("Las Olas"), UNIQUE WESTON LTD.,
a Florida limited partnership ("Weston"), XXXXXX X. MAX, UNIQUE RESTAURANT
CONCEPTS, INC., a Florida corporation ("URCI"), and UNIQUE RESTAURANT CONCEPTS,
LTD., a Florida limited partnership ("URCL"), hereby agree and consent to
change the date set forth in Section 5 of that certain Funding Agreement dated
July 1, 1997 entered into by and among the parties from September 30, 1997 to
October 31, 1997. All other provisions of said Funding Agreement remain in
effect unchanged.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the ___
day of September, 1997.
XXXXXX ENTERPRISES INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Name: XXXXXX X. XXXXXXXX, XX. XXXXXX X. MAX
Title: VICE PRESIDENT
MAX'S BEACH GRILL, LTD. by UNIQUE RESTAURANT CONCEPTS,
Max's Beach Grill, Inc., LTD., by Unique Restaurants,
its general partner Inc., its general partner
By: By:
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Name: ________________________ Name: _______________________
Title: _______________________ Title: ______________________
UNIQUE BRICKELL LTD., by Unique UNIQUE RESTAURANT CONCEPTS,
Brickell, Inc., its general INC.
partner
By: By:
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Name: ________________________ Name: ________________________
Title: _______________________ Title: _______________________
UNIQUE WESTON LTD., by Unique
Weston, Inc., its general
partner
By:
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Name: ________________________
Title: _______________________
