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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of August 11, 1997, between AIG Latin America Equity
Partners, Ltd., a Bermuda company (the "Fund") and Brazil Fast Food Corp., a
Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Fund and the Company are, simultaneously with
this Agreement, entering into a certain Stock Purchase Agreement (the "Stock
Purchase Agreement") to provide for the purchase by the Fund of 1,500,000 shares
of common stock, par value $0.0001 per share of the Company (the "Common Stock")
and five-year warrants to purchase 250,000 shares of Common Stock (the
"Warrants").
NOW, THEREFORE, in consideration of the respective agreements
herein contained and in order to induce the Fund to enter into the Stock
Purchase Agreement, the parties hereby agree as follows:
1. IMMEDIATE REGISTRATION
(a) The Company agrees that within 45 days of the Closing
Date, it will cause to be registered under the Securities Act of 1933, as
amended (the "Act"), on Form S-3, or any other similar form then in effect, a
"shelf" registration statement (the "Shelf Registration") with respect to all of
the shares of Common Stock then owned by the Fund, including the shares of
Common Stock issuable upon exercise of the Warrants (the "Shares"), and in the
event that the Company no longer qualifies to register the Shares on Form S-3,
the Company shall file, on demand, one or more successive registration
statements on Form S-1. The Company agrees that it will use its best efforts to
cause any registration statement filed pursuant to this Section 1 to become
effective as soon as practicable after Closing. With respect to any registration
statement filed pursuant to this Section 1, if the Fund desires to distribute
the shares in an underwritten offering, the managing underwriter or underwriters
shall be selected by the Fund, subject to the approval by the Company, which
approval shall not be unreasonably withheld or delayed, and the Company agrees
to enter into an underwriting agreement in customary form with such
underwriters.
(b) Notwithstanding the effectiveness of any Registration
Statement filed pursuant to this Section 1, the Fund agrees that it will not
publicly offer the Shares for sale for a period of one year from the Closing
Date, provided that this limitation shall not apply to any sales by the Fund
pursuant to any underwritten offering by the Company or any stockholder of the
Company, other than the Fund or any sale in connection with a tender or exchange
offer, merger or similar transaction.
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2. PIGGYBACK REGISTRATION
(a) If at any time or from time to time, the Company shall
determine to register any of its Common Stock, for its own account or for the
account of any of its stockholders, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145
transaction under the Act, and to distribute such Common Stock in an
underwritten offering, the Company will:
(i) give to the Fund written notice thereof as soon as
practicable prior to filing the registration statement; and
(ii) include in any such registration and in such underwriting
involved therein, all of the Shares specified in a written
request or requests made by the Fund within fifteen (15) days
after receipt of such written notice from the Company by the
Fund, except as set forth in subsection (b) below.
(b) If the Fund desires to distribute any or all of its shares
of Common Stock through such underwriting, it shall (together with the Company
and the other holders distributing their Common Stock through such underwriting)
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. Notwithstanding the
foregoing, if in the written opinion of the managing underwriter for such
offering, the inclusion of all or a portion of the shares requested to be
included in such underwriting will exceed the maximum amount of the Company's
Common Stock which can be sold in such offering (the "Total Common Stock")
without materially adversely affecting the entire offering, then the Company
shall include in such underwriting only that number of shares which the Company
is so advised can be sold in such offering without having such adverse effect.
The shares of Common Stock which shall be excluded from such offering shall be
determined in following manner: (i) first, all shares of Common Stock held by
shareholders that do not have a contractual right to include their shares in
such offering and (ii) second, to the extent additional shares must be excluded,
all shares of Common Stock held by the Company and the shareholders possessing
such right (including the Fund), allocated pro rata among the Company and such
other holders of Common Stock (including the Fund) in accordance with the ratio
that the number or amount of Common Stock that the Company or such shareholders
sought to register bears to the Total Common Stock.
