-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L/laxyRQpPkG3a43Aif8RpYjSaI/C8o/H39EaUcZOOjg+AIUSokomG5WKldJtgsK nBaEMMUNG1djrAaitGyInQ== /in/edgar/work/0000950148-00-002432/0000950148-00-002432.txt : 20001128 0000950148-00-002432.hdr.sgml : 20001128 ACCESSION NUMBER: 0000950148-00-002432 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20001127 GROUP MEMBERS: RESTAURANT TEAMS INTERNATIONAL INC GROUP MEMBERS: W/F INVESTMENT CORP. GROUP MEMBERS: WILLIAM O. FLEISCHMAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RESTAURANT TEAMS INTERNATIONAL INC CENTRAL INDEX KEY: 0000921066 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 752337102 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-55699 FILM NUMBER: 776904 BUSINESS ADDRESS: STREET 1: 911 N.W. LOOP 281 STREET 2: SUITE 111 CITY: LONGVIEW STATE: TX ZIP: 75604 BUSINESS PHONE: 903.758.28 MAIL ADDRESS: STREET 1: 911 N.W. LOOP 281 STREET 2: SUITE 111 CITY: LONGVIEW STATE: TX ZIP: 75604 FORMER COMPANY: FORMER CONFORMED NAME: FRESH N LITE INC DATE OF NAME CHANGE: 19971030 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RESTAURANT TEAMS INTERNATIONAL INC CENTRAL INDEX KEY: 0000921066 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 752337102 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 911 N.W. LOOP 281 STREET 2: SUITE 111 CITY: LONGVIEW STATE: TX ZIP: 75604 BUSINESS PHONE: 903.758.28 MAIL ADDRESS: STREET 1: 911 N.W. LOOP 281 STREET 2: SUITE 111 CITY: LONGVIEW STATE: TX ZIP: 75604 FORMER COMPANY: FORMER CONFORMED NAME: FRESH N LITE INC DATE OF NAME CHANGE: 19971030 SC 13D 1 v67567sc13d.txt SCHEDULE 13D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO_______)* Restaurant Teams International, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 Par Value Per Share - -------------------------------------------------------------------------------- (Title of Class of Securities) 761265-10-7 --------------- (Cusip Number) Curtis Swanson Restaurant Teams International, Inc. 911 N.W. Loop 281, Suite 11, Longview, Texas 75604 - -------------------------------------------------------------------------------- (903) 295-6800 (Name, Address, and Telephone Number of Person Authorized to Receive Notices and Communications) November 17, 2000 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b) (3) or (4), check the following box [ ]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. o The remained of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided on a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"" or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provision of the Exchange Act. 2 Cusip No. 761265-10-7 - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON W/F Investment Corp, a California corporation, and William O. Fleischman S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Not Applicable - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION W/F Investment Corp State of California William O. Fleischman United States Citizen - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 10,780,908 BENEFICIALLY --------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 0 REPORTING --------------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER 10,780,908 --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,780,908 - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON W/F INVESTMENT CORP CO WILLIAM O. FLEISCHMAN IN - -------------------------------------------------------------------------------- 3 ITEM 1. SECURITY AND ISSUER This statement on Schedule 13D relates to the common stock, $0.01 par value per share (the "Common Stock"), of Restaurant Teams International, Inc., a Texas corporation (the "Company"). The principal executive office of the Company is located at 911 N.W. Loop 281, Suite 111, Longview, Texas 75604. ITEM 2. IDENTITY AND BACKGROUND This Statement is being filed by W/F Investment Corp ("W/F"), a California corporation and William O. Fleischman ("Mr. Fleischman"), its principal shareholder. The principal business address of W/F and Mr. Fleischman is 1900 Avenue of the Stars, Suite 2410, Los Angeles, CA 90067. The principal business of W/F is investing for long-term gain. The principal business of Mr. Fleischman is President of W/F. During the past five years, neither W/F Investment Corp, Mr. Fleischman, or its officers and directors have (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdictions a result of which such