Exhibit 10
PURCHASE AGREEMENT
BETWEEN
SHAREHOLDERS OF CREATIVE EATERIES CORPORATION
A NEVADA PUBLIC CORPORATION
AND
SHAREHOLDERS OF FRANCHISE CAPITAL CORPORATION
A NEVADA PUBLIC CORPORATION
AGREEMENT, made this 4th day of October
2005, by and between Franchise Capital
Corporation ("FCC") and Creative Eateries
Corporation ("CEC").
RECITALS
WHEREAS, FCC is a the managing member and
90% owner of Kokopelli Franchise
Company, LLC, the managing member and 72.5%
owner in Comstock Jake's Franchise
Company, LLC, the managing member and 100%
owner of Cousin Vinnie's Franchise
Company, LLC, and the managing member and
100% owner of Kirby Foo's Franchise
Company, LLC which are considered their
portfolio companies (Restaurants).
WHEREAS, FCC's portfolio companies operate
restaurant concepts (Concepts)
Kokopelli Sonoran Grill(R), Comstock
Jake's(R), Cousin Vinnie's Italian
Diner(R), and Kirby Foo's Asian Grill(R).
These Concepts, offer to the public
franchise restaurant concepts. The Concepts
include, among other things: all
assets, including company owned and
operated stores, specific trademarks or
service marks, including without
limitation, trademarks, logos and related
commercial symbols and slogans, and recipes
and related liabilities.
WHEREAS, other third parties, as
individuals and entities are owners of the
remaining membership interests in the
Restaurants and are as listed in Exhibit
B.
WHEREAS, CEC desires to purchase the
Restaurants and the Concepts from FCC, for
$2,161,493 to be paid in $200,000 in cash
and 3,583,667 shares of CEC's
restricted common stock consistent with the
following terms.
NOW, THEREFORE, in consideration of the
mutual promises, covenants, and
representations contained herein,
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF FCC
FCC hereby represents and warrants to CEC
that:
1.1 FCC will
transfer to CEC its manager positions and ownership in each of
the Restaurants and the Concepts including,
without limitation, all hard assets
including company owned and operated
stores, specific trademarks or service
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marks, including without limitation,
trademarks, logos and related commercial
symbols and slogans, and recipes and
related liabilities in exchange for
$2,161,493 to be paid in $200,000 in cash
and 3,583,667 shares of CEC's
restricted common stock. Said shares shall
be exempt from reverse splits and
dilution as stated in 2.2.
1.2 FCC
Organization. FCC is a corporation duly organized, validly
existing
and in good standing under the laws of
Nevada, has all necessary corporate
powers to own its property and to carry on
its business as now owned and
operated by it, and is duly qualified to do
business and is in good standing in
each of the states where its business
requires qualification.
1.3 Restaurants
Organization. The Restaurants are LLC's duly organized,
validly existing and in good standing under
the laws of Arizona, has all
necessary corporate powers to own its
property and to carry on its business as
now owned and operated by it, and is duly
qualified to do business and is in
good standing in each of the states where
its business requires qualification.
1.4 Capital.
Management of FCC owns control of the Restaurants and
therefore has the right to vote for the
completion of this transaction. FCC
represents that there are no other issued
and outstanding open subscriptions,
options, rights, warrants, debentures,
instruments, convertible securities, or
other agreements or commitments obligating
FCC in regards to the Restaurants.
1.5 Financial
Statements. The most recent financial statements of the
Restaurants are attached as Exhibit A. The
financial statements have been
prepared in accordance with generally
accepted accounting principles and
practices consistently followed by the
Restaurants throughout the period
indicated, and fairly represent the
financial position of each as of the date of
the balance sheet included in the financial
statements.
1.6
Investigation of Financial Condition. Without in any manner
reducing or
otherwise mitigating the representations
contained herein, CEC and/or its
attorneys shall have the opportunity to
meet with the accountants and attorneys
to discuss the financial condition of the
Restaurants. FCC shall make available
to CEC and/or its attorney all books and
records of the Restaurants, once
reasonable notice of such request has been
given.
1.7 Authority.
The Board of Directors of FCC have authorized the execution
of this Agreement and the consummation of
transactions contemplated herein, and
FCC has full power and authority to
execute, deliver, and perform this Agreement
and this Agreement is a legal, valid and
binding obligation of FCC, and is
enforceable in accordance with its terms
and conditions.
1.8 Ability to
Carry Out Obligations. The execution and delivery of this
Agreement by FCC of its obligations
hereunder in the time and in the manner
contemplated will not cause, constitute or
conflict with or result in (a) any
breach or violation of any of the
provisions or constitute a default under any
license, indenture, mortgage, charter,
instrument, articles of incorporation,
bylaws, or other agreement or instrument to
which either is a party, or by which
it may be bound, nor will any consents or
authorizations of any party other than
those hereto be required, (b) an event that
would permit any party to any
agreement or instrument to terminate it or
to accelerate the maturity of any
indebtedness or other obligation of FCC, or
(c) any event that would result in
the creation or imposition of any lien,
charge, or encumbrance on any asset of
FCC.
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1.9 Full
Disclosure. None of the representations and warranties made by
FCC
herein, or in any exhibit, certificate or
memorandum furnished or to be
furnished by either, or on their behalf,
contains or will contain any untrue
statement of material fact, or omit any
material fact the omission of which
would be misleading.
1.10 Good Title.
Other than as described in Exhibit A, the Restaurants have
good and marketable title to all of its
property free and clear of any liens,
claims and encumbrances of any nature, form
or description.
1.11
Indemnification. FCC and the Restaurants agrees to defend and hold
CEC
harmless against and in respect of any and
all claims, demands, losses, costs,
expenses, obligations, liabilities,
damages, recoveries, and deficiencies,
including interest, penalties, and
reasonable attorney's fees, that it shall
incur or suffer, which arise out of, result
from or relate to any breach of, or
failure by FCC to perform any of its
representations, warranties, covenants and
agreements in this Agreement or in any
exhibit or other instrument furnished or
to be furnished by FCC under this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CEC
CEC hereby represents and warrants to FCC
that:
2.1 CEC will
deliver $2,161,493 to be paid in $200,000 in cash and
3,583,667 shares of CEC's restricted common
stock. Said shares shall be exempt
from reverse splits and dilution as stated
in 2.2 below. The $200,000 in cash
will be delivered within ninety days after
closing. Once $200,000 in cash is
received FCC will deliver their ownership
in Kokopelli Franchise Company, LLC.
FCC's ownership in Comstock Jake's
Franchise Company, LLC, Cousin Vinnie's
Franchise Company, LLC, and Kirby Foo's
Franchise Company, LLC will be delivered
upon closing. CEC will acquire FCC's
position in the Restaurants and the
Concepts including, without limitation, all
hard assets including company owned
and operated stores, specific trademarks or
service marks, including without
limitation, trademarks, logos and related
commercial symbols and slogans, and
recipes and related liabilities.
2.2 CEC agrees
the 3,583,667 shares of restricted common stock shall carry
a limited exemption from reverse splits and
dilution. CEC assures FCC that for
as long as they own their shares, or after
a period of twenty-four months, or
which ever comes first, FCC shall control a
minimum of 5% of the total
outstanding shares of CEC, or hold
