EXHIBIT 10.4
SOUTH FLORIDA
DEVELOPMENT OPTION AGREEMENT
THIS SOUTH FLORIDA DEVELOPMENT OPTION AGREEMENT ("Agreement") is made
effective as of this 7th day of October, 1996, by and between HOPS GRILL & BAR,
INC., a corporation organized and existing under the laws of the State of
Florida (hereinafter referred to as "Hops"), XXXXX XXXXX, an individual residing
at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Toomy"), and TOOMY CLN, INC., a corporation organized and existing under the
laws of the State of Florida (hereinafter referred to as "TC").
W I T N E S S E T H:
WHEREAS, the principals of Hops own all of the issued and outstanding
shares of common stock of Hops of South Florida, Inc., a corporation organized
and existing under the laws of the State of Florida ("HSF");
WHEREAS, as of the date hereof, Toomy is the sole owner of TC, subject to
the limited minority interest transfers permitted under Section 9(h) hereof;
WHEREAS, HSF, TC, Hops Partners, Inc., a Florida corporation (hereinafter
referred to as "HPI"), and Xxxxx Xxxxxx, the proposed Territory Area Manager
(hereinafter referred to as "Torrey"), are parties to that certain Limited
Partnership Agreement of even date herewith (the "Partnership Agreement")
whereby HSF, TC, HPI, and Torrey formed Hops of South Florida, Ltd., a Florida
limited partnership (the "Partnership") for the purpose of developing and
operating, directly or indirectly, certain Hops Grill & Bar restaurants
(including, but not necessarily limited to, the Initial Restaurant (as defined
herein)) in the Territory (as defined herein) pursuant to the terms and
conditions contained therein; and
WHEREAS, Hops has agreed to grant to Toomy the option to participate in
the development and operation of the Initial Restaurant and certain Additional
Restaurant(s) (as defined herein) in the Territory (as defined herein), if any,
pursuant to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound thereby, agree as follows:
DEFINITIONS
The following definitions shall apply to the following terms as used in
this Agreement:
(1) "Additional Restaurants" means restaurant(s) (in addition to the
Initial Restaurant) to be developed and operated in the Territory prior to the
expiration or termination of Toomy's rights hereunder.
(2) "Hops" means Hops Grill & Bar, Inc., a corporation organized and
existing under the laws of the State of Florida which, either directly or
through one or more subsidiaries, is the owner of all rights under the unique
"Hops Grill & Bar" system of restaurant development, theme and operation.
(3) "Hops Offer" means the notice and information served upon Toomy by
Hops pursuant to Section 2(b).
(4) "Initial Restaurant" means the first restaurant to be developed and
operated, directly or indirectly, by the Partnership as described in Section 1
hereof.
(5) "Operating Agreement" means the agreement(s) to be entered into by the
Partnership (or one or more Second-Tier Partnerships) governing the development
and operation of each restaurant to be developed and operated, directly or
indirectly, by the Partnership within the Territory pursuant to this Agreement.
(6) "Option Fee" shall mean the fee payable by Toomy to Hops pursuant to
Section 2(e) hereof, for the right to participate in the development and
operation of Additional Restaurants.
(7) "Option Period" shall have the meaning as set forth in Section 2(d). (
(8) "Partnership" means the Florida limited partnership formed by HSF, TC,
HPI, and Torrey pursuant to the Partnership Agreement and the laws of the State
of Florida and known as Hops of South Florida, Ltd.
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(9) "Partnership Agreement" means the agreement in which HSF, Toomy, HPI,
and Torrey formed the Partnership under the laws of the State of Florida for the
purpose of owning and operating, directly or indirectly, certain restaurants
within the Territory.
(10) "Second-Tier Partnership" means a limited partnership that may be
formed at the discretion of Hops and HSF for the purpose of developing or
operating the Initial Restaurant or any Additional Restaurant(s) pursuant to
this Agreement whereby (i) HSF will be a general partner which will have a one
percent (1%) equity interest in such partnership, (ii) the manager of the
Initial Restaurant or any Additional Restaurant(s) may be a limited partner
which may have up to a ten percent (10%) equity interest in such partnership,
and (iii) the Partnership will be a limited partner that will own the remaining
equity interest in such partnership.
