AGREEMENT BETWEEN
REDNECK FOODS. INC. & PIGS "R" US
This Agreement, made this 9th day of October 1997, by and between
Redneck Foods. Inc. ("Redneck") and Pigs "R" Us Inc. ("Pigs").
RECITALS
A. Redneck is a newly formed Delaware corporation, principally
located in North Carolina, formed for the purpose of creating
barbecue restaurants and related food products.
B. Redneck has certain license rights to the name and likeness and
other marks and rights of Xxxx Xxxxxxxxx ("Xxxxxxxxx") pursuant to a
License Agreement with Xxxxxxxxx dated February 4, 1997 and attached
hereto as Exhibit "A" (the "License Agreement").
C. Pigs is a Florida corporation principally located at 0000 \Xxxx
Xxxxxxx Xxxxxxx. Xxxxxxxxx, Xxxxxxx 00000 (including the
improvements thereon, the "'Property').
D. Pigs is the current owner of a leasehold interest in the
Property' pursuant to a written lease dated as of October 2. 1977
with Xxxxxx X. Xxxxxxx, as lessor, a true and correct copy of which
is attached hereto as Exhibit "'B".
E. Redneck has created concepts and designs for barbecue
restaurants that will use some of the license rights under the
License Agreement, including Xxxxxxxxx'x name (the t'Bar-B-Q
Concepts").
F. The parties have agreed (i) to form a joint venture (the
""Venture") for the sole purpose of creating a single barbecue
restaurant on the Property' (the "'Pilot Restaurant") that will
serve as a pilot (i.e. "research and development") restaurant for
the Bar-B-Q Concepts, (ii) to convert the venture into a Limited
Liability Company (an "LLC") as soon as practicable and (iii) to
jointly plan, operate and the Pilot Restaurant. In connection
therewith. Redneck sublicense to the Venture certain rights
under the License Agreement solely In connection with the operation
of the Pilot Restaurant.
G. The parties desire to memorialize the terms and conditions of
the Venture pursuant to this written agreement.
Agreements
In consideration of the mutual promises of the parties hereto and
for other good and valuable consideration. The receipt and
sufficiency of which is hereby acknowledged. Redneck and Pigs.
intending to be legally bound, do hereby agree as follows:
1. Formation or Venture: Conversion to LLC.
A. Formation of Venture. Redneck and Pigs hereby form the venture
as a Joint venture under the laws of the State of Florida, pursuant
to this instrument, for the purposes
herein set forth.
B. Conversion to LLC. B no later than October 15,1997, the parties
shall convert the Venture into a limited liability company under the
laws of the State of Florida or such other state as the Members
mutually agree. The Venture shall be managed by the Members as
provided in this Agreement. The Members shall cause such formation
and shall file appropriate Articles of Organization or similar
documents to cause such formation. Upon such formation, all
references to the Venture shall mean the Venture as converted to an
LLC and this Agreement shall be the Operating Agreement of the
Venture. Upon conversion to an LLC, the Venture shall continuously
maintain an office and registered agent in the State of Florida as
required by applicable law and shall appoint a registered agent as
required by applicable law.
2. Name of Venture. The name of the Venture shall be "Redneck Pigs
Joint Venture 1". The sole members of the Venture are Redneck and
Pigs. Upon conversion to an LLC, the Venture shall add the words
"LLC" or similar words required by applicable law, to the name of
the Venture.
3. Sublease of Property: Lease of Equipment. Pigs hereby subleases
the Property to the Venture for the Term of the Venture. The
sublease of the Property shall be on all of the terms and conditions
of the Lease including rent without any modification whatsoever.
Pigs hereby represents that the consent of the landlord to this
sublease is not required or has been obtained. Pigs hereby leases
all equipment and other materials located on or used on the Property
for restaurant purposes (collectively, the "Equipment") to the
Venture during the Term for no consideration other than the overall
consideration given to Pigs as a Member of the Venture pursuant to
this Agreement.
