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SEC Filings

8-K
COSI INC filed this Form 8-K on 12/28/2016
Entire Document
 

ARTICLE IX.A
CERTAIN FRANCHISE MATTERS

Section 9.01A  Provisions relating to certain Franchise Agreements.  Notwithstanding anything in this Agreement to the contrary, the following provisions will apply to (i) the Cosi, Inc. Master Development and Franchise Agreement, Territory of Costa Rica (MDFA) (including all addendums, amendments, supplemental written agreements and guarantees relating thereto, the “FC Franchise Agreement”) dated as of March 28, 2012 between Cosi, Inc. and Fast Casual S.A. (“Fast Casual”) and (ii) the International License Agreement (including all amendments, supplemental written agreements and guarantees relating thereto, the “Dubai Franchise Agreement”) in relation to Dubai with Al Tayer Group, LLC (including all related entities, “Al Tayer”):

(a)          On the Closing Date, a portion of the cash component of the Purchase Price equal to $525,000 (the “Dubai Franchise Reserve”) shall be withheld by the Purchaser and placed with a mutually acceptable third party custodian.  On or before December 17, 2017, if Al Tayer has extended the Dubai Franchise Agreement on a long term basis (or a new agreement has been executed with Al Tayer on substantially similar terms as the Dubai Franchise Agreement for the current location or for another location in Dubai) for at least five years on development and ten years on franchise operations, then 100% of the Dubai Franchise Reserve shall be paid to Sellers.  If the Dubai Franchise Agreement is extended on a long term basis (or a new agreement has been executed with Al Tayer on substantially similar terms as the Dubai Franchise Agreement for the current location or for another location in Dubai) but for a shorter time than five years development/ten years franchise operations, then a proportional portion of the Dubai Franchise Reserve shall be paid to Sellers (such proportion to be determined in good faith including appropriate allocation as between development and operations) and the remainder shall be paid to Purchaser or its designee.  If the Dubai Franchise Agreement has not been extended on a long term basis on or before December 17, 2017, then 100% of the Dubai Franchise Reserve shall be paid to Purchaser or its designee.  Purchaser and Sellers shall issue instructions to the third party custodian consistent with the provisions of this Section 9.01A(a).

(b)          If, prior to the Closing Date, Seller resolves the disputes related to the assignment of the Dubai Franchise Agreement on alternative terms acceptable to Seller and Purchaser, then Purchaser shall direct and facilitate the immediate release of the Dubai Franchise Reserve to Seller.

(c)          On the Closing Date, a portion of the cash component of the Purchase Price equal to $975,000 (the “FC Franchise Reserve”) shall be withheld by the Purchaser and placed with a mutually acceptable third party custodian.  On or before December 31, 2017, (1) Sellers shall receive from the FC Franchise Reserve an amount (but not greater than the FC Franchise Reserve) equal to (x) 3.5 times the amount of franchise royalty revenue actually paid by Fast Casual to Purchaser following the Closing Date in respect of revenues for the trailing twelve month period commencing December 1, 2016 and ending November 30, 2017 less (y) any out of pocket expenses incurred by the Purchaser in enforcing its rights under the FC Franchise Agreement and (2) the remainder (if any) of the FC Franchise Reserve shall be paid to Purchaser or its designee.  Purchaser and Sellers shall issue instructions to the third party custodian consistent with the provisions of this Section 9.01A(b).
 
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