Company or person(s) was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activity subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION On October 31, 2000, W/F entered into an agreement with Oxford Commercial Funding, LLC ("Oxford"), the holder of a secured note of and judgment against the Company (the "judgment"), by which W/F acquired all the rights, title and interest in the judgment. On October 31, 2000, W/F entered into an agreement with the Company by which W/F, in return for purchasing the judgment held by Oxford, was granted a right to convert the judgment into shares of common stock of the Company at a price per share equal to the lesser of a) the closing bid price on the day immediately preceding the agreement ($.09 per share) or b) the average closing bid price of RTIN stock for the five- 4 day trading period immediately preceding the date of conversion, less a discount of 25%, considered to be a Beneficial Conversion Feature. W/F notified the Company on November 17, 2000 of its conversion of $400,000 of the current balance of the judgment of $522,899.79 into 10,680,908 shares of the common stock of the Company based upon a conversion factor of $.03745 per share. ITEM 4. PURPOSE OF TRANSACTION The shares of Common Stock owned by W/F were acquired for investment purposes. W/F intends to review its investment in the Company on a continuing basis and, depending upon price and availability of securities of the Company, subsequent developments affecting the Company, the Company business prospects, general stock market and economic conditions, tax considerations and other factors deemed relevant, to consider increasing or decreasing the size of W/F's investment in the Company. Pursuant to the Agreement between W/F and the Company dated October 31, 2000, immediately following the execution of the agreement and the completion of the acquisition of the judgment from Oxford, W/F and the Company are to enter into a shareholder's agreement, by the terms of which the Company will elect a new board of directors, which will include two of its current members, two representatives of W/F and a fifth director to be selected by the four aforesaid individuals. The parties have not, as yet, executed such shareholder's agreement, although it is contemplated that an agreement will be signed shortly. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of the date hereof, W/F beneficially owns 10,780,908 of the outstanding shares of Common Stock. Such shares represent approximately 35.14% of the outstanding shares of Common Stock. W/F has the right to acquire additional shares of Common Stock of the Company through conversion of the remaining balance of the judgment during the ninety-day period after October 31, 2000. (b) By virtue of his controlling interest in W/F, William O. Fleischman has the power to vote or direct the vote of the securities owned by W/F. By virtue of his controlling interest in W/F, William O. Fleischman has the power to dispose or direct the disposition of the securities owned by W/F. (c) Neither W/F nor Mr. Fleischman have effected any transaction in the Common Stock during the past 60 days, except as disclosed herein. (d) By virtue of his controlling interest in W/F, William O. Fleischman has the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock. ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH REPSECT TO SECURITIES OF THE ISSUER. 5 Other than as described in Items 3 and 5 above, there are no contracts, arrangements, understandings or relationship (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- --------------- 99.1 Agreement between the Company and W/F Investment Corp dated October 31, 2000 99.2 Agreement between W/F Investment Corp and Oxford dated October 31, 2000 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information named in this statement is true, complete and correct. Date: November 21, 2000 W/F Investment Corp By: /s/ William O. Fleischman ----------------------------- William O. Fleischman, Its Chief Executive Officer /s/ William O. Fleischman ----------------------------- William O. Fleischman EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ------------- 99.1 Agreement between the Company and W/F Investment Corp dated October 31, 2000 99.2 Agreement between W/F Investment Corp and Oxford dated October 31, 2000 EX-99.1 2 v67567ex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 AGREEMENT