4. Licenses.
A. Sublicense of Licensed Materials.
(1) Redneck hereby sublicenses to the Venture on a non-exclusive
basis during the Term the right to use the Licensed Materials under
the License Agreement solely for the operation of the Pilot
Restaurant. Such sublicense is on and subject to all of the terms
and conditions of the License Agreement, including the payment by
the Venture of all amounts payable under the License Agreement for
the activities and sales of the Venture. However, despite the
foregoing, it is understood and an express provision of such License
that Redneck be, and it hereby is, granted the sole and exclusive
right and authority to manage, direct and exercise the sublicensed
rights on behalf of the Venture and Pigs shall not exercise any such
rights individually or on behalf of the Venture. Each use of the
Licensed Materials shall only be with the approval of both Redneck
and Xxxxxxxxx.
(2) Redneck shall use reasonable effort to provide to the Venture
such rights in and to the Licensed Materials as Redneck deems
necessary to operate the Pilot Restaurant under the Bar-B-Q Concept;
provided tat Redneck shall have no responsibility for anything not
provided under the License Agreement.
(3) The Venture and Pigs hereby agree to be bound by all of the
terms of the License agreement and acknowledge that are breach b\
them of the provisions of this Section or of the License Agreement
will be a material reach of this Agreement (and of the License
Agreement). Neither the Venture nor Pigs v.11 obtain any rights In
or to the Licensed Materials and it is acknowledged that Xxxxxxxxx
is the owner of all such rights.
(4) Upon termination of the venture for any reason neither the
Venture nor Pigs shall have any rights in or to the licensed
Materials and shall terminate their use immediately. Without
limiting the foregoing. Upon such termination, any and all Licensed
Material, including any property containing the Xxxxxxxxx name,
logo, likeness or any other unique xxxx or right of Xxxxxxxxx, shall
be taken, held and retained BV Redneck or Xxxxxxxxx, including all
signs, menus, displays, products etc. Pigs hereby agrees that with
respect to said Licensed Materials (including any item bearing the
likeness, logo, xxxx or other right of Xxxxxxxxx), neither Pig nor
the Venture will have any right to transfer, encumber or In any way
deal with such Licensed Materials except as expressly permitted by
Redneck in conformance with the License Agreement (and in all cases
subject to approvals that Xxxxxxxxx Is entitled to provide or
withhold).
B. License Of Restaurant Rights
(1) Pigs and the Venture both acknowledge and agree that all
aspects of the Bar-B-Q Concepts now existing or hereafter developed,
including all changes developed by either party as part of the Pilot
Restaurant (including all copyrights, trade secrets, patents, design
rights, trademarks. service marks, know how, products, product
concepts, menus, recipes, food preparation, operational procedures,
cost analysis, marketing plans, etc.) (collectively the "Restaurant
Rights") are and will be owned solely by Redneck (or its licensees,
including Xxxxxxxxx).
(2) To the extent that Pigs or the Venture are deemed to acquire
any rights in any Restaurant Rights. Pigs and the Venture each
hereby irrevocably assign such rights in whole to Redneck. Pigs and
the Venture agree to execute such agreements and instruments
evidencing such assignment from time to time upon request by Redneck
and irrevocably appoint Redneck (coupled with an interest) as
attorney-in-fact to execute such documents in their name.
(3) The Restaurant Rights are hereby licensed to the Venture on a
non-exclusive basis during the Term solely for the operation of the
Pilot Restaurant. It is an specific condition to such grant that
Redneck will (and it is hereby granted the right) at all times to
have the absolute right in its discretion to control and implement
all uses of the Restaurant Rights by the Venture under this license.
(4) Upon termination of tie Venture for any reason, neither the
Venture nor Pigs shall have any rights in or to the Restaurant
Rights and shall terminate their use immediately. All such rights
shall be the sole property of Redneck (or its licensors).
(5) Redneck agrees that it will use its reasonable efforts to
develop the designs for all signs, logos, interior and exterior
decor arid design, preliminary roof elevation drawings, menu and
related licensed products for use by the Pilot Restaurant.
C Material Nature of Rights The parties hereby acknowledge that
the provisions of Sections 4.A. and 4.B. and the compliance by the
parties with their terms is critical to Redneck and, Redneck would
not have entered into this Agreement but for the agreement of the
Venture and Pigs to comply strictly with their terms.
D. Possible Termination of License Agreement. Pigs recognizes that,
pursuant to a certain Stock Purchase Agreement entered into between
Xxxxxxxxx and Redneck on or about February 4, 1 997, Redneck is
required to reach a capitalization level of at least Two Million
Five Hundred Thousand Dollars ($2,500,000.00) no later than March 1,
1998. In the event this capitalization level is not reached by that
date. Xxxxxxxxx retains the right to rescind and cancel the License
Agreement (including any licensing rights sublicensed hereunder).
Xxxxxxxxx also retains the right to terminate the License Agreement
upon any breach thereof by Redneck or any of its sublicensees. Upon
any such termination any and all uses of the Licensed Materials
would need to be terminated by the Venture without limiting the
foregoing, all signs, logos and merchandise bearing Xxxxxxxxx'x name
or likeness or using his marks, etc. would then need to be
immediately removed from the premises of the premises or destroyed.
Pigs acknowledges that it has reviewed and understands these
agreements. In the event the License Agreement should terminate for
any reason, then this Venture shall terminate and dissolve (without
liability on the part of Redneck for such termination) and the
parties shall have the rights specified herein upon such termination
and dissolution.
5. Pilot Nature. Pigs recognizes that the Pilot Restaurant is
intended as a pilot and is to be used for research and development
purposes. Pigs recognizes and agrees that food items, layouts, signs
and other aspects of the Bar-H-Q Concept and the Restaurant Rights
may be changed on a regular basis by Redneck as part of Redneck's
ongoing research and development for this new restaurant concept.
The cost of any such changes made by the Venture, subsequent to the
initial costs having been borne by Pigs, will thereafter be treated
as a deduction from Redneck's capital account (but solely up to the
extent of the capital account contributions theretofore made by
Redneck and without creating any negative capital account).
6. Business of Venture. The sole business of the Venture shall
consist of the day to day operation of the Pilot Restaurant at the
Property.
7. Place of Business. The principal offer and place of business of
the Venture shall be 0000 Xxxx Xxxxxxx Xxxxxxx. Xxxxxxxxx, Xxxxxxx,
00000. The Venture may have such additional offices as the Members
shall deem advisable and jointly agree upon
8. Term of Venture.
A. The term of the Venture (the "Term") shall commence as of the
date hereof and continue thereafter until the expiration of the
Lease. subject to earlier termination as provided herein. Without
limiting the foregoing the Term shall terminate (I) upon the terms
described in Section 4.D., (ii) upon consummation of the purchase
option described in Section 16.A; and(iii) upon any of the events
described in Section 8.B.
B. Despite the provisions of Section 8.A., the Term of the Venture
will cease upon the occurrence of any of the following additional
events or conditions: (a) the adjudication of a Member as a
bankrupt; (b) the making of an assignment by a Member for the
benefit of its creditors; c the institution of any voluntary or
involuntary proceedings resulting in the appointment of a receiver
for a Member or for any substantial portion of the assets of a
Member; or (d) the institution of any voluntary or involuntary
proceedings by or against a Member, under any state or federal
law(s) providing for the relief of debtors., or re-adjustment of
debts resulting in an adjudication of bankruptcy or insolvency.
C. Automatically upon the happening of any event described in
Section 8.B., the Member to whom the event occurs shall be deemed to
have sold its interest in the Venture to the Venture as of the time
of the filing of any aforesaid petition or institution of any of
said proceedings or procedures. The purchase price of the Interest
of such Member shall be the book value of its capital ac count (but
not less than zero) at the end of the month prior to the month in
which such event condition or proceeding occurs, as such book value
is determined for income tax purposes by an independent Certified
Public Accountant. Upon any such purchase of Redneck's interest, it
is understood that the sublicenses and licenses set forth in Section
4.A. and 4.B. shall terminate and be of no further force of effect.
Payment of said price for the interest of such Member shall be made
only out of the percentage of profit of the Venture which would have
been distributed to such Member had not its interest in the Venture
been purchased. In the event any Member whose interest is thus
acquired has a negative capital account at such time, the purchase
price of his interest shall be $l.00. The terms of this paragraph
shall not be construed to create an executory option in future but
shall automatically effect a sale, as aforesaid, immediately upon
the occurrence of any event or condition set forth above.