(11) "System" shall mean a unique system owned by Hops, and associated
with "Hops Grill & Bar Restaurants," which specialize in the sale of high
quality, moderately priced, American food with a microbrewery and includes
proprietary rights in certain valuable trade names, service marks and
trademarks, including the service xxxx "Hops Grill & Bar", designs and color
schemes for restaurant premises, signs, equipment, procedures and formulae for
preparing food and beverage products, specifications for certain food and
beverage products, inventory methods, operating methods, financial control
concepts, training methods and teaching techniques.
(12) "Territory" shall mean Dade, Broward, Palm Beach and Xxxxxx Counties
in the State of Florida.
1. INITIAL RESTAURANT.
(a) On the date hereof, HSF, TC, HPI, and Torrey have executed the
Partnership Agreement for the purpose of the development and operation, direct
or indirect, of the Initial Restaurant. It is hereby agreed by the parties that
the Initial Restaurant will be located in Plantation (Broward County), Florida
and will be owned indirectly by the Partnership through a Second-Tier
Partnership known as "Hops of Plantation, Ltd." which will initially be owned as
follows: HSF will own a 1% interest as the sole general partner; HSF will own a
0.1% as a limited partner; and the Partnership will own a 98.9% interest as a
limited partner. The parties hereby acknowledge that at the discretion of Hops
and HSF, up to ten percent (10%) of
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Hops of Plantation, Ltd. may be owned by a manager of the Plantation restaurant
at a future date.
(b) [REMOVED AND RESERVED.]
(c) Upon the execution of this Agreement, Toomy shall pay to Hops a fee in
the amount of seven thousand five hundred dollars (U.S.$7,500) for the right to
participate with HSF, through the Partnership (and potentially a Second-Tier
Partnership), in the development and operation of the Initial Restaurant. Such
fee, once paid, shall be non-refundable.
(d) Attached hereto as EXHIBIT 1(D) is the form of the Operating Agreement
to be executed by HSF, the Partnership (or the Second-Tier Partnership, if
appropriate) and TC relating to the Initial Restaurant. The Operating Agreement
for the Initial Restaurant will be executed at the time of the execution of this
Agreement.
2. ADDITIONAL RESTAURANTS; GRANT OF OPTION.
(a) [REMOVED AND RESERVED.]
(b) TOOMY RIGHT OF FIRST REFUSAL. If, during the Option Period as
described in Section 2(d), Hops desires, directly or indirectly, to develop
Additional Restaurant(s) in the Territory, Hops shall first serve written notice
(hereinafter called the "Hops Offer") to that effect upon Toomy, stating the
proposed location of the Additional Restaurant(s) to be developed, reasonable
demographic information regarding the location, and the estimated capital (both
equity and debt) required to develop and operate such Additional Restaurant(s).
Toomy shall have the option to participate in the development and operation of
any such Additional Restaurant(s) upon the terms set forth in Section 3 hereof
by giving written notice to Hops of the acceptance by Toomy of the Hops Offer
and making payment to Hops of the Option Fee described in Section 2(e) hereof,
within fifteen (15) days after the date of the Hops Offer.
(c) RIGHT OF HOPS TO DEVELOP. In the event that Toomy fails to timely
accept a Hops Offer or TC or Toomy fail to timely negotiate and execute the
agreements necessary to develop and operate such Additional Restaurant(s) as
provided in Section 4 hereof, Hops shall be free to develop and operate the
Additional Restaurant(s) described in the Hops Offer (i) on its own, directly or
indirectly through one or more subsidiaries or related entities, or (ii) with
any third party upon such terms as Hops shall, in its sole discretion, elect.
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(d) OPTION PERIOD. For purposes of this Section 2, the Option Period shall
commence upon the effective date of this Agreement and shall expire upon the
earlier of:
(i) the date upon which HSF or Hops (or any affiliate of Hops) shall
acquire the Partnership interest of TC;
(ii) the date upon which HSF or Hops (or any affiliate of Hops) shall
acquire the direct or indirect interest of Toomy in any
Additional Restaurant(s);
(iii) the date upon which Toomy shall allow any Hops Offer to expire
without acceptance or Toomy shall fail to timely negotiate and
execute the agreements necessary to develop and operate any
Additional Restaurant(s) as provided in Section 4 hereof; or
(iv) the date of the termination of this Agreement as provided in
Section 5 hereof.
(e) OPTION FEE. TC shall pay an Option Fee to Hops with respect to each
Additional Restaurant in which Toomy shall participate pursuant to Sections 2(a)
or 2(b) hereof in an amount equal to U.S. $7,500 for each Additional Restaurant.