This agreement (the "Agreement") is entered into this 31st day of October 2000 by and between Restaurant Teams International, Inc., a Texas corporation ("RTIN" herein), and W/F Investment Corp., a California corporation ("W/F" herein), with reference to the following facts: A. In April 1999, Oxford Commercial Funding LLC, an Illinois limited liability company ("Oxford" herein), loaned $500,000 to RTIN, which loan was guaranteed by Stanley L. Swanson, Carole Swanson and Curtis Swanson. The loan fell into default and the parties thereafter entered into a settlement agreement dated May 8, 2000, which provided for a stipulated judgment (the "Judgment" herein) against RTIN and the guarantors, in the event of any further default. B. Oxford has noticed a hearing in the United States District Court for the Northern District of Illinois, Eastern Division, in case number 99C8200, for Wednesday, October 25, 2000, by reason of the alleged default of RTIN under the terms of the settlement agreement, and for an order to realize on certain collateral given for the Judgment. C. RTIN has requested that W/F purchase the Judgment from Oxford, together with all collateral given therefor, and W/F has agreed to do so on the terms and conditions hereinafter set forth. NOW, THEREFORE, for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. PURCHASE OF JUDGMENT. Within 24 hours of the full execution of this Agreement, W/F shall take such steps as may be necessary to acquire the Judgment from Oxford, on such terms and conditions as Oxford and W/F may agree. Provided, however, W/F shall not be obligated to pay a sum in excess of $250,000 for the Judgment. 2. CONVERSION TO EQUITY. RTIN and W/F agree that at such time as W/F has completed its purchase of the Judgment from Oxford, W/F shall have the right to convert its Judgment into shares of common stock of RTIN. Conversion shall be at W/F's option and the number of shares of common stock to be received upon conversion shall be based upon the lesser of a) the closing bid price on the day immediately preceding this Agreement ($.09 per share), or b) the average closing bid price for RTIN stock for the five-day trading period immediately preceding the date of conversion, less a discount of 25%, which shall be considered the beneficial conversion feature. If W/F has not elected to so convert within 90 days of the date of this Agreement, the Judgment shall be due and payable. 3. REPRESENTATIONS OF RTIN. RTIN hereby warrants and represents that the 2 Judgment in the amount of $522,679 is valid and binding, and that there are no offsets claimed by RTIN which might affect the validity thereof. Collateral for the original loan which resulted in the Judgment includes virtually all the assets of RTIN, plus 403,500 shares of stock in RTIN shall be and remain good collateral in the hands of W/F. Evidence of all shares given as collateral, including 120,000 shares of the 250,000 shares formerly held by Oxford, shall be transmitted to W/F forthwith. (The parties acknowledge that Oxford liquidated approximately 130,000 shares, thereby reducing the then outstanding balance of the Judgment by approximately $16,000.) "Collateral" shall also include a warrant issued by RTIN to Oxford as part of the original loan transaction, for approximately 150,000 shares. 4. SHAREHOLDERS' AGREEMENT. Immediately following full execution hereof and the completion of the acquisition of the Judgment by W/F, the parties shall enter into a shareholders' agreement, by the terms of which RTIN shall elect a new board of directors, which shall include two of its current members and two representatives of W/F Investment Corp., with a fifth person to be selected by the four aforesaid individuals. All extraordinary activities of the company, other than those in the ordinary course of business, shall be subject to board approval. No contracts or other agreements shall be entered into involving more than $5,000 in each instance without prior board approval, as otherwise may be set forth in the shareholders' agreement empowering the board. 5. NOTICES. All notices which either party may wish to serve on the other shall be deemed given on the date of service, if served personally, or, within 72 hours after mailing, if mailed to the party to whom notice is given, as follows: W/F Investment Corp. 1900 Avenue of the Stars, Suite 2410 Los Angeles, California 90067 Fax: (310) 552-0834 Restaurant Teams International, Inc. 911 NW Loop 281, Suite 111 Longview, Texas 75604 Fax: (903) 295-6790 Any party may change its address or fax number, providing notice of such change is given in the manner required under this paragraph. 