EXHIBIT 2.8
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CONTRIBUTION AGREEMENT
DATED AS OF
DECEMBER 29, 2000
BY AND AMONG
ELXSI,
A CALIFORNIA CORPORATION
("ELXSI"),
▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.,
A DELAWARE CORPORATION
("BICKHOLDCO"),
AND
▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.,
A DELAWARE CORPORATION
("BICKOPCO")
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THIS CONTRIBUTION AGREEMENT, dated as of December 29, 2000 (this
"AGREEMENT" or the "CONTRIBUTION AGREEMENT"), is by and among: (1) ELXSI, a
California Corporation ("ELXSI"), (2) ▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC., a
Delaware corporation ("BICKHOLDCO"), and (3) ▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS,
INC., a Delaware corporation ("BICKOPCO").
BACKGROUND
A. ELXSI, a wholly owned subsidiary of ELXSI Corporation, a Delaware
corporation ("PARENT"), is currently engaged in two separate lines of business,
owned and operated as divisions thereof, one of which is its ▇▇▇▇▇▇▇▇'▇ Family
Restaurant Division (the "▇▇▇▇▇▇▇▇'▇ DIVISION" or "SUBJECT BUSINESS"),
headquartered in Boston, Massachusetts and including, at the date hereof,
sixty-seven (67) ▇▇▇▇▇▇▇▇'▇ Family Fare restaurants located in New England and
operated under the owned ▇▇▇▇▇▇▇▇'▇ and/or ▇▇▇▇▇▇▇▇'▇ Family Fare name,
trademark(s) and concept (the "RESTAURANTS"). ELXSI's other line of business is
its Cues Division (the "CUES DIVISION"), which is headquartered in Orlando,
Florida and manufactures and services video inspection and repair equipment for
wastewater and drainage systems, primarily for governmental municipalities,
service contractors and industrial users.
B. ELXSI has caused BickHoldCo to be formed with the intention that ELXSI
will contribute the Subject Business and Included Assets, subject to the
Included Liabilities (as such terms are hereinafter defined), to BickHoldCo in
consideration of (in addition to the assumption by BickHoldCo of the Included
Liabilities) 100% of the issued and outstanding BickHoldCo Common Stock and the
Senior Subordinated Note, Subordinated Note and BickHoldCo Preferred Shares (as
such terms are hereinafter defined) in a so-called "ss.351 transaction" under
the Code (as more particularly defined below, the Initial Contribution). ELXSI
has also caused BickOpCo to be formed with the intention that, immediately after
the effectiveness of the Initial Contribution, BickHoldCo will contribute the
Subject Business and Included Assets, subject to the Included Liabilities, to
BickOpCo in consideration of (in addition to the assumption by BickOpCo of the
Included Liabilities) 100% of the issued and outstanding BickOpCo Common Stock
and the assumption by BickOpCo of the Senior Subordinated Note and Subordinated
Note in a so-called "ss.351 transaction" under the Code (as more particularly
defined below, the Second Contribution).
C. As a result of and immediately after the consummation of the foregoing
transactions (the "MAIN TRANSACTIONS"), among other things: (i) BickHoldCo will
be a wholly owned subsidiary of ELXSI and will be the 100% parent corporation of
BickOpCo, and (ii) BickOpCo will be a wholly owned subsidiary of BickHoldCo and
will own and operate the Subject Business and Included Assets (subject to the
Included Liabilities).
NOW, THEREFORE, in consideration of the mutual benefits to be derived and
the covenants, agreements and conditions herein contained, and intending to be
legally bound hereby, the Parties hereby agree as follows:
ARTICLE I: DEFINITIONS
For purposes of this Agreement, the following terms, not defined elsewhere
herein, have the following meanings:
SECTION 1.1. ▇▇▇▇▇▇▇▇'▇ HEAD OFFICE means the Boston, Massachusetts
headquarters building and site of the ▇▇▇▇▇▇▇▇'▇ Division (and Subject
Business).
SECTION 1.2. ▇▇▇▇▇▇▇▇'▇ INSURANCE POLICIES means and includes the
insurance policies and insurance contracts of any kind that are owned or
maintained by, or provide a benefit in favor of (in whole or in part), the
▇▇▇▇▇▇▇▇'▇ Division, Subject Business and/or ▇▇▇▇▇▇▇▇'▇ or any predecessors
thereof as the insured party or interest, including primary and excess policies,
commercial general liability policies, commercial automobile insurance policies,
workers' compensation policies (including occupational disease), property,
casualty and directors' and officers' liability insurance policies, fiduciary
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liability insurance policies, commercial crime insurance policies, and
self-insurance and captive insurance company arrangements, together with the
rights, privileges and benefits arising thereunder.
SECTION 1.3. ▇▇▇▇▇▇▇▇'▇ MORTGAGE means and includes any
Restaurant-specific mortgage financing provided to ELXSI and/or the ▇▇▇▇▇▇▇▇'▇
Division to purchase or otherwise acquire the real property (and related assets)
comprising or included in such Restaurant.
SECTION 1.4. ▇▇▇▇▇▇▇▇'▇ MORTGAGE LENDER means and includes any
third-party Person who provided (or provides) any ▇▇▇▇▇▇▇▇'▇ Mortgage.
SECTION 1.5. ▇▇▇▇▇▇▇▇'▇ PARTY means BickHoldCo and/or BickOpCo, as the
context may require or permit.
SECTION 1.6. ▇▇▇▇▇▇▇▇'▇ PSOR PLAN means the ELXSI 1991 Phantom Stock
Plan, which was established for the benefit of certain Subject Business
executives).
SECTION 1.7. ▇▇▇▇▇▇▇▇'▇-VERMONT means Vermont ▇▇▇▇▇▇▇▇'▇, Inc., a Vermont
corporation and wholly owned subsidiary of ELXSI. ▇▇▇▇▇▇▇▇'▇-Vermont holds one
or more Permits relating to the Subject Business Restaurant located in
Brattleboro, Vermont and is considered to be part of the ▇▇▇▇▇▇▇▇'▇ Division.
SECTION 1.8. BICKHOLDCO CERTIFICATE OF DESIGNATIONS means the Certificate
of Designations with respect to the BickHoldCo Preferred Stock, which is (or
shall be) in the form of EXHIBIT D.
SECTION 1.9. BICKHOLDCO COMMON STOCK means the Common Stock, par value
$.001 share, of BickHoldCo.
SECTION 1.10. BICKHOLDCO PREFERRED STOCK means the Class A 3% Cumulative
Redeemable Preferred Stock, par value $.001 per share, of BickHoldCo.
SECTION 1.11. BICKOPCO COMMON STOCK means the Common Stock, par value
$.001 share, of BickOpCo.
SECTION 1.12. ▇▇▇▇ OF SALE means a ▇▇▇▇ of Sale, Assignment and Assumption
substantially in the form of EXHIBIT A.
SECTION 1.13. BOFA means Bank of America, N.A., and its successors and
assigns.
SECTION 1.14. CLOSING means the closing and consummation of the Main
Transactions.
SECTION 1.15. CLOSING DATE means December 30, 2000. Such Closing Date will
be the effective date of the Closing notwithstanding that the physical Closing
may take place prior thereto.
SECTION 1.16. CODE means the U.S. Internal Revenue Code of 1986, as
amended.
SECTION 1.17. CONSENT means and includes any consent, authorization,
approval or waiver from, or any notification requirement to, any Person.
SECTION 1.18. CONTRACT means and includes any contract, agreement,
instrument, undertaking, bid, commitment or arrangement, written or oral, of any
kind or description whatsoever.
SECTION 1.19. CONTRIBUTION-RELATED BOFA FACILITY AMENDMENTS means such
amendments, restatements, supplements and other modifications to ELXSI Credit
Agreement (and/or certain Related Agreements and Supplemental Documentation (as
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defined therein)), and such new, replacement and other additional agreements,
instruments, certificates and other documents, required or requested by BofA and
acceptable to ELXSI, as have been or (effective on or as of the Closing Date) as
shall be required or requested by BofA in connection with the transactions
contemplated hereby.
SECTION 1.20. ELXSI CREDIT AGREEMENT means that certain Amended and
Restated Loan and Security Agreement, dated as of December 30, 1996, between
ELXSI and BofA (then named Bank of America Illinois), as amended.
SECTION 1.21. ENVIRONMENTAL LAW means and includes any federal, state,
regional, special district, local or foreign statute, ordinance, rule,
regulation, code, license, permit, authorization, approval, consent, common law
(including tort and nuisance law), legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any Governmental Authority, now or
hereafter in effect relating to health, safety, pollution or the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata) or to emissions, discharges, releases or threatened releases of any
substance currently or at any time hereafter listed, defined designated or
classified as hazardous, toxic, waste, radioactive or dangerous, or otherwise
regulated, under any of the foregoing, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any such substances, including the federal Comprehensive
Environmental Response, Compensation and Liability Act, the federal Superfund
Amendments and Reauthorization Act and the federal Resource Conservation and
Recovery Act and comparable provisions in any federal, state, regional, special
district, local or foreign law.
SECTION 1.22. ENVIRONMENTAL LIABILITIES means all Liabilities resulting
from, relating to, arising out or in connection with any Environmental Law or
Contract relating to environmental, health or safety matters (including all
removal, remediation or cleanup costs, investigatory costs, governmental
response costs, natural resources damages, property damages, personal injury
damages, costs of compliance with any product take back requirements or with any
settlement, judgment or other determination of Liability and indemnity,
contribution or similar obligations) and all costs and expenses, interest,
fines, penalties or other monetary sanctions in connection therewith.
SECTION 1.23. EXECUTIVE EMPLOYMENT AGREEMENTS means those certain two
Employment Agreements, dated as of June 30, 1997, as amended, between ELXSI and
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (respectively).
SECTION 1.24. GOVERNMENTAL APPROVAL means and includes any notice, report
or other filing given (or to be given) to or made (or to be made) with, or any
consent, registration, approval, permit or authorization obtained (or to be
obtained) from, any Governmental Authority.
SECTION 1.25. GOVERNMENTAL AUTHORITY means and includes any federal,
state, regional, special district, local or foreign court, government,
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority.
SECTION 1.26. INFORMATION means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
SECTION 1.27. INITIAL CONTRIBUTION means the contribution, transfer,
grant, conveyance, assignment, setting over and delivery by ELXSI to BickHoldCo
of the Included Assets pursuant to Section 2.1 subject to (by means of the
transfer, assignment, delegation and assumption pursuant to Section 2.2 of) the
Included Liabilities.
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SECTION 1.28. LEGAL ACTION means and includes any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation before any
federal, state, regional, special district, local or foreign Governmental
Authority or any arbitration or mediation tribunal.
SECTION 1.29. LIABILITIES means and includes all indebtedness,
liabilities, obligations, commitments, payments, losses, claims, charges,
demands, actions, causes of action, suits, damages, costs and expenses, sums of
money, accounts, reckonings, bonds, specialties, indemnities and similar
obligations, exonerations, covenants, contracts, controversies, agreements,
promises, doings, omissions, variances, guarantees, make whole agreements and
similar obligations, and other liabilities and requirements, including all
contractual obligations and Environmental Liabilities, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law (including any Environmental Law), rule, regulation, action, cause of
action or suit (actual, threatened or contemplated) (including the costs and
expenses of demands, assessments, judgments, settlements and compromises
relating thereto and attorneys' fees and any and all costs and expenses,
whatsoever reasonably incurred in investigating, preparing or defending against
any such action, cause of action or suit), order or consent decree of any
Governmental Authority or any award of any arbitrator or mediator of any kind,
and those arising under any contract, agreement, instrument commitment or
undertaking, in each case, whether or not recorded, carried or reflected on the
books and records or financial statements of any relevant Person, or required to
be so recorded, carried or reflected.
SECTION 1.30. LIEN means and includes any mortgage, security interest,
pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance or adverse claim of any nature
whatsoever.
SECTION 1.31. MANAGEMENT AGREEMENT means that certain Management Agreement
dated as of September 25, 1989, as amended, between Cadmus Corporation (as
assignee of ▇▇▇▇▇▇ Management Incorporated, the assignee of Winchester National,
Inc. d/b/a ▇▇▇▇▇▇ & Company), and ELXSI (as assignee of Parent).
SECTION 1.32. MATERIAL ADVERSE EFFECT means a material adverse effect on
the Subject Business or its prospects.
SECTION 1.33. NOTES is the collective reference to the Senior Subordinated
Note(s) and Subordinated Note(s).
SECTION 1.34. ORLANDO PROPERTIES means the real property (land, buildings
and improvements) located in Orlando, Florida, the location of Parent's and
ELXSI's present and former corporate headquarters and of the Cues's Division
head office and manufacturing facility (addresses: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇).
SECTION 1.35. PARTY is the collective reference to ELXSI, BickHoldCo and
BickOpCo.
SECTION 1.36. PERSON means and includes any individual, corporation,
general or limited partnership, limited liability company or partnership, trust,
joint venture, unincorporated entity, Governmental Authority or other entity.
SECTION 1.37. SECOND CONTRIBUTION means the contribution, transfer, grant,
conveyance, assignment, setting over and delivery by BickHoldCo to BickOpCo of
the Included Assets pursuant to Section 2.3 subject to (by means of the
transfer, assignment, delegation and assumption pursuant to Section 2.4 of) the
Included Liabilities.
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SECTION 1.38. TAXES means and includes all federal, state, regional,
special district, local and foreign taxes, levies, imposts, assessments,
deductions, withholdings and other similar payments, additions to tax and any
interest and penalties with respect thereto.
SECTION 1.39. TRANSFEREE means and includes: (i) BickHoldCo in its
capacity as the transferee of the Subject Business, Included Assets and Included
Liabilities in the Initial Contribution, and (ii) BickOpCo in its capacity as
the transferee of the Subject Business, Included Assets and Included Liabilities
in the Second Contribution.
SECTION 1.40. TRANSFEROR means and includes: (i) ELXSI in its capacity as
the transferor of the Subject Business, Included Assets and Included Liabilities
in the Initial Contribution, and (ii) BickHoldCo in its capacity as the
transferor of the Subject Business, Included Assets and Included Liabilities in
the Second Contribution.
SECTION 1.41. USPTO means the United State Patent and Trademark Office.
ARTICLE II: INITIAL AND SECOND CONTRIBUTIONS
SECTION 2.1. INITIAL CONTRIBUTION. (a) INCLUDED ASSETS. Effective at
11:59 PM on the Closing Date, ELXSI shall contribute, transfer, grant, convey,
assign, set over and deliver to BickHoldCo, and its successors and assigns
forever, and BickHoldCo shall receive and accept from ELXSI, all of ELXSI's
rights, title and interest in, to and under the ▇▇▇▇▇▇▇▇'▇ Division and all of
the businesses, operations, franchises, rights, claims, privileges, properties
and assets owned, used or held for use by ELXSI with respect to or in connection
with, in whole or in part, the ▇▇▇▇▇▇▇▇'▇ Division, of every nature and
description; real, personal or mixed; tangible, intangible or contingent;
wherever located (including in the possession of vendors or other third parties,
or elsewhere); and whether or not recorded, carried or reflected on the books
and records or financial statements of ELXSI or required to be so recorded,
carried or reflected (the "INCLUDED ASSETS"); including the following:
(1) OWNED REAL PROPERTY. All fee and other ownership interests in real
property (land, buildings and improvements) comprising or relating to any
Restaurant site or the ▇▇▇▇▇▇▇▇'▇ Head Office ("OWNED REAL PROPERTY");
(2) LEASED REAL PROPERTY. All leasehold interests in real property
(land, buildings and improvements) comprising or relating to any Restaurant site
leased from third parties ("LEASED REAL PROPERTY");
(3) OTHER REAL PROPERTY INTERESTS. All such interests in real
property, not described in the foregoing clauses (1) or (2), as shall run with
the ownership, leasing, use or occupancy of, or shall otherwise be held by or
inure to the benefit of, any of the Restaurant or the ▇▇▇▇▇▇▇▇'▇ Head Office
sites, and/or the owner or operator thereof ("OTHER REAL PROPERTY INTERESTS");
(4) FURNITURE, FIXTURES AND EQUIPMENT. All furniture, fixtures
(including trade fixtures), equipment and like property located at: (i) any of
the Restaurants (including booths; tables; chairs; counters; ice cream chests;
counters; cash registers; salad bars; ovens; refrigerators; freezers, grills,
broilers, microwave ovens, convection ovens, heating and warming equipment,
mixers, ice machines, dishwashers and other appliances; sinks; pots, pans and
kitchen utensils; special and general tools; testing devices; storage shelves
and bins; telephones and telephone systems; computers, computer equipment and
other data storage apparatus; and office materials and supplies); or (ii) the
▇▇▇▇▇▇▇▇'▇ Head Office (including: desks; tables; chairs; counters; computers,
computer equipment and other data storage apparatus; telephones and telephone
systems; office materials and supplies); and all motor vehicles and other
transportation or loading equipment located or used at any of the Restaurants or
the ▇▇▇▇▇▇▇▇'▇ Head Office;
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(5) INVENTORY. All inventory of any type whatsoever located at or in,
or in transit to or from, any of the Restaurants or the ▇▇▇▇▇▇▇▇'▇ Head Office,
including food and beverages, retail goods generally sold at cashier stands,
utensils, chinaware, glasses, cups, uniforms, cleaning and maintenance supplies,
and paper goods;
(6) CONTRACTS. All contracts, agreements, instruments, commitments,
undertakings, bids and purchase and supply orders (including for food and
beverages), written or oral, to which ELXSI (for the benefit of the ▇▇▇▇▇▇▇▇'▇
Division) and/or the ▇▇▇▇▇▇▇▇'▇ Division is a party, and/or which relate to the
Subject Business, any Included Asset and/or any Included Liability ("INCLUDED
CONTRACTS"), including equipment and other personal property leases and the
▇▇▇▇▇▇▇▇'▇ Division 401(k) Plan but excluding the ▇▇▇▇▇▇▇▇'▇ PSOR Plan;
(7) PREPAID EXPENSES. All prepaid expenses, advances and deposits to
the extent relating to any of the Restaurants or the ▇▇▇▇▇▇▇▇'▇ Head Office, or
otherwise made by or for the benefit of the Subject Business;
(8) INFORMATION, BOOKS AND RECORDS. All Information, files, books and
records (including Restaurant and ▇▇▇▇▇▇▇▇'▇ Head Office real estate records and
files, surveys and environmental reports; historical and other accounting books,
records, files and work papers; market studies; competition analyses; sales,
cost and pricing information and models; product testing data; product files;
bills of materials, customer and vendor lists and records; employee and
employment records; plans; prints; specifications; architectural drawings;
forms; and operation and employee manuals) used or held for use by the
▇▇▇▇▇▇▇▇'▇ Division;
(9) MENUS, FORMS, ETC. All: menus; employee training and operating
manuals; contract, purchase, work and supply order form copies and counterparts;
labels; shipping materials; catalogs; brochures; art work; photographs and
advertising and promotional copy; materials and literature; in each case in
whatever form (including: paper; computer tape, disc or diskette; or magnetic
tape), used or held for use by the ▇▇▇▇▇▇▇▇'▇ Division; used or held for use by
the ▇▇▇▇▇▇▇▇'▇ Division; and all ▇▇▇▇▇▇▇▇'▇ stationery, in whatever form;
(10) INTELLECTUAL PROPERTY RIGHTS. All: patents; patent applications;
registered and unregistered trademarks (including the "▇▇▇▇▇▇▇▇'▇ Country" and
"▇▇▇▇▇▇▇▇'▇" trademark registered in the USPTO (the "▇▇▇▇▇▇▇▇'▇ REGISTERED
MARKS")); trademark applications; service marks; trade names; corporate and
fictitious names; trade dress rights; copyrights; copyright applications;
inventions; technical information; administrative systems; recipes, formulations
and specifications; trade secrets; computer applications, programs and other
software, and licenses therefor; telephone and telecopier numbers; logos;
slogans; proprietary processes and formulae; and all other confidential,
proprietary and other information, know-how and intellectual property rights; in
each case whether patentable or unpatentable, registered or unregistered, owned,
licensed or used or held for use by the ▇▇▇▇▇▇▇▇'▇ Division and/or any Included
Assets ("INTELLECTUAL PROPERTY RIGHTS");
(11) PERMITS. All Governmental Authority licenses, permits, rights,
privileges, registrations, reports, franchises, authorizations and other
Consents (including liquor licenses, and food and beverage service licenses)
which are required under any applicable law in connection with the ownership
and/or operation of the Subject Business, any of Restaurants and/or any of the
other Included Assets ("PERMITS") to the extent assignable or otherwise
transferrable;
(12) ▇▇▇▇▇▇▇▇'▇-VERMONT. All the outstanding shares of capital stock
and other equity interests in ▇▇▇▇▇▇▇▇'▇-Vermont;
(13) GOODWILL AND OTHER INTANGIBLES. All goodwill of the ▇▇▇▇▇▇▇▇'▇
Division and Subject Business; and all rights to use and exploit the Included
Assets, including the Subject Business's customer base, supplier base and
workforce in place, and the business and commercial relationships appertaining
to the Subject Division and/or Included Assets;
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(14) OTHER RIGHTS AND CLAIMS. All rights (including to bring or assert
Legal Actions), claims (including counterclaims) and causes of action against
third parties relating to the Subject Business, any of the Included Assets
(including warranties, service contracts and insurance recoveries or rights)
and/or any of the Included Liabilities; and
(15) OTHER MISCELLANEOUS. All such other businesses, operations,
franchises, rights, claims, privileges, properties and assets in the possession
or control of ELXSI to the extent that they pertain to the Subject Business
and/or any other Included Assets.
(b) EXCLUDED ASSETS. Notwithstanding the foregoing, the "Included Assets"
do not include, and ELXSI is retaining and shall retain all of its rights, title
and interest in, to and under the following (collectively, the "EXCLUDED
ASSETS"):
(1) ORLANDO PROPERTIES. All interests in the Orlando Properties;
(2) ACCOUNTS RECEIVABLE AND CASH. All trade and other accounts and
notes receivable of the ▇▇▇▇▇▇▇▇'▇ Division and/or Subject Division, if any, and
all cash on hand, cash equivalents and other proceeds thereof;
(3) CUES ASSETS. The Cues Division and all of the businesses,
operations, franchises, rights, claims, privileges, properties and assets owned,
used or held for use by ELXSI and/or the Cues Division with respect to or in
connection with, in whole or in part, the Cues Division, of every nature and
description; real, personal or mixed; tangible, intangible or contingent;
wherever located (including in the possession of vendors or other third parties,
or elsewhere); and whether or not recorded, carried or reflected on the books
and records or financial statements of ELXSI or required to be so recorded,
carried or reflected (the "CUES ASSETS"), including all: (i) equipment,
machinery, general or special tools, testing devices, furniture, fixtures
(including trade fixtures) and like property located at any of the Orlando
Properties; (ii) inventory, raw materials, work-in-process, spare parts and
finished goods, of any type whatsoever; (iii) contracts, agreements,
instruments, undertakings, bids, and purchase and supply orders, written or
oral, to which ELXSI (for the benefit of the Cues Division) and/or the Cues
Division is a party, and/or which relate to the business of the Cues Division;
(v) trade and other accounts and notes receivable of the Cues Division, any
intercompany receivable owed to the Cues Division, and all cash on hand, cash
equivalents and other proceeds of any of the foregoing; (vi) prepaid expenses,
advances and deposits made by or for the benefit of the Cues Division, any Cues
Assets and/or the Orlando Properties; (vii) Information, files, books and
records (including: historical and other accounting books, records, files and
work papers; research and development materials; market studies; competition
analyses; sales, costs and pricing information and models; product testing data;
product engineering files; bills of materials; customer and vendor lists and
records; employee and employment records; plans; prints; specifications;
engineering drawings; product data sheets; forms; and operation and maintenance
manuals) used or held for use by the Cues Division; (viii) contract, purchase,
work and supply order form copies and counterparts; labels; shipping materials;
catalogs; brochures; art work; photographs; and advertising and promotional
copy, materials and literature; in each case in whatever form, used or held for
use by the Cues Division, and all Cues stationery, in whatever form; (ix)
patents; patent applications; registered and unregistered trademarks; trademark
applications; service marks; trade names; corporate and fictitious names; trade
dress rights; copyrights; copyright applications; inventions; technical
information; administrative systems; trade secrets; computer applications,
programs and other software, and licenses therefor; telephone and telecopier
numbers; logos; slogans; proprietary processes and formulae; and all other
confidential, proprietary and other information, know-how and intellectual
property rights; in each case whether patentable or unpatentable, registered or
unregistered, owned, licensed or used or held for use by the Cues Division
and/or any Cues Assets; (x) Governmental Authority licenses, permits, rights,
privileges, registrations, reports, franchises, authorizations and other
Consents which are required under any applicable law in connection with the
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ownership or operation of the Cues Division and/or any Cues Assets; (xi)
goodwill of the Cues Division; and all rights to use and exploit the Cues
Assets, including the Cues Division's customer base, supplier base and workforce
in place, and the business and commercial relationships appertaining to the Cues
Division and/or Cues Assets; (xi) rights (including to bring or assert Legal
Actions), claims (including counterclaims) and causes of action against third
parties relating to the Cues Division and/or any Cues Assets (including
warranties, service contracts and insurance recoveries or rights) or any of the
Excluded Liabilities (as defined in Section 2.2(b));
(4) ELXSI CORPORATE ASSETS. All of the franchises, rights, claims,
privileges, properties and assets owned, used or held for use by ELXSI with
respect to or in connection with, in whole or in part, the so-called
"head-office" or "corporate" activities of ELXSI as the parent entity and owner
of the ▇▇▇▇▇▇▇▇'▇ Division and Cues Division and/or as the subsidiary of Parent
("CORPORATE ACTIVITIES"), of every nature and description; real, personal or
mixed; tangible, intangible or contingent; wherever located (including in the
possession of vendors or other third parties, or elsewhere); and whether or not
recorded, carried or reflected on the books and records or financial statements
of ELXSI or required to be so recorded, carried or reflected (the "CORPORATE
ASSETS"), including all: (i) ELXSI corporate seals, minute books, certificate or
articles of incorporation and by-law documents, stock record books and other
books and records that pertain to the organization of ELXSI; (ii) income and
franchise tax returns and records; (iii) equipment (including office equipment),
furniture, fixtures (including trade fixtures) and like property located at any
of the Orlando Properties; (iv) contracts, agreements, instruments, commitments,
undertakings, bids, and purchase and supply orders, written or oral, to which
ELXSI is a party and which relate to Corporate Activities; (v) accounts and
notes receivable relating to Corporate Activities, and all intercompany
receivables owed by Parent, any subsidiary of ELXSI or the Cues Division; (vi)
all of ELXSI's cash on hand, cash equivalents, and bank, brokerage and other
deposit accounts; (vii) prepaid expenses, advances and deposits made by or for
the benefit of any Corporate Activities, any Corporate Assets or the Orlando
Properties; (viii) Information, files, books and records, used or held for use
by the ELXSI in connection with its Corporate Activities, including historical
and other accounting books, records, files and work papers; (ix) contract,
purchase, work and supply order form copies and counterparts; labels; shipping
materials; and art work; in each case in whatever form (including: paper;
computer tape, disc or diskette; or magnetic tape); and all ELXSI stationery, in
whatever form; (x) trade names; corporate and fictitious names; copyrights;
technical information; administrative systems; trade secrets; computer
applications, programs and other software, and licenses therefor; telephone and
telecopier numbers; logos; slogans; proprietary processes and formulae; and all
other confidential, proprietary and other information, know-how and intellectual
property rights; in each case whether patentable or unpatentable, registered or
unregistered, owned, licensed or used or held for use by ELXSI in connection
with its Corporate Activities and/or any Corporate Assets; (xi) Governmental
Authority licenses, permits, rights, privileges, registrations, reports,
franchises, authorizations and other Consents which are required under any
applicable law in connection with the ownership or operation of the Orlando
Properties and/or any Corporate Assets; (xii) goodwill of ELXSI; and all rights
to use and exploit the Corporate Assets; and (xiii) rights (including to bring
or assert Legal Actions), claims (including counterclaims) and causes of action
against third parties relating to the Corporate Activities, any of the Corporate
Assets, the Orlando Properties (including warranties, service contracts and
insurance recoveries or rights) and/or any of the Excluded Liabilities;
(5) SUBSIDIARY STOCK. All outstanding shares of capital stock and
other equity interests in any subsidiary of ELXSI or any other Person (excluding
▇▇▇▇▇▇▇▇'▇-Vermont);
(6) INTERCOMPANY RECEIVABLES. All intercompany accounts and other
receivables owed by ELXSI, Parent, the Cues Division or any other affiliated
entity (including those created in respect of any advance of funds by the
▇▇▇▇▇▇▇▇'▇ Division to ELXSI or Parent);
(7) TAX ASSETS AND ATTRIBUTES. All income and other Taxes receivable
and Tax attributes of ELXSI; and
(8) NON-INCLUDED ASSETS. All other business, operations, franchises,
rights, claims, privileges, properties and assets not expressly listed or
referred to in Section 2.1(a) hereof (of every nature and description; real,
9
personal or mixed; tangible, intangible or contingent; wherever located
(including in the possession of vendors or other third parties, or elsewhere);
and whether or not recorded, carried or reflected on the books and records or
financial statements of ELXSI).