9. Capital Contributions: Ownership Interests.
A. Contributions. Redneck shall be obligated to contribute $50,000
in cash to the Venture. Such amount shall be contributed as follows:
(I) within fifteen (15) days after the date hereof, Redneck shall
pay into the capital account S35,000 in cash. The balance of the
$50,000 capital contribution will be made on an as needed basis.
Pigs shall be required to contribute the amounts and services to the
Venture as are set forth on Exhibit "C" attached hereto. No other
capital contributions shall be required of either Member.
B. Ownership Interests. The respective percentages of ownership
interest of the Members in the Venture (the "Ownership Interests")
are as set forth opposite their names on Exhibit 'C~.' attached
hereto. The venture shall maintain a separate capital account for
each Member strictly in accordance with the requirements of Code
Section 704(b) and applicable regulations thereunder.
The Members intend that the capital accounts of the Members be
maintained strictly in accordance with the rules of Regulations
Section l.704-1(b)(2)(iv), as amended from time to time.
10. Decisions - Management. Except provided in Section 4 regarding
Licensed Materials and Restaurant Rights (which shall be managed
solely by the decision of Redneck), all actions, matters and
agreements including but not limited to the sale, lease,
encumbrances, financing, management operation or other matters
involving the business of the Venture, shall be determined by the
mutual agreement of Redneck and Pigs, with each having an equal
voice in and control over all such matters (and with neither being
able to act 'without the approval of the other). All operations
undertaken by the Venture must at all times comply with minimum
quality control standards as well as the License Agreement. Nothing
herein contained shall be deemed or construed to make or constitute
any member hereof an agent for any other member of this Venture.
Anything herein to the contrary notwithstanding, it is agreed that
no member of this Venture shall, without the prior written consent
of the other Member: (I) on behalf of this Venture borrow or lend
any money, (ii) assign, transfer or pledge any claims or debts due
this Venture, or release any such claims or debts, except upon
payment in full; (iii) make an assignment of the assets and/or
properties of the Venture for the benefit of creditors; (Iv) in the
name of or on behalf of the Venture make, execute, deliver or accept
any commercial paper, or execute and deliver any mortgage, deed of
trust, bond, lease, guaranty, deed of other instrument, or purchase
or contract to purchase, sell or contract to sell, any properties of
the Venture; or (v) assign, pledge, sell, mortgage, hypothecate,
encumber or in any other manner transfer or dispose of its interest
in the Venture or in its capital assets or property, or perform any
act detrimental to the best interests of the Venture or which would
make it impossible to carry on the business of the Venture.
11. Distributions. The operating cash flow of the Venture available
for distribution to its Members shall belong to, inure to the
benefit of, and be paid to all of the Members of the Venture in
proportion to their respective ownership interest in the Venture.
Distributions of profits will be made on a quarterly basis. For
purposes of this Agreement, the term "operating cash flows" shall
mean taxable income of the Venture for federal income tax purposes
(including all items of income and expense which. by virtue of
Federal Income Tax Laws, are passed through directly to the Members)
as shown on the book of the Venture, increased by (i) the amount of
depreciation and other non-cash deductions taken in computing such
taxable income and (ii) an;' non-taxable income of the Venture, and
reduced by (a) payments upon the principal of any mortgages or deeds
of trust upon Venture properties and assets or upon any other loans
to the Venture, (b) expenditures for maintenance, repairs,
replacements, and improvements, and (c) such reserve's for capital
improvements and/or replacements, and such reserves to meet
anticipated expenses, as the Venture shall deem to be reasonably
necessary for the efficient conduct of its business. However, the
share of cash flow payable to any Member who is in default under
this Agreement shall be withheld until such default is fully
corrected and may be applied on account of curing such default at
the discretion of the non-defaulting Member.
12. Allocation of Profits and Losses. All net income realized by
the Venture shall belong to, or inure to the benefit of, and be
allocated to the Members in the proportions of their respective
Ownership Interests in the Venture, and losses, in any, sustained by
the Venture, including loss of capital shall be borne by, and
allocated to, the Members in the like proportion. Each of the
Members shall receive, as soon as practicable after the expiration
of each taxable year of the Venture, a statement of receipts and
expenses, together with a statement prepared by an independent
certified public accountant showing the profit and loss of the
Venture for federal, state and municipal purposes, and a
distribution analyzed by reference to taxable income and return of
capital. For purposes of Sections 702 and 7034 of the U.S. Internal
Revenue Code of 1954, as amended, and any corresponding sections of
any future Federal Internal Revenue law or any similar state, county
or municipal income tax law, the allocations set forth in this
Paragraph 12 shall apply. The allocations in this section shall be
subject to all rules and requirements of the Code, including all
provisions of Section 704(b) and (c) thereof.