6. INTEGRATION. This Agreement shall constitute the entire agreement between the parties with respect to the subject matter hereof, and supercedes all prior oral and written agreements between said parties. No representations, promises, conditions or agreements with reference to the execution of this document have been made or entered into between the parties hereto, other than as herein expressly provided. This Agreement may only be modified or amended by an agreement in writing executed by all of the parties hereto. 2 3 7. FURTHER ASSURANCES. Each party to this Agreement agrees to perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement. 8. WAIVER. The provisions of this Agreement may be waived, altered, amended, or repealed, in whole or in part, only on the written consent of all parties to this Agreement. 9. NO THIRD PARTY BENEFICIARIES. This Agreement is intended by the parties hereto to be for the sole benefit of said parties, and shall not, under any circumstances, create any rights in any third party with respect to the matters presented herein. 10. SEVERABILITY. It is intended that each paragraph of this Agreement shall be viewed as separate and divisible, and in the event that any paragraph shall be held to be invalid, the remaining paragraphs shall continue to be in full force and effect. 11. GOVERNING LAW. This Agreement shall be construed in accordance with, and governed by, the laws of the State of California. 12. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 13. ATTORNEYS FEES. The prevailing party in any legal action or proceeding brought to enforce the terms and provisions of this Agreement (including an action for injunctive relief), shall be entitled to recover his reasonable attorney's fees as well as costs of suit. 14. LEGAL ADVICE. Each of the parties hereto has received independent legal advice from its attorneys with respect to the advisability of executing this Agreement. Accordingly, any rule of law, including but not limited to ss.1654 of the California Civil Code, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. 15. MEANING OF TERMS. Where the context so requires, the use of the masculine gender shall include the feminine and neuter genders and vice versa, and the singular shall include the plural and vice versa. 3 4 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first hereinabove written. Dated: October 31, 2000 RESTAURANT TEAMS INTERNATIONAL, INC. By: /s/ Stanley L. Swanson ------------------------------- Stanley L. Swanson Chairman of the Board Dated: October 31, 2000 W/F INVESTMENT CORP. By: /s/ William O. Fleischman -------------------------------- William O. Fleischman Chairman of the Board Consent is hereby given to all of the foregoing. /s/ Stanley L. Swanson - ------------------------------- Stanley L. Swanson /s/ Carole Swanson - ------------------------------- Carole Swanson /s/ Curtis A. Swanson - ------------------------------- Curtis Swanson 4 EX-99.2 3 v67567ex99-2.txt EXHIBIT 99.2 1 EXHIBIT 99.2 PURCHASE AND ASSIGNMENT AGREEMENT THIS AGREEMENT is made this 31st day of October, 2000, by and among OXFORD COMMERCIAL FUNDING, LLC, an Illinois limited liability company ("Seller"), with an office at 676 North Michigan Avenue, Suite 3000, Chicago, Illinois 60611, successor in interest to LJB HOLDINGS, INC., an Illinois corporation ("LJB"), W/F INVESTMENT CORP., a California corporation ( "Buyer"), having an address at 1900 Avenue of The Stars, Suite 2410, Los Angeles, California 90067, and RESTAURANT TEAMS INTERNATIONAL, INC., a Texas corporation, having an address at 911 N.W. Loop 281, Suite 111, Longview, TX 75605 ("Borrower"). RECITALS: 1. Seller has succeeded to the interests of LJB in certain agreements between LJB and Borrower, including a Loan and Security Agreement, dated as of April 15, 1999, as amended by the First Amendment to Loan and Security Agreement dated as of May 28, 1999, and as further modified by a letter agreement dated August 31, 1999 (as so amended and modified the "Loan Agreement"). 2. Under the terms of the Loan Agreement, LJB made a loan (the "Loan") to Borrower, which was evidenced by the Promissory Note (the "Note") dated April 15, 1999, made by Borrower in the original principal amount of $500,000.00. 3. The Loan is secured by the Collateral described in the Loan Agreement, including, among other things: 1. 403,500 shares of common stock of Borrower, pursuant to the terms of the Escrow Agreement dated as of April 15, 1999 (the "Escrow Agreement"), among Borrower, Seller and Seyfarth, Shaw, Fairweather & Geraldson (now known as Seyfarth Shaw) ("Escrowee"). 2. The following Deeds of Trust, Mortgage, Security Agreement and Financing Statements (collectively the "Deeds of Trust") from Borrower to Benjamin Grant, Trustee, for the benefit of Seller (also identified therein as "LAB Holdings, Inc."), each dated April 15, 1999: a. Recorded April 28, 1999, in Vol. 99082, Page 03900, in Dallas County, Texas, with respect to Borrower's interest in property located in Richardson, Texas. b. Recorded April 28, 1999, in Vol. 99082, Page 03926, in Dallas County, Texas, with respect to Borrower's interest in property located in Dallas, Texas. c. Recorded April 27, 1999, as Document Number 99-0051869, in Collin County, Texas, with respect to Borrower's interest in property located at Valley Ranch, Texas. d. Recorded April 28, 1999, as Doc. No. 99-R0041345 in Denton County, Texas, with respect to Borrower's interest in property located at The Colony, Texas. 2 2 4. The Borrower's obligations under the Loan Agreement are guaranteed pursuant to the Guaranty (the "Guaranty") dated as of May 28, 1999 from Stanley L. Swanson, Carole Swanson and Curtis A. Swanson (the "Guarantors") in favor of Seller. 5. The obligations of the Guarantors under the Guaranty are secured by a pledge of 250,000 shares of common stock of Borrower (the "Pledged Shares") pursuant to the Pledge Agreement (the "Pledge Agreement") dated as of May 28, 1999, among Borrower, Seller and Stanley L. Swanson and Carole Swanson (collectively, the "Pledgor"). 6. Seller has executed on its interest in the Pledged Shares, and 100,000 of the Pledged Shares remain unsold. 7. Seller is the holder of warrants (the "Warrants") for the purchase of 150,000 shares of common stock of Borrower pursuant to a 1999 Warrant to Purchase Common Stock No. 99-1 dated April 15, 1999. 8. Seller has obtained a judgment against Borrower and Guarantors pursuant to an action in United States District Court for the Northern District of Illinois consolidated as Case Nos. 99 C 8200 and 00 C 1048 (the "Judgment"). 9. The Judgment was for payment in the amount of $522,679.30 plus accrued interest and attorneys' fees. 10. The balance due on the Judgment has been reduced by $18,209.33, the net proceeds from the sale of certain of the Pledged Shares. 11. Buyer desires to purchase and Seller desires to sell all of Seller's interest in the above-described transaction with Borrower and the assets described hereinabove. NOW, THEREFORE, in consideration of the mutual undertakings herein contained, the parties agree as follows: 1. Assignment: Seller agrees to assign and set over unto Buyer, without recourse (except to the extent of the Seller's representations expressly provided herein), and Buyer agrees to accept and assume, each as of the date of disbursement of the Purchase Price pursuant to the Escrow Letter described herein, all of Seller's right, title, obligations and interest in, to and under all of the following (the "Purchased Assets"): a. the Loan Agreement; b. the Note; c. the Collateral; d. the Deeds of Trust; e. the Guaranty; f. the Pledge Agreement; 3 3 g. the remaining (unsold) Pledged Shares; h. the Warrants; i. the Registration Rights Agreement as defined in the Loan Agreement; j. the Judgment; and k. the certificate representing shares of stock of Au Pharmaceuticals, Inc. previously delivered by Stanley L. Swanson to Seller. 2. Escrow Agreement: Seller and Borrower hereby agree to termination of the Escrow Agreement and direct the Escrowee thereunder to deliver all certificates and other items held pursuant thereto to Buyer under the terms of the Escrow Letter attached hereto as Exhibit B (the "Escrow Letter"). 3. Purchase Price: The purchase price of the Purchased Assets is $250,000.00 (the "Purchase Price") and shall be paid by Buyer to Seyfarth Shaw to be held in escrow pursuant to the terms of the Escrow Letter. 