REPURCHASE AGREEMENT
This REPURCHASE AGREEMENT (this "Agreement") is made as of the 28 day
of October, 1997, by Xxxx X. Xxxxx, having an address at X.X. Xxx 000, Xxxxxxx,
Xxx Xxxx 00000 ("Xxxxx"), and Xxxxx Xxxxxxx, having an address at 0000 Xxxxxx
Xxx, 0, Xxxxxxx, Xxx Xxxx 00000 ("Xxxxxxx"), as the "Sellers", mid Jreck Subs,
Inc., a New York corporation ('"JSI") and Jreck Subs Group, Inc., a Colorado
corporation ("JSGI") each having an address at X.X. Xxx 0, Xxxxxxxxx, Xxx Xxxx
00000.
WHEREAS, the Sellers are members of Pastry Product Producers LLC, a New
York limited liability company (the "LLC"), which owns and operates a bakery;
and
WHEREAS, JSI is also a member of the LLC; and
WHEREAS, JSI is a wholly-owned subsidiary of JSGI; and
WHEREAS, the Sellers desire to sell to JSI, and JSI desires to purchase
from the Sellers, all of the Sellers' right, title, and interest in and to the
LLC and the bakery business conducted by it, including, without limitation, any
right or interest they may have as shareholders, organizers, incorporators, or
promoters of a corporation named Pastry Product Producers, Inc.; and
WHEREAS, the LLC is obligated to Xxxxx under Mortgage Note dated
September 20, 1996 (the "Note"), which is secured by a Mortgage by the LLC to
Xxxxx, dated September 20, 1996 and recorded September 25, 1996 (the
"Mortgage"), on which the outstanding principal amount on the date of this
Agreement is $150,222.00; and
WHEREAS, the agreed purchase price for the Sellers' LLC interests is
212,500 shares of common stock, no par value ("Common Stock") of JSGI, plus
options to purchase 37,500 shares of Common Stock, together with the additional
consideration set forth in this Agreement:
NOW, THEREFORE, the Sellers. JSI, and JSGI agree as follows:
1. The Sellers hereby sell, assign; and transfer to JSI all of their
respective right, title, and interest in and to Pastry Product Producers LLC,
including, without limitation, their respective membership interests therein.
2. Xxxxx and Xxxxxxx hereby sell, assign, and transfer to JSI all of
their respective right, title, and interest in and to Pastry Product Producers,
Inc., whether as shareholders, organizers, incorporators, or promoters. Xxxxx
and Xxxxxxx jointly and severally represent and warrant to JSI that Xxxxx and
Xxxxxxx (a) have not caused any corporation with such name or a similar name to
be incorporated and (b) own no stock certificates representing shares of stock
in any corporation with such name or a similar name.
3. JSGI hereby sells to Xxxxx a total of 106,250 shares of Common Stock
and to Xxxxxxx a total of 106,250 shares of Common Stock. Such shares are fully
paid and non-assemble. Upon the effectiveness of this Agreement JSGI shall
deliver to Xxxxx and Xxxxxxx certificates representing such shares.
4. JSGI hereby grants to Xxxxx options to purchase a total of 18,750
shares of Common Stock and to Xxxxxxx options to purchase a total of 18,750
shares of Common Stock. Such options shall be exercisable at any time between
October 28, 1998 and
-2-
October 28, 2008, in whole or in part and at one or more times. The option price
per share on each date of exercise shall be equal to fifty percent (50%) of (a)
the mean between the most recent bid and ask price per share as of such date, if
Common Stock is actively traded an established market on such date, or (b) the
fair market value per share of Common Stock as of such date, if Common Stock is
not actively traded on an established market on such date. The terms and
conditions of such grant are further set forth in the form of Option Agreement
attached as Exhibit A to this Agreement.
5. The Sellers are acquiring the shares of Common Stock and options
under this Agreement for their own account with the present intention of holding
such securities for purposes of investment, and they have no intention of
selling such securities in a public distribution in violation of the federal
securities laws or any applicable state securities laws. The Sellers understand
that such Common Stock and options have not been registered under the Securities
Act of 1933 and may not be offered or sold by them except in accordance with the
provisions of such Act and applicable state securities laws.
6. The terms of the Note shall be amended, effective on the date of
this Agreement, to provide for level monthly payments $2,493.84 each, which
shall amortize the principal over a period of 7 years, at the interest rate of
10% per annum. The Note shall be replaced by a Replacement Note in the form of
Exhibit B to this Agreement.
7. To secure the obligations of the LLC under this Agreement and the
Note, the LLC shall grant a security interest to Xxxxx in accounts receivable,
under a Security Agreement in the form of Exhibit C to this Agreement and shall
deliver UCC-1 financing statements describing such collateral security to Xxxxx
for filing with the Jefferson County
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Clerk and the New York Secretary of State.