With respect to Additional Restaurants pursuant to Section 2(a) hereof, the
Option Fee shall be paid by Toomy to Hops immediately prior to the time that
Hops, HSF, the Partnership or any Second-Tier Partnership makes a financial
commitment for the property for the Additional Restaurant either by means of
lease or purchase agreement. With respect to Additional Restaurants in which
Toomy shall participate pursuant to Section 2(b) hereof, the Option Fee shall be
paid by Toomy with the acceptance of the Hops Offer as provided in Section 2(b)
hereof. All Option Fees, once paid, shall be non-refundable.
(f) LIMITATION. The option granted to Toomy hereunder shall extend only to
Additional Restaurants (in addition to the Initial Restaurant), if any, to be
developed in the Territory during the term of this Agreement as described in
Section 5 hereof (subject to the early termination of the Option Period as
provided in Section 2(d) hereof), and except as may otherwise be agreed by Hops
in its sole discretion in a future writing, Toomy shall have no rights with
respect to any restaurants other that those specifically provided for herein.
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3. EXTENT OF PARTICIPATION.
(a) In the event that Toomy timely accepts a Hops Offer to participate in
the development and operation of the Additional Restaurant(s) pursuant to the
provisions of Section 2(b) hereof, Toomy shall be entitled to participate in the
development and operation of the Additional Restaurant(s) only through the
Partnership (and any associated Second-Tier Partnership designated by Hops or
HSF) unless otherwise approved by Hops, in its sole discretion, upon the terms
provided for in this Agreement and the Partnership Agreement and Toomy shall
cause TC to:
(i) make the additional capital contributions and loan or guarantee
commitments, pro rata with HSF (or Hops or an affiliate of
Hops), necessary to fund the development and operation of any
such Additional Restaurant(s); and
(ii) execute the then current Operating Agreement (or similar
agreements) required for the Additional Restaurant(s).
(b) Hops' participation in any Additional Restaurant(s) may be through
Hops or HSF (or any other affiliate of Hops selected by Hops), in its sole
discretion.
(c) In the event that the development of any Additional Restaurants in
which Toomy shall exercise his right to participate hereunder, occurs through a
Second-Tier Partnership, unless otherwise agreed upon by Toomy, the Partnership
(or such other entity as designated by Hops which shall substitute for the
Partnership with respect to such Additional Restaurant) shall own a minimum of
eighty-eight and 9/10 percent (88.9%) of the equity of such Second-Tier
Partnership.
4. ADDITIONAL RESTAURANT AGREEMENTS.
(a) As soon as possible (but in any event within thirty (30) days) after
the mutual agreement to develop Additional Restaurant(s) as provided in Section
2(a) hereof or the acceptance by Toomy of any Hops Offer pursuant to Section
2(b) above, Toomy and TC shall, in good faith, negotiate and enter into, any
amendment to the Partnership Agreement reasonably
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requested by Hops or HSF to effectuate the development and operation of any such
Additional Restaurant(s).
(b) OPERATING AGREEMENT. In the event that Toomy shall exercise his option
to participate in the development and operation of the Additional Restaurant(s)
pursuant to the provisions of Section 2(b), Toomy hereby agrees and covenants to
execute with Hops and the Partnership (or any appropriate Second-Tier
Partnership) an Operating Agreement that specifies the terms and conditions upon
which the Additional Restaurant(s) are to be operated. Such Operating Agreement
shall conform in form and substance to the form of Operating Agreement (or
similar agreement) then in use by Hops; provided, however, that anything in this
Agreement to the contrary notwithstanding, the Operating Agreement (or similar
agreements) required to be executed by Toomy and/or TC with respect to
Additional Restaurants shall not contain terms which materially and adversely
alter the obligations of Toomy or TC as compared with the Operating Agreement
for the Initial Restaurant.
5. TERMINATION.
(a) This Agreement shall terminate on the date that is four (4) years from
the date of the opening of the Initial Restaurant to the public, unless sooner
terminated pursuant to the terms hereof.
