FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment to Agreement and Plan of Merger (this
"Amendment") is dated as of October 23, 1997, and is by and among El Chico
Holding Company, L.P., a limited partnership formed under the laws of the
State of Texas ("Parent"), El Chico Acquisition, Inc., a corporation
formed under the laws of the State of Texas and a wholly-owned subsidiary
of Parent ("Sub"), and El Chico Restaurants, Inc., a corporation formed
under the laws of the State of Texas (the "Company").
Recitals
. Parent, Sub, and the Company entered into that certain Agreement and
Plan of Merger, dated as of September 23, 1997 (the "Agreement").
. Parent, Sub, and the Company desire to amend the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the agreements
contained in this Amendment, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
1 The second sentence of Section 3.2(a) of the Agreement is amended to
read in its entirety as follows:
"On the Closing Date and prior to the filing of the Articles
of Merger, Sub shall deposit with the Exchange Agent a
sufficient amount of cash to pay to the shareholders of the
Company the consideration for the Merger specified in Section
3.1(b)."
2. The first sentence of Section 3.2(d) of the Agreement is amended to
read in its entirety as follows:
"All funds held by the Exchange Agent for payment to the
holders of unsurrendered Certificates and unclaimed at the end
of one year from the Effective Time shall be returned to the
Surviving Corporation whereupon any holder of unsurrendered
Certificates shall look as a general unsecured creditor only
to the Surviving Corporation for payment of any funds to which
such holder may be entitled, subject to applicable law."
3. The second sentence of Section 9.9 of the Agreement is amended to
read in its entirety as follows:
"The Company shall take such action as may be necessary so
that from and after the date hereof, except as set forth in
Schedule 9.9, no further grants of stock, options, or other
rights shall be made under any Stock Plan. The Company shall
also take such actions as are appropriate to provide that, at
the Effective Time, (a) all options or restricted stock awards
then outstanding under any Stock Plan, whether or not then
exercisable or vested, shall become fully exercisable and
vested; (b) each option or restricted stock award then
outstanding under any Stock Plan shall be cancelled and (c) in
consideration of such cancellation and in full satisfaction of
all rights of the holder under such option or restricted stock
award, each such stock option or restricted stock award shall
be converted into an amount in cash in respect thereof equal
to the product of (i), in the case of an option, the excess of
the Conversion Value over the exercise price of such option
or, in the case of a restricted stock award, the Conversion
Value, multiplied by (ii) the number of shares of Company
Common Stock subject to such option or restricted stock award
(such payment to be net of applicable withholding taxes)
(collectively, the "Option Consideration)."
3. Section 10.3(e) of the Agreement is amended to read in its entirety
as follows:
"(e) Merger Consideration Deposit. Sub shall have deposited
with the Exchange Agent by wire transfer in immediately
available funds an amount equal to the product of the
Conversion Value times the number of issued and outstanding
shares of Company Common Stock (other than shares of Company
Common Stock canceled pursuant to Section 3.1(a)) as of the
Effective Date, plus the Option Consideration."
4. Section 11.1(j) of the Agreement is amended to read in its entirety
as follows:
"(j) by Parent or the Company, if within 38 days following
the date of this Agreement, Parent shall not have received
either (i)(x) a commitment to purchase certain improved real
properties of the Company for a consideration of not less than
$25.6 million and (y) a financing commitment from a reliable
financial institution in the principal amount of not less than
$35 million bearing interest at an annual rate not to exceed
11 1/2% with repayment amortized over not less than 7 years, or
(ii) a financing commitment from a reliable financial
institution in the principal amount of not less than $58
million bearing interest at an annual rate not to exceed 11 1/2%
with repayment amortized over not less than 7 years to effect
the Merger and the transactions contemplated by this
Agreement, refinance certain existing indebtedness of the
Company and pay related fees and expenses; such commitments or
commitment being on terms and conditions reasonably
satisfactory to Parent and Sub. In the event Parent
terminates this Agreement on or before October 31, 1997 at
11:59 p.m. C.S.T. pursuant to the provisions of this Section
11.1(j), upon such termination, the Company shall only be
entitled to receive $250,000 of the fund deposited by Parent
pursuant to the Escrow Agreement entered into between the
parties pursuant to Section 9.15 hereinabove."
5. The reliable financial institution referenced in Section 4 of this
Amendment (the "Lender") may require, as a condition to its provision of
financing at the Closing (as defined in the Agreement), that each
landlord, lessor and/or sublessor of real property leased by the Company
execute various agreements (including, but not limited to, a landlord
consent for leasehold mortgage, a landlord consent for change of control,
an estoppel certificate, a memorandum of lease, and a lease renewal
option) requested by the Lender (collectively, the "Consents"). Any
failure by the Lender to provide financing at the Closing in accordance
with the terms and conditions set forth in the Lender's financing
commitment issued on or before and in effect October 31, 1997, a cause for
which is the failure of the Company to obtain any or all of the Consents,
shall entitle Parent (a) to the return of all but $500,000 (which $500,000
shall be payable to the Company) of the escrow funds placed into escrow by
Parent pursuant to that certain Escrow Agreement executed September 23,
1997, by the Company, as seller; Parent, as buyer; and Texas Bank, as
escrow agent (the "Escrow Agreement") and (b) to terminate the Agreement;
and, the Company, Parent and Sub shall have no liability for the failure
to obtain the Consents. The terms of this Section 5 of this Amendment
shall supersede the terms of all prior or contemporaneous written or oral
agreements between the Company and any or all of Parent, Sub and/or
Cracken, Xxxxxx & Co., L.L.C., including, but not limited to, the terms of
the Agreement, the terms of the Escrow Agreement, or both.
* * * * * *
IN WITNESS WHEREOF, Parent, Sub, and the Company have caused this
Amendment to be signed by their respective officers thereunto duly
authorized as of the date first written above.
El Chico Holding Company, L.P.
By: Cracken, Harkey, Street & Co.,
L.L.C.
General Partner
By: /s/Xxxx X. Xxxxxx, Xx.
--------------------------
Xxxx X. Xxxxxx, Xx.
Manager
El Chico Acquisition, Inc.
By: /s/Xxxx X. Xxxxxx, Xx.
--------------------------
Xxxx X. Xxxxxx, Xx.
President
El Chico Restaurants, Inc.
By: /s/Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
President and Chief Executive
Officer
