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EXHIBIT 2.9
AMENDMENT NO. ONE TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. One to Agreement and Plan of Merger (the "Amendment")
is entered into as of July 15, 1999 by and among LA SALSA HOLDING CO., INC., a
Delaware Corporation (the "Company"), SANTA XXXXXXX RESTAURANT GROUP, INC., a
Delaware corporation ("Parent"), LA SALSA MERGER, INC., a Delaware corporation
and a wholly-owned subsidiary of Parent ("Sub").
R E C I T A L S:
A. The Company, Parent and Sub have entered into that certain Agreement
and Plan of Merger, dated as of June 8, 1999 (the "Agreement"), pursuant to
which Sub will merge with and into the Company, thereby causing the Company to
become a wholly-owned subsidiary of Parent; and
B. The parties desire to amend the Agreement as hereinafter set forth.
NOW, THEREFORE, the parties agree as follows:
1. Defined Terms. Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Agreement, as amended
hereby.
2. Escrow Notes. Section 2.6 shall be amended and restated to read, in
its entirety, as follows:
"At the Effective Time, (i) for purposes of securing claims for
indemnification pursuant to Section 9.2(a), Parent Notes in an aggregate
principal amount of $1,700,000 issuable to the Company's stockholders on
a pro rata basis (the "Escrow Notes"), shall be registered in the names
of the stockholders of the Company or in the name of the stockholder's
representative (the "Holders' Representative"), as agent for such
stockholders, but shall be deposited with an institution selected by
Parent and the Company, as escrow agent (the "Escrow Agent"), pursuant
to the terms of an escrow agreement substantially in the form of Exhibit
F hereto (the "Escrow Agreement") by and among Parent, the Escrow Agent
and the Company's stockholders or the Holders' Representative.
3. Indemnification. Sections 9.2(a) and 9.2(b) shall be amended and
restated to read, in their entirety, as follows:
9.2 Indemnification Provisions for Benefit of Parent.
(a) Subject to the provisions of this Article IX, Parent, the
Company and Sub, together with their directors, officers, stockholders,
employees, agents, successors and assigns (collectively, the "Parent Indemnified
Parties") shall be indemnified after the Effective Time from and against any and
all damage, loss, liability and expense (including without limitation reasonable
expenses of investigation and reasonable attorneys' fees and reasonable expenses
in connection with any action, suit or proceeding) incurred or suffered by the
Parent Indemnified Parties arising out of any (i) breach of the representations,
warranties, covenants or agreements of the Company set forth
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herein (the "Breach Damages"), (ii) failure to obtain the consent, approval or
waiver required under any Lease as a result of the consummation of the
transactions contemplated by this Agreement (the "Lease Damages" and, together
with the Breach Damages, the "Parent Indemnifiable Damages") (iii) claim or
action by either Xxxxx Xxxxxxxx or DiNata, Inc., a franchisee of the Company,
related to facts or circumstances that exist as of the Effective Time (the
"Xxxxxxxx/DiNata Claim Damages") or (iv) claim or action by Xxxxxxxxxx Xxxxx
("Xxxxx"), including, but not limited to, the Equal Employment Opportunity
Commission claim made by Xxxxx (the "Xxxxx Claim Damages" and, together with the
Xxxxxxxx/DiNata Claim Damages, the "Specific Claim Damages").
For purposes of indemnification under Section 9.2(a)(ii), the Lease
Damages shall be calculated by determining the reduction in the amount of annual
earnings before interest, taxes, depreciation and amortization ("EBITDA") of the
store that is subject to the Lease for which consent, approval or waiver was not
obtained, compared to the EBITDA of that store for the twelve (12) month period
ended December 31, 1998, and multiplying such reduction by 3.5. In the event
that a store is closed as a result of the failure to obtain a required consent,
approval or waiver, the Lease Damages shall be calculated based upon the EBITDA
of that store for the 12 month period ended December 31, 1998, multiplied by
3.5.
The Parent Indemnified Parties shall not be entitled to indemnification
under Section 9.2(a)(i) and (ii) until the Parent Indemnifiable Damages exceed
$100,000 (the "Indemnity Threshold") but once exceeded shall be entitled to
indemnification for all Parent Indemnifiable Damages, inclusive of the Indemnity
Threshold, subject to the provisions of Section 9.2(b).
The Parent Indemnified Parties may obtain indemnification for any Parent
Indemnifiable Damages or Specific Claim Damages to which this Section 9.2
relates only if they make a claim for indemnification within the Indemnification
Period (as defined below).
(b) The Escrow Notes shall be registered in the names of the
stockholders of the Company or in the name of the Holders' Representative, but
shall be deposited with the Escrow Agent, such deposit to constitute an escrow
fund to be governed by the terms set forth herein and in the Escrow Agreement
(the "Escrow Fund"). The adoption and approval of this Agreement by the
Company's stockholders in accordance with the DGCL shall constitute approval for
the Escrow Agreement and of all of the arrangements relating thereto, including
without limitation the placement of the Escrow Notes in escrow and the
appointment of the Holders' Representative to act for and on behalf of the
stockholders of the Company to give and receive notices and communications, to
authorize delivery of any of the Escrow Notes from the Escrow Fund in
satisfaction of claims by Parent, to object to such deliveries, to agree to,
negotiate and enter into settlements and compromises of, and demand arbitration
and comply with orders of courts and awards of arbitrators with respect to such
claims, and to take all actions necessary or appropriate in the judgment of such
representative for the accomplishment of the foregoing.
Parent and Sub agree that the sole and exclusive remedy of the Parent
Indemnified Parties against the stockholders for any Parent Indemnifiable
Damages and/or any Specific Claim Damages shall be limited to the Escrow Notes
(or the Parent Shares issuable upon conversion of the Escrow Notes) deposited
into the Escrow Fund. At any time on or before eighteen (18) months after the
Effective Time (the "Indemnification Period"), if the Parent Indemnified Parties
make a claim for Parent Indemnifiable Damages or Specific Claim Damages and are
entitled to indemnification pursuant to Section 9.2(a), the Escrow Agent shall,
upon compliance with the procedures set forth in the Escrow Agreement, release
to the Parent Indemnified Parties such amount from the Escrow Fund that is equal
in value to such Parent Indemnifiable Damages or Specific Claim Damages, as the
case may be. Escrow Notes (or Parent Shares issuable upon conversion thereof) so
released shall be
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valued as set forth in the Escrow Agreement. Upon distribution by the Escrow
Agent to the Parent Indemnified Parties pursuant to this Section, the Escrow
Fund will be correspondingly reduced. At the end of the Indemnification Period,
the Escrow Agent shall release to the stockholders of the Company on a pro rata
basis the Escrow Notes (or Parent Shares issuable upon conversion thereof), less
any amount of Escrow Notes (or Parent Shares issuable upon conversion thereof),
released from the Escrow Fund during the Indemnification Period as payment for
any Parent Indemnifiable Damages or Specific Claim Damages and less any Escrow
Notes (or Parent Shares issuable upon conversion thereof) necessary to cover any
unresolved claims made by Parent Indemnified Parties prior to the expiration of
the Indemnification Period, and the Escrow shall remain in full force and
effect, but only as it relates to claims for any claims for indemnification made
during the Indemnification Period which remain in dispute or which have not
otherwise been resolved as of the end of the Indemnification Period.
4. Nature of Indemnification Payments. Section 9.5 shall be amended and
restated to read, in its entirety, as follows:
"Except as set forth in Article X below, Parent and Sub agree that the
sole and exclusive remedy of the Parent Indemnified Parties against the
stockholders for any damage, loss, liability or expense under this
Agreement or in connection with the transactions contemplated hereunder
shall be limited to the Escrow Fund as described in Section 9.2(b) above
and the Escrow Agreement."
5. Effect of Amendment. Except as provided in this Amendment, all of the
terms and conditions of the Agreement shall remain in full force and effect.
The parties hereto have caused this Amendment No. One to Agreement and
Plan of Merger to be duly executed by their respective authorized officers as of
the day and year first above written.
SANTA XXXXXXX RESTAURANT GROUP, INC.
By: /s/ XXXXXXXX XXXXXXX
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Name: Xxxxxxxx Xxxxxxx
Title: Chief Financial Officer
LA SALSA MERGER, INC.
By: /s/ XXXXXXXX XXXXXXX
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Name: Xxxxxxxx Xxxxxxx
Title: Chief Financial Officer
LA SALSA HOLDING CO., INC.
By: /s/ XXXXXXX XXXXX
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Name: Xxxxxxx Xxxxx
Title:
