Appendix 2 – Related Party Agreements

1) On January 31st 2005, ARC and KFCPH (Kentucky Fried Chicken Poland Holdings B.V.) concluded a Share Purchase Agreement, under which KFCPH undertook to sell to ARC, through IRI as the nominee, 5,000,000 shares in AmRest, subject to a condition subsequent that the shares comprising the entire share capital of AmRest will not be offered in a public offering on the Warsaw Stock Exchange by April 30th 2005. The Parties may agree on a later date for the condition subsequent only in the form of an agreement amending the Share Purchase Agreement, drawn up as a notarial deed. If the condition subsequent is fulfilled, the Share Purchase Agreement will be terminated by operation of law. The Parties agreed that 50% of shares covered by the Agreement will be sold at the price established in the public offering (net of the underwriter’s fee), and that the price will be paid in cash within five business days as of the date on which ARC receives proceeds from the public offering of AmRest shares. The price for the remaining 50% of shares will equal 85% of the price established in the public offering, and the payment will be made in the following manner: (i) 50% of the price will be paid in cash within five days from the date on which ARC receives the proceeds from the public offering of AmRest shares, (ii) 50% of the price will paid in the form of a promissory note issued by ARC to KFCPH, secured with a pledge and ARC’s representation on submission to enforcement made in the form agreed upon by the Parties. The pledge agreement and the representation on submission to enforcement are to be executed by the date on which ARC receives the proceeds from the public offering of AmRest shares. Pursuant to Appendix 3 to the Share Purchase Agreement, KFCPH and IRI concluded a Deed of Transfer concerning all the shares in AmRest. Pursuant to the provisions of the Appendix, KFCPH transferred the ownership of 5,000,000 shares in AmRest to IRI, subject to the condition subsequent stipulated in the Share Purchase Agreement. AmRest confirmed the transfer of shares and issued a representation on entering IRI into the shareholder register.

2) On March 16th 2005, American Restaurants Sp. z o.o. and ARC Inc. concluded a service agreement which supersedes the former agreement of substantially the same subject matter. Under the agreement, ARC Inc. is to provide ongoing services supporting the operations of American Restaurants Sp. z o.o. ARC Inc. owns 100% of shares in IRI LLC, which – as at March 31st 2005 – owned 100% of shares in AmRest Holdings N.V. As part of its contractual obligation, ARC Inc. is to appoint employees (Employees) who are to provide to American Restaurants Sp. z o.o. services related to HR policy, strategic marketing, supplies, sale strategies for the products of American Restaurants Sp. z o.o., including advice on the product quality control systems and financial policies implemented by American Restaurants Sp. z o.o. The Employees are: Henry McGovern, Alan Laughlin, Peter Whiskerd-Wegorzewski, Tomasz Suchowierski, Alan Polansky, James Glover and Drew O'Malley. The estimated annual value of the agreement is USD 270,000 (VAT exclusive). American Restaurants Sp. z o.o. is obliged to cover the personnel costs related to the services of the Employees, as specified in the appendices to the agreement, as well as other costs incurred in connection with the tasks performed by the Employees.

3) On March 16th 2005, American Restaurants s.r.o. and ARC Inc. concluded a service agreement which superseded a previous agreement of substantially the same subject matter. Under the agreement ARC Inc. is to provide ongoing services supporting the operations of American Restaurants s.r.o. As part of its contractual obligations, ARC Inc. is to appoint employees (Employees) who are to provide to American Restaurants s.r.o. services related to the HR policy, strategic marketing, supplies, sale strategies for the products of American Restaurants s.r.o., including advice on the product quality control systems and the financial policies implemented by American Restaurants s.r.o. The Employees are: Henry McGovern, Alan Laughlin, Peter Whiskerd-Wegorzewski, Tomasz Suchowierski, Alan Polansky, James Glover and Drew O'Malley. The estimated annual value of the agreement amounts to USD 900,000 (VAT exclusive). American Restaurants s.r.o. is obliged to cover the personnel costs related to the services of the Employees, as specified in the appendices to the agreement, and other costs incurred in connection with the tasks performed by the Employees.  

4) On April 28th 2005, AmRest Holdings N.V. (the Lender) and American Restaurants s.r.o. (the Borrower) concluded a cash loan agreement for CZK 141,944,000. The loan was granted for the period of five years. Additionally, on August 22nd 2005, AmRest Holdings N.V. (the Lender) and American Restaurants s.r.o. (the Borrower) concluded a cash loan agreement for CZK 25,362,300. The loan was granted for the period of five years. For details concerning the advanced loans, see Note 19. 

5) On May 30th 2005, by virtue of a decision of the District Court for Wrocław-Fabryczna, VI Commercial Division of the National Court Register, a change in the share capital of American Restaurants Sp z o.o. was entered into the relevant register. The share capital of American Restaurants Sp. z o.o. was increased from PLN 69,015,000 to PLN 124,015,000. AmRest Holdings N.V. acquired 55,000 new shares with a par value of PLN 1,000 per share and thus it currently holds 100% of the share capital of the company. At an earlier date (on April 26th 2005), the Extraordinary General Shareholders Meeting of American Restaurants Sp. z o.o., wholly-owned by AmRest Holdings, had adopted a resolution authorising an increase in the share capital of American Restaurants Sp. z o.o. by PLN 55,000,000, to be effected through issuing 55,000 new shares with a par value of PLN 1,000 per share. The increased share capital will be acquired in its entirety by one shareholder – AmRest Holdings N.V. and will be paid up in cash. The payment will be financed with the proceeds from the public offering of shares. The increased share capital of the Company totals PLN 124,015,000 and is made up of 124,015 shares with a par value of PLN 1,000 per share. 

