AGREEMENT FOR THE TRANSFER OF TITLE TO SHARES BY WAY OF SECURITY
THIS AGREEMENT FOR THE TRANSFER OF TITLE TO SHARES BY WAY OF SECURITY
(hereinafter referred to as the "Agreement") is entered into as of February 24,
1999, by and between INTERNATIONAL FAST FOOD CORPORATION, a company organized
under the laws of Florida, USA, having its principal place of business at 0000
Xxxxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxx 00000, XXX (hereinafter referred
to as "IFFC"), BURGER KING CORPORATION a company organized under the laws of
Florida, USA, having its principal place of business at 00000 Xxx Xxxxxx Xx,
Xxxxx, Xxxxxxx, XXX (hereinafter referred to as "BKC"), and INTERNATIONAL FAST
FOOD POLSKA Sp. z o.o. , a Polish limited liability company organized under the
laws of Poland, having its registered office at 00 Xxxxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxx, hereinafter referred to as "IFFP"),
WHEREAS, the IFFC is the owner of one issued share having a nominal
value of PLN 54,866,089.57 at present constituting 100% of entire share capital
(hereinafter referred to as the "Shares"), of IFFP;
WHEREAS, Citibank (Poland) S.A. has agreed to grant IFFP a credit in
the total amount of USD 5,000,000 (Five Million US dollars) (hereinafter
referred to as the "Facility") pursuant to the Framework Agreement and the
Credit Agreement dated February 24, 1999 (hereinafter referred to as the "Credit
Agreement");
WHEREAS, it is a condition of the disbursement of the Facility that BKC
issue a guarantee for the benefit of Citibank (Poland) S.A. of the repayment of
the Facility and BKC has agreed to issue such guarantee (hereinafter referred to
as the "Guarantee");
WHEREAS, IFFC along with IFFP have executed a certain Reimbursement
Agreement, of even date (the "Reimbursement Agreement"), agreeing to reimburse
BKC for any loss, cost or expense which BKC may or might incur by reason of its
execution of or performance under the Guarantee;
WHEREAS, IFFC is willing to transfer title to the Shares to BKC as
security for the performance of the obligations of IFFC and IFFP under the
Reimbursement Agreement;
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. DEFINITIONS
"Business Day" means a day (other than Saturday) when banks are open for
business in Miami Beach, Florida.
"Collateral" means the Shares, together with all certificates, options or rights
of any nature that may be issued or granted by IFFP with respect thereto, any
property received or otherwise distributed in connection therewith, all
dividends and income with respect thereto, and all Proceeds thereof.
"Event of Default" shall have the meaning set forth in Section 7 hereof.
"Lien" means a mortgage, pledge, lien, security interest or other charge or
encumbrance or any segregation of assets or revenues or other preferential
arrangement (whether or not constituting a security interest) with respect to
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any present or future assets, including fixtures, revenues or rights to the
receipt of income of the Person referred to in the context in which the term is
used.
"Person" means any natural person, corporation, unincorporated organization,
trust, joint-stock company, joint venture, association, company, partnership or
government, or any agency or political subdivision of any government.
"PLN" or "Polish Zlotys" means the lawful currency of the Republic of Poland.
"Proceeds" means all "proceeds" as such term is defined in Section 679.306 of
the Uniform Commercial Code in effect in the State of Florida on the date
hereof.
"Secured Liabilities" means all liabilities of IFFC to BKC which may arise under
the Reimbursement Agreement.
All capitalized terms not otherwise defined herein shall have the meanings given
to such terms in the Reimbursement Agreement.
2. SECURITY
As security for the prompt payment and complete performance when due (whether by
acceleration or otherwise) of the Secured Liabilities, IFFC hereby transfers to
BKC the ownership title to the Shares.
3. REPRESENTATIONS AND WARRANTIES OF IFFC
IFFC represents and warrants to BKC as follows:
(a) The execution and performance of this Agreement does not
violate any provisions of any existing indenture, contract or
agreement to which IFFC is a party.
