SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 7, 1996
BRAZIL FAST FOOD CORP.
(Exact name of Registrant as specified in charter)
Delaware 0-23278 13-3688737
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
Praia do Flamengo
200-22o. Andar
CEP 22210-30, Rio de Janeiro, Brazil N/A
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 55 21 285 2424
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On July 24, 1996, Registrant acquired all of the assets
(the "Acquisition") of each of BigBurger Ltda. ("BigBurger") and
five of its affiliates, all Brazilian corporations having no
affiliation with either Registrant or any of its officers or
directors (collectively, the "BigBurger Companies"), for 1,520,000
shares of Registrant's Common Stock (the "Shares") pursuant to the
terms and conditions of an Exchange Agreement dated July 24, 1996
by and among Registrant, BigBurger, BigBurger Niteroi Lanchonetes
Ltda., BigBurger Fortaleza Lanchonetes Ltda., BigBurger Aracaju
Lanchonetes Ltda., BigBurger Porto Alegre Lanchonetes Ltda., and
BigBurger Recife Lanchonetes Ltda. (the "Acquisition Agreement").
The BigBurger Companies own and operate 27 hamburger fast
food restaurants, inclusive of outlets operated by franchisees
(collectively, the "BigBurger Stores"), in 9 Brazilian states. Of
the 27 BigBurger Stores, 9 are expected to be rebranded and in
operation under Registrant's "Bob's" tradename by mid-August 1996,
while the balance are scheduled to be rebranded and in operation by
mid-October 1996.
Of the 1,520,000 Shares issued to BigBurger, (i) 228,000
Shares have been pledged in favor of Registrant as collateral
security for the transfer of the operating leases of the BigBurger
Stores to Registrant, to be released to BigBurger upon the transfer
of the last of such operating leases, and (ii) an additional
228,000 Shares have been pledged in favor of Registrant as
collateral security for the truth and accuracy of the several
representations and warranties made by BigBurger in the Acquisition
Agreement (collectively, "Representations"), which Shares are to be
released to BigBurger to the extent of 57,000 Shares on each of
July 24, 1997, 1998, 1999 and 2000, respectively, less any such
Shares retained to compensate Registrant for breach of any of the
Representations.
Jose Ricardo Bousquet Bomeny, the principal shareholder
of BigBurger, was elected as a member of Registrant's Board of
Directors upon consummation of the Acquisition.
Registrant has agreed to file a registration statement
covering the Shares under the Securities Act of 1933, as amended,
no later than November 22, 1996 and to exert its best efforts
thereafter to cause such registration statement to be declared
effective, thereby enabling BigBurger to publicly offer the Shares
for public sale.
<PAGE>
Item 7. Financial Statements and Exhibits.
I. Financial Statements of BigBurger.*
(i) Report of Bendoraytes, Aizenman & Cie.,
Independent Auditors;
(ii) Balance Sheets of BigBurger as of June
30, 1996 (unaudited) and as of December
31, 1995 and 1994;
(iii) Statements of Operations of BigBurger for
the six months ended June 30, 1996
(unaudited) and for each of the three
years ended December 31, 1995;
(iv) Statements of Stockholders' Equity of
BigBurger for the six months ended June
30, 1996 (unaudited) and for each of the
three years ended December 31, 1995;
(v) Statements of Cash Flows of BigBurger for
the six months ended June 30, 1996
(unaudited) and for each of the three
years ended December 31, 1995; and
(vi) Notes to the Financial Statements of
BigBurger.
(a) Pro Forma Financial Information.*
(i) Unaudited Pro Forma Combined Balance
Sheet as of June 30, 1996;
(ii) Unaudited Pro Forma Combined Statement of
Operations for the six months ended June
30, 1996;
(iii) Unaudited Pro Forma Combined Statement of
Operations for the Year Ended December
30, 1995; and
(iv) Notes to Unaudited Pro Forma Financial
Information.
(b) Exhibits.
(i) Exchange Agreement dated July 24, 1996
among Registrant, BigBurger Ltda.,
BigBurger Niteroi Lanchonetes Ltda.,
BigBurger Fortaleza Lanchonetes Ltda.,
BigBurger Aracaju Lanchonetes Ltda.,
BigBurger Porto Alegre Lanchonetes Ltda.,
and BigBurger Recife Lanchonetes Ltda.
* Registrant's provision of historical financial statements of
BigBurger and pro forma financial information relating to the
Acquisition within 15 days after the Acquisition, as
prescribed by Regulation S-X, promulgated by the Securities
and Exchange Commission, is impracticable. Registrant will
file such historical financial statements and pro forma
financial information no later than 75 days after the
Acquisition.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: August 7, 1996 BRAZIL FAST FOOD CORP.
(Registrant)
By: /s/Ira Roxland
Ira Roxland
Assistant Secretary
EXHIBIT 7(c)(i)
EXCHANGE AGREEMENT
This Agreement, executed the dates and places hereunder
indicated, by and between:
a) BIGBURGER LTDA., a company duly organized and validly
existing under the laws of the Federative Republic of
Brazil, having its head office in S o Paulo, SP, in
Jardim America, at Rua Estados Unidos 1.181, enrolled in
the Tax Payer Registry (C.G.C.) under the nr.
