AMENDMENT NO. 1
TO
STOCK PURCHASE AGREEMENT
AMENDMENT NO. 1, dated as of June 26, 2000, to STOCK PURCHASE
AGREEMENT, dated as of May 9, 2000 (the "STOCK PURCHASE AGREEMENT"), between
AMERICAN RESTAURANT GROUP, INC., a Delaware corporation (the "SELLER"), and
NBACO, INC., a Delaware corporation (the "PURCHASER"). Capitalized terms not
otherwise defined herein have the meanings set forth in the Stock Purchase
Agreement.
W I T N E S S E T H :
WHEREAS, the Seller and the Purchaser have agreed that the Stock
Purchase Agreement be amended as set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
Section 1. AMENDMENT TO SECTION 1.3 OF THE STOCK PURCHASE
AGREEMENT. Section 1.3 of the Stock Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
"1.3 REORGANIZATION OF CERTAIN ASSETS AND ASSUMPTION OF CERTAIN
LIABILITIES. (a) Immediately prior to the Closing, the Seller shall, or
shall cause its Affiliates, as appropriate, to sell, convey, assign,
transfer and deliver to one of the Companies (reasonably satisfactory to
the Purchaser) all right, title and interest in and relating to the
following assets and any claims by the Seller related thereto: (i) the
Lease (as defined below) (and any related subleases) for the
Headquarters, (ii) all furniture, fixtures, equipment and other tangible
personal property owned or leased by the Seller or one of its Affiliates,
which are now, or may hereafter prior to the Closing Date be, placed in
or attached to the Headquarters, (iii) the NSG Foreign License and (iv)
the Grants of Rights (collectively, the "INCLUDED ASSETS"). Immediately
prior to the Closing, the Seller shall, or shall cause the Companies, as
appropriate, to sell, convey, assign, transfer and deliver to the Seller
or its Affiliates (other than the Companies) any and all Leases set forth
on Schedule 1.3(a) (collectively, the "EXCLUDED LEASES") and all
liabilities related thereto. The Seller also shall assume all of the
liabilities that have accrued and are represented by specific amounts on
the consolidated balance sheets of the Companies in the ordinary course
of business that are associated with the accounts listed on Schedule
1.3(a)(ii); PROVIDED, that the Seller shall under no circumstance be
obligated to pay any amount in respect of any such liabilities to the
extent that such payment, together with all other
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payments made after the Closing Date in respect of such liabilities,
exceeds the aggregate amount of such liabilities as set forth on the
consolidated balance sheets of the Companies as of the Closing Date.
(b) Notwithstanding any other provision hereof, (i) the Seller
shall retain any assets used solely by the Seller in connection with the
operations of its Black Angus restaurant concept, and shall have the
right to remove any of such assets after the Closing Date, upon
reasonable notice to the Purchaser, to the extent any of such assets are
located at the Headquarters, (ii) the Purchaser shall, by reason of this
Agreement, acquire the right to any assets that are owned solely by the
Companies, and (iii) any assets that are used both in the operations of
the Black Angus restaurant concept and in the business of the Companies
shall be acquired by the Purchaser, unless otherwise indicated on
Schedule 1.3(b)."
Section 2. AMENDMENT TO SECTION 1.4(a) OF THE STOCK PURCHASE
AGREEMENT. Section 1.4(a) of the Stock Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
"1.4 PURCHASE PRICE. (a) The total consideration (the "PURCHASE
PRICE") payable by the Purchaser to the Seller for the purchase and sale
of the Shares shall be equal to $17.0 million. The Purchase Price shall
be payable as set forth in Section 1.5 and is subject to adjustment as
provided below in this Section 1.4 and Section 5.3."