(b) Hops shall have the right to terminate this Agreement immediately upon
written notice to Toomy stating the reason for such termination, and Toomy shall
no longer have any rights created by this Agreement in the event of:
(i) the filing by Toomy or TC of a petition in bankruptcy or an
arrangement for the benefit for reorganization; the filing
against Toomy or TC of a petition in bankruptcy, an arrangement
for the benefit of creditors, or petition for reorganization,
not dismissed within sixty (60) days of the filing thereof; the
making of an arrangement by Toomy or TC for the benefit of
creditors; or the appointment of a receiver or trustee for Toomy
or TC, which receiver or trustee shall not have been dismissed
within sixty days of such appointment; or
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(ii) the breach by Toomy or TC of this Agreement, the Partnership
Agreement or of any other agreement with HSF, Hops or any
affiliate thereof or any operating or other agreement related to
the Initial Restaurant or any Additional Restaurant(s). This
Agreement shall not be deemed terminated because of the breach
of the Partnership Agreement or any other agreement with HSF,
Hops or any affiliate thereof, during any period during which
Toomy or TC may cure any such breach pursuant to the terms of
the Partnership Agreement or any such other agreement, as
applicable.
(c) The obligations and limitations of Toomy and TC pursuant to Section 6
and Section 9(h) below shall survive any termination of this Agreement.
6. CONFIDENTIALITY; RESTRICTIONS UPON COMPETITION.
(a) CONFIDENTIALITY.
(i) CONFIDENTIAL INFORMATION. For purposes of this Agreement, the
term "Confidential Information" shall mean any and all
information disclosed or made known to Toomy or TC by Hops (or
its affiliates) or obtained by Toomy or TC, directly or
indirectly, as a consequence of or through Toomy's association,
dealings, discussions or relationship with Hops (or its
affiliates), which information is not generally known in the
industry in which Hops is or may become engaged, concerning Hops
or Hops' products, services, operations, processes, techniques,
research, engineering, development, programming, techniques of
application, properties, constructions, inventions, discoveries,
concepts, ideas, designs, methods, formulas, plans,
organization, accounting, intellectual property, marketing,
selling, purchasing, merchandising, contracting, leasing,
renting, computer programming, recording, manufacturing,
business plan(s), strategies, negotiations, advertising and/or
promotional concepts or materials, copy, logos, customers,
distributors, suppliers, agents, employees, representatives,
marketing contacts, prospects, references,
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business associates or otherwise associated persons or entities
and any and all other information which may be considered as the
proprietary or intellectual property or trade secret of Hops
under applicable law whether or not such information was
intentionally or unintentionally disclosed or made known to
Toomy or TC and whether or not such information is written or
complete and as it may exist from time to time.
(ii) USE AND DISCLOSURE OF INFORMATION. Toomy and TC recognize and
acknowledge that all and each item of Hops' Confidential
Information is a valuable, special, and unique asset of Hops and
the System. Toomy and TC further recognize and agree that such
Confidential Information must remain confidential in order to
maintain its value to both Hops and to all of the restaurant
operators operating under the System, both now and in the
future. Accordingly, Toomy and TC will not, directly or
indirectly, during or after the term of this Agreement, compete
by use of, disclose, disseminate, publish or use, or permit the
competition through use of, disclosure, dissemination,
publishing or use of the Confidential Information, or any part
thereof, to or for itself or any other person, group, firm,
corporation, association, or any other entity for any reason or
purpose whatsoever, except as may be required in the good faith
operation of the Initial Restaurant or Additional Restaurants.
Upon termination of this Agreement and the Operating Agreements
relating to the Initial Restaurant and each Additional
Restaurant, Toomy and TC shall immediately return to Hops all
System manuals and all other documents, records, notebooks,
computer disks or tape (or other computer storage media) and
similar repositories containing Confidential Information,
including all copies thereof, then in the possession, control or
influence of Toomy or TC, whether prepared by Hops (or its
affiliates), Toomy or TC or their respective employees or
affiliates or others.
(iii) BREACH OR THREATENED BREACH. In the event of a breach or
threatened breach by Toomy of the provisions of this Agreement,
Hops shall be
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entitled to an injunction (without the posting of bond),
restraining Toomy from using any of the Confidential Information
or from rendering any services to any person, firm, corporation,
association, or other entity to whom any of the Confidential
Information has been disclosed. Nothing herein shall be
construed as prohibiting Hops from pursuing any other remedies
available to it for such breach or threatened breach, including
the recovery of damages from Xxxxx, XX and/or any party or
parties to whom such disclosure has been made or who has (have)
been in any way involved in such breach or threatened breach or
who has (have) encouraged or solicited such breach or threatened
breach or who has (have) benefitted from such breach or
threatened breach. This agreement by Toomy and TC shall be
construed as an agreement independent of any other provision of
any agreement, and the existence of any claim or cause of action
of Xxxxx, XX or any other person or entity, whether predicated
on this Agreement or otherwise, shall not constitute a defense
to the enforcement of this Agreement by Hops or any other
person, firm, corporation or entity.