13. Funds of the Venture. All monies that are or shall become due
to the Venture shall be deposited in one or more accounts to the
credit of the Venture in such banks or other depository as may be
mutually agreed upon by the Members. Checks drawn on funds in any
such account will be signed by Pigs, subject to Redneck's right to
require its approval as to future signings upon thirty (30) day
notice to Pigs.
14. Books of Account. The accounts of the Venture shall be kept
properly posted by Pigs, at its sole expense. The parties agree that
the books of account will remain the property of the Venture. Said
books of account shall be all times during regular business hours be
available for inspection by any Member or his duly authorized
representative. Each Member shall have the right, at its sole cost
and expense, to audit the books of the Venture (provided that, if
the audit shows that the books are materially inaccurate, the
Venture shall pay for such audit). Pigs further agrees that it will
furnish on not less than a weekly basis copies of all normal and
customary weekly recap sheets as well as internal accounting
reports, monthly or quarterly profit and loss statements and such
other and further financial records as may be reasonably requested
by Redneck.
15. Consulting Fee. As a further condition of this Agreement, the
Venture shall pay to Redneck a consulting fee of Three Percent (3%)
of gross sales from the Pilot Restaurant during the Term. This fee
is in addition to the Ownership Interest of Redneck and shall be
considered a guaranteed payment to Redneck.
16. Option and Rights of Refusal
A. Pig's Option. Redneck agrees that Pigs will have the right of
first refusal for a period of five (5) years after the date hereof
to buy any franchise stores in the Orlando, Florida television area
of dominant influence as specified on the map attached as Exhibit
"D", at such time, if any, as franchises may be offered for sale by
Redneck. There is no promise or agreement that Redneck will offer
any franchises. THIS AGREEMENT IS NOT INTENDED TO ACT AS AND SHOULD
NOT BE CONSTRUED AS THE SALE OF ANY FRANCHISE RIGHTS OR A FRANCHISE
AND PIGS UNDERSTANDS THAT IT AND REDNECK ARE TRUE CO-OWNERS OF THE
RESTAURANT. The precise number of stores and geographic reach of
each store will be negotiated as part of any franchise agreement
negotiated and executed by the parties and will be offered at the
then customary and prevailing franchise rates and term's, provided
that as to any restaurant opened by Pigs under any franchise or
marketing development agreement during the first two (2) years
following the date of this Agreement, the royalties payable to
Redneck will be set at three percent (3%) of gross sales for the
first term of franchise contract not to exceed 10 years). Upon
execution of such agreements, if franchises are to be offered in the
area in which the Pilot Restaurant is located, Pigs shall have the
right and option to purchase the interest of Redneck in the Venture
and enter into a franchise agreement for the Pilot Restaurant to
become a franchise. To exercise such option, Pigs will pay (1) a
franchise fee to Redneck of Thirty Thousand Dollars ($30,000.00) for
the franchise for the Pilot Restaurant (which shall be in addition
to any ongoing royalty or other franchise fees); and (ii) as full
and complete payment for Redneck's Ownership Interest in the
restaurant, the amount of Redneck's then current capital account.
Once the payments from Pigs to Redneck for Redneck's interest in
the Venture are fully paid, then, notwithstanding anything to the
contrary contained herein, the Venture will terminate and Redneck
shall have no further rights in or to the Venture or the Pilot
Restaurant. Additionally, once the above described payment is made
by Pigs, they will then be the sole owners of any and all equipment
contained on site. The operation of the Pilot Restaurant shall
thereafter be subject to all franchise agreements.
