REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT (this "Agreement"), dated as of February 24,
1999, by and among INTERNATIONAL FAST FOOD CORPORATION, a company organized
under the laws of the State of Florida, United States ("IFFC"), INTERNATIONAL
FAST FOOD POLSKA S.P. z.o.o., a Polish limited liability company organized under
the laws of Poland ("IFFP") and BURGER KING CORPORATION, a company organized
under the laws of State of Florida, United States ("BKC").
WHEREAS, IFFC is the owner of all the issued and outstanding shares
(the "IFFP Shares") of IFFP;
WHEREAS, Citibank (Poland) S.A. ("Citibank") has agreed to provide
credit to IFFP in the aggregate amount of U.S. $5,000,000, pursuant to a credit
agreement dated February 24, 1999 (the "Credit Agreement");
WHEREAS, It is a condition to the disbursement of funds under the
Credit Agreement that BKC issue a guarantee in favor of Citibank to secure the
repayment by IFFP of amounts borrowed under the Credit Agreement (the
"Guarantee");
WHEREAS, in consideration of the Guarantee, IFFC has agreed to grant
BKC a perfected security interest in the IFFP Shares to secure BKC's claims
which may arise as a result of the payment by BKC of any amounts under the
Guarantee; and
WHEREAS, it is a condition to the making of the Guarantee that IFFC
agree to reimburse BKC for any payments that it may be required to make to
Citibank under the Guarantee, together with related costs, expenses and
interest, as more fully said forth herein.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree has follows:
1. Reimbursement. IFFC and IFFP agree, jointly and severally, to pay or
reimburse BKC within 72 hours of its written demand (which demand may be made
upon either IFFC or IFFP) for (i) any payments to be made or previously made by
BKC under the Guarantee (such amounts are hereinafter referred to as "Indemnity
Payments"), (ii) interest on the amount of any Indemnity Payment remaining
unpaid by IFFC or IFFP under clause (i) above, from (and including) date of such
Indemnity Payment, until payment in full thereof (after as well as before
judgment) at a rate equal to the Base Rate (as defined below) from time to time
in effect plus two hundred basis points, such interest to be payable on demand
(which demand may be made upon IFFC or IFFP) and (iii) all fees, costs and
expenses incurred by BKC in connection with the enforcement of its rights
hereunder. "Base Rate" means, on any date, a fluctuating rate of interest per
annum equal to the rate of interest published in the "Wall Street Journal" on
such date as the "prime rate" for U.S. dollar loans by major money center banks.
Interest accruing on the Base Rate shall be computed on the basis of the actual
number of days elapsed in a 365 day year.
(b) Any failure of IFFC or IFFP to perform its obligations pursuant to
this Section 1 shall constitute an event of Default within the meaning and for
purposes of the Agreement for the Transfer of Title to Share by way of Security
dated of even date herewith (the "Security Agreement") by and between IFFC, BKC
and IFFP.
2. Covenants. IFFC and IFFP agree that, except for actions taken solely and
directly in connection with the repayment of amounts outstanding under the
Credit Agreement or due under this Agreement, from the date hereof until the
later to occur of (i) the date of repayment by IFFP of all amounts borrowed
under the Credit Agreement or (ii) the date of payment by IFFC or IFFP of all
amounts due and owing BKC under this Agreement, as follows:
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(a) Neither IFFC nor IFFP shall incur any Indebtedness of other than
Indebtedness as in effect on the date hereof, without the prior written consent
of BKC. BKC shall not unreasonably withhold its consent in the case of
Indebtedness proposed to be incurred by IFFC. BKC may refuse to consent in its
sole and absolute discretion for any reason or for no reason in the case of
Indebtedness proposed to be incurred by IFFP.
(b) Upon the consummation by IFFC of the sale of any of its equity or
debt securities (including any securities convertible into any of the
foregoing), whether in a private transaction or through a public offering, IFFC
shall cause the proceeds, if any, from such sale which are in excess of
$10,000,000 first to be paid to BKC to the extent required under the
Reimbursement Agreement, and then to be promptly paid to Citibank under the
Credit Agreement to repay outstanding borrowings thereunder, and shall use its
best efforts to cause the amount of the Guarantee to be reduced by the amount of
such payment(s).
(c) BKC's authorized officers and representatives shall have the right
during normal business hours upon reasonable notice to examine the books and
records of IFFC and IFFP and to make copies and notes therefrom for the purpose
of ascertaining compliance with or obtaining enforcement of the this Agreement
or the Credit Agreement.
(d) Except with respect to operating leases entered into in the
ordinary course of business and consistent with past practices and IFFP's
development plans, neither IFFC nor IFFP shall become liable with respect to any
guarantee, including any reimbursement obligation, whether contingent or matured
under letters of credit or otherwise (or become contractually committed to do
so).
(e) Neither IFFC nor IFFP shall make any dividend or other distribution
with respect to its outstanding equity securities (or become contractually
committed to do so) except for dividends payable solely in the securities of
IFFC or IFFP or as permitted by the Credit Facility.
(f) Neither IFFC nor IFFP shall enter into any agreement, instrument,
deed or lease which prohibits or limits the ability of IFFC or IFFP to create,
incur, assume or suffer to exist any Lien upon any of their respective
properties, assets or revenues, whether now owned hereafter acquired, or which
requires the grant of any collateral for such obligation if such collateral is
granted for another obligation, except with respect to borrowings under the
Credit Agreement. Notwithstanding the foregoing, the covenants set forth in this
Section 2 shall not be deemed to preclude the sale and leaseback of assets so
long as the terms of such transaction are at least as favorable to IFFC or IFFP
and IFFC or IFFP, as the case may be, could have obtained in an arms-length
transaction with an unaffiliated party.
(g) Neither IFFC nor IFFP shall effect any transaction with any of
their respective Affiliates (as such term is defined under the Securities Act of
1933, as amended (except for IFFC and IFFP) on a basis less favorable to IFFC
and IFFP than would be the case if such transaction had been effected with a
non-Affiliate.
(h) IFFP shall not engage in any business other than the business in
which it is currently engaged on the date hereof.
(i) IFFC and IFFP shall observe and comply with all of the covenants
set forth in the Credit Agreement.
(j) For purposes of the foregoing covenants, the following terms shall
have the respective meanings set forth below:
"Indebtedness" means all obligations, contingent or otherwise, which in
accordance with U.S. generally accepted accounting principles are
required to be classified upon a balance sheet of the specified person
as liabilities.
"Lien" means, with respect to the specified person:
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(a) any lien, encumbrance, mortgage, pledge, charge, or
security interest of any kind upon any property or assets
of such person, whether now owned or hereafter acquired,
or upon the income or profits therefrom;
(b) the sale, assignment, pledge or transfer of any accounts
or general intangibles of such person for purposes of
creating a security interest; and
(c) the transfer of any tangible property or assets for the
purpose of creating or granting a security interest.
3. Representations and Warranties
3.1 Representations and Warranties of IFFC and IFFP. Each of IFFC and
IFFP represents and warrants to BKC that:
(a) Corporate Existence and Qualification. Each of IFFC and IFFP is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization. Each of IFFC and IFFP has all required
power and authority to own its properties and to carry on its business as
presently conducted.
(b) Authority, Approval and Enforceability. This Agreement has been
duly executed and delivered by each of IFFC and IFFP, and each of IFFC and IFFP
has all requisite power and legal authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby, and to perform
its obligations hereunder. This Agreement constitutes the legal, valid and
binding obligation of each of IFFC and IFFP, enforceable in accordance with its
terms.
(c) No Company Defaults or Consents. Neither the execution and delivery
of this Agreement nor the effectuation of the transactions contemplated hereby
will:
(i) violate or conflict with any of the terms,
conditions or provisions of the certificate of incorporation or bylaws (or
similar organizational documents) of IFFC or IFFP;
(ii) violate any legal requirements applicable to
IFFC or IFFP;
(iii) violate, conflict with, result in a breach of,
constitute a default under (whether with or without notice or the lapse of time
or both), or accelerate or permit the acceleration of the performance required
by, or give any other party the right to terminate, any contract or permit
applicable to IFFC or IFFP;
(iv) result in the creation of any lien, charge or
other encumbrance on any property of IFFC or IFFP (except as expressly
contemplated hereby); or
(v) require IFFC or IFFP to obtain or make any
waiver, consent, action, approval or authorization of, or registration,
declaration, notice or filing with, any private non-governmental third party or
any governmental authority.
(d) No Proceedings. Except as disclosed in IFFC's filings with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, or for matters which are not, individually or in the
aggregate, material to IFFC, no suit, action or other proceeding is pending or,
to the Knowledge of IFFC or IFFP, threatened, before any governmental authority
seeking to restrain such or prohibit its entry into this Agreement, or seeking
damages against IFFC or IFFP or their respective properties as a result of the
transactions contemplated by this Agreement.