(b) RESTRICTIONS UPON COMPETITION.
(i) For a period which shall end upon the earlier of: (A) five (5)
years following the date of the opening of the Initial
Restaurant to the general public; (B) the date upon which Toomy
is no longer a direct or indirect owner of the Initial
Restaurant or any Additional Restaurant; or (C) the date upon
which neither Toomy nor TC is responsible for any restaurant
operating duties under any Operating Agreement, Toomy may not be
involved, directly or indirectly, in any manner or capacity
whatsoever, with any restaurant or restaurant concept, as Toomy
must devote his entire business time and energy to the Initial
Restaurant and the Additional Restaurants.
(ii) In addition to, and not in limitation of, the restrictions
contained in Section 6(a) hereof, during the term of this
Agreement and each Operating
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Agreement and for a period of five (5) years following the
termination of the last such Operating Agreement, Toomy and TC
shall not, directly or indirectly, within any state of the
United States (or similar jurisdiction within any foreign
country) in which Hops or its affiliates operates or licenses or
otherwise authorizes others to operate restaurants under the
System (the "Restricted Territory"), enter into or engage in any
business in competition with the business of Hops or its
affiliates (or any operator of restaurants under the Hops
System), as it now exists or may exist in the future, either as
an individual on his own account, or as a partner, joint
venturer, employee, agent, salesman, contractor, officer,
director, stockholder or otherwise. For purposes of this Section
6(b)(ii), a business shall be deemed competitive with the
business of Hops if it utilizes, directly or indirectly, a menu,
theme, design, motif, concept, method of operation or other
distinctive characteristic of the Hops System as it shall exist
from time to time. While not limiting the generality of the
preceding sentence, (A) any restaurant or bar operating its own
microbrewery (or affiliated with an entity which operates a
microbrewery) shall be deemed to be a direct competitor of Hops;
and (B) an "American-style" restaurant which does not utilize,
directly or indirectly, a menu, theme, design, motif, concept,
method of operation or other distinctive characteristic of the
Hops System as it shall exist from time to time shall not be
deemed competitive with the business of Hops. This covenant on
the part of Toomy and TC is made by Toomy and TC to induce Hops
to enter into this Agreement with Toomy and TC and to xxxxx
Xxxxx and TC access to Hops' Confidential Information and Toomy
and TC hereby acknowledges the sufficiency of the consideration
received by him and it for this covenant. This covenant on the
part of Toomy and TC shall be construed as an agreement
independent of any other provision in this Agreement or any
other Agreement between Toomy or TC and Hops (or any affiliate
of Hops); and the existence of any claim or cause of action
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of Toomy against Hops (or any affiliate of Hops), whether
predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by Hops of this covenant. It is
agreed by the parties hereto, however, that if any portion of
this covenant is held to be unreasonable, arbitrary or against
public policy, the covenant herein shall be considered divisible
both as to time and geographical area; and each month of the
specified period shall be deemed a separate period of time, and
each state, county or other political subdivision within the
Restricted Territory shall be deemed a separate geographical
area so that the lesser period of time or geographical area
shall remain effective so long as the same is not unreasonable,
arbitrary, or against public policy. The parties hereto agree
that, in the event any court determines the specified time
period or the specified geographical area covered by this
covenant to be unreasonable, arbitrary, or against public
policy, a lesser time period or geographical area which is
determined to be reasonable, non-arbitrary and not against
public policy may be enforced against Toomy and TC. It is
further agreed by the parties hereto that in the event of a
breach or violation or threatened breach or violation by Toomy
or TC of the provisions of this covenant, Hops shall be entitled
to an injunction (without the provision of bond by Hops)
restraining Toomy and/or TC from, directly or indirectly,
engaging in business in competition with Hops in breach or
violation of this covenant, and restraining Toomy and or TC from
any direct or indirect association with any person, firm,
corporation, association, partnership, venture or other entity
engaging in business in competition with Hops or its affiliates
in the Restricted Territory, whether directly or indirectly.