SECTION 2.2. INITIAL CONTRIBUTION. (a) INCLUDED LIABILITIES. Effective at
11:59 PM on the Closing Date, ELXSI shall transfer, assign and delegate to
BickHoldCo, and BickHoldCo shall assume and agree to pay, satisfy and discharge
in accordance with their respective terms (subject to any defenses or claimed
offsets asserted in good faith against the obligee to whom the same are owed) or
reimburse ELXSI, Parent or the Cues Division for any payment made by (or for the
account of) any of them after the Closing Date on account of, the following
Liabilities of ELXSI, the ▇▇▇▇▇▇▇▇'▇ Division and/or Parent, known or unknown,
absolute or contingent (or otherwise), accrued or accruing prior to or after the
Closing Date and whether or not carried on the books or records of ELXSI or
Parent (the "INCLUDED LIABILITIES"):
(1) INCIDENTAL TO OWNERSHIP OF INCLUDED ASSETS. Those resulting from,
relating to, arising out or in connection with of the ownership, operation, use
or occupancy of any of the Included Assets, including Environmental Liabilities,
and sales and use Taxes;
(2) ACCOUNTS PAYABLE, ETC. All trade and other accounts payable and
other expenses resulting from, relating, arising out or in connection with of
the ownership or operation of Included Assets and/or the Subject Business,
including those resulting from, relating to, arising out or in connection with:
(i) the ownership, operation use or occupancy of any of the Owned Real Property,
Leased Real Property and Other Real Property Interests (including property
Taxes), and (ii) the purchase or supply of any Restaurant or ▇▇▇▇▇▇▇▇'▇ Head
Office inventory, supplies, furniture, fixtures or equipment included in, or
otherwise constituting, Included Assets;
(3) SUBJECT BUSINESS EMPLOYEES. Those for: (i) salary, wages and other
compensation and benefits payable or provided to Subject Business employees,
except for the items listed or described in Section 2.2(b)(1), (2) or (4), and
(ii) payroll and withholding Taxes attributable thereto, except as provided in
Section 2.2(b)(5)(ii));
(4) INCLUDED CONTRACT LIABILITIES. Those resulting from, relating to,
arising out of or in connection with the Included Contracts (including Leased
Real Property leases and equipment finance leases and the ▇▇▇▇▇▇▇▇'▇ Division
401(k) plan), including those Liabilities resulting from, relating to, arising
out of or in connection with: (i) any breach of any of the representations,
warranties, covenants or agreements of ELXSI and/or the ▇▇▇▇▇▇▇▇'▇ Division
therein; and (ii) any of this ▇▇▇▇▇▇▇▇'▇ Insurance Policies, including the
obligation to pay (or reimburse others for) any premiums payable thereunder;
(5) PERMIT LIABILITIES. Those resulting from, relating to, arising out
of or in connection with any Permits, including those Liabilities resulting
from, relating to, arising out of or in connection with any violation of the
terms, conditions or provisions thereof;
(6) ▇▇▇▇▇▇▇▇'▇ MORTGAGE DEBT. Those resulting from, relating to,
arising out of or in connection with the ▇▇▇▇▇▇▇▇'▇ Mortgages, it being the
intent of the Parties that (with the consent and agreement of the ▇▇▇▇▇▇▇▇'▇
Mortgage Lenders): (i) the indebtedness and other Liabilities thereunder shall
be assumed by the owner of the Included Assets (BickHoldCo or BickOpCo), and
(ii) to the extent permitted by the ▇▇▇▇▇▇▇▇'▇ Mortgage Lenders, ELXSI shall be
fully released from such indebtedness and other Liabilities and relieved of all
further responsibility therefor (the "▇▇▇▇▇▇▇▇'▇ MORTGAGE
ASSUMPTIONS/RELEASES");
(7) LEGAL ACTIONS. Those resulting from, relating to, arising out of
or in connection with any Legal Action relating to the Subject Business, any of
the Included Assets (including those claims for personal injury or property
damage caused (actually or allegedly) at or by any Included Asset or any
employee or agent of the Subject Business) and/or any of the other Included
Liabilities; and
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(8) OTHER MISCELLANEOUS. All such other Liabilities (absolute,
contingent or otherwise) to the extent that they related to the Subject
Business, any Included Assets and/or any other Included Liabilities.
(b) RETAINED LIABILITIES. Except as specifically set forth above in Section
2.2(a), BickHoldCo does not and will not assume, and shall in no event be liable
for, and ELXSI (or Parent) or the Cues Division retains and shall retain
responsibility for, and be liable to pay, satisfy and discharge in accordance
with their respective terms ("RETAINS"), the Liabilities of ELXSI (or Parent) or
the Cues Division to the extent that they do not relate to the Subject Business,
any Included Assets or any Included Liabilities. In addition, notwithstanding
anything to the contrary set forth in Section 2.2(a), the "Included Liabilities"
do not include, and ELXSI (or Parent) Retains the following Liabilities:
(1) PSOR PLAN. Those resulting from, relating to, arising out of or in
connection with the ▇▇▇▇▇▇▇▇'▇ PSOR Plan (it being acknowledged that such Plan
is for the benefit of certain Subject Business executives);
(2) PARENT OPTIONS. Those resulting from, relating to, arising out of
or in connection with any Parent incentive stock option plan and/or any options
granted thereunder (it being acknowledged that certain of such options are held
by Subject Business executives and other employees);
(3) MANAGEMENT AGREEMENT. Those resulting from, relating to, arising
out of or in connection with the Management Agreement;
(4) EXECUTIVE EMPLOYMENT AGREEMENTS. Those resulting from, relating
to, arising out of or in connection with the Executive Employment Agreements;
(5) TAXES. Those for: (i) Taxes, of every nature and description,
arising or attributable to any period prior to the Closing Date, and (ii)
payroll and withholding Taxes attributable to Subject Business employees arising
as a result of any payments made or other value realized under the items listed
or described in any of the foregoing clauses (1), (2) and (4); and
(6) ELXSI/CUES CREDITS. Those resulting from, relating to, arising out
of or in connection with: (i) the industrial revenue bond financing of certain
of the Orlando, Properties, and (ii) the ELXSI Credit Agreement.
All of the Liabilities listed or described in this Section 2.2(b) are
hereinafter sometimes collectively referred to as the "EXCLUDED LIABILITIES".
SECTION 2.3. SECOND CONTRIBUTION; INCLUDED AND EXCLUDED ASSETS. Effective
immediately after the effectiveness of the Initial Contribution on the Closing
Date, BickHoldCo shall contribute, transfer, grant, convey, assign , set over
and deliver to BickOpCo, and its successors and assigns forever, and BickOpCo
shall receive and accept from BickHoldCo, all of BickHoldCo's rights, title and
interest in, to and under the Included Assets. The Included Assets included in
the foregoing contribution, transfer, grant, conveyance, assignment, setting
over and delivery by BickHoldCo to BickOpCo are only those businesses,
operations, franchises, rights, claims, privileges, properties and assets,
received by BickHoldCo from ELXSI in the Initial Contribution; without
limitation, such Included Assets exclude the Excluded Assets.
SECTION 2.4. SECOND CONTRIBUTION; INCLUDED AND EXCLUDED LIABILITIES.
Effective immediately after the effectiveness of the Initial Contribution on the
Closing Date, BickHoldCo shall transfer, assign and delegate to BickOpCo, and
BickOpCo shall assume and agree to pay, satisfy and discharge in accordance with
their respective terms (subject to any defenses or claimed offsets asserted in
good faith against the obligee to whom the same are owed) or reimburse ELXSI,
Parent, the Cues Division or BickHoldCo for any payment made by (or for the
account of) any of them after the Closing Date on account of, the Included
Liabilities. The Included Liabilities included in the foregoing transfer,
11
assignment and delegation from BickHoldCo to BickOpCo (and assumption by
BickOpCo) are only those Liabilities transferred, assigned and delegated by
ELXSI to BickHoldCo (and assumed by BickHoldCo) in the Initial Contribution;
without limitation, such Included Liabilities exclude the Excluded Liabilities.
SECTION 2.5. METHODS OF TRANSFER. The Initial Contribution and Second
Contribution of Included Assets shall be effected by the execution and delivery
by the relevant Party or Parties of the following agreements, instruments,
certificates or other documents (collectively, "TRANSFER INSTRUMENTS"), and the
taking of the other and further actions referred to below, all to have an
effectiveness (insofar as reasonably possible) as of the Closing Date:
(1) OWNED REAL PROPERTY. All Owned Real Property shall be transferred
by: (i) the execution and delivery by ELXSI of such deed instruments, in
recordable form for the respective jurisdictions where such Owned Real Property
is located (each, a "Deed"); and (ii) the recordation thereof in the local land
records. Each Deed shall be a quitclaim deed (or the legal equivalent thereof)
unless, in any jurisdiction, such a form of deed instrument is not used or may
render the title insurance contemplated by Section 6.2(c) unavailable (or
unavailable without extra cost)). To the extent necessary or advisable under
local law, the recordation of the Deeds shall include proceedings therefor in
the local land court. In order to avoid the cost and expense of effecting and
recording two transfers with respect to the Owned Real Property (i.e.,
ELXSI-to-BickHoldCo in the Initial Contribution and BickHoldCo-to-BickOpCo in
the Second Contribution), and for administrative convenience, BickHoldCo may
direct that any and all such Deeds run directly from ELXSI to BickOpCo (each, a
"DIRECT-TO-BICKOPCO TRANSFER"). For all purposes hereunder, any and all such
Direct-to-BickOpCo Transfers shall be deemed to be a part of the effectuation of
the Initial Contribution followed by the Second Contribution.
(2) LEASED REAL PROPERTY. All Leased Real Property shall be assigned
by: (i) the execution and delivery by the Parties of such assignments of lease
instruments, in recordable form (if the relevant underlying lease shall have
been recorded), as shall be reasonably acceptable to ELXSI and (to the extent
necessary or desirable) the relevant landlord(s) (each, an "ASSIGNMENT OF
LEASE"); and (ii) the recordation thereof in the local land records (if the
relevant underlying lease shall have been recorded). In addition, to the extent:
(A) deemed necessary or desirable by ELXSI, the Consent to such assignment of
any landlord shall be obtained and expressed or memorialized in such agreement,
instrument, certificate or other document as shall be reasonably acceptable to
ELXSI and the relevant landlord(s); and (B) necessary or advisable under local
law, any such recordation shall include proceedings therefor in the local land
court. In order to avoid the cost and expense of effecting and recording two
transfers with respect to the Leased Real Property, and for administrative
convenience, BickHoldCo may direct that any and all such Assignments of Lease
and Consent agreements, instruments, certificates or other documents run
directly from ELXSI to BickOpCo; accordingly, any Assignment of Lease and any
Consent agreement, instrument, certificate or other document referred to in this
subsection (2) may be executed and delivered by (in addition to ELXSI and any
landlord) BickOpCo and not BickHoldCo. For all purposes hereunder, any and all
such Direct-to-BickOpCo Transfers shall be deemed to be a part of the
effectuation of the Initial Contribution followed by the Second Contribution.
(3) OTHER REAL PROPERTY INTERESTS. All Other Real Property Interests
which shall not be effectively transferred by the means described in the
foregoing subsections (1) and (2) shall be transferred by the execution and
delivery by the Parties of such agreements, instruments, certificates or other
documents ("OTHER REAL PROPERTY TRANSFER INSTRUMENTS"), and the taking by the
Parties of such other and further actions, as ELXSI shall determine to be
necessary or desirable under the circumstances.
(4) ALL PERSONAL PROPERTY: ▇▇▇▇ OF SALE. All personal property
constituting a part of the Included Assets shall be transferred by the execution
and delivery by ELXSI (as Transferor in the Initial Contribution), BickHoldCo
(as Transferee in the Initial Contribution and Transferor in the Second
Contribution) and BickOpCo (as Transferee in the Second Contribution) of the
▇▇▇▇ of Sale. In addition: (i) the outstanding shares of capital stock and other
equity interests in ▇▇▇▇▇▇▇▇'▇-Vermont shall also be transferred by the
endorsement in blank by ELXSI of the assignment or transfer portion(s) of the
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stock certificate(s) therefor, or the execution in blank by ELXSI of an
accompany stock power, and the delivery of such certificate(s) and stock power
(if any) to the Transferees, and (ii) motor vehicles shall also be transferred
by the endorsement by ELXSI of the assignment or transfer portion(s) of the
certificate of title documents with respect thereto, and the recordation of such
transfer with the relevant Governmental Authorities. In order to avoid the cost
and expense of effecting and recording two transfers with respect to motor
vehicles, and for administrative convenience, BickHoldCo may direct that any and
all such certificate of title assignments or transfers ("MOTOR VEHICLE
ASSIGNMENTS") run directly from ELXSI to BickOpCo. For all purposes hereunder,
any and all such Direct-to-BickOpCo Transfers shall be deemed to be a part of
the effectuation of the Initial Contribution followed by the Second
Contribution.
(5) INCLUDED CONTRACTS. Each Included Contract that is assignable or
otherwise transferrable (either because third-party Consent is not required
under the terms thereof or such Consent shall have been obtained on or prior to
the Closing Date) shall be assigned under the ▇▇▇▇ of Sale. With respect to any
Included Contract that is not assignable or otherwise transferrable (because
third-party Consent shall not have been obtained on or prior to the Closing
Date), the Parties shall cooperate with each other in order to obtain any
Consent, substitution, amendment or novation required to assign and transfer or
novate all rights and Liabilities thereunder to BickOpCo as soon as practicable
after the Closing Date. Any such Consent, substitution, amendment or novation
may be expressed or memorialized in such agreements, instruments, certificates
or other documents as shall be reasonably acceptable to ELXSI and the relevant
third party(ies). The Parties shall use their reasonable best efforts to obtain
all such Consents, substitutions, amendments and/or novations as soon as
practicable. In the event that any such Consent, substitution, amendment and/or
novation shall not have been obtained prior to the Closing Date in respect of
any Included Contract, such Included Contract shall be retained by ELXSI, which
shall thereafter (until such Consent is obtained) hold the same for the use and
benefit, insofar as reasonably possible, of BickOpCo (at the expense of the
BickOpCo). In addition, ELXSI shall take such other and further actions as may
be reasonably requested by the Transferees in order to place BickOpCo, insofar
as reasonably possible, in the same position as if such Included Contract had
been fully transferred as contemplated hereby and so that all the benefits and
burdens relating thereto (including possession, use, risk of loss, potential for
gain, and dominion, control and command over the same) shall inure to BickOpCo
from and after the Closing Date. The foregoing is intended to effect a
Direct-to-BickOpCo Transfer; for all purposes hereunder, such Direct-to-BickOpCo
Transfer shall be deemed to be a part of the effectuation of the Initial
Contribution followed by the Second Contribution. If and when after the Closing
Date any required Consent to the assignment and transfer of any Included
Contract shall have been obtained, such assignment and transfer of such Included
Contract shall be effected in such manner (and/or by the execution and delivery
by the Parties of such agreements, instruments, certificates and other
documents) as shall be reasonably determined by ELXSI. Nothing in this Section
2.5(5) shall in any way limit the obligations of the ▇▇▇▇▇▇▇▇'▇ Parties to
indemnify ELXSI (and such Party's Indemnitees) for Liabilities resulting from,
relating to, arising out of or in connection with (or constituting) any Included
Contract, before or after (and whether or not) any required Consent,
substitution, amendment and/or novation shall have been obtained.
(6) INTELLECTUAL PROPERTY RIGHTS. All Intellectual Property Rights
shall be transferred under the ▇▇▇▇ of Sale. In addition: (i) those Intellectual
Property Rights as to which the interests of ELXSI are recorded in the USPTO
(such as the ▇▇▇▇▇▇▇▇'▇ Registered Marks) shall also be transferred by the
execution and delivery by ELXSI of such assignments instruments, in the
USPTO-recordable form, as shall be reasonably acceptable to ELXSI (each, an
"INTELLECTUAL PROPERTY ASSIGNMENT"); and (ii) as to those Intellectual Property
Rights licensed by ELXSI, to the extent deemed necessary or desirable by ELXSI,
the Consent of the relevant licensor(s) shall be obtained and expressed or
memorialized in such agreement, instrument, certificate or other document as
shall be reasonably acceptable to ELXSI and the relevant licensor(s). In order
to avoid the cost and expense of effecting and recording two transfers with
respect to Intellectual Property Rights described in the foregoing clauses (i)
and (ii), and for administrative convenience, BickHoldCo may direct that any and
all Intellectual Property Assignments and Consent agreements, instruments,
certificates or other documents run directly from ELXSI to BickOpCo;
accordingly, any Intellectual Property Assignment and any Consent agreement,
instrument, certificate or other document referred to in this subsection (6) may
be executed and delivered by (in addition to ELXSI and any licensor) BickOpCo
13
and not BickHoldCo. For all purposes hereunder, any and all such
Direct-to-BickOpCo Transfers shall be deemed to be a part of the effectuation of
the Initial Contribution followed by the Second Contribution.
(7) PERMITS. Each Permit that is assignable or otherwise transferrable
(either because Governmental Approval is not required under applicable law or
such Governmental Approval shall have been obtained on or prior to the Closing
Date) shall be transferred under the ▇▇▇▇ of Sale. With respect any Permit that
is not assignable or otherwise transferrable, the Parties shall cooperate with
each other in order to obtain a new or replacement Permit as soon as practicable
after the Closing Date. The Parties shall use their reasonable best efforts to
obtain all required Governmental Approvals and new or replacement Permits as
soon as practicable. In the event that (x) any such Governmental Approval or new
or replacement Permit shall not be obtained prior to the Closing Date, and (y)
as a consequence thereof, the ownership of any Included Asset(s) and/or the
operation of any part of the Subject Business by BickOpCo would be (until such
Governmental Approval or new or replacement Permit is obtained) in violation of
applicable law, such Included Asset(s) and/or Subject Business portion (as the
case may be) and Permit shall be retained by ELXSI, which shall thereafter
(until such Governmental Approval or new or replacement Permit is obtained) hold
the same for the use and benefit, insofar as reasonably possible, of BickOpCo
(at the expense of the BickOpCo). In addition, ELXSI shall take such other and
further actions as may be reasonably requested by the Transferees in order to
place BickOpCo, insofar as reasonably possible, in the same position as if such
Included Asset(s) and/or Subject Business portion (as the case may be) and
Permit had been fully transferred as contemplated hereby and so that all the
benefits and burdens relating thereto (including possession, use, risk of loss,
potential for gain, and dominion, control and command over the same) shall inure
to BickOpCo from and after the Closing Date. The foregoing is intended to effect
a Direct-to-BickOpCo Transfer; for all purposes hereunder, such
Direct-to-BickOpCo Transfer shall be deemed to be a part of the effectuation of
the Initial Contribution followed by the Second Contribution. If and when after
the Closing Date any required Governmental Approval to the assignment or
transfer of any Permit shall have been obtained, the assignment and transfer of
such Permit, as well as of any related Included Asset(s) or Subject Business
portion retained by ELXSI as aforesaid, shall be effected in such manner (and/or
by the execution and delivery by the Parties of such agreements, instruments,
certificates and other documents) as shall be reasonably determined by ELXSI.
Similarly, if and when after the Closing Date any required new or replacement
Permit shall have been obtained, the assignment and transfer of any related
Included Asset(s) or Subject Business portion retained by ELXSI as aforesaid
shall be effected in such manner (and/or by the execution and delivery by the
Parties of such agreements, instruments, certificates and other documents) as
shall be reasonably determined by ELXSI. Nothing in this Section 2.5(7) shall in
any way limit the obligations of the ▇▇▇▇▇▇▇▇'▇ Parties to indemnify ELXSI (and
such Party's Indemnitees) for Liabilities resulting from, relating to, arising
out of or in connection with (or constituting) any Permit, or the ownership,
operation, use or occupancy of any Included Asset(s) or Subject Business portion
retained by ELXSI as aforesaid, before or after (and whether or not) any
required Governmental Approval or new or replacement Permit shall have been
obtained.
(8) INCLUDED LIABILITIES. All Included Liabilities shall be
transferred under the ▇▇▇▇ of Sale. In addition, to the extent deemed necessary
or desirable by ELXSI, the Consent of any third party obligee to whom any
Included Liabilities are owed to (x) the assumption of such Included Liabilities
by the Transferees and/or (y) except with respect to certain Leased Real
Property leases, the full release of ELXSI therefrom shall be obtained and
expressed or memorialized in such Consent and/or assumption agreement,
instrument, certificate or other document as shall be reasonably acceptable to
the ELXSI and the relevant third party obligee(s) (each, a "RELEASE"). In
furtherance of the foregoing, the Parties shall execute and deliver: (i) the
Contribution-Related BofA Facility Amendments, and take such other and further
actions as shall be agreed upon by ELXSI and BofA in connection with the
transactions contemplated hereby; and (ii) such agreements, instruments,
certificates or other documents, and the take such other and further actions, as
shall be agreed upon by ELXSI and the ▇▇▇▇▇▇▇▇'▇ Mortgage Lenders in order to
effect, on or as of the Closing Date, the ▇▇▇▇▇▇▇▇'▇ Mortgage
Assumptions/Releases ("▇▇▇▇▇▇▇▇'▇ MORTGAGE ASSUMPTION/RELEASE INSTRUMENTS"). In
order to avoid the cost and expense of effecting and recording two transfers
with respect to the ▇▇▇▇▇▇▇▇'▇ Mortgages and the Liens created thereunder and/or
pursuant thereto, and for administrative convenience, if and to the extent
14
approved by the respective ▇▇▇▇▇▇▇▇'▇ Mortgage Lenders BickHoldCo may direct
that the ▇▇▇▇▇▇▇▇'▇ Mortgage Assumptions/Releases be effected as
Direct-to-BickOpCo Transfers. For all purposes hereunder, any and all such
Direct-to-BickOpCo Transfers shall be deemed to be a part of the effectuation of
the Initial Contribution followed by the Second Contribution.
