EXHIBIT 10.1
AGREEMENT TO EXCHANGE
This Agreement to Exchange (the "Agreement") is made this 16th day of
August 1999 by and between International Fast Food Corporation (the "Company")
and Northstar Investment Management Corp. (the "Holder").
RECITALS
1. Pursuant to the Indenture (the "Indenture") dated November 5, 1997
by and among the Company, as Issuer, and Marine Midland Bank, as Trustee, the
Company issued $27,536,000 in aggregate stated principal amount at maturity of
the Company's 11% Convertible Senior Subordinated Discount Notes due 2007 (the
"Securities").
2. The Holder is the record and beneficial owner of $17,900,000 in
aggregate stated principal amount at maturity of the Securities.
3. The Holder has agreed to exchange the Securities on the terms and
subject to the conditions set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, for and in consideration
of the mutual covenants and agreements set forth herein, hereby agree as
follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Indenture.
(a) "Current Market Price" means the average of the daily
Closing Price per share of the Common Stock for the ten consecutive Trading Days
immediately prior to the date in question.
(b) "Closing Price" means the closing sale price, regular
way, on the applicable day or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices, regular way, in each case
on the Nasdaq National Market or SmallCap Market, or, if such security is not
listed or admitted for trading on such exchange, on the principal national
securities exchange or quotation system on which such security is quoted or
listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the best bid
offered price on the OTC Bulletin Board Service (the "OTC BBB") on days when
transactions in the Common Stock of the Company are not effected, or on such
days as transactions are effected on the OTC BBS, the highest price at which a
trade was executed as reported to the National Association of Securities
Dealers, Inc. through the Automated Confirmation Transaction Service.
(c) "Trading Day" means any day on which the OTC BBS or the
Nasdaq National Market or SmallCap Market System is open for the transaction of
business.
2. EXCHANGE. On the Exchange Date (as defined in Section 4 below),
the Holder agrees to exchange all Securities held by it for that number of fully
paid and nonassessable whole shares of Series B Convertible Preferred Stock of
the Company (the "Preferred Stock"), obtained by dividing (i) the aggregate
Accreted Value of the Securities, through and including the Exchange Date, by
(ii) $100.00.
3. TERMS OF THE PREFERRED STOCK. The Preferred Stock shall have the
terms set forth in the term sheet attached hereto as Exhibit A. These terms
shall be set forth in an amendment to the Articles of Incorporation of the
Company to be filed with the Secretary of State of the State of Florida.
4. EXCHANGE DATE. The Exchange Date shall be the date on which the
Series Resolutions of the Series B Convertible Preferred Stock are filed with
the Florida Secretary of State.
5. LOCK-UP PERIOD. The Holder may not sell, assign, convey or
encumber any shares of Common Stock received upon the conversion of the
Preferred Stock until January 1, 2001. The Holder may not sell, assign or convey
any shares of Preferred Stock unless the person or entity to whom the shares of
Preferred Stock are being sold, transferred or conveyed agrees in writing to be
bound by this lock-up provision, which agreement shall be provided to the
Company prior to such sale, transfer or conveyance.
6. MAKE WHOLE ADJUSTMENT. On December 31, 2000, if the Current Market
Price of the Common Stock is less than $.66, the Conversion Price shall be
adjusted to equal the Current Market Price.
7. GENERAL PROVISIONS. This Agreement, including matters of
construction, validity and performance, shall be governed in accordance with the
laws of the State of Florida, without giving effect to its choice of law rules.
This Agreement may not be assigned by either party hereto without the written
consent of the non-assigning party. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, between the parties hereto
with respect to the subject matter hereof. This Agreement cannot be amended
orally, but only by an agreement in writing signed by the parties hereto. This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
[Signatures on following page]
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
International Fast Food Corporation
By: /S/ XXXXXXXX XXXXXXXX
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Name: Xxxxxxxx Xxxxxxxx
Its: Chairman of the Board and Chief Executive
Officer
Northstar Investment Management Corp.
By: /S/ XXXXXXX X. XXXXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Its: Vice President
EXHIBIT A
INTERNATIONAL FAST FOOD CORPORATION
SERIES B CONVERTIBLE PREFERRED STOCK TERM SHEET
Issuer: International Fast Food Corporation (the "Company")
Security: Series B Convertible Preferred Stock (the "Preferred
Stock")
Issue Date: Exchange Date as defined in the Agreement to
Exchange
Rank: The Preferred Stock shall rank equally with the
highest ranking preferred stock of the Company with
respect to liquidation.
Liquidation Value: $100.00 per share upon the voluntary or
involuntary liquidation, dissolution or winding up
of the Company
Dividend: 3.0% of the liquidation value per annum beginning on
December 31, 2001, to be paid in shares of Series B
Preferred Stock; provided, however, if at any time
after January 1, 2003, the Common Stock has a
Current Market Price of $1.28 or higher, the
dividend rights of the Preferred Stock shall be
cancelled.
Conversion Price: The conversion price will be $.66.
Conversion Date The Preferred Stock shall be immediately
convertible.
Maturity The Preferred Stock shall be perpetual.
Registration Requirements The Company will be required to file a
registration statement for the Preferred Stock and
the shares of Common Stock underlying the Preferred
Stock within 180 days after the Exchange Date;
provided, however, that if the Company fails to file
the registration statement prior to such time, the
dividend rate shall be increased by one-quarter of
one percent for each subsequent 30-day period that
the registration statement is not filed. The Company
shall use its reasonable business efforts to cause
such registration statement to be declared
effective.