Nothing herein shall be construed as prohibiting Hops from
pursuing any other remedies available to it by law or by this
Agreement for breach, violation or threatened breach or
violation of the provisions of this covenant, including, by way
of illustration and not by way of limitation, the recovery of
damages from Toomy and TC or any other
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person, firm, corporation or entity. The provisions of this
covenant shall survive the termination of this Agreement for the
purpose of providing Hops with the protection of the covenants
of Toomy provided herein.
(iii) Toomy and TC hereby acknowledge that this covenant is a
reasonable and necessary requirement of Hops for the protection
of the legitimate and valid business interests of Hops and other
restaurant operators under the System. Toomy and TC hereby agree
that this covenant is a reasonable and necessary restraint of
trade and does not violate the Xxxxxxx Antitrust Act, the
Florida Antitrust Act or the common law. The parties hereto
specifically acknowledge and agree, for all purposes, that the
specified time period and the specified geographical area set
forth in this covenant is both reasonable and necessary for the
protection of Hops' interests.
(iv) Should an action have to be brought by Hops against Toomy or TC
to enforce this covenant, the period of restriction shall be
deemed to begin running on the date of entry of an order
granting Hops preliminary injunctive relief and shall continue
uninterrupted for the next succeeding five (5) year period.
Toomy and TC acknowledge and agree that the intent and purpose
of this covenant is to preclude Toomy and TC from competing with
Hops for a full five (5) year period and that such purpose and
effect would be frustrated by measuring the period of
restriction from the date of termination of Toomy's or TC's last
Operating Agreement where Toomy or TC failed to honor this
covenant until directed to do so by court order.
(v) The restrictions contained in Section 6(a) above shall not apply
to ownership of less than two percent (2%) of the shares of a
company whose shares are listed and traded on a national
securities exchange, if such shares are owned for investment
only, and are not owned by an officer, director, employee or
consultant of such publicly traded company.
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7. DISPUTE RESOLUTION.
(a) In the event there should arise any misunderstanding or disagreement
between the parties as to the compliance with the terms and conditions of this
Agreement, or as to whether either party has grounds hereunder entitling it to
terminate this Agreement, or any other dispute related to this Agreement
including arbitrability of the dispute, it is mutually agreed that such
differences, if they cannot be satisfactorily resolved between the parties
within thirty (30) days after either party seeking arbitration delivers notice
of same to the other party, shall be submitted to a single arbitrator, if the
parties agree upon one; otherwise, to a board of three arbitrators, of whom one
shall be selected by each party within twenty (20) days after such 30-day
period, and a third arbitrator shall be selected by these two selected
arbitrators. If one of the parties fails to timely select an arbitrator, the
arbitrator that was timely selected shall be the sole arbitrator. If neither
party timely selects an arbitrator, the first arbitrator selected thereafter
shall be the sole arbitrator, no others being appointed. Where each of the
parties timely selects an arbitrator, said arbitrators will have ten (10) days
from the end of the twenty (20) day period to select the third arbitrator. In
the event the arbitrators are unable to timely agree on the third arbitrator,
either party may petition any official of the American Arbitration Association
for appointment of the third arbitrator and the parties agree to accept any
arbitrator appointed by such official subject to the limitations hereof.
Arbitrators must be reasonably independent of the parties and their principals.
Persons who are hereby expressly disqualified to serve as arbitrators are
principals of the parties, relatives of said principals, employees of the
parties or said principals, persons not residing within 100 miles of Tampa,
Florida, attorneys, accountants and other business persons having professional
or business relationships with the parties or said principals.
(b) Arbitration shall proceed in accordance with the rules of the American
Arbitration Association. The arbitration shall be conducted in Tampa, Florida.
The arbitrators shall have all the powers permitted arbitrators under the laws
of the State of Florida. The decision and award of such single arbitrator, if
only one is used, or any two of such board if three are used, as the case may
be, shall be final and binding upon the parties, their heirs, legal
representatives, successors and assigns respectively, and shall have the same
force and effect as though such decision had been handed down by a court of
final jurisdiction. The cost of arbitrator(s) is to
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be shared equally by the parties. Each party shall be responsible for and shall
pay for the expenses of presenting its respective case, including depositions,
attorney's fees and costs and witness fees which expenses shall not be subject
to award by the arbitrator(s), nor shall such expenses be subject to award by
any court or other judicial authority. The parties shall deposit, at the
beginning of the arbitration process, with the arbitrator(s) an amount equal to
the estimated costs (including arbitrators' time charges) of the total
arbitration. Arbitrators' time charges shall be at the same rate for all
arbitrators. Each of the parties hereto covenants to abide by any arbitration
decision.
