Exhibit 10.11
SECURITY AND PLEDGE AGREEMENT
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THIS SECURITY AND PLEDGE AGREEMENT (the "Agreement"), dated this 21st
day of October, 1999, by and between Xxxxxxxx Xxxxxxxx (hereinafter referred to
as "Xxxxxxxx" or the "Debtor"), and Burger King Corporation (hereinafter
referred to as "BKC" or the "Secured Party").
WHEREAS, International Fast Food Corporation ("IFFC") is the owner of
all the issued and outstanding shares (the "IFFP Shares") of International Fast
Food Polska S.P. z.o.o. ("IFFP");
WHEREAS, on February 24, 0000, Xxxxxxxx (Xxxxxx) S.A. ("Citibank")
agreed to provide credit to IFFP in the aggregate amount of U.S. $5,000,000,
pursuant to a credit agreement dated February 24, 1999 (as amended, the "Credit
Agreement");
WHEREAS, as a condition to the disbursement of funds under the Credit
Agreement, BKC issued a guarantee in favor of Citibank to secure the repayment
by IFFP of amounts borrowed under the Credit Agreement (as amended, the
"Guarantee");
WHEREAS, pursuant to an Agreement for the Transfer of Title to Shares
by way of Security dated February 24, 1999 (as amended, the "Security
Agreement"), in consideration of the Guarantee, IFFC granted BKC a perfected
security interest in the IFFP Shares to secure BKC's claims which may arise as a
result of the payment by BKC of any amounts under the Guarantee;
WHEREAS, as a condition to the making of the Guarantee, IFFC agreed to
reimburse BKC for any payments that it may be required to make to Citibank under
the Guarantee, together with related costs, expenses and interest, as more fully
said forth in that certain Reimbursement Agreement dated as of February 24, 1999
(as amended, the "Reimbursement Agreement"), by and among IFFC, IFFP and BKC;
WHEREAS, Citibank has agreed to increase the amount which may be
borrowed under the Credit Agreement to an aggregate amount of U.S. $8,000,000,
and BKC has agreed to increase the amount of the Guarantee to secure the
repayment by IFFP of amounts borrowed under the Credit Agreement;
WHEREAS, in the event that Citibank is willing to further increase the
available credit under the Credit Agreement, BKC has agreed to increase the
amount of the Guarantee to a maximum aggregate amount of U.S. $10,000,000, upon
the terms, and subject to the conditions, of that certain Guarantee of Future
Advances Agreement dated of even date herewith by and among BKC, IFFC and IFFP;
WHEREAS, pursuant to a Purchase Agreement dated February 24, 1999 (as
amended, the "Purchase Agreement"), the parties agreed that, in the event that
BKC acquires the IFFP Shares pursuant to the exercise of its rights under the
Security Agreement, BKC will sell the IFFP Shares held by BKC to Xxxxxxxx;
WHEREAS, pursuant to a Guaranty of even date herewith (the "Xxxxxxxx
Guaranty:), Xxxxxxxx has agreed to personally guarantee the Obligations (as
hereinafter defined, and to secure such personal guarantee by the grant of a
security interest in, and a pledge to BKC of, an aggregate of 5,000,000 shares
of common stock of IFFC (the "Shares") which are owned by Xxxxxxxx.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
1. SECURITY INTEREST. For value received, Debtor hereby sells,
transfers, conveys, sets over, delivers, bargains, pledges, assigns and grants
to Secured Party, upon the terms and conditions of this Agreement, a security
interest in and to any and all present or future rights of Debtor in and to all
of the following rights, interests and property (all of the following being
herein sometimes called the "Collateral"):
(a) Five million (5,000,000) shares (the "Shares") of the
common stock, par value $.01 per share, of IFFC which are owned by
Debtor;
(b) All rights, powers, privileges and preferences pertaining
to the Shares described in Section 1(a) above and any stock rights,
rights to subscribe, cash distributions, dividends, stock dividends,
liquidating dividends, new securities (whether certificated or
uncertificated) and other property to which the Obligor may become
entitled by reason of the ownership of any Securities pledged and
assigned hereunder from time to time; and
(c) All Proceeds of any of the foregoing Collateral described
above in this Section 1.
