Exhibit 10
OPERATING AGREEMENT
OF
KOKOPELLI MEXICAN GRILL FRANCHISE CORPORATION
THIS OPERATING AGREEMENT (this "Agreement") is made and entered into as of
February 2, 2004, by and between AZTECA WRAP FOODS, LLC., an Arizona Limited
Liability Company ("AZTECA") with address being 0000 X. Xxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000 and BGR CORPORATION, a Nevada corporation ("BGR")
with address being 0000 X. Xxxxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000.
ARTICLE I
FORMATION, NAME, PURPOSES, DEFINITIONS
1.1 FORMATION. Pursuant to the Nevada Corporation Act (the "Act"), the
parties have formed a Nevada corporation effective upon the filing of the
Articles of Corporation of this Company with the Nevada Corporation Commission.
The parties shall immediately, and from time to time hereafter, as may be
required by law, execute all amendments of the Articles of Corporation, and do
all filing, recording and other acts as may be appropriate to operate the
Company in compliance with the Act.
1.2 INTENT. It is the intent of the Initial Shareholders that the Company
shall always be operated in a manner consistent with its treatment as a
"Sub-Chapter C Corporation" for federal and state income tax purposes. No
Initial Shareholder shall take any action inconsistent with the express intent
of the parties.
1.3 NAME. The name of this Company shall be:
KOKOPELLI MEXICAN GRILL FRANCHISE CORPORATION (KMGFC)
1.4 PLACE OF BUSINESS. The principal place of business of the Company shall
be at 0000 X. Xxxxxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, or
such other place as the majority consent of all the Board of Directors shall
determine.
1.5 PURPOSE.
(a) The purpose of this Company shall be to operate a franchise
company, and in connection therewith to transact any and all lawful
business for which a sub-chapter C corporation may be organized under
Nevada law. Subject to the terms hereof, the Company shall have the
authority to do any act or thing necessary or appropriate to accomplish the
foregoing purpose.
(b) Except as otherwise provided in this Agreement, without the
majority consent of all the Board of Directors, the Company shall not
engage in any other activity or business, and no Initial Shareholder acting
in its capacity as an Initial Shareholder shall have any authority to
obligate the Company or any other Initial Shareholder, or to hold itself
out as a Initial Shareholder of the Company, with respect to any
transaction or activity whatsoever other than those entered into or carried
out within the scope and business purpose of the Company as provided in
Section 1.5(a) above.
1.6 TERM. This Company shall commence upon the filing of its Articles of
Corporation and shall continue until such time as it shall be terminated under
the provisions of Article XI hereof.
1.7 INITIAL SHAREHOLDERS. The name and address of each of the Initial
Shareholders of this Company are set forth on Schedule 1 hereto.
1.8 AGENT FOR SERVICE OF PROCESS. The name and business address of the
agent for service of process for the Company is Xxxxx Xxxxxxxx, Chief Financial
Officer, or such other person, as the Initial Shareholders shall appoint from
time to time.
1.9 DEFINITIONS. Whenever used in this Agreement, the following terms shall
have the following meanings:
(a) "ACT" shall mean the Nevada Corporation Act, as amended.
(b) "ADDITIONAL CAPITAL CONTRIBUTIONS" shall mean any Capital
Contribution to the Company pursuant to Article II below.
(c) "ADDITIONAL INITIAL SHAREHOLDER" shall mean any person who is
admitted to the Company as an Additional Initial Shareholder pursuant to
this Operating Agreement.
(d) "AFFILIATE" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by, or under common control
with such Person, (ii) any Person owning or controlling ten percent (10%)
or more of the outstanding voting interest of such Person, (iii) any
officer, director, or general partner of such Person, or (iv) any Person
who is an officer, director, general partner, trustee, or holder of ten
percent (10%) or more of the voting interest of any Person described in
clauses (i) through (ii) of this sentence. For purposes of this definition,
the term "controls," "is controlled by," or "is under common control with"
shall mean the possession, direct or of indirect, of the power to direct or
cause the direction of the management and policies of a person or entity,
whether through the ownership of voting securities, by contract or
otherwise.
(e) "AGREEMENT" shall mean this written Operating Agreement. No other
document or oral agreement among the Initial Shareholders shall be treated
as part of or superseding this Agreement unless it is reduced to writing
and it has been signed by all of the Initial Shareholders.
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(f) "CAPITAL ACCOUNT" shall mean the account established and
maintained for each Initial Shareholder in accordance with this Agreement
and applicable Treasury Regulations.
(g) "CAPITAL CONTRIBUTION" shall mean any contribution to the capital
of the Company in cash, property or services by an Initial Shareholder,
whenever made.
(h) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(i) "COMPANY" shall refer to KOKOPELLI MEXICAN GRILL FRANCHISE
CORPORATION.
(j) "CONTRIBUTING INITIAL SHAREHOLDER" shall mean any Initial
Shareholder who desires to pay an amount due to cure a default of a
Defaulting Initial Shareholder.
(k) "DEFAULTING INITIAL SHAREHOLDER" shall mean any Initial
Shareholder who has caused a Monetary Default or a Non-Monetary Default,
which remains uncured under this Agreement. All other Initial Shareholders
are Non-Defaulting Initial Shareholders.
(l) "DISTRIBUTABLE CASH" means all cash, revenues, receipts and funds
generated by, or received from, Company operations, from the sale of the
Company's assets or business, and from all other sources, less the sum of
the following to the extent paid or set aside by a majority consent of all
the Board of Directors:
(i) all principal and interest payments on indebtedness of the
Company and all other sums paid to lenders, including Initial
Shareholders when acting in the capacity as lenders;
(ii) all cash expenditures incurred incident to the normal
operation of the Company's business; and
(iii) such Reserves as the Board of Directors deems reasonably
necessary to the proper operation of the Company's business.
(m) "EXERCISE DATE" shall mean the date on which the Company or
Contributing Initial Shareholder provides notice to Defaulting Initial
Shareholder that the Company or a Contributing Initial Shareholder has
elected to exercise the option to acquire a Defaulting Initial
Shareholder's interest.
(n) "FAIR MARKET VALUE" shall mean, with respect to any asset or
property, the fair market value thereof as determined in good faith by a
Majority-In-Interest. If a Majority-In-Interest of the Initial Shareholders
cannot agree upon a "Fair Market Value" the Majority-In-Interest of the
Initial Shareholders shall select a qualified independent third-party to
appraise the assets and property to determine the Fair Market Value, which
determination shall be binding on the Initial Shareholders.
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(o) "FISCAL YEAR" means the Company's fiscal year, which shall be
December 31.
(p) "INITIAL CAPITAL CONTRIBUTION" shall mean the amount (exclusive of
Additional Capital Contributions) which the Initial Shareholders actually
pay as Capital Contributions to the Company, whether in cash, by the
transfer of assets to the Company or by services rendered.
(q) "SHARES" or "UNITS" shall mean the ownership interest, which an
Initial Shareholder owns in the Company from time to time.
(r) "MAJORITY-IN-INTEREST" shall mean Initial Shareholders owning a
simple majority of the Percentage Interests in the Company.
(s) "CHIEF EXECUTIVE OFFICER" shall mean Xxxxxx X. Xxxxxxx or any
Person that becomes the Chief Executive Officer under the terms of this
Agreement. Xxxxxx X. Xxxxxxx shall be the initial Chief Executive Officer
of the Company, and shall serve until he resigns or is removed from office.
(t) "CHIEF FINANCIAL OFFICER" shall mean Xxxxx Xxxxxxxx or any Person
that becomes the Chief Financial Officer under the terms of this Agreement.
Xxxxx Xxxxxxxx shall be the initial Chief Financial Officer of the Company,
and shall serve until he resigns or is removed from office.
(u) "INITIAL SHAREHOLDER" shall mean each of the parties who execute a
counterpart of this Operating Agreement as an Initial Shareholder and each
of the parties who may hereafter become Additional or Substituted Initial
Shareholders. To the extent the Chief Executive Officer or the Chief
Financial Officer has purchased Interests in the Company, they will have
all the rights of an Initial Shareholder with respect to such Interests.
(v) "MONETARY DEFAULT" shall mean the failure of an Initial
Shareholder to pay when due any Additional Capital Contribution or other
sum required to be paid under this Agreement.
(w) "NON-MONETARY DEFAULT" shall mean the failure of an Initial
Shareholder to cure any default under this Agreement (other than a Monetary
Default, for which there is no curative period) within thirty (30) days
after delivery of a written notice of default from another Initial
Shareholder, Chief Financial Officer or the Chief Executive Officer, which
notice shall set forth in detail the nature of the alleged default;
provided that if curative performance cannot reasonably be completed within
such thirty (30) day period, said period will be extended, provided that
curative performance was begun within a reasonable time, not to exceed ten
(10) days, after the delivery of the notice of default, and is diligently
pursued thereafter. Without intending to limit the generality of the
foregoing, the following are included within the definition of a
Non-Monetary Default:
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(i) Attempted dissolution of the Company by any Initial
Shareholder other than pursuant to the provisions of this Agreement;
(ii) Attempted partitioning of the assets of the Company;
(iii) Withdrawal as an Initial Shareholder without the consent of
all other Initial Shareholders;
(iv) Attempted or actual assignment or transfer of an Interest
other than pursuant to the provisions of this Agreement.