(c) In the event that it becomes necessary for any party to this Agreement
to enforce a decision of arbitration through legal proceedings, the parties
hereby agree that the Circuit Court for the Thirteenth Judicial Circuit in and
for Hillsborough County, Florida, Tampa Division, and the United States District
Court for the Middle District of Florida, Tampa Division, shall have exclusive
jurisdiction to hear and determine any such matters. Each party hereby expressly
submits and consents in advance to such jurisdiction and venue in any action or
proceeding whether commenced by or brought against them in either of such
Courts. In any such court proceeding the prevailing party shall be entitled to
reimbursement of all costs and expenses, which may be reasonably incurred or
paid in connection therewith, including without limitation, attorney's fees and
costs at the trial court and appellate court levels.
8. REPRESENTATIONS AND WARRANTIES. Toomy and TC hereby jointly and severally
acknowledge, represent, warrant and agree as follows:
(a) Toomy acknowledges that all documents, records and books pertaining to
the Partnership, the Initial Restaurant and the proposed Additional Restaurants
have been made available for inspection by him, his attorney, his accountant
and/or his other advisors. Toomy and/or his advisors have had a reasonable
opportunity to ask questions of and receive answers from representatives of Hops
and HSF concerning the Partnership, the Initial Restaurant and the proposed
Additional Restaurants, and to obtain additional information, to the extent
possessed or obtainable without unreasonable effort or expense, necessary to
verify the accuracy of the information contained in all documents and materials
that have been made available to him and/or his advisors. All such questions
have been answered to the full satisfaction of Toomy.
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No oral representations have been made or oral information furnished to Toomy or
his advisors in connection with his review of the documents, records and books
pertaining to the Partnership, the Initial Restaurant and the proposed
Additional Restaurants that were in any way inconsistent with such documents,
records and books.
(b) Toomy has been advised by Hops and HSF that the Partnership was formed
for the purpose of developing and operating certain "Hops Grill & Bar"
restaurants in the Territory; provided, however, that the decision as to the
actual development and the timing of the actual development of the Initial
Restaurant and the Additional Restaurants will rest solely with Hops and HSF and
may be influenced by numerous factors beyond the control of Hops, HSF, and
Toomy, some of which may not relate to the Partnership or its restaurant
operations and accordingly, the Initial Restaurant and the Additional
Restaurants may not be built in accordance with the original schedule, if any,
developed by Hops and HSF and, it is possible that, in a worst case, all or a
portion of the Initial Restaurant and the Additional Restaurants may not be
constructed. Additionally, once constructed, any decision regarding the
continued operation of some or all of the Initial Restaurant or the Additional
Restaurants, if any, will rest solely with HSF and may be influenced by factors
unrelated to the business of the Partnership.
(c) Toomy is aware that HSF is an affiliate of Hops and that as a part of
its business operations, Hops will be actively involved in the development and
operation of restaurants other than those to be owned and operated, directly or
indirectly, by the Partnership and that Toomy shall have no right in or to any
of the portion of the business operations or opportunities of Hops or its
affiliates other than those specifically granted to Toomy herein. Toomy
acknowledges that some of the restaurants that may be developed, directly or
indirectly, by Hops (other than the Initial Restaurant or the Additional
Restaurants to be developed hereunder) may directly or indirectly compete with
the restaurants to be developed and operated hereunder.
(d) Toomy (i) has adequate means of providing for his current needs and
possible personal contingencies, (ii) has no need for liquidity with respect to
his interest in the Partnership, (iii) is able to bear the substantial economic
risk of holding his interest in the Partnership for an indefinite period, (iv)
can afford a complete loss of his contributions to and obligations with respect
to the Partnership, and (v) does not have an overall commitment to assets that
are not readily marketable that is disproportionate to his net worth, and
Toomy's
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purchase of his interest in the Partnership will not cause such overall
commitment to become excessive.