(9) FURTHER ACTIONS. In addition: (A) the Transferors shall, at any
time and from time to time after the date hereof, do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged or delivered, all such
further acts, deeds, assignments, transfers, conveyances, certificates of title,
powers of attorney and/or assurances as may be reasonably requested by either
Transferee in order to: (i) better evidence or effect the contributions,
transfers, grants, conveyances, assignments, settings over and deliveries of the
Included Assets hereunder, (ii) better or further vest in BickOpCo all of such
Parties' respective rights, title and interest in, to and under the Included
Assets, (iii) aid and assist in the collection of or reducing to possession by
BickOpCo of any of the Included Assets and Subject Business, and/or (iv)
otherwise enable BickOpCo to realize upon or otherwise use, enjoy and operate
the Included Assets and Subject Business; and (B) the Transferees shall, at any
time and from time to time after the date hereof, do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged or delivered, all such
further acts, deeds, assignments, transfers, assumptions and/or assurances as
may be reasonably requested by either Transferor in order to: (i) better
evidence or effect the assignments, delegations and assumptions of, and
agreements to pay, satisfy and discharge, and reimburse for, the Included
Liabilities hereunder, (ii) better or further vest in BickOpCo all of the
Transferors' respective Liabilities under (or constituting) the Included
Liabilities, (iii) aid and assist in the full release of the Transferors
therefrom, and/or (iv) otherwise hold the Transferors harmless from the Included
Liabilities.
ARTICLE III: CONSIDERATION
SECTION 3.1. CONSIDERATION FOR INITIAL CONTRIBUTION. (a) In consideration
of Initial Contribution (in addition to the assumption by BickHoldCo of the
Included Liabilities), on the Closing Date BickHoldCo shall pay or issue and
deliver to ELXSI a:
(1) $20,000,000 original principal amount Senior Subordinated Promissory
Note in form and substance as set forth in EXHIBIT B (a "SENIOR
SUBORDINATED NOTE") executed and delivered by BickHoldCo to ELXSI
and with the terms and provisions indicated therein as being
applicable to BickHoldCo (and not BickOpCo) included (the
"BICKHOLDCO SENIOR SUBORDINATED NOTE"); a
(2) $30,000,000 original principal amount 15% Subordinated Promissory Note
in form and substance as set forth in EXHIBIT C (a "SUBORDINATED
NOTE") executed and delivered by BickHoldCo to ELXSI and with the
terms and provisions indicated therein as being applicable to
BickHoldCo (and not BickOpCo) included (the "BICKHOLDCO
SUBORDINATED NOTE");
(3) 10,000 shares (the "BICKHOLDCO PREFERRED SHARES") of BickHoldCo
Preferred Stock; and
(4) 10,000 shares (the "BICKHOLDCO COMMON SHARES") of BickHoldCo Common
Stock.
(b) BICKHOLDCO EQUITY SECURITIES. The BickHoldCo Common Shares, being
shares of BickHoldCo Common Stock, shall have and carry such rights as are
provided for such shares under Delaware law and the certificate of incorporation
of BickHoldCo. The BickHoldCo Preferred Shares, being shares of BickHoldCo
Preferred Stock, shall have and carry such designations, preferences and
relative, participating, optional and other special rights, and qualifications,
limitations and restrictions thereof, as are provided for such shares under
Delaware law, the certificate of incorporation of BickHoldCo and the BickHoldCo
Certificate of Designations. Upon their issuance, the BickHoldCo Common Shares
and BickHoldCo Preferred Shares shall represent 100% of the issued and
outstanding shares of capital stock of BickHoldCo.
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SECTION 3.2. CONSIDERATION FOR SECOND CONTRIBUTION. (a) In consideration
of Second Contribution (in addition to the assumption by BickOpCo of the
Included Liabilities), on the Closing Date BickOpCo shall pay or issue and
deliver to BickHoldCo:
(1) The assumption by BickOpCo, by its execution and delivery to ELXSI
(against ELXSI's surrender for cancellation of the BickHoldCo
Senior Subordinated Note) of a Senior Subordinated Note with the
terms and provisions indicated in EXHIBIT B as being applicable
to BickOpCo (and not BickHoldCo) included (the "BICKOPCO SENIOR
SUBORDINATED NOTE");
(2) The assumption by BickOpCo, by its execution and delivery to ELXSI
(against ELXSI's surrender for cancellation of the BickHoldCo
Subordinated Note) of a Subordinated Note with the terms and
provisions indicated in EXHIBIT C as being applicable to BickOpCo
(and not BickHoldCo) included (the "BICKOPCO SUBORDINATED NOTE");
and
(3) 100 shares (the "BICKOPCO COMMON SHARES") of BickOpCo Common Stock.
(b) BICKOPCO COMMON SHARES. The BickOpCo Common Shares, being shares of
BickOpCo Common Stock, shall have and carry such rights as are provided for such
shares under Delaware law and the certificate of incorporation of BickOpCo. Upon
their issuance, the BickOpCo Common Shares shall represent 100% of the issued
and outstanding shares of capital stock of BickOpCo.
ARTICLE IV: CERTAIN INCOME TAX MATTERS
SECTION 4.1. CERTAIN INTENDED EFFECTS. The Parties acknowledge that the
Main Transactions are intended to qualify under ss.351 of the Code and,
accordingly: (i) ELXSI will recognize gain as a result of the Initial
Contribution in an amount equal to (x) the amount of the Included Liabilities
less ELXSI's historical basis in the Included Assets (as depreciated or
amortized prior to the Closing Date) plus (y) the value of the BickHoldCo
Preferred Shares and the Notes (the sum of (x) and (y), the "STEP-UP AMOUNT"),
(ii) BickHoldCo will not recognize any gain or loss as a result of the Second
Contribution; and (iii) BickOpCo's basis in the Included Assets will equal (x)
ELXSI's historical basis in the Included Assets (as depreciated or amortized
prior to the Closing Date) plus (y) the Step-Up Amount.
SECTION 4.2. TAX VALUES. In order, for federal and state income tax
purposes, to determine the Step-Up Amount and to allocate such Step-Up Amount
among the items (or categories of items) of Included Assets in accordance with
the Code, the Parties agree that: (i) all cash, cash equivalents, accounts
receivable and prepaid expenses, advances and deposits shall be valued at their
respective face amounts (net of any applicable reserves); (ii) all Included
Liabilities having an ascertainable face amount shall be valued at their
respective face amounts; and (iii) all other Included Assets, all other Included
Liabilities and the value of the BickHoldCo Preferred Shares and Subordinated
Note shall be valued in accordance with such appraisals or other valuation
methodologies as may be obtained or selected by ELXSI. The Parties shall prepare
their respective federal and state tax returns employing the foregoing
valuations and allocations and shall not take a position in any tax proceeding
or tax audit, or otherwise, inconsistent with such valuations and allocations;
provided, however, that nothing contained in this Section 4.2 shall require any
Party to seek redress through administrative remedies before any taxing
authority or agency, and no Party shall be required to litigate before any
court, including United States Tax Court, any proposed deficiency or adjustment
by any taxing authority or agency which challenges any such valuation and/or
allocation. Each Party shall give each other Party: (a) prompt notice of the
commencement of any tax audit or the assertion of any proposed deficiency or
adjustment by any taxing authority or agency which challenges any such valuation
and/or allocation, and (b) the opportunity to participate in any tax audit or
tax proceeding which challenges any such valuation and/or allocation.
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ARTICLE V: REPRESENTATIONS AND WARRANTIES
SECTION 5.1. ALL PARTIES. Each of the Parties (with respect to itself
only) hereby represents and warrants to the other Parties that, as of the
Closing Date:
(a) such Party has the full corporate power and authority to enter into
this Agreement and the other agreements, instruments, certificates or other
documents contemplated hereby to which it is or is to be a party and to carry
out its obligations hereunder and thereunder;
(b) the execution and delivery by such Party of this Agreement and the
other agreement(s) and instrument(s) contemplated hereby to which it is or is to
be a party and the consummation by such Party of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on its part; and
(c) this Agreement and the other agreement(s) and instrument(s)
contemplated hereby to which it is a party have been duly executed and delivered
by such Party and constitute the legal, valid and binding obligations of such
Party, enforceable against such Party in accordance with their respective terms.
SECTION 5.2. BICKHOLDCO. BickHoldCo hereby further represents and
warrants to ELXSI that:
(a) BickHoldCo was formed for the purpose of effecting the Main
Transactions and (as a consequence thereof) being the parent holding company of
BickOpCo, the intended owner and operator of the Subject Business. Except for
those arising under this Agreement, the Transfer Instruments and the other
agreement(s) and instrument(s) contemplated hereby to which it is or is to be a
party, BickHoldCo has virtually no assets or liabilities other than: (i)
expenses associated with its formation; (ii) immediately after the Initial
Contribution and prior to the Second Contribution, the Subject Business,
Included Assets and Included Liabilities (except as otherwise set forth in
Section 2.5) and (iii) immediately after the Second Contribution, the BickOpCo
Common Shares; and
(b) the authorized capital stock of BickHoldCo consists of: (i)
1,000,000 shares of BickHoldCo Common Stock, of which no shares are outstanding
prior to the Closing and only 10,000 shares (the BickHoldCo Common Shares) will
be outstanding immediately after the Closing; (ii) 20,000 shares of BickHoldCo
Preferred Stock, of which no shares will be outstanding prior to the Closing and
only 10,000 shares (the BickHoldCo Preferred Shares) will be outstanding
immediately after the Closing; and (iii) 980,000 shares of undesignated
preferred stock, par value $.001 per share, of which no shares are outstanding
prior to the Closing and no shares will be outstanding immediately after the
Closing. Upon the Closing, the BickHoldCo Common Shares and BickHoldCo Preferred
Shares will be duly authorized, validly issued, fully paid and nonassessable
shares of capital stock of BickHoldCo, and no personal liability will attach to
the ownership thereof. There are no issued or outstanding: (1) securities
convertible into or exchangeable for any shares of capital stock of BickHoldCo;
(2) options, warrants or other rights to purchase or subscribe for any shares of
capital stock of BickHoldCo or for securities convertible into or exchangeable
for any shares of capital stock of BickHoldCo; or (3) agreements or commitments
of any kind or description relating to the issuance or purchase of any shares of
capital stock of BickHoldCo, any such convertible or exchangeable securities or
any such options, warrants or other rights (including preemptive rights).
SECTION 5.3. BICKOPCO. BickOpCo hereby further represents and warrants to
the Transferors that:
(a) BickOpCo was formed for the purpose of effecting certain Main
Transactions and (as a consequence thereof) being the owner and operator of the
Subject Business. Except for those arising under this Agreement, the Transfer
Instruments and the other agreement(s) and instrument(s) contemplated hereby to
which it is or is to be a party, BickOpCo has virtually no assets or liabilities
other than: (i) expenses associated with its formation; and (ii) immediately
after the Second Contribution, the Subject Business, Included Assets and
Included Liabilities (except as otherwise set forth in Section 2.5); and
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(b) the authorized capital stock of BickOpCo consists of: (i) 1,000
shares of BickHoldCo Common Stock, of which no shares are outstanding prior to
the Closing and only 100 shares (the BickOpCo Common Shares) will be outstanding
immediately after the Closing; and (ii) 1,000 shares of undesignated preferred
stock, par value $.001 per share, of which no shares are outstanding prior to
the Closing and no shares will be outstanding immediately after the Closing.
Upon the Closing, the BickOpCo Common Shares will be duly authorized, validly
issued, fully paid and nonassessable shares of capital stock of BickOpCo, and no
personal liability will attach to the ownership thereof. There are no issued or
outstanding: (1) securities convertible into or exchangeable for any shares of
capital stock of BickOpCo; (2) options, warrants or other rights to purchase or
subscribe for any shares of capital stock of BickOpCo or for securities
convertible into or exchangeable for any shares of capital stock of BickOpCo; or
(3) agreements or commitments of any kind or description relating to the
issuance or purchase of any shares of capital stock of BickOpCo, any such
convertible or exchangeable securities or any such options, warrants or other
rights (including preemptive rights).
SECTION 5.4. NO REPRESENTATIONS OR WARRANTIES AS TO INCLUDED ASSETS;
DISCLAIMERS. Each Transferee hereby acknowledges and agrees that it is receiving
the Subject Business, Included Assets and Included Liabilities from their its
Transferor without representation or warranty and subject to such Liens as may
exist thereon, and such other facts and circumstances (including the presence or
absence of Consents and Governmental Approvals) as may be prevailing with
respect thereto, on the Closing Date. Accordingly, each Transferee hereby
acknowledges and agrees that, notwithstanding anything to the contrary set forth
herein or in any Transfer Instrument:
(1) THE SUBJECT BUSINESS, INCLUDED ASSETS AND INCLUDED LIABILITIES ARE BEING
CONTRIBUTED, TRANSFERRED, GRANTED, CONVEYED, DELIVERED, ASSIGNED, DELEGATED
TO, AND ASSUMED BY, SUCH PARTY ON AN "AS IS, WHERE IS" BASIS;
(2) NEITHER TRANSFEROR MAKES ANY GUARANTEES, REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT BUSINESS, INCLUDED ASSETS
OR INCLUDED LIABILITIES; AND
(3) EACH TRANSFEROR DISCLAIMS AND EXCLUDES (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) ALL OTHER WARRANTIES, OBLIGATIONS, LIABILITIES, RIGHTS AND
REMEDIES, EXPRESS, IMPLIED OR ARISING UNDER LAW, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND ANY WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING, OR USAGE OF TRADE.
ARTICLE VI: CLOSING
SECTION 6.1. CLOSING. (a) The Closing shall place take on such date, on
or prior to December 30, 2000, as shall be mutually agreed upon by the Parties,
at such location(s) as shall be mutually agreed upon by the Parties.
Notwithstanding the foregoing, the Parties shall not be obligated to consummate
the Main Transactions on any date on which there shall be: (i) any outstanding
order, injunction or decree issued by any Governmental Authority of competent
jurisdiction, or any other legal restraint or prohibition, preventing the
consummation of any of the Main Transactions or any of the other transactions
contemplated hereby, and/or (ii) any Legal Action pending or threatened by any
Governmental Authority or other Person seeking to restrain, enjoin or hinder, or
to seek damages from any Party or any affiliate thereof on account of the
consummation of, this Agreement, any of the Main Transactions or any matter in
relation thereto.
(b) The Parties shall use their reasonable best efforts to obtain all
Consents and Governmental Approvals referred to in Section 2.5 or which may
otherwise be necessary or desirable in order for the Parties, effective on or as
of the Closing Date: (i) to consummate the Main Transactions; (ii) to vest in
BickHoldCo and then BickOpCo title to the Subject Business and Included Assets
(subject to the Included Liabilities); and (iii) to continue in effect, and/or
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assure that BickOpCo shall be entitled to have and enjoy the benefits of, all
Included Contracts, Permits and all other Included Assets from and after the
Closing; and (iv) to fully release ELXSI from the Included Liabilities and
relieve ELXSI of all further responsibility therefor.
(c) The Parties acknowledge and agree that, for reasons beyond their
control, the Closing may be effected at a time when all Consents and
Governmental Approvals referred to in Section 2.5 or 6.1(b) shall not have been
obtained and all deliveries and other actions referred to in Section 6.2 below
shall not be capable of being completed (each, a "CLOSING SHORTFALL").
Notwithstanding any Closing Shortfall, the Main Transactions shall be
consummated on the Closing Date unless the Parties shall determine that doing so
will have a Material Adverse Effect. A Party's consummation of the Main
Transactions despite any Closing Shortfall(s) shall constitute a final, binding
and conclusive waiver by such Party of any and all: (i) rights it may have to
object to such Closing Shortfall(s), and (ii) claims, causes of action and
rights to assert Legal Actions as a result thereof or in connection therewith.
The Parties shall use their reasonable best efforts to cure any Closing
Shortfall(s) as soon as practicable after the Closing Date.
(d) The Parties further acknowledge and agree that: (i) certain Closing
Shortfalls may result in (x) the title to certain Included Assets (as against
non-Parties) and Included Liabilities not being fully or completely vested in
BickHoldCo and then BickOpCo and (y) all Liabilities under (or constituting)
certain Included Liabilities (as against non-Parties) not being fully
transferred to BickHoldCo and then BickOpCo, and ELXSI not being fully released
therefrom; (ii) the Closing may be effected nevertheless; and (iii) in such
event, notwithstanding any such lack of full vesting, transfer or release, as
among the Parties effective on and as of the Closing Date: (A) the Initial
Contribution shall fully: (x) transfer to, and vest in, BickHoldCo all of
ELXSI's rights, title and interest in, to and under the Subject Business and
Included Assets to the exclusion of ELXSI, and (y) transfer to, and effect the
assumption by, BickHoldCo of the Included Liabilities to the exclusion of ELXSI;
and (B) the Second Contribution shall fully: (x) transfer to, and vest in,
BickOpCo all of BickHoldCo's rights, title and interest in, to and under the
Subject Business and Included Assets to the exclusion of BickOpCo and ELXSI, and
(y) transfer to, and effect the assumption by, BickOpCo of the Included
Liabilities to the exclusion of BickHoldCo and ELXSI.
SECTION 6.2. CLOSING DELIVERIES AND ACTIONS. On or as of the Closing
Date, the Parties shall execute and deliver the following agreements,
instruments, certificates or other documents and take (or cause to be taken) the
following other actions:
(a) TRANSFER INSTRUMENTS. The Parties shall execute and deliver the
▇▇▇▇ of Sale. The appropriate Party(ies) shall execute and deliver the Deeds,
Assignments of Leases, Other Real Property Transfer Instruments, Motor Vehicle
Assignments, Intellectual Property Assignments, Contribution-Related BofA
Facility Amendments and ▇▇▇▇▇▇▇▇'▇ Mortgage Assumption/Release Instruments
referred to in Section 2.5 above. The appropriate Parties shall execute and
deliver the agreements, instruments, certificates or other documents required or
requested by third parties (including Governmental Authorities) in order to
evidence or effect the Governmental Approvals, Consents and Releases referred to
in Section 2.5 above. To the extent necessary or desirable, the Parties shall
take (or cause to be taken) such other and further actions as are required in
order to effect the recordation of the Deeds, Assignments of Leases (if the
relevant underlying lease(s) shall have been recorded), Other Real Property
Interest Transfer Instruments, Motor Vehicle Assignments and Intellectual
Property Assignments as described in Section 2.5. Any of the foregoing Transfer
Instruments not available, and any of the foregoing actions not taken, on the
Closing Date for reasons beyond the control of the Parties (such as lack of any
necessary Governmental Approval or Consent) shall constitute a Closing Shortfall
subject to Sections 6.1(c) and (d) hereof.
(b) CERTIFICATES FOR SHARES; NOTES. BickHoldCo shall issue and deliver
to ELXSI an executed and sealed stock certificate representing the BickHoldCo
Common Shares registered in the name of ELXSI and an executed and sealed stock
certificate representing the BickHoldCo Preferred Shares registered in the name
of ELXSI. BickHoldCo shall issue, execute and deliver to ELXSI the BickHoldCo
Senior Subordinated Note and the BickHoldCo Subordinated Note. BickOpCo shall
issue and deliver to BickHoldCo an executed and sealed stock certificate
19
representing the BickOpCo Common Shares registered in the name of BickHoldCo.
After its receipt of the BickHoldCo Senior Subordinated Note and BickHoldCo
Subordinated Note, in order to evidence and effect the assumption contemplated
by Section 3.2(a)(2): (i) ELXSI shall surrender the same to BickHoldCo for
cancellation, and (ii) BickOpCo shall issue, execute and deliver to ELXSI the
BickOpCo Senior Subordinated Note and the BickOpCo Subordinated Note.
(c) REAL PROPERTY TITLE INSURANCE. With respect to the Owned Real
Property, Leased Real Property as to which the relevant underlying leases shall
have been recorded and insurable Other Real Property Interests (collectively
"INSURABLE REAL Property"), the Parties shall procure for: (i) BickOpCo owner's
title insurance policies (or assurances from the insurer that any existing
polices remain in force notwithstanding the Initial Contribution and Second
Contribution), and (ii) BofA (with respect to any Insurable Real Property as to
which it shall be or become mortgagee) and any ▇▇▇▇▇▇▇▇'▇ Mortgage Lender (for
whom an existing mortgage insurance title policy shall be in force and may be
voided or otherwise adversely affected by the conveyance of the relevant
Insurable Real Property to BickOpCo), at such time or times as they shall
require, mortgagee's title insurance policy, in such respective amounts as ELXSI
and BofA (as such mortgagee) or any such ▇▇▇▇▇▇▇▇'▇ Mortgage Lender shall
reasonably determine, issued by a title insurance company reasonably acceptable
to such Persons, containing (i) exceptions for only Liens (excluding the Liens
of BofA and the ▇▇▇▇▇▇▇▇'▇ Mortgage Lenders, as appropriate) that do not
materially interfere with the use, occupancy or possession of such Insurable
Real Property or detract from the value thereof, and (ii) such endorsements or
affirmative insurance as shall be reasonably requested by such Persons. The
Parties shall execute and deliver such owner's affidavits and other agreements,
instruments, certificates and other documents as shall be reasonably necessary
in order to induce the issuer(s) of such policies to issue extended coverage and
"gap" insurance.
(d) ▇▇▇▇▇▇▇▇'▇ INSURANCE POLICIES. The Parties shall take or cause to
be taken such actions as are necessary or desirable in order to transfer the
ownership of, or otherwise ensure that ▇▇▇▇▇▇▇▇'▇ (and/or its employees,
officers and directors) have the benefit of, all ▇▇▇▇▇▇▇▇'▇ Insurance Policies.
(h) EMPLOYEE BENEFITS. The Parties shall take or cause to be taken such
actions as are necessary or desirable in order to transfer to BickOpCo: (i) the
payroll obligations, mechanisms and procedures with respect to the Subject
Business employees, and (ii) the "employer" rights and obligations with respect
to all other compensation and benefits payable or provided to such employees
(including the ▇▇▇▇▇▇▇▇'▇ Division 401(k) plan).
(h) BANK ACCOUNTS. The Parties shall take or cause to be taken such
actions as are necessary or desirable in order to transfer the ownership of the
Subject Business and/or Restaurants bank and other depository accounts to
BickOpCo, and/or to open substitute accounts therefor.
(e) CHARTER, BYLAWS, ETC. Each Party shall cause to be executed and
delivered to each other Party a certificate signed by two or of more its
officers certifying to: (i) a true, correct and complete copy of such Party's
certificate or articles of incorporation; (ii) a true, correct and complete copy
of such Party's bylaws; (iii) a true, correct and complete copy of all
resolutions of the Board of Directors of such Party adopted in connection with
this Agreement and/or the Main Transactions; (iv) in the case of ELXSI and
BickHoldCo, inasmuch as the Initial Contribution and Second Contribution may
constitute a transfer of all or substantially all of their respective properties
and assets (respectively), all resolutions of the sole shareholder of such Party
(Parent and ELXSI, respectively) in connection with this Agreement and/or the
Main Transactions; and (v) the identity and signature of its officer or officers
who shall have executed this Agreement or any Transfer Instrument in the name or
on behalf of such Party on or before the Closing Date.
(f) FIRPTA CERTIFICATES. The Transferor's shall execute and deliver to
their respective Transferees a Certification of Nonforeign Status (commonly
referred to as a FIRPTA Certificate) in accordance with Sections 897 and 1445 of
the Code.
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(g) OTHER MATTERS. Each Party shall furnish or cause to be furnished
such other agreements, instruments, certificates and other documents as any
other Party (or counsel) may reasonably request in connection with the
transactions contemplated by this Agreement.
ARTICLE VII: MISCELLANEOUS
SECTION 7.1. OPERATION OF THE SUBJECT BUSINESS. From the date hereof to
the Closing Date, ELXSI and the ▇▇▇▇▇▇▇▇'▇ Division shall operate the Subject
Business for the sole benefit of ELXSI. During such period the ▇▇▇▇▇▇▇▇'▇
Division may open new Restaurants as opportunities arise, close Restaurants as
exigencies present themselves and take (or omit to take) the other actions
described in the following sentence. Nothing herein shall be deemed to prohibit
or restrict ELXSI or the ▇▇▇▇▇▇▇▇'▇ Division from taking (or omitting to take)
any of the following actions, or permitting any the following circumstances to
prevail, in their discretion, with respect to the Subject Business, Included
Assets and Included Liabilities, it being acknowledged and agreed that such
actions (or inactions) and circumstances may have the effect of (without
limitation) decreasing the Included Assets (or the value thereof) or increasing
the Included Liabilities (or the burdens thereof) as of the Closing Date: (i)
selling, assigning, transferring, delivering or otherwise disposing of, or
purchasing or otherwise acquiring, any properties or assets that which if held
on the Closing Date would constitute Included Assets; (ii) making or agreeing to
make any capital expenditure or commitment for additions to property, plant or
equipment; (iii) incurring, assuming or otherwise becoming obligated with
respect to any Liabilities that, if outstanding on the Closing Date, would
constitute Included Liabilities; (iv) delaying the payment of expenses,
commitments and other Included Liabilities beyond the Closing Date; (v) entering
or terminating any contract, agreement, instrument or commitment that, if
outstanding on the Closing Date, would constitute an Included Contract, or
amending any Included Contract; (vi) suffering or experiencing any damage,
destruction or loss to or of any of its properties or assets, whether or not
covered by insurance; (vii) making or agreeing to make any increase in the
compensation payable to any employee or executive; (viii) cancelling or waiving
any claim or right of substantial value; (ix) writing off as uncollectible any
trade or other account receivable or any note receivable of the Subject
Business; or (x) agreeing or committing to do any of the foregoing. In addition,
nothing set forth herein shall be deemed to prohibit or restrict ELXSI or the
▇▇▇▇▇▇▇▇'▇ Division from taking any action necessary, desirable, convenient or
proper in order to consummate the Main Transactions or any of the actions
transactions contemplated by this Agreement, or from taking any other actions in
furtherance thereof.