(e) Compliance with Laws. Each of IFFC and IFFP has all material
franchises, permits, licenses and other rights and privileges necessary to
permit it to own its properties and to conduct its businesses as presently
conducted. The business and operations of each of IFFC and IFFP have been and
are being conducted in accordance in all material respects with all applicable
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laws, rules and regulations, and each of IFFC and IFFP is not in violation of
any judgment, law or regulation.
(f) Disclosure; Due Diligence. This Agreement, when taken as a whole
with other documents and certificates furnished by each of IFFC and IFFP to BKC
or its counsel have been furnished in good faith and, do not contain any untrue
statement of material fact or omit any material fact necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading.
3.2 Representations and Warranties by BKC. BKC represents and warrants
to each of IFFC and IFFP that:
(a) Corporate Existence and Qualification. BKC is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. BKC has all required power and authority to own
its properties and to carry on its business as presently conducted.
(b) Authority, Approval and Enforceability This Agreement has been duly
executed and delivered by BKC, and BKC has all requisite power and legal
authority to execute and deliver this Agreement, to consummate the transactions
contemplated hereby, and to perform its obligations hereunder. This Agreement
constitutes the legal, valid and binding obligation of BKC, enforceable in
accordance with its terms.
4. Miscellaneous.
4.1 Further Assurances. Each of the parties hereto agrees with the
other parties hereto that it will cooperate with such other parties and will
execute and deliver, or cause to be executed and delivered, all such other
instruments and documents, and will take such other actions, as such other
parties may reasonably request from time to time to effectuate the provisions
and purposes of this Agreement.
4.2 Binding on Successors, Transferees and Assigns; Assignment. This
Agreement shall be binding upon the parties hereto and their respective
successors, transferees and assigns. Notwithstanding the foregoing neither no
party hereto may assign any of its obligations hereunder with the prior written
consent of the other parties hereto; provided, that BKC may assign its rights
and delegate its duties under this Agreement to one or more of its subsidiaries
or affiliates.
4.3 Amendments; Waivers. No amendment to or waiver of any provisions of
this Agreement, nor consent to any departure therefrom by any party hereto,
shall in any event be effective unless the same shall be in writing and signed
by such party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
4.4 No Waiver; Remedies. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any right. The
remedies herein provided are cumulative and not exclusive of any remedy provided
by law.
4.5 Expenses. IFFC shall pay or reimburse BKC for all of its legal,
accounting and other expenses directly related to the consummation of the
transactions contemplated hereby, together with the costs and expenses of
enforcing any of its rights hereunder including, without limitation, the
reimbursement rights provided in Section 1 hereof.
4.6 Jurisdiction. Any claim arising out of this Agreement shall be
brought in any state or federal court located in Miami-Dade County, Florida,
United States. For the purpose of any suit, action or proceeding instituted with
respect to any such claim, each of the parties hereto irrevocably submits to the
jurisdiction of such courts in Miami-Dade County, Florida, United States. Each
of the parties hereto further irrevocably consents to the service of process out
of said courts by mailing a copy thereof by registered mail, postage prepaid, to
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such party and agrees that such service, to the fullest extent permitted by law,
(i) shall be deemed in every respect effective service of process upon it in any
such suit, action or proceeding and (ii) shall be taken and held to be a valid
personal service upon and a personal delivery to it. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court located in Miami-Dade County,
Florida, United States, and any claim that any such suit, action or proceeding
brought in such court has been brought in an inconvenient forum. Notwithstanding
the foregoing, at the option of BKC, any claims against IFFP hereunder shall be
settled by the Arbitration Court at the Polish Chamber of Commerce with its seat
in Warsaw in accordance with its rules, and all such proceedings will be
conducted in the English language.
4.7 Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Florida,
United States, without regard to any conflict of law, rule or principle that
would give effect to the laws of another jurisdiction.
4.8 Notices. All notices, requests and other communications to any
party hereunder shall be writing (including facsimile transmission or similar
writing) and shall be given to such party, addressed to it, at its address or
facsimile number set forth on the signature pages below, or at such other
address or facsimile number as such party may hereafter specify for such purpose
by notice to the other party. Each such notice, request or communication shall
be deemed effective when received at the address or facsimile number specified
below.
4.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, when taken together,
shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INTERNATIONAL FAST FOOD CORPORATION
By:__________________________
Name:
Title:
c/o Xxxxxxxx Xxxxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000, XXX
INTERNATIONAL FAST FOOD POLSKA S.P. Z.O.O.
By:__________________________
Name:
Title:
00 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx
BURGER KING CORPORATION
By:_________________________
Name:
Title:
c/o Burger Xxxx XXX
Xxxxxxx Xxxxx
Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX00XX
Attn: General Counsel and
Vice President - Financial Affairs
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