(x) "ORGANIZATIONAL EXPENSES" shall mean those expenses incurred in
connection with the formation of the Company.
(y) "PERCENTAGE INTEREST" shall be the percentage interest of each
Initial Shareholder in the capital of this Company as set forth in Schedule
1, which shall be the basis for allocating all requirements for contract
payments, property taxes and other operating cash expenses and needs of the
Company, as well as the basis for allocating operating losses of the
Company to the Initial Shareholders for individual tax treatment.
(z) "PERSON" shall mean any individual or any legal entity, and their
respective heirs, executors, administrators, legal representatives,
successors, and assigns.
(aa) "PRIME RATE" shall mean the rate of interest, as of the first
business day of each month, designated in the Wall Street Journal as the
"prime rate," the rate of interest charged by banks in the United States to
their largest and most credit-worthy commercial borrowers for unsecured
loans maturing in ninety (90) days, but in no event in excess of the
highest legal rate in Arizona.
(bb) "PROFITS" shall mean, for each Fiscal Year, the income and gains
of the Company determined in accordance with accounting principles
consistently applied from year to year under the method of accounting
selected for the Company and as reported, separately or in the aggregate,
as appropriate, on the Company's informational tax return filed for federal
income tax purposes.
(cc) "RESERVES" shall mean, with respect to any fiscal period, funds
set aside or amounts allocated during such period to reserves which shall
be maintained in amounts deemed sufficient by the majority consent of the
Board of Directors for fixed and contingent obligations and working capital
needs and to pay taxes, insurance, debt service and other costs and
expenses incident to the ownership or operation of the Company's business.
(dd) "TRANSFER" shall mean to sell, assign, exchange, transfer, give,
donate, pledge, deposit, alienate, bequeath, devise or otherwise dispose of
or encumber to any Person other than the Company.
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(ee) "TREASURY REGULATIONS" shall mean the Regulations issued by the
Department of the Treasury under the Code.
(ff) "WITHDRAWAL EVENT" shall mean those events and circumstances
listed in Act Section 29-733.
ARTICLE II
CAPITALIZATION OF THE COMPANY; LOANS
2.1 INITIAL CAPITAL CONTRIBUTIONS. The Initial Capital Contribution of each
Initial Shareholder is set forth opposite each Initial Shareholder's name on
Schedule 1 attached hereto. Each Initial Shareholder is required to contribute
to the Company its Initial Capital Contribution promptly upon execution of this
Operating Agreement.
2.2 INITIAL SHAREHOLDER LOANS AND ADDITIONAL CAPITAL CONTRIBUTIONS. The
Initial Shareholders acknowledge that, to conduct its business authorized
herein, the Company will require funds to cover expenses of management, day to
day operations, ordinary business expenses, losses and/or pay Company
obligations as set forth in The KoKoPelli Mexican Grill Financial Projections to
be completed and agreed to by a majority of the Board of Directors within 90
days from signing of this Agreement. To the extent that the Company determines
that payments in addition to scheduled Capital Contributions are required, and
if such additional amounts cannot be obtained by the Company from one or more
lenders (other than the Initial Shareholders) under terms and conditions
acceptable to a Majority-In-Interest of the Initial Shareholders, then the
Initial Shareholders, by a majority vote, shall decide whether or not such
additional amounts shall be provided to the Company by the Initial Shareholders
and, if so, whether such additional amounts shall be provided by way of loans to
the Company by the Initial Shareholders or by way of Additional Capital
Contributions from the Initial Shareholders. Loans to the Company by Initial
Shareholders shall be made in cash and shall be evidenced by promissory notes in
a form satisfactory to the Chief Financial Officer. Such loans shall earn
interest at the Prime Rate and be repayable on such terms as shall be approved
by the Chief Financial Officer with consent from the majority of the Board of
Directors of the Company. Initial Shareholder loans shall be fully repaid
(principal and interest) prior to any dividends pursuant to Article IV hereof.
Notwithstanding anything to the contrary set forth herein, no Initial
Shareholder shall be required to take any action or perform any act, including,
without limitation, the payment of money, on behalf of or for the benefit of any
third party creditor.
2.3 CAPITAL CONTRIBUTIONS IN GENERAL. Except as otherwise expressly
provided for in this Agreement: (a) no part of the Capital Contributions of any
Initial Shareholder may be withdrawn except as otherwise approved in writing by
all Non-Defaulting Initial Shareholders, and (b) no Initial Shareholder shall be
entitled to demand or to receive property other than cash in return for its
Capital Contributions to the Company.
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ARTICLE III
REDEMPTIONS AND DIVIDENDS
3.1 REDEMPTIONS. As a general rule, Initial Shareholders are expected to
hold their Interest in the Company for investment during the term of the
Company. Although bound by Article III of this Agreement, an Initial Shareholder
may apply to redeem part or all of his Interest, and a redemption may occur,
upon the unanimous approval of all Initial Shareholders of the Company at a
price agreed upon by all Initial Shareholders.
3.2 DIVIDENDS.
(a) CASH DIVIDENDS. Any Company Dividends shall be paid to the Initial
Shareholders from time to time (and at such intervals, but not less
frequently than quarterly) as the Chief Financial Officer with the consent
of the majority of the Board of Directors deems proper. Such proceeds shall
be paid pro rata to the Initial Shareholders in accordance with their
Percentage Interests.
(b) EFFECT OF DEFAULTS. If any Initial Shareholder has caused a
Non-Monetary Default to occur, no amount shall be paid to such Defaulting
Initial Shareholder until the Non-Monetary Default has been cured. If any
Initial Shareholder has caused a Monetary Default to occur, any dividend to
such Defaulting Initial Shareholder shall be subject to the right of offset
in favor of the Company, subject to the rights of Contributing Initial
Shareholders under any other provisions of this Agreement.
(c) EXCESS DIVIDENDS. If for any reason during a given Fiscal Year any
Initial Shareholder receives dividends in excess of the amount to which
such Initial Shareholder should have been entitled pursuant to the terms of
this Agreement, then such excess dividends shall be returned to the Company
and paid to the Initial Shareholder entitled to such excess amount. The
amounts of dividends pursuant to paragraph 3.2 hereof are to be determined
on a Fiscal Year basis and any amounts paid on a more frequent basis are
for convenience only and are not controlling as to the total amounts to be
paid to an Initial Shareholder for any Fiscal Year.
(d) RECORD DATE. The Record Date for the purpose of receiving cash
dividends from the Company shall be as set forth in Section 5.6.
3.3 LIMITATION ON DIVIDENDS. The power of the Chief Financial Officer to
pay dividends may not be used by the Chief Financial Officer in its position as
an Initial Shareholder to satisfy its personal needs or those of its creditors,
nor shall its powers be used to satisfy the needs of any other Initial
Shareholder if making a payment of dividends would be contrary to the interests
of the Company and the other Initial Shareholders. No dividend shall be declared
and paid unless, after the dividend is paid, the assets of the Company are in
excess of all liabilities of the Company, except liabilities to Initial
Shareholders on account of their contributions.
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ARTICLE IV
RIGHTS AND OBLIGATIONS OF INITIAL SHAREHOLDERS
4.1 APPROVAL OF SALE OF ALL ASSETS. The Initial Shareholders shall have the
right, by the affirmative vote of a Majority-In-Interest of the Initial
Shareholders, to approve the sale, exchange or other disposition of all, or
substantially all, of the Company's assets which is to occur as part of a single
transaction or plan.
4.2 PRIORITY AND RETURN OF CAPITAL. No Initial Shareholder shall have
priority over any other Initial Shareholder, either as to the return of Capital
Contributions or as to Profits, Losses or dividends; provided that this Section
shall not apply to loans (as distinguished from capital contributions), which an
Initial Shareholder has made to the Company.
4.3 LIMITATION OF AUTHORITY. Except as otherwise permitted by this
Agreement, no Initial Shareholder (except one who may also be a Corporate
Officer, and then only in his capacity as a Corporate Officer within the scope
of his authority hereunder) shall transact any business for the Company or shall
have any authority or right to act for or bind the Company.
4.4 REMOVAL OF INITIAL SHAREHOLDERS. Upon the redemption, either
involuntary or voluntary, of the entire Interest of a Initial Shareholder, or
upon the transfer of the entire Interest of a Initial Shareholder, he shall no
longer be considered an Initial Shareholder or included in the definition of the
word "Initial Shareholder" as that term may appear herein, for any purpose
whatsoever including, but not limited to, the right to notice, vote or consent
as Initial Shareholder, to participate in or receive any subsequent income,
Profits or Losses of the Company, make any further contribution to the capital
of the Company, or receive any cash dividends from the Company.
4.5 NO RIGHT TO DEMAND DIVIDEND. No Initial Shareholder has a right, to
demand a dividend. No Initial Shareholder has a right to receive any return of
his or her Capital Contribution in property other than cash. Specifically, no
Initial Shareholder may demand a dividend of any portion of any real or personal
property.
4.6 NO RIGHT TO PARTITION. Each Initial Shareholder waives his or her right
to maintain any action for partition with respect to any of the property of the
Company. No Initial Shareholder may call upon a court to divide or distribute
the Property of the Company.
