Exhibit 10.2
August 12, 1998
ABP Corporation
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Stock Purchase Agreement
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Ladies and Gentlemen:
Reference is made to that certain Stock Purchase Agreement of even date by
and among Au Bon Pain Co., Inc., ("Seller"), ABP Holdings, Inc. ("ABPH"), and
ABP Corporation ("Buyer"), each a Delaware corporation. Capitalized terms used
herein and not otherwise defined shall have the respective meanings ascribed to
them in the Stock Purchase Agreement. Simultaneously with the execution of this
letter agreement, Seller ABPH and Buyer are entering into the Stock Purchase
Agreement providing, among other things, for the acquisition of all of the
issued and outstanding capital stock of ABPH by Buyer.
In consideration and as a condition of the Buyer's entering into the Stock
Purchase Agreement, Seller, ABPH and Buyer agree as follows:
1. Any provision of the Stock Purchase Agreement to the contrary
notwithstanding, in the event that Seller, with the prior written consent of
Buyer, which consent may be withheld by Buyer in its sole discretion, enters
into an agreement prior to the Closing Date to sell any of Seller's Au Bon Pain
bakery/cafes: (a) in the Pittsburgh, Pennsylvania and/or Cleveland, Ohio
markets, or (b) in the locations listed below, the Lease Loss Adjustment with
respect to any such bakery/cafes shall equal the purchase price received by
Seller in respect of any such sale. Such consent hereby is granted by Buyer to
Seller for the sale of Store Number 93 (Tower City) for book value.
Store Number Store Name
------------ ----------
04 The Cookie Jar
000 Xxxxxx Xxxxxx
47 Bowdoin Square
2. Reference is made to: (a) that certain Bakery Products Supply Agreement
dated March 23, 1998 by and between Seller and Xxxxx Foods Corporation (the "ABP
Supply Agreement"); and (b) that certain Bakery Products Supply Agreement dated
March 23, 1998 by and between Saint Louis Bread Company, Inc. ("SLB"), a
wholly-owned subsidiary of Seller, and Xxxxx Foods Corporation (the "SLB Supply
Agreement"). Buyer and Seller agree that, for a period of not less than eighteen
(18) months following the Closing, they shall jointly administer the operation
of the ABP Supply Agreement and the SLB Supply Agreement, including without
limitation, the appointment of a mutually acceptable quality assurance
representative pursuant to Section 8.2 of each of the ABP Supply Agreement and
the SLB Supply Agreement. Buyer and Seller shall cause the costs associated with
such quality assurance representative and administration to be borne by ABPH and
SLB, respectively, in
ABP Corporation
August 12, 1998
Page 2
proportion to the relative volume of products purchased by each of ABPH under
the ABP Supply Agreement and by SLB under the SLB Supply Agreement,
respectively, determined on a quarterly basis. The cost of any employee of Buyer
or Seller that Buyer and Seller mutually agree shall devote time to the
administration of such agreements shall be computed at 115% of such employee's
salary multiplied by the agreed upon percentage of such employee's time that
shall be devoted to contract administration.
3. With respect to Seller's ABP2000 remodeling program, Seller shall
complete at its expense the remodel of the following bakery/cafes known as Store
Numbers: 61 (1101 Vermont), 64 (1401 I Street), 128 (Warner Building), and 62
(1850 M Street). In addition, Seller shall undertake to remodel the following
the bakery/cafes known as Store Numbers: 70 (Short Hills), 83 (Columbus City
Center), 69 (West Farms), and 44 (International Place) pursuant to the ABP2000
program, and Buyer shall reimburse Seller for the cost of such remodels at the
Closing in an amount not to exceed $125,000 per store.
4. Buyer acknowledges that the inventory of personal property listed on
Schedule "1" hereto, and located at Seller's offices at 00 Xxx Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, is the personal property of Xxxxx X. Xxxx and does belong
to Seller or ABPH.
5. Buyer acknowledges: (1) that the original draft of the Stock Purchase
Agreement contemplated that the assets and liabilities of the Au Bon Pain
Division would be transferred to a newly formed Delaware corporation and,
immediately thereafter, the capital stock of such corporation (together with the
capital stock of ABPH) would be sold to Buyer; and (2) that, at Buyer's request,
this transactional structure was subsequently modified in later drafts to
provide for the transfer of the Au Bon Pain Division assets and liabilities
directly to ABPH; and (3) as a result of accommodating Buyer's request, Seller
may incur additional tax liabilities that would not have been incurred had the
original transactional structure been maintained. Accordingly, Buyer agrees that
if Seller reasonably determines that a modification of the transaction structure
would reduce Seller's tax liability arising from the transactions contemplated
by the Stock Purchase Agreement, Buyer shall enter into an appropriate amendment
or modification to the Stock Purchase Agreement in order to achieve such
objective; provided, however, that Buyer shall have no obligation to enter into
any amendment or modification that would adversely impact Buyer.
ABP Corporation
August 12, 1998
Page 3
This letter agreement may be executed in one or more counterparts, each of
which will be deemed an original but all of which together shall constitute one
and the same instrument. This letter agreement is deemed to be signed as a
sealed instrument and is to be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the principles of conflicts of laws
thereof. If the foregoing accurately reflects your understanding of the subject
matter intended to be contained herein, please confirm our agreement by signing
this letter where indicated below.
Very truly yours,
AU BON PAIN CO., INC.
/S/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Co-Chairman and Chief Executive Officer
AGREED TO AND ACCEPTED:
ABP CORPORATION
By: /S/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President
