FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT ("First Amendment") is
made and entered into as of January 26, 2001, by and among MOUNTAIN RANGE
RESTAURANTS, LLC, an Arizona limited liability company ("Buyer"), PHOENIX
RESTAURANT GROUP, INC., a Georgia corporation ("Seller"), and PHOENIX FOODS,
INC., a Florida corporation ("Phoenix Foods") and wholly-owned subsidiary of
Seller.
RECITALS
A. Buyer and Seller entered into an Asset Purchase Agreement (the "Asset
Purchase Agreement") dated as of January 5, 2001, pursuant to which Seller
agreed to sell the Purchased Assets (as defined in the Asset Purchase
Agreement) associated with 24 Denny's restaurants (the "Restaurants") to
Buyer. Buyer and Seller have subsequently determined that three of the
Restaurants subject to the Asset Purchase Agreement are owned by Phoenix
Foods. These Restaurants are designated as Units 6309, 6356 and 6357
(collectively, the "Phoenix Foods Units").
B. Phoenix Foods wishes to join the Asset Purchase Agreement so that the
Phoenix Foods Units can be sold to Buyer in accordance with the terms set
forth in the Asset Purchase Agreement as amended by this First Amendment.
C. Seller is unable to sell and Buyer is unable to purchase the
Restaurant designated as Unit 6710. Buyer and Seller wish to modify the Asset
Purchase Agreement to reflect that Unit 6710 will not be purchased by Buyer.
D. As of the date hereof, sublessor estoppel certificates have not been
obtained for the Restaurants designated as Units 6708, 6867 and 7025. Buyer
and Seller wish to set forth their respective rights and obligations if such
sublessor estoppel certificates have not been obtained within forty-five (45)
days after the date hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
Section 1. Joinder, Etc. Phoenix Foods hereby joins in the Asset
Purchase Agreement and agrees to sell to Buyer, and Buyer agrees to purchase
from Phoenix Foods, that portion of the Purchased Assets relating to the
Phoenix Foods Units upon the same terms and conditions as those set forth in
the Asset Purchase Agreement as if Phoenix Foods is the Seller under the
Asset Purchase Agreement with respect to the Phoenix Foods Units. Seller and
Phoenix Foods shall be jointly and severally liable for all representations,
warranties and covenants under the Asset Purchase Agreement with respect to
the Phoenix Foods Units and the Purchased Assets associated therewith.
Section 2. Unit 6710. Unit 6710 shall not be sold by Seller to
Buyer pursuant to the Asset Purchase Agreement.
In connection therewith, the second paragraph of Section 2.2 of the Asset
Purchase Agreement is hereby deleted in its entirety and replaced with the
following:
In addition, Buyer shall assume (a) Seller's liability
arising after the Closing Date with respect to the
capitalized lease described on Schedule 2.2 for the
Pavilions-Scottsdale, Arizona Restaurant (Unit 6348) (the
"Capitalized Lease"), and (b) up to $8.6 million of the
Seller's debt secured by the Restaurants to CNL American
Properties Fund and/or its affiliates (the "CNL Debt").
In addition, Section 3.1 of the Asset Purchase Agreement is hereby
deleted in its entirety and replaced with the following:
3.1 Amount and Payment. As full and complete payment for the
Purchased Assets, Buyer shall pay Seller the aggregate sum of Twenty
Million Three Hundred Seven Thousand and Two Hundred Seventy-Five
Dollars ($20,307,275.00) (the "Purchase Price"), payable by Buyer at
the Closing, by Buyer delivering to Seller cash (via wire transfer)
in the amount of Twenty Million Three Hundred Seven Thousand and Two
Hundred Seventy-Five Dollars ($20,307,275.00), less (a) the
unamortized balance of the Capitalized Lease (estimated to be
$450,000) as of the Closing, (b) the amount of the CNL Debt (of up
to $8.6 million) as of the Closing, and (c) the principal amount of
a subordinated promissory note (the "Subordinated Note") from the
Buyer to the Seller substantially in the form attached hereto as
Exhibit A.
Section 3. Put Right for Units 6708, 6867 and 7025. In the event
that a fully-executed sublessor estoppel certificate, in a form that is
reasonably acceptable to Seller, Buyer and Buyer's lender, is not received by
the Buyer and its lender with respect to any of the Restaurants designated as
Units 6708, 6867 and 7025 within forty-five (45) days after the date hereof,
Buyer shall have the option for a period of 30 days thereafter of requiring
Seller to repurchase any of such Units for which such sublessor estoppel
certificate has not been obtained by providing Seller notice of the exercise
of such option and Seller shall repurchase any of such Units within ten (10)
days thereafter for a purchase price that is $542,200 with respect to Unit
6708, $1,017,315 with respect to Unit 6867 and $773,630 with respect to Unit
7025, plus any and all of Buyer's direct costs in connection with
transferring any of such Units to Seller, including and prepaying a portion
of its debt to General Electric Capital Business Asset Funding Corporation,
including without limitation any prepayment penalty. At Buyer's option, all
or any portion of any payment due from Seller to Buyer hereunder may be paid
by reduction of the principal balance of the Subordinated Note (as defined in
the Asset Purchase Agreement).
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Section 4. Definitions. Except as otherwise defined herein, all
capitalized terms shall have the definitions set forth in the Asset Purchase
Agreement.
Section 5. Effect of Amendment. Except as otherwise expressly
amended pursuant to this First Amendment, the Asset Purchase Agreement shall
remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed and delivered this First
Amendment as of the date first above written.
BUYER:
MOUNTAIN RANGE RESTAURANTS, LLC, an
Arizona limited liability company
/s/ Robert Gentz
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By: Robert Gentz
-----------------------------------
Its: Manager
SELLER:
PHOENIX RESTAURANT GROUP, INC.,
a Georgia corporation
/s/ W. Craig Barber
--------------------------------------
By: Craig Barber
Its: President
PHOENIX FOODS:
PHOENIX FOODS, INC., a Florida corporation
/s/ W. Craig Barber
--------------------------------------
By: Craig Barber
Its: President
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