4.7 AUDIT. The books of the Company shall be audited unless an audit is not
required for the business of the Company, and a Majority-In-Interest of the
Initial Shareholders vote not to conduct an audit.
ARTICLE V
MEETINGS OF INITIAL SHAREHOLDERS
5.1 ANNUAL MEETING. An annual meeting of the Initial Shareholders shall be
held on the second Friday in April, or at such other time as shall be determined
by the Chief Executive Officer or by a Majority-In-Interest of the Initial
Shareholders, commencing with the year 2004, for the purpose of the transaction
of such business as may come before the meeting.
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5.2 SPECIAL MEETINGS. Special meetings of the Initial Shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the Chief Executive Officer or by a Majority-In-Interest of the Initial
Shareholders.
5.3 PLACE OF MEETINGS. The party calling the meeting may designate any
place, either within or outside the State of Arizona, as the place of meeting
for any meeting of the Initial Shareholders. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be held at the
place of business designated in Section 1.4 above.
5.4 NOTICE OF MEETINGS. Except as provided in Section 5.5, written notice
stating the place, day and hour for which the meeting is called shall be
delivered not less than three nor more than fifty days before the date of the
meeting, either personally or by mail, by or at the direction of the party
calling the meeting, to each Initial Shareholder entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered two calendar
days after being deposited in the United States mail, addressed to the Initial
Shareholder at the Initial Shareholder's address as it appears on the books of
the Company, with postage thereon prepaid. If transmitted by way of facsimile,
such notice shall be deemed to be delivered on the date of such facsimile
transmission to the telephone number for the Initial Shareholder, which has been
supplied by such Initial Shareholder to the Company and identified as such
Initial Shareholder's facsimile number.
5.5 MEETING OF ALL INITIAL SHAREHOLDERS. If all of the Initial Shareholders
shall meet at any time and place, either within or outside of the State of
Arizona, and consent to the holding of a meeting at such time and place, such
meeting shall be valid without call or notice, and at such meeting lawful action
may be taken.
5.6 RECORD DATE FOR MEETINGS AND DIVIDENDS. For the purpose of determining
Initial Shareholders entitled to notice of or to vote at any meeting of Initial
Shareholders or any adjournment thereof, or Initial Shareholders entitled to
receive payment of any dividends, or in order to make a determination of Initial
Shareholders for any other purpose, the date on which notice of the meeting is
mailed or the date on which the resolution declaring such dividend is adopted,
as the case may be, shall be the record date for such determination of Initial
Shareholders. When a determination of Initial Shareholders entitled to vote at
any meeting of Initial Shareholders has been made as provided in this Section,
such determination shall apply to any adjournment thereof.
5.7 QUORUM. A Majority-In-Interest of the Initial Shareholders, represented
in person or by proxy, shall constitute a quorum at any meeting of Initial
Shareholders. In the absence of a quorum at any such meeting, a majority of the
Interests so represented may adjourn the meeting from time to time for a period
not to exceed 60 days without further notice. However, if the adjournment is for
more than 60 days, or if after the adjournment a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be given to each
Initial Shareholder of record entitled to vote at a meeting.
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5.8 MANNER OF ACTING. If a quorum is present, the affirmative vote of a
Majority-In-Interest of the Initial Shareholders shall be the act of the Initial
Shareholders, unless the vote of a greater or lesser proportion or number is
otherwise required by the Act, by the Articles of Organization, or by this
Operating Agreement.
5.9 PROXIES. At all meetings of Initial Shareholders, an Initial
Shareholder may vote in person or by proxy executed in writing by the Initial
Shareholder or by a duly authorized attorney-in-fact. Such proxy shall be filed
with the Chief Executive Officer of the Company before or at the time of the
meeting. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
5.10 ACTION BY INITIAL SHAREHOLDERS WITHOUT A MEETING. Action required or
permitted to be taken at a meeting of Initial Shareholders may be taken without
a meeting if the action is evidenced by one or more written consents describing
the action taken, delivered to each Initial Shareholder entitled to vote,
executed by the unanimous consent of all Initial Shareholders entitled to vote,
a Majority-In-Interest or such other number of Initial Shareholders required for
such action, and delivered to the Chief Executive Officer of the Company for
inclusion in the minutes or for filing with the Company records. Action taken
under this Section is effective when Initial Shareholders holding the requisite
number of Interests entitled to vote have signed the consents, unless the
consents specify a different effective date. The record date for determining
Initial Shareholders entitled to take action without a meeting shall be the date
the first Initial Shareholder signs a written consent.
5.11 WAIVER OF NOTICE. When any notice is required to be given to any
Initial Shareholder, a waiver thereof in writing signed by any Person entitled
to act on behalf of the Initial Shareholder which is entitled to such notice,
whether before, at, or after the time stated therein, shall be equivalent to the
giving of such notice.
5.12 LOST INITIAL SHAREHOLDERS. In circumstances where a unanimous vote of
the Initial Shareholders is required and one or more Initial Shareholders cannot
be located after legal notice under this Agreement is sent and a good faith
effort to find the Initial Shareholder(s) based on all information available to
the Chief Executive Officer is made, the Chief Executive Officer may vote for
the Initial Shareholder(s) or appoint another Person to vote for the Initial
Shareholder(s) with the understanding that the Person casting the vote for the
absent Initial Shareholder(s) shall act prudently and in the best interests of
the Initial Shareholder(s) in light of the information available at the time.
ARTICLE VI
RIGHTS AND DUTIES OF CHIEF EXECUTIVE OFFICER,
CHIEF FINANCIAL OFFICER AND INITIAL SHAREHOLDERS
6.1 CO-CHIEF EXECUTIVE OFFICERS AND PRESIDENTS. Xxxxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxxxx shall be the initial Co-Chief Executive Officers and
Presidents of the Company, and shall serve as the Co-Chief Executive Officer of
the Company until January 31, 2009 provided that, and as long as, the Company
meets the business objectives set forth in Exhibit A below (the "Business
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Objectives"), the day-to-day business and affairs of the Company shall be
managed exclusively by its designated Chief Executive Officer. The Chief
Executive Officer shall direct, manage and control the business of the Company
to the best of its ability and shall have full and complete authority, power and
discretion to make any and all decisions and to do any and all things which the
Chief Executive Officer shall deem to be reasonably required to accomplish the
business and objectives of the Company. No Initial Shareholder or the Chief
Executive Officer shall have the authority to act for or bind the Company
without the vote of a Majority-In-Interest of the Initial Shareholders.
6.2 CHIEF FINANCIAL OFFICER. Xxxxx Xxxxxxxx shall be the initial Chief
Financial Officer of the Company, and shall serve as the Chief Financial Officer
of the Company until January 31, 2009 provided that, and as long as, the Company
meets the financial business objectives set forth from time to time by the Board
of the Directors of the Company (the "Business Objectives"), the day-to-day
financial business affairs of the Company shall be managed exclusively by its
designated Chief Financial Officer. The Chief Financial Officer shall direct,
manage and control the financial business of the Company to the best of its
ability and shall have full and complete authority, power and discretion to make
any and all decisions and to do any and all things which the Chief Financial
Officer shall deem to be reasonably required to accomplish the business and
objectives of the Company subject to overview of the Board of Directors of the
Company. The Chief Financial Officer shall not have the authority to act for or
bind the Company without the consent of the majority of the Board of Directors
of the Company.
6.3 NUMBER, TENURE AND QUALIFICATIONS. The Chief Executive Officer and
Chief Financial Officer of the Company and its respective term shall be fixed
from time to time by the affirmative vote from a majority of the Board of
Directors of the Company. The Chief Executive Officer and Chief Financial
Officer shall hold office for the term for which it is elected and until its
successor shall have been elected and qualified, unless earlier removed under
Section 6.10. The Chief Executive Officer and Chief Financial Officer need not
be a resident of the State of Arizona or an Initial Shareholder of the Company.
If the Chief Executive Officer fails to meet the Business Objectives, then
Xxxxxx X. Xxxxxxx shall, upon the request of KMG, resign as Chief Executive
Officer, and KMG shall elect a new Chief Executive Officer. If the Chief
Financial Officer fails to meet the Business Objectives, then Xxxxx Xxxxxxxx
shall, upon the request of KMG, resign as Chief Financial Officer, and KMG shall
elect a new Chief Financial Officer.