SECTION 7.2. INDEMNIFICATION. (a) From and after the Closing Date, each
Party shall fully and effectively indemnify and defend the other Parties and
their respective officers, directors, employees and agents (as to each Party,
"SUCH PARTY'S Indemnitees") against, and hold such Party's Indemnitees harmless
from, any and all Liabilities and all Legal Actions, of whatever nature,
suffered or incurred by such Party's Indemnitees resulting from, relating to,
arising out of or in connection with the breach by such Party of any
representation, warranty, covenant or agreement made by it in this Agreement or
(subject to Section 5.4 hereof) any Transfer Instrument or any other agreement,
instrument, certificate or other document contemplated hereby to which it is or
is to be a party. In the case of each Transferee, the foregoing indemnification
shall include the obligation to indemnify and defend such Party's Indemnitees
against, and to hold such Party's Indemnitees harmless from, any and all
Liabilities suffered or incurred by such Party's Indemnitees resulting from,
relating to, arising out of or in connection with (or constituting) the Included
Liabilities from and after the Closing Date.
(b) With respect to any matter as to which any Person (the "INDEMNIFIED
PERSON") is entitled to indemnification from any other Person (the "INDEMNIFYING
PERSON") under this Section 7.2, the Indemnified Person shall have the right,
but not the obligation, to contest, defend or litigate, and to retain counsel of
its choice in connection with, any claim, demand, action, suit or proceeding by
any third party alleged or asserted against the Indemnified Person in respect
of, resulting from, relating to, arising out of or in connection with such
matter, and the costs and expenses thereof shall be subject to the
indemnification obligations of the Indemnifying Person hereunder; provided,
however, that if the Indemnifying Person acknowledges in writing its obligation
to indemnify the Indemnified Person in respect of such matter to the fullest
21
extent provided by this Section 7.2, the Indemnifying Person shall be entitled,
at its option, to assume and control the defense of such claim, action, suit or
proceeding at its expense through counsel of its choice if it gives prompt
notice of its intention to do so to the Indemnified Person. Neither an
Indemnified Person nor an Indemnifying Person shall be entitled to settle or
compromise any such claim, action, suit or proceeding without the prior written
consent of the other Parties hereto, which consent shall not be unreasonably
withheld, delayed or conditioned.
(c) Notwithstanding anything to the contrary set forth in this
Agreement, any Transfer Instrument or any other agreement, instrument,
certificate or other document contemplated hereby, no Party shall have any
liability to any other Party hereto or such Party's Indemnitees for any
punitive, exemplary, consequential, incidental or special damages by virtue of
any breach of any representation, warranty, covenant or agreement in or pursuant
to this Agreement, any Transfer Instrument or any such other agreement(s) or
instrument(s), or in connection with the Main Transactions or the Closing;
provided that the foregoing shall not be deemed to limit the obligation of any
Party to indemnify for Liabilities constituting punitive, exemplary,
consequential, incidental or special damages awarded to any third-party
claimant.
(d) Any amounts owing by any Party under this Section 7.2, any other
provision of this Agreement, any Transfer Instrument or any other agreement,
instrument, certificate or other document contemplated hereby may be satisfied
by such Party (but no Party shall be obligated to seek such satisfaction) by
setting-off such amounts against amounts owing by another Party (the "OTHER
PARTY") under this Section 7.2, any other provision of this Agreement, any
Transfer Instrument or any other agreement(s) or instrument(s) contemplated
hereby, as (and in such order of maturity) as the Other Party may elect (and
notwithstanding any terms thereof to the contrary).
SECTION 7.3. FURTHER ACTIONS. From time to time after the Closing Date,
the Parties shall execute and deliver (or cause to be executed and delivered)
such other and further agreements, instruments, certificates or other documents
and shall take (or cause to be taken) such other and further actions, as any
other Party hereto may reasonably request in order to further effect and/or
evidence the Main Transactions or to otherwise consummate and give effect to the
covenants and agreements borrow funds under the Fleet Loan Agreement to the
fullest extent permitted thereby and to grant the Corporation Security; and set
forth herein.
SECTION 7.4. BULK SALES. The Transferee hereby waive compliance with all
applicable bulk sales laws (if any) in connection with the Initial Contribution
and Second Contribution.
SECTION 7.5. TRANSACTION EXPENSES. All: legal fees and expenses;
accountants' fees and expenses; banking, investment banking and syndication fees
and expenses; title charges; recording fees; title insurance premiums; survey
fees; appraisal and valuation fees; and the other third-Person, fees, costs and
expenses with respect to the negotiation, execution and delivery of (x) this
Agreement, the Transfer Instruments and the consummation of the Main
Transactions, and/or (y) the Contribution-Related BofA Facility Amendments and
the consummation of the transactions contemplated thereby (collectively,
"TRANSACTION EXPENSES") shall be borne by ELXSI.
SECTION 7.6. ENTIRE AGREEMENT. This Agreement, the Transfer Instruments
and the other agreements, instruments, certificates or other documents referred
to herein contain the entire agreement among the Parties with respect to the
subject matter hereof and thereof, and supersede all prior agreements,
arrangements and understandings with respect thereto.
SECTION 7.7. DESCRIPTIVE HEADINGS; REFERENCES. The descriptive headings
of this Agreement and the ▇▇▇▇ of Sale are for convenience of reference only and
shall not control or affect the meaning or construction of any provision hereof
or thereof. Article, Section and Exhibit references in this Agreement are to the
referenced Articles and Sections of, and Exhibits to, this Agreement, unless the
context otherwise requires.
22
SECTION 7.8. NOTICES. Any notice or other communication which is required
or permitted hereunder shall be in writing and shall be deemed to have been
delivered and received (x) on the day of (or, if not a business day, the first
business day after) its having been personally delivered or telecopied to the
following address or telecopy number, (y) on the first business day after its
having been sent by overnight delivery service to the following address, or (z)
if sent by regular, registered or certified mail, when actually received at the
following address:
23
If to ELXSI: c/o ELXSI Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: President
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
If to either ▇▇▇▇▇▇▇▇'▇ Party: [c/o] ▇▇▇▇▇▇▇▇'▇ Holdings Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: President
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may by notice change the address or telecopier number to which notices
or other communications to it are to be delivered, telecopied or sent.
SECTION 7.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7.10. ASSIGNMENT. This Agreement, and the respective rights and
obligations of the Parties hereunder, may not be assigned or delegated otherwise
than by operation of law by any Party without the prior written consent of the
other Parties; provided, however, that any or all rights of any Party to receive
the performance of the obligations of the other Parties hereunder (but not any
obligations of the parties hereunder) and rights to assert claims against the
other Parties hereto in respect of breaches of representations, warranties or
covenants hereunder may be assigned by any Party to any Person(s) extending
credit to such Party, or any affiliate of such Person(s), but any such assignee
of such rights shall take such rights subject to any defenses, counterclaims and
rights of set-off to which the other parties might be entitled under this
Agreement. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
SECTION 7.11. WAIVERS AND AMENDMENTS. Any waiver of any term or condition
of this Agreement or any Transfer Instrument, and any modification, amendment or
supplementation of this Agreement or any Transfer Instrument, shall be effective
only if expressed in a writing executed by each of the parties hereto or
thereto. A waiver of any breach or failure to enforce any of the terms or
conditions of this Agreement or any Transfer Instrument shall not in any way
affect, limit or waive a Party's rights hereunder or thereunder at any time to
enforce strict compliance thereafter with every term or condition of this
Agreement or any Transfer Instrument. No failure or delay by any Party in
exercising any right, power or privilege under this Agreement or any Transfer
Instrument shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
SECTION 7.12. THIRD PARTY RIGHTS. Except for the indemnification rights
under this Agreement of any Indemnified Person as such, this Agreement and the
Transfer Instruments: (i) are solely for the benefit of the parties hereto or
thereto, (ii) shall not confer or create any rights, remedies or benefits upon
or in favor of any Person not a party hereto or thereto, and (iii) shall be
effective only as between the parties hereto or thereto, their successors and
permitted assigns.
SECTION 7.13. SEVERABILITY. If any provision of this Agreement or any
Transfer Instrument or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof or thereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby or thereby, as the case may be, is not affected in any
24
manner adverse to any Party. Upon such determination, the Parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the Parties.
SECTION 7.14. INTERPRETATION. Words of gender or neuter may be read as
masculine, feminine or neuter, as required or permitted by the context. Singular
and plural forms of defined and other terms herein may be read as singular or
plural, as required or permitted by the context. The word "including" and words
of similar import when used in this Agreement (or the ▇▇▇▇ of Sale) shall mean
"including, without limitation," unless the context otherwise requires or unless
otherwise specified. The word "or" shall not be exclusive.
[The remainder of this page is intentionally blank]
25
SECTION 7.15. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement. This Agreement shall become effective when each Party hereto shall
have received counterparts hereof signed by all of the other Parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective authorized officers as of the
day and year first above written.
ELXSI: BICKHOLDCO:
ELXSI ▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
BICKOPCO:
▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.
By:
------------------------------
Name:
Title:
EXHIBIT A-PAGE 1
(to Contribution Agreement)
FORM OF ▇▇▇▇ OF SALE, ASSIGNMENT AND ASSUMPTION
THIS ▇▇▇▇ OF SALE, ASSIGNMENT AND ASSUMPTION, dated as of December 30, 2000
(this "▇▇▇▇ OF SALE"), is by and among: (1) ELXSI, a California Corporation
("ELXSI"), (2) ▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC., a Delaware corporation
("BICKHOLDCO"), and (3) ▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC., a Delaware
corporation ("BICKOPCO"). ELXSI, BickHoldCo and BickOpCo are hereinafter
sometimes collectively referred to as the "PARTIES" and individually as a
"PARTY".
BACKGROUND
A. ELXSI, a wholly-owned subsidiary of ELXSI Corporation, a Delaware
corporation ("PARENT"), is (prior to the effectiveness of the transactions
effected or evidenced hereby) engaged in two separate lines of business, owned
and operated as divisions thereof, one of which is its ▇▇▇▇▇▇▇▇'▇ Family
Restaurant Division (the "▇▇▇▇▇▇▇▇'▇ DIVISION" or "SUBJECT BUSINESS"),
headquartered in Boston, Massachusetts and including, at the date hereof,
sixty-seven (67) ▇▇▇▇▇▇▇▇'▇ Family Fare restaurants located in New England and
operated under the owned ▇▇▇▇▇▇▇▇'▇ and/or ▇▇▇▇▇▇▇▇'▇ Family Fare name,
trademark(s) and concept (the "RESTAURANTS"). ELXSI's other line of business is
its Cues Division (the "CUES DIVISION"), which is headquartered in Orlando,
Florida and manufactures and services video inspection and repair equipment for
wastewater and drainage systems, primarily for governmental municipalities,
service contractors and industrial users.
B. The Parties are party to that certain Contribution Agreement, dated as
of December 29, 2000 (the "CONTRIBUTION Agreement"), pursuant to which (among
other things): (i) ELXSI agreed to contribute and transfer to BickHoldCo the
Included Assets subject to the Included Liabilities, and BickHoldCo agreed to
receive the Included Assets and assume the Included Liabilities (defined therein
as the "INITIAL CONTRIBUTION"), in each case to be effective on the date hereof,
and (ii) BickHoldCo agreed to contribute and transfer to BickOpCo the Included
Assets subject to the Included Liabilities, and BickOpCo agreed to receive the
Included Assets and assume the Included Liabilities (defined therein as the
"SECOND CONTRIBUTION"), in each case be effective on the date hereof immediately
after the effectiveness of the Initial Contribution.
C. The purpose of this ▇▇▇▇ of Sale is to effect and evidence the Initial
Contribution and Second Contribution (insofar as they may be effected and
evidenced by an instrument of this kind) and to provide for certain related
matters. All capitalized terms used and not defined herein shall have the
respective meanings ascribed to such terms in the Contribution Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the Parties:
1. INITIAL CONTRIBUTION. (a) INCLUDED ASSETS. Effective 11:59 PM, Boston
time, on December 30, 2000, ELXSI DOES HEREBY CONTRIBUTE, TRANSFER, GRANT,
CONVEY, ASSIGN, SET OVER AND DELIVER to BickHoldCo, and its successors and
assigns forever, and BickHoldCo DOES HEREBY RECEIVE AND ACCEPT from ELXSI, all
of ELXSI's rights, title and interest in, to and under the ▇▇▇▇▇▇▇▇'▇ Division
and all of the businesses, operations, franchises, rights, claims, privileges,
properties and assets owned, used or held for use by ELXSI with respect to or in
connection with, in whole or in part, the ▇▇▇▇▇▇▇▇'▇ Division, of every nature
and description; real, personal or mixed; tangible, intangible or contingent;
wherever located (including in the possession of vendors or other third parties,
or elsewhere); and whether or not recorded, carried or reflected on the books
and records or financial statements of ELXSI or required to be so recorded,
carried or reflected (the "INCLUDED ASSETS"), including the following:
EXHIBIT A-PAGE 2
(to Contribution Agreement)
(1) OWNED REAL PROPERTY. All fee and other ownership interests in real
property (land, buildings and improvements) comprising or relating to any
Restaurant site or the ▇▇▇▇▇▇▇▇'▇ Head Office ("OWNED REAL PROPERTY");
(2) LEASED REAL PROPERTY. All leasehold interests in real property
(land, buildings and improvements) comprising or relating to any Restaurant site
leased from third parties ("LEASED REAL PROPERTY");
(3) OTHER REAL PROPERTY INTERESTS. All such interests in real
property, not described in the foregoing clauses (1) or (2), as shall run with
the ownership, leasing, use or occupancy of, or shall otherwise be held by or
inure to the benefit of, any of the Restaurant or the ▇▇▇▇▇▇▇▇'▇ Head Office
sites, and/or the owner or operator thereof ("OTHER REAL PROPERTY INTERESTS");
(4) FURNITURE, FIXTURES AND EQUIPMENT. All furniture, fixtures
(including trade fixtures), equipment and like property located at: (i) any of
the Restaurants (including booths; tables; chairs; counters; ice cream chests;
counters; cash registers; salad bars; ovens; refrigerators; freezers, grills,
broilers, microwave ovens, convection ovens, heating and warming equipment,
mixers, ice machines, dishwashers and other appliances; sinks; pots, pans and
kitchen utensils; special and general tools; testing devices; storage shelves
and bins; telephones and telephone systems; computers, computer equipment and
other data storage apparatus; and office materials and supplies); or (ii) the
▇▇▇▇▇▇▇▇'▇ Head Office (including: desks; tables; chairs; counters; computers,
computer equipment and other data storage apparatus; telephones and telephone
systems; office materials and supplies); and all motor vehicles and other
transportation or loading equipment located or used at any of the Restaurants or
the ▇▇▇▇▇▇▇▇'▇ Head Office;
(5) INVENTORY. All inventory of any type whatsoever located at or in,
or in transit to or from, any of the Restaurants or the ▇▇▇▇▇▇▇▇'▇ Head Office,
including food and beverages, retail goods generally sold at cashier stands,
utensils, chinaware, glasses, cups, uniforms, cleaning and maintenance supplies,
and paper goods;
(6) CONTRACTS. All contracts, agreements, instruments, commitments,
undertakings, bids and purchase and supply orders (including for food and
beverages), written or oral, to which ELXSI (for the benefit of the ▇▇▇▇▇▇▇▇'▇
Division) and/or the ▇▇▇▇▇▇▇▇'▇ Division is a party, and/or which relate to the
Subject Business, any Included Asset and/or any Included Liability ("INCLUDED
CONTRACTS"), including equipment and other personal property leases and the
▇▇▇▇▇▇▇▇'▇ Division 401(k) Plan but excluding the ▇▇▇▇▇▇▇▇'▇ PSOR Plan;
(7) PREPAID EXPENSES. All prepaid expenses, advances and deposits to
the extent relating to any of the Restaurants or the ▇▇▇▇▇▇▇▇'▇ Head Office, or
otherwise made by or for the benefit of the Subject Business;
(8) INFORMATION, BOOKS AND RECORDS. All Information, files, books and
records (including Restaurant and ▇▇▇▇▇▇▇▇'▇ Head Office real estate records and
files, surveys and environmental reports; historical and other accounting books,
records, files and work papers; market studies; competition analyses; sales,
cost and pricing information and models; product testing data; product files;
bills of materials, customer and vendor lists and records; employee and
employment records; plans; prints; specifications; architectural drawings;
forms; and operation and employee manuals) used or held for use by the
▇▇▇▇▇▇▇▇'▇ Division;
(9) MENUS, FORMS, ETC. All: menus; employee training and operating
manuals; contract, purchase, work and supply order form copies and counterparts;
labels; shipping materials; catalogs; brochures; art work; photographs and
advertising and promotional copy; materials and literature; in each case in
whatever form (including: paper; computer tape, disc or diskette; or magnetic
tape), used or held for use by the ▇▇▇▇▇▇▇▇'▇ Division; used or held for use by
the ▇▇▇▇▇▇▇▇'▇ Division; and all ▇▇▇▇▇▇▇▇'▇ stationery, in whatever form;
EXHIBIT A-PAGE 3
(to Contribution Agreement)
(10) INTELLECTUAL PROPERTY RIGHTS. All: patents; patent applications;
registered and unregistered trademarks (including the "▇▇▇▇▇▇▇▇'▇ Country" and
▇▇▇▇▇▇▇▇'▇" trademarks registered in the USPTO (the "▇▇▇▇▇▇▇▇'▇ REGISTERED
MARKS")); trademark applications; service marks; trade names; corporate and
fictitious names; trade dress rights; copyrights; copyright applications;
inventions; technical information; administrative systems; recipes, formulations
and specifications; trade secrets; computer applications, programs and other
software, and licenses therefor; telephone and telecopier numbers; logos;
slogans; proprietary processes and formulae; and all other confidential,
proprietary and other information, know-how and intellectual property rights; in
each case whether patentable or unpatentable, registered or unregistered, owned,
licensed or used or held for use by the ▇▇▇▇▇▇▇▇'▇ Division and/or any Included
Assets ("INTELLECTUAL PROPERTY RIGHTS");
(11) PERMITS. All Governmental Authority licenses, permits, rights,
privileges, registrations, reports, franchises, authorizations and other
Consents (including liquor licenses, and food and beverage service licenses)
which are required under any applicable law in connection with the ownership
and/or operation of the Subject Business, any of Restaurants and/or any of the
other Included Assets ("PERMITS") to the extent assignable or otherwise
transferrable;
(12) ▇▇▇▇▇▇▇▇'▇-VERMONT. All the outstanding shares of capital stock
and other equity interests in ▇▇▇▇▇▇▇▇'▇-Vermont;
(13) GOODWILL AND OTHER INTANGIBLES. All goodwill of the ▇▇▇▇▇▇▇▇'▇
Division and Subject Business; and all rights to use and exploit the Included
Assets, including the Subject Business's customer base, supplier base and
workforce in place, and the business and commercial relationships appertaining
to the Subject Division and/or Included Assets;
(14) OTHER RIGHTS AND CLAIMS. All rights (including to bring or assert
Legal Actions), claims (including counterclaims) and causes of action against
third parties relating to the Subject Business, any of the Included Assets
(including warranties, service contracts and insurance recoveries or rights)
and/or any of the Included Liabilities; and
(15) OTHER MISCELLANEOUS. All such other businesses, operations,
franchises, rights, claims, privileges, properties and assets in the possession
or control of ELXSI to the extent that they pertain to the Subject Business
and/or any other Included Assets.
(b) EXCLUDED ASSETS. Notwithstanding the foregoing, the "Included Assets"
do not include, and ELXSI is retaining and shall retain all of its rights, title
and interest in, to and under the following (collectively, the "EXCLUDED
ASSETS"):
(1) ORLANDO PROPERTIES. All interests in the Orlando Properties;
(2) ACCOUNTS RECEIVABLE AND CASH. All trade and other accounts and
notes receivable of the ▇▇▇▇▇▇▇▇'▇ Division and/or Subject Division, if any, and
all cash on hand, cash equivalents and other proceeds thereof;
(3) CUES ASSETS. The Cues Division and all of the businesses,
operations, franchises, rights, claims, privileges, properties and assets owned,
used or held for use by ELXSI and/or the Cues Division with respect to or in
connection with, in whole or in part, the Cues Division, of every nature and
description; real, personal or mixed; tangible, intangible or contingent;
wherever located (including in the possession of vendors or other third parties,
or elsewhere); and whether or not recorded, carried or reflected on the books
and records or financial statements of ELXSI or required to be so recorded,
carried or reflected (the "CUES ASSETS"), including all: (i) equipment,
EXHIBIT A-PAGE 4
(to Contribution Agreement)
machinery, general or special tools, testing devices, furniture, fixtures
(including trade fixtures) and like property located at any of the Orlando
Properties; (ii) inventory, raw materials, work-in-process, spare parts and
finished goods, of any type whatsoever; (iii) contracts, agreements,
instruments, undertakings, bids, and purchase and supply orders, written or
oral, to which ELXSI (for the benefit of the Cues Division) and/or the Cues
Division is a party, and/or which relate to the business of the Cues Division;
(v) trade and other accounts and notes receivable of the Cues Division, any
intercompany receivable owed to the Cues Division, and all cash on hand, cash
equivalents and other proceeds of any of the foregoing; (vi) prepaid expenses,
advances and deposits made by or for the benefit of the Cues Division, any Cues
Assets and/or the Orlando Properties; (vii) Information, files, books and
records (including: historical and other accounting books, records, files and
work papers; research and development materials; market studies; competition
analyses; sales, costs and pricing information and models; product testing data;
product engineering files; bills of materials; customer and vendor lists and
records; employee and employment records; plans; prints; specifications;
engineering drawings; product data sheets; forms; and operation and maintenance
manuals) used or held for use by the Cues Division; (viii) contract, purchase,
work and supply order form copies and counterparts; labels; shipping materials;
catalogs; brochures; art work; photographs; and advertising and promotional
copy, materials and literature; in each case in whatever form, used or held for
use by the Cues Division, and all Cues stationery, in whatever form; (ix)
patents; patent applications; registered and unregistered trademarks; trademark
applications; service marks; trade names; corporate and fictitious names; trade
dress rights; copyrights; copyright applications; inventions; technical
information; administrative systems; trade secrets; computer applications,
programs and other software, and licenses therefor; telephone and telecopier
numbers; logos; slogans; proprietary processes and formulae; and all other
confidential, proprietary and other information, know-how and intellectual
property rights; in each case whether patentable or unpatentable, registered or
unregistered, owned, licensed or used or held for use by the Cues Division
and/or any Cues Assets; (x) Governmental Authority licenses, permits, rights,
privileges, registrations, reports, franchises, authorizations and other
Consents which are required under any applicable law in connection with the
ownership or operation of the Cues Division and/or any Cues Assets; (xi)
goodwill of the Cues Division; and all rights to use and exploit the Cues
Assets, including the Cues Division's customer base, supplier base and workforce
in place, and the business and commercial relationships appertaining to the Cues
Division and/or Cues Assets; (xi) rights (including to bring or assert Legal
Actions), claims (including counterclaims) and causes of action against third
parties relating to the Cues Division and/or any Cues Assets (including
warranties, service contracts and insurance recoveries or rights) or any of the
Excluded Liabilities (as defined in Section 2(b));
(4) ELXSI CORPORATE ASSETS. All of the franchises, rights, claims,
privileges, properties and assets owned, used or held for use by ELXSI with
respect to or in connection with, in whole or in part, the so-called
"head-office" or "corporate" activities of ELXSI as the parent entity and owner
of the ▇▇▇▇▇▇▇▇'▇ Division and Cues Division and/or as the subsidiary of Parent
("CORPORATE ACTIVITIES"), of every nature and description; real, personal or
mixed; tangible, intangible or contingent; wherever located (including in the
possession of vendors or other third parties, or elsewhere); and whether or not
recorded, carried or reflected on the books and records or financial statements
of ELXSI or required to be so recorded, carried or reflected (the "CORPORATE
ASSETS"), including all: (i) ELXSI corporate seals, minute books, certificate or
articles of incorporation and by-law documents, stock record books and other
books and records that pertain to the organization of ELXSI; (ii) income and
franchise tax returns and records; (iii) equipment (including office equipment),
furniture, fixtures (including trade fixtures) and like property located at any
of the Orlando Properties; (iv) contracts, agreements, instruments, commitments,
undertakings, bids, and purchase and supply orders, written or oral, to which
ELXSI is a party and which relate to Corporate Activities; (v) accounts and
notes receivable relating to Corporate Activities, and all intercompany
receivables owed by Parent, any subsidiary of ELXSI or the Cues Division; (vi)
all of ELXSI's cash on hand, cash equivalents, and bank, brokerage and other
deposit accounts; (vii) prepaid expenses, advances and deposits made by or for
the benefit of any Corporate Activities, any Corporate Assets or the Orlando
Properties; (viii) Information, files, books and records, used or held for use
by the ELXSI in connection with its Corporate Activities, including historical
and other accounting books, records, files and work papers; (ix) contract,
purchase, work and supply order form copies and counterparts; labels; shipping
materials; and art work; in each case in whatever form (including: paper;
EXHIBIT A-PAGE 5
(to Contribution Agreement)
computer tape, disc or diskette; or magnetic tape); and all ELXSI stationery, in
whatever form; (x) trade names; corporate and fictitious names; copyrights;
technical information; administrative systems; trade secrets; computer
applications, programs and other software, and licenses therefor; telephone and
telecopier numbers; logos; slogans; proprietary processes and formulae; and all
other confidential, proprietary and other information, know-how and intellectual
property rights; in each case whether patentable or unpatentable, registered or
unregistered, owned, licensed or used or held for use by ELXSI in connection
with its Corporate Activities and/or any Corporate Assets; (xi) Governmental
Authority licenses, permits, rights, privileges, registrations, reports,
franchises, authorizations and other Consents which are required under any
applicable law in connection with the ownership or operation of the Orlando
Properties and/or any Corporate Assets; (xii) goodwill of ELXSI; and all rights
to use and exploit the Corporate Assets; and (xiii) rights (including to bring
or assert Legal Actions), claims (including counterclaims) and causes of action
against third parties relating to the Corporate Activities, any of the Corporate
Assets, the Orlando Properties (including warranties, service contracts and
insurance recoveries or rights) and/or any of the Excluded Liabilities;
(5) SUBSIDIARY STOCK. All outstanding shares of capital stock and
other equity interests in any subsidiary of ELXSI or any other Person (excluding
▇▇▇▇▇▇▇▇'▇-Vermont);
(6) INTERCOMPANY RECEIVABLES. All intercompany accounts and other
receivables owed by ELXSI, Parent, the Cues Division or any other affiliated
entity (including those created in respect of any advance of funds by the
▇▇▇▇▇▇▇▇'▇ Division to ELXSI or Parent);
(7) TAX ASSETS AND ATTRIBUTES. All income and other Taxes receivable
and Tax attributes of ELXSI; and
(8) NON-INCLUDED ASSETS. All other business, operations, franchises,
rights, claims, privileges, properties and assets not expressly listed or
referred to in Section 2(a) hereof (of every nature and description; real,
personal or mixed; tangible, intangible or contingent; wherever located
(including in the possession of vendors or other third parties, or elsewhere);
and whether or not recorded, carried or reflected on the books and records or
financial statements of ELXSI).