6) On May 31st 2005, Pizza Hut Czech s.r.o. (subsidiary) acquired 100% of shares in the limited liability company miklik’s food s.r.o., whose share capital amounts to CZK 10,000,000. The purchase price for 100% of shares in miklik’s food s.r.o. was estimated at CZK 45,000,000 and paid up in cash. Miklik’s food’s business consisted in the operation of a chain of quick service chicken restaurants under the Big Food brand. As a result of the transaction, AmRest became the owner of nine restaurants previously operating under the Big Food brand. One of the acquired restaurants was closed down and the other were rebranded to KFC in June 2005. All the restaurants are situated in the Czech Republic.

7) On June 3rd 2005, American Restaurants Sp. z o.o. (subsidiary company) sold 50 shares in Surf&Sip Eastern Europe Sp. z o.o., which did not conduct operations. The sale comprised 100% of the company’s share capital, conferring the rights to 100% of the total vote at the General Shareholders Meeting. The total selling price of 50 shares amounted to PLN 50. The sale of shares in Surf&Sip Eastern Europe Sp. z o.o., which had been put into liquidation pursuant to a resolution of the General Shareholder Meeting of March 16th 2005, is an element of the strategy aimed at streamlining the Group’s structure.

8) On October 1st 2005, two subsidiary companies, Spolpep Sp. z o.o. and Delta Creator Sp. z o.o., were merged into American Restaurants Sp. z o.o. (also a subsidiary company). Following the merger, American Restaurants Sp. z. o. o. assumed all the rights and obligations of the acquired companies. The merger is to simplify the Group’s structure and reduce the costs of its operations. Earlier, following the performance of the agreement of July 5th 2005, concluded between American Restaurants Sp. z o.o. and American Retail Concepts Inc. (company which is the main shareholder in AmRest Holdings N.V. through IRI LLC), American Restaurants Sp. z o.o. acquired four flagship Pizza Hut and KFC restaurants in Poland, located in Warsaw at ul. Widok 26 (“Zodiak”) and ul. Solidarności 68a (“Gruba Kaśka”). The aggregate price was PLN 21m, and covered the acquisition of Spolpep and the cost of the lease agreement of July 14th 2005, whereby the lease of the Spolpep sites was extended until 2017 on favourable terms, and an annex thereto, dated July 31st 2005, the aim of which was to simplify and optimise the transaction (information on the agreements under which the transactions were executed is presented in Current Reports No. 44/2005, No. 46/2005 and No. 48/2005). Following implementation of the detailed provisions of the agreement on acquisition of Spolpep, American Restaurants Sp. z o.o. will receive/take over a tax refund of PLN 2.5m, which was due to Spolpep from the tax office prior to the company’s acquisition by AmRest. On September 13th 2005, an annex to the above agreement was executed, whereby the acquisition price of Spolpep was increased by the amount specified in the decision on the tax refund. Settlement of the amount provided for in the annex and the received tax refund is neutral in terms of cash expenditure incurred by American Restaurants Sp. z o.o. to acquire Spolpep. As at March 31st 2006, American Restaurants Sp. z o.o. received from the tax office PLN 1.8m on account of the refund.

9) In December 2005, Amrest Ukraina t.o.w. of Kiev, Ukraine, was registered. AmRest Holdings N.V., holds, through its subsidiary American Restaurants Sp. z o.o., 100% of shares in this newly-established company. Amrest Ukraina t.o.w.’s share capital amounts to UAH 252,500. The company was established in order to supervise investments and operate restaurants in Ukraine. The company plans to open two restaurants, in aggregate, on the Ukrainian market by the end of 2006.

10) On February 3rd 2006, American Restaurants Sp. z o.o., a subsidiary, acquired 10% of shares in SCM Sp. z o.o., with a par value of PLN 10,000, thereby increasing its shareholding to 45%. Under the agreement of April 29th 2005, SCM Sp. z o.o. provides to American Restaurants Sp. z o.o. services which consist in intermediation and negotiation of terms of supplies for the restaurants, including the negotiation of terms of distribution agreements. In consideration for the services received, American Restaurants Sp. z o.o. is to pay fees of 1.5% of the value of ordered products or 2% of the value of ordered restaurant equipment. Under the agreement SCM is to be the sole provider of this type of services to American Restaurants Sp. z o.o. The agreement was concluded for six years, with an option to extend its term upon a written notice. Under the agreement, American Restaurants Sp. z o.o. undertook to order, in each 12 months during the agreement term, products and equipment of the minimum value of EUR 27.5m. American Restaurants Sp. z o.o. is entitled to terminate the agreement if the quality of services provided deteriorates in relation to the standards stipulated in the agreement (SLA). The estimated value of the agreement over its term is PLN 10.5m.