B Redneck Right of Refusal. Pigs hereby grants to Redneck during
the Term a right of first refusal to match any bona fide offer to
acquire any interest that Pigs has in the Venture, the Property, the
Lease or the Equipment, under those terms and conditions as are
offered by Pigs to any other party. Redneck will have not less than
ten (10) business days to respond to any bona fide right of first
refusal once rendered by Pigs. To be a "bona fide offer," for
purposes of this Section, the offer must be in writing, and be made
by a party having sufficient financial ability to consummate the
purchase of the interest so offered to be purchased; and said offer
must be accompanied by a good faith deposit (by cashier's or
certified check) of at least Five Percent (5%) of the purchase price
offered; and the name and home and business address of the officer
must be shown therein. Pigs shall have no right to sell any of the
foregoing other than pursuant to a bona fide offer. If Redneck does
not exercise its right. Pigs shall have 90 days after such right
expires to make a sale pursuant to the terms of the bona fide offer.
Any sale after such 90 days or on other terms will again be subject
to Redneck's right of first refusal. In addition, any sale by Pigs
shall still be subject to all of the terms of Section 20 of this
Agreement, including consent by Redneck.
17. Ownership of Property. Title to the Venture's property,
leasehold interests and other assets shall be held in the name of
the Venture. It is again recognized that the Venture has no ~ title
or interest in any of the Licensed Material under the License
Agreement nor in any of the Restaurant Rights.
18. Salary. Neither one of the Venturers shall receive a salary
for services rendered to the Venture by it or any of its agents,
employees or representatives. However, this shall not prevent the
Venture from entering into any separate contract with a Member for
the rendering of any services to the Venture, including payment by
the Venture for such services, provided that such contracts are
approved in writing by all Members in each instance.
19. Confidentiality.
A. Definition. "Confidential information" means: (i) all Licensed
Materials and all Restaurant Rights; and (ii) any other nonpublic
information that is confidential or trade secret information of the
Venture (including any information that circumstances indicate
should be treated as confidential (including without limitation,
information relating to the Venture's business, customers,
marketing, recipes, plans, designs, costs, prices and names,
customer lists, finances. business opportunities personnel,
research, development or know-how or information received from
others that the Venture is obligated to treat as confidential; and
(iii) the specific terms and conditions of this Agreement.
Confidential Information shall not include any information that: (i)
is or subsequently becomes publicly available without the receiving
party's breach of any obligation owed to the disclosing party; (ii)
became known to the receiving party prior to the disclosing party's
disclosure of such information to the receiving party: (iii) became
known to the receiving party from a source other than the disclosing
part;' other than by the breach of an obligation of confidentiality
owed to the disclosing party; or (iv) is independently developed by
the receiving party.
B. Obligations. Pigs agrees to maintain the confidential status of
Confidential Information and not disclose it to any other party,
Using reasonable security precautions, at least as great as the
precautions it takes to protect its own confidential Information,
and not to use any such Confidential Information for any purpose
other than the operation of the Pilot Restaurant. It is recognized
that Redneck shall have no such obligation and that it owns or shall
have the right to use all of such information as it determines in
its discretion.
20. Restrictions on Transfer or Encumbrance of Interests. Each of
the Members agrees that it will not pledge, mortgage, hypothecate or
otherwise encumber, nor sell, assign, transfer or otherwise dispose
of its interest in the Venture (or any portion of or right in such
interest), without in each instance receiving the prior written
consent of the other Member of this Venture. No act done in
contravention of this Paragraph 20 shall be legally effective or
binding upon the Venture.
21. Default. If a Member is in default as to any obligations
under this Agreement and does not cure such default within thirty'
(30) days after written notice from the other Member, then, in
addition to any other rights and remedies as may be available at law
or in equity, no further distributions shall be made to the
defaulting Member until the liability of the Member for its default
has been determined by a court of law (and such distributions may be
used to offset any such liability'). The Venture and the other
Member are each hereby granted a security interest in the Ownership
Interest of the Venture to secure all obligations of a Member
hereunder. In addition, if a court of law should determine a breach
to be a material breach that would give a Member the right to
terminate this Agreement for such breach, then the non-defaulting
Member shall have the option to purchase the Ownership Interest for
the price and on the terms specified in Section 8.C, including
payment terms.