6.4 CERTAIN POWERS OF THE CHIEF EXECUTIVE OFFICER. Without limiting the
generality of Section 6.1, the Chief Executive Officer shall have power and
authority, on behalf of the Company subject to the affirmative vote of a
majority of the Board of Directors of the Company:
(a) To acquire property from any Person as the Chief Executive Officer
may determine. The fact that an Initial Shareholder is directly or
indirectly affiliated or connected with any such Person shall not prohibit
the Chief Executive Officer from dealing with that Person;
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(b) To purchase liability and other insurance, including, without
limitation, life insurance on the Chief Executive Officer and key
employees, and to protect the Company's property and business;
(c) To hold and own any Company real and/or personal properties in the
name of the Company;
(d) To borrow such amounts (not to exceed $100,000 in the aggregate)
as the Chief Executive Officer may deem appropriate for the business of the
Company, to make all investment decisions and to invest any Company funds
(by way of example but not limitation) in time deposits, governmental
obligations, various securities including shares in mutual funds, various
derivative securities including options or other investments;
(e) To execute on behalf of the Company all instruments and documents,
including, without limitation, checks; drafts; promissory notes; security
instruments; partnership agreements; and any other instruments or documents
necessary to the business of the Company;
(f) To employ accountants, legal counsel, investment advisers,
managing agents or other experts to perform services for the Company and to
compensate them from Company funds;
(g) To act as "tax matters partner" pursuant to Section 6221 of the
Code;
(h) To enter into any and all other agreements on behalf of the
Company, with any other Person or entity for any purpose;
(i) Employ, supervise and coordinate on behalf of the Company, all
personnel, except that the compensation paid to any Affiliate of an Initial
Shareholder or Chief Executive Officer must be approved by at least 80% of
the Percentage Interests;
(j) Pay all bills, invoices and expenses properly incurred by and on
behalf of the Company;
(k) Except as otherwise restricted in this Agreement, to make all
decisions regarding dividends including, but not limited to, deciding when
and if dividends shall be paid, determining the amounts and record date and
authorizing the payments thereof to Initial Shareholders of record;
(l) Any matter relating to the purchase or acquisition, or the sale,
transfer, conveyance, exchange, or grant of option relating to any real or
personal property;
(m) Obligate the Company as a guarantor, endorser, accommodations
endorser or surety for the obligation of any other Person;
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(n) Institute any proceeding at law or in equity or before
administrative agencies or compromise or settle claims against the Company
in any civil or administrative action or proceeding;
(o) Acquire by lease, purchase or otherwise any real or personal
property;
(p) Loan money to any Person;
(q) To substitute in its stead as Chief Executive Officer any entity
which has, by merger, consolidation or otherwise, acquired substantially
all of the Chief Executive Officer's assets or equity interests and
continued its business, except that, as a Initial Shareholder, the Chief
Executive Officer shall be subject to the terms and conditions of Article
VIII of this Agreement; and
(r) To do and perform all other acts as may be necessary or
appropriate to the conduct of the Company's business.
The Chief Executive Officer may act by a duly authorized attorney-in-fact.
Unless authorized to do so by this Agreement or by a Majority-In-Interest of the
Initial Shareholders, no Initial Shareholder, agent, or employee of the Company
shall have any power or authority to bind the Company in any way, to pledge its
credit or to render it liable for any purpose.
6.5 RESTRICTIONS AND LIMITATIONS ON CHIEF EXECUTIVE OFFICER'S AUTHORITY.
Except as may otherwise be specifically permitted elsewhere in this Agreement,
neither the Chief Executive Officer nor any other Initial Shareholder shall do,
or cause to be done, individually, on behalf of or in the name of the Company,
any of the following without the approval of not less than an 80% vote of
Percentage Interests of the Initial Shareholders (unless some other percentage
of the Percentage Interests is specifically stated to be required):
(a) Do any act in contravention of the Articles of Organization or
this Agreement;
(b) Confess a judgment against the Company;
(c) Possess Company property, or assign rights in specific Company
property, for other than a Company purpose;
(d) Knowingly perform any act that would subject any Initial
Shareholder to liability similar to that of a general partner in any
jurisdiction;
(e) Encumber, sell, exchange, transfer or otherwise dispose of all or
substantially all of the Company's property;
(f) Elect to dissolve the Company;
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(g) File a petition for relief in bankruptcy under any federal
bankruptcy laws or under debtor relief laws of any jurisdiction;
(h) Make any decision or take any action which, under the provisions
of this Agreement, is required to be approved by the Initial Shareholders;
(i) Admit any Person as an Initial Shareholder of the Company.
6.6 CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND INITIAL
SHAREHOLDERS HAVE NO EXCLUSIVE DUTY TO COMPANY. The Chief Executive Officer and
Chief Financial Officer shall not be required to manage the Company as his sole
and exclusive function, and the Chief Executive Officer, Chief Financial Officer
and the Initial Shareholders may have other business interests and may engage in
other activities in addition to those relating to the Company. Neither the
Company nor any Initial Shareholder shall have any right, by virtue of this
Agreement, to share or participate in such other investments or activities of
the Chief Executive Officer, Chief Financial Officer or any other Initial
Shareholder to the income or proceeds derived therefrom. Neither the Chief
Executive Officer, Chief Financial Officer nor any Initial Shareholder shall be
obligated to present any particular investment opportunity to the Company even
if such opportunity is of a character which, if presented to the Company, could
be taken by the Company and the Chief Executive Officer, Chief Financial Officer
and any Initial Shareholder shall have the right to take for his own account
(individually or as a trustee) or to recommend to others any such particular
investment opportunity. Nothing herein shall prevent the Company from employing
any entity in which the Chief Executive Officer, Chief Financial Officer or
Initial Shareholder may have an interest as a partner, Initial Shareholder,
officer, director or otherwise.
6.7 BANK ACCOUNTS AND INVESTMENT ACCOUNTS. The Chief Executive Officer or
Chief Financial Officer may from time to time open bank accounts in the name of
the Company, and the Chief Executive Officer, Chief Financial Officer and one
designee shall be the sole signatory thereon, unless the Initial Shareholders
determine otherwise. All checks over the amount(s) of one thousand ($1000.00)
dollars shall require two signatures. The Chief Financial Officer may from time
to time open investment accounts with NASD broker-dealers, mutual funds and
other investment companies or financial institutions in the name of the Company,
and the Chief Financial Officer shall be the sole signatory thereon, unless the
consent of the majority of the Board of Directors determine otherwise. The Chief
Financial Officer may, for the protection of the Company, deposit some or all of
the Company assets with an independent custodian of sufficient financial
strength and/or covered by insurance to provide a reasonable expectation of
security, and require that all investments of the Company be processed on a
deposit-versus-payment basis with the custodian.
6.8 LIABILITY AND INDEMNITY OF THE MANAGER. No Officer of the Company will
have any liability to the Company for a mistake or error of judgment or for any
act or omission believed to be within the scope of authority conferred on him by
the Operating Agreement unless such mistake, error of judgment or act or
omission was made, performed or omitted by such Officer fraudulently or
constituted gross negligence or breach of fiduciary duty. The Officer shall be
indemnified by the Company to the fullest extent permitted by Arizona law.
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6.9 RESIGNATION. Any Officer of the Company may resign as an Officer of the
Company at any time by giving written notice to the Board of Directors of the
Company. The resignation of any Officer shall take effect upon receipt of notice
thereof or at such later time as shall be specified in such notice; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Such resignation shall not affect such Officer's
rights and liabilities as an Initial Shareholder, if any.
6.10 REMOVAL.
(a) REPLACEMENT BY INITIAL SHAREHOLDER VOTE. Consent of a majority of
the Board of Directors may at any time replace any Officer and designate
another Person to take over the duties of an Officer. The removal of an
Officer hereby shall have no effect on or alter any Interest owned by the
Officer.
(b) OFFICER BANKRUPTCY. In the event of bankruptcy by an Officer,
consent of a majority of the Board of Directors may elect another Person to
serve as a new Officer.
(c) DEATH, INCAPACITY OR RESIGNATION OF OFFICER. In the event of the
death or mental incapacity of an Officer or if an Officer resigns, consent
of a majority of the Board of Directors may elect a new Officer for the
Company.
6.11 VACANCIES. Any vacancy occurring for any reason of an Officer of the
Company which is filled by the consent of a majority of the Board of Directors
shall cause the Officer so elected to serve until his successor shall be elected
and shall qualify or until his earlier death, resignation or removal.
6.12 AUTHORITY. No person dealing with the Officers shall be required to
determine his authority to make any undertaking on behalf of the Company, or to
determine any fact or circumstance bearing upon the existence of its authority,
other than to rely upon a statement signed by an Officer, thereunto authorized,
as to:
(a) the identity of any Officer or Initial Shareholder hereof;
(b) the existence or non-existence of any fact or facts, which
constitute a condition precedent to, acts by an Officer or which are in any
other manner germane to the affairs of the Company;
(c) the Persons who are authorized to execute and deliver any
instrument or document of the Company; or
(d) any act or failure to act by the Company or as to any other matter
whatsoever involving the Company or any Initial Shareholder.
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6.13 OFFICER'S COMPENSATION.
(a) The Officer's may enter into annual employment agreements that
must be ratified by a consent of a majority of the Board of Directors of
the Company.
(b) The Officer's will receive reimbursement for the actual costs
incurred by the Officer for goods, materials and services of third parties
used for or by the Company in connection with Company operations, Company
legal and accounting fees and expenses, report preparation and printing,
and other expenses of the business of the Company. Specific expenses may or
may not be eligible for reimbursement as may be specified in the Officer's
Employment Agreement.
(c) Any other compensation of the Officer's of the Company shall be
fixed from time to time by consent of a majority of the Board of Directors
of the Company and no Officer shall be prevented from receiving such
compensation by reason of the fact that he is also an Initial Shareholder
of the Company.