2. INITIAL CONTRIBUTION. (a) INCLUDED LIABILITIES. Effective 11:59 AM,
Boston time, on December 30, 2000, ELXSI DOES HEREBY TRANSFER, ASSIGN AND
DELEGATE to BickHoldCo, and BickHoldCo DOES HEREBY ASSUME AND AGREE TO PAY,
SATISFY AND DISCHARGE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS (subject to any
defenses or claimed offsets asserted in good faith against the obligee to whom
the same are owed) OR REIMBURSE ELXSI or Parent for any payment made by either
of them after the date hereof on account of, the following indebtedness,
liabilities, obligations, commitments and payments ("LIABILITIES") of ELXSI, the
▇▇▇▇▇▇▇▇'▇ Division and/or Parent, known or unknown, absolute or contingent (or
otherwise), accrued or accruing prior to or after the Closing Date and whether
or not carried on the books or records of ELXSI or Parent (the "INCLUDED
LIABILITIES"):
(1) INCIDENTAL TO OWNERSHIP OF INCLUDED ASSETS. Those resulting from,
relating to, arising out or in connection with of the ownership, operation, use
or occupancy of any of the Included Assets, including Environmental Liabilities,
and sales and use Taxes;
(2) ACCOUNTS PAYABLE, ETC. All trade and other accounts payable and
other expenses resulting from, relating, arising out or in connection with of
the ownership or operation of Included Assets and/or the Subject Business,
including those resulting from, relating to, arising out or in connection with:
(i) the ownership, operation use or occupancy of any of the Owned Real Property,
Leased Real Property and Other Real Property Interests (including property
Taxes), and (ii) the purchase or supply of any Restaurant or ▇▇▇▇▇▇▇▇'▇ Head
Office inventory, supplies, furniture, fixtures or equipment included in, or
otherwise constituting, Included Assets;
EXHIBIT A-PAGE 6
(to Contribution Agreement)
(3) SUBJECT BUSINESS EMPLOYEES. Those for: (i) salary, wages and other
compensation and benefits payable or provided to Subject Business employees,
except for the items listed or described in Section 2(b)(1), (2) or (4), and
(ii) payroll and withholding Taxes attributable thereto, except as provided in
Section 2(b)(5)(ii));
(4) INCLUDED CONTRACT LIABILITIES. Those resulting from, relating to,
arising out of or in connection with the Included Contracts (including Leased
Real Property leases and equipment finance leases and the ▇▇▇▇▇▇▇▇'▇ Division
401(k) plan), including those Liabilities resulting from, relating to, arising
out of or in connection with: (i) any breach of any of the representations,
warranties, covenants or agreements of ELXSI and/or the ▇▇▇▇▇▇▇▇'▇ Division
therein; and (ii) any of this ▇▇▇▇▇▇▇▇'▇ Insurance Policies, including the
obligation to pay (or reimburse others for) any premiums payable thereunder;
(5) PERMIT LIABILITIES. Those resulting from, relating to, arising out
of or in connection with any Permits, including those Liabilities resulting
from, relating to, arising out of or in connection with any violation of the
terms, conditions or provisions thereof;
(6) ▇▇▇▇▇▇▇▇'▇ MORTGAGE DEBT. Those resulting from, relating to,
arising out of or in connection with the ▇▇▇▇▇▇▇▇'▇ Mortgages, it being the
intent of the Parties that (with the consent and agreement of the ▇▇▇▇▇▇▇▇'▇
Mortgage Lenders): (i) the indebtedness and other Liabilities thereunder shall
be assumed by the owner of the Included Assets (BickHoldCo or BickOpCo), and
(ii) to the extent permitted by the ▇▇▇▇▇▇▇▇'▇ Mortgage Lenders, ELXSI shall be
fully released from such indebtedness and other Liabilities and relieved of all
further responsibility therefor (the "▇▇▇▇▇▇▇▇'▇ MORTGAGE
ASSUMPTIONS/RELEASES");
(7) LEGAL ACTIONS. Those resulting from, relating to, arising out of
or in connection with any Legal Action relating to the Subject Business, any of
the Included Assets (including those claims for personal injury or property
damage caused (actually or allegedly) at or by any Included Asset or any
employee or agent of the Subject Business) and/or any of the other Included
Liabilities; and
(8) OTHER MISCELLANEOUS. All such other Liabilities (absolute,
contingent or otherwise) to the extent that they related to the Subject
Business, any Included Assets and/or any other Included Liabilities.
(b) RETAINED LIABILITIES. Except as specifically set forth above in Section
2(a), BickHoldCo does not and will not assume, and shall in no event be liable
for, and ELXSI (or Parent) or the Cues Division retains and shall retain
responsibility for, and be liable to pay, satisfy and discharge in accordance
with their respective terms ("RETAINS"), the Liabilities of ELXSI (or Parent) or
Cues Division to the extent that they do not relate to the Subject Business, any
Included Assets or any Included Liabilities. In addition, notwithstanding
Section 2(a), the "Included Liabilities" do not include, and ELXSI (or Parent)
Retains the following Liabilities:
(9) PSOR PLAN. Those resulting from, relating to, arising out of or in
connection with the ▇▇▇▇▇▇▇▇'▇ PSOR Plan (it being acknowledged that such Plan
is for the benefit of certain Subject Business executives);
(10) PARENT OPTIONS. Those resulting from, relating to, arising out of
or in connection with any Parent incentive stock option plan and/or any options
granted thereunder (it being acknowledged that certain of such options are held
by Subject Business executives and other employees);
(11) MANAGEMENT AGREEMENT. Those resulting from, relating to, arising
out of or in connection with the Management Agreement;
EXHIBIT A-PAGE 7
(to Contribution Agreement)
(12) EXECUTIVE EMPLOYMENT AGREEMENTS. Those resulting from, relating
to, arising out of or in connection with the Executive Employment Agreements;
(13) TAXES. Those for: (i) Taxes, of every nature and description,
arising or attributable to any period prior to the Closing Date, and (ii)
payroll and withholding Taxes attributable to Subject Business employees arising
as a result of any payments made or other value realized under the items listed
or described in any of the foregoing clauses (1), (2) and (4); and
(14) ELXSI/CUES CREDITS. Those resulting from, relating to, arising out
of or in connection with: (i) the industrial revenue bond financing of certain
of the Orlando, Properties, and (ii) the ELXSI Credit Agreement.
All of the Liabilities listed or described in this Section 2(b) are hereinafter
sometimes collectively referred to as the "EXCLUDED LIABILITIES".
3. SECOND CONTRIBUTION; INCLUDED ASSETS. Effective 12:00 AM, Boston time,
on December 30, 2000 (midnight Saturday night-Sunday morning), BickHoldCo DOES
HEREBY CONTRIBUTE, TRANSFER, GRANT, CONVEY, ASSIGN, SET OVER AND DELIVER to
BickOpCo, and its successors and assigns forever, and BickOpCo DOES HEREBY
RECEIVE AND ACCEPT from BickHoldCo, all of BickHoldCo's rights, title and
interest in, to and under the Included Assets. The Included Assets included in
the foregoing contribution, transfer, grant, conveyance, assignment, setting
over and delivery by BickHoldCo to BickOpCo are only those businesses,
operations, franchises, rights, claims, privileges, properties and assets
received by BickHoldCo from ELXSI in the Initial Contribution; without
limitation, such Included Assets exclude the Excluded Assets.
4. SECOND CONTRIBUTION; INCLUDED LIABILITIES. Effective 12:00 AM, Boston
time, on December 30, 2000 (midnight Saturday night-Sunday morning), 2000,
BickHoldCo DOES HEREBY TRANSFER, ASSIGN AND DELEGATE to BickOpCo, and BickOpCo
DOES HEREBY ASSUME AND AGREE TO PAY, SATISFY AND DISCHARGE IN ACCORDANCE WITH
THEIR RESPECTIVE TERMS (subject to any defenses or claimed offsets asserted in
good faith against the obligee to whom the same are owed) OR REIMBURSE ELXSI,
Parent or BickHoldCo for any payment made by any of them after the date hereof
on account of, the Included Liabilities. The Included Liabilities included in
the foregoing transfer, assignment and delegation from BickHoldCo to BickOpCo
(and assumption by BickOpCo) are only those Liabilities transferred, assigned
and delegated by ELXSI to BickHoldCo (and assumed by BickHoldCo) in the Initial
Contribution; without limitation, such Included Liabilities exclude the Excluded
Liabilities.
5. THE CONTRIBUTION AGREEMENT. (a) Nothing contained in this ▇▇▇▇ of Sale
shall be deemed to enlarge, diminish or otherwise affect any of the rights,
obligations, covenants, agreements, representations or warranties of the Parties
contained in the Contribution Agreement.
(b) Without limiting the generality of the foregoing (and as provided
in the Contribution Agreement), BickOpCo and BickHoldCo ("TRANSFEREES") hereby
acknowledge and agree that they are receiving the Subject Business, Included
Assets and Included Liabilities from ELXSI and BickHoldCo (respectively; and
such Parties in their capacity as the transferors of the Included Assets and
Included Liabilities, "TRANSFERORS") without representation or warranty and
subject to such liens, security interests, mortgages, pledges, covenants,
easements, encumbrances, defects in title, agreements and claims and rights of
third parties as may exist thereon. Accordingly, each Transferee hereby
acknowledges and agrees that, as between such Party and its Transferor, and
notwithstanding anything to the contrary set forth in any Transfer Instrument:
(1) THE SUBJECT BUSINESS, INCLUDED ASSETS AND INCLUDED LIABILITIES ARE BEING
CONTRIBUTED, TRANSFERRED, GRANTED, CONVEYED, DELIVERED, ASSIGNED, DELEGATED
TO, AND ASSUMED BY, SUCH PARTY ON AN "AS IS, WHERE IS" BASIS;
EXHIBIT A-PAGE 8
(to Contribution Agreement)
(2) NEITHER TRANSFEROR MAKES ANY GUARANTEES, REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT BUSINESS, INCLUDED ASSETS
OR INCLUDED LIABILITIES; AND
(3) EACH TRANSFEROR DISCLAIMS AND EXCLUDES (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) ALL OTHER WARRANTIES, OBLIGATIONS, LIABILITIES, RIGHTS AND
REMEDIES, EXPRESS, IMPLIED OR ARISING UNDER LAW, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND ANY WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING, OR USAGE OF TRADE.
6. POWER OF ATTORNEY. Each Transferors DOES HEREBY CONSTITUTE AND APPOINT
BickOpCo, and its successors and assigns forever, as the true and lawful
attorney-in-fact of such Transferor, with full power of substitution and at the
expense of BickOpCo, to institute and prosecute all proceedings which such
BickOpCo may reasonably deem proper in order to collect, assert or enforce any
claim, right, title or interest in, to or under any of the Included Assets, to
defend or compromise any or all actions, suits or proceedings in respect of any
of the Included Assets or any of the Included Liabilities, and to do all such
other acts and things in relation to the Included Assets and Included
Liabilities as BickOpCo shall deem advisable.
7. FURTHER ASSURANCES. (a) Transferors will, at any time and from time to
time after the date hereof, do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged or delivered, all such further acts, deeds,
assignments, transfers, conveyances, certificates of title, powers of attorney
and/or assurances as may be reasonably requested by BickOpCo in order to: (i)
better evidence or effect the contributions, transfers, grants, conveyances,
assignments, settings over and delivery of the Included Assets hereunder, (ii)
better or further vest in BickOpCo all of Transferors' respective rights, title
and interest in, to and under the Included Assets, (iii) aid and assist in the
collection of or reducing to possession by BickOpCo of any of the Included
Assets and Subject Business, and/or (iv) otherwise enable BickOpCo to realize
upon or otherwise use, enjoy and operate the Included Assets and Subject
Business.
(b) BickOpCo will, at any time and from time to time after the date
hereof, do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged or delivered, all such further acts, deeds, assignments, transfers,
assumptions and/or assurances as may be reasonably requested by either
Transferor in order to: (i) better evidence or effect the assignments,
delegations and assumptions of, and agreements to pay, satisfy and discharge,
the Included Liabilities hereunder, (ii) better or further vest in BickOpCo all
of Transferors' respective Liabilities under (or constituting) the Included
Liabilities, (iii) aid and assist in the release of Transferors therefrom,
and/or (iv) otherwise hold Transferors harmless from the Included Liabilities.
8. SUCCESSORS AND ASSIGNS. This ▇▇▇▇ of Sale shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
9. GOVERNING LAW. This ▇▇▇▇ of Sale shall be governed by and construed in
accordance with the laws of the State of New York.
[The remainder of this page is intentionally blank]
EXHIBIT A-PAGE 9
(to Contribution Agreement)
10. COUNTERPARTS. This ▇▇▇▇ of Sale may be executed in any number of
counterparts, each of which shall be deemed to be an original document but all
of which together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective authorized officers as of the
day and year first above written.
ELXSI: BICKHOLDCO:
ELXSI ▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
BICKOPCO:
▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.
By:
------------------------------
Name:
Title:
EXHIBIT B-PAGE 1
(to Contribution Agreement)
FORM OF SENIOR SUBORDINATED NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OR OTHER JURISDICTION, AND
NEITHER THIS NOTE NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED,
DISTRIBUTED, ASSIGNED OR OTHERWISE DISPOSED OF UNLESS: (A) THERE IS AN EFFECTIVE
REGISTRATION UNDER SUCH ACT COVERING SUCH TRANSACTION, OR (B) THE COMPANY
RECEIVES AN OPINION FROM LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO
THE EFFECT THAT SUCH TRANSACTION IS EXEMPT FROM THE APPLICABLE REGISTRATION
REQUIREMENTS OF SUCH ACT.
THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATED TO ALL SENIOR
DEBT (AS DEFINED HEREINBELOW), IN THE MANNER AND TO THE EXTENT SET FORTH HEREIN.
[▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.][1]
[▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.][2]
SENIOR SUBORDINATED PROMISSORY NOTE
Note No. DDSN-___ $20,000,000 December 30, 2000
FOR VALUE RECEIVED, the undersigned [▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.][1]
[▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.][2], a Delaware corporation (the
"COMPANY"), hereby promises to pay to the order of ELXSI, a California
corporation, or the registered assigns thereof, on December 30, 2010 (the
"MATURITY DATE"), the principal sum of TWENTY MILLION UNITED STATES DOLLARS
($20,000,000), plus interest as hereinafter provided.
This Note (this "NOTE") [is the "BickHoldCo Senior Subordinated Note"][1]
[is or constitutes a part of the "BickOpCo Senior Subordinated Note"][2] issued
on or as of December 30, 2000 (the "ORIGINAL ISSUE DATE") under (and as defined
in) that certain Contribution Agreement, dated as of December 29, 2000 (the
"CONTRIBUTION AGREEMENT"), among ELXSI, ▇▇▇▇▇▇▇▇'▇ Holdings Company, Inc. and
▇▇▇▇▇▇▇▇'▇ Family Restaurants, Inc. This Note, together with any other similar
Senior Subordinated Promissory Notes of the Company issued upon division,
combination and/or transfer of such Senior Subordinated Note are hereinafter
collectively referred to as the "SENIOR SUBORDINATED NOTES".
Certain terms used and not defined above in this Note are defined in
Section 7.
--------------------
[1] Include in BickHoldCo Senior Subordinated Note only
[2] Include in BickOpCo Senior Subordinated Note only
EXHIBIT B-PAGE 2
(to Contribution Agreement)
SECTION 1. INTEREST; PAYMENTS
1.1. INTEREST RATE. The outstanding principal amount of this Note shall
bear interest at a per annum rate equal to the Bank Reference Rate plus 0.5%;
provided, however, that if an Event of Default (as defined in Section 3 hereof)
shall have occurred and be continuing, the Company shall pay interest on the
outstanding principal amount of this Note, and (to the extent permitted by
applicable law) on any unpaid interest under this Note, from the date of such
Event of Default and for so long as such Event of Default is continuing, at a
per annum rate equal to the Bank Reference Rate plus 2.5%. Interest shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed.
1.2. INTEREST PAYMENTS. Interest hereunder shall be due and payable
monthly in arrears on the last day of each calendar month, commencing with
January 31, 2001. In addition, any payment or prepayment of all or any portion
of the principal balance of this Note shall be accompanied by the payment of all
accrued and unpaid interest on the principal balance being repaid.
1.3. PRINCIPAL PAYMENTS. SCHEDULED. On each Amortization Date, the
Company shall make a mandatory payment of the principal of the Senior
Subordinated Notes in an amount in the aggregate equal to the Amortization
Payment corresponding to such Amortization Date (as set forth in Section 7);
provided, however, that any mandatory or voluntary prepayments of Senior
Subordinated Notes made in accordance with any other provision of this Section
1.3 shall be credited against the Amortization Payment(s) otherwise required to
made on the succeeding Amortization Date(s), so as to reduce the Amortization
Payment(s) required to be made on such succeeding Amortization Date(s), in the
order of their occurrence.
(b) RECAPTURE EVENTS. The Company shall apply the net cash proceeds of
any consummated debt or equity financing, asset sale or other cash realization
event that, under the terms of any Senior Debt, requires or triggers a permanent
reduction in the loans and/or credit commitments outstanding thereunder: (i) to
make the payments and/or prepayments (if any) required under the terms of any
Senior Debt as a result thereof or in connection therewith, and (ii) if and to
the extent that (x) there shall be any net cash proceeds remaining thereafter
and (y) it shall be permitted under Section 4 and any Separate Subordination
Agreement, to the mandatory prepayment of the principal of the Senior
Subordinated Notes.
(c) VOLUNTARY. The Company may voluntarily prepay the principal balance
of the Senior Subordinated Notes, in whole or from time to time in part, without
premium or penalty.
(d) MATURITY DATE. The entire principal balance of the Senior
Subordinated Notes outstanding on the Maturity Date shall be due and payable on
the Maturity Date.
(e) PRO RATA PAYMENTS. All payments and prepayments required under the
terms of this Note shall be made to all holders of the Senior Subordinated Notes
on a pro rata basis. All such payments and prepayments shall be applied first to
the payment of accrued interest and second to the payment of the principal
balance thereof.
1.4. CHANGE OF CONTROL OFFER. (a) Within ten days after a Change of
Control shall have occurred (if it then be continuing), the Company shall make
an offer to purchase (a "CHANGE OF CONTROL OFFER") all outstanding Senior
Subordinated Notes at a price of 100% of the outstanding principal amount
thereof plus an amount equal to all interest accrued and unpaid thereon to and
including the Change of Control Payment Date (as hereinafter defined), without
any interest (the "CHANGE OF CONTROL PRICE").
(b) Notice of any Change of Control and Change of Control Offer shall
be given by the Company by mailing (postage prepaid) or otherwise delivering a
written notice to the holders of record of the Senior Subordinated Notes at
their respective addresses then appearing on the books of the Company, stating:
(i) that a Change of Control Offer is being made pursuant to this Section 1.4
and that all Senior Subordinated Notes tendered will be accepted for payment,
subject to the terms and conditions set forth herein; (ii) the Change of Control
EXHIBIT B-PAGE 3
(to Contribution Agreement)
Price and the purchase date (which shall be no earlier than 10 and no later than
60 days after the date that such notice is mailed) (the "CHANGE OF CONTROL
PAYMENT DATE"); (iii) that holders of Senior Subordinated Notes accepting the
Change of Control Offer will be required to surrender their Senior Subordinated
Notes to the Company or its agent designated for the purpose (a "PAYING AGENT"),
if any, at the address specified in such notice prior to the close of business
on the business day immediately preceding the Change of Control Payment Date;
(iv) that holders of Senior Subordinated Notes will be entitled to withdraw
their acceptance of the Change of Control Offer if the Company or its Paying
Agent, if any, receives, not later than the close of business on the business
day immediately preceding the Change of Control Payment Date, a telegram,
facsimile transmission or other written advice setting forth the name of the
withdrawing holder and the election of such holder to withdraw its election to
have the Senior Subordinated Notes identified therein purchased pursuant to the
Change of Control Offer; and (v) that holders whose Senior Subordinated Notes
are being purchased only in part will be issued a new Senior Subordinated Note
representing the unpurchased Senior Subordinated Notes surrendered.
(c) On the Change of Control Payment Date, the Company shall: (i)
accept for payment all Senior Subordinated Notes validly tendered and not
withdrawn pursuant to the Change of Control Offer; (ii) promptly mail (postage
prepaid) or otherwise deliver to each holder of Senior Subordinated Notes so
accepted payment of the Change of Control Price therefor; and (iii) issue and
forward to each such holder who submitted a Senior Subordinated Note
representing (in part) not so tendered a Senior Subordinated Note representing
the unpurchased Senior Subordinated Notes surrendered.
(d) If notice of a Change of Control as provided in this subsection
1.4(b) above has been given and the funds to pay the Change of Control Price for
Senior Subordinated Notes tendered and not withdrawn have been paid or
irrevocably set aside for payment, then all Senior Subordinated Notes accepted
for payment pursuant to the Change of Control Offer shall, on the Change of
Control Payment Date, be deemed to be no longer outstanding for any purpose and
shall have no right to receive any interest payable to the holders of Senior
Subordinated Notes accrued after the Change of Control Payment Date, and all
other rights with respect to such Senior Subordinated Notes shall thereupon
cease and terminate, excepting, however: (i) the right of the holders thereof to
receive the Change of Control Price therefor, without any interest, and (ii)
rights of registration of transfer and exchange (subject to Section 5 hereof).
1.5. NON-BUSINESS DAYS. If a payment under this Note becomes due and
payable hereunder other than on a business day, the due date thereof shall be
extended to the next succeeding business day and interest shall be payable
thereon during such extension at the applicable rate specified above.
SECTION 2. COVENANTS
The Company hereby covenants and agrees that, except as may be consented to
by the Majority Holders:
IT WILL:
(a) Promptly give notice to the holder of this Note of the occurrence
and continuation of any Event of Default hereunder;
(b) Preserve its corporate existence;
(c) Comply in all material respects with all federal, state, local and
foreign laws, statutes, ordinances, codes, judgments, orders, decrees,
directives, rules and regulations of any governmental authority, court or
arbitrator, and with all governmental licenses, permits, rights, privileges,
registrations, required reports, franchises, authorizations and other consents,
applicable to the Company or the business, operations or assets thereof;
EXHIBIT B-PAGE 4
(to Contribution Agreement)
(d) Comply in all material respects with all material contracts,
agreements, instruments, undertakings, commitments and arrangements, written or
oral, of any kind or description whatsoever, applicable to the Company or the
business, operations or assets thereof;
(e) Pay promptly when due all taxes, fees, assessments and other
governmental charges imposed upon the Company's property, assets or income,
provided, however, that payment of any such tax, fee, assessment, charge, claim
or indebtedness shall not be necessary so long as the applicability or validity
thereof shall be contested in good faith by appropriate proceedings and a
reserve, if appropriate, shall have been established with respect thereto, and
such failure to pay is not prejudicial in any material respect to the interests
of the holder of this Note; and
(f) Maintain insurance to such an extent, in such amounts and covering
such risks as is customary for companies engaged in the same or similar
businesses; and
IT WILL NOT:
(g) Whenever: (x) the Company fails to pay on any interest payment date
the full amount of interest then accrued on the outstanding Senior Subordinated
Notes, whether or not such payment is prohibited by the terms of any Senior
Debt, or (y) the Company fails make any mandatory principal payment or Change of
Control Offer payment with respect to the Senior Subordinated Notes that it is
required by the terms hereof to make, whether or not such payment is prohibited
by the terms of any Senior Debt (the events described in the foregoing clauses
(x) and (y), a "PAYMENT DEFAULT"), thereafter, until such Payment Default shall
no longer be continuing, the Company shall not: (i) pay any interest, fee or
similar payments on or with respect to any Junior Debt other than interest
payable in Junior Debt; or (ii) declare or pay dividends, or make any other
distributions, on or in respect of any shares of its capital stock, other than
dividends or distributions payable in its capital stock; or
(h) Whenever a Payment Default shall have occurred, thereafter, until
such Payment Default shall no longer be continuing, the Company shall not (i)
pay, prepay, redeem, purchase or otherwise acquire for value any Junior Debt
(provided that the Company may at any time: (A) pay, prepay, redeem, purchase or
otherwise acquire for value Junior Debt in exchange for shares of its capital
stock or other Junior Debt; and (B) accept Junior Debt for conversion into
shares of its capital stock or other Junior Debt, provided that the dividends or
interest (as the case may be) payable on, and aggregate liquidation preference
(if any) or principal (as the case may be) of, any of its capital stock or
Junior Debt issued in such a conversion shall be no greater than that of its
Junior Debt converted); or (ii) redeem, purchase or otherwise acquire for value
shares of its capital stock (provided that the Company may at any time: (A)
redeem, purchase or otherwise acquire for value shares of its capital stock in
exchange for shares of its capital stock; and (B) accept shares of its capital
stock for conversion into shares of its capital stock, provided that the
dividends payable on, and aggregate liquidation preference (if any) of, any of
its capital stock issued in such a conversion shall be no greater than that of
its capital stock converted).