22. Effect of Transfers. No assignment or transfer of a Venture
interest, whether permitted by the other Member or in violation of
this Agreement, shall relieve the assignor of its liability under
any provisions of this Agreement unless all Members shall otherwise
agree in writing. Furthermore, in the event or any approval of any
such sale or transfer of a Member's interest, the transferee shall
not be deemed a Member of the Venture, nor be entitled o an rights
or benefits as Member, unless the full name and address of such
Member and the amount of Venture interest acquired by him is
disclosed writing to the other Member and such transferee executes
and delivers such instruments as counsel for the other Member shall
require, evidencing the admission of such new party as a Member and
his or its agreement to comply with all provisions of this
Agreement.
23. Sale or Refinancing of Joint Venture Property. If any bona
fide written offer is received for the purchase of the entire
property of the Venture or any part thereof or if application is
made to refinance the joint venture property, the Venture shall
promptly furnish to each Member a copy of said offer, and within
five (5) days of their receipt thereof, each Venturer shall notify
the Venture as to whether such offer is acceptable to said Venturer.
If the offer is acceptable to both Members, then the parties agree
that the Venture ma accept said offer.
24. Dissolution.
A. Conditions. The Venture shall be dissolved, its assets shall be
disposed of, and its affairs wound up on the first to occur of the
following: (i) a determination by the vote of both Members; (ii) the
sale of all or substantially all of the assets of the Venture; (iii)
the occurrence of any event specified elsewhere in this Agreement;
(iv) as provided by law, (v) the expiration of the period for the
duration of the term of the Venture as stated herein or (v) at such
earlier time as may be provided by the Act.
B. Statement of Intent to Dissolve. As soon as possible following
the occurrence of any of the events specified in this Article
effecting the dissolution of the Venture, the Members shall execute
a statement of intent to dissolve in such form as shall be
prescribed by the Secretary of State of Florida and file any
statement or document required by applicable law.
C. Winding Up. Upon the occurrence of a liquidating event for
purposes of Regulations Section 1.704-1(b), the Venture shall
continue solely for the purpose of winding up its affairs in an
orderly manner, liquidating its assets, and satisfying the claims of
its creditors. To the extent not inconsistent with the foregoing,
all covenants and obligations in this Agreement shall continue in
full force and effect until such time as the assets have been
distributed and the Venture has terminated.
D. Responsibilities of Managers for Winding Up. The Members shall
be responsible for overseeing the winding up and liquidation of the
Venture, shall take full account of the liabilities and assets of
the Venture, shall cause its assets to be liquidated as promptly as
is consistent with obtaining the fair market value thereof and shall
cause the proceeds therefrom, to the extent sufficient therefor, to
be applied and distributed as next provided. During the winding-up
process, profits, income and losses will be allocated and
distributions will continue to he shared by Members in accordance
with this Agreement. Redneck shall have the authority to take all
actions to cause the Venture to cease using the Licensed Materials
and the Restaurant Rights as soon as practicable.
E. Distribution. Upon any winding up and liquidation of the
Venture, the proceeds from liquidation, to the extent available,
will be applied and distributed by the Venture as soon as reasonably
possible in the following order:
(i) first, to pay the expenses of liquidation and the debts and
liabilities of the Venture (including loans or advances from
Member), except the claims of creditors or Members whose obligations
will be assumed or otherwise transferred upon liquidation of the
Venture;
(ii) second, to establish any reserves which the Members may deem
necessary, appropriate or desirable for any future, contingent or
unforeseen liabilities, obligations or debts of the Venture which
are not then payable or have not then been paid;
(iii) third, to each Member in accordance with and to the extent of
the positive balance in its capital account after taking into
account all capital account items and adjustments for the taxable
year of such distribution and all allocations that affect the
Member's capital account, Including all items and adjustments
related to the winding up and dissolution itself: and
(iv) fourth, to the Members In accordance with their respective
Ownership Interests.
F Distribution in Kind. Upon any dissolution the Members may elect
by the mutual agreement of both Members to distribute any assets in
kind. Upon any such election, all rights to intangibles shall be
distributed to the Members ratably in proportion to the total
distributions to be made to each Member. Any Property distributed in
kind will be valued at its fair market value and distribution will
then proceed as if the property were sold for cash at such value
with the resulting gain, income profits and/or loss expense and
deduction allocated as provided in this Agreement.