8. JSI and JSGI will pay all amounts payable under leases of the LLC's
equipment which have been guaranteed by Xxxxx, and will cause all other
obligations incurred from time to time by the LLC, to be paid on a current
basis.
9. JSI and JSGI agree that the Sellers shall have the option of being
partners in the construction and operation of the next bakery to by built by
JSGI or any of its affiliates.
10. Each Seller covenants that such Seller will not, during the period
commencing an the date of this Agreement and ending October 31, 1999, either
alone, or jointly with, or a partner of, co-venturer of, owner of 10% or more of
the common stock of, or member of, any person or entity, compete with the LLC,
JSI, or JSGI in the business of owning or operating a bakery located in New York
State which sells or distributes bagels, sandwich rolls, or any other baked
goods to bagel stores or Jreck Subs shops.
11. JSI and JSGI shall jointly and severally defend and indemnify the
Sellers and their respective successors and assigns and hold them harmless from
and against any and all liabilities, obligations, damages, and expenses
resulting from any and all claims against the LLC or against or in connection
with the bakery business of the LLC or the accounts or business arrangements of
such bakery business.
12. This Agreement will become effective upon the delivery to the
Sellers of fully-executed copies of an Option Agreement substantially in the
form of Exhibit A, a Replacement Note substantially in the form of Exhibit B, a
security agreement substantially in one form of Exhibit C, UCC-1 financing
statements with respect to the accounts receivable of
-4-
the LLC to be pledged as collateral, and a Mortgage Modification Agreement with
respect to the Mortgage.
13. JSI and JSGI each represent and warrant to the Sellers that this
Agreement, the transactions contemplated by this Agreement and performance of
their respective obligations hereunder have been duly approved by their
respective Boards of Directors at meetings thereof or by unanimous written
consent.
14. All notices provided for under this Agreement shall be in writing
and shall be delivered by hand or sent by certified mail to the addresses set
forth above or to such other addresses that the respective parties may designate
in writing.
15. This Agreement shall be governed by and construed under the laws of
the State of New York without reference to conflict-of-law principles.
16. No term, condition, understanding or agreement purporting to modify
the terms of this Agreement shall be binding unless made in writing and signed
by all of the parties hereto.
17. No failure of a party to exercise any power given to such party
under this Agreement or to insist upon strict compliance with any obligation or
condition hereunder, and no custom or practice of the parties at variance with
the terms hereof, shall constitute a waiver by any party of such party's right
to demand exact compliance with the terms of this Agreement.
-5-
18. This Agreement shall be binding upon the parties and their
respective successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
/s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
/s/ Xxxxx Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx
JRECK SUBS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
------------------------------
Title: President
JRECK SUBS GROUP, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
------------------------------
Title: C.E.O.
XXXXXX X. XXXXXXX, XX.
Notary Public, State of New York
Qualified in Jefferson County
Commission Expires Sept. 22, 1998
No. 4870284
/s/ Xxxxxx X. Xxxxxxx, Xx.
Notary Public
-6-
SECURITY AGREEMENT
In consideration of the Repurchase Agreement dated October 28, 1997
(the "Repurchase Agreement") between Xxxx X. Xxxxx (the "Secured Party") and
Xxxxx Xxxxxxx, as the "Sellers," and Jreck Subs, Inc. ("JSI") and Jreck Subs
Groups, Inc. ("JSGI") and the transactions contemplated in such Repurchase
Agreement, the undersigned Pastry Producers LLC (the "LLC") agrees with the
Secured Party as follows:
1. Security Interest. The LLC hereby pledges to and grants the Secured
Party a security interest in the property described in Schedule "A* hereto (as
the same may be supplemented or amended hereafter) and any other property of the
LLC now or hereafter in the possession or control of the Secured Party for any
purpose, together with all attachments, parts, accessions and repairs now or
hereafter affixed thereto, any substitutes and replacements for any thereof, any
additions thereto, any dividends and distributions and all other rights in
connection therewith, and all products and proceeds in whatever form of any such
property (all of the foregoing hereafter collectively referred to as the
"Collateral").
2. Indebtedness. This security interest secures all indebtedness,
obligations and liabilities of the LLC or Xxxxxxxxxxx X. Xxxxxx ("Xxxxxx") to
the Secured Party of any kind, direct or contingent, now existing or hereafter
arising, including in connection therewith the obligations of the LLC or Xxxxxx
under the Replacement Note referred to in the Repurchase Agreement and all other
principal, interest, costs and expenses or every kind (hereafter collectively
referred to, as the "Indebtedness").