SECTION 3. EVENTS OF DEFAULT
Upon the occurrence of any of the following, each of which is referred to
herein as an "EVENT OF DEFAULT":
(a) Any failure of the Company to pay within five business days of the
applicable due date any principal of, interest under, or other sums due under
this Note, whether by reason of stated maturity or due date, notice of
prepayment, mandatory prepayment, offer to purchase, cancellation, acceleration
or otherwise;
(b) Any breach by the Company, or any failure to fulfill, any of its
other obligations set forth in Section 1.4 or 2 of this Note;
EXHIBIT B-PAGE 5
(to Contribution Agreement)
(c) The filing by the Company of a petition in bankruptcy or a
voluntary petition or of an answer seeking readjustment of its debts or for any
other relief under any bankruptcy, insolvency, or other similar act or law of
any jurisdiction, domestic or foreign, now or hereafter existing, or the taking
by the Company of any action indicating its consent to, approval of, or
acquiescence in, any such petition or proceeding; or the application by the
Company for, or any the Company's sustaining the appointment by consent or
acquiescence of, a receiver or trustee for the Company or for all or a
substantial part of its property or assets; or an assignment by the Company for
the benefit of its creditors;
(d) The filing of any involuntary petition against the Company in
bankruptcy or seeking readjustment of its debts or for any other relief under
any bankruptcy, insolvency, or other similar act or law of any jurisdiction,
domestic or foreign, now or hereafter existing; or the appointment of a receiver
or trustee for the Company or for all or a substantial part of its property or
assets; or the serving on the Company of a warrant of attachment, execution or
similar process against any substantial part of the property or assets of the
Company and any of such events continues for 60 days undismissed, unbonded or
undischarged;
(e) A final judgment for the payment of money in excess of $50,000
shall be rendered by a court against the Company and the Company shall not
discharge the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, within 60 days after the date of entry
thereof and within said period of 60 days (or such longer period during which
execution of such judgment shall have been stayed) appeal therefrom and cause
the execution thereof to be stayed during such appeal;
(f) The effectuation by the Company of any dissolution, liquidation or
winding up, or the taking of any corporate action or the commencement of any
proceedings in connection with any of the foregoing; or
(g) Any Senior Debt Event of Default;
then, during the continuance of any such event, the holder of this Note may, by
written notice to the Company declare the outstanding principal balance of this
Note immediately due and payable, whereupon the same shall become immediately
due and payable (without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived); provided, however, that if
there shall have occurred an Event of Default described under the foregoing
subsection (c) or (d), the outstanding principal balance of this Note shall
automatically become immediately due and payable (without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived).
SECTION 4. SUBORDINATION
4.1. IN GENERAL. (a) By acceptance of this Note, the holder hereof hereby
agrees to the subordination provisions of this Note, set forth below in this
Section 4.
(b) If any payment of any principal of, interest under, or other sums
due under the Senior Subordinated Notes (including under Sections 1.3 and 1.4)
may not be made without violating the terms of any Senior Debt then outstanding,
such payment shall not be made to the extent that the Company is so prohibited
from making such payment. Any payment not made by reason of the application of
the foregoing terms shall be made by the Company as promptly as practicable
after such payment may be made without violating the terms of any Senior Debt
then outstanding.
4.2. "SENIOR DEBT" DEFINED. For purposes of this Note, "SENIOR DEBT"
shall mean the following, whether outstanding on the Original Issue Date, the
date of this Note or thereafter created, incurred, assumed or guaranteed:
EXHIBIT B-PAGE 6
(to Contribution Agreement)
(i) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to any indebtedness for
borrowed money (including indebtedness incurred under the Bank Agreement);
(ii) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to any of the Liabilities of
the type described in either of the foregoing clause (i) assumed by or
guaranteed in any manner by the Company or in effect guaranteed by the
Company (including through an agreement to purchase, contingent or
otherwise); and
(iii) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to any indebtedness
representing a refinancing, renewal, extension, refunding, replacement or
substitution of any of the Liabilities of the type described in either of
the foregoing clauses (i) or (ii), or this clause (iii);
unless and to the extent that, in the case of any of the foregoing, the
agreement, document or instrument creating, evidencing or governing the same
provides that the same ranks pari passu with or junior to the Senior
Subordinated Notes or that it is not superior or senior in right of payment to
the Senior Subordinated Notes.
4.3. INSOLVENCY, ETC. In the event of (x) any insolvency proceeding,
bankruptcy, receivership, liquidation, reorganization, arrangement, assignment
for the benefit of creditors, or other similar proceeding relative to the
Company or its creditors, as such, or its property, or (y) any proceeding for
the voluntary or involuntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy proceedings, then and
in any such event:
(i) all Senior Debt (including interest on the principal amount
thereof accruing after the commencement of any such proceedings) shall
first be paid in full before any payment or distribution of any character,
whether in cash, securities or other property, shall be made in respect of
this Note or any other Senior Subordinated Notes;
(ii) any payment or distribution of any character, whether in cash,
securities or other property, which would otherwise (but for the terms of
this Section 4.3) be payable or deliverable in respect of this Note or any
other Senior Subordinated Notes (including any payment or distribution in
respect of this Note and other Senior Subordinated Notes by reason of any
other indebtedness of the Company being subordinated to the Senior
Subordinated Notes and any payment in respect of interest on the principal
amount thereof accruing after the commencement of any such proceedings),
shall be paid or delivered directly to the holders of the Senior Debt, or
their representatives, until the aggregate amount of the Senior Debt
(including interest on the principal amount thereof accruing after the
commencement of any such proceedings) shall have been paid in full (and the
holder of this Note hereby irrevocably authorizes, empowers and directs all
receivers, trustees, liquidators, conservators and others having authority
in the premises to effect all such payments and deliveries); and
(iii) the holder of this Note will execute and deliver to the holders
of the Senior Debt, or their representatives, all such other and further
instruments confirming the authorization referred to in the foregoing
clause (ii), any powers of attorney specifically confirming the rights of
the holders of the Senior Debt arising hereunder, and all such proofs of
claim, assignments of claim and other instruments, and shall take all such
other and further actions as may be requested by any holder of the Senior
Debt or its representatives.
EXHIBIT B-PAGE 7
(to Contribution Agreement)
4.4. PAYMENTS IN CONTRAVENTION. If, notwithstanding the provisions of
Section 4, any payment or distribution of any character (whether in cash,
securities, or other property) or any security shall be received by the holder
of this Note in contravention of the terms of this Section 4, and before the
Senior Debt shall have been paid in full, such payment, distribution or security
shall not be commingled with any asset of the holder of this Note, but shall be
held in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Debt, or their representatives, for
application to the payment of all Senior Debt remaining unpaid, until the Senior
Debt (including interest on the principal amount thereof accruing after the
commencement of any proceedings described in Section 4.3 hereof) shall have been
paid in full.
4.5. SEPARATE SUBORDINATION AGREEMENTS. The holder of this Note, by his
acceptance thereof, agrees that such holder shall, from time to time upon the
request of the Company made in accordance with any request or demand of any
holder (or prospective holder) of Senior Debt, or its representative, to execute
and deliver, or cause to be executed and delivered, such other agreements,
documents and instruments with respect to the subordination of the indebtedness
evidenced by this Note to such Senior Debt as shall be so requested or demanded
by such holder (or prospective holder), or its representative (any such
agreement, document or instrument, a "SEPARATE SUBORDINATION AGREEMENT").
Without limiting the generality of the foregoing, a Separate Subordination
Agreement may establish or provide for subordination agreements or arrangements
greater than (i.e., more detrimental to the interests of the holder of his Note)
as those set forth above in this Section 4. Unless and to the extent otherwise
stated in any Separate Subordination Agreement, in the event of a conflict or
inconsistency between any term or provision thereof and this Section 4, such
Separate Subordination Agreement shall govern and control.
SECTION 5. RESTRICTIONS ON TRANSFER
5.1. LEGEND. Except as otherwise provided in this Section 5, each Note
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OR OTHER
JURISDICTION, AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, DISTRIBUTED, ASSIGNED OR OTHERWISE DISPOSED OF
UNLESS: (A) THERE IS AN EFFECTIVE REGISTRATION UNDER SUCH ACT COVERING SUCH
TRANSACTION, OR (B) THE COMPANY RECEIVES AN OPINION ADDRESSED FROM LEGAL
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH
TRANSACTION IS EXEMPT FROM THE APPLICABLE REGISTRATION REQUIREMENTS OF SUCH
ACT."
5.2. RESTRICTIONS ON TRANSFER. Each offer, sale, transfer, distribution,
assignment or other disposal of this Note or any interest therein shall be
subject to compliance with the terms of the foregoing legend, and the Company
(and any transfer agent of the Company) may refuse to register or otherwise
recognize any transfer of this Note or Conversion Shares not in compliance
therewith.
SECTION 6. TRANSFER OFFICE; OWNERSHIP; REGISTRATION OF TRANSFER, ETC.
6.1. TRANSFER OFFICE. The Company shall maintain an office or agency in
the United States of America where books for the registration and registration
of transfer of Senior Subordinated Notes will be kept and where Senior
Subordinated Notes may be presented for division or combination and substitution
pursuant to the provisions thereof (the "TRANSFER OFFICE"). The Transfer Office
shall initially be located at ▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and may subsequently be located at such other address in the United
States of America as to which the Company shall have previously delivered prior
written to the holder or holders of the Senior Subordinated Notes.
EXHIBIT B-PAGE 8
(to Contribution Agreement)
6.2. OWNERSHIP OF NOTES. The Company may deem and treat the Person in
whose name this Note is registered as the owner and holder thereof for all
purposes hereunder and shall not be bound by any notice to the contrary, until
presentation of this Note for registration of transfer as provided in this
Section 6.
6.3. REGISTRATION OF TRANSFER. The Company agrees to maintain at the
Transfer Office books for the registration and registration of transfer of
Senior Subordinated Notes, and (subject to the provisions of Section 5) this
Note and all rights hereunder are transferable, in whole or in any part, on said
books at said office upon surrender of this Note at said Transfer Office,
together with a written instrument of transfer of this Note duly executed by the
holder thereof or its duly authorized agent or attorney and funds sufficient to
pay any transfer taxes payable in respect thereof. Upon such surrender and
payment, the Company shall execute and deliver a new Senior Subordinated Note in
the name of the assignee or assignees and in the denominations specified in such
instrument and this Note shall promptly be cancelled.
6.4. DIVISION OR COMBINATION OF NOTES. This Note may be divided or
combined with other Senior Subordinated Notes upon presentation of this Note and
of any other Senior Subordinated Notes with which this Note is to be combined at
the Transfer Office, together with a written notice specifying the names and
denominations in which the new Senior Subordinated Note or Notes are to be
issued duly executed by the holders hereof and thereof or their respective duly
authorized agents or attorneys. Subject to compliance with Section 6.3 as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Senior Subordinated Note or Notes in exchange
for the Senior Subordinated Note or Notes to be divided or combined in
accordance with such notice.
6.5. LOSS, DESTRUCTION, ETC. OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Senior Subordinated Note, and in the case of any such loss, theft or destruction
upon delivery of a written indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation upon
surrender and cancellation of the mutilated Senior Subordinated Note, the
Company shall execute and deliver a new Senior Subordinated Note of like tenor
in lieu of such lost, stolen, mutilated or destroyed Senior Subordinated Note.
Any Senior Subordinated Note issued under the provisions of this Section 6.5 in
lieu of any Senior Subordinated Note alleged to be lost, stolen, mutilated or
destroyed shall constitute an original contractual obligation on the part of the
Company.
6.6. EXPENSES OF DELIVERY. The Company shall bear and pay all expenses,
taxes (other than transfer taxes) and other charges incurred or charged in
connection with the preparation, issuance and delivery of Senior Subordinated
Notes hereunder.
SECTION 7. DEFINITIONS
For purposes of the Senior Subordinated Notes, the following definitions,
not defined elsewhere herein, shall have the following respective meanings:
"AMORTIZATION DATE" means the last day of each calendar quarter, commencing
with March 31, 2001, and "AMORTIZATION PAYMENT" means, for any Amortization Date
falling in any of the following calendar years, the amount hereinafter set forth
opposite such calendar year:
Calendar Year Amortization Payment (on
(of Amortization Date) each Amortization Date in such Calendar Year)
---------------------- ---------------------------------------------
2001 $ 250,000
2002 $ 250,000
2003 $ 375,000
2004 $ 375,000
2005 $ 500,000
2006 $ 500,000
2007 $ 500,000
2008 $ 500,000
2009 $ 750,000
2010 $1,000,000
EXHIBIT B-PAGE 9
(to Contribution Agreement)
"BANK" means Bank of America, N.A.
"BANK AGREEMENT" means that certain Amended and Restated Loan and Security
Agreement, dated as of December 30, 1996, between ELXSI and the Bank (then named
Bank of America Illinois), as amended from time to time.
"BANK REFERENCE RATE" means the rate of interest publicly announced by the
Bank as its prime rate. The prime rate is set by the Bank based on various
factors, including the Bank's cost and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans. The Bank may price loans to its customers at, above, or below the prime
rate. Any change in the prime rate will take effect at the opening of business
on the day specified in the Bank's public announcement of a change in the prime
rate.
"CHANGE OF CONTROL" means any of the following events: (A) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d) of the Exchange Act),
other than Permitted Holders, is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of Voting Securities carrying 50%
or more of the aggregate voting power of all classes of Voting Stock of the
Company; (B) the Company merges or consolidates with or into another Person, or
sells, assigns, conveys, exchanges, leases, transfers or otherwise disposes of
all of substantially all of its property and assets to any Person, in any such
event pursuant to a transaction in which the outstanding Voting Stock of all
classes and series of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where: (i) the
outstanding Voting Stock of each class and series of the Company is converted
into or exchanged for Voting Stock of the surviving or transferee Person (as the
case may be), and (ii) the holders of each class and series of Voting Stock of
the Company immediately prior to such transaction own, directly or indirectly,
Voting Stock carrying 50% or more of the aggregate voting power of all classes
of Voting Stock of the surviving or transferee Person (as the case may be)
immediately after such transaction; or (C) at any time, individuals who
constituted the Board of Directors of the Company on the Original Issue Date
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was approved by
a vote of 66-2/3% of the directors then still in office who were either
directors on the Original Issue Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office.
"ELXSI" means ELXSI, a California corporation and wholly owned subsidiary
of ELXSI Corp.
"ELXSI CORP." means ELXSI Corporation, a Delaware corporation.
"ELXSI CORP. RIGHTS PLAN" means that certain Rights Agreement, dated as of
June 4, 1997 (as amended from time to time), between ELXSI Corp. and Continental
Stock Transfer & Trust Company, as Rights Agent.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"JUNIOR DEBT" means and includes: (i) all Liabilities for borrowed money
wherein the agreement, document or instrument creating, evidencing or governing
the same provides that the same ranks junior to the Senior Subordinated Notes or
that it is not superior or senior in right of payment to, or parri passu with,
the Senior Subordinated Notes, and (ii) the Subordinated Notes.
EXHIBIT B-PAGE 10
(to Contribution Agreement)
"LIABILITIES" has the meaning ascribed to such term under the Contribution
Agreement.
"MAJORITY HOLDERS" means, at any time, holders of the majority of the
Senior Subordinated Notes outstanding at such time.
"PERMITTED HOLDER" means and includes: (i) ELXSI Corp, ELXSI, and any other
subsidiary of ELXSI Corp.; and (ii) any ▇▇▇▇▇▇ Group Member and any Affiliate
and Associate of any ▇▇▇▇▇▇ Group Member (as such terms are defined in the ELXSI
Corp. Rights Agreement).
"PERSON" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated association or organization, governmental agency
or other body, or other entity of whatever nature.
"SENIOR DEBT EVENT OF DEFAULT" means and includes each "event of default"
under, or within the meaning of, the terms of any Senior Debt (whenever
incurred). Any Senior Debt Event of Default agreed to or otherwise coming into
effect after the Original Issue Date or the date hereof shall, automatically and
simultaneously with its effectiveness, become a "Senior Debt Event of Default"
for purposes hereof. Any amendment, waiver or other modification of the Senior
Debt Events of Default as in effect under the terms of any relevant Senior Debt
shall have no force and effect with respect to the Senior Debt Events of Default
as in effect under the Senior Subordinated Notes, unless and to the extent
approved by the Majority Holders.
"SUBORDINATED NOTES" means and included the Subordinated Note issued under
(and as defined in) the Contribution Agreement, together with any other similar
Subordinated Promissory Notes of the Company issued upon division, combination
and/or transfer of such Subordinated Note.
"VOTING STOCK" means, of any Person, outstanding securities of all classes
of such Person ordinarily (and apart from rights accruing under special
circumstances) having the right to elect directors of such Person.
SECTION 8. MISCELLANEOUS
8.1. NOTICES. All notices, requests, demands or other communications to
or upon the Company or the holder of this Note shall be deemed to have been
delivered, given or made when deposited in the mails, postage prepaid, addressed
(if to the Company) at ▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or (if to the holder of this Note) at such holder's address as provided by such
holder to the Company. No other method of giving notice is hereby precluded.
8.2. EXPENSES OF ENFORCEMENT. The Company agrees to pay and save the
holder of this Note harmless from and against any expenses arising in connection
with the enforcement of this Note, including, without limitation, the reasonable
fees and expenses of counsel selected by the holder of this Note.
8.3. WAIVERS AND AMENDMENTS. Any term or provision of the Senior
Subordinated Notes (including this Note) may be waived, supplemented or amended
in a writing executed by the Company and executed (or consented to in writing)
by the Majority Holders; provided, however, that no such waiver, supplement or
amendment shall, without the consent of the holder of this Note, change the
maturity date of the principal of or any interest under this Note, or reduce the
principal amount of this Note or reduce the rate of interest hereunder.
8.4. WAIVERS, ETC. No failure or delay on the part of the holder of this
Note in exercising any right, power or privilege hereunder, and no course of
dealing between the Company and the holder of this Note shall operate as a
waiver thereof nor shall any single or partial exercise of any right, power or
EXHIBIT B-PAGE 11
(to Contribution Agreement)
privilege hereunder preclude the simultaneous or later exercise of any other
right, power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the holder of this
Note would otherwise have. No notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the holder of this
Note to take any other or further action in any circumstances without notice or
demand.
8.5. DESCRIPTIVE HEADINGS; REFERENCES. The descriptive headings of this
Note are for convenience of reference only and shall not control or affect the
meaning or construction of any provision hereof. Section references in this Note
are to the referenced Sections of this Note, unless the context otherwise
requires.
8.6. GENDER; SINGULAR AND PLURAL. Words of gender or neuter may be read
as masculine, feminine or neuter, as required or permitted by the context.
Singular and plural forms of defined and other terms herein may be read as
singular or plural, as required or permitted by the context.
8.7. GOVERNING LAW; SEVERABILITY. This Note shall be interpreted, and the
rights and obligations of the parties hereto shall be determined, in accordance
with the laws of the State of New York (other than the conflicts of law
principles thereof). Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note, provided that the prohibition or
invalidity does not reduce the amount of any payment obligation of Company or
delay the time for any such payment.
[3][SECTION 9. SUBSTITUTION OF "BICKOPCO SENIOR SUBORDINATED NOTE" FOR THIS
"BICKHOLDCO SENIOR SUBORDINATED NOTE"
9.1. ASSUMPTION AND RELEASE. This Note was originally issued, executed
and delivered by the Company to ELXSI on the Original Issue Date as part of the
consideration for the Initial Contribution under (and as defined in) the
Contribution Agreement. The Contribution Agreement provides, among other things,
that effective immediately after the effectiveness of the Initial Contribution,
on the Original Issue Date and as part of the Second Contribution under (and as
defined in) the Contribution Agreement: (i) BickOpCo (as defined in the
Contribution Agreement) shall assume and agree to pay, satisfy and discharge in
accordance with its terms (subject to any defenses or claimed offsets asserted
in good faith against the obligee to whom the same are owed) this Note (the
"BICKOPCO ASSUMPTION"), and (ii) BickHoldCo shall be fully released from the
indebtedness and other Liabilities under this Note and relieved of all further
responsibility therefor (the "BICKHOLDCO RELEASE"). ELXSI, and each other holder
of Senior Subordinated Notes, by its acceptance thereof, hereby: (A) irrevocably
consents and agrees to the BickOpCo Assumption and BickHoldCo Release, and (B)
agrees to execute and deliver such agreements, instruments, certificates or
other documents, and to take such other and further actions, as BickHoldCo
and/or BickOpCo may reasonably request in order to further effect and/or
evidence such BickOpCo Assumption and/or BickHoldCo Release.
9.2. SUBSTITUTION OF NOTE INSTRUMENTS. Simultaneously with the
consummation of the Second Contribution and in order evidence the BickOpCo
Assumption and BickHoldCo Release, BickHoldCo shall cause BickOpCo to issue,
execute and deliver to ELXSI a new Senior Subordinated Note in replacement of
this Note, whereupon ELXSI shall surrender to BickHoldCo for cancellation this
Note and the same shall no longer be of any force or effect.]
--------------------
[3] Include in BickHoldCo Senior Subordinated Note only
EXHIBIT B-PAGE 12
(to Contribution Agreement)
IN WITNESS WHEREOF, the undersigned has executed this Note on the date
first above written.
[▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.][4]
[▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.][5]
By:
------------------------------
Name:
Title:
--------------------
[4] Include in BickHoldCo Senior Subordinated Note only
[5] Include in BickOpCo Senior Subordinated Note only
EXHIBIT C-PAGE 1
(to Contribution Agreement)
FORM OF SUBORDINATED NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OR OTHER JURISDICTION, AND
NEITHER THIS NOTE NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED,
DISTRIBUTED, ASSIGNED OR OTHERWISE DISPOSED OF UNLESS: (A) THERE IS AN EFFECTIVE
REGISTRATION UNDER SUCH ACT COVERING SUCH TRANSACTION, OR (B) THE COMPANY
RECEIVES AN OPINION FROM LEGAL COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO
THE EFFECT THAT SUCH TRANSACTION IS EXEMPT FROM THE APPLICABLE REGISTRATION
REQUIREMENTS OF SUCH ACT.
THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATED TO ALL SENIOR
DEBT (AS DEFINED HEREINBELOW), IN THE MANNER AND TO THE EXTENT SET FORTH HEREIN.
[▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.][1]
[▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.][2]
15% SUBORDINATED PROMISSORY NOTE
Note No. DDSU-___ $25,000,000 December 30, 2000
FOR VALUE RECEIVED, the undersigned [▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.][1]
[▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.][2], a Delaware corporation (the
"COMPANY"), hereby promises to pay to the order of ELXSI, a California
corporation, or the registered assigns thereof, on December 30, 2010 (the
"MATURITY DATE"), the principal sum of TWENTY-FIVE MILLION UNITED STATES DOLLARS
($25,000,000), plus interest as hereinafter provided.
This Note (this "NOTE") [is the "BickHoldCo Subordinated Note"][1] [is or
constitutes a part of the "BickOpCo Subordinated Note"][2] issued on or as of
December 30, 2000 (the "ORIGINAL ISSUE DATE") under (and as defined in) that
certain Contribution Agreement, dated as of December 29, 2000 (the "CONTRIBUTION
AGREEMENT"), among ELXSI, ▇▇▇▇▇▇▇▇'▇ Holdings Company, Inc. and ▇▇▇▇▇▇▇▇'▇
Family Restaurants, Inc. This Note, together with any other similar 15%
Subordinated Promissory Notes of the Company issued upon division, combination
and/or transfer of such Subordinated Note are hereinafter collectively referred
to as the "SUBORDINATED NOTES".
Certain terms used and not defined above in this Note are defined in
Section 7.
--------------------
[1] Include in BickHoldCo Subordinated Note only
[2] Include in BickOpCo Subordinated Note only
EXHIBIT C-PAGE 2
(to Contribution Agreement)
SECTION 1. INTEREST; PAYMENTS
1.1. INTEREST RATE. The outstanding principal amount of this Note shall
bear interest at a per annum rate equal to fifteen percent (15%); provided,
however, that if an Event of Default (as defined in Section 3 hereof) shall have
occurred and be continuing, the Company shall pay interest on the outstanding
principal amount of this Note, and (to the extent permitted by applicable law)
on any unpaid interest under this Note, from the date of such Event of Default
and for so long as such Event of Default is continuing, at a per annum rate
equal to seventeen percent (17%). Interest shall be computed on the basis of a
year of 360 days and the actual number of days elapsed.
1.2. INTEREST PAYMENTS. Interest hereunder shall be due and payable
monthly in arrears on the last day of each calendar month, commencing with
January 31, 2001. In addition, any payment or prepayment of all or any portion
of the principal balance of this Note shall be accompanied by the payment of all
accrued and unpaid interest on the principal balance being repaid.
1.3. PRINCIPAL PAYMENTS. SCHEDULED. On each Amortization Date, the
Company shall make a mandatory payment of the principal of the Senior
Subordinated Notes in an amount in the aggregate equal to the Amortization
Payment corresponding to such Amortization Date (as set forth in Section 7);
provided, however, that any mandatory or voluntary prepayments of Subordinated
Notes made in accordance with any other provision of this Section 1.3 shall be
credited against the Amortization Payment(s) otherwise required to made on the
succeeding Amortization Date(s), so as to reduce the Amortization Payment(s)
required to be made on such succeeding Amortization Date(s), in the order of
their occurrence.