G. Limits. Each Member will look solely to the assets of the
Venture for the payment of any income allocated to such Member and,
if the assets of the Venture remaining after payment or discharge of
the debts and liabilities of the Venture are insufficient to pay all
or any part of such amounts, they will have no recourse against
another Member, or any partner, director, officer, other
stockholder, employee or agent of another Member.
H. Authority After Dissolution. After dissolution, if the Venture
is to be liquidated, the Members can bind the Venture only: (i) by
any act appropriate for winding up the Venture affairs or completing
transactions unfinished at dissolution; and (ii) by any transaction
which would bind the Venture if dissolution had not taken place, if
the other party to the transaction: (a) had extended credit to the
Venture prior to dissolution and had no actual knowledge or notice
of the dissolution; or (b) though not so extending credit, had
nevertheless known of the Venture prior to dissolution and had no
actual knowledge or notice of dissolution. and a certificate of
dissolution had not been filed.
I. Accounting. Upon dissolution (if the business of the Venture is
not continued),and again upon the completion of the winding up of
the affairs of the Venture, an accounting of the Venture will be
made and furnished to all Members.
25. General Provisions.
A. In the construction of this Agreement, words used in the
singular shall include the plural, and the plural the singular, and
words used in the masculine gender shall include the feminine and
neuter. and vice versa. in all cases where such meanings would be
appropriate.
B. This Agreement shall be governed in all respects by the Laws of
the State of Florida.
C. The terms, covenants and provisions of this Agreement shall bind
and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives and
assigns.
D. This Agreement is executed in several counterparts, each of
which shall be deemed to be an original.
E. Any member of this Venture may have other business interests,
and may possess, engage in or participate in any business, trade,
profession. employment or business operation or Investment
(including any restaurant including barbecue style restaurants) for
its own account, or in partnership with or as a stockholder of any
other person, firm, partnership, joint venture, corporation or other
entity and neither this Venture nor the other Member shall have any
rights in or to such independent ventures or the income or profits
derived therefrom. Despite the foregoing, neither Member (nor its
affiliates) will, during the Term, own, operate or actively
participate in the operation of a barbecue style located within a
mile radius of the Property.
26. Board of Directors Approval. Notwithstanding anything
contained herein to the contrary this agreement shall not be binding
on Redneck until presented to its Board of Directors and approved by
the Board in accordance with its bylaws.
IN WITNESS WHEREOF, the undersigned parties have hereunto set their
hands and seals as of the date first hereinbefore Written.
WITNESS: REDNECK FOODS Inc
Xxxxx X. Xxxxxxxxxx Xxxxx Xxxxxx, President
PIGS 'R' US, Inc.
Xxxxx X. Xxxxx By: Xxxxxxx X. Xxxxxxxxx
Title: President
Exhibit 'A'
Xxxxxxxxx License Agreement
Exhibit "B" Lease
Exhibit C
Capital Contributions and Services to be Provided
Cash contributions -
Redneck - $50,000
Noncash contributions by Redneck:
Marketing strategies
Research and development of food and menu items
Noncash contributions by Pigs:
Lease
Leasehold Improvements
Furniture
Equipment
Market Development
Build out of leasehold
Contributions of Pigs in paid personnel:
Operating Personnel for day to day operations
Revised Exhibit C1
Capital Contributions and Services to be Provided
Cash Contributions
Redneck - $50,000
Noncash contributions by Redneck:
Marketing Strategies
Research and development of food items and menu items
Noncash contributions by Pigs:
Lease
Leasehold Improvements
Furniture
Equipment
Market Development
Build out of Leasehold
Contributions of Pigs in Paid Personnel:
Operating personnel for day to day operations
Percentage interest in Joint Venture:
Pigs "R" Us, Inc. 90%
Redneck Foods, Inc. 10%
1 Revised 10/31/97 only to clearly state the respective percentage
interests in the joint venture by each of the venturers, as originally
agreed upon.
Seen and Approved: Redneck Foods, Inc. by X.X. Xxxxxxxxxxx, Secretary
10/30/97
'Exhibit "D"
Map of Area of Right to Buy Franchises
The following counties constitute the area in which Franchise
rights may be acquired:
Brevard
Flagler
Xxxx
Xxxxxx
Orange
Oscala
Polk
Seminole
Volusia