45.737.905/0001-87, herein duly represented by its legal
representatives, according to its Articles of
Incorporation (hereinafter referred to as BBLTDA);
b) BIGBURGER NITEROI LANCHONETES LTDA., a company duly
organized and validly existing under the laws of the
Federative Republic of Brazil, having its head office in
the city of Niteroi, RJ, at Rua Gavi o Peixoto 147,
Icarai, enrolled in the Tax Payer Registry (C.G.C.) under
the nr. 27.517.747/0001-78, herein duly represented by
its legal representatives, according to its Articles of
Incorporation (hereinafter referred to as BB NITER I);
and validly existing under the laws of the Federative
Republic of Brazil, having its head office in the city of
Rio de Janeiro, RJ, at Rua Constancia Barbosa 109, Stores
A and B, Meier, enrolled in the Tax Payer Registry
(C.G.C.) under the nr. 97.516.710/0001-00, herein duly
represented by its legal representatives, according to
its Articles of Incorporation (hereinafter referred to as
BBRJ); organized and validly existing under the laws of
the Federative Republic of Brazil, having its head office
in the city of Salvador, Bahia, at Av. Antonio Carlos
Magalh es s/n, enrolled in the Tax Payer Registry
(C.G.C.) under the nr. 86.894.953/0001-66, herein duly
represented by its legal representatives, according to
its Articles of Incorporation (hereinafter referred to as
BB SALVADOR);
e) BIGBURGER FORTALEZA LANCHONETES LTDA., a company duly
organized and validly existing under the laws of the
Federative Republic of Brazil, having its head office in
the city of Fortaleza, Recife, at Av. Washington Soares
85, Stores named SUC nrs 81,82 and 83, Shopping Center
Iguatemi, enrolled in the Tax Payer Registry (C.G.C.)
under the nr. 06.887.533/0001-13, herein duly represented
by its legal representatives, according to its Articles
of Incorporation (hereinafter referred to as BB
FORTALEZA);
f) BIGBURGER ARACAJU LANCHONETES LTDA., a company duly
organized and validly existing under the laws of the
Federative Republic of Brazil, having its head office in
the city of Aracaju, at Rua Delmiro Gouveia s/n, 2nd
floor, Store 232, Coroa do Meio, Sergipe, inscrita no
C.G.C. sob o n 97.486.070/0001-33, enrolled in the Tax Payer
Registry (C.G.C.) under the nr. 06.887.533/0001-13, herein duly
represented by its legal representatives, according to its Articles
of Incorporation (hereinafter referred to as BB ARACAJU);
g) BIGBURGER PORTO ALEGRE LANCHONETES LTDA., a company duly
organized and validly existing under the laws of the
Federative Republic of Brazil, having its head office in
the city of Porto Alegre, at Rua Jo o Wallig nr 1.800,
Stores JW 60/65, enrolled in the Tax Payer Registry
(C.G.C.) under the nr. 88.725.122/0001-96, herein duly
represented by its legal representatives, according to
its Articles of Incorporation (hereinafter referred to as
BB POA); NORTE CENTER LANCHES LTDA., a company duly
organized and validly existing under the laws of the
Federative Republic of Brazil, having its head office in
the city of Rio de Janeiro, RJ, at Av. Suburbana 5.474,
Stores 307/308, Level S, Del Castilho, enrolled in the
Tax Payer Registry (C.G.C.) under the nr.
30.795.751/0001-02, herein duly represented by its legal
representatives, according to its Articles of
Incorporation (hereinafter referred to as NORTE CENTER);
i) BIGBURGER RECIFE LANCHONETES LTDA., a company duly
organized and validly existing under the laws of the
Federative Republic of Brazil, having its head office in
the city of Recife, in Shopping Center do Recife, at Rua
Padre Carapoceiro nr 777, Stores PC 47 and 52, enrolled
in the Tax Payer Registry (C.G.C.) under the nr.
11.623.659/0001-10, herein duly represented by its legal
representatives, according to its Articles of
Incorporation (hereinafter referred to as BB RECIFE);
(All of the above parties, when toghether, referred to as
the CONTRACTORS).
And
i) BRAZIL FAST FOOD CORP, a company duly organized and
validly existing under the laws of the State of
Delaware, having its head office at 15 East North
Street, Dover, State of Delaware, United States of
America, and executive head office in Rio de
Janeiro, RJ, at Praia do Flamengo 200/22th. Floor,
herein duly represented by its Directors, Mr.
PIETER J. F. van VOORST VADER, Dutch, businessman,
resident and domiciled in the city of Rio de
Janeiro, RJ, Brazil, with offices at Praia do
Flamengo 200/22th. floor, bearer of the I.D. card
nr. RNE W 226066-9, and registered in CPF under the
nr. 960372617-68, and ROGERIO CARLOS LAMIM BRAZ,
Portuguese, businessman, resident and domiciled in
the city of Rio de Janeiro, RJ, Brazil, with
offices at Praia do Flamengo 200/22th. floor,
bearer of the I.D. card nr. 1014437 SRE, and
registered in CPF under the nr. 718.510.627-34
(hereinafter referred to as the BBFC).