3. The LLC's Representations and Warranties. The LLC hereby represents and
warrants as follows: (a) the LLC is the true and sole owner of the Collateral;
(b) the Collateral is free and clear of all liens and encumbrances and there are
no financing statements, security agreements, or other similar documents
covering any of the Collateral; (c) this Agreement constitutes the legal, valid,
and binding obligation of the LLC; and (d) the granting of the security interest
by this Agreement will not contravene any contract provision binding upon the
LLC.
4. Covenants of the LLC. (a) The LLC will not sell, offer to sell,
grant a security interest in, or permit to exist any other lien or encumbrance
upon the Collateral or any interest therein without the written consent of the
Secured Party; (b) the LLC will preserve its existence as a New York limited
liability company; (c) the LLC will defend the Collateral against the claims and
demands of all other parties; (4) the LLC authorizes the Secured Party to file a
financing statement covering the Collateral without the LLC's signature and to
take any other action, in his own name or in the name of the LLC, as the LLC's
attorney-in-fact, which the Secured Party deems necessary or appropriate to
perfect the security interest granted hereby. The LLC agrees to take any action
requested by the Secured Party to perfect and enforce the rights of the Secured
Party granted by this Agreement; (e) the LLC authorizes the Secured Party to
inspect the LLC's books and records pertaining to the Collateral at any
reasonable time upon request, and the LLC shall cooperate with the Secured Party
in such inspection; provided, however, that, so long as no Event of Default has
occurred and is continuing, the LLC shall not be obligated to permit such
inspection more frequently than once every sixty days; (f) after an Event of
Default has occurred and is continuing, the LLC on demand shall pay the Secured
Party all his expenses (referred to herein as "Collateral
-2-
Expenses") related to the perfecting, taking, holding, preparing for
disposition, and disposing of the Collateral, including reasonable attorneys'
fees and legal expenses incurred in protecting and enforcing the Secured Party's
rights with respect to the Collateral.
5. Events of Default. The occurrence of any one of the following shall
be deemed an "Event of Default" under this Agreement: (a) default in any payment
of principal, interest, or other amount when due with respect to any part of the
Indebtedness and, if provided by any note or other writing evidencing such
Indebtedness, the continuance of such default for any grace period allowed after
the due date; (b) failure of the LLC or Xxxxxx to fulfill or perform any term of
any instrument or agreement of the LLC or Xxxxxx issued to or entered into with
the Secured Party; (c) dissolution of the LLC; or (d) commencement of any
bankruptcy, receivership or similar proceeding involving the LLC or Xxxxxx as a
debtor.
6. The Secured Party Rights Following Default. Upon the occurrence of
any Event of Default as defined above, the Secured Party shall have all the
rights and remedies available to a secured party under the New York Uniform
Commercial Code and otherwise available to it by any agreement with the LLC or
Xxxxxx or under the law of New York, including (a) those rights and remedies
available under any written instrument or agreement relating to any
Indebtedness; (b) to sell, lease, or otherwise dispose of, all or any part of
the Collateral at public or private sale; (c) to apply the proceeds from the
sale, lease, or other disposition of the Collateral to the payment of all
Collateral Expenses, and any balance to the payment of such of the Indebtedness,
and in such order, as the Secured Party may elect. The LLC shall pay any
deficiency remaining after such application. If a notice of intended disposition
of any of the Collateral is required by law, notice shall be deemed reasonably
-3-
given if received by the LLC at least five days prior to such disposition or if
mailed to the LLC at the LLC's last known address at least eight days prior to
such disposition.
7. Miscellaneous Provisions. (a) In addition to all other rights the
Secured Party may have, the Secured Party may, after the occurrence any Event of
Default: (j) notify the parties obligated on any of the Collateral to make
payment directly to the Secured Party on any amounts due or to become due
thereunder; (ii) enforce collection of any of the Collateral by suit or
otherwise; (iii) surrender, release or exchange all or any part of the
Collateral; (iv) compromise or extend or renew for any period (whether or not
longer than the original period) any Indebtedness; (v) take control of any
proceeds of the Collateral; and (vi) separately or concurrently with an exercise
of rights hereunder, exercise such additional rights and powers, if any, with
respect to any other security for or guaranty of any of the Indebtedness, as may
be provided in any written instrument. (b) The Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
if it takes such action as the LLC shall request in writing, but failure of the
Secured Party to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care. A failure of the Secured Party to preserve
or protect any rights with respect to the Collateral against prior parties, or
to do any act with respect to preservation of the Collateral not so requested by
the LLC, shall not be deemed a failure to exercise reasonable care in the
custody of the Collateral. (c) No course of dealing between the Secured Party
and the LLC, nor any delay or omission on the part of the Secured Party in
exercising any right hereunder, shall operate as a waiver of such right or of
any other right under this Agreement. (d) No waiver, release, modification or
rescission pertaining to this Agreement shall be effective unless in writing and
signed by the Secured Party nor shall a waiver on one occasion be
-4-
construed as a waiver on any future occasion. (e) The LLC authorizes the Secured
Party and hereby constitutes and appoints the Secured Party as the LLC's true
and lawful attorney-in-fact, irrevocably to verify the existence and scope of,
protect, preserve and realize upon the Collateral, and to endorse checks, drafts
and orders received from the sale, lease or other disposition of the Collateral
and apply the proceeds of any such checks, drafts or orders upon the
Indebtedness in such order as the Secured Party in his discretion chooses. (f)
This Agreement shall be binding upon the heirs, successors and assigns of the
LLC. It shall be interpreted and construed in accordance with the laws of New
York State, without reference to conflict-of-laws principles.