4. Delivery of Documents: Following delivery of the Purchase Price to Seyfarth Shaw pursuant to the Escrow Letter in good, same day funds, Seller shall deliver to Seyfarth Shaw the Assignment in form attached hereto as Exhibit A (the "Assignment") and the items described in the Escrow Letter, and Buyer shall deliver to Seyfarth Shaw a counterpart of the Assignment executed on behalf of Buyer. Such documents shall be dealt with in accordance with the terms of the Escrow Letter. The Assignment shall become effective upon release of funds to or for the benefit of Seller as provided in the Escrow Letter. 5. Taxes. Seller shall be responsible for the payment of all sales, use or other transfer taxes (if any) imposed by the State of Illinois or any political subdivision thereof in connection with the transaction described herein. Buyer shall be responsible for the payment of all other sales, use or other transfer taxes (if any) (other than by the State of Illinois or any political subdivision thereof) in connection with the transaction described herein. 6. Representations of Seller: Seller hereby represents and acknowledges as follows: (a) To the best knowledge of Seller, Recitals A through I hereof are true and correct as of the date hereof. (b) Seller holds and owns the Purchased Assets free and clear of liens, claims and encumbrances and has the right and requisite authority to enter into and perform it obligations hereunder. 7. Representation of Buyer. Buyer hereby represents and acknowledges as follows: Buyer is an "accredited investor" as that term is defined in Rule 501(a) under the Securities Act of 1933, as amended and has the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of this investment. Buyer has had the opportunity to ask questions and receive satisfactory answers concerning the terms and conditions of this investment and the information concerning Borrower that it has reviewed. Buyer is 4 4 purchasing the Purchased Assets for its own account, for investment, and not with a view toward distribution or resale thereof. Buyer acknowledges that neither Seller nor any person acting on Seller's behalf has offered to sell the Purchased Assets by means of any form of advertising. Buyer's financial condition is such that Buyer is not under any present necessity or constraint to dispose of the Purchased Assets to satisfy any existing or contemplated debt or undertaking. 8. Miscellaneous: (a) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. (b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, including all matters of construction, validity, performance and enforcement. (c) Construction of Agreement. The titles appearing in this Agreement and in any other documents relating to this transaction are inserted only as a matter of convenience and in no way define, limit or describe the scope or intent of such sections or articles not in any way affect this Agreement or any documents relating to this transaction. (d) Successors and Assigns. This Agreement and all covenants and agreements contained herein as well as other documents provided for herein shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. (e) Buyer Indemnity. Buyer shall indemnify and hold Seller harmless from and against any and all loss, cost, damage, injury or expense (including court costs and reasonable attorneys' fees) wheresoever and howsoever arising which Seller may incur by reason of (i) any breach by Buyer of any of its warranties, representations or obligations set forth herein or in any documents executed in connection herewith, and (ii)any occurrence with respect to the Purchased Assets after the Closing Date. (f) Seller Indemnity. Seller shall indemnify and hold Buyer harmless from and against any and all loss, cost, damage, injury or expense (including court costs and reasonable attorneys' fees) wheresoever and howsoever arising which Buyer may incur by reason of any breach by Seller of any of its warranties, representations or obligations set forth herein or in any documents executed in connection herewith. (g) Further Assurances. The parties hereto agree to execute and deliver, or cause to be executed and delivered, such further instruments or documents and take such other action as may be required effectively to carry out the transactions contemplated herein. (h) Counterparts. This Agreement may be executed in one or more counterparts, any one of which need not contain the signature of more than one party and all of which 5 5 taken together shall constitute one and the same agreement. The assignment described in this Agreement and the Assignment shall become effective when this Agreement and the Assignment are fully executed and delivered by both parties hereto, whether in one or more counterparts, and payment of the Purchase Price as provided in this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and do each hereby warrant and represent that their respective signatories whose signatures appear below have been and are on the date of this Agreement duly authorized by all necessary and appropriate action to execute this Agreement. OXFORD COMMERCIAL FUNDING, LLC W/F INVESTMENT CORP. SELLER BUYER By: /s/ Lloyd J. Baretz By: /s/ William O. Fleischman -------------------------------- --------------------------- Name: Lloyd J. Baretz Name: William O. Fleischman ------------------------------ ------------------------- Title: Chairman Title: Chairman ------------------------------ ------------------------ RESTAURANT TEAMS INTERNATIONAL, INC. BORROWER By: /s/ Stanley L. Swanson ------------------------------- Name: Stanley L. Swanson ----------------------------- Title: CEO ---------------------------- ACKNOWLEDGED: LJB HOLDINGS, INC. By: /s/ Lloyd J. Baretz -------------------------------- Name: Lloyd J. Baretz ------------------------------ Title: President ----------------------------- /s/ Stanley L. Swanson /s/ Carole Swanson - ----------------------------------- -------------------------- Stanley L. Swanson Carole Swanson /s/ Curtis A. Swanson - ----------------------------------- Curtis A. Swanson 6 6 ASSIGNMENT FOR VALUE RECEIVED, OXFORD COMMERCIAL FUNDING, LLC ("Assignor") hereby sells and assigns to W/F INVESTMENT CORP., having an address at 1900 Avenue of The Stars, Suite 2410, Los Angeles, California 90067 ("Assignee"), without recourse (except to the extent of the Seller's representations expressly provided in the Purchase and Assignment Agreement between the parties), all of its right, title and interest in, to and under the following "Purchased Assets": a. Loan and Security Agreement, dated as of April 15, 1999, between Assignor and Restaurant Teams International, Inc. ("Borrower"), as amended by the First Amendment to Loan and Security Agreement dated as of May 28, 1999, and as further modified by a letter agreement dated August 31, 1999 (as so amended an modified the "Loan Agreement"); b. Promissory Note (the "Note") dated April 15, 1999, made by Borrower in the original principal amount of $500,000.00.; c. the "Collateral" as defined in the Loan Agreement; d. the Escrowed Shares and related documents held by Seyfarth Shaw pursuant to the Escrow Agreement as defined in the Loan Agreement; e. the Deeds of Trust from Borrower as described in the Loan Agreement; f. the Guaranty from Stanley L. Swanson, Carole Swanson and Curtis A. Swanson to Assignor; g. the Pledge Agreement from Stanley L. Swanson and Carole Swanson; h. the remaining (unsold) Pledged Shares; i. warrants for the purchase of 150,000 shares of common stock of Borrower pursuant to a 1999 Warrant to Purchase Common Stock No. 99-1 dated April 15, 1999. i. the Registration Rights Agreement dated April 15, 1999, between Borrower and Assignor; j the "Judgment" entered in the United States District Court for the Northern District of Illinois in the case consolidated under Case Nos. 99 C 8200 and 00 C 1048; and k. the shares of stock of Au Pharmaceuticals, Inc. previously delivered by Stanley L. Swanson to Seller. 1. Assignee hereby accepts the above assignment and covenants to be bound to all the duties and obligations of the Purchased Assets as of the date of Assignor's receipt of the Purchase Price as described in a Purchase and Assignment Agreement and Escrow Letter, each dated as of the date hereof. 2. Assignee shall look solely to the Borrower and Guarantors for payment and performance of all obligations under the Judgment, the Loan Agreement and other documents representing the Purchased Assets, and Assignor shall have no obligation to Assignee with respect to such payment or performance. 7 7 IN WITNESS WHEREOF, the parties hereto have executed this instrument as of 31st day of October, 2000. OXFORD COMMERCIAL FUNDING, LLC W/F INVESTMENT CORP. By: /s/ LLOYD J. BARETZ /s/ WILLIAM O. FLEISCHMAN --------------------------- ----------------------------------- Name: Lloyd J. Baretz Name: William O. Fleischman Title: Chairman Title: Chairman 8 10 ESCROW LETTER -----END PRIVACY-ENHANCED MESSAGE-----