PRELIMINAR DEFINITIONS
The words hereinbelow shall have the following definitions in
this Agreement:
a) Goodwill - the entirety of goods and services of the
business, tangible and intangible, which is useful and
enables the accomplishment and achievement of the
business, including the respective renting;
b) Equipment - All the machines necessary to the good and
due functioning of the hamburger fast food stores, run by
the chain called BIGBURGER;
c) Hamburgers Fast Food - type of trade whose principal
activity is the sale of hamburgers;
d) Assets - the entirety of goodwill and equipment, as
described in letters "a" and "b" above;
e) Stores - all the stores previously operated by the
CONTRACTORS, as listed in Exhibit 1, whose leasing
contract shall be assigned to BFFC, or to any third
parties appointed by it.
I - PREMISES
I.1. The CONTRACTORS are fast-food companies, being
interested in passing on its hamburger operation, reason why they
have agreed with BFFC to have this exchange executed;
I.2. BFFC is a public North-American company, being the
controller of a company, in Brazil, which is the second biggest
chain of fast-food in that country;
I.3. BFFC is interested in expanding its operation in Brazil,
through the acquisition from the SELLER of all of the Assets, and
only the Assets, provided all the conditions herein established are
met, and according to the conditions of the exchange herein set
forth;
I.4. The CONTRACTORS are deeply interested in exchanging all
of their Assets with BFFC, by means of receiving the shares as
hereunder described, and according to the conditions hereby agreed
and established;
I.6. The CONTRACTORS understand that, due to the Brazilian
legislation, specially the laws related to tax and labor
obligations, one of the basic conditions for the execution of this
Agreement is to hold BFFC harmless and safe against any possible
damage and/or responsibility for any payment, regarding any
subsidiary responsibility or succession, as it may be understood by
the local legislation, by means of granting the due guarantees, by
themselves, jointly and severally, declaring, furthermore, to be
their own and sole the legal responsible for all the tax,
commercial and/or legal obligations regarding third parties,
according to this Agreement.
IT HAS NOW BEEN AGREED THE FOLLOWING, ACCORDING TO THE PREMISES
ABOVE EXPOSED:
1. THE OBJECTS
1.1 The objects of this Agreement are:
a) The exchange, between the CONTRACTORS and BFFC, of
all of the Assets belonging to the CONTRACTORS, by
shares issued by BFFC, as hereunder described in
clause 2, being all the Assets and the shares
totally free of any liens and encumbrances,
liabilities or any other obligations, including
whatever rights there may exist, relative to the
Assets and to the shares, and not expressly
mentioned hereby;
b) The transfer, from the CONTRACTORS to BFFC, of the
leasing contracts and the operation of the Stores;
and
c) The full commitment of the CONTRACTORS to hold
harmless BFFC regarding any debt, superveniences
or breach regarding any of the CONTRACTORS, which
may be attributed to the BFFC, due to the present
acquisition of the Assets by means of an exchange,
as hereby ruled.
2. THE EXCHANGE
2.1 In such way as the CONTRACTORS legally own the Assets and
operate the Stores, without any impediment, opposition and/or onus,
the CONTRACTORS exchange all of the respective Assets and transfer
the leasing contracts and the operation of the Stores to BFFC,
which receives the Assets and accepts the Stores, by the total and
fixed exchange value of 1,520,000 (one million five hundred and
twenty thousand) shares of common stock issued by BFFC (the
Shares) , to be delivered to the CONTRACTORS as follows:
a) 70% (seventy percent) of the Shares, equivalent to
1,064,000 (one million sixty four thousand) Shares, are
delivered, in this date, to the 1st SELLER, which is
appointed by the other CONTRACTORS as their true and
lawful attorney in fact, with powers to receive the
shares, to pledge the shares, to undertake and to be
obliged as bailees of the shares, and to give
acquittance. Due to the deliver of the Shares, as
referred to in this letter "a", the CONTRACTORS give to
BFFC the fully, irrevocable and irreparable acquittance,
concerning this parcel of the Exchange Value.
b) 30% (thirty percent) of the Shares, equivalent to 456,000
(four hundred and fifty six thousand) Shares, are pledged
in this act to BFFC, according to the following
conditions:
b.1.) 15% (fifteen percent) of the Shares, equivalent
to 228,000 (two hundred twenty eight thousand) Shares are
pledged by the CONTRACTORS in favor of BFFC, as a
guarantee of the transfer of all the Stores to BFFC.
Once all the site leasing contracts and the operations of
the Stores are transferred to the BFFC, the shares herein
pledged according to this letter "b.1" shall be released
from this onus, within a term of up to 72 (seventy two)
hours, as from the evidence of the transfer of the last
Store;
b.2.) 15% (fifteen percent) of the Shares, equivalent
to 228,000 (two hundred twenty eight thousand) Shares are
also pledged by the CONTRACTORS in favor of BFFC, as a
guarantee to the representation and guarantees referred
to in clauses 4 and 7, respecting the rule agreed in
clause 3 hereunder.
2.2. The CONTRACTORS declare that BBLTDA is duly authorized to
receive the Shares pertaining to each of the CONTRACTORS, due to
this Exchange Agreement, according to the powers granted to BBLTDA,
in accordance to letter "a" of clause 2, being understood that
BBLTDA is the sole responsible for the division and deliver of the
Shares to each of the CONTRACTORS in their respective proportions,
being BBFC totally released and free from such obligation.
2.3. The CONTRACTORS hereby undertake and declare themselves
fully committed to give full, irrevocable and irreparable
acquittance, concerning the liquidation of the obligations related
to letters "b.1."and "b.2.", when done, and to declare not to have
anything else to charge, receive, complain or demand to or against
BFFC, at any title, under any reason, regarding the liquidation
above mentioned.