DATED: October 28, 1997 PASTRY PRODUCT PRODUCERS LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Title: President
XXXXXX X. XXXXXXX, XX.
Notary Public, State of New York
Qualified in Jefferson County
Commission Expires Sept. 22, 1998
No. 4870284
/s/ Xxxxxx X. Xxxxxxx, Xx.
Notary Public
-5-
SCHEDULE "A" - PROPERTY
(1) All of the LLC's now owned or hereafter acquired accounts (including
but not limited to accounts receivable and contract rights), chattel
paper, documents and instruments, including the right to receive
payment under any of the foregoing.
(2) All proceeds of any of the foregoing.
EXHIBIT C
SECURITY AGREEMENT
In consideration of the Repurchase Agreement dated October 28, 1997
(the "Repurchase Agreement") between Xxxx X. Xxxxx (the "Secured Party") and
Xxxxx Xxxxxxx, as the "Sellers," and Jreck Subs, Inc. ("JSI") and Jreck Subs
Group, Inc. ("JSGI") and the transactions contemplated in such Repurchase
Agreement, the undersigned Pastry Product Producers LLC (the "LLC") agrees with
the Secured Party as follows:
1. Security Interest. The LLC hereby pledges to and grants the Secured
Party a security interest in the property described in Schedule "A" hereto (as
the same may be supplemented or amended hereafter) and any other property of the
LLC now or hereafter in the possession or control of the Secured Party for any
purpose, together with all attachments, parts, accessions and repairs now or
hereafter affixed thereto, any substitutes and replacements for any thereof, any
additions thereto, any dividends and distributions and all other rights in
connection therewith, and all products and proceeds in whatever form of any such
property (all of the foregoing hereafter collectively referred to as the
"Collateral").
2. Indebtedness. This security interest secures all indebtedness,
obligations and liabilities of the LLC or Xxxxxxxxxxx X. Xxxxxx ("Xxxxxx") to
the Secured Party of any kind, direct or contingent, now existing or hereafter
arising, including in connection therewith the obligations of the LLC or Xxxxxx
under the Replacement Note referred to in the Repurchase Agreement and all other
principal, interest, costs and expenses of every kind (hereafter collectively
referred to as the "Indebtedness").
3. The LLC's Representations and Warranties. The LLC hereby represents
and
warrants as follows: (a) the LLC is the true and sole owner of the Collateral;
(b) the Collateral is free and clear of all liens and encumbrances and there are
no financing statements, security agreements, or other similar documents
covering any of the Collateral; (c) this Agreement constitutes the legal, valid,
and binding obligation of the LLC; and (d) the granting of the security interest
by this Agreement will not contravene any contract provision binding upon the
LLC.
4. Covenants of the LLC. (a) The LLC will not sell, offer to sell,
grant a security interest in, or permit to exist any other lien or encumbrance
upon the Collateral or any interest therein without the written consent of the
Secured Party; (b) the LLC will preserve its existence as a New York limited
liability company; (c) the LLC will defend the Collateral against the claims and
demands of all other parties; (d) the LLC authorizes the Secured Party to file a
financing statement covering the Collateral without the LLC's signature and to
take any other action, in his own name or in the name of the LLC, as the LLC's
attorney-in- fact, which the Secured Party deems necessary or appropriate to
perfect the security interest granted hereby. The LLC agrees to take any action
requested by the Secured Party to perfect and enforce the rights of the Secured
Party granted by this Agreement; (e) the LLC authorizes the Secured Party to
inspect the LLC's books and records pertaining to the Collateral at any
reasonable time upon request, and the LLC shall cooperate with the Secured Party
in such inspection; provided however, that, so long as no Event of Default has
occurred and is continuing, the LLC shall not be obligated to permit such
inspection more frequently then once every sixty days; (f) after an Event of
Default has occurred and is continuing, the LLC on demand shall pay the Secured
Party all his expenses (referred to herein as "Collateral
-2-
Expenses") related to the perfecting, taking, holding, preparing for
disposition, and disposing of the Collateral, including reasonable attorneys'
fees and legal expenses incurred in protecting and enforcing the Secured Party's
rights with respect to the Collateral.
5. Events of Default. The occurrence of any one of the following shall
be deemed an "Event of Default" under this Agreement: (a) default in any payment
of principal, interest, or other amount when due with respect to any part of the
Indebtedness and, if provided by any note or other writing evidencing such
Indebtedness, continuance of such default for any grace period allowed after the
due date; (b) failure of the LLC or Xxxxxx to fulfill or perform any term of any
instrument or agreement of the LLC or Xxxxxx issued to or entered into with the
Secured Party; (c) dissolution of the LLC; or (d) commencement of any
bankruptcy, receivership or similar proceeding involving the LLC or Xxxxxx as a
debtor.
6. The Secured Party's Rights following Default. Upon the occurrence of
any Event of Default as defined above, the Secured Party shall have all the
rights and remedies available to a secured party under the New York Uniform
Commercial Code and otherwise available to it by any agreement with the LLC or
Xxxxxx or under the law of New York, including (a) those rights and remedies
available under any written instrument or agreement relating to any
Indebtedness; (b) to sell, lease, or otherwise dispose of, all or any part of
the Collateral at public or private sale; (c) to apply the proceeds from the
sale, lease, or other disposition of the Collateral to the payment of all
Collateral Expenses, and any balance to the payment of such of the Indebtedness,
and in such order, as the Secured Party may elect. The LLC shall pay any
deficiency remaining after such application. If a notice of intended disposition
of any of the Collateral is required by law, notice shall be deemed reasonably
-3-
given if received by the LLC at least five days prior to such disposition or if
mailed to the LLC at the LLC's last known address at least eight days prior to
such disposition.
7. Miscellaneous Provisions. (a) In addition to all other rights the
Secured Party may have, the Secured Party may, after the occurrence any Event of
Default: (i) notify the parties obligated on any of the Collateral to make
payment directly to the Secured Party on any amounts due or to become due
thereunder; (ii) enforce collection of any of the Collateral by suit or
otherwise; (iii) surrender, release or exchange all or any part of the
Collateral; (iv) compromise or extend or renew for any period (whether or not
longer than the original period) any Indebtedness; (v) take control of any
proceeds of the Collateral; and (vi) separately or concurrently with an exercise
of rights hereunder, exercise such additional rights and powers, if any, with
respect to any other security for or guaranty of any of the Indebtedness, as may
be provided in any written instrument. (b) The Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
if it takes such action as the LLC shall request in writing, but failure of the
Secured Party to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care. A failure of the Secured Party to preserve
or protect any rights with respect to the Collateral against prior parties, or
to do any act with respect to preservation of the Collateral not so requested by
the LLC, shall not be deemed a failure to exercise reasonable care in the
custody of the Collateral. (c) No course of dealing between the Secured Party
and the LLC, nor any delay or omission on the part of the Secured Party in
exercising any right hereunder, shall operate as a waiver of such right or of
any other right under this Agreement. (d) No waiver, release, modification or
rescission pertaining to this Agreement shall be effective unless in writing and
signed by the Secured Party nor shall a waiver on one occasion be
-4-
construed as a waiver on any figure occasion. (e) The LLC authorizes the Secured
Party and hereby constitutes and appoints the Secured Party as the LLC's true
and lawful attorney-in-fact, irrevocably to verify the existence and scope of,
protect, preserve and realize upon the Collateral, and to endorse checks, drafts
and orders received from the sale, lease or other disposition of the Collateral
and apply the proceeds of any such checks, draft or orders upon the Indebtedness
in such order as the Secured Party in his discretion chooses. (f) This Agreement
shall be binding upon the heirs, successors and assigns of the LLC. It shall be
interpreted and construed in accordance with the laws of New York State, without
reference to conflict-of-laws principles.
DATED: October 28, 1997 PASTRY PRODUCT PRODUCERS LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Title: President
XXXXXX X. XXXXXXX, XX.
Notary Public, State of New York
Qualified in Jefferson County
Commission Expires Sept. 22, 1998
No. 4870284
/s/ Xxxxxx X. Xxxxxxx, Xx.
Notary Public
-5-
EXHIBIT "A"
ALL THAT TRACT OR PARCEL Of LAND situate on the westerly side of Route 37, in
the Town of Xxxxxxx, County of Jefferson, State of New York, being a 3.60 acre
portion of the 73.9 acre tract of land conveyed to Xxxxxxx X. Xxxxxx and Xxxxx
X. Xxxxxx by the Willowbrook Country Club Inc. Nov. 10, 1983 (reference L. 935,
p. 695, Jefferson County Clerk's office) and further described as follows:
BEGINNING at a one inch diameter iron pipe set in the westerly margin of N.Y.