All capitalized terms used but not otherwise defined in this Agreement shall
have the respective meanings given them in the Florida Uniform Commercial Code.
As used in this Agreement, the term "Securities" means any notes, stocks,
treasury stocks, bonds, debentures, evidences of indebtedness, warrants,
partnership interests, stock options, beneficial interests in trusts, or equity
interests of any nature whatsoever in any legal entity or, in general, any
interest or instrument commonly known as a "security," or any warrant or right
to subscribe to or purchase any of the foregoing; and the term "issuer" means,
with respect to any Securities, the legal entity in which such Securities
evidence an ownership or beneficial interest.
2. XXXXXXXX GUARANTY. This Agreement is being executed and delivered
pursuant to the terms, conditions and requirements of the Xxxxxxxx Guaranty. The
security interest herein granted ("Security Interest") shall secure full payment
and performance of (i) Xxxxxxxx'x obligations to BKC under the Purchase
Agreement, (ii) IFFC's and IFFP's obligations under the Reimbursement Agreement,
and (iii) the due and punctual observance and performance of each and every
agreement, covenant and condition on Debtor's part to be observed or performed
under this Agreement and the Xxxxxxxx Guarantee (all of which debts, duties,
liabilities and obligations are referred to as the "Obligations").
3. PRIORITY. Debtor represents and warrants that the Security Interest
is a first and prior security interest in and to all of the Collateral.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor hereby
represents and warrants to Secured Party and covenants for the benefit of
Secured Party as follows:
(a) Debtor is the sole legal and equitable owner of the Shares
free from any adverse claim, lien, security interest, encumbrance or other
right, title or interest of any person, except for the security interest created
hereby. Debtor has the right and power to grant a security interest in the
Collateral to Secured Party without the consent of any other person, and Debtor
shall at his expense defend the Collateral against all claims and demands of all
persons at any time claiming the Collateral or any interest therein adverse to
Secured Party. So long as any Obligation to the Secured Party is outstanding,
Debtor will not without the prior written consent of Secured Party grant to any
person a security interest in any of the Collateral or permit any lien or
encumbrance to attach to any of the Collateral, or suffer or permit any levy or
garnishment, or attachment to be made on any part of the Collateral, or permit
any financing statement to reflect an interest in any part of the Collateral,
except that of Secured Party, to be on file with respect thereto.
(b) Debtor has delivered to Secured Party all stock
certificates evidencing the Shares pledged and assigned under this Agreement
(and the Debtor shall promptly deliver the same with respect to all certificated
Securities pledged and assigned to Secured Party hereafter, together with duly
executed stock powers in blank and all other assignments or endorsements
reasonably requested by Secured Party.
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(c) If new or additional Securities are issued to Debtor (as a
stock dividend, stock split, or pursuant to any reclassification or
recapitalization of the capital of any issuer of Securities pledged and assigned
hereunder, or the reorganization or, merger, acquisition or consolidation of any
such issuer or otherwise) with respect to the Collateral, then the same shall be
deemed an increment to the Collateral and under pledge and assignment to Secured
Party hereunder. If evidenced by a stock certificate, bond, warrant, debenture,
certificate, or other Instrument or writing, then such Securities shall (to the
extent acquired or received by or placed under Debtor's control) be held in
trust for and promptly delivered to Secured Party, together with duly executed
stock powers in blank and any other assignments or endorsements as Secured Party
may request. If any such Securities are uncertificated, then Debtor shall
immediately upon acquisition of such Securities cause Secured Party to be
registered as the transferee thereof on the books of the depository, custodian
bank, clearing corporation, brokerage house, issuer or otherwise, as may be
requested by Secured Party.