3. THE PLEDGE
3.1. The Pledge agreed in letter "b.2."of clause 2 above
shall be for a term of 4 (four) years, as from today, and it is
divided into four (4) installments, of 57,000 (fifty seven
thousand) shares each, being understood that each year, as from the
date of the anniversary of this Agreement, shall represent one
installment. Therefore, each year, in the date of anniversary of
this Agreement, it shall be released to the CONTRACTORS one
installment of 57,000 (fifty seven thousand) Shares, provided the
conditions established in clause 3.3. and its subclauses are met.
3.2. After the terms hereinabove agreed, in clause 3.1., and
in accordance to clause 3.3. hereunder, BFFC shall have the shares
related to letter "b.2."above released from the pledge, being
BFFC's responsibility all the arrangements and costs necessary to
the release herein referred to.
3.3 It is clearly understood that once the period of 4 (four)
years, above agreed by the parties in clause 3.1., have reached its
final term, and in the case there has not been and does not exist
any breach by any of the CONTRACTORS, related to the obligations
herein undertaken by them, according to this Agreement, which may
had caused any harm or damage to BFFC, BFFC shall immediately
release the shares from the pledge herein constituted, according to
this clause 3. However, if BFFC is obliged to execute the shares
herein pledged, in order to be reimbursed of any eventual damage
caused due to any obligation pertaining or related to any of the
CONTRACTORS, the parties herein agree to follow the rules hereunder
established, to have the shares certificates, related to the
pledge, duly substituted:
3.3.1. Once BFFC is notified as party to any
administrative or legal procedure against it, or once such
procedures start against BFFC, due to any obligation related to any
of the CONTRACTORS, the term above mentioned in clause 3.3. shall
be suspended, up to the final solution of the said procedure,
according to subclauses 7.1.2. and 7.1.3.
3.3.2. The CONTRACTORS may choose, in the case above
established in clause 3.3.1., to have the guarantee represented by
the Pledge substituted by any other security collateral or deposit
in local currency, of the value demanded against BFFC. In this
case, the counting related to the term for the release of the
installments of the Pledge shall continue, without any suspension.
3.3.3. If BFFC must have the pledge duly executed to
be reimbursed from any damage, reducing, therefore, the remaining
balance related to the number of shares left as a guarantee, if
there will be any remaining balance, then the counting of the term
stipulated in clause 3.1. shall be reinitiated, for what the
parties herein agree that the shares certificates referred to in
letter "b.2" shall be canceled and replaced by other new
certificates, representing the remaining balance, being understood
that such remaining balance shall be divided by the number of
installments left.
3.4. It is understood and agreed that the period of time of 4
(four) years, above mentioned, is not related and does not intend
to refer to any of the prescription terms hereunder established, or
determined by the law, but only to guarantee BFFC for a determined
period of time. The CONTRACTORS shall remain, jointly and
severally, as personal guarantors of all the obligation and duties
during all the terms foreseen in the respective laws and local
legislation, regarding exchange operation.
3.5. The CONTRACTORS herein declare and represent that they
are acquiring by means of an exchange the Shares from BFFC for
investment and not with a view to their public distribution.
3.6. In order to satisfy the U.S. Securities Act of 1933, the
Shares shall have placed with a legend, as follows, to which the
CONTRACTORS agree: "The shares represented by this certificate have
not been registered under the Securities Act of 1933. The shares
have been acquired for investment and may not be sold, transferred
or assigned in the absence of an effective registration statement
for these shares under the Securities Act of 1933 or an opinion of
the company's counsel that registration is not required under said
Act."
3.7. BFFC undertakes to have the Shares related to letters "a"
and "b" of clause 2 above included in a registration statement to
be filed by BFFC with the US Securities and Exchange Commission
(the SEC) under the Securities Act of 1933 no later than 120 (one
hundred and twenty) business days, as from the execution of this
Agreement, and following such registration to exert BFFC's best
efforts to cause the SEC to declare such registration statement
effective at the earliest possible time.
3.7.1. The parties agree that once the term of 120
(one hundred and twenty) days, above established, has reached its
end, without the due registration of the Shares, according to
clause 3.7. above, the CONTRACTORS may demand from BFFC the payment
of the amount equivalent to the value of the Shares, being already
agreed that such amount shall be calculated in the value equivalent
to US$ 5.00 (five American dollars) for each share. In such case,
the CONTRACTORS undertake to have all of the shares certificates
returned to BFFC, for further cancellation or substitution,
according to BFFC's sole discretion.
3.8. The parties hereby agree that the CONTRACTORS may have
the guarantee above established substituted, at their sole
expenses, by any other collateral security, provided it is in the
same value of the remaining balance of the Pledge, by the time of
the substitution. In such case, if the collateral security offered
can not be divided into parts, the collateral security offered by
the CONTRACTORS shall remain totally pledged up to the final term
as agreed in clause 3.1. above, or even substituted each year, at
the CONTRACTORS sole expenses, for another collateral security,
whose value is equivalent to the remaining balance, each year.
3.8.1. In the case the parties do not reach an
agreement, concerning the value of the guarantee offered by the
CONTRACTORS to have the Pledge substituted, according to clause
3.8. above, the parties agree to have such offered guarantee
appraised by a company or professional which or who is considered
an expert in appraising the type of the offered guarantee.