(e) Toomy acknowledges and agrees that it is the parties' belief that, in
his hands, his interest in the Partnership does not constitute a security under
the Securities Act of 1933, as amended (the "Act"), or any applicable securities
laws. Toomy understands that neither the offering nor the sale of his interest
in the Partnership has been registered under the Act or any state securities
laws. Toomy further understands that in the event his interest in the
Partnership were determined to constitute a security under the Act or any
applicable state securities laws, his interest in the Partnership would have to
be held indefinitely unless (i) the sale or other transfer thereof were
registered under the Act, or (ii) an exemption from such registration were
available. Toomy further understands that (i) HPI has the right to purchase his
interest in the Partnership in the circumstances and on the terms specified in
the Partnership Agreement, and (ii) the transferability of his interest in the
Partnership is subject to the requirements of this Agreement and the Partnership
Agreement.
(f) Toomy's interest in the Partnership is being purchased solely for his
own account and not for the account of any other person and not for
distribution, assignment or resale to others and no other person has a direct or
indirect beneficial interest in Toomy's interest in the Partnership.
(g) Toomy hereby confirms to Hops, HSF and the Partnership that neither
the entry of performance of this Agreement or the Agreements for the Partnership
or any Second-Tier Partnership will cause Toomy to breach any existing agreement
or obligation of Toomy with any other person or entity.
9. MISCELLANEOUS.
(a) Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telegraphed or
telexed, or sent express mail, postage prepaid, and shall be deemed given when
so delivered personally, telegraphed or telexed, or if mailed, two days after
the date of mailing, as follows:
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Hops:
0000 Xxxxx Xxxxx Xxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Toomy:
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Toomy CLN, Inc.:
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx
(b) BINDING AGREEMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns; provided,
except as provided in Section 9(h) hereof that this Agreement may not be
assigned by any party without the consent of the other party to this Agreement.
(c) AMENDMENT. This Agreement may be amended only by an instrument in
writing executed by all of the parties to this Agreement.
(d) ENTIRE AGREEMENT. This Agreement, including the exhibits and other
documents referred to herein which form a part hereof, contains the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersede all prior arrangements or understandings with respect
thereto. There are no restrictions, agreements, promises, warranties, covenants,
or undertakings other than those expressly set forth herein or therein
(e) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
(f) GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Florida (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters including, but not limited to,
matters of validity, construction, effect and performance.
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(g) SEPARABILITY. If any section, subsection or other provision of this
Agreement, or the application of such section, subsection or provision, is held
invalid, then the remainder of this Agreement and the application of such
section, subsection or provision to person or circumstance other than those with
respect to which it is held invalid, shall not be affected thereby.
(h) ASSIGNMENT. Except as provided in this Section 9(h), neither this
Agreement nor the rights hereunder may be assigned by Toomy or TC. The parties
hereto understand that Toomy's participation in the Initial Restaurant and the
Additional Restaurants, if any, will be through TC. Toomy and TC hereby agree
that Toomy shall, at all times, retain a minimum of 51% of the equity interest
in and absolute voting and other control of TC. Toomy may sell or otherwise
assign up to 49% of the equity of TC to persons who have received the prior
written approval of Hops (which approval shall not be unreasonably delayed or
withheld). Any such transferee of an interest in such corporation may be
required, as a condition to the consent of Hops, to execute reasonable
confidentiality and transfer agreements as are deemed necessary by Hops to
assure the compliance by such transferees with the spirit of this Agreement.
Additionally, the Bylaws of TC shall reflect that the issuance and transfer of
shares of stock (or other equity interests in such corporation) is restricted by
the terms of this Agreement and the following legend shall appear conspicuously
upon the face of each stock certificate of (or certificate otherwise
representing an interest in) such corporation: "The transfer of this stock (or
interest) is subject to the terms and conditions of a Development Option
Agreement dated October 7, 1996 by and between Toomy and Hops and the Bylaws of
the corporation." Toomy hereby acknowledges that the purpose of the aforesaid
transfer restrictions and procedures is to protect the trademarks, trade secrets
and operating procedures of Hops. Toomy and TC hereby acknowledge that
non-compliance with the transfer restrictions and procedures set forth in this
Section 9(h) shall constitute a breach of this Agreement by Toomy and TC.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of
the date first above written.
HOPS:
HOPS GRILL & BAR, INC.
By: /s/ XXXXX X. XXXXX
----------------------------
Xxxxx X. Xxxxx, President
TC:
TOOMY CLN, INC.
By: /s/ XXXXX XXXXX
---------------------------
Xxxxx Xxxxx, President
TOOMY:
/s/ XXXXX XXXXX
------------------------------
Xxxxx Xxxxx, Individually
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