(b) RECAPTURE EVENTS. The Company shall apply the net cash proceeds of
any consummated debt or equity financing, asset sale or other cash realization
event that, under the terms of any Senior Debt, requires or triggers a permanent
reduction in the loans and/or credit commitments outstanding thereunder: (i) to
make the payments and/or prepayments (if any) required under the terms of any
Senior Debt as a result thereof or in connection therewith, and (ii) if and to
the extent that (x) there shall be any net cash proceeds remaining thereafter
and (y) it shall be permitted under Section 4 and any Separate Subordination
Agreement, to the mandatory prepayment of the principal of the Subordinated
Notes.
(c) VOLUNTARY. The Company may voluntarily prepay the principal balance
of the Subordinated Notes, in whole or from time to time in part, without
premium or penalty.
(d) MATURITY DATE. The entire principal balance of the Subordinated
Notes outstanding on the Maturity Date shall be due and payable on the Maturity
Date.
(e) PRO RATA PAYMENTS. All payments and prepayments required under the
terms of this Note shall be made to all holders of the Subordinated Notes on a
pro rata basis. All such payments and prepayments shall be applied first to the
payment of accrued interest and second to the payment of the principal balance
thereof.
1.4. CHANGE OF CONTROL OFFER. (a) Within ten days after a Change of
Control shall have occurred (if it then be continuing), the Company shall make
an offer to purchase (a "CHANGE OF CONTROL OFFER") all outstanding Subordinated
Notes at a price of 100% of the outstanding principal amount thereof plus an
amount equal to all interest accrued and unpaid thereon to and including the
Change of Control Payment Date (as hereinafter defined), without any interest
(the "CHANGE OF CONTROL PRICE").
(b) Notice of any Change of Control and Change of Control Offer shall
be given by the Company by mailing (postage prepaid) or otherwise delivering a
written notice to the holders of record of the Subordinated Notes at their
respective addresses then appearing on the books of the Company, stating: (i)
that a Change of Control Offer is being made pursuant to this Section 1.4 and
that all Subordinated Notes tendered will be accepted for payment, subject to
the terms and conditions set forth herein; (ii) the Change of Control Price and
EXHIBIT C-PAGE 3
(to Contribution Agreement)
the purchase date (which shall be no earlier than 10 and no later than 60 days
after the date that such notice is mailed) (the "CHANGE OF CONTROL PAYMENT
DATE"); (iii) that holders of Subordinated Notes accepting the Change of Control
Offer will be required to surrender their Subordinated Notes to the Company or
its agent designated for the purpose (a "PAYING Agent"), if any, at the address
specified in such notice prior to the close of business on the business day
immediately preceding the Change of Control Payment Date; (iv) that holders of
Subordinated Notes will be entitled to withdraw their acceptance of the Change
of Control Offer if the Company or its Paying Agent, if any, receives, not later
than the close of business on the business day immediately preceding the Change
of Control Payment Date, a telegram, facsimile transmission or other written
advice setting forth the name of the withdrawing holder and the election of such
holder to withdraw its election to have the Subordinated Notes identified
therein purchased pursuant to the Change of Control Offer; and (v) that holders
whose Subordinated Notes are being purchased only in part will be issued a new
Subordinated Note representing the unpurchased Subordinated Notes surrendered.
(c) On the Change of Control Payment Date, the Company shall: (i)
accept for payment all Subordinated Notes validly tendered and not withdrawn
pursuant to the Change of Control Offer; (ii) promptly mail (postage prepaid) or
otherwise deliver to each holder of Subordinated Notes so accepted payment of
the Change of Control Price therefor; and (iii) issue and forward to each such
holder who submitted a Subordinated Note representing (in part) not so tendered
a Subordinated Note representing the unpurchased Subordinated Notes surrendered.
(d) If notice of a Change of Control as provided in this subsection
1.4(b) above has been given and the funds to pay the Change of Control Price for
Subordinated Notes tendered and not withdrawn have been paid or irrevocably set
aside for payment, then all Subordinated Notes accepted for payment pursuant to
the Change of Control Offer shall, on the Change of Control Payment Date, be
deemed to be no longer outstanding for any purpose and shall have no right to
receive any interest payable to the holders of Subordinated Notes accrued after
the Change of Control Payment Date, and all other rights with respect to such
Subordinated Notes shall thereupon cease and terminate, excepting, however: (i)
the right of the holders thereof to receive the Change of Control Price
therefor, without any interest, and (ii) rights of registration of transfer and
exchange (subject to Section 5 hereof).
1.5. NON-BUSINESS DAYS. If a payment under this Note becomes due and
payable hereunder other than on a business day, the due date thereof shall be
extended to the next succeeding business day and interest shall be payable
thereon during such extension at the applicable rate specified above.
SECTION 2. COVENANTS
The Company hereby covenants and agrees that, except as may be consented to
by the Majority Holders:
IT WILL:
(a) Promptly give notice to the holder of this Note of the occurrence
and continuation of any Event of Default hereunder;
(b) Preserve its corporate existence;
(c) Comply in all material respects with all federal, state, local and
foreign laws, statutes, ordinances, codes, judgments, orders, decrees,
directives, rules and regulations of any governmental authority, court or
arbitrator, and with all governmental licenses, permits, rights, privileges,
registrations, required reports, franchises, authorizations and other consents,
applicable to the Company or the business, operations or assets thereof;
EXHIBIT C-PAGE 4
(to Contribution Agreement)
(d) Comply in all material respects with all material contracts,
agreements, instruments, undertakings, commitments and arrangements, written or
oral, of any kind or description whatsoever, applicable to the Company or the
business, operations or assets thereof;
(e) Pay promptly when due all taxes, fees, assessments and other
governmental charges imposed upon the Company's property, assets or income,
provided, however, that payment of any such tax, fee, assessment, charge, claim
or indebtedness shall not be necessary so long as the applicability or validity
thereof shall be contested in good faith by appropriate proceedings and a
reserve, if appropriate, shall have been established with respect thereto, and
such failure to pay is not prejudicial in any material respect to the interests
of the holder of this Note; and
(f) Maintain insurance to such an extent, in such amounts and covering
such risks as is customary for companies engaged in the same or similar
businesses; and
IT WILL NOT:
(g) Whenever: (x) the Company fails to pay on any interest payment date
the full amount of interest then accrued on the outstanding Subordinated Notes,
whether or not such payment is prohibited by the terms of any Senior Debt, or
(y) the Company fails make any mandatory principal payment or Change of Control
Offer payment with respect to the Subordinated Notes that it is required by the
terms hereof to make, whether or not such payment is prohibited by the terms of
any Senior Debt (the events described in the foregoing clauses (x) and (y), a
"PAYMENT DEFAULT"), thereafter, until such Payment Default shall no longer be
continuing, the Company shall not: (i) pay any interest, fee or similar payments
on or with respect to any Junior Debt other than interest payable in Junior
Debt; or (ii) declare or pay dividends, or make any other distributions, on or
in respect of any shares of its capital stock, other than dividends or
distributions payable in its capital stock; or
(h) Whenever a Payment Default shall have occurred, thereafter, until
such Payment Default shall no longer be continuing, the Company shall not (i)
pay, prepay, redeem, purchase or otherwise acquire for value any Junior Debt
(provided that the Company may at any time: (A) pay, prepay, redeem, purchase or
otherwise acquire for value Junior Debt in exchange for shares of its capital
stock or other Junior Debt; and (B) accept Junior Debt for conversion into
shares of its capital stock or other Junior Debt, provided that the dividends or
interest (as the case may be) payable on, and aggregate liquidation preference
(if any) or principal (as the case may be) of, any of its capital stock or
Junior Debt issued in such a conversion shall be no greater than that of its
Junior Debt converted); or (ii) redeem, purchase or otherwise acquire for value
shares of its capital stock (provided that the Company may at any time: (A)
redeem, purchase or otherwise acquire for value shares of its capital stock in
exchange for shares of its capital stock; and (B) accept shares of its capital
stock for conversion into shares of its capital stock, provided that the
dividends payable on, and aggregate liquidation preference (if any) of, any of
its capital stock issued in such a conversion shall be no greater than that of
its capital stock converted).
SECTION 3. EVENTS OF DEFAULT
Upon the occurrence of any of the following, each of which is referred to
herein as an "EVENT OF DEFAULT":
(a) Any failure of the Company to pay within five business days of the
applicable due date any principal of, interest under, or other sums due under
this Note, whether by reason of stated maturity or due date, notice of
prepayment, mandatory prepayment, offer to purchase, cancellation, acceleration
or otherwise;
(b) Any breach by the Company, or any failure to fulfill, any of its
other obligations set forth in Section 1.4 or 2 of this Note;
EXHIBIT C-PAGE 5
(to Contribution Agreement)
(c) The filing by the Company of a petition in bankruptcy or a
voluntary petition or of an answer seeking readjustment of its debts or for any
other relief under any bankruptcy, insolvency, or other similar act or law of
any jurisdiction, domestic or foreign, now or hereafter existing, or the taking
by the Company of any action indicating its consent to, approval of, or
acquiescence in, any such petition or proceeding; or the application by the
Company for, or any the Company's sustaining the appointment by consent or
acquiescence of, a receiver or trustee for the Company or for all or a
substantial part of its property or assets; or an assignment by the Company for
the benefit of its creditors;
(d) The filing of any involuntary petition against the Company in
bankruptcy or seeking readjustment of its debts or for any other relief under
any bankruptcy, insolvency, or other similar act or law of any jurisdiction,
domestic or foreign, now or hereafter existing; or the appointment of a receiver
or trustee for the Company or for all or a substantial part of its property or
assets; or the serving on the Company of a warrant of attachment, execution or
similar process against any substantial part of the property or assets of the
Company and any of such events continues for 60 days undismissed, unbonded or
undischarged;
(e) A final judgment for the payment of money in excess of $50,000
shall be rendered by a court against the Company and the Company shall not
discharge the same or provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, within 60 days after the date of entry
thereof and within said period of 60 days (or such longer period during which
execution of such judgment shall have been stayed) appeal therefrom and cause
the execution thereof to be stayed during such appeal;
(f) The effectuation by the Company of any dissolution, liquidation or
winding up, or the taking of any corporate action or the commencement of any
proceedings in connection with any of the foregoing; or
(g) Any Senior Debt Event of Default;
then, during the continuance of any such event, the holder of this Note may, by
written notice to the Company declare the outstanding principal balance of this
Note immediately due and payable, whereupon the same shall become immediately
due and payable (without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived); provided, however, that if
there shall have occurred an Event of Default described under the foregoing
subsection (c) or (d), the outstanding principal balance of this Note shall
automatically become immediately due and payable (without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived).
SECTION 4. SUBORDINATION
4.1. IN GENERAL. (a) By acceptance of this Note, the holder hereof hereby
agrees to the subordination provisions of this Note, set forth below in this
Section 4.
(b) If any payment of any principal of, interest under, or other sums
due under the Subordinated Notes (including under Sections 1.3 and 1.4) may not
be made without violating the terms of any Senior Debt then outstanding, such
payment shall not be made to the extent that the Company is so prohibited from
making such payment. Any payment not made by reason of the application of the
foregoing terms shall be made by the Company as promptly as practicable after
such payment may be made without violating the terms of any Senior Debt then
outstanding.
4.2. "SENIOR DEBT" DEFINED. For purposes of this Note, "SENIOR DEBT"
shall mean the following, whether outstanding on the Original Issue Date, the
date of this Note or thereafter created, incurred, assumed or guaranteed:
EXHIBIT C-PAGE 6
(to Contribution Agreement)
(i) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to any indebtedness for
borrowed money (including indebtedness incurred under the Bank Agreement);
(ii) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to the Senior Subordinated
Notes;
(iii) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to any of the Liabilities of
the type described in either of the foregoing clauses (i) or (ii) assumed
by or guaranteed in any manner by the Company or in effect guaranteed by
the Company (including through an agreement to purchase, contingent or
otherwise); and
(iv) the principal of, any premium on, all interest under, and all
other Liabilities due under or with respect to any indebtedness
representing a refinancing, renewal, extension, refunding, replacement or
substitution of any of the Liabilities of the type described in either of
the foregoing clauses (i), (ii) or (iii), or this clause (iv);
unless and to the extent that, in the case of any of the foregoing, the
agreement, document or instrument creating, evidencing or governing the same
provides that the same ranks pari passu with or junior to the Subordinated Notes
or that it is not superior or senior in right of payment to the Subordinated
Notes.
4.3. INSOLVENCY, ETC. In the event of (x) any insolvency proceeding,
bankruptcy, receivership, liquidation, reorganization, arrangement, assignment
for the benefit of creditors, or other similar proceeding relative to the
Company or its creditors, as such, or its property, or (y) any proceeding for
the voluntary or involuntary liquidation, dissolution or other winding up of the
Company, whether or not involving insolvency or bankruptcy proceedings, then and
in any such event:
(i) all Senior Debt (including interest on the principal amount
thereof accruing after the commencement of any such proceedings) shall
first be paid in full before any payment or distribution of any character,
whether in cash, securities or other property, shall be made in respect of
this Note or any other Subordinated Notes;
(ii) any payment or distribution of any character, whether in cash,
securities or other property, which would otherwise (but for the terms of
this Section 4.3) be payable or deliverable in respect of this Note or any
other Subordinated Notes (including any payment or distribution in respect
of this Note and other Subordinated Notes by reason of any other
indebtedness of the Company being subordinated to the Subordinated Notes
and any payment in respect of interest on the principal amount thereof
accruing after the commencement of any such proceedings), shall be paid or
delivered directly to the holders of the Senior Debt, or their
representatives, until the aggregate amount of the Senior Debt (including
interest on the principal amount thereof accruing after the commencement of
any such proceedings) shall have been paid in full (and the holder of this
Note hereby irrevocably authorizes, empowers and directs all receivers,
trustees, liquidators, conservators and others having authority in the
premises to effect all such payments and deliveries); and
(iii) the holder of this Note will execute and deliver to the holders
of the Senior Debt, or their representatives, all such other and further
instruments confirming the authorization referred to in the foregoing
clause (ii), any powers of attorney specifically confirming the rights of
the holders of the Senior Debt arising hereunder, and all such proofs of
claim, assignments of claim and other instruments, and shall take all such
other and further actions as may be requested by any holder of the Senior
Debt or its representatives.
EXHIBIT C-PAGE 7
(to Contribution Agreement)
4.4. PAYMENTS IN CONTRAVENTION. If, notwithstanding the provisions of
Section 4, any payment or distribution of any character (whether in cash,
securities, or other property) or any security shall be received by the holder
of this Note in contravention of the terms of this Section 4, and before the
Senior Debt shall have been paid in full, such payment, distribution or security
shall not be commingled with any asset of the holder of this Note, but shall be
held in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Debt, or their representatives, for
application to the payment of all Senior Debt remaining unpaid, until the Senior
Debt (including interest on the principal amount thereof accruing after the
commencement of any proceedings described in Section 4.3 hereof) shall have been
paid in full.
4.5. SEPARATE SUBORDINATION AGREEMENTS. The holder of this Note, by his
acceptance thereof, agrees that such holder shall, from time to time upon the
request of the Company made in accordance with any request or demand of any
holder (or prospective holder) of Senior Debt, or its representative, to execute
and deliver, or cause to be executed and delivered, such other agreements,
documents and instruments with respect to the subordination of the indebtedness
evidenced by this Note to such Senior Debt as shall be so requested or demanded
by such holder (or prospective holder), or its representative (any such
agreement, document or instrument, a "SEPARATE SUBORDINATION AGREEMENT").
Without limiting the generality of the foregoing, a Separate Subordination
Agreement may establish or provide for subordination agreements or arrangements
greater than (i.e., more detrimental to the interests of the holder of his Note)
as those set forth above in this Section 4. Unless and to the extent otherwise
stated in any Separate Subordination Agreement, in the event of a conflict or
inconsistency between any term or provision thereof and this Section 4, such
Separate Subordination Agreement shall govern and control.
SECTION 5. RESTRICTIONS ON TRANSFER
5.1. LEGEND. Except as otherwise provided in this Section 5, each Note
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE OR OTHER
JURISDICTION, AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, DISTRIBUTED, ASSIGNED OR OTHERWISE DISPOSED OF
UNLESS: (A) THERE IS AN EFFECTIVE REGISTRATION UNDER SUCH ACT COVERING SUCH
TRANSACTION, OR (B) THE COMPANY RECEIVES AN OPINION ADDRESSED FROM LEGAL
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH
TRANSACTION IS EXEMPT FROM THE APPLICABLE REGISTRATION REQUIREMENTS OF SUCH
ACT."
5.2. RESTRICTIONS ON TRANSFER. Each offer, sale, transfer, distribution,
assignment or other disposal of this Note or any interest therein shall be
subject to compliance with the terms of the foregoing legend, and the Company
(and any transfer agent of the Company) may refuse to register or otherwise
recognize any transfer of this Note or Conversion Shares not in compliance
therewith.
SECTION 6. TRANSFER OFFICE; OWNERSHIP; REGISTRATION OF TRANSFER, ETC.
6.1. TRANSFER OFFICE. The Company shall maintain an office or agency in
the United States of America where books for the registration and registration
of transfer of Subordinated Notes will be kept and where Subordinated Notes may
be presented for division or combination and substitution pursuant to the
provisions thereof (the "TRANSFER OFFICE"). The Transfer Office shall initially
be located at ▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and may
subsequently be located at such other address in the United States of America as
to which the Company shall have previously delivered prior written to the holder
or holders of the Subordinated Notes.
EXHIBIT C-PAGE 8
(to Contribution Agreement)
6.2. OWNERSHIP OF NOTES. The Company may deem and treat the Person in
whose name this Note is registered as the owner and holder thereof for all
purposes hereunder and shall not be bound by any notice to the contrary, until
presentation of this Note for registration of transfer as provided in this
Section 6.
6.3. REGISTRATION OF TRANSFER. The Company agrees to maintain at the
Transfer Office books for the registration and registration of transfer of
Subordinated Notes, and (subject to the provisions of Section 5) this Note and
all rights hereunder are transferable, in whole or in any part, on said books at
said office upon surrender of this Note at said Transfer Office, together with a
written instrument of transfer of this Note duly executed by the holder thereof
or its duly authorized agent or attorney and funds sufficient to pay any
transfer taxes payable in respect thereof. Upon such surrender and payment, the
Company shall execute and deliver a new Subordinated Note in the name of the
assignee or assignees and in the denominations specified in such instrument and
this Note shall promptly be cancelled.
6.4. DIVISION OR COMBINATION OF NOTES. This Note may be divided or
combined with other Subordinated Notes upon presentation of this Note and of any
other Subordinated Notes with which this Note is to be combined at the Transfer
Office, together with a written notice specifying the names and denominations in
which the new Subordinated Note or Notes are to be issued duly executed by the
holders hereof and thereof or their respective duly authorized agents or
attorneys. Subject to compliance with Section 6.3 as to any transfer which may
be involved in such division or combination, the Company shall execute and
deliver a new Subordinated Note or Notes in exchange for the Subordinated Note
or Notes to be divided or combined in accordance with such notice.
6.5. LOSS, DESTRUCTION, ETC. OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Subordinated Note, and in the case of any such loss, theft or destruction upon
delivery of a written indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation upon surrender
and cancellation of the mutilated Subordinated Note, the Company shall execute
and deliver a new Subordinated Note of like tenor in lieu of such lost, stolen,
mutilated or destroyed Subordinated Note. Any Subordinated Note issued under the
provisions of this Section 6.5 in lieu of any Subordinated Note alleged to be
lost, stolen, mutilated or destroyed shall constitute an original contractual
obligation on the part of the Company.
6.6. EXPENSES OF DELIVERY. The Company shall bear and pay all expenses,
taxes (other than transfer taxes) and other charges incurred or charged in
connection with the preparation, issuance and delivery of Subordinated Notes
hereunder.
SECTION 7. DEFINITIONS
For purposes of the Subordinated Notes, the following definitions, not
defined elsewhere herein, shall have the following respective meanings:
"AMORTIZATION DATE" means the last day of each calendar quarter, commencing
with March 31, 2002, and "AMORTIZATION PAYMENT" means, for any Amortization Date
falling in any of the following calendar years, the amount hereinafter set forth
opposite such calendar year:
EXHIBIT C-PAGE 9
(to Contribution Agreement)
Calendar Year Amortization Payment (on
(of Amortization Date) each Amortization Date in such Calendar Year)
---------------------- ---------------------------------------------
2002 $ 250,000
2003 $ 250,000
2004 $ 250,000
2005 $ 250,000
2006 $ 500,000
2007 $ 750,000
2008 $ 1,000,000
2009 $ 1,000,000
2010 $ 1,000,000
2011 $ 1,000,000
"BANK AGREEMENT" means that certain Amended and Restated Loan and Security
Agreement, dated as of December 30, 1996, between ELXSI and Bank of America,
N.A. (then named Bank of America Illinois), as amended from time to time.
"CHANGE OF CONTROL" means any of the following events: (A) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d) of the Exchange Act),
other than Permitted Holders, is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of Voting Securities carrying 50%
or more of the aggregate voting power of all classes of Voting Stock of the
Company; (B) the Company merges or consolidates with or into another Person, or
sells, assigns, conveys, exchanges, leases, transfers or otherwise disposes of
all of substantially all of its property and assets to any Person, in any such
event pursuant to a transaction in which the outstanding Voting Stock of all
classes and series of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where: (i) the
outstanding Voting Stock of each class and series of the Company is converted
into or exchanged for Voting Stock of the surviving or transferee Person (as the
case may be), and (ii) the holders of each class and series of Voting Stock of
the Company immediately prior to such transaction own, directly or indirectly,
Voting Stock carrying 50% or more of the aggregate voting power of all classes
of Voting Stock of the surviving or transferee Person (as the case may be)
immediately after such transaction; or (C) at any time, individuals who
constituted the Board of Directors of the Company on the Original Issue Date
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was approved by
a vote of 66-2/3% of the directors then still in office who were either
directors on the Original Issue Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office.
"ELXSI" means ELXSI, a California corporation and wholly owned subsidiary
of ELXSI Corp.
"ELXSI CORP." means ELXSI Corporation, a Delaware corporation.
"ELXSI CORP. RIGHTS PLAN" means that certain Rights Agreement, dated as of
June 4, 1997 (as amended from time to time), between ELXSI Corp. and Continental
Stock Transfer & Trust Company, as Rights Agent.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"JUNIOR DEBT" means and includes all Liabilities for borrowed money wherein
the agreement, document or instrument creating, evidencing or governing the same
provides that the same ranks junior to the Subordinated Notes or that it is not
superior or senior in right of payment to, or parri passu with, the Subordinated
Notes.
EXHIBIT C-PAGE 10
(to Contribution Agreement)
"LIABILITIES" has the meaning ascribed to such term under the Contribution
Agreement.
"MAJORITY HOLDERS" means, at any time, holders of the majority of the
Subordinated Notes outstanding at such time.
"PERMITTED HOLDER" means and includes: (i) ELXSI Corp, ELXSI, and any other
subsidiary of ELXSI Corp.; and (ii) any ▇▇▇▇▇▇ Group Member and any Affiliate
and Associate of any ▇▇▇▇▇▇ Group Member (as such terms are defined in the ELXSI
Corp. Rights Agreement).
"PERSON" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated association or organization, governmental agency
or other body, or other entity of whatever nature.
"SENIOR DEBT EVENT OF DEFAULT" means and includes each "event of default"
under, or within the meaning of, the terms of any Senior Debt (whenever
incurred). Any Senior Debt Event of Default agreed to or otherwise coming into
effect after the Original Issue Date or the date hereof shall, automatically and
simultaneously with its effectiveness, become a "Senior Debt Event of Default"
for purposes hereof. Any amendment, waiver or other modification of the Senior
Debt Events of Default as in effect under the terms of any relevant Senior Debt
shall have no force and effect with respect to the Senior Debt Events of Default
as in effect under the Subordinated Notes, unless and to the extent approved by
the Majority Holders.
"SENIOR SUBORDINATED NOTES" means and includes the Senior Subordinated Note
issued under (and as defined in) the Contribution Agreement, together with any
other similar Senior Subordinated Promissory Notes of the Company issued upon
division, combination and/or transfer of such Senior Subordinated Note.
"VOTING STOCK" means, of any Person, outstanding securities of all classes
of such Person ordinarily (and apart from rights accruing under special
circumstances) having the right to elect directors of such Person.
SECTION 8. MISCELLANEOUS
8.1. NOTICES. All notices, requests, demands or other communications to
or upon the Company or the holder of this Note shall be deemed to have been
delivered, given or made when deposited in the mails, postage prepaid, addressed
(if to the Company) at ▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or (if to the holder of this Note) at such holder's address as provided by such
holder to the Company. No other method of giving notice is hereby precluded.
8.2. EXPENSES OF ENFORCEMENT. The Company agrees to pay and save the
holder of this Note harmless from and against any expenses arising in connection
with the enforcement of this Note, including, without limitation, the reasonable
fees and expenses of counsel selected by the holder of this Note.
8.3. WAIVERS AND AMENDMENTS. Any term or provision of the Subordinated
Notes (including this Note) may be waived, supplemented or amended in a writing
executed by the Company and executed (or consented to in writing) by the
Majority Holders; provided, however, that no such waiver, supplement or
amendment shall, without the consent of the holder of this Note, change the
maturity date of the principal of or any interest under this Note, or reduce the
principal amount of this Note or reduce the rate of interest hereunder.
8.4. WAIVERS, ETC. No failure or delay on the part of the holder of this
Note in exercising any right, power or privilege hereunder, and no course of
dealing between the Company and the holder of this Note shall operate as a
waiver thereof nor shall any single or partial exercise of any right, power or
EXHIBIT C-PAGE 11
(to Contribution Agreement)
privilege hereunder preclude the simultaneous or later exercise of any other
right, power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the holder of this
Note would otherwise have. No notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the holder of this
Note to take any other or further action in any circumstances without notice or
demand.