6.14 RECORDS, AUDITS AND REPORTS. At the expense of the Company, the Chief
Financial Officer shall maintain records and accounts of all operations and
expenditures of the Company. Upon reasonable request, each Initial Shareholder
shall have the right, during ordinary business hours, to inspect and copy the
documents, required to be kept by this Section, at the Initial Shareholder's
expense. At a minimum the Company shall keep at its principal place of business
the following records:
(a) A current list of the full name and last known business,
residence, or mailing address of each Initial Shareholder and Officer, both
past and present;
(b) A copy of the Articles of Incorporation of the Company and all
amendments thereto, together with executed copies of any powers of attorney
pursuant to which any amendment has been executed;
(c) Copies of the Company's federal, state, and local income tax
returns and reports, if any, for the three most recent years;
(d) Copies of the Company's currently effective written Operating
Agreement and all amendments thereto, copies of any prior written Operating
Agreement no longer in effect, copies of any prior writings permitted or
required with respect to an Initial Shareholder's obligation to contribute
cash, property or services and copies of any financial statements of the
Company for the three most recent years;
(e) Minutes of every annual, special, and court-ordered meeting; and
(f) Any written consents obtained from Initial Shareholders for
actions taken by Initial Shareholders without a meeting.
(g) Any written consents obtained from the Board of Directors for
actions taken.
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6.15 RIGHTS OF AZTECA WRAP FOODS, LLC. AZTECA shall have the absolute right
to retain its existing store, which shall not become a franchise store. However,
AZTECA will maintain its existing stores so that they are suitable for training
franchisees, and for that purpose will utilize all systems and methods used by
the Company in connection with its franchise stores. AZTECA shall not be
obligated to pay any franchise fees or charges with respect to its existing
store.
ARTICLE VII
DELINQUENT AND DEFAULTING INITIAL SHAREHOLDERS
7.1 FAILURE TO PAY AMOUNTS DUE. If any Initial Shareholder fails to pay a
Capital Contribution or any other assessment within ten (10) days of the due
date specified on a capital call billing, he shall be considered a
"Non-Contributing Initial Shareholder". Another Initial Shareholder or other
Initial Shareholders shall have the right to advance directly to the Company the
funds required from the Non-Contributing Initial Shareholder (a "Contribution
Loan").
7.2 DEFAULT. If no Contributing Initial Shareholder elects to advance the
amount of the additional funds required from the Non-Contributing Initial
Shareholder, then the failure of the Non-Contributing Initial Shareholder to
make the Additional Capital Contribution or assessment shall constitute a
default and the Non-Contributing Initial Shareholder shall be a Defaulting
Initial Shareholder.
7.3 CONTRIBUTION LOAN. In the event a Contributing Initial Shareholder
elects to make a Contribution Loan, then the Contribution Loan shall bear
interest at a rate equal to the Prime Rate in effect from time to time, plus
three (3) percentage points, from the date the Contribution Loan is made until
paid in full (adjusted monthly on the 1st day of each month).
(a) Repayment of the Contributing Initial Shareholder's Contribution
Loan shall be secured by the Non-Contributing Initial Shareholder's
Interest.
(b) The Non-Contributing Initial Shareholder hereby grants a security
interest in his Interest in the Company to the Contributing Initial
Shareholder who has advanced a Contribution Loan and hereby irrevocably
appoints the Contributing Initial Shareholder as his attorney-in-fact with
full power to prepare and execute any reasonable documents, instruments and
agreements, including but not limited to, reasonable Uniform Commercial
Code Financing and Continuation Statements, and other reasonable security
instruments as may be appropriate to perfect and continue such security
interest in favor of the Contributing Initial Shareholder. Copies of any
such documents shall be mailed to the Non-Contributing Initial Shareholder.
7.4 DEFAULTING INITIAL SHAREHOLDER. If any Contribution Loan (which shall
include all attorney fees, interest, and costs incurred by the Contributing
Initial Shareholder) has not been repaid in full within sixty (60) days of the
date the Contribution Loan is made, then without further notice, demand or
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advertisement (all of which are hereby expressly waived), the Non-Contributing
Initial Shareholder shall be considered a Defaulting Initial Shareholder and his
full and complete Capital Account and Percentage Interest shall be automatically
transferred to the Contributing Initial Shareholder. Such transfer shall be
deemed to be given for adequate consideration and deemed effective as of the
date the Defaulting Initial Shareholder failed to make the Capital Contribution
or other assessment.
7.5 LOSS OF RIGHT TO VOTE. A Defaulting Initial Shareholder shall not be
entitled to attend Company meetings nor receive information relating to the
Company business and shall have no further voice in the management of the
Company business and no right to vote on Company matters. A Defaulting Initial
Shareholder shall not be considered in determining a Majority-In-Interest for
action by the Initial Shareholders.
7.6 ADDITIONAL RIGHTS AND REMEDIES. If an Initial Shareholder becomes a
Defaulting Initial Shareholder, and if no other Initial Shareholder elects to
make a Contribution Loan or elects to purchase the Defaulting Initial
Shareholder's interest, such Defaulting Initial Shareholder will be immediately
expelled from the Company. An expelled Initial Shareholder shall not be entitled
to withdraw any capital from the Company and shall have no right to participate
in the affairs of the Company or to make any further Capital Contributions. The
Defaulting Initial Shareholder's Capital Account shall be proportionately
divided among the remaining Non-Defaulting Initial Shareholders based on their
Percentage Interest or transferred to a new incoming Initial Shareholder in
accordance with the terms hereof. The expulsion of a Initial Shareholder shall
not dissolve or terminate the Company. In lieu of, but not in addition to the
rights and remedies provided for in this Article VIII, the Company and/or any
Non-Defaulting Initial Shareholder(s) may elect to evoke and pursue any and all
other remedies against any such Defaulting Initial Shareholder, whether provided
at law or in equity, including, but not limited to, bringing suit for damages,
for specific performances, or for the appointment of a receiver or special
master, in the discretion of the Company and/or such Non-Defaulting Initial
Shareholder(s).
ARTICLE VIII
RESTRICTIONS ON TRANSFERABILITY
8.1 RESTRICTIONS ON TRANSFER OF INTERESTS. No Initial Shareholder shall
have any right to retire or withdraw voluntarily from the Company or to sell,
transfer or assign an Interest or to voluntarily commit an act that constitutes
a Withdrawal Event. With certain exceptions noted in Section 8.2 below, no
Initial Shareholder may transfer, assign, or otherwise dispose of his or her
Interest in the Company without first having a bona fide offer from a third
party to purchase the Interest (an "Offer") and then giving the Company the
opportunity to purchase the Interest for the price offered by the third party.
Further, there must be approval by a Majority-In-Interest of the Initial
Shareholders of the Company, and the assignee of the Interest must agree to be
bound by the provisions of this Operating Agreement. Any voluntary act of an
Initial Shareholder that constitutes a withdrawal from the Company shall
constitute a material breach of this Agreement and the Company shall be entitled
to collect damages for such breaches. Such damages shall offset any cash or
other property otherwise distributable to such Initial Shareholder by the
Company. The admission of a transferee of an Interest as an Initial Shareholder
shall not effect the dissolution of the Company.
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8.2 PERMITTED TRANSFERS. A Transfer of any Interest or any portion thereof
may be made only under any of the following circumstances:
(a) A Majority-In-Interest of the Initial Shareholders has consented
to such Transfer;
(b) The Transfer is made to the estate, personal representative,
executor, heirs, or devisees of a deceased Initial Shareholder;
(c) The Transfer is made to an Initial Shareholder's living trust;
(d) Any Initial Shareholder may, without the consent of the other
Initial Shareholders, transfer its Interest in the Company to or from any
entity controlled by, controlling or under common control with such
transferring Initial Shareholder. For purposes of this Section 8.2, control
shall mean the power to direct at least eighty percent (80%) of the voting
power within a transferring Initial Shareholder;
(e) Any Initial Shareholder may gift any of his or her Units of the
Company to children or other descendants, but not spouses, without the
consent of all of the Initial Shareholders; or
(f) Upon dissolution of an Initial Shareholder's marriage, the named
Initial Shareholder has the option to purchase any interest, which his or
her spouse may be deemed to hold in the Company pursuant to the purchase
price and payout set forth in Sections 8.4 and 8.6 below.
8.3 STATUS OF UNAPPROVED TRANSFEREES. Without the consent of a
Majority-In-Interest of the Initial Shareholders in accord with Section 8.2(a)
above, no transferee of an Interest in the Company, including any transferee
pursuant to Section 8.2(b)-(f), may succeed to all of the rights of an Initial
Shareholder. Any such transferee would be only an assignee in adverse possession
entitled to only receive the dividends to which the assignor Initial Shareholder
would have been entitled, and entitled to any tax benefits and liable for any
tax payments, which would have accrued to the assignor Initial Shareholder. Such
an assignee has no right to vote or exercise any discretion with respect to the
affairs of the Company.
8.4 SPECIAL PROVISION RESPECTING TRANSFER OF AN INTEREST.
(a) Upon the death or dissolution of an Initial Shareholder, if it is
determined that a successor, heir and/or devisee of that Initial
Shareholder has a legal right to an interest in the Company, and if the
remaining Initial Shareholders do not agree by a unanimous vote to permit
the successor, heirs and/or devisees of a Initial Shareholder to become a
substituted Initial Shareholder hereunder, the Company and all the
remaining Initial Shareholders shall have the right and option for thirty
(30) days from receiving written notice of such event to purchase all, but
19
not less than all, of the Interest of the successor, heir and/or devisee of
such dissolved or deceased Initial Shareholder. The total purchase price
for the interest in the Company of the successor, heir or devisee of such
dissolved or deceased Initial Shareholder shall be computed by taking: (i)
the sum of the Fair Market Value of the assets of the Company less the
total liabilities of the Company as of the valuation date, (ii) multiplied
times the Percentage Interest of the successor, heir or devisee of the
deceased Initial Shareholder, and (iii) subtracting the amount of any
obligations owed by the dissolved or deceased Initial Shareholder to the
Company from the product of (i) and (ii).