State Route 37 said iron pipe being situate S. 31(degrees) - 22' W. a distance
of 51.0 feet from an iron pin that is the southerly corner of a 3.08 acre parcel
of land formerly conveyed to Xxxxx X. Xxxxxx by Willowbrook Country Club Inc.
1963, (ref. L. 735, P. 416 Xxxx. Co. Xxxxx'x office) and presently owned by
Xxxxxxx X. and Xxxxx X. Xxxxxx; said one inch dia. iron pipe being also the most
northerly corner of a 0.31 acre strip of land acquired for highway widening in
1931 (ref. L. 399 P. 439, Xxxx. Co. Xxxxx'x office) Xxxxx X. Xxxxx to the County
of Jefferson:
THENCE S. 37(degrees) - 02' W. a distance of 222.0 feet along the westerly
boundary of said 0.31 acre strip of land conveyed to Xxxx. County to a one inch
dia. iron pipe set:
THENCE S. 31(degrees) - 22' W. a distance of 229.0' along the westerly boundary
of said 0.31 acre strip of land conveyed to Xxxx. County to a one. inch iron
pipe set:
THENCE N. 64(degrees) - 12' W. a distance of 350.0 feet to a one inch dia. iron
pipe set:
THENCE N. 31(degrees) - 22' E. a distance of 450.0 feet to a one inch dia. iron
pipe set:
THENCE S. 64(degrees) - 12' a distance of 360.9 feet to a one inch iron pipe set
in the westerly margin of N.Y. State Route 37, which is the point of beginning.
CONTAINING 3.60 acres more or less.
Being a part of premises conveyed from Willowbrook Country Club Inc. to Xxxxxxx
X. Xxxxxx and Xxxxx X. Xxxxxx by deed dated and recorded November 11, 1983 in
Liber 935 of Deeds at Page 695.
More recently described as:
ALL that tract or parcel of land situate in the Town of Xxxxxxx, County of
Jefferson, and State of New York, and further described as follows:
EXHIBIT "A" continued
BEGINNING at a capped pin set in the westerly highway limits of NYS Route 37,
said capped pin is situate a direct tie of S 77(degrees) 57' W, 62.15 feet from
the intersection of the centerline of XXX Xxxxx 00 and the centerline of Xxxxx
Road;
THENCE N 64(degrees) 12' W, a distance of 350.00 feet to a capped pin set;
THENCE N 31(degrees) 22' E, a distance of 447.78 feet to a capped pin set;
THENCE S 64(degrees) 12' E, a distance of 372.02 feet to a I" iron pipe found in
the westerly highway limits of NYS Route 37;
THENCE S 37(degreed) 02' W, along the westerly highway limits of XXX Xxxxx 00, a
distance of 222.00 feet to a capped pin set at an angle point in said highway
limits;
THENCE S 31(degrees) 22' W, along the westerly highway limits of XXX Xxxxx 00, a
distance of 229.00 feet to the point of beginning.
CONTAINING - 3.636 acres of land more or less.
SUBJECT to all covenants, casements and restrictions of record.
IT BRING the intent, to describe the parcel of land conveyed by Xxxxx X. Xxxxx,
Referee, to Key Bank of New York N.A. n/k/a Key Bank of New York by deed
recorded in the Jefferson County Xxxxx'x office in Liber 1345 at Page 226 on May
12, 1993.
-2-
OPTION AGREEMENT
The undersigned JRECK SUBS GROUP, INC., a Colorado corporation with
offices at 00000 XXX Xxxxx 00, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter referred
to as the "Company") hereby grants to XXXX X. XXXXX, having an address at X.X.
Xxx 000, Xxxxxxx, Xxx Xxxx (the "Optionee"), options to purchase 18,750 shares
of the Company's common stock upon the terms and conditions hereinafter set
forth:
1. Grant of Options. By this Agreement, the Company grants to the
Optionee, on the terms and conditions set forth herein, options (individually or
collectively referred to as the "Options") to purchase 18,750 shares of its
common stock, no par value (the "Common Stock"), at the purchase price per share
(the "Exercise Price") equal to fifty percent (50%) of (a) the mean between the
most recent bid and ask price per share as of the date of exercise, if Common
Stock is actively traded on an established market on such date, or (b) the fair
market value per share of Common Stock as of the date of exercise, if Common
Stock is not actively traded on an established market at such date,
2. Term of Options. The Options shall be exercisable during the period
(the "Exercise Period") from and after October 31. 1998 and, shall terminate on
the close of business on October 31, 2008 (the "Expiration Date").