8.5. DESCRIPTIVE HEADINGS; REFERENCES. The descriptive headings of this
Note are for convenience of reference only and shall not control or affect the
meaning or construction of any provision hereof. Section references in this Note
are to the referenced Sections of this Note, unless the context otherwise
requires.
8.6. GENDER; SINGULAR AND PLURAL. Words of gender or neuter may be read
as masculine, feminine or neuter, as required or permitted by the context.
Singular and plural forms of defined and other terms herein may be read as
singular or plural, as required or permitted by the context.
8.7. GOVERNING LAW; SEVERABILITY. This Note shall be interpreted, and the
rights and obligations of the parties hereto shall be determined, in accordance
with the laws of the State of New York (other than the conflicts of law
principles thereof). Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Note, provided that the prohibition or
invalidity does not reduce the amount of any payment obligation of Company or
delay the time for any such payment.
[1][SECTION 9. SUBSTITUTION OF "BICKOPCO SUBORDINATED NOTE" FOR THIS "BICKHOLDCO
SUBORDINATED NOTE"
9.1. ASSUMPTION AND RELEASE. This Note was originally issued, executed
and delivered by the Company to ELXSI on the Original Issue Date as part of the
consideration for the Initial Contribution under (and as defined in) the
Contribution Agreement. The Contribution Agreement provides, among other things,
that effective immediately after the effectiveness of the Initial Contribution,
on the Original Issue Date and as part of the Second Contribution under (and as
defined in) the Contribution Agreement: (i) BickOpCo (as defined in the
Contribution Agreement) shall assume and agree to pay, satisfy and discharge in
accordance with its terms (subject to any defenses or claimed offsets asserted
in good faith against the obligee to whom the same are owed) this Note (the
"BICKOPCO ASSUMPTION"), and (ii) BickHoldCo shall be fully released from the
indebtedness and other Liabilities under this Note and relieved of all further
responsibility therefor (the "BICKHOLDCO RELEASE"). ELXSI, and each other holder
of Subordinated Notes, by its acceptance thereof, hereby: (A) irrevocably
consents and agrees to the BickOpCo Assumption and BickHoldCo Release, and (B)
agrees to execute and deliver such agreements, instruments, certificates or
other documents, and to take such other and further actions, as BickHoldCo
and/or BickOpCo may reasonably request in order to further effect and/or
evidence such BickOpCo Assumption and/or BickHoldCo Release.
9.2. SUBSTITUTION OF NOTE INSTRUMENTS. Simultaneously with the
consummation of the Second Contribution and in order evidence the BickOpCo
Assumption and BickHoldCo Release, BickHoldCo shall cause BickOpCo to issue,
execute and deliver to ELXSI a new Subordinated Note in replacement of this
Note, whereupon ELXSI shall surrender to BickHoldCo for cancellation this Note
and the same shall no longer be of any force or effect.]
--------------------
[1] Include in BickHoldCo Subordinated Note only
EXHIBIT C-PAGE 12
(to Contribution Agreement)
IN WITNESS WHEREOF, the undersigned has executed this Note on the date
first above written.
[▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.][1]
[▇▇▇▇▇▇▇▇'▇ FAMILY RESTAURANTS, INC.][2]
By:
------------------------------
Name:
Title:
--------------------
[1] Include in BickHoldCo Subordinated Note only
[2] Include in BickOpCo Subordinated Note only
EXHIBIT D-PAGE 1
(to Contribution Agreement)
FORM OF BICKHOLDCO CERTIFICATE OF DESIGNATIONS
CERTIFICATE OF DESIGNATIONS
OF
CLASS A 3% CUMULATIVE REDEEMABLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE,
OF
▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC., a Corporation organized and existing
under the General Corporation Law of the State of Delaware (the "CORPORATION"),
DOES HEREBY CERTIFY that:
A. Pursuant to authority expressly conferred upon the Board of Directors of
the Corporation under the Certificate of Incorporation of the Corporation, as
amended, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, said Board of Directors duly adopted a
resolution on or as of December 22, 2000 providing for the authorization of
10,000 shares of Class A 3% Cumulative Redeemable Preferred Stock, par value
$.001 per share, and establishing the designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, which resolution is as follows:
"RESOLVED, that pursuant to Article FOURTH of the Certificate of
Incorporation of the Corporation, as amended: (i) the Board of Directors of
the Corporation hereby authorizes the designation of a class of its
Preferred Stock hereby designated as Class A 3% Cumulative Redeemable
Preferred Stock, par value $.001 per share (the "CLASS A"), (ii) the
designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions
thereof, of the Class A be, and the same hereby are, fixed as set forth in
Annex I attached hereto, (iii) upon the issuance of any shares of the Class
A, only the aggregate par value thereof shall be determined to be capital
of the Corporation for purposes of the General Corporation Law of the State
of Delaware (including Section 154 thereof), and (iv) the Chairman, the
President and any Vice President of the Corporation be, and each of them
hereby is, authorized and empowered, in the name and on behalf of the
Corporation and/or as an officer thereof, to execute and acknowledge a
Certificate of Designations in respect of the Class A that incorporates the
Annex I attached hereto, and to cause such Certificate of Designations to
be filed in the Office of the Secretary of State of the State of Delaware;"
B. Set forth immediately below is a true, complete and correct copy of the
Annex I referred to in said resolution:
SECTION 1. DESIGNATION AND NUMBER. (a) Of the shares of Preferred Stock,
par value $.001 per share ("PREFERRED STOCK"), of the Corporation, 20,000 shares
are hereby designated as Class A 3% Cumulative Redeemable Preferred Stock
(hereinafter referred to as the "CLASS A"). Such number of shares of the Class A
may be increased or decreased (but not below the number of then outstanding
shares of the Class A) by a vote of the Board of Directors of the Corporation
(but subject to Sections 1(c) and 8). The Class A may be issued in fractions of
a share, which shall entitle the holder thereof, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of shares
of the Class A.
(b) RANKING. The Class A shall rank, with respect to dividends and upon
liquidation, dissolution or winding up of the Corporation: (1) senior to the
Common Stock, par value $.001 per share, of the Corporation ("COMMON STOCK"),
and (2) senior to any other class or series of Preferred Stock or other
preferred or preference stock of the Corporation ("OTHER PREFERRED STOCK"),
except for any Senior Stock or Parity Stock authorized by the holders of the
Class A as provided in the following Sections 1(c) and 8.
(c) ADDITIONAL SHARES. The Corporation may authorize and issue such
additional shares of Other Preferred Stock, of any class or series, to the full
extent permitted by the Certificate of Incorporation; provided, however, that,
EXHIBIT D-PAGE 2
(to Contribution Agreement)
as provided in Section 8 hereof, the Corporation may not issue any Senior Stock
or Parity Stock unless approved by the holders of a majority of the Class A
voting as a single class.
SECTION 2. DIVIDENDS. (a) IN GENERAL. The holders of shares of the Class
A shall be entitled to receive, when, as and if declared by the Board of
Directors of the Corporation out of funds of the Corporation legally available
therefor, dividends at an annual rate of $30.00 per share (the "DIVIDEND" or
"DIVIDENDS"). Dividends on shares of the Class A will be cumulative and will
accrue from the Deemed Issue Date of such shares and will be payable (when, as
and if declared by the Board of Directors of the Corporation out of funds of the
Corporation legally available therefor) annually in arrears at a rate of $30.00
per share for each Dividend Period on the Dividend Payment Date that falls at
the end of such Dividend Period; provided, however, that with respect to such
first Dividend Period and first Dividend Payment Date for any particular shares
of the Class A issued (or deemed to have been issued): (i) prior to the first
Dividend Payment Date, Dividends will be payable (when, as and if declared by
the Board of Directors of the Corporation out of funds of the Corporation
legally available therefor) in an amount equal to $30.00 per share multiplied by
a fraction the numerator of which shall be the number of days from but excluding
the Deemed Issue Date of such shares to and including the first Dividend Payment
Date and the denominator of which shall be 365 days, or (ii) on any other date
not constituting a Dividend Payment Date, Dividends will be payable (when, as
and if declared by the Board of Directors of the Corporation out of funds of the
Corporation legally available therefor) in an amount equal to $30.00 per share
multiplied by a fraction the numerator of which shall be the number of days from
but excluding the Deemed Issue Date of such shares to and including the next
Dividend Payment Date and the denominator of which shall be the numbers of days
in the period from but excluding the immediately preceding Dividend Payment Date
to and including the next Dividend Payment Date.
(b) ACCUMULATION AND PAYMENT. Dividends, whether or not declared, will
begin to accrue and be cumulative on shares of the Class A from the Deemed Issue
Date thereof until declared and paid, when declaration and payment may be for
all or part of the then accumulated Dividends. Each Dividend shall be payable to
holders of record of the Class A as they appear on the books of the Corporation
on the relevant Dividend Record Date. Accrued and unpaid Dividends, if any,
shall not bear any interest or Dividends. Dividends in arrears for any past
Dividend Payment Date, and Dividends in connection with any redemption or
purchase of shares of the Class A, may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such date, not
exceeding 60 days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Corporation. The amount of any Dividends "accrued" on
any share of the Class A at any date shall be deemed to be the amount of any
unpaid Dividends accumulated thereon to and including such date, whether or not
earned or declared. Dividends accrued with respect to less than a whole Dividend
Period shall be computed on the basis of the actual number of days comprising
such Dividend Period and the actual number of days elapsed.
(c) CASH OR IN KIND. All Dividends shall be paid in cash; provided that
if and to the extent that the payment of any Dividend in cash is prohibited by
the terms of any Senior Stock or Parity Stock or any binding agreement or
instrument to which the Corporation is a party or subject, such Dividend shall
be paid in such combination of cash and additional shares of the Class A (with
each whole such share being valued at $1,000 and fractional shares the
corresponding fraction thereof) ("PIK SHARES"), or entirely in PIK shares, to
the extent necessary to avoid a violation of such terms. Dividends paid by the
issuance of PIK shares shall be deemed to have been paid for all purposes
hereunder (except as otherwise provided in Section 6), and for all purposes
hereunder such PIK Shares shall be deemed to have been issued and to be
outstanding on (and shall have a Deemed Issue Date of) the relevant Dividend
Payment Date. Only the aggregate par value of any PIK Shares shall be determined
to be capital of the Corporation for purposes of the General Corporation Law of
the State of Delaware (including Section 154 thereof).
(d) NO OTHER DIVIDENDS. The holders of shares of Class A shall not be
entitled to receive any dividends or other distributions, or otherwise
participate in the growth of the Corporation, except as provided in this Section
2. The right to receive Dividends under this Section 2 shall be subject to the
restrictions contained in Section 6 hereof.
EXHIBIT D-PAGE 3
(to Contribution Agreement)
SECTION 3. REDEMPTION. (a) AT THE CORPORATION'S OPTION. (1) The
outstanding shares of the Class A may be redeemed, at the option of the
Corporation (but subject to the restrictions contained in Section 6 hereof), in
whole or in any part, at any time and from time to time, upon not more than 60
nor less than 10 days' prior written notice to the holders of the shares to be
redeemed, at a redemption price per share equal to $1,000 plus an amount equal
to all Dividends accrued (whether or not accumulated) and unpaid thereon,
whether or not declared, to and including the date fixed for redemption, without
any interest (the "REDEMPTION PRICE").
(2) If less than all of the shares of the Class A are to be
redeemed in a particular Optional Redemption, the shares to be redeemed shall be
redeemed pro rata or determined by lot in such manner as the Board of Directors
of the Corporation may determine to be equitable.
(b) MANDATORY REDEMPTION. The Corporation shall be required to redeem,
on December 29, 2010, all then-outstanding shares of the Class A, at the
Redemption Price.
(c) Notice of any Optional Redemption or Mandatory Redemption shall be
given by written notice of the Corporation mailed (postage prepaid) or otherwise
delivered to the holders of record of the shares of the Class A to be redeemed
at their respective addresses then appearing on the books of the Corporation,
not more than 60 nor less than 10 days prior to the date fixed for redemption,
but neither the failure to mail or otherwise such notice nor any defect therein
or in the mailing or other delivery thereof shall affect the validity of the
proceeding for the redemption of any shares of the Class A called for
redemption. The Corporation may, at its option, by giving notice thereof (with
or in the aforementioned redemption notice) to the holders of record of the
shares of the Class A to be redeemed, impose as a condition to such holders'
entitlement to receive payment of the Redemption Price for such holders' shares
the requirement that the certificate(s) therefor be surrendered for cancellation
to the Corporation or its agent designated for the purpose (a "REDEMPTION
AGENT"), if any. However, if notice of a redemption has been duly given as
provided in this Section 3(c) and the funds to pay the Redemption Price for the
shares to be redeemed have been paid or irrevocably set aside for payment, then
all such shares of the Class A (whether or not the certificate(s) therefor have
been surrendered for cancellation) shall, effective on the date fixed for such
Optional Redemption or Mandatory Redemption (as the case may be), be deemed to
be no longer outstanding for any purpose and shall have no right to receive
Dividends payable to the holders of shares of the Class A on any record date
falling after the date fixed for such redemption, and all other rights with
respect to such shares shall thereupon cease and terminate, excepting, however:
(i) the right of the holders of such shares to receive (upon the satisfaction of
any condition to surrender the certificate(s) therefor for cancellation) the
Redemption Price therefor, without any interest, and (ii) rights of registration
of transfer and exchange (subject to Section 9 hereof).
(d) AT THE HOLDERS' OPTION. (1) At any time after the fifth anniversary
of the Original Issue Date, each holder of outstanding shares of the Class A may
require the Corporation to redeem all or any portion of such shares held by such
holder, at the Redemption Price.
(2) In order for a holder to require the Corporation to redeem
outstanding shares of the Class A held by such holder pursuant to a Put
Redemption, such holder shall: (A) deliver written notice to the Corporation, at
its principal offices or at the office of its Redemption Agent, if any, stating
that such holder elects to require the Corporation to effect a Put Redemption of
all or a specified number of such shares in accordance with the provisions of
this Section 3(d) and specifying: (i) the date required by such holder for such
Put Redemption (which may not be more than 60 nor less than 30 days after the
date of the Corporation's receipt of such notice), and (ii) the address to which
any check for the Redemption Price for such shares should be forwarded, and (B)
surrender to the Corporation, at its principal offices or at the office of any
Redemption Agent, the certificate(s) representing the Class A shares to be
redeemed. It shall be a condition to such holder's entitlement to receive
payment of the Redemption Price for such holder's shares the requirement that
the certificate(s) therefor be surrendered for cancellation to the Corporation
or its Redemption Agent, if any. However, if notice of a Put Redemption has been
duly given as provided in this Section 3(d)(2) and the funds to pay the
Redemption Price for the shares to be redeemed have been paid or irrevocably set
aside for payment, then all such shares of the Class A (whether or not the
certificate(s) therefor have been surrendered for cancellation) shall, on the
date required for such Put Redemption, be deemed to be no longer outstanding for
EXHIBIT D-PAGE 4
(to Contribution Agreement)
any purpose and shall have no right to receive Dividends payable to the holders
of record of shares of the Class A on any record date falling after the date
required for such redemption, and all other rights with respect to such shares
shall thereupon cease and terminate, excepting, however: (i) the right of the
holders of such shares to receive (upon the satisfaction of the condition to
surrender the certificate(s) therefor for cancellation) the Redemption Price
therefor, without any interest, and (ii) rights of registration of transfer and
exchange (subject to Section 9 hereof).
SECTION 4. CHANGE OF CONTROL OFFER. (a) Within ten days after a Change of
Control shall have occurred (if it then be continuing), the Corporation shall
make an offer to purchase (a "CHANGE OF CONTROL OFFER") all outstanding shares
of the Class A at a purchase price per share equal to $1,000 plus an amount
equal to all Dividends accrued (whether or not accumulated) and unpaid thereon,
whether or not declared, to and including the Change of Control Payment Date (as
hereinafter defined), without any interest (the "CHANGE OF CONTROL PRICE").
(b) Notice of any Change of Control and Change of Control Offer shall
be given by the Corporation by mailing (postage prepaid) or otherwise delivering
a written notice to the holders of record of the shares of the Class A at their
respective addresses then appearing on the books of the Corporation, stating:
(i) that a Change of Control Offer is being made pursuant to this Section 4 and
that all shares of Class A tendered will be accepted for payment, subject to the
terms and conditions set forth herein; (ii) the Change of Control Price and the
purchase date (which shall be no earlier than 10 and no later than 60 days after
the date that such notice is mailed) (the "CHANGE OF CONTROL PAYMENT DATE");
(iii) that holders of the Class A accepting the Change of Control Offer will be
required to surrender their certificates representing shares of the Class A to
the Corporation or its agent designated for the purpose (a "PAYING AGENT"), if
any, at the address specified in such notice prior to the close of business on
the business day immediately preceding the Change of Control Payment Date; (iv)
that holders of the Class A will be entitled to withdraw their acceptance of the
Change of Control Offer if the Corporation or its Paying Agent, if any,
receives, not later than the close of business on the business day immediately
preceding the Change of Control Payment Date, a telegram, facsimile transmission
or other written advice setting forth the name of the withdrawing holder and the
election of such holder to withdraw its election to have the shares of Class A
identified therein purchased pursuant to the Change of Control Offer; and (v)
that holders whose Class A whose shares are being purchased only in part will be
issued a new certificate representing the unpurchased shares of the Class A
represented by the Class A certificate(s) surrendered.
(c) On the Change of Control Payment Date, the Corporation shall: (i)
accept for payment all shares of Class A validly tendered and not withdrawn
pursuant to the Change of Control Offer; (ii) promptly mail (postage prepaid) or
otherwise deliver to each holder of shares of the Class A so accepted payment of
the Change of Control Price therefor; and (iii) issue and forward to each such
holder who surrendered a certificate representing (in part) shares of the Class
A not so tendered a new certificate representing the unpurchased shares of the
Class A represented by such Class A certificate(s) surrendered.
(d) If notice of a Change of Control as provided in this subsection
4(b) above has been given and the funds to pay the Change of Control Price for
the shares tendered and not withdrawn have been paid or irrevocably set aside
for payment, then all shares of the Class A accepted for payment pursuant to the
Change of Control Offer shall, on the Change of Control Payment Date, be deemed
to be no longer outstanding for any purpose and shall have no right to receive
Dividends payable to the holders of record of shares of the Class A on any
record date falling after the Change of Control Payment Date, and all other
rights with respect to such shares shall thereupon cease and terminate,
excepting, however: (i) the right of the holders of such shares to receive the
Change of Control Price therefor, without any interest, and (ii) rights of
registration of transfer and exchange (subject to Section 9 hereof).
SECTION 5. CORPORATION MAY PURCHASE SHARES. Nothing contained in Sections
3 or 4 or any other provision of this Certificate of Designations shall be
deemed to prohibit or restrict the Corporation from purchasing or otherwise
acquiring any shares of the Class A (whether in privately negotiated
transactions, in a tender or exchange offer or otherwise) and, unless otherwise
prohibited by applicable law, the Corporation is authorized to purchase or
otherwise acquire shares of the Class A at any time or from time to time, and at
such prices which may be obtained by the Corporation; subject, however, to the
applicable restrictions set forth in Section 6 hereof.
EXHIBIT D-PAGE 5
(to Contribution Agreement)
SECTION 6. PAYMENT RESTRICTIONS. (a) Whenever: (x) the Corporation fails
to pay on any Dividend Payment Date the full amount of Dividends then accrued on
the outstanding shares of the Class A, whether or not such payment is legally
permissible or is prohibited by the terms of any Senior Stock or Parity Stock or
any binding agreement or instrument to which the Corporation is a party or
subject, or (y) the Corporation fails to make any redemption or Change of
Control Offer payment with respect to the Class A that it is required by the
terms hereof to make, whether or not such payment is legally permissible or is
prohibited by the terms of any Senior Stock or Parity Stock or any binding
agreement or instrument to which the Corporation is a party or subject, or (z)
the Corporation shall be prohibited, under the terms of any Senior Stock or
Parity Stock or any binding agreement or instrument to which the Corporation is
a party or subject, to pay any such Dividends in cash (the events described in
the foregoing clauses (x), (y) and (z), a "PAYMENT DEFAULT"), thereafter, until
such Payment Default shall no longer be continuing, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on or in respect
of any shares of any Parity Stock, other than (A) dividends or distributions
payable in Parity Stock or Junior Stock, and (B) dividends or distributions paid
ratably on the Class A and all Parity Stock on which dividends are payable or in
arrears, in proportion to the total amounts to which the holders of all shares
of the Class A and such Parity Stock are then entitled; or (ii) declare or pay
dividends, or make any other distributions, on or in respect of any shares of
Junior Stock, other than dividends or distributions payable in Junior Stock.
(b) Whenever a Payment Default shall have occurred, thereafter, until
such Payment Default shall no longer be continuing, the Corporation shall not:
(i) redeem, purchase or otherwise acquire for value shares of Junior Stock or
Parity Stock (provided that the Corporation may at any time: (A) redeem,
purchase or otherwise acquire for value shares of: (x) Junior Stock in exchange
for shares of Junior Stock, and (y) Parity Stock in exchange for shares of
Junior Stock or Parity Stock, provided that the dividends payable on, and
aggregate liquidation preference (if any) of, any Junior Stock or Parity Stock
issued in such an exchange shall be no greater than that of the Junior Stock or
Parity Stock redeemed, purchased or otherwise acquired (as the case may be); (B)
accept shares of: (x) Junior Stock for conversion into shares of Junior Stock
and (y) Parity Stock for conversion into shares of Junior Stock or Parity Stock,
provided that the dividends payable on, and aggregate liquidation preference (if
any) of, any Junior Stock or Parity Stock issued in such a conversion shall be
no greater than that of the Parity Stock converted; and (C) redeem, purchase or
otherwise acquire for value shares of any Junior Stock or Parity Stock pursuant
to any mandatory redemption, offer to purchase, put, sinking fund or other
similar obligation, pro rata with the Class A in proportion to the total amount
then required to be applied by the Corporation to redeem, repurchase or
otherwise acquire shares of the Class A and shares of such Parity Stock); or
(ii) redeem, purchase or otherwise acquire for value any shares of the Class A
(except to cure such Payment Default).
(c) If any payment of Dividends on, or any redemption, purchase or
other acquisition of, the Class A may not be made without violating the terms of
any Senior Stock or Parity Stock or any binding agreement or instrument to which
the Corporation is a party or subject, such payment of Dividends, or such
redemption, purchase or other acquisition (as the case may be) shall not be made
to the extent that the Corporation is prohibited from making such payment by the
terms of such Senior Stock, Junior Stock or binding agreement or instrument (as
the case may be). Any Dividends not paid by reason of the application of the
foregoing terms shall accumulate and shall be paid by the Corporation as
promptly as practicable after such payment may be made without violating such
terms; and any Optional Redemption, Mandatory Redemption, Put Redemption or
purchase pursuant to a Change of Control Offer not effected by reason of the
application of the foregoing terms shall be effected by the Corporation as
promptly as practicable after such payment may be made without violating such
terms.
(d) The Corporation shall not permit any of its subsidiaries to
purchase or otherwise acquire for value any shares of capital stock of the
Corporation unless the Corporation could, pursuant to Section 6(b) and 6(c),
purchase or otherwise acquire such shares at such time and in such manner.
EXHIBIT D-PAGE 6
(to Contribution Agreement)
SECTION 7. REACQUIRED SHARES. Any shares of the Class A redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever may
be retired and canceled or may be held by the Corporation as treasury shares.
All such shares retired and cancelled shall thereupon become authorized but
unissued shares of the Class A available for reissue by the Board of Directors
of the Corporation (or an authorized committee thereof); provided that the
Corporation shall be permitted to prohibit the reissuance of retired and
cancelled shares of the Class A by filing the appropriate certificate in the
Office of the Secretary of State of the State of Delaware, and in such event
such shares shall become authorized but unissued shares of Preferred Stock,
without designation, available for reissue by the Board of Directors (or an
authorized committee thereof) as part of another class or series of Preferred
Stock (subject to Sections 1(c) and 8).
SECTION 8. VOTING. (a) IN GENERAL. Except as provided above in Section
1(c) and below in this Section 8 and Section 11, the Class A shall be non-voting
stock and the holders of the Class A shall not be entitled to vote on any
matters presented to the stockholders of the Corporation.
(b) CLASS VOTING IN CERTAIN EVENTS. The affirmative vote of the holders
of a majority of the shares of the Class A at the time outstanding, voting
separately as a single class, shall be required in order to authorize or
approve: (i) the issuance of any Senior Stock or Parity Stock, (ii) any decrease
in the number of authorized shares of the Class A below the sum of (x) the
number of shares of the Class A then outstanding plus (y) the number of PIK
Shares required to pay all Dividends on such outstanding shares and all PIK
Shares assuming, for this purpose, that all subsequent Dividends will be paid
entirely in PIK Shares, and (iii) any amendment to the Certificate of
Incorporation that would alter or change (or result in an alteration or change
in) the powers, preferences or special rights of the Class A shares adversely.
With respect to any matter on which the Class A is entitled to vote separately
as a single class, each outstanding whole share of the Class A shall be entitled
to one vote.
(c) VOTING REQUIRED BY LAW. The holders of the Class A shall have such
other and further voting rights as shall be provided for under the General
Corporation Law of the State of Delaware in effect at the time of determination.
SECTION 9. RESTRICTION ON TRANSFER; LEGENDS. (a) Except as otherwise
provided in Section 9(b), each certificate representing shares of the Class A
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or the securities or blue sky laws
of any state or other jurisdiction, and neither such shares nor any
interest therein may be offered, sold, transferred, distributed, assigned
or otherwise disposed of unless: (A) there is an effective registration
under such Act covering such transaction, or (B) the Corporation receives
an opinion from legal counsel reasonably acceptable to the