Section 3. ADDITION OF SECTIONS 5.7 AND 5.8 TO THE STOCK PURCHASE
AGREEMENT. Article V of the Stock Purchase Agreement is hereby amended by
adding the following Section 5.7 and 5.8:
"Section 5.7 INSURED CLAIMS. The Seller and the Purchaser shall
cooperate and use all commercially reasonable efforts necessary to seek
payment for the benefit of the Seller or the Purchaser, as applicable,
under insurance policies in respect of any insured claims relating to the
conduct of the business of the Companies that is covered by insurance
policies held by the Seller. To the extent that the Seller receives
proceeds after the Closing Date with respect to insurance claims that
relate to liabilities of the Companies that are not assumed by the Seller
hereunder, or that relate to insurance policies held for the benefit of
the Purchaser or the Companies pursuant to the Transition Agreement,
dated as of the date hereof between the Seller and the Purchaser (the
"TRANSITION AGREEMENT"), the Seller shall promptly forward such payments
to the Purchaser. To the extent that the Purchaser receives proceeds
after the Closing Date with respect to insurance claims that relate to
liabilities of the Companies that are assumed by the Seller hereunder,
the Purchaser shall promptly forward such payments to the Seller. Neither
the Seller nor the Purchaser shall be obligated to pay or reimburse the
other party for any internal or out-of-pocket expenses incurred in
connection with such party's obligations under this Section 5.7. Except
as provided in the Transition Agreement, the Seller shall be under no
obligation to maintain any insurance policy for the benefit of the
Purchaser or any of the Companies after the Closing Date."
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Section 5.8 POST-CLOSING PAYMENTS TO SOLIMAN. In consideration
of Anwar S. Soliman resigning from his position as chairman of the Board
of Directors and as an officer of the Seller and all positions of
non-Company Subsidiaries of the Seller and termination of his employment
agreement with the Seller, the Seller shall pay to Mr. Soliman a sum
equal to $182,512, in six bi-weekly installments of $30,418.68 each,
beginning no later than two weeks after Closing."
Section 4. AMENDMENT TO SECTION 6.2 OF THE STOCK PURCHASE
AGREEMENT. Section 6.2 of the Stock Purchase Agreement is hereby amended by
deleting subsection 6.2(f) in its entirety.
Section 5. AMENDMENT TO SECTION 8.2 OF THE STOCK PURCHASE
AGREEMENT. Section 8.2 of the Stock Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
"8.2 AGREEMENT TO INDEMNIFY BY THE SELLER. Subject to the terms
and conditions of this Article VIII, the Seller hereby agrees to
indemnify, defend, and hold harmless the Purchaser and its Affiliates,
directors, officers, and employees (individually, a "PURCHASER
INDEMNITEE") (except with respect to Taxes, which is governed by Article
VII) from and against, for and in respect of, any and all damages,
losses, obligations, liabilities, claims, actions or causes of action,
encumbrances, costs, and expenses (including, without limitation,
reasonable attorneys' fees), suffered, sustained, incurred, or required
to be paid by any Purchaser Indemnitee (collectively, "PURCHASER'S
DAMAGES") arising out of, based upon, in connection with, or as a result
of (a) the untruth, inaccuracy, breach, or nonfulfillment of any
representation or warranty that shall survive the Closing Date pursuant
to Section 8.1 or any covenant or agreement of the Seller contained in or
made pursuant to this Agreement, the Disclosure Schedules and the Seller
Disclosure Letter in and or certificate delivered hereunder, (b) the
Excluded Leases; provided, however, that the Seller's aggregate liability
pursuant to this clause (b) relating to matters addressed in Section
3.2(k) shall not exceed $500,000, (c) the conduct of the Seller's
business at any time following the Closing Date or (d) the liabilities
assumed by the Seller immediately prior to the Closing that are
identified on Schedule 1.3(a)(ii)."
Section 6. AMENDMENT TO SECTION 8.3 OF THE STOCK PURCHASE
AGREEMENT. Section 8.3 of the Stock Purchase Agreement is hereby amended and
restated to read in its entirety as follows:
"8.3 Agreement to Indemnify by the Purchaser. Subject to the
terms and conditions of this Article VIII, the Purchaser hereby agrees to
indemnify, defend, and hold harmless the Seller and its Affiliates
(individually, a "SELLER INDEMNITEE") (except with respect to Taxes,
which is governed by Article VII) harmless from and against, for and in
respect of, any and all damages, losses, obligations, liabilities,
claims, actions or causes of action, encumbrances, costs, and expenses
(including, without limitation, reasonable attorneys' fees) suffered,
sustained, incurred, or required to be paid by any Seller Indemnitee
(collectively, "SELLER'S DAMAGES") arising out of, based upon, in
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connection with, or as a result of (a) the untruth, inaccuracy, breach,
or nonfulfillment of any representation or warranty that shall survive
the Closing Date pursuant to Section 8.1 or any covenant or agreement of
the Purchaser contained in or made pursuant to this Agreement, including
in any certificate delivered hereunder, (b) the conduct of the business
of the Companies any time following the Closing Date (including, without
limitation, liabilities, if any, for severance or for providing
continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, as a result of or in connection
with any termination of employment occurring following the Closing of any
employee of the Companies whose employment continues with any of the
Companies following the Closing; any such termination following the
Closing on the Closing Date shall be deemed to have occurred following
the Closing Date for the purposes of the indemnification provisions of
this clause (b)), (c) the Seller's being forced to disgorge, reimburse or
return amounts received under any contract listed on Schedule 8.3(c) (a
"PRORATED CONTRACT") to the other party thereto as a result of any breach
by a Company, including a Company not continuing to purchase or use the
product or service supplied under any Prorated Contract consistent with
practice prior to the Closing Date; (d) any amounts relating to any
period after the Closing Date paid by the Seller pursuant to any of the
guarantees set forth in Schedule 4.6 or pursuant to any indemnification
obligation owed by the Seller to Saga Corporation relating to any Lease
other than an Excluded Lease; and (e) any amounts paid by the Seller
relating to the Headquarters Lease for periods from and after the Closing
Date; provided, however, that the Purchaser shall not be obligated to
indemnify the Seller for a breach of Section 3.2(k) unless and until the
aggregate of all Seller's Damages (including indemnification payments to
Purchaser Indemnitee pursuant to Section 8.2(b)) caused by, arising out
of, related to or incurred as a result of or in connection with all
breaches by Purchaser of Section 3.2(k) exceeds $500,000."