3.9. The shares certificate representing the pledged Shares,
according to letter "b" above, are delivered, in this dated, to Mr.
Jose Ricardo Bousquet Bomeny, Brazilian citizen, married, resident
and domiciled in Rio de Janeiro, Brazil, at Rua Custodio Serr o
43/101, bearer of the I.D. card nr. 15.620.009, issued by SSP/SP,
and registered in CPF under the nr. 016.102.797-00, who, as the
legal representative of the CONTRACTORS, is appointed as the lawful
bailee of the 456,000 (four hundred and fifty six thousand) shares
(the bailment), as mentioned in letters "b.1."and "b.2." Mr. Bomeny
hereby declares to accept the duty herein established, undertaking
to keep the certificates, submitting himself to the obligations and
penalties prescribed by the Brazilian law, related to the bailment,
and to return such certificates to BFFC, if and when notified to
do it, according to clause 3 and to subclauses 7.1.2. and 7.1.3.
4. THE CONTRACTORS' REPRESENTATIONS
4.1. The CONTRACTORS represent and warrant to BFFC, under the
law penalties, that:
I. The CONTRACTORS are all limited liability companies, duly
organized and validly existing under the laws of the Federative
Republic of Brazil, in normal function, with all legal documents
duly filed before the respective authorities, whose Articles of
Incorporation are duly filed before the respective Board of Trades,
registered under the nrs listed in Exhibit 2;
II. The CONTRACTORS are the true, lawful and sole owners of
the Assets, which allow and enable the perfect function of all of
the Stores, within BIGBURGER's standards, and which are totally
free of any liens and encumbrances, liabilities or any other
obligations, and the CONTRACTORS have the total free disposal of
such Assets;
III. There is no restriction which may prevent the alienation,
by the CONTRACTORS, of the Assets, nor which may restraint the
CONTRACTORS' right of disposing of such Assets, herein alienated to
BFFC, being understood that this Agreement does not harm or
conflict with any other statutory disposition of the CONTRACTORS,
or any agreement executed by the CONTRACTORS with third parties;
IV. The Equipment included in the Assets are in good
operating condition and received in their real state, being
suitable, adequate and fit for the purposes of using them in an
activity similar to the one in which they are used nowadays;
V. The CONTRACTORS are in good standing, and there is no
legal procedures or fact which may put in danger or weaken their
financial health and/or their commercial credibility, or even which
may cause any harm or damage to this transaction;
VI. There is no legal procedures or fact which may put in
danger or weaken the CONTRACTORS' financial health and/or
commercial credibility, or even which may cause any harm or damage
to this transaction;
VII. The Balance Sheet of the CONTRACTORS, related to Dec.
31st, 1995 and the Trial Balance related to April 30th, 1996, do
present their financial situation in those dates, and have been
prepared according to the Brazilian GAAP (Exhibits 3 and 4);
VIII. All of the CONTRACTORS' social documents and fiscal
book are regularly opened and duly accounted, according to the
legal requirements;
IX. All of the Assets belonging to the CONTRACTORS do
physically exist, having been suitable amortized or depreciated, if
the case;
X. All of the assets physically located in the Stores belong
to the CONTRACTORS, except for any eventual free loan for use
(comodato) of any equipment belonging to third parties, are duly
accounted and fully paid, not existing any dispute of any nature
related to such Assets;
XI. All of the Assets are free from any liens or
encumbrances;
XII. The CONTRACTORS declare that they own other assets which
may guarantee the existence of any eventual debt or execution
against them, reason why this exchange does not configure any
defraud of creditors (fraude contra credores) or defraud of
execution (fraude a execuc o);
XIII. All of the CONTRACTORS obligations, including the
social, fiscal and labor obligations, are updated and not in
delay, and there is not any suits, execution and/or labor
proceedings against them, administrative and/or judicial
procedures, in any court or jurisdiction, except for those related
in Exhibit 5, which are solely under the CONTRACTORS'
responsibility;
XIV. There is no legal or contractual impediment or
obstruction for the regular functioning of the Stores, including
all of the rules related to urban occupation and environmental
protection. Also, all the Stores have all the licenses and
documents required for their regular operation;
XV. All of the necessary authorization for the regular
function of the Stores were obtained in due time;
XVI. All of the taxes, contributions and charges related to
the Stores were paid in due time;
XVII. All of the values and amounts related to rental or
lease agreements, concerning the real estate used by the Stores,
including the charges and taxes, have been paid in time, and,
therefore, there is no debt concerning these values or amounts;
XVIII. They are acquiring the Shares from BFFC for investment
and not with a view to their public distribution, except (i)
pursuant to a current registration statement under the U.S.
Securities Act of 1933, as amended, covering the Shares; or (ii)
pursuant to an available exemption from registration under such
Act;
XIX. All the Equipment are totally paid, not existing any
liens or debt of any kind related to them;
XX. The CONTRACTORS undertake to proceed to the extinction of
the respective branches related to the Stores, as well as to have
all the business licenses (Alvaras) canceled, undertaking, also,
to provide all the necessary documents to enable BFFC to establish
its activities in the Stores, without opposition or claims. This
representation is limited to the documents and arrangements related
to the CONTRACTORS only, in the extinction of their Stores.
