AMENDMENT TO RESTAURANT DEVELOPMENT AGREEMENT
AMENDMENT dated as of February 24, 1999 (the "Amendment"), to that
certain RESTAURANT DEVELOPMENT AGREEMENT dated as of March 14, 1997 (the
"Development Agreement"), by and among BURGER KING CORPORATION, a company
organized under the laws of State of Florida, United States ("BKC"), and
INTERNATIONAL FAST FOOD CORPORATION, a company organized under the laws of the
State of Florida, United States ("IFFC").
WHEREAS, pursuant to the Development Agreement, BKC has granted IFFC
the right to develop new "Burger King" restaurants in the Republic of Poland;
WHEREAS, IFFC is the owner of all the issued and outstanding shares
(the "IFFP Shares") of International Fast Food Polska S.P. z.o.o. ("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;
WHEREAS, pursuant to a Reimbursement Agreement of even date herewith
(the "Reimbursement Agreement") by and among IFFC, IFFP and BKC, IFFC has agreed
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;
WHEREAS, pursuant to an 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, IFFC has granted BKC a security interest in and to
the IFFP Shares, which permits BKC to retain the IFFP Shares in the event that
BKC is required to make any payment under the Guarantee and neither IFFC nor
IFFP reimburse BKC for the amount of such payment and other items under the
Reimbursement Agreement; and
WHEREAS, in connection with, and in consideration of, the foregoing,
BKC and IFFC desire to amend the Development Agreement upon the terms, and
subject to the conditions, hereinafter set forth.
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. Defined Terms. Unless otherwise defined herein, all capitalized terms used
herein shall have the respective meanings assigned to such terms in the
Development Agreement.
2. Amendment to Schedule 1. Schedule 1 of the Development Agreement is hereby
amended to provide that in each year during the Term of the Development
Agreement, commencing January 1, 2000, the Developer shall develop no less than
16 Development Units, of which no fewer than four Development Units in each such
year in-line or free-standing restaurants within city centers or shopping mall
locations. The Developer may develop Burger King Restaurants at a rate faster
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than the rate specified herein (16 per annum) upon written notice thereof to the
BKC (subject to the following sentence); provided that each Burger King
Restaurant is developed in accordance with the franchise and location procedures
described herein and in the Development Agreement. If IFFC (or IFFP) notifies
BKC that it intends to build in any year more than 16 Burger King Restaurants,
it shall provide BKC such information as BKC may request regarding the
management structure of IFFP. If BKC is reasonably satisfied that the management
structure of IFFP is sufficiently strong to ensure that the proposed accelerated
development and related restaurant operations will meet BKC's required
standards, BKC shall not withhold its consent to such development on the basis
that IFFP lacks the requisite management breadth to develop such additional
restaurants. If in any annual period the total number of Development Units
opened is less than the number required for such period (16), but the total
number of Development Units opened prior to and during such annual period is
equal to or exceeds the required total for the period commencing January 1, 2000
to the end of such annual period, the Developer shall have complied with its
obligation. In the event that the foregoing development schedule has not been
met, the Development Agreement shall be automatically terminated pursuant to
paragraph 7.1(b) of the Development Agreement.
3. Amendment to Schedule 2. Schedule 2 of the Development Agreement is
hereby amended and restated in its entirety as follows:
Time Period for Royalty Amount of Royalty Marketing Spendback
----------------------- ----------------- -------------------
From February 24, 1999 until 3% of Gross Sales 2% of Gross Sales
December 31, 2002
Commencing January 1, 2003 5% of Gross Sales Not applicable
4. Amendment to Section 5.3.1. Section 5.3.1 of the Development Agreement
is hereby amended and restated in its entirety as follows:
"5.3.1 Standard Fees. Each franchise agreement for a Burger King Restaurant to
be opened during the term of this Agreement shall provide for a payment of a
royalty equal to five percent (5%) of "Gross Sales" (as defined in the form of
Franchise Agreement attached as Exhibit C) and for payment of an advertising
contribution equal to five percent (5%) of "Gross Sales"."
5. Deferral of Specified Franchise Fees. Franchise Fees in the aggregate amount
of $280,000 payable pursuant to Section 5.2 of the Development Agreement with
respect to seven Burger King Restaurants scheduled to open in 1999 shall not be
payable until December 31, 1999.
6. Representations and Warranties
6.1 Representations and Warranties of IFFC, IFFP and Xxxxxxxx. IFFC
represents and warrants to BKC that:
(a) Corporate Existence and Qualification. IFFC is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. IFFC 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 Amendment has been
duly executed and delivered by IFFC, and IFFC has all requisite power and legal
authority to execute and deliver this Amendment, to consummate the transactions
contemplated hereby, and to perform its obligations hereunder. This Amendment
constitutes the legal, valid and binding obligation of each of IFFC, enforceable
in accordance with its terms.
(c) No Company Defaults or Consents. Neither the execution and delivery
of this Amendment nor the effectuation of the transactions contemplated hereby
will:
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(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;
(ii) violate any legal requirements applicable to
IFFC;
(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;
(iv) result in the creation of any lien, charge or
other encumbrance on any property of IFFC (except as expressly contemplated
hereby); or
(v) require IFFC 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. No suit, action or other proceeding is pending or,
to the Knowledge of IFFC, threatened, before any governmental authority seeking
to restrain such or prohibit its entry into this Amendment, or seeking damages
against IFFC or its properties, as a result of the transactions contemplated by
this Amendment.
(e) Disclosure; Due Diligence. This Amendment, when taken as a whole
with other documents and certificates furnished by each of IFFC, IFFP or
Xxxxxxxx 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.
7.2 Representations and Warranties by BKC. BKC represents and warrants
to IFFC 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 Amendment has been duly
executed and delivered by BKC, and BKC has all requisite power and legal
authority to execute and deliver this Amendment, to consummate the transactions
contemplated hereby, and to perform its obligations hereunder. This Amendment
constitutes the legal, valid and binding obligation of BKC, enforceable in
accordance with its terms.
8. Miscellaneous.
8.1 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 Amendment.
8.2 Binding on Successors, Transferees and Assigns; Assignment. This
Amendment shall be binding upon the parties hereto and their respective
successors, transferees and assigns. Notwithstanding the foregoing none of the
parties 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 Amendment and the Development
Agreement to one or more of its subsidiaries or affiliates.
8.3 Amendments; Waivers; Conflicts. No amendment to or waiver of any
provisions of this Amendment, nor consent to any departure therefrom by any
party hereto, shall in any event be effective unless the same shall be in
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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. Except as amended hereby, the Development Agreement shall continue in
full force and effect. In the event of any conflict between the terms of this
Amendment and the terms of the Development Agreement, this Amendment shall be
determinative, and shall control the outcome of any such conflict.
8.4 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.
8.5 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.
8.6 Jurisdiction. Any claim arising out of this Amendment 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
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.
8.7 Governing Law; Severability. This Amendment 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.
8.8 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.
8.9 Counterparts. This Amendment 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 Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment 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
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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