BH Biglari Holdings Inc

On May 22, 2017, Biglari Holdings Inc. (the “Company”) through its wholly-owned subsidiary BHIC Inc. (“Acquirer”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with John M. McGraw (“JM McGraw”), JDM Living Trust, Michael J. McGraw (“MJ McGraw”), Michael Joseph McGraw Family Trust to purchase all of the outstanding capital stock of two companies, McGraw Insurance, Inc. and Western Service Contract Corporation (“Western”), the parent company of Pacific Specialty Insurance Company, for a purchase price of $299.5 million, which consists of $24 million in cash payable at the closing of the transaction and $275.5 million of deferred payments. $175.5 million is payable in cash over a 10-year period, and $100 million is payable by a promissory note that matures upon the death of MJ McGraw (or in 10 years following the closing should death occur within that time period) for the benefit of the University of Notre Dame, payable at maturity either in securities or in cash, at the election of Acquirer. The interest during Mr. McGraw’s lifetime is set at the rate of 6% per annum.

The respective obligations of the parties to consummate the transactions contemplated by the Purchase Agreement are subject to customary conditions, including the obtaining of required antitrust and regulatory approvals. The Purchase Agreement obligates JM McGraw and MJ McGraw to repay outstanding indebtedness owing to Western and its subsidiaries.

The foregoing summary of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to this report and is incorporated herein by reference.

The Purchase Agreement and the above description have been included to provide investors and security holders with information regarding the terms of the Purchase Agreement. They are not intended to provide any other factual information about the parties to the Purchase Agreement or their respective subsidiaries, affiliates or shareholders. Investors should read the representations and warranties in the Purchase Agreement not in isolation but only in conjunction with the other information about the Company and its subsidiaries that the Company includes in reports, statements and other filings it makes with the Securities and Exchange Commission.