3. Exercise of Options. The Optionee may exercise the Options from time
to time, in whole or in part, at any time during the Exercise Period, by giving
written notice to the Company of such exercise and of the number of shares the
Optionee has elected to purchase. The purchase price per share of the Options
shall be the Exercise Price. The full Exercise Price of the shares as to which
the Options are being exercised shall be paid in cash or certified or cashier's
check.
4. Shareholder Rights. No Option shall confer any rights as a
shareholder with respect to the share subject to such option until the date the
Optionee exercises such Option. The Company shall deliver to the Optionee a
certificate representing the shares as to which Options have been exercised as
soon as administratively feasible following such exercise.
5. Adjustments.
a. If the Company shall at any time subdivide its outstanding
shares of common stock (or other securities at the time receivable upon the
exercise of the Options) by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or distribute shares
of common stock (or any other security convertible into shares of common stock)
to its shareholders, the number of shares of common stock subject to this
Agreement immediately prior to such subdivision shall be proportionately
increased, and if the Company shall at any time combine the outstanding shares
of common stock by
recapitalization, reclassification, reverse stock split, at combination thereof,
the number of shares of common stock subject to this Agreement immediately prior
to such combination shall be proportionately decreased.
b. In case of any reorganization of the Company (or any other
corporation, the securities of which are at the time receivable on the exercise
of Options) of if the Company (or any such other corporation) shall consolidate
with or merge into another corporation or convey all or substantially all of its
assets to another corporation, then, and in each such case, the Optionee, upon
the exercise of any Options at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be entitled to
receive in lieu of the securities and property receivable upon the exercise of
the Options prior to such consummation, the securities or property to which the
Optionee would have been entitled upon such consummation if the Optionee had
exercised the Options immediately prior thereto; in each such case, the terms of
this Agreement shall be applicable to the securities or property received upon
the exercise of the Options after such consummation.
6. Reserved Shares. The Company shall reserve sufficient authorized but
unissued shares of its Common Stock (or other securities, its referred to in
Section 5 above) so that, at any time on or prior to the Expiration Date,
authorized shares of Common stock (or other securities, as referred to in
Section 5 above) may be issued upon the exercise of all Options under this
Agreement.
7. Notices. All notices provided for under this Agreement shall be in
writing and shall be delivered by hand or sent by certified mail to the
addresses set forth above or to such other addresses that the respective parties
may designate in writing.
8. Interpretation. This Agreement shall be governed by and construed
under the laws of the State of New York without reference to conflict-of-law
principles.
9. Amendment. No term, condition, understanding or agreement purporting
to modify the terms of this Agreement shall be binding unless made in writing
and signed by both parties hereto.
10. Waiver. No failure of a party to exercise any power given to it
under this Agreement or to insist upon strict compliance with any obligation or
condition hereunder, and no custom or practice of the parties at variance with
the terms hereof, shall constitute a waiver by such party of its rights to
demand exact compliance with the terms of this Agreement.
11. Binding, etc. This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of the Optionee and
his or her heirs, executors, and administrators.
-2-
IN WITNESS WHEREOF, the undersigned JRECK SUBS GROUP, INC. has caused
this Option Agreement to be executed by its duly authorized officer as of the 28
day of October, 1997.
JRECK SUBS GROUP, INC,
By: Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
-------------------------------
Title: C.E.O.
XXXXXX X. XXXXXXX, XX.
Notary Public, State of New York
Qualified in Jefferson County
Commission Expires Sept. 22, 1998
No. 4870284
/s/ Xxxxxx X. Xxxxxxx, Xx.
Notary Public
-3-
REPLACEMENT NOTE
$150,222.00 October 28,1997
FOR VALUE RECEIVED, PASTRY PRODUCT PRODUCERS LLC, having an address at
00000 XXX XXXXX 00, XXXXXXXXX, X.X. 00000 (the "LLC"), and XXXXXXXXXXX X.
XXXXXX, having an address at 000 XXXXXX XXXXX, XXXXXXXXX, X.X. 00000 ("Xxxxxx"
and, together with the LLC, collectively hereinafter referred to as "Maker"),
hereby jointly and severally covenant and promise to pay to XXXX X. XXXXX having
an address at XXX 000, XXXXXXX, XXX XXXX 00000 ("Payee"), or order, at Payee's
address first above written or at such other address as Payee may designate in
writing, One Hundred Fifty Thousand Two Hundred Twenty-Two Dollars
($150,222.00), lawful money of the United States of America, together with
interest thereon computed from the date hereof at the rate of 10 percent per
annum. Maker shall make 84 level monthly payments of combined principal and
interest of $2,493.84 each, commencing on the 1st day of December,1997, and
continuing on the1st day of each month thereafter. All outstanding principal and
interest shall be due and payable on November 1st, 2004, if not theretofore
paid.