(d) Without the prior consent of Secured Party, Debtor shall
not sell, transfer, assign, convey, lease or otherwise dispose of any part of
the Collateral, nor enter into any contract or agreement to do so. Debtor will
not compromise, release, surrender or waive any rights of any nature whatsoever
in respect of any of the Collateral without Secured Party's prior written
consent.
5. DEBTOR'S OBLIGATIONS. So long as the Obligations are outstanding,
Debtor covenants and agrees with Secured Party (a) not to permit any material
part of the Collateral to be levied upon under any legal process; (b) not to
dispose of or pledge any of the Collateral without the prior written consent of
Secured Party; (c) to comply with all applicable federal, state and local
statutes, laws, rules and regulations, the noncompliance with which could
reasonably be likely to have a material and adverse effect on the value of the
Collateral; and (d) to pay all taxes accruing after the Closing Date which
constitute, or may constitute, a lien against the Collateral, prior to the date
when penalties or interest would attach to such taxes; provided, that Debtor may
contest any such tax claim if done diligently and in good faith.
6. EVENT OF DEFAULT. As used herein, the term "Event of Default" shall
include any or all of the following if same exist on the 10th day after written
notice by Secured Party to Debtor which certifies such default:
(a) The assignment, voluntary or involuntary conveyance of
legal or beneficial interest, mortgage, pledge or grant of a security interest
in any of the Collateral; or
(b) The filing or issuance of a notice of any lien or notice
of levy for taxes or assessment against the Collateral; or
(c) Nonpayment of any amounts due under the Xxxxxxxx Guarantee
upon the date same shall be due and payable; or
(d) The adjudication of Debtor as bankrupt, or the taking of
any voluntary action by Debtor or any involuntary action against Debtor seeking
an adjudication of Debtor as bankrupt, or seeking relief by or against Debtor
under any provision of the Bankruptcy Code.
7. REMEDIES. Upon the occurrence and during the continuation of an
Event of Default as defined herein, in addition to any and all other rights and
remedies which Secured Party may then have hereunder or under the Note, under
the Uniform Commercial Code of the State of Florida or of any other pertinent
jurisdiction (the "Code"), or otherwise, Secured Party may, at its option: (a)
reduce its claim to judgment or foreclosure or otherwise enforce the Security
Interests, in whole or in part, by any available judicial procedure; (b) sell,
or otherwise dispose of, at the office of Secured Party, or elsewhere, all or
any part of the Collateral, and any such sale or other disposition may be as a
unit or in parcels, by public or private proceedings, and by way of one or more
contracts (it being agreed that the sale of any part of the Collateral shall not
exhaust the Secured Party's power of sale, but sales may be made from time to
time, and at any time, until all of the Collateral has been sold or until the
Obligation has been paid and performed in full); (c) at his discretion, retain
the Collateral in satisfaction of the Obligation whenever the circumstances are
such that Secured Party is entitled to do so under the Code or otherwise; (d)
exercise all voting or consensual rights of the Collateral upon notice to Debtor
of such election and otherwise act with respect to the Collateral as though it
were the outright owner thereof (Debtor hereby irrevocably constitutes and
appoints Secured Party as the proxy and attorney-in-fact of Debtor, with full
power of substitution, to do so); and (e) exercise any and all other rights,
remedies and privileges he may have under the Note and the other documents
defining the Obligation. Until such time, if any, as an Event of Default has
occurred and shall be continuing, the Debtor shall retain all voting rights with
respect to the Collateral
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8. APPLICATION OF PROCEEDS BY SECURED PARTY. Any and all proceeds ever
received by Secured Party from any sale or other disposition of the Collateral,
or any part thereof, or the exercise of any other remedy pursuant hereto shall
be applied by Secured Party to the Obligations in such order and manner as
Secured Party, in its sole discretion, may deem appropriate, notwithstanding any
directions or instructions to the contrary by Debtor; provided that (a) the
proceeds and/or accounts shall be applied toward satisfaction of the
Obligations; and (b) if such proceeds and/or accounts are not sufficient to pay
the Obligations in full, Debtor shall remain liable to Secured Party for the
deficiency. Any proceeds received by Secured Party under this Agreement in
excess of those necessary to fully and completely satisfy the Obligations shall
be distributed to Debtor.
