EXHIBIT 2.4
THIRD AMENDMENT TO
STOCK PURCHASE AGREEMENT
This Third Amendment to Stock Purchase Agreement (the "Third
Amendment") dated effective as of November 19, 2003, by and between AFC
ENTERPRISES, INC., a Minnesota corporation ("AFC") and STARBUCKS CORPORATION, a
Washington corporation ("Purchaser"), serves to amend the Stock Purchase
Agreement dated as of April 15, 2003, by and among the parties hereto (as
previously amended, the "Stock Purchase Agreement"). Capitalized terms not
otherwise defined herein shall have the meaning attributed to such terms in the
Stock Purchase Agreement.
RECITAL
The parties wish to amend the Stock Purchase Agreement to eliminate AFC's
obligation to deliver Company Audited Financial Statements and Closing Financial
Statements and to set forth a new procedure for the determination of the Working
Capital and EBITDA adjustments to the Purchase Price.
Therefore, the parties agree to amend the Stock Purchase Agreement as
follows:
AMENDMENT
1. WORKING CAPITAL ADJUSTMENT. Notwithstanding paragraph 2.c. of
the Stock Purchase Agreement, the parties hereby agree that the Working Capital
on the Closing Date was $17,413,000. Within ten (10) days of the date hereof,
AFC shall pay to Purchaser $2,744,000 ("Closing Working Capital") which is equal
to the amount by which the Working Capital reflected on the October Financial
Statements exceeds the Closing Working Capital.
2. PURCHASE PRICE ADJUSTMENTS. Paragraph 2.d is hereby amended to
read as follows:
"2.d. PURCHASE PRICE ADJUSTMENT.
i. EBITDA ADJUSTMENT. Within ten (10) days
after determination of the "EBITDA" of the
Companies for the year ending December 29,
2002 (the "2002 EBITDA") in accordance with
Paragraph 2.d.ii. below, AFC shall pay to
Purchaser an amount, if any, equal to the
product of (i) the difference between
10,650,000 and the 2002 EBITDA, multiplied
by (ii) 6.76. "EBITDA" shall be determined
based upon earnings before interest, taxes,
depreciation expense, amortization expense,
impairment charges
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calculated under Statements of Financial
Accounting Standards No.'s 142 and 144,
charges for the Companies' coffee grinders,
brewing equipment, dispensers, cabinetry,
shelving, bins, display cases and the like
which are installed at customer locations,
and AFC corporate overhead allocations
(consistent with past practices), and shall
be reasonably determined by Purchaser and
AFC as provided in Paragraph 2.d.ii. below,
consistent with the example set forth on
SCHEDULE 2.d. Seller agrees to provide
detailed descriptions and supporting
schedules reasonably requested by Purchaser
to enable Purchaser to make such
determination.
ii. COMPUTATION OF PURCHASE PRICE ADJUSTMENTS.
Within five (5) days following AFC's
delivery to Purchaser of the AFC 2002
Financial Statements (as hereinafter
defined), the Restated Financial Statements,
AFC and the Updated Company Financial
Statements (as hereinafter defined) and
Purchaser will each designate a
representative (the "Representatives") who
shall work together to determine the 2002
EBITDA consistent with the provisions of
this Agreement. Each party shall cooperate
with the other party to provide all
materials in its possession to facilitate
such determination. In the event that the
Representatives are unable to reach
agreement as to the amount of the 2002
EBITDA or any other matter relating to the
amount of the Purchase Price adjustments
required hereby within thirty (30) days
following AFC's delivery to Purchaser of the
AFC 2002 Financial Statements, the Restated
Financial Statements, AFC and the Updated
Company Financial Statements, the dispute
shall be resolved in accordance with the
provisions of Paragraph 15 hereof."
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3. FINANCIAL STATEMENTS. The following sentence is hereby added
to the end of Paragraph 6.d:
"The AFC 2002 Financial Statements, on the date of delivery to
Purchaser, will be (1) complete and correct in all material respects, and will
fairly present in all material respects the financial positions and results of
operations of the AFC Affiliates on a consolidated basis as of the date thereof
and the result of operations and the cash flows of the AFC Affiliates on a
consolidated basis for the period presented therein, (2) prepared in accordance
with GAAP applied on a consistent basis during the period involved, and (3)
comply as to form, as of the date thereof, in all material respects with
applicable accounting requirements of the Financial Accounting Standards Board
and other authoritative accounting or regulatory organizations with respect
thereto. The Updated Company Financial Statements, on the date of delivery to
Purchaser, will be (1) complete and correct in all material respects, and will
fairly present in all material respects the financial positions and results of
operations of the Companies as of the date thereof and the result of operations
of the Companies for the period presented therein, (2) prepared in accordance
with GAAP applied on a consistent basis during the period involved (except as
otherwise stated in Updated Company Financial Statements and except for the
absence of footnotes and subject to normal, recurring adjustments), and (3)
comply as to form, as of the date thereof, in all material respects with
applicable accounting requirements of the Financial Accounting Standards Board
and other authoritative accounting or regulatory organizations with respect
thereto."
4. AUDITED FINANCIAL STATEMENTS. Paragraph 8.q. is hereby amended
to read as follows:
"q. FINANCIAL STATEMENTS. AFC shall use its best efforts
to deliver to Purchaser (i) complete audited and
restated financial statements (including balance
sheet, statement of operations and statement of cash
flows) of AFC, together with all auditor's notes
thereto, for the fiscal years ending December 30,
2001 and any other prior years which AFC determines
will need to be restated ("Restated Financial
Statements"), (ii) complete audited financial
statements (including balance sheet, statement of
operations and statement of cash flows), together
with all auditor's notes thereto, of AFC for the
fiscal year ending December 29, 2002 consistent with
the information contained in the Restated Financial
Statements ("AFC 2002 Financial Statements"), and
(iii) the Current Company Financial Statements
updated based on adjustments, reclassifications and
other modifications identified in the audit of the
AFC 2002 Financial Statements (the "Updated Company
Financial Statements"), as soon as such statements
are available. This obligation shall survive the
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Closing if not satisfied in full prior to the
Closing. Delivery of the AFC 2002 Financial
Statements, the Restated Financial Statements and the
Updated Company Financial Statements shall not be a
condition of the Closing. Notwithstanding anything
herein to the contrary, AFC shall have no obligation
to deliver audited financial statements of the
Companies for any period and references to the
delivery of audited financial statements of the
Companies in this Stock Purchase Agreement shall be
disregarded."
5. COUNTERPARTS. This Third Amendment may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
6. ENTIRE AGREEMENT; EFFECTIVENESS OF THIRD AMENDMENT. This Third
Amendment, together with the Stock Purchase Agreement, as amended by the First
Amendment to the Stock Purchase Agreement dated June 30, 2003 ("First
Amendment") and Second Amendment to the Stock Purchase Agreement dated July 11,
2003 (the "Second Amendment") (including without limitation all exhibits,
schedules and appendices thereto) constitutes the entire agreement between the
parties, and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this Third
Amendment. Except as expressly provided in this Third Amendment, all other terms
and conditions of the Stock Purchase Agreement, including all exhibits,
schedules and appendices thereto, and the First Amendment and Second Amendment
remain in full force and effect and are not amended or modified in any respect.
IN WITNESS WHEREOF, the parties hereto have executed or caused this Third
Amendment to be executed and delivered their duly authorized officers, as of the
day and year first above written.
AFC ENTERPRISES, INC. STARBUCKS CORPORATION
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxx Xxxxxxx Name: Xxxxxxx Xxxxx
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Title: CEO Title: Executive Vice President
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