AGREEMENT
THIS AGREEMENT is made and entered into as of the 28th date of September 1999,
BY AND BETWEEN NEW YORK BAGEL ENTERPRISES, INC.
A Kansas corporation,
Hereinafter referred to as
"NYBE"
AND ATOMIC BURRITO, INC. formerly known as
WESTERN COUNTRY CLUBS, INC.
An Oklahoma corporation,
Hereinafter referred to as
"ATOM"
WITNESSETH:
WHEREAS, NYBE and ATOM entered into a certain Joint Venture Agreement
dated October 27, 1998, as amended by the certain First Amendment to Joint
Venture Agreement dated December 15, 1998 (collectively, the "JV Agreement")
copies of which are marked Exhibit A and Exhibit B, respectively, and attached
hereto;
WHEREAS, NYBE, ATOM and certain representatives of such entries entered
into a certain Confidentiality Agreement dated November 25, 1998 (the
"Confidentiality Agreement") a copy of which is marked Exhibit C and attached
hereto;
WHEREAS, NYBE and ATOM entered into a certain letter dated May 6, 1999
concerning a potential stock for assets transaction (the "Letter of Intent") a
copy of which is marked Exhibit D and attached hereto; and
WHEREAS, the parties wish to provide for the due termination of the JV
Agreement, the Confidentiality Agreement and the Letter of Intent (collectively,
the "Subject Agreement") and to provide for certain other matters, upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual convenants and agreements
contained herein and other good and valuable considerations, the receipts and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Incorporation of Recitals. The parties agree that the above recitals
are hereby incorporated herein.
2. Termination of Subject Agreements Offers Recession. The Subject
Agreements shall each immediately terminate upon execution of this Agreement by
all parties. Any outstanding offer by a party to the other party is hereby
rescinded, terminated and withdrawn.
3. Assignment of Limited Liability Company Interests. NYBE agrees to
sell, transfer, convey, assign and deliver to ATOM, and ATOM agrees to purchase
and accept from NYBE, (i) forty (40) limited liability company units of AB of
Wichita-I, L.L.C., an Oklahoma limited liability company, and (ii) thirty-eight
(38) limited liability company units of AB of Tulsa-I, L.L.C., and Oklahoma
limited liability company (collectively, the "Interest"), pursuant to the terms
of Assignment Separate From Interest Certificate copies of which are marked
Exhibit E and Exhibit F, respectively, and attached hereto, on September 30,
1999 in consideration of ATOM paying and performing as set forth below, One
Hundred Seventy-Five Thousand Dollars ($175,000) for the purchase of Interests.
ATOM shall have until October 10, 1999 to complete its financing of the purchase
price as set forth hereinabove with the bank of first choice of ATOM. In the
event the bank of the first choice of ATOM shall not complete said financing for
ATOM, then ATOM shall have an additional thirty (30) days to complete said
financing with another lender. In the event ATOM is unable to secure financing
within said time period, then NYBE shall have the option of terminating the
assignments provided herein, or may choose to allow ATOM additional time to
pursue such financing. In the event ATOM successfully completes such financing.
ATOM agrees to pay to NYBE, in addition to the purchase price set forth herein,
interest at the rate of eight percent (8%) per annum on the purchase price from
November 10, 1999 until closing.
4. AB of Tulsa-I, L.L.C. The parties agree that ATOM shall be permitted
to continue to display the current "New York Bagel Cafe" signage located at the
restaurant operated by AB of Tulsa-I, L.L.C. (the "Tulsa Restaurant"). ATOM
agrees to cease and discontinue the use, for any purpose, of any other trade
name or service xxxx or other commercial symbol identifying or relating to NYBE.
ATOM agrees to continue to purchase from NYBE bagels and other related products
for sale at such location upon the terms and conditions as the parties may
agree. ATOM shall immediately remove the signage relating to NYBE at the Tulsa
Restaurant if ATOM shall cease to purchase bagels and related products from NYBE
or if ATOM purchases any such products from a third party. ATOM shall and does
hereby indemnify and hold harmless NYBE, NYBE's affiliates, predecessors,
successors and franchises, as well as their respective stockholders, principals,
directors, owners, officers, agents and employees, from and against any and all
costs, expenses, claims, losses, demands, damages, suits or causes of action of
whatsoever kind or nature which any creditor, patron, or other persons or equity
may now have or may hereafter accrue against NYBE or any such person or entity
from, arising out of, or as a result of ATOM's operation of the Tulsa Restaurant
and the restaurant operated by AB of Wichita-I, L.L.C. In addition to the
payment requirements set forth in Section 3 above, ATOM agrees to pay to NYBE on
September 30, 1999 all monies due to NYBE relating to NYBE's supplying bagels
and related products to the Tulsa Restaurant prior to, as of and after the date
of this Agreement which amount is estimated to be Seven Thousand Dollars
($7,000) as of the date of this agreement and which amount will be determined as
of September 30, 1999. To determine whether ATOM is in compliance with this
Agreement, NYBE or its designated agents shall have the right at any reasonable
time and with reasonable notice to ATOM, to inspect the premises and the books
and records of the Tulsa Restaurant.