9. NOTICE OF SALE. Reasonable notification of the time and place of any
public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Debtor and to any other persons entitled under the
Uniform Commercial Code, as in effect from time to time in the State of Florida,
to notice; provided, that if any of the Collateral threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Secured Party
may sell, pledge, assign or otherwise dispose of the Collateral without
notification, advertisement or other notice of any kind. It is agreed that
notice sent or given not less than ten (10) calendar days prior to the taking of
the action to which the notice relates is reasonable notification and notice for
the purpose of this paragraph.
10. MISCELLANEOUS.
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10.1 FURTHER ASSURANCES. Each of the parties hereto agrees
with the other parties hereto that it will cooperate with such other
parties and will execute and deliver, or cause to be executed and
delivered, all such other instruments and documents, and will take such
other actions, as such other parties may reasonably request from time
to time to effectuate the provisions and purposes of this Agreement.
10.2 BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS;
ASSIGNMENT. This Agreement shall be binding upon the parties hereto and
their respective successors, transferees and assigns. Notwithstanding
the foregoing no party hereto may assign any of its obligations
hereunder with the prior written consent of the other parties hereto;
provided, that BKC may assign its rights and delegate its duties under
this Agreement to one or more of its subsidiaries or affiliates.
10.3 AMENDMENTS; WAIVERS. No amendment to or waiver of any
provisions of this Agreement, nor consent to any departure therefrom by
any party hereto, shall in any event be effective unless the same shall
be in writing and signed by such party, and then such waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given.
10.4 NO WAIVER; REMEDIES. No failure on the part of any party
hereto to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any right. The remedies herein provided are
cumulative and not exclusive of any remedy provided by law.
10.5 EXPENSES. IFFC shall pay or reimburse BKC for all of its
legal, accounting and other expenses directly related to the
consummation of the transactions contemplated hereby, together with the
costs and expenses of enforcing any of its rights hereunder.
10.6 JURISDICTION. Any claim arising out of this Agreement
shall be brought in any state or federal court located in Miami-Dade
County, Florida, United States. For the purpose of any suit, action or
proceeding instituted with respect to any such claim, each of the
parties hereto irrevocably submits to the jurisdiction of such courts
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in Miami-Dade County, Florida, United States. Each of the parties
hereto further irrevocably consents to the service of process out of
said courts by mailing a copy thereof by registered mail, postage
prepaid, to such party and agrees that such service, to the fullest
extent permitted by law, (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and
(ii) shall be taken and held to be a valid personal service upon and a
personal delivery to it. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it
may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court located in Miami-Dade
County, Florida, United States, and any claim that any such suit,
action or proceeding brought in such court has been brought in an
inconvenient forum.
10.7 GOVERNING LAW; SEVERABILITY. This Agreement shall be
governed by and construed in accordance with the internal laws of the
State of Florida, United States, without regard to any conflict of law,
rule or principle that would give effect to the laws of another
jurisdiction.
10.8 NOTICES. All notices, requests and other communications
to any party hereunder shall be writing (including facsimile
transmission or similar writing) and shall be given to such party,
addressed to it, at its address or facsimile number set forth on the
signature pages below, or at such other address or facsimile number as
such party may hereafter specify for such purpose by notice to the
other party. Each such notice, request or communication shall be deemed
effective when received at the address or facsimile number specified
below.
10.9 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be
an original, and all of which counterparts, when
taken together, shall constitute one and the same
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ Xxxxxxxx Xxxxxxxx
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Xxxxxxxx Xxxxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000, XXX
BURGER KING CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Vice President
c/o Burger Xxxx XXX
Xxxxxxx Xxxxx
Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx XX00XX
Attn: General Counsel and
Vice President - Financial Affairs
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