Exhibit 2.2
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT (the "First Amendment") is made and entered into
as of the 1st day of November, 2004, by and between AFC Enterprises, Inc.
("AFC"), a Minnesota corporation, and Focus Brands Inc. ("Buyer"), a Delaware
corporation.
W I T N E S S E T H:
WHEREAS, AFC and Focus are parties to that certain Stock Purchase
Agreement dated as of September 3, 2004 (the "Agreement"); and
WHEREAS, AFC and Focus desire to amend the Agreement, as hereinafter
more particularly set forth;
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, AFC and
Focus hereby covenant and agree as follows:
1. All capitalized terms used in this First Amendment which are
not otherwise defined in this First Amendment are used with the same meaning
attributed to such capitalized terms in the Agreement.
2. Section 2.2 is hereby amended by deleting the entire text
thereof and replacing such deleted text with the following:
"2.2 PURCHASE PRICE. The purchase price (the "Purchase Price")
to be paid by Buyer for all of the Shares shall equal Twenty-One
Million Dollars ($21,000,000) adjusted at Closing as provided in
section 2.6 below (such amount, as adjusted, the "Closing Payment"),
plus the amount by which Final Working Capital is more than Base
Working Capital, or minus the amount by which Final Working Capital is
less than Base Working Capital. The Closing Payment shall be paid at
Closing by wire transfer to the account designated by AFC."
3. Section 10.2(a) is hereby amended by deleting the entire text
thereof and replacing such deleted text with the following:
"(a) AFC will indemnify and hold harmless Buyer, the Company,
the Subsidiary, and their respective representatives, stockholders, controlling
persons, and affiliates (collectively, the "INDEMNIFIED PERSONS") for, and will
pay to the Indemnified Persons the amount of, any loss, liability, claim,
assessment, penalty, fine, damage (but excluding incidental and consequential
damages), or expense (including costs of investigation and defense and
reasonable attorneys' fees), whether or not involving a third-party claim
(collectively, "DAMAGES"), arising, directly or indirectly, from or in
connection with:
(i) any breach of any representation or warranty
made by AFC in this Agreement (without giving effect to any
supplement to the Disclosure Schedule), the Disclosure
Schedule, the supplements to the Disclosure Schedule, or any
other certificate or document delivered by AFC pursuant to
this Agreement;
(ii) any breach by AFC of any covenant or
obligation of AFC in this Agreement;
(iii) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by
any such Person with AFC, the Company or the Subsidiary (or
any Person acting on their behalf) in connection with any of
the Transactions;
(iv) the Retained Employment Liabilities;
(v) the legal Proceedings set forth on Section
3.16, 3.17 and 3.26(c) of the Disclosure Schedule;
(vi) any claims or assessments arising under any
Benefit Plan;
(vii) the Excluded Liabilities;
(viii) any asserted claim, whether or not resulting
in a filed lawsuit or action, by any shareholder of AFC, in
his, her or its capacity as a shareholder, against AFC or any
of its affiliates or against its officers or directors;
(ix) any failure prior to the Effective Time on
the part of AFC, the Company and/or the Subsidiary to disclose
to prospective Franchisees and Licensees Rebates received from
Suppliers and others as required by any Franchise Regulation;
(x) any claims related to the offer or sale of
Franchises by SBC prior to July 13, 2003;
(xi) any claims that offers or sales of any
Franchise offered or sold during the period March 1, 2003
through May 25, 2004 or offers or sales of non-United States
Franchises violated applicable Franchise Regulations; and
(xii) any claims described on Schedule
10.2(a)(xii) attached hereto.