5. Mutual Release. Except as otherwise provided in this Agreement, NYBE
and ATOM each shall and do hereby remise, release and forever discharge each
other and their respective successors, predecessors, assigns, directors,
officers, agents, administrators, employees and attorneys from their respective
obligations to keep, observe and perform the various covenants, indemnities and
agreements contained in the Subject Agreements, and, except as otherwise
provided in this Agreement, further release and discharge each other with
respect to claims, actions, causes of action, suits, proceedings, debts due,
contracts, demands, liabilities, judgements, settlements, rights, losses,
damages, costs and expenses of any nature whatsoever, as law or in equity, which
either party may now have or may hereafter have, for or by reason of any matter,
cause or thing whatsoever, arising out of or in any way in connection with the
Subject Agreements. The foregoing release shall survive the execution and
delivery of this Agreement.
6. Indemnification by ATOM. ATOM shall and does hereby indemnify and
hold harmless NYBE, its affiliates, predecessors, successors and franchisees, as
well as NYBE's stockholders, principals, directors, owners, officers, agents and
employees, from and against any and all costs, expenses, rents, charges, claims,
losses, demands, damages, suites or causes of action of whatsoever kind or
nature which any party may now have or may hereafter accrue against NYBE or any
such person or entity from, arising out of, or as a result of the Commercial
Lease Agreement dated April 7, 1997 by and between Andeel and Andeel Properties,
as landlord, and NYBE, as tenant, and as assigned to AB of Wichita-I, L.L.C. by
Assignment of Lease and Assumption Agreement dated December 30, 1998. Such
indemnification shall be only for such matters occurring on or after December
30, 1998.
7. Covenant of Confidentiality. The parties covenant and agrees in to
keep confidential the other party's Evaluation Materials (as defined) and
further covenant and agree not to disclose or otherwise convey any portion of
the other party's Evaluation Materials either within or outside of its
organization except to those of the receiving party's Representatives (as
defined), including Representatives of its affiliates, who had a need to know
such information in connection with the evaluation of a possible transaction and
who agree to be bound by the terms hereof (it being understood and agreed that
the receiving party shall inform its Representatives of the confidential nature
of such information and that each such Representative shall be supplied with a
copy hereof and shall be directed to treat such information confidentially and
return all Evaluation Materials to the disclosing party upon the request of the
disclosing party). The receiving party further covenants and agrees that the
terms and conditions of the Agreement shall apply to all persons who receive
from it or have received from it, directly or indirectly, the disclosing party's
Evaluation Materials, and that it shall be held legally responsible for any and
every breach of this Agreement or unauthorized disclosure or use of Evaluation
Materials by any of such persons. The term "person" as used in this Agreement
shall include, without limitation, any corporation, company, partnership,
limited liability company, trust, limited liability partnership, professional
limited liability partnership, professional limited liability company, joint
venture, other entity or individual.
8. Evaluation Materials. The term "Evaluation Materials" includes all
information in whatever form or format and however it may be embodied,
concerning the disclosing party that are or have been furnished, made available,
or otherwise disclosed to the receiving party by or on behalf of the disclosing
party, orally or in writing, and whether or not such Evaluation Materials in
whole or in part are protectable trade secrets independent from this Agreement;
and includes all notes, analyses, compilations, studies or other documents or
materials, whether prepared by NYBE, ATOM or others, which contain or reflect
all or any portion of such materials. Notwithstanding any other provision of
this Agreement, Evaluation Materials does not include information that (i) is or
in the future becomes generally available to the public, or entered, or in the
future enters the public domain, other than as a result of a disclosure by the
receiving party or its employees: directors: affiliates: legal, financial and
technical advisors; agents or representatives (collectively, its
"Representatives") in violation of the provisions of this Agreement; (ii)
becomes available to the receiving party on a nonconfidential basis from an
independent source without breach of any confidentiality obligations; or (iii)
is developed by the receiving party without breach of this Agreement or any
other confidentiality obligations to the disclosing party.
9. Manual Covenants Not to Compete. NYBE and ATOM agree and covenant
with each other not to enter into, engage in, or otherwise participate in any
way in any business which is engaged in the same or similar primary business of
the other for a term of two years after the date of this Agreement.
Specifically, NYBE agrees not to enter into, engage in or otherwise participate
in the business of operating a restaurant offering Mexican food items, including
burritos or any other similar item presently on the ATOM menu. Also, ATOM agrees
not to enter into, engage in or otherwise participate in the business of
operating a restaurant offering Bagels, including deli-style sandwiches or any
other similar item presently on the NYBE menu. This provision will not apply to
the Tulsa Restaurant, so long as NYBE shall continue to supply bagels and
related products to said restaurant, but shall apply to any other restaurant
owned or operated or franchised or licensed by either party to this Agreement.
Any other exceptions to this section must be agreed to in writing by both of the
parties hereto.
10. Limited Use. The receiving party covenants and agrees to not use the
Evaluation Materials directly or indirectly for any purpose.
11. Equitable Remedies. It is further understood and agreed that money
damages would not be a sufficient remedy for any breach of this Agreement by
either party, and that either party shall be entitled to specific performances
and injunctive or other equitable relief as a remedy for any such breach by the
other party, without the necessity of posting bond. Such remedies shall not be
deemed to be the exclusive remedy for a breach of this Agreement, but shall be
in addition to all other remedies that may be available at law or in equity.
12. Press Releases: Announcements: Form 8-Ks. Except as may be required
by applicable securities laws or stock exchange requirements, no party shall
issue any press release or public announcement relating to the subject matter of
this Agreement without the prior written approval of the other party, which
written approval will not be unreasonably withheld by such party, provided,
however, that any party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing party will advise
the other party prior to making such disclosure). The parties agree to release a
joint press release in the form of Exhibit H attached hereto after the close of
the Nasdaq National Market on the date of this Agreement. The parties agree that
they may be required to file respective form 8-Ks with the United States
Securities and Exchange Commission, which filings the parties agree will not
conflict with the above press release. The parties agree that if either party
breaches the terms of this Section, then the breaching party shall pay the
non-breaching party Twenty-Five Thousand Dollars ($25,000).
13. Governing Laws Venues: Fees. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas. Any legal action
brought to enforce or construe this Agreement shall be brought in the courts
located in Sedgwick County, Kansas, and the parties hereby agree to the
jurisdiction of such courts and agree that they will not invoke the doctrine of
forum non conveniens or other similar defenses. In the event that any
litigation occurs under this Agreement, the non-prevailing party shall pay the
reasonable attorneys' fees and costs incurred by the prevailing party because of
such litigation.
14. Entire Agreement. This Agreement constitutes the entire
understanding of the parties and there are no other oral or written
understandings between them relating to the subject matter of this Agreement.
15. Amendment and Modifications. This Agreement may only be amended or
modified in writing signed by the parties.
16. Counterparts and Facsimile Signatures. This Agreement may be
executed simultaneously in two (2) or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Facsimile signatures of the parties hereto shall be binding.
17. Headings. The headings contained in this Agreement are for
convenience and reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
18. Successors and Assigns. This Agreement shall be binding upon and
more to the benefit of the parties hereto and their respective successors,
permitted assigns, heirs and personal representatives.
Neither party may assign this Agreement.
19. Terms and Words. All terms and words used in this Agreement,
regardless of numbers and genders in which they are used, shall be deemed to
include singular or plural and all genders as the context or sense of this
Agreement or any section or clause herein may require.
20. Survival. The obligations, covenants, agreements, warranties,
representations and indemnifications included or provided for herein shall
survive the entering into of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
NEW YORK BAGEL ENTERPRISES, INC.
By: /s/Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
--------------------
Title: President
--------------------
"NYBE"
ATOMIC BURRITO, INC. formerly known as
WESTERN COUNTRY CLUBS, INC.
By: /s/Xxxxx X. Xxxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxxx
---------------------
Title: President
---------------------
"ATOM"
Exhibit E
Form of Assignment Separate From Interest Certificate
ASSIGNMENT SEPARATE FROM INTEREST CERTIFICATE
---------------------------------------------
In consideration of One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged. New
York Bagel Enterprises, Inc., a Kansas corporation ("Assignor"), does hereby
assign, transfer, and set over to Atomic Burrito, Inc., and Oklahoma corporation
("Assignee"), all of Assignor's interest in 40 limited liability company units
of AB of Wichita-I, L.L.C., an Oklahoma limited liability company (the
"Company"). Assignee does hereby accept such assignment of the interests in 40
limited liability company units of the Company from Assignor and consents to the
transfer of the interest in such units of the Company that results from this
Assignment.
Dated and effective as of this 28 day of September, 1999.
NEW YORK BAGEL ENTERPRISES, INC.
By: /s/Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
--------------------
Title: President
--------------------
"Assignor"
ATOMIC BURRITO, INC.
By: /s/Xxxxx X. Xxxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxxx
---------------------
Title: President
---------------------
"Assignee"
Exhibit F
Form of Assignment Separate From Interest Certificate
ASSIGNMENT SEPARATE FROM INTEREST CERTIFICATE
---------------------------------------------
In consideration of One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, New
York Bagel Enterprises, Inc., a Kansas corporation ("Assignor"), does hereby
assign, transfer, and set over to Atomic Burrito, Inc., an Oklahoma corporation
("Assignee"), all of Assignor's interest in 38 limited liability company units
of AB of Tulsa-I, L.L.C., an Oklahoma limited liability company (the "Company").
Assignee does hereby accept such assignment of the interests in 38 limited
liability company units of the Company from Assignor and consents to the
transfer of the interest in such units of the Company that results from this
Assignment.
Dated and effective as of this 28 day of September, 1999.
NEW YORK BAGEL ENTERPRISES, INC.
By: /s/Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
--------------------
Title: President
--------------------
"Assignor"
ATOMIC BURRITO, INC.
By: /s/Xxxxx X. Xxxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxxx
---------------------
Title: President
---------------------
"Assignee"