5. BFFC'S REPRESENTATIONS
5.1. BFFC represents and warrants to the CONTRACTORS-, under
the law penalties, that:
I. It is a public company, duly organized and validly
existing and in good standing under the laws of the State
of Delaware, having all its acts and registers duly
filed, as well as all requisite corporate power to carry
on the business herein agreed as it is now being
conducted, and is duly qualified to do business as a
foreign corporation and is in good standing in each
jurisdiction where such qualification is necessary under
applicable law, having all the corporate authorizations
necessary to carry on with this Agreement and to issue
the Shares to the SELLER, which does not harm or conflict
any statutory or corporate disposition, nor any
agreement, executed with third parties;
II. it is totally economical and financial capable to
contract all the obligations herein established, as well
as to have them accomplished, in time;
III. as a consequence for the representations above stated, it
undertakes to hold harmless and to indemnify the
CONTRACTORS, as shareholders of Brazil Fast Food Corp.,
regarding any claims, losses, damages, requirements,
investigations, penalties, fines, expenses (including
lawyers fees), which may be demanded or caused to the
CONTRACTORS by any company or person, including Brazilian
or North-American governmental authorities and organs,
due to the issuance and deliverance of the Shares by BFFC
to the 1st SELLER, excluding the capital gain to any
Government as per clause 2.3.;
IV. There is no restriction, of any nature, which may impede
the exchange with the CONTRACTORS, of the Shares, nor
even which may restringe its right to dispose from such
Shares, being understood that this Agreement does not
harm or collide with any statutory disposition of BFFC,
or any agreement executed with third parties;
V. The Shares are totally free from any liens and
encumbrances, either judicial or extrajudicial,
attachments or alike, and BFFC has full and total
disposition of such Shares;
VI. There is no other document or agreement with the
shareholders of BFFC with may restringe the issuance and
circulation of the Shares;
VII. It is in good social, commercial and fiscal standing, and
there is no procedure or fact which may put in danger or
weaken their financial health and/or their commercial
credibility, or even which may cause any harm or damage
to this transaction
VIII. It is hereby granted to BBLTDA the right to appoint a
member to the Counsel of BFFC, for a minimum term of 5
(five) years, such right to be ratified by means of the
execution of a Shareholders Agreement, up to 30 (thirty)
days, as from this date.
6 - BFFC'S COMMITMENTS
6.1. The parties agree that BFFC shall assume all the labor
and welfare costs related to the CONTRACTORS' employees, who are
dismissed by them with the specific purposes of being hired by
BFFC, to work in the Stores. Such costs are limited to R$
400.000,00 (four hundred thousand reais), being understood that
this commitment does not intend to mean any assumption, by BFFC, of
any responsibility related to any obligation or any special
arrangement which is not registered in the CONTRACTORS' books
concerning such employees.
6.2. BFFC undertakes to execute a Franchising agreement with
Mr. Jose Ricardo Bomeny, hereunder duly qualified, related to the
Bob's franchise system, being understood that such franchise shall
be established by Mr. Bomeny in four (4) stores located in Recife,
and one store located in the Airport of Salvador, Bahia, being,
therefore, five points of sale, to be exploited by the franchisee
under the trademark Bob's , according to the know-how to be offered
by BFFC.
6.3. The franchises above mentioned in clause 6.2. shall be
granted to the future franchisee free from the franchise tax and by
means of the execution of all the contracts and legal documents
usually executed by the Bob's franchiser, Venbo Comercio de
Alimentos Ltda., a company duly organized and validly existing
under the laws of the Federative Republic of Brazil, having its
head office at Praia do Flamengo 200/22th floor, enrolled in the
Tax Payers Registry (C.G.C.) under the nr. 71.833.552/0001-29,
herein duly represented by its Directors, Mrs. Pieter J. F. van
Voorst Vader and Rogerio Carlos Lamim Braz, which is present to
this Agreement, and agree with this clause, and its franchisees.
6.4. BFFC undertakes to grant to BBLTDA. the right to appoint
a member to the Counsel of BFFC, for a minimum term of 5 (five)
years, such right to be ratified by means of the execution of a
Shareholders Agreement, up to 30 (thirty) days, as from this date.
7. INDEMNIFICATION
7.1. Due to the present acquisition, by BFFC, of the Assets,
and in special of the Goodwill, as well as the transfer of the
operation of the Stores, from the CONTRACTORS to BFFC, according to
this Agreement, and taking into consideration the article 133 of
the Brazilian National Tax Code, the CONTRACTORS declare themselves
jointly and severally responsible for all the representations
expressed in this Agreement, as well as for all the acts and facts
practiced by the CONTRACTORS, occurred up to this date,
undertaking, furthermore, as GUARANTORS, to hold harmless and to
indemnify BFFC for all the losses or payments BFFC may suffer or be
compelled to do, or due to any debt or responsibility related to
any fact or act that the CONTRACTORS may have practiced, neglected
or omitted, or even due to a consequence of any inexactness
verified or, also, due to any obligation previously undertaken by
the CONTRACTORS, or any superveniences, everything either reflected
or not in the accountancy of the Company, including any under
evaluated liabilities, being understood that:
7.1.1. The obligation of indemnification, herein
undertaken by the CONTRACTORS, according to clause 7.1. above,
shall last for a period of 5 (five) years, regarding the taxes and
labor issues and proceedings, and for legal prescription terms all
other obligation, all of them as from this date.
7.1.2. In the case any governmental authority or third
parties initiate any administrative or judicial proceeding, or
decide to collect any amount or to demand any right against BFFC,
risen due to any act, fact or omission occurred or practiced by the
CONTRACTORS, the BFFC shall notify BBLTDA, by means of a fax, with
the confirmation of transmission, or simple letter, with
confirmation of reception, within suitable time, in order to allow
the CONTRACTORS to: (i) appeal either administrative or judicially
the procedure against BFFC; and (ii) provide the immediate release
of the charges and onus imposed to BFFC, due to the succession
determined by the respective authorities, due to the CONTRACTORS'
obligation to indemnify BFFC, as established in this clause and
according to the rules of subclauses 7.1.3.1., 7.1.3.2. and
7.1.3.3. In the case BFFC does not obey to the rules herein
determined, related to its obligation in notifying BBLTDA ,
regarding any administrative and/or judicial proceeding, according
to this subclause 7.1.3, then the CONTRACTORS shall not be obliged
to face the obligation of indemnifying BFFC, concerning the amounts
related to such proceedings.
7.1.3. Any amount due according to clause 7.1. shall be
informed to BBLTDA, by means of fax transmittal, with confirmation
of transmission, or a simple letter, with confirmation of
reception, and shall be paid, by the CONTRACTORS, within the
unsurpassable term of 3 (three) days, as from the reception of the
notification above mentioned, if BFFC is required to pay such
amount, provided the condition established in subclause 7.1.3. is
met. In the case of delay, by the CONTRACTORS, of the payment
herein established, it shall be added 10% (ten percent), as
compensatory fine, to the amount due by the CONTRACTORS, plus
interests at a rate of 1% (one percent) per month.
7.1.3.1. The CONTRACTORS herein undertake to offer
all the guarantees it may be requested to protect BFFC's interests
and to release BFFC's obligation in offering such guarantees either
in the administrative or in the judicial fields, up to the final
solution of the procedure.
7.1.3.2. In the event the CONTRACTORS decide to
take upon the responsibility of defending BFFC up to the final
solution of the dispute, BFFC may demand from the CONTRACTORS to
jointly and severally guarantee the timely payment of the debt or
to have the proper deposit or pledge done, if and when it may be
necessary, according to the law, as a condition to suspend, up to
the final decision of the respective legal proceeding, the joint
and several responsibility undertaken by the CONTRACTORS.
7.1.3.3. The CONTRACTORS shall notify BFFC, by
means of fax transmittal, with confirmation of transmission, or
simple letter, with confirmation of reception, about their decision
in taking upon the defense of the proceedings mentioned in clause
7.1.3.2. above, within the term of 72 (seventy two) hours, as from
the reception of the notification herein above mentioned in
subclause 7.1.3, excluding Saturdays, Sundays and holidays,
provided such excluded days are not part of the legal term granted
to BFFC to present its defense. The absence, by the CONTRACTORS, in
answering such notification, shall be interpreted as their
abdication in exercising such right, but not the release of their
obligation in guaranteeing BFFC, according to this clause 7.
8 - NON COMPETITION
8.1. The CONTRACTORS and their quotaholders undertake not to
act in Brazil, either by themselves, or through third parties,
individually, personally or by means of incorporation of any
company or participation in the capital of any company, at any
title, for any reason, including the rendering of advisory or
consultancy services in such area, for term of 10 (ten) years, as
from the execution of this Agreement, in any business related to
the hamburger fast-food system. Such prohibition does not include
the activities carried on by the company named Pastello, nor the
participation, by the CONTRACTORS, in the capital of BFFC, or in
any successor or BFFC of the assets of the above mentioned
Pastello, provided it is not related to the hamburger fast-food
system, or of BFFC.
8.1.1 The inobservance by the CONTRACTORS regarding the
commitment above undertaken, shall cause to the breach party,
individually, to pay a compensatory fine, equivalent to US$
1,000,000.00 (one million American dollars), to be collected
through executive procedure, according to the applicable law.
8.1.2. The breach by the CONTRACTORS and/or their
respective shareholders and/or quotaholders, related to clause 8
above, may be proved through a simple evidence, by any means, of
the performance of the any CONTRACTORS and/or their respective
quotaholders, personally or through third parties, in the
hamburgers fast food system.
8.1.3. The parties hereby acknowledge and accept that
the pecuniary fine above agreed shall not constitute a sufficient
reparation to the infringement, by the CONTRACTORS, their
quotaholders or third parties or companies incorporated by them or
in which any of them participates, of the rule established in this
clause 8 and its subclauses. Therefore, and independently of the
right of BFFC to make use of all the resources available to guard
and defend its rights, it is herein agreed that BFFC may demand,
in such case, to be indemnified by all losses, damages and/or
ceasing profits derived from the inobservance, by the CONTRACTORS,
related to this clause 8, to be verified in a specific proceeding,
and paid independently of the fine to which they are submitted to,
according to subclause 8.1.1.
9 - THE NOTICES
9.1. Any notice to be given, regarding this Agreement, shall
be considered as effective if delivered by fax or letter, in any
case with confirmation of reception and copy, from the CONTRACTORS
to BFFC, and from BFFC to BBLTDA, to which is granted, by all of
the other CONTRACTORS, the necessary powers to serve and to be
served, as well as to receive any letter, fax, notification or any
other kind of communication, as a reciprocal mandate, obliging all
of them, in the following addresses:
BBLTDA: BIGBURGER LTDA
Rua Lauro Muller 116/2005
Rio de Janeiro, RJ
Tel: (5521) 542-7040
Fax: (5521) 542-6814
Att.: Mr. Jose Ricardo Bomeny
BFFC: BRAZIL FAST FOOD CORP
Praia do Flamengo 200/22th floor
Flamengo - Rio de Janeiro - RJ - Brazil
Tel: (5521) 285-2424
Fax: (5521) 205-5768
Att.: Mr. Pieter J. F. van Voorst Vader
or Mr. Rogerio C. L. Braz
10 - GENERAL DISPOSITIONS
10.1. The nullity or invalidity of any of the clauses
herein agreed shall not cause any harm to the validity and
enforceability of all of the other dispositions, which shall be
strictly observed and accomplish by the parties. The parties
herein undertake to endeavor their best efforts to have all the
dispositions duly valid and enforceable, with the same effects and
purposes of the ones which were considered either null or void.
10.2. This Agreement and its Exhibits reflect the whole
operation as it has been agreed by the parties, and constitute an
integral agreement between them, relating to all the information
herein expressed, superseding, therefore, any and all previous
agreements or negotiation, either oral or written, with reference
to the object of this Agreement.
10.3. This Agreement represents the parties' will, and
there is no other commitment which may not be herein foreseen,
being understood that this Agreement can only be changed or amended
in writing, by the parties' mutual agreement, or their successors
and/or heirs.
10.4. This Agreement is made in both Portuguese and
English languages, being understood that, in case of any doubt, the
Portuguese version shall prevail.
10.5. This Agreement and the rights and obligations herein
established are irrevocable, and shall be binding upon and shall
inure to the benefit of the respective administrators, successors
and assigns of the Parties hereto.
10.6. This Agreement and obligations herein established
shall be construed under the laws of the Federative Republic of
Brazil, as well as the legal relations between the Parties. The
Court of the city of Rio de Janeiro, RJ, Brazil will have
jurisdiction.
10.7. Each party shall be responsible for all the costs
related to the respective counsels and/or professionals hired for
the execution of the documents and verification necessary to the
implementation of this Agreement and its purposes.
10.8. The CONTRACTORS declare to know and to agree to all
the dispositions herein expressed, undertaking to observe and
accomplish with all of them, specially the ones related to clauses
7 and 8, and their subclauses.
10.9. The following Exhibits are to be considered as part
of this Contract, for all the purposes and effects herein agreed:
Exhibit 1 - Relation of the stores previously operated by
the CONTRACTORS;
Exhibit 2 - List of the registration numbers of all the
CONTRACTORS, before the respective Board of
Trades.
Exhibit 3 - Balance Sheet of the CONTRACTORS, as of Dec.
31st, 1995.
Exhibit 4 - Trial Balance of the CONTRACTORS, as of Apr.
30th, 1996.
Exhibit 5 - Suits, execution and/or labor proceedings
against the CONTRACTORS, administrative
and/or judicial procedures, in any court or
jurisdiction.
IN WITNESS WHEREOF, the Parties have executed this Contract in Rio
de Janeiro, RJ, Brazil, on July 24th, 1996, in 3 (three) original
counterparts, for the same effect, in the presence of two (2)
witnesses.
CONTRACTORS: BIGBURGER LTDA
_____________________________________
By:
Title:
BIGBURGER NITEROI LANCHONETES LTDA
_____________________________________
By:
Title:
(Continuation of the Exchange Agreement, executed in July 24th,
1996, by and between the Bigburger Companies and Brazil Fast Food
Corp)
BIGBURGER RJ LANCHONETES LTDA
_____________________________________
By:
Title:
BIGBURGER SALVADOR LANCHONETES LTDA
_____________________________________
By:
Title:
BIGBURGER FORTALEZA LANCHONETES LTDA
_____________________________________
By:
Title:
BIGBURGER ARACAJU LANCHONETES LTDA
_____________________________________
By:
Title:
BIGBURGER PORTO ALEGRE LANCHONETES LTDA
_____________________________________
By:
Title:
NORTE CENTER LANCHES LTDA
_____________________________________
By:
Title:
BIGBURGER RECIFE LANCHONETES LTDA.
_____________________________________
By:
Title:
BFFC: BRAZIL FAST FOOD CORP.
_____________________________________________________________
By: Pieter J. F. van Voorst Vader / Rogerio Carlos Lamin
Braz
Title: Chief Executive Officer / President
INTERVENOR: VENBO COMERCIO DE ALIMENTOS LTDA.
_____________________________________________________________
By: Pieter J. F. van Voorst Vader / Rogerio Carlos Lamin
Braz
Title: Chief Executive Office / President
(Continuation of the Exchange Agreement, executed in July 24th,
1996, by and between the Bigburger Companies and Brazil Fast Food
Corp)
BAILEE: I hereby declare to accept the duty and to have received
the shares certificates herein bailed.
___________________________________________________
JOSE RICARDO BOUSQUET BOMENY
Witnesses:
I. ________________________________________
Name:
CPF:
2. ________________________________________
Name:
CPF:
