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Exhibit 10-36
FINANCING AGREEMENT
THIS FINANCING AGREEMENT ("Agreement") is made and entered
into this 12th day of February, 1997, by and between UNITED LEISURE CORPORATION
("Leisure"), a Delaware corporation, and UNITED RESTAURANTS, INC.
("Restaurants"), a Delaware corporation.
WHEREAS, Restaurants is in need of up to $1,250,000 in
financing in connection with the furniture, fixtures, and improvements for the
Grand Havana Rooms in New York City and Washington, D.C.; and
WHEREAS, Leisure is interested in providing such funds upon
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises
contained herein, the parties hereto agree as follows:
1. Leisure hereby agrees to loan to Restaurants, from
time to time, during a period of six months from the date hereof, the aggregate
sum of up to $1,250,000 (the "Loan"). The Loan shall be advanced in such
increments as shall be requested by Restaurants from time to time. Interest on
the amount of the Loan that have bee advanced shall bear interest at the rate
of 8% per annum from the date of advance until paid. The full principal amount
advanced, and all accrued but unpaid interest thereon, shall be payable in one
lump sum payment on September 30, 1997 (the "Maturity Date"); provided,
however, if the Loan shall not be repaid in full on the Maturity Date, then the
Loan shall thereafter be payable on demand of Leisure and shall incur a late
fee as set forth in Section 3 below. The Loan shall be evidenced by a
promissory note made by Restaurants in form satisfactory to Leisure.
2. In consideration for making the Loan as set forth
above, Restaurants shall issue to Leisure Seventy-Five Thousand (75,000) shares
of Restaurants' $.01 par value common stock (the "Common Stock").
3. If the Loan shall not be paid at the Maturity Date,
then Restaurants shall cause to be issued to Leisure, as a late fee, an
additional 25,000 shares of Common Stock.
4. As a condition to the issuance of the aforesaid
Common Stock ("Securities"), Leisure hereby represents and warrants to, and
covenants with, Restaurants as follows:
(a) Leisure has received and had the opportunity
to review Restaurants' Form 10-K and Form 10-Q filed with the Securities and
Exchange Commission for the periods ended December 29, 1995 and September 30,
1996, respectively ("Information") and has been given access to full and
complete information regarding
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Restaurants, and has utilized such access to Leisure's satisfaction for the
purpose of obtaining such information regarding Restaurants as Leisure has
requested; and, particularly, Leisure has been given reasonable opportunity to
ask questions of, and receive answers from, representatives of Restaurants
concerning the terms and conditions of the issuance of the Securities and to
obtain any additional information, to the extent available;
(b) Leisure was not offered or sold the
Securities, directly or indirectly, by means of any form of general advertising
or general solicitation, including but not limited to the following: (1) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar medium of or broadcast over television or
radio; or (2) any seminar or meeting whose attendees had been invited by any
general solicitation or general advertising;
(c) Stop transfer instructions will be placed
with the transfer agent for the Securities, and a legend may be placed on any
instrument or certificate representing the Securities substantially to the
following effect:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT
AND REGULATION D UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS
SECURITY WAS NECESSARILY WITH THE INTENT OF INVESTMENT AND NOT WITH A
VIEW FOR DISTRIBUTION. THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS
SECURITY OR ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS
REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. FURTHERMORE, IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN, WITHOUT THE OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE PROPOSED TRANSFER OR
SALE DOES NOT AFFECT THE EXEMPTIONS RELIED UPON BY THE COMPANY IN
ORIGINALLY DISTRIBUTING THE SECURITY AND THAT REGISTRATION IS NOT
REQUIRED.
(d) Leisure has been advised and understands that
the Securities have not been registered under the Securities Act of 1933 or
applicable state securities laws and that the Securities are being offered and
sold pursuant to exemptions from such laws. Leisure represents and warrants
that the Securities are being acquired for Leisure's own account and for
investment purposes only, and without the intention of reselling or
redistributing the same; Leisure has made no agreement with others regarding
any of the Securities; and Leisure's financial condition is such that it is not
likely that it will be necessary to dispose of any of such Securities in the
foreseeable future. Leisure further represents and agrees that if, contrary to
the foregoing intentions, Leisure should later desire
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to dispose of or transfer any of the Securities in any manner, Leisure shall
not do so unless and until (i) said Securities shall have first been registered
under the Act and all applicable securities laws; or (ii) Leisure shall have
first delivered to Restaurants a written notice declaring such holder's
intention to effect such transfer and describe in sufficient detail the manner
and circumstances of the proposed transfer, which notice shall be accompanied
either by a written opinion of legal counsel who shall be reasonably
satisfactory to Restaurants which opinion shall be addressed to Restaurants and
reasonably satisfactory in form and substance to Restaurants' counsel, to the
effect that the proposed sale or transfer is exempt from the registration
provisions of the Act and all applicable state securities laws, or by a "no
action" letter from the Securities and Exchange Commission to the effect that
the transfer of the Securities without registration will not result in
recommendation by the staff of the Commission that action be taken with respect
thereto.
5. This Agreement and the Exhibit hereto contain the
entire understanding and agreement of the parties regarding the subject matter
hereof. This Agreement may not be amended or superseded except by a written
instrument executed by both parties hereto.
6. In the event that either party to this Agreement
institutes legal action against the other party as a result of a breach or
default under this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys fees and court costs.
7. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
general conflicts of law principles.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
UNITED LEISURE CORPORATION
By:_____________________________________
Its: President
UNITED RESTAURANTS, INC.
By:_____________________________________
Its: President
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