The holder of this Note may declare the entire unpaid amount of
principal and interest under this Note to be immediately due and payable if (1)
Maker defaults in the due and punctual payment or performance of any obligation
under this Note or under any collateral security agreement or document in
connection herewith, and (2) Maker has not cured such default within 30 days
after Payee has sent notice of such default either to Xxxxxx or to the LLC.
Maker shall have the right to prepay the indebtedness evidenced by this
Note, in whole or in part, without penalty, upon ten calendar days prior written
notice to Payee. Each prepayment will be effective as at the end of a calendar
month which is at least ten calendar days after such prepayment. After such
prepayment, Payee shall recalculate the payment schedule so that Maker shall be
obligated to make level monthly payments from and after the date of such
prepayment through November1, 2004. Each payment or prepayment shall be applied
first to unpaid interest due and owing and the, balance, if any, to principal.
Maker hereby waives presentment for payment, demand, protest, notice of
protest, notice of nonpayment, and notice of dishonor of this Note. The parties
which comprise the Maker hereunder shall be the joint and several obligors under
this Note.
Any notice or demand required or permitted to be made or given
hereunder shall be deemed sufficiently made and given if given by personal
service or by the mailing of such notice or demand by certified or registered
mail, return receipt requested, addressed, if to Maker, either to Xxxxxx or to
the LLC at their respective addresses first above written, or if to Payee, at
Payee's address first above written. Any party may change its address by like
notice to the other parties.
Maker agrees to pay all costs of collection and the reasonable
attorneys' fees of Payee in the event this Note is placed in the hands of an
attorney for collection.
This Note may not be changed or terminated orally, but only by an
agreement in writing signed by the party against whom enforcement of any change,
modification, termination, waiver, or discharge is sought. This Note shall be
construed and enforced in
-2-
accordance with the laws of the State of New York, without reference to
conflict-of-laws principles.
This Note evidences an amendment of, and not a repayment or reborrowing
of, certain indebtedness evidenced by (1) a Promissory Note dated June 17, 1996
of Xxxxxx in favor of Payee, and (2) a Mortgage Note dated September 20, 1996 of
the LLC in favor of Payee. Maker and Payee agree that Maker's obligations under
this Replacement Note replace Maker's obligations under such other Notes in
their entirety. IN WITNESS WHEREOF, Maker has executed this Note as of the date
first above written.
/s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxxxxxx X. Xxxxxx
PASTRY PRODUCT PRODUCERS LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Title: President
/s/ Xxxx X. Xxxxx
-------------------------------
Xxxx X. Xxxxx
XXXXXX X. XXXXXXX, XX.
Notary Public, State of New York
Qualified in Jefferson County
Commission Expires Sept. 22, 1998
No. 4870284
/s/ Xxxxxx X. Xxxxxxx, Xx.
Notary Public
-3-
CONSULT YOUR LAWYER
BEFORE SIGNING THIS INSTRUMENT - THIS INSTRUMENT SHOULD 89 USED By LAWYERS ONLY.
MORTGAGE NOTE
$150,222.00 Watertown, New York, September 20, 1996
FOR VALUE RECEIVED, Pastry Product Producers LLC, a limited liability company
organized under New York law, and having so address of Route 37. Xxxxxxxxx, Xxx
Xxxx 00000,
promised to pay to Xxxx X. Xxxxx, having an address at X.X. Xxx 000, Xxxxxxx,
Xxx Xxxx 00000,
or order, at Watertown, New York,
or at such other place as may be designated in writing by the holder of this
note, the principal sum of One Hundred Fifty Thousand, Two Hundred Twenty-Two
dollars and zero cents ($150,222.00) , said sum to be due and payable to full on
September 20, 2001,
with interest thereon to be computed from the date hereof, at the rate of Nine
(9) per centum per annum and to be paid on the lst day of January 1997, next
ensuing and each calendar quarter thereafter being the first day of each April,
July, October and January thereafter, until all amounts outstanding under this
Note are paid to full.
IT 15 HEREBY EXPRESSLY AGREE, that the said principal sum secured by this note
shall became due at the option of the holder thereof on the happening of any
default or event by which, under the terms of the mortgage securing this note,
said principal sum may or shall become due and payable; also, that all of the
covenants, conditions and agreements contained in said mortgage are hereby made
part of this instrument.
Presentment for payment, notice of dishonor, protest and notice of protest are
hereby waived.
This note is secured by a mortgage made by the maker to the payee of even date
herewith, on property situate in the Town of Xxxxxxx, Jefferson County, New
York.
This note may not be changed or terminated orally.
PASTRY PRODUCT PRODUCERS LLC
-------------------------------
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxxxxxx X. Xxxxxx, President