(b) Upon bankruptcy of a Initial Shareholder, if the remaining Initial
Shareholders do not agree by a unanimous vote to permit the trustee (or
other legal representative) of the bankrupt Initial Shareholder to become a
substituted Initial Shareholder hereunder, the Company and all the
remaining Initial Shareholders shall have the right and option for thirty
(30) days from receiving written notice of such event to purchase all, but
not less than all, of the Interest of such bankrupt Initial Shareholder.
The total purchase price for such bankrupt Initial Shareholder's entire
interest in the Company shall be computed by taking: (i) the sum of the
Fair Market Value of the assets of the Company less the total liabilities
of the Company as of the valuation date, (ii) multiplied times the
Percentage Interest of the bankrupt Initial Shareholder, and (iii)
subtracting the amount of any obligations owed by the bankrupt Initial
Shareholder to the Company from the product of (i) and (ii).
8.5 REQUIREMENTS FOR TRANSFEREE BECOMING A SUBSTITUTED INITIAL SHAREHOLDER.
No transferee shall become a "Substituted Initial Shareholder" in the Company
unless all of the following conditions are satisfied:
(a) A Majority-In-Interest of the Initial Shareholders shall have
consented to such substitution or such substitution is otherwise in
accordance with Section 8.2 hereof;
(b) The person to whom the Transfer is to be made shall have assumed
any and all of the obligations and will execute any and all necessary
documents to effect the Transfer under this Agreement with respect to the
Interest to which the Transfer relates;
(c) All expenses (including legal fees) incurred in connection with
the Transfer shall have been paid by or for the account of the Person to
whom the Transfer is to be made; the Company will bear no expenses; and
(d) All agreements, certificates and all other documents shall have
been executed and filed and all other acts shall have been performed which
the Initial Shareholders deem necessary to make the Person to whom the
Transfer is to be made a substituted Initial Shareholder in the Company, to
preserve the status of the Company, and to comply with all applicable
governmental statutes, rules and regulations and requirements, if any, of
Company creditors.
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8.6 SETTLEMENT AND PURCHASE PRICE. The settlement for the purchase of the
Interest pursuant to Sections 8.1 or 8.4 hereof shall be held thirty (30) days
from the exercise of any option relating to such settlement at 10:00 a.m.
Phoenix time at the principal office of the Company or at such other date, time
and place as shall be agreed upon by the parties to the settlement.
(a) In the case of a purchase pursuant to Section 8.1 hereof, the
purchase price shall be paid in accordance with the terms of the Offer;
provided, however, that notwithstanding any of the terms of the Offer, the
closing shall not occur any sooner than the settlement date provided for
herein. If the closing date of the Offer is later than the settlement date
provided for herein, the settlement shall take place upon the settlement
date provided for herein or the closing date set forth in the Offer, as may
be elected by the purchasing Initial Shareholders.
(b) In the case of a purchase pursuant to Section 8.4 hereof, the
purchase price of the dissolved, deceased or bankrupt Initial Shareholder's
Interest may, at the purchaser's option, be payable either in cash or on a
deferred basis, as follows:
(i) A down payment of ten percent (10%) of the purchase price
shall be payable at the settlement;
(ii) The balance of the purchase price shall be paid in six (6)
equal annual principal installments, the first installment to be due
one (1) year following the settlement date and subsequent annual
principal payments shall be due on the same day of each successive
year thereafter.
(iii) Interest on the deferred balance of the purchase price
shall bear interest at the Prime Rate from the settlement date until
paid in full (adjusted monthly on the 1st day of each month). Accrued
interest shall be payable at the same time as installments of
principal.
(iv) If not sooner paid in full, the unpaid principal plus
accrued interest shall be paid in full upon the winding up of the
Company's business and affairs. In the event of default in the payment
of principal or interest pursuant to the provisions hereof, the party
entitled to payment, at its option shall have the right to declare the
unpaid balance of principal and accrued interest immediately due and
payable.
(v) The deferred balance of such purchase price plus such accrued
interest shall be secured by a security interest in the transferring
Initial Shareholder's Interest.
8.7 COMPULSORY BUY-SELL.
(a) Any Initial Shareholder (the "Initiating Initial Shareholder") may
offer to sell all (but not less than all) of its Percentage Interest to the
remaining Initial Shareholders ("Remaining Initial Shareholders") by
submitting to the Remaining Initial Shareholders a written offer (the
"Offering Notice"), setting forth the Initiating Initial Shareholders'
21
intent to rely on this Section 8.7(a) and setting forth the sales price for
the Percentage Interest (indicating the price for each one Percentage
Interest).
(b) The Remaining Initial Shareholders shall have thirty (30) days
following the date of receipt of the Offering Notice to either:
(i) purchase in the aggregate all of the Percentage Interest of
the Initiating Initial Shareholder for the price and price per one
Percentage Interest basis set forth in the Offering Notice; or
(ii) sell all of the Remaining Initial Shareholders' Percentage
Interest to the Initiating Initial Shareholder for the same price per
one Percentage Interest basis set forth in the Initiating Initial
Shareholder's Offering Notice, and the Initiating Initial Shareholder
shall be obligated to purchase the Remaining Initial Shareholders'
Percentage Interest at such price per one Percentage Interest basis.
(c) The Remaining Initial Shareholders shall make the election called
for in Section 8.7(b)(i) by unanimous vote of the Remaining Initial
Shareholders. If one Remaining Initial Shareholder votes to acquire the
Initiating Initial Shareholder's Percentage Interest (the "Acquiring
Remaining Initial Shareholder") and the others to sell his Percentage
Interest to the Initiating Initial Shareholder (the "Selling Remaining
Initial Shareholder"), then the Acquiring Remaining Initial Shareholder
shall have the option, for ten (10) days after the Selling Remaining
Initial Shareholder's election, to acquire all of the Selling Remaining
Initial Shareholder's Percentage Interest at the same price per one
Percentage Interest basis and on the same terms as he is acquiring the
Initiating Initial Shareholder's Percentage Interest. If the Remaining
Initial Shareholders do not exercise their rights under Section 8.7(b) in a
timely manner, then the Remaining Initial Shareholders shall be deemed to
have unanimously elected to purchase all of the Initiating Initial
Shareholders' Percentage Interest in accordance with Section 8.7(b)(i).
(d) The purchase price for the Percentage Interest purchased pursuant
to this Section 8.7 shall be paid by payment in cash of 20% of the purchase
price upon the date of Closing and the balance in twelve (12) equal
quarterly installments of principal and interest, with such payments
commencing on the first day of the third month from the date of Closing.
The outstanding balance of the purchase price shall be evidenced by a
promissory note, which note shall bear interest at the Prime Rate. The note
shall be secured by a security interest in the Percentage Interest to be
purchased. Notwithstanding any contrary provisions herein, the selling
Initial Shareholder and the purchasing Initial Shareholder may agree to any
other mutually acceptable terms and provisions for the payment of the
purchase price.
(e) If any Initial Shareholder fails to complete the mandatory
purchase or sale, as applicable, once initiated by an Offering Notice
according to the terms of this Section 8.7, such Initial Shareholder shall
be deemed a Defaulting Initial Shareholder within the meaning of this
22
Agreement, and such Defaulting Initial Shareholder's full and complete
Capital Account and Percentage Interest shall be automatically transferred
to the non-defaulting Initial Shareholders. Such transfer shall be deemed
to be given for adequate consideration and deemed effective as of the date
the Defaulting Initial Shareholder failed to complete the mandatory
purchase or sale, as applicable.
(f) In connection with the purchase and sale of an Initial
Shareholder's Percentage Interest pursuant to this Section, the purchasing
Initial Shareholders and their spouses, if any, shall, as a condition to
such purchase, jointly and severally indemnify and hold harmless the
selling Initial Shareholder from any and all liabilities theretofore or
thereafter arising from the activities of the Company, provided, however,
the purchasing Initial Shareholder shall not be obligated to indemnify the
selling Initial Shareholder from any liability arising out of or in
connection with any act or omission of the selling Initial Shareholders
which was fraudulent, wanton, grossly negligent, in bad faith, contrary to
the policies of the Company, contrary to the selling Initial Shareholder's
fiduciary duty to the Company and its Initial Shareholders. In connection
with the purchase and sale of an Initial Shareholder's interest, pursuant
to this Section 8.7, the purchasing Initial Shareholder shall use its best
efforts to obtain the release of the selling Initial Shareholders from all
personal liability for the debts and other liabilities of the Company, if
any.
In connection with the sales transaction contemplated by this Section, the
selling Initial Shareholder shall represent and warrant to the purchasing
Initial Shareholder, as of the closing date, that they are not aware of any
material liability of the Company, other than the liabilities disclosed on
the books and records of the Company and other than those liabilities
otherwise disclosed to or known by the purchasing Initial Shareholder. The
selling Initial Shareholders shall indemnify and hold harmless the
purchasing Initial Shareholders from any and all loss, cost, damages or
expenses, including attorneys' fees, incurred by the purchasing Initial
Shareholders arising out of the inaccuracy of said representation and
warranty.
No Initial Shareholder shall be permitted to make an offer pursuant to
this Section at any time while such Initial Shareholder is in default under
this Agreement.
8.8 TERMINATION OF THE COMPANY FOR TAX PURPOSES. Notwithstanding anything
to the contrary contained in any other provision of this Agreement, the sale or
exchange of all or any part of an interest in the Capital and/or the Profits of
the Company may not be made (and will be null and void) if the interest sought
to be sold or exchanged, when added to all other interests in the Company's
Capital and/or Profits transferred within the twelve (12) consecutive month
period ending on the date of such proposed sale or exchange, would cause the
termination of the Company for federal income tax purposes.
8.9 RESTRAINING ORDER. If any Initial Shareholder shall at any time
transfer or attempt to transfer all or any part of its Interest in violation of
the provisions of this Agreement, then any other Initial Shareholder, in
addition to all other available rights and remedies, shall be entitled to a
decree or order restraining and enjoining such transfer.
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ARTICLE IX
ADDITIONAL INITIAL SHAREHOLDERS
After the formation of the Company, any Person acceptable to all of the
Initial Shareholders may become an Initial Shareholder of this Company for such
consideration as the Initial Shareholders by their unanimous vote shall
determine.
ARTICLE X
DISSOLUTION AND TERMINATION
10.1 DISSOLUTION. The Company shall be dissolved upon the first to occur of
any of the following events:
(a) upon the entry of a decree of dissolution under A.R.S. ss.29-785;
(b) upon any Withdrawal Event, unless the business of the Company is
continued by the specific unanimous consent of the remaining Initial
Shareholders given within 90 days after such event, and there are at least
two remaining Initial Shareholders;
(c) a vote of a Majority-In-Interest to dissolve;
(d) The appointment of a receiver, trustee or liquidator of the assets
of the Company, or the attachment, execution or other judicial seizure of
all or a portion of the assets of the Company, unless such seizure is
discharged within thirty (30) days thereafter; or
(e) The inability of the Initial Shareholders owning a
Majority-In-Interest of all Non-Defaulting Initial Shareholders to agree
upon any matter which makes it impossible for the Company business to be
continued in a normal business-like manner.
10.2 EFFECT OF FILING OF DISSOLVING STATEMENT. Upon the dissolution of the
Company, the Company shall cease to carry on its business, except insofar as may
be necessary for the winding up of its business, but its separate existence
shall continue until Articles of Termination have been filed with the Nevada
Corporation Commission or until a decree dissolving the Company has been entered
by a court of competent jurisdiction.
10.3 WINDING UP, LIQUIDATION AND DISTRIBUTION OF ASSETS.
(a) Upon dissolution, an accounting shall be made by the Chief
Financial Officer of the accounts of the Company and of the Company's
assets, liabilities and operations, from the date of the last previous
accounting until the date of dissolution. The Chief Executive Officer shall
immediately proceed to wind up the affairs of the Company. Notwithstanding
the foregoing, if the majority of the Board of Directors determines that an
immediate sale of part or all of the investments or assets of the Company
would cause undue loss to the Initial Shareholders, the majority of the
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Board of Directors, in order to avoid such loss, may, to the extent not
then prohibited by the governing law applicable in the circumstances, defer
liquidation of and withhold from distribution for a reasonable time any
assets of the Company except those necessary to satisfy the immediately due
debts and obligations of the Company.
(b) If the Company is dissolved and its affairs are to be wound up,
the Chief Executive Officer, with the consent to the majority of the Board
of Directors, shall (1) sell or otherwise liquidate all of the Company's
assets as promptly as practicable (except to the extent the Chief Executive
Officer, with the consent to the majority of the Board of Directors, may
determine to distribute any assets to the Initial Shareholders in kind),
(2) allocate any profit or loss resulting from such sales to the Initial
Shareholders' Capital Accounts in accordance with Article II hereof, (3)
discharge all liabilities of the Company (other than liabilities to Initial
Shareholders), including all costs relating to the dissolution, winding up,
and liquidation and distribution of assets, (4) establish such Reserves as
may be reasonably necessary to provide for contingent liabilities of the
Company (for purposes of determining the Capital Accounts of the Initial
Shareholders, the amounts of such reserves shall be deemed to be an expense
of the Company), (5) discharge any liabilities of the Company to the
Initial Shareholders other than on account of their interests in Company
capital or profits, and (6) distribute the remaining assets in the
following order:
(i) If any assets of the Company are to be distributed in kind,
the net fair market value of such assets as of the date of dissolution
shall be determined by independent appraisal or by agreement of the
Initial Shareholders. Such assets shall be deemed to have been sold as
of the date of dissolution for their Fair Market Value, and the
Capital Accounts of the Initial Shareholders shall be adjusted
pursuant to the provisions of Article II of this Agreement to reflect
such deemed sale.
(c) Upon completion of the winding up, liquidation and distribution of
the assets, the Company shall be deemed terminated.
(d) The Chief Executive Officer shall comply with any applicable
requirements of applicable law pertaining to the winding up of the affairs
of the Company and the final distribution of its assets.
10.4 ARTICLES OF TERMINATION. When all debts, liabilities and obligations
have been paid and discharged, or adequate provisions have been made therefor,
and all of the remaining property and assets have been distributed to the
Initial Shareholders, Articles of Termination shall be executed and filed with
the Nevada Corporation Commission.
10.5 COMPENSATION AND REIMBURSEMENT. The Chief Executive Officer, Chief
Financial Officer or other Initial Shareholders acting as liquidator of the
Company's assets shall be entitled to reimbursement for out-of-pocket expenses
incurred and reasonable compensation for services rendered in connection with
the winding up and liquidation of the Company. Such reimbursement shall be paid
as an expense of the Company after all debts to third parties have been repaid
or adequately provided for but before any repayment of loans or advances by the
Initial Shareholders.
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10.6 RETURN OF CONTRIBUTION NON-RECOURSE TO OTHER INITIAL SHAREHOLDERS.
Except as provided by law, upon dissolution, each Initial Shareholder shall look
solely to the assets of the Company for the return of its Capital Contribution.
If the Company property remaining after the payment or discharge of the debts
and liabilities of the Company is insufficient to return the cash or other
property contribution of one or more Initial Shareholders, such Initial
Shareholder or Initial Shareholders shall have no recourse against any other
Initial Shareholder.
ARTICLE XI
NO PARTITION
Each Initial Shareholder hereby waives any right to partition or the right
to take any other action which might otherwise be available to such Initial
Shareholder for the purpose of severing its relationship with the Company or its
Interest in the assets and properties held by the Company from the Interest of
the other Initial Shareholders until the dissolution of the Company. Each
Initial Shareholder specifically agrees not to institute any action therefor and
each Initial Shareholder agrees that this section may be pled as a bar to the
maintenance of any such action. A violation of this provision shall entitle the
non-violating Initial Shareholders to collect, from the Initial Shareholder
violating this provision, the actual attorney's fees, costs and other damages
those non-violating Initial Shareholders and the Company incur in connection
therewith.
ARTICLE XII
INDEMNIFICATION
12.1 INDEMNIFICATION OF OFFICERS. Except as provided in this Agreement and
subject to the provisions of this Section, any Officer shall not be liable to
the Company or to any other Initial Shareholder(s) for any liability, loss,
cost, damage, attorney's fees, or other expenses which shall or may be incurred
as a result of or in connection with any act or actions performed or taken by
the Officer or by virtue of any omission of the Officer in the capacity as an
Officer on behalf of the Company, and the Company shall defend, indemnify and
hold the Officer harmless as a condition precedent to recovery. Such indemnity
shall not extend to gross negligence, fraudulent acts or willful misconduct on
the part of the Officer. Any amounts paid by the Company pursuant to the
provisions of this paragraph shall be deemed to be a Company expense and shall
be paid before determining profit participation.
12.2 INITIAL SHAREHOLDER INDEMNIFICATION. Each Initial Shareholder shall
indemnify the other Initial Shareholders from and against any and all claims,
demands, losses, damages, liabilities, suits and other proceedings, judgments
and awards, costs and expenses (including but not limited to reasonable
attorney's fees) arising directly or indirectly out of any breach of the
covenants contained herein, by such Initial Shareholder, its Affiliates,
officers, agents or employees.
12.3 NO LIABILITY FOR INVESTMENT TAX CREDITS OR CAPITAL GAINS. Anything
herein to the contrary notwithstanding, no Initial Shareholder shall have any
liability to the Company or any other Initial Shareholder by reason of failure
to qualify for investment tax credits or long term capital gains.
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ARTICLE XIII
GENERAL
13.1 NOTICES. All notices and other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given, made and received only when personally delivered against
receipt or five (5) days after being (i) sent by telegram or (ii) deposited in
the United States mails, certified or registered, postage prepaid, return
receipt requested, addressed to the addressee at its address set forth below on
the attached Schedule 1 or as shown from time to time in the records of the
Company. Any Initial Shareholder may alter the address to which communications
are to be sent by giving notice of such change of address to the other Initial
Shareholders in conformity with the provisions of this Section.