(c) Notwithstanding the provisions of this Section 2, the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section 2 (irrespective of whether any written request
for inclusion of Shares shall have already been made) to elect not to file any
such proposed registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
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3. REGISTRATION PROCEDURES
In the case of each registration statement filed, requested to
be filed or intended to be filed by the Company pursuant to this Agreement, the
Company will keep the Fund advised in writing as to the initiation of each
registration and as to the status and completion thereof. At its expense, the
Company will:
(a) keep such registration statement effective:
(i) in the case of the Shelf Registration or the S-1
Registration Statement, until such time as all of such Shares have been disposed
of in accordance with the intended methods of disposition set forth in such
registration statement; and
(ii) in the case of the Piggyback Registration Statement,
until the earlier of (A) 90 days following the effectiveness of such
registration statement and (B) such time as all of such Shares have been
disposed of in accordance with the intended methods of disposition set forth in
such registration statement;
(b) provide appropriate officers (including, if requested, the
Company's Chief Executive Officer and Chief Financial Officer) for such
reasonable periods as are requested by the underwriters to participate in a
"road show" or similar marketing effort being conducted by such underwriter with
respect to an underwriting offering;
(c) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith (including, without limitation, any post-effective amendment or
pricing supplement necessary to include a form of prospectus reasonably
requested by its underwriter) as may be necessary to keep such registration
statement continuously effective and to comply with the registration form used
by the Company or by the instructions applicable to such registration form or by
the Act (and use its best efforts to have such amendments declared effective as
soon as reasonably practicable after such filing);
(d) furnish such number of prospectuses and other documents
related thereto as the Fund may from time to time reasonably request;
(e) use its best efforts to obtain the withdrawal or lifting
of any order suspending the effectiveness of a registration statement, or the
lifting of any suspension of the qualification of any of the Shares for sale in
any jurisdiction, at the earliest possible moment;
(f) register or qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Fund or its
underwriter reasonably requests, and keep such registration or qualification
effective during the period set forth in Section 3(a) above;
(g) cause the Shares covered by such registrations to be
listed on each securities exchange, including NASDAQ, on which similar
securities issued by the Company are
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then listed or, if no such listing exists, use its best efforts to list the
Shares on one of the New York Stock Exchange, the American Stock Exchange or
NASDAQ;
(h) cause its accountants to issue to the underwriter, if any,
or to the Fund, if there is no underwriter, comfort letters and updates thereof,
including "cold comfort" letters, in customary form and covering matters of the
type customarily covered in such letters with respect to underwritten offerings;
(i) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Fund or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Shares;
(j) make available for inspection by the Fund, any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by the Fund or any such
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by the Fund, underwriter, attorney, accountant or agent in connection
with such registration statement; provided, however, that the Company may
request that customary confidentiality agreements be entered into prior to the
delivery of any such information to any such underwriter, attorney, accountant
or agent;
(k) if the offering is underwritten, at the request of the
Fund to furnish on the date that the Shares are delivered to the underwriters
for sale pursuant to such registration: (i) an opinion dated such date of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters and to the Fund, stating that such registration
statement has become effective under the Act and that (A) to the best knowledge
of such counsel, no stop order suspending the effectiveness thereof has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the Act, (B) the registration statement, the related
prospectus and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Act, (C) nothing has come to the
attention of such counsel that would lead it to believe that the Registration
Statement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading and
nothing has come to the attention of such counsel that would lead it to believe
that the Prospectus contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made and (D) to such other
effects as may reasonably be requested by counsel for the underwriters or by the
Fund or its counsel and (ii) a letter dated such date from the independent
public accountants retained by the Company, addressed to the underwriters and
the Fund, stating that they are independent public accountants within the
meaning of the Act and that, in the opinion of such accountants, the financial
statements of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto, comply as to form in all
material respects with the applicable accounting
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requirements of the Act, and such letter shall additionally cover such other
financial matters (including information as to the period ending no more than
five business days prior to the date of such letter) with respect to such
registration as such underwriters or the Fund may reasonably request;
(l) notify the Fund, at any time a prospectus covered by such
registration statement is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(m) take such other actions as shall be reasonably requested
by the Fund.
4. PROSPECTUSES, DOCUMENTS, ETC.
Prior to the filing of a registration statement pursuant to
Section 1 hereof or upon making a request for piggyback registration pursuant to
Section 2 hereof, the Fund shall furnish to the Company such information
regarding the Fund's holdings and the proposed manner of distribution thereof as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in such Sections, and shall otherwise reasonably
cooperate with the Company in the preparation and filing of any registration
statement, amendment or supplement required thereunder.
5. EXPENSES
With respect to the filing of a registration statement
pursuant to Section 1 or 2 hereof, the Fund shall pay for (i) all underwriters'
discounts and commissions applicable to the sale of the Shares and (ii) the fees
of its legal counsel. All other fees and expenses incurred in connection with
such a registration shall be borne by the Company, including, but not limited
to, (i) all expenses (including filing fees) incurred in connection with
qualifying under state securities or Blue Sky laws, (ii) all other filing fees,
including SEC and NASD filing fees, (iii) the fees of its legal counsel, (iv)
audit and other accounting fees and expenses, and (v) printing costs (together
the "Registration Costs").
6. INDEMNIFICATION AND CONTRIBUTION
(a) In connection with any registration statement, the Company
shall indemnify and hold harmless the Fund, each underwriter who participates in
an offering of the Shares, each Person, if any, who controls any of such parties
within the meaning of Section 15 of the Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and each of their
respective directors, officers, employees and agents, as follows:
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(i) from and against any and all loss, liability, claim,
damage and expense whatsoever as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement (or any amendment thereto), covering Shares, including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by any
court or government agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the prior
written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursement of counsel chosen by the
Fund, or any underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
court or governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) of this Section 6(a); provided, however, that (i)
this indemnity does not apply to any loss, liability, claim, damage or expense
to the extent that it shall be determined by a court in a judgment not subject
to appeal or final review that such loss, liability, claim, damage or expense
resulted from an untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information
furnished in writing to the Company by the Fund or any underwriter, as the case
may be, expressly for use in a registration statement (or any amendment thereto)
or any prospectus (or any amendment or supplement thereto) and (ii) the Company
shall not be liable to the Fund or any underwriter, as the case may be, with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus to the extent that any such loss,
liability, claim, damage or expense of the Fund or any underwriter, as the case
may be, results from the fact that the Fund or any underwriter, as the case may
be, sold Common Stock to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the final prospectus
as then amended or supplemented if the Company had previously furnished copies
thereof to the Fund or underwriter, as the case may be, and the loss, liability,
claim, damage or expense of the Fund or underwriter, as the case may be, results
from an untrue statement or omission of a material fact contained in the
preliminary prospectus which was corrected in the final prospectus.
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(b) The Fund agrees, severally and not jointly, to indemnify
and hold harmless the Company and any underwriter and each of their respective
directors, officers (including each officer of the company who signed the
registration statement), employees and agents and each Person, if any, who
controls the Company or any underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all loss,
liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 6 (a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in a
registration statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Fund with respect to the Fund
expressly for use in such registration statement (or any amendment thereto);
provided however, that the Fund shall not be liable for any amount hereunder in
excess of the amount of net proceeds received by the Fund from the sale of
Shares.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder enclosing a copy of all papers properly served
on such indemnified party, but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability which it may have under
this Section 6, except to the extent that it is materially prejudiced by such
failure. In the event that an indemnifying party so elects within a reasonable
time after receipt of such notice, an indemnifying party, severally or jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it and reasonably acceptable to
the indemnified parties defendant in such action, provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential party and the indemnifying
party and any such indemnified party reasonably determines that there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to such indemnifying party, then in the case of
clauses (i) and (ii) of this Section 6 (c) such indemnifying party and counsel
for each indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party and counsel for each indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties. If an
indemnifying party assumes the defense of such action, in accordance with and as
permitted by the provisions of this paragraph, such indemnifying parties shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its own counsel, for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this
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Section 6 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional written release in form and substance satisfactory to the
indemnified parties of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) Notwithstanding the last sentence of Section 6 (c), if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel
pursuant to Section 6 (a) (iii) above, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement; provided that an indemnifying party shall not be
liable for any such settlement effected without its consent if such indemnifying
party (1) reimburses such indemnified party in accordance with such request to
the extent it considers reasonable and (2) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 6 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Fund shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnify agreement incurred by the Company and
the Fund, as incurred; provided that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the 0000 Xxx) shall
be entitled to contribution from any person that was not guilty of such
fraudulent misrepresentation. As between the Company and the Fund, such parties
shall contribute to such aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of the Company,
on the one hand, and the Fund, on the other hand, with respect to the statements
or omissions which resulted in such loss, liability, claim, damage or expenses,
or action in respect thereof; as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Fund, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or by or on behalf of the Fund, on the
other, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Fund of the Shares agree that it would not be just and equitable if
contribution pursuant to this Section 6 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 6, each
affiliate of the
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Fund, and each director, officer, employee, agent and Person, if any, who
controls the Fund or such affiliate within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
the Fund, and each director or officer of the Company who signed the
registration statement, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company.
(f) For purposes of this Section 6 the terms "control",
"controlling person" and "underwriter" have the meanings which they have in and
under the Act.
(g) The indemnification provided by this Section 6 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any Person entitled to indemnification hereunder.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Fund as follows:
(a) The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Articles of Organization or Bylaws of the Company or any
provision of any indenture, agreement or other instrument to which it or its
subsidiaries or any of their respective properties or assets is bound, conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other instrument or
result in the creation or imposition of any lien, charge or Encumbrance of any
nature whatsoever upon any of the properties or assets of the Company or
subsidiaries.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
8. NEGATIVE COVENANT.
The Company may not, without the prior written consent of the
Fund, grant any rights to any Persons to register shares of capital stock or
securities of the Company, unless and until all of the Shares have been
registered pursuant to an effective registration statement in accordance with
the provisions hereof.
9. MISCELLANEOUS
(a) For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act and any Shares remain
outstanding, the Company covenants that it will file the reports required to be
filed by it under the Act and Section 13(a) or 14(d) of the Exchange Act and the
rules and regulations adopted by the SEC thereunder, that if it
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ceases to be so required to file such reports, it will upon the request of the
Fund (a) make publicly available such information as is necessary to permit
sales pursuant to Rule 144 under the Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the Act and (c) take such further action, if any, that is reasonable in
the circumstances, in each case, to the extent required from time to time to
enable the Fund to sell its Shares without registration under the Act within the
limitation of the exemptions provided by (i) Rule 144 under the Act, as such
rule may be amended from time to time, (ii) Rule 144A under the Act, as such
rule may be amended from time to time, or (iii) any similar rules or regulations
hereafter adopted by the SEC. Upon the reasonable request of the Fund, the
Company will deliver to the Fund a written statement as to whether it has
complied with such requirements.
(b) The Fund and the Company acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any State thereof having jurisdiction, in addition
to any other remedy to which any of them may be entitled by law or equity.
(c) All notices, consents, requests, instructions, approvals
and other communications provided for herein and all legal process in regard
hereto shall be validly given, made or served, if in writing and delivered or
mailed as provided in the Stock Purchase Agreement.
(d) This Agreement, the Stock Purchase Agreement, the
Stockholders' Agreement and the Warrant Agreement contain the entire
understanding of the parties with respect to the transactions contemplated
hereby and thereby and this Agreement may be amended only by an agreement in
writing executed by the parties hereto.
(e) For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto and each
such executed counterpart shall be, and shall be deemed to be, an original
instrument.
(f) Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provisions of this
Agreement.
(g) This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the Fund, the Company and
any transferees of the Shares.
(h) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision
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of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid or unenforceable provision were not contained herein.
(i) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed therein.
10. DEFINITIONS
Each capitalized term used and not otherwise defined herein
shall have the meaning assigned to it by the Stock Purchase Agreement.
IN WITNESS WHEREOF, the Fund and the Company have caused this
Agreement to be duly executed by their respective officers, each of whom is duly
authorized, all as of the day and year first above written.
BRAZIL FAST FOOD CORP.
By:/s/ X. Xxx Xxxxxx Vader
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Name: X. Xxx Xxxxxx Vader
Title: Chief Executive Officer
AIG LATIN AMERICA EQUITY PARTNERS, LTD
By:/s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
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