Section 7. LIMITATION OF AMENDMENT. Except as expressly provided
herein, the Stock Purchase Agreement shall continue to be, and shall remain, in
full force and effect. Except as expressly provided herein, this Amendment
shall not be deemed to be a waiver or, or consent to, or a modification or
amendment of, any other term or condition of the Stock Purchase Agreement.
Section 8. EXECUTION IN COUNTERPARTS. THIS AMENDMENT MAY BE
EXECUTED IN ONE OR MORE COUNTERPARTS, ALL OF WHICH SHALL BE CONSIDERED ONE AND
THE SAME AGREEMENT, AND SHALL BECOME A BINDING AGREEMENT WHEN ONE OR MORE
COUNTERPARTS HAVE BEEN SIGNED BY EACH PARTY AND DELIVERED TO THE OTHER PARTIES.
Section 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AS APPLIED
TO CONTRACTS ENTERED INTO AND TO BE PERFORMED IN CALIFORNIA.
Section 10. SEVERABILITY. If any provision of this Amendment
shall be declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Amendment shall not be affected and
shall remain in full force and effect.
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[Signatures appear on next page.]
IN WITNESS WHEREOF, the parties have executed, delivered and
entered into this Amendment as of the day and year first above written.
AMERICAN RESTAURANT GROUP, INC.
By: /s/ Robert D. Beyer
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Name: ROBERT D. BEYER
TITLE: DIRECTOR
NBACO, INC.
By: /s/ Anwar S. Soliman
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Name: ANWAR S. SOLIMAN
Title: CHIEF EXECUTIVE OFFICER,
PRESIDENT AND SECRETARY
Schedule 1.3(a)(ii)
Account # ACCOUNT DESCRIPTION
20000 Accounts Payable
21000 Accrued Expenses - Other
21050 Accrued Advertising Expenses
21700 Accrued Sales Taxes
21750 Accrued Sales Tax Suspense
21760 Accrued Use Tax
21999 Closed Unit Reserve
22100 THROUGH 22210 Accrued Workers' Compensation/Employee
Injury
22300 General Liability Accrual (1)
22407 AND 22408 Accrued Real & Personal Property Insurance
22410 Auto Liability Insurance
22602 AND 22612 Accrued Unit Staff & Administrative
Medical/Dental
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(1)INCLUDES liabilities of the Companies to third parties covered under
the Seller's insurance policies for General Liability, Employed Attorney's
Professional Liability, Crime (to the extent included in the Working Capital
Target), Foreign Liability (General, Auto, Workers Compensation and Employer's
Liability) and Directors' & Officers' Liability and EXCLUDES Employment
Practices Liability and matters not covered by Insurance.
Schedule 8.3(a)(ii)
Prorated Contracts
Product and Supplies Agreement, effective as of January 1, 2000, between Ecolab
Inc. and the Seller
Product and Supplies Agreement, effective as of January 31, 2000, between Ecolab
Inc. and the Seller
Marketing Agreement, dated August 11, 1999, between Coca Cola USA Fountain and
the Seller
Supply Agreement, dated June 15, 1999, between Hunt-Wesson, Inc. and the Seller