13.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
13.3 CONTROLLING LAW. This Agreement shall be governed by, interpreted and
construed in accordance with the laws of the State of Arizona.
13.4 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided by
this Operating Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive the right to use any or all other
remedies. Such rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance or otherwise.
13.5 SEVERABILITY. If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid, illegal or unenforceable
to any extent, the remainder of this Agreement and the application thereof shall
not be affected and shall be enforceable to the fullest extent permitted by law.
13.6 INDULGENCES NOT WAIVERS. Neither the failure nor any delay on the part
of any party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of any other right, remedy, power or privilege with respect to any
occurrence or be construed as a waiver of such right, remedy, power or privilege
with respect to any subsequent occurrence.
13.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any persons to be signatory hereto may execute this
Agreement by signing any such counterpart.
13.8 AMENDMENT. This Agreement may be amended only by an agreement in
writing executed by all Initial Shareholders.
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13.9 ATTORNEY'S FEES. If any party institutes a suit or other proceeding
against any other party in any way connected with this Agreement or its
enforcement, the prevailing party to any such action shall be entitled to
recover from the other party reasonable attorney's fees (not to exceed the
actual attorney's fees incurred), witness fees and expenses and court costs in
connection with said suit or proceeding at both trial and appellate levels,
regardless of whether any such action or proceeding is prosecuted to judgment.
13.10 NUMBER OF DAYS. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays, and
holidays; provided however, that if the final day of any time period falls on a
Saturday, Sunday or recognized United States holiday, then the final day shall
be deemed to be the next date which is not a Saturday, Sunday, or holiday.
13.11 CAPTIONS. Captions are not intended to convey any meaning or be a
part of this agreement but are merely used for assistance in identifying
paragraphs.
13.12 EXECUTION OF ADDITIONAL INSTRUMENTS. Each Initial Shareholder hereby
agrees to execute such other and further statements of interest and holdings,
designations, powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.
13.13 CONSTRUCTION. Whenever the singular number is used in this Operating
Agreement and when required by the context, the same shall include the plural,
and the masculine gender shall include the feminine and neuter genders and vice
versa; and the work "person" or "party" shall include a corporation, firm,
partnership, proprietorship or other form of association.
13.14 CREDITORS. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the Company.
13.15 AGREEMENT OF SPOUSES OF INITIAL SHAREHOLDERS. By executing this
Agreement, the spouse of each Initial Shareholder acknowledges and consents to
the terms and conditions of this Agreement and agrees, for himself or herself
and for the community of himself and herself and the Initial Shareholder, to be
bound hereby. Each spouse of an Initial Shareholder, for himself or herself and
the community of which he or she is an Initial Shareholder, hereby irrevocably
appoints the Initial Shareholder as attorney-in-fact with an irrevocable proxy
coupled with an Interest to vote on any matter to come before the Initial
Shareholders or to agree to and execute any amendments of this Agreement without
further consent or acknowledgment of the spouse and to execute proxies,
instruments, or documents in the spouse's name as may be required to effect the
same. This power of attorney is intended to be durable and shall not be affected
by disability of the spouse.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first above written.
AZTECA WRAP FOODS, L.L.C.
By:______________________________ Date: ________________________
Xxxxxx X. Xxxxxxx, Manager/Member
and Initial Shareholder
BGR CORPORATION
By:______________________________ Date: ________________________
Xxxxx Xxxxx, President and Initial Shareholder
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SCHEDULE 1
As of January _____, 2004
PERCENTAGE
INITIAL SHAREHOLDER/ADDRESS INTEREST INITIAL CONTRIBUTIONS
BGR Corporation 50% Cash and services as set
0000 X. Xxxxxxxxxx Xxxxx Xxxx, Xxxxx 000 forth on Exhibit B.
Xxxxxxxxxx, Xxxxxxx 00000
AZTECA WRAP FOODS, L.L.C. 50% License of concept, design,
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000 service marks, menus, trade
Xxxxxxx, Xxxxxxx 00000 dress, recipes, etc., as set
forth in Exhibit C.
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EXHIBIT A
BUSINESS OBJECTIVES
BGR shall meet the following minimum sales performance standards for
cumulative sale of Qualified Franchise Units, as defined in Exhibit B,
commencing with the date of this Agreement. "Quarter" shall refer to each
consecutive 90-day period.
Cumulative
Quarter Sales
------- -----
1st (90 days) 0
2nd (180 days) 7
3rd (270 days) 16
4th (360 days) 25
5th (450 days) 34
6th (540 days) 34
At the end of each Quarter, BGR shall have sold the cumulative number of
Franchise Units set forth above; provided, however, that if BGR fails to meet
the cumulative sales number as to any quarter, BGR shall have an additional 90
days to cause BGR to meet the requirement. AZTECA shall apply for registration
of service marks and trade names necessary or appropriate for the business of
the Company, and shall diligently pursue such registration. The time to meet
Business Objectives shall not run, and shall be suspended, or "tolled", during
any period in which AZTECA cannot provide the Company with rights to proper
service marks and tradenames relating to the Company's franchise concept which
are adequate, in BGR's reasonable judgment, to protect the Company and its
franchisees.
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EXHIBIT B
1. CASH CONTRIBUTIONS. BGR shall contribute cash as needed as provided for
in Section 2.2 of the Operating Agreement and further defined in Company
obligations as set forth in The KoKoPelli Mexican Grill Financial Projections to
be completed and agreed to by a majority of the Board of Directors within 90
days from signing of this Agreement.
2. SERVICES. BGR or assignee shall market and sell Qualified Franchise
Units (as defined below), and will make such personnel available, as BGR deems
necessary for that purpose. The term "Qualified Franchise Unit" includes: (1)
every Franchise Unit for which the Company's then-current form of Franchise
Agreement ("Franchise Agreement") has been fully executed and a non-refundable
initial franchise fee ("Franchise Fee") has been paid; (2) every Franchise Unit
for which the Company's then-current form of development agreement pursuant to
which multiple Franchise Units are to be developed ("Development Agreement") has
been fully executed and a non-refundable initial deposit fee ("Deposit Fee") has
been paid; and (3) every existing Franchise Unit, the ownership of which has
transferred and for which a Franchise Fee or a transfer fee has been paid.
BGR or assignee shall have the right to execute any document (including the
Franchise Agreement, Uniform Franchise Offering Circular ("UFOC"), or other
related document) on behalf of the Company, and shall provide potential
Franchisees with the UFOC, Franchise Agreement and other related documents. BGR
or assignee shall negotiate with potential Franchisees.
BGR or assignee shall determine the states in which Franchise Units shall
be marketed. BGR or assignee shall cause the Company to file effective franchise
registrations and maintain such registrations in all such states that require
registration of franchises, shall amend all registrations as required, shall
timely renew all registrations, and shall make any and all applications,
filings, or otherwise as required by law.
BGR shall:
* UNIFORM FRANCHISE OFFERING CIRCULAR (UFOC) -Oversee the development of the
circular, franchise agreements and area development agreements. Complete
the registration process in pertinent states.
* WEB SITE REDEVELOPMENT -Oversee the redevelopment of a corporate website to
improve online presence for franchise sales and marketing.
* MARKETING COLLATERAL -Develop a marketing brochure to incorporate the
concept branding messages and the franchise information to send to
prospects. This brochure will be used along with the website in marketing
the concept to prospective franchisees.
* REAL ESTATE -Develop and implement a rigorous KoKoPelli-centric real estate
market analysis and site analysis process for all future KoKoPelli Mexican
Grill locations. Complete all real estate set-up to include individual
market analysis, as well as establishing local real estate firms in each
market that KoKoPelli enters.
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* FRANCHISE SALES -Begin prospecting for franchise sales, initial pubic
relations campaign, initial advertising campaign and preliminary prospect
meetings.
* PROTOTYPE DEVELOPMENT -Develop a standard set of prototypes for traditional
and non-traditional locations, as well as, set up national suppliers for
all FF&E, small wares, design and construction management.
* PURCHASING -Set up national purchasing program for all food, beverage, and
paper purchases. This will include setting up product distribution
throughout the country.
* SALES BUILDING MARKETING -Develop a tool set for every restaurant to use
while marketing to their immediate 2-3 mile radius. This complete system
will include a marketing program to be used as part of the franchise
operating system.
* BRANDING/POSITIONING/DIFFERENTIATION -Analyze current business practices
against several other companies competing for similar customers to
determine the most strategic positioning.
* MENU DEVELOPMENT AND FOOD COST -Develop a menu costing program to cost out
individual menu items, implement an inventory management program to be used
by all franchisees, and complete a thorough analysis of check averages,
product mix, and day part sales to further improve the site selection
criteria. Develop new menu items and refine existing menu items to improve
sales and product mix.
* BRAND AWARENESS MARKETING -Set up a national marketing fund, national-level
marketing strategies, securing national and industry public relations.
* OPERATIONS AND TRAINING -Redevelop all manuals and systems to be suitable
for a national franchise roll out. This will include all of the operations
manuals, job responsibilities by positions, training programs for
management and employees, human resources, marketing, site selection,
financial tools, forms, and checklists.
* INTRANET SERVICES -All manuals, financial tools, systems and programs will
be posted on a secure intranet and maintained and updated.
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