EXHIBIT 2
COMMITMENT LETTER
Xxxxxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxx., #000
Xxxxxx, Xxxxx 00000
May 14, 2001
Xxxxxx's Mexican Buffet, Inc.
0000 Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Re: Agreement and Plan of Merger among Pancho's Foods, Inc., Xxxxxx's
Restaurants, Inc., and Pancho's Mexican Buffet, Inc. dated March 31, 2001
("Agreement")
Ladies and Gentlemen:
Two companies affiliated with me, Pancho's Foods, Inc. and Pancho's
Restaurants, Inc., and you have entered in to the Agreement referred to above.
Pursuant to the terms of the Agreement, and subject to the terms and conditions
contained in it, Xxxxxx's Restaurants Inc. will be merged with and into Pancho's
at the Effective Time described in the Agreement. At that time, the separate
corporate existence of Xxxxxx's Restaurants, Inc. will cease and Xxxxxx's will
continue as the surviving corporation and will succeed to and assume all the
rights and obligations of Xxxxxx's Restaurants, Inc. As more fully described in
the Agreement, and subject to the terms and conditions contained in it, (1)each
issued and outstanding share of the common stock of Pancho's Restaurants, Inc.
will be converted into one share of common stock of Pancho's, and (2) all of
your common stock, except certain shares which will be canceled and certain
other shares, issued and outstanding immediately prior to the Effective time
will be converted into the right to receive from Xxxxxx's Restaurants, Inc. in
cash $4.60 ("Merger Consideration").
Among other conditions to the consummation of the transactions
contemplated by the Agreement are (1) Xxxxxx's Restaurants, Inc.'s or Pancho's
Foods, Inc.'s entering into a commitment letter with a lender pursuant to which
the lender shall have committed to provide, subject to the terms and conditions
contained in it, a certain amount in cash in respect to the Merger
Consideration, and (2) my entering into a commitment letter with you, pursuant
to which I have committed to provide an amount equal to the aggregate amount of
the Merger Consideration and all other fees and expenses required to be paid by
Exhibit 2, Page 1
Xxxxxx's Foods Inc. and Xxxxxx's Restaurants, Inc. in connection with the
transactions contemplated by the Merger Agreement, less the amount committed by
the lender pursuant to its commitment letter, in cash to Xxxxxx's Restaurants,
Inc.
I have provided you with a signed copy of a Commitment Letter dated May
10, 2001, from American Commercial Capital LLC ("ACC Commitment Letter"). In the
ACC Commitment Letter, American Commercial Capital LLC has, subject to the terms
and conditions contained in such letter, agreed to loan a company affiliated
with me, Rockbay Properties LTD II, up to an aggregate of the lesser of
$5,000,000 or 95% of the appraised value of certain of your assets ("ACC
Commitment").
Subject to the next paragraph, I commit and agree to provide an amount
equal to the aggregate amount of the Merger Consideration and all
other fees and expenses required to be paid by Xxxxxx's Foods Inc.
and Xxxxxx's Restaurants, Inc. in connection with the transactions
contemplated by the Merger Agreement, less the ACC Commitment.
My commitment and agreement contained in this letter is contingent
upon the occurrence of each of the following events:
1. All the conditions contained in Sections 14 and 16 and of the ACC
Commitment Letter shall have satisfied or waived and the closing
contemplated by the ACC Commitment Letter shall have occurred; and
2. All the closing conditions contained in Section 6.1 of the Merger
Agreement shall have been satisfied or waived and the Merger Agreement
shall not have been terminated as provided in Section 7.1 of the Merger
Agreement.
I represent and warrant to the Company that I have the financial
resources to fulfil the my commitment and agreement given above.
Very truly yours,
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx, President of
Pancho's Foods, Inc.
Accepted: Xxxxxx's Mexican Buffet, Inc.
Exhibit 2, Page 2
May 14, 2001
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, President and
Chief Executive Officer
Exhibit 2, Page 3