(b) The Shares have been duly and validly issued and are fully
paid and nonassessable, except the amount of 279,109.50 PLN
which has not been paid to date.
(c) IFFC is the sole legal and beneficial owner of, and has good
and marketable title to, the Shares, free and clear of any and
all Liens or options in favor of, or claims of, any other
Person, except the Lien created by this Agreement, and has the
unqualified right and power to grant the security interest in
the Collateral granted hereby without the consent of any other
Person.
(d) The Shares are all of the shares of IFFP owned by IFFC, and
constitute 100% of the issued and outstanding share capital of
IFFP.
(e) IFFC has delivered to BKC all documents evidencing the Shares,
together with all documents permitting transfer of title to
the Shares in BKC.
(f) The Lien granted pursuant to this Agreement constitutes a
valid, perfected first priority Lien on the Collateral,
enforceable as such against all creditors of IFFC and any
Persons purporting to purchase any Shares from IFFC.
(g) IFFC is not in default under any agreement, obligation or duty
to which it is a party, which default would threaten the
ability of IFFC to fulfill its obligations under this
Agreement;
(h) Neither the signing of this Agreement nor the performance of
any of the transactions contemplated in it does or will
controvert or constitute a default under, or cause to be
exceeded, any limitation imposed on IFFC by or contained in:
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(i) any law by which it or any of its assets is bound or
affected; or
(ii) any agreement to which it is a party or is bound,
(i) The execution and delivery of this Agreement has been duly
authorized by all required corporate action and IFFC has
received all required consents and approvals from IFFP and its
shareholders to transfer the Shares to BKC according to this
Agreement;
(k) Except as otherwise disclosed in IFFC's periodic reports filed
with the United States Securities and Exchange Commission
under the Securities and Exchange Act of 1934, as amended, no
litigation, arbitration or administrative proceedings claim in
which there is a serious possibility of an adverse decision
which could by itself or together with any other such
proceedings or claims either have a material adverse effect on
the business, assets or condition thereof, or materially and
adversely affect its ability to observe or perform its
obligations under this Agreement, is currently in progress or
pending against IFFC;
(l) Except as disclosed in IFFC's periodic reports filed under the
Securities Exchange Act of 1934, as amended, IFFC is not in
default in the payment of any taxes, or other public dues and
no material claim is being asserted with respect to taxes or
other public dues.
4. UNDERTAKINGS OF IFFC
IFFC covenants and agrees with BKC that until its obligations under the
Reimbursement Agreement have been satisfied:
(a) Without the prior written consent of BKC, the IFFC shall not
(i) vote to enable, or take any other action to permit, IFFP
to issue any stock or other equity securities of any nature or
to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity
securities of any nature; (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral; or (iii) create, incur or permit
to exist any Lien or option in favor of, or any claim of any
Person with respect to, any of the Collateral, or any interest
therein, except for the Lien provided for by this Agreement.
(b) At any time and from time to time, upon the written request of
BKC, and at the sole expense of the IFFC, IFFC will promptly
and duly execute and deliver such further instruments and
documents and take such further actions as BKC may reasonably
request for the purposes of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein
granted.
(c) Without the prior written consent of BKC, IFFC shall not
receive, collect or have paid over any dividends or other
distributions declared or paid on the Shares, including, but
not limited to, (i) dividends or redistributions constituting
dividends, (ii) dividends or distributions in property other
than cash or stock, and (iii) liquidation dividends (either
partial or complete), and any and all such dividends and
distributions shall constitute and be additional security for
the obligations hereby secured, shall be held by the IFFC in
trust for BKC without commingling such dividends and
distributions with any other funds of IFFC and shall be paid
over and/or pledged and deposited with BKC, duly endorsed or
accompanied by appropriate instruments of transfer duly
executed by IFFC, all in form and substance satisfactory to
BKC, and BKC shall have in respect thereof all of the other
powers and rights as are herein provided in respect of the
Share.
(d) IFFC shall take, at its own expense, whatever action BKC may
require for establishing, maintaining, or enforcing the
Security over the Shares, and the giving of any notice, order
or direction, and the making of any registration, which BKC
may think expedient. Specifically, IFFC shall execute and file
with the Florida Secretary of State a UCC-1 financing
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statement, which shall be in form and substance satisfactory
to BKC and shall execute and file with the Polish Antimonopoly
Office a notification of transfer of the Shares to BKC.
(e) IFFC shall not do or knowingly permit to be done any act or
thing which might reasonably be expected to jeopardize the
right of BKC as owner of the Shares.
5. UNDERTAKINGS OF IFFP
IFFP recognizes the transfer evidenced by this Agreement and undertakes, upon
the execution hereof, to enter BKC into IFFP's register of shares as beneficiary
of the security interest with respect to the Shares. IFFP further undertakes
that after BKC is entered into share register, it will deliver the share
register to BKC or its designated agent in Warsaw to hold in trust for the term
of this Agreement. IFFP further undertakes to maintain its existence, keep its
properties in good repair, maintain insurance as reasonably required by the
conduct of its business and defend BKC's security interests in the Collateral
against claims of third parties. IFFP shall provide BKC with proof of the
keeping of this undertaking from time to time, as reasonably requested by BKC.
6. UNDERTAKINGS OF BKC
BKC hereby undertakes to transfer and or release the ownership title to, or any
security interest in, the Shares and all other Collateral to IFFC immediately
after expiration of the Guarantee (including the termination or the Guarantee
upon the termination of the Facility), unless before such expiration Citibank
(Poland) S.A. has demanded BKC to pay the Guarantee.
7. EVENTS OF DEFAULT
As used herein, the term "Event of Default" shall include any or all of the
following:
(a) The filing or issuance of a notice of any lien, warrant or
notice of levy for taxes or assessment against the assets of
IFFC or IFFP (except for those which relate to claims which
are not, individually or in the aggregate, material to IFFC or
IFFC or those which are being contested in good faith and for
which adequate reserves have been created); or
(b) The occurrence of a default under the Reimbursement Agreement;
or
(c) The adjudication of IFFC or IFFP as bankrupt, or the taking of
any voluntary action by IFFC or IFFP or any involuntary action
against IFFC or IFFP seeking an adjudication of IFFC or IFFP
as bankrupt, or seeking relief by or against IFFC or IFFP
under any provision of the United States Bankruptcy Code or
analogous code of the Republic of Poland.
8. REMEDIES
Subject to the provisions of that certain Purchase Agreement of even date
herewith (the "Purchase Agreement"), by and among IFFC, Xxxxxxxx Xxxxxxxx, IFFP
and BKC, upon the occurrence any Event of Default, BKC may, without demand of
performance or other demand, advertisement or notice (except, the notice
specified below with respect to sales) to or upon IFFC or IFFP, all of which are
expressly hereby waived, and in addition to other rights it may have, or
hereafter acquire, (i) immediately collect, receive, appropriate, retain and, if
it so chooses, realize upon, the Shares, or any part thereof, have such Shares
registered in the name of BKC or its nominee, and thereafter exercise all voting
and other rights with respect to the Shares; (ii) sell, assign, give options to
purchase, or otherwise dispose of, in one or more parcels, the Shares, or (iii)
exercise the rights of a secured creditor under the Uniform Commercial Code of
Florida or similar law in any applicable jurisdiction. Without limiting the
foregoing, subject to the provisions of the Purchase Agreement, BKC shall have
the right to retain the Collateral in discharge of the indebtedness secured
thereby. Any notice of sale, disposition, or other intended action by BKC,
mailed by ordinary mail to the address of IFFC as shown on the records of BKC at
least five (5) days before the action, shall constitute reasonable notice. In
case of any sale or other disposition of any of the Collateral aforesaid, after
deducting all costs and expenses of every kind for care, safekeeping,
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collection, sale, delivery and for reasonable attorneys' fees for legal services
in connection therewith, BKC shall apply the residue of the proceeds of the sale
or sales or other disposition of the Collateral, in full or partial payment of
the obligations hereby secured, as it may deem proper, and returning the
surplus, if any, to IFFC.
9. REALIZATION
BKC may, if it deems it advisable to do so, restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the resale or
distribution of any of the Collateral and, in particular may restrict the
prospective bidders of purchasers to Persons which, in its judgment will have
the capacity to perform the commitments required by an owner of IFFP as the
holder of rights under any development or franchise agreement with BKC.
10. ASSIGNMENT
BKC may assign or transfer this Agreement, or any instrument evidencing the
obligations hereby secured, and may transfer and/or deliver any and/or all of
the Collateral, whether now owned or hereafter acquired, held as security
hereunder, or any part hereof, to any subsidiary or affiliate of BKC, which
shall thereupon become vested with all the powers and rights and obligations in
respect thereto given to BKC in this Agreement or in the instruments so
transferred. BKC shall thereafter be forever relieved and fully discharged from
any liability or responsibility with respect to such Collateral, but BKC shall
retain all rights and powers hereby given with respect to any and all
instruments, rights or Collateral not so transferred. No delay on the part of
BKC shall operate as a waiver of such rights, nor shall the waiver of any breach
hereunder operate as a waiver of any subsequent breach. IFFC hereby agrees that
its obligations under this Agreement shall be absolute and unconditional,
irrespective of:
(i) any lack of validity or enforceability of the
Reimbursement Agreement, the Guarantee, or any other agreement or
instrument relating to any of the foregoing;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations secured hereunder,
or any other amendment or waiver of or any consent to any departure
from the Reimbursement Agreement, the Guarantee, or any other agreement
or instrument relating to any of the foregoing, in each case so long as
IFFC shall have received written notice thereof; or
(iii) any exchange, release or non-perfection of any other
collateral securing the obligations secured hereby, or any release or
amendment or waiver of or consent to departure from any guaranty, for
all or any of such obligations.
11. POWER OF ATTORNEY TO BKC
IFFC hereby appoints BKC as IFFC's attorney-in-fact for the purpose of carrying
out the provisions of this Agreement and taking any action contemplated or
permitted hereby and executing any instrument that BKC may deem necessary or
advisable to accomplish the purposes hereof. Without limiting the generality of
the foregoing, if an Event of Default shall have occurred, BKC shall have the
right and power to receive, endorse and collect all checks and other orders for
the payment of money made payable to IFFC representing any dividend, payment or
other distribution payable in respect of the Shares or any part thereof and to
give full discharge for the same.
12. POWER OF ATTORNEY TO IFFC
For the time the transfer of ownership title to the Shares under this Agreement
is effective, BKC hereby gives IFFC the Power of Attorney subject to the
covenants contained at Paragraph 4, above, to vote in the name and on behalf of
BKC at the ordinary and extraordinary Shareholders' Meetings of IFFP in all
matters which may be placed on the agenda of these meetings. BKC has the right
to revoke this Power of Attorney at any time during the term of this Agreement
upon the occurrence of an Event of Default. This power of attorney does not
give the right:
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a) to receive notices of convening the Shareholders' Meeting
(IFFP should separately notify IFFC and BKC on the convening
of any Shareholders' Meeting); and
b) to vote at the Shareholders' Meeting held without formal
convening.
13. BKC's DUTIES WITH RESPECT TO COLLATERAL
Except as may result from BKC's gross negligence or willful misconduct, BKC
shall not be under any liability or obligation to take any steps whatsoever to
preserve the value of any Collateral pledged hereunder, to fix any liability
upon, or to collect or to enforce payment of the obligations hereby secured,
whether by giving any notice, presenting, demanding payment, protesting,
instituting suit or otherwise.
14. EXPENSES AND INDEMNITY
IFFC will indemnify BKC with respect to all liabilities and expenses incurred by
it in good faith in the execution or purported execution of any right, powers,
or discretion vested in it pursuant hereto. BKC shall not be liable for any
losses arising in connection with the exercise or purported execution of any of
its rights hereunder.
15. NOTICES
Except as otherwise expressly provided herein, all notices, requests, demands or
other communications required or contemplated by the provisions hereof shall be
in writing, or by telex or facsimile transmission, and shall be deemed to have
been given or made on the third Business Day after the deposit thereof in the
United States mail, registered mail postage prepaid, or when received if sent by
telex or facsimile transmission or delivered by hand, addressed to the
appropriate party at its address set forth next to such party's signature
hereto, or at such other address as may be designated by such party by notice to
the other parties hereto given pursuant to this Section 12.
The addresses, and facsimile number of the for all notices under or in
connection with this Agreement are as follows:
As to BKC:
Burger King Corporation
P.O. Box 020783
00000 Xxx Xxxxxx Xx,
Xxxxx, Xxxxxxx 00000-0000,
XXX
telephone: __________________
facsimile: __________________
As to IFFC:
International Fast Food Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000,
Xxxxx Xxxxx, Xxxxxxx 00000,
XXX
telephone: (000) 000 00 00
facsimile: (000) 000 00 00
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As to IFFP:
International Fast Food Polska
00 Xxxxxxxxxxxx Xxxxxx,
00-000 Xxxxxx,
Xxxxxx
telephone: (00) 000 00 00
facsimile: (00) 000 00 00
or such other as such party may notify to the others by not less than 5 Business
Days' notice.
16. NON-EXCLUSIVITY OF REMEDIES
No remedy herein conferred upon or reserved to BKC is intended to be exclusive
of any other available remedy or remedies, but each and every such remedy shall
be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity. No delay or omission
to exercise any right or power accruing upon any default, omission or failure of
performance hereunder shall impair any such right or power or shall be construed
to be a waiver thereof, but any such right and power may be exercised from time
to time and as often as may be deemed expedient. In order to entitle BKC to
exercise any remedy reserved to it in this Agreement, it shall not be necessary
to give any notice, other than such notice as may be herein expressly required.
In the event any provision contained in this Agreement should be breached by
IFFC and hereafter duly waived by BKC, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder. No waiver, amendment, release or modification of this Agreement shall
be established by conduct, custom or course of dealing, but solely by an
instrument in writing duly executed by BKC.
17. ENTIRE AGREEMENT
This Agreement, together with the Reimbursement Agreement, the Purchase
Agreement and the Guarantee, constitute the entire agreement with respect to the
pledge of the Collateral, and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and may be executed simultaneously in several
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
18. SEVERABILITY
The invalidity or unenforceability of any one or more phrases, sentences,
clauses or sections in this Agreement shall not affect the validity or
enforceability of the remaining portions of this Agreement, or any part thereof.
This Agreement shall be governed and construed exclusively by the laws of the
State of Florida without reference to the conflict of laws rules thereof.
19. BINDING EFFECT
The terms and provisions of this Agreement shall be binding upon and shall inure
to the benefit of IFFC and BKC, and their respective successors, assigns, heirs,
devisees, and personal representatives. This Agreement may not be assigned by
either party hereto without the prior written consent of the other party hereto;
provided, that BKC may assign its rights and delegate its duties hereunder to
one of its subsidiaries or affiliates.
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21. LANGUAGE
All notices or communications under or in connection with this Agreement shall
be in English. This Agreement shall be executed in English Language.
22. WAIVER OF TRIAL BY JURY
IFFC AND BKC, BY THEIR ACCEPTANCE OF THIS AGREEMENT, EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR BKC ACCEPTING THIS AGREEMENT.
23. SETTLEMENT OF DISPUTES
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 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day first above written.
BURGER KING CORPORATION
By: ________________________________________
INTERNATIONAL FAST FOOD CORPORATION
By: ________________________________________
INTERNATIONAL FAST FOOD POLSKA Sp. z o.o.
By: ________________________________________
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