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4. Section 10.4 is hereby amended by deleting the entire text
thereof and replacing such deleted text with the following:
"10.4 TIME LIMITATIONS. If the Closing occurs, AFC will
have no liability for indemnification with respect to:
(a) any representation or warranty contained in Article
III (other than the representations and warranties
contained in Sections 3.4 (Capitalization and Stock
Ownership), 3.6 (Title to Assets and Related
matters), 3.12 (Taxes) and 3.14 (Benefit Plans))
unless on or before the first anniversary of the
Closing Date, Buyer notifies AFC of a claim based
upon a breach of any such representation and
warranty;
(b) the obligations under Section 10.2(a)(x), unless on
or before the third anniversary of the Closing Date,
Buyer notifies AFC of a claim based upon any offer or
sale of a franchise contemplated thereby;
(c) the obligations under Sections 10.2(a)(xi), unless on
or before the earlier of the fifth anniversary of the
Closing Date or the expiration of the applicable
statute of limitations with respect to the basis for
such claim, Buyer notifies AFC of a claim based upon
such offer or sale of a franchise contemplated
thereby;
(d) the obligations under Sections 10.2(a)(xii), unless
on or before the fifth anniversary of the Closing
Date, Buyer notifies AFC of a claim contemplated
thereby; and
(e) the representations and warranties contained in
Sections 3.12 and 3.14 unless Buyer notifies AFC of a
claim based upon a breach of any such representation
and warranty prior to the expiration of the
applicable statute of limitations with respect to the
basis for such claim.
A claim based upon the breach of any other representation and
warranty of AFC contained in this Agreement or based upon the breach by
AFC of any covenant or agreement to be performed by it hereunder may be
brought at any time. If the Closing occurs, Buyer will have no
liability for indemnification with respect to any representation or
warranty, or covenant or obligation to be performed and complied with
prior to the Closing Date, unless on or before the first anniversary of
the Closing Date, AFC notifies Buyer of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by
AFC."
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5. Article 5 is hereby amended by inserting the following new
Sections 5.16, 5.17 and 5.18:
"5.16 PURSUIT OF CERTAIN CLAIMS AND RELEASE. AFC agrees that
it will not take any action, pursue any claim or otherwise seek any
payment or other compensation from any Franchisee in the SBC Division,
without the consent of Buyer; provided, however, that following the
submission of a Claim Notice by Buyer pursuant to Section 10.2(a)(xii),
such consent shall be deemed granted with respect to any Franchisee
that is the subject of such Claim Notice. In connection with any Claims
Notice, AFC further agrees to grant an unconditional and general
release of claims to any Franchisee in the SBC Division, if requested
to do so by Buyer in writing; provided that AFC and its affiliates
receive an unconditional and general release from such Franchisee and
AFC shall have no liability under Section 10 to Buyer with respect to
any claims of such Franchisee related to claims covered by the Claim
Notice.
5.17 TRANSFER OF CERTAIN ACCOUNTS RECEIVABLE. On or before the
Closing, AFC shall transfer to the Subsidiary the accounts receivable
described in Schedule 5.17 hereto, subject to the terms and conditions
set forth in said Schedule 5.17.
5.18 COOPERATION. The parties agree to cooperate after
Closing as set forth on Schedule 5.18 hereto.
6. The Schedules to the Purchase Agreement are hereby amended by
adding thereto Schedule 10.2(a)(xii), Schedule 5.17 and Schedule 5.18 in the
forms attached to this Amendment.
7. Section 6 of Appendix A is hereby amended by deleting the
entire text thereof and replacing such deleted text with the text set forth in
Schedule 6.A. attached to this Amendment.
8. Except as expressly set forth herein, the parties make no
other amendment, alteration or modification of the Agreement nor do they, nor
does any of them, by executing this First Amendment, waive any provision of the
Agreement or any right that they or it may have thereunder.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have executed and sealed or have
caused this First Amendment to be executed and sealed as of the date first above
written by their respective officers thereunto duly authorized.
AFC ENTERPRISES, INC.
By: /s/ Frederick Beilstein
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Name: Frederick Beilstein
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Title: Chief Financial Officer
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FOCUS BRANDS INC.
By: /s/ Steve Romaniello
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Name: Steve Romaniello
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Title: Chief Executive Officer
and President
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