AGREEMENT
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This Agreement ("Agreement") is entered into this 9th day of May, 1997 by
and between Litigation Funding, Inc., a Florida corporation ("Litigation
Funding"), International Fast Food Corporation, a Florida corporation ("IFFC")
and International Fast Food Polska Sp. Zo.o, a Polish limited liability
corporation ("IFFP").
RECITALS
WHEREAS, Litigation Funding, IFFP and IFFC entered into that certain
Agreement to Assign Litigation Proceeds dated January 25, 1996, which agreement
was amended on July 3, 1996 and March 13, 1997 (such agreement, as amended,
referred to as the "Funding Agreement");
WHEREAS, IFFP has, on September 11, 1996, assigned all of its rights to
receive proceeds in the above-referenced litigation to IFFC;
WHEREAS, in early March 1997, settlement negotiations commenced between
Burger King Corporation ("Burger King"), IFFP and IFFC pertaining to that
certain litigation known as INTERNATIONAL FAST FOOD CORPORATION AND
INTERNATIONAL FAST FOOD POLSKA SP. ZO.O X. XXXXXX XXXX CORPORATION (Case No.
95-05130 CA 02) in the Circuit Court of the 11th Judicial Circuit in and for
Dade County, Florida;
WHEREAS, Litigation Funding was a party to such settlement negotiations,
by virtue of Burger King being aware of the interest of Litigation Funding in
the settlement proceeds, as evidenced by reference to the March 13, 1997
amendment to the Funding Agreement;
WHEREAS, in order to facilitate the settlement of the above-referenced
litigation, a settlement agreement by and among Burger King, IFFP, IFFC,
Xxxxxxxx Xxxxxxxx and Litigation Funding (the "Settlement Agreement") was
entered into effective March 11, 1997 and executed on March 14, 1997, in which
agreement Litigation Funding ultimately gave up rights to which it was otherwise
entitled to in the proceeds of the settlement, as set forth in Section 4.a. of
the Settlement Agreement; and
WHEREAS, Litigation Funding, IFFP and IFFC wish to implement and modify
the provisions of the March 13, 1997 amendment to the Funding Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises of
the parties hereto and of other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereby agree as
follows:
1. DETERMINATION OF AMOUNTS OWED UNDER FUNDING AGREEMENT. With respect
to amounts owed to Litigation Funding under the Funding Agreement, the parties
hereto agree as follows.
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(a) CASH AND DEBT CANCELLATION. The parties acknowledge that the
cash settlement proceeds received from Burger King in the Settlement Agreement
totaled $5,000,000 and the proceeds deemed received by virtue of cancellation by
Burger King of indebtedness owed to it is $499,768.
The parties agree that, applying the terms and provisions of the
Funding Agreement to the above figures, Litigation Funding is entitled to
receive the sum of $3,227,014, of which $750,001 represents reimbursement of
litigation costs previously advanced by Litigation Funding on behalf of IFFC,
which reimbursement is contemplated under the Funding Agreement. The remaining
$2,477,014 represents the amount to which Litigation Funding would be entitled
over and above the reimbursement of the amounts advanced by it under the Funding
Agreement.
The parties agree and acknowledge that, due to (a) restrictions
placed on the utilization of the settlement proceeds by Burger King in the
Settlement Agreement, (b) the inability of IFFC and IFFP (due to their
illiquidity and their inability to use the Burger King settlement proceeds as
described above) to currently satisfy their obligations under the Funding
Agreement, (c) the refusal by Litigation Funding (as permitted under the Funding
Agreement) to accept any other assets of IFFC or IFFP other than cash or a
promissory note from IFFC as payment under the Funding Agreement, and (d) the
inability of either IFFC or IFFP to obtain alternate financing in order to
provide the funds necessary to satisfy their respective obligations to
Litigation Funding under the Funding Agreement to pay the aforementioned
$3,227,013.60, that Litigation Funding shall accept, as partial payment under
the Funding Agreement, the following:
(i) On or before the execution hereof, the sum of $759,001,
representing the sum of $750,001 (the amount for which Litigation Funding was
entitled to be reimbursed under the Funding Agreement) together with interest
thereon at the rate of 8% per annum accruing from March 14, 1997 to May 7, 1997,
the date of payment of such amount, the receipt of which Litigation Funding
hereby acknowledges.
(ii) On or before the execution hereof, the sum of
$281,861.75, representing the sum of $278,519.52 (representing a partial payment
of the amounts owed in excess of the above $750,000 reimbursement amount)
together with interest thereon at the rate of 8% per annum accruing from March
14, 1997 to May 7, 1997, the date of payment of such amount, the receipt of
which Litigation Funding hereby acknowledges.
(iii) A promissory note (the "Promissory Note") from IFFC to
Litigation Funding in the amount of $2,198,494.23, providing for interest at
prime plus 1% per annum, with such interest to be paid quarterly commencing July
1, 1997, and for the entire principal balance thereof (and all accrued interest
thereon) to be paid on December 31, 1998. IFFC shall execute the Promissory Note
in the form attached hereto as Exhibit "A".
The parties acknowledge and agree that the obligations of IFFC and
IFFP under the Funding Agreement were secured by certain security agreements,
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UCC-1 financing statements and stock pledges held in escrow, all as set forth as
exhibits to the Funding Agreement. The parties hereto agree and acknowledge that
such security shall continue in full force and effect in order to secure the
repayment obligations hereunder of IFFC with respect to the Promissory Note, and
that this Agreement shall constitute a security agreement creating a security
interest in the aforementioned collateral to secure payment of the Promissory
Note. The parties hereto agree, after the date of this Agreement, to execute any
and all documents reasonably necessary to accomplish the foregoing.
(b) REMAINING AMOUNTS OWED UNDER FUNDING AGREEMENT. The parties
acknowledge that Litigation Funding is also owed certain amounts with respect to
the "contract modification proceeds", as such term is defined in the Funding
Agreement. The parties are currently attempting to reach agreement as to the
value and amount of such "contract modification proceeds" (including, but not
limited to, the value of (i) the "marketing spendback" and "incentive marketing
spendback" provisions of that certain Development Agreement entered into by and
between Burger King and IFFC dated as of March 14, 1997, and (ii) the value of
the Development Agreement (independent of the value of the above-referenced
"marketing spendback" and "incentive marketing spendback" provisions; in
particular, the value of the exclusive rights granted under that Development
Agreement to IFFC and IFFP).
The parties acknowledge that, upon the determination of the value
and amount of such "contract modification proceeds", as set forth under the
Funding Agreement, IFFC and IFFP shall be liable for payment of a portion of
such amount to Litigation Funding, in the amount and manner set forth under the
Funding Agreement.
2. FUNDING AGREEMENT. The parties agree and acknowledge that, with
respect to the payments referenced herein and the amounts to be subsequently
determined as owed by IFFC and IFFP to Litigation Funding, the provisions of the
Funding Agreement shall continue in full force and effect. It is the intent of
the parties hereto that the agreement of the parties as to payment of the
amounts owed to Litigation Funding (under the Funding Agreement) as to the cash
settlement proceeds and debt cancellation proceeds owed under the Funding
Agreement shall be final and determinative as between the parties as to the
amounts owed under such provisions of the Funding Agreement, but that the
provisions of the Funding Agreement shall otherwise continue in full force and
effect until such time as (a) the value and amount of the "contract modification
proceeds" (as such term is defined in the Funding Agreement) is agreed to and
provisions are made for the payment thereof, and (b) all amounts payable by IFFC
and IFFP under the Funding Agreement and hereunder (including all amounts owed
under the Promissory Note) are paid in full to Litigation Funding.
To the extent the foregoing provisions are inconsistent with the
provisions of the Funding Agreement, the parties agree that the provisions of
this Agreement shall be controlling.
3. MISCELLANEOUS.
(a) ASSIGNMENT OF SECURITY INTEREST IN IFFP COMMON STOCK. IFFP
hereby reconfirms its assignment to Litigation Funding of the security interest
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as set forth in Section 3 of the Funding Agreement, and agrees that the security
interest fully secures the payment to Litigation Funding of all amounts owed
under the Promissory Note. IFFP agrees to, as soon as possible, and at its own
expense, take all such actions as are necessary, to insure that the original
security interests in the IFFP stock shall be modified to fully secure delivery
of all amounts still owing under the Funding Agreement and all amounts payable
under the Promissory Note.
All rights of Litigation Funding with respect to the security
interest created pursuant to the Funding Agreement shall remain absolute,
unconditional and unaffected by the provisions of this Agreement, it being the
sole intent and purpose of this Section 3 of this Agreement to provide that the
security interest granted pursuant to the Funding Agreement shall be construed
also to secure fully all obligations of IFFC hereunder (in particular, under the
Promissory Note).
(b) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement. Facsimile copies of
manually executed signature pages shall be deemed originals until the parties
hereto have received manually executed signature pages.
(c) GOVERNING LAW. Each of the parties to this Agreement hereby
irrevocably submits to the jurisdiction of the State or Federal courts located
in Dade County, Florida in connection with any suit, action or other proceeding
arising out of or relating to this Agreement and the transactions contemplated
hereby, and hereby agree not to assert, by way of motion, as a defense, or
otherwise in any such suit, action or proceeding that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced by such courts. IFFP expressly waives any rights it
may have which conflict with the foregoing agreements in this paragraph.
IFFP, IFFC AND LITIGATION FUNDING HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY AND ALL RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS-CLAIMS
AND THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR THE SECURITY INTEREST. EACH OF THEM HEREBY CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF THE OTHER NOR THE OTHER'S COUNSEL HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE OTHER WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS JURY WAIVER PROVISION. EACH OF THEM
ACKNOWLEDGES THAT THIS JURY WAIVER HAS BEEN A MATERIAL INDUCEMENT TO LITIGATION
FUNDING TO ENTER INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LITIGATION FUNDING, INC.
By:_______________________________________
INTERNATIONAL FAST FOOD CORPORATION
By:_______________________________________
INTERNATIONAL FAST FOOD POLSKA SP. ZO.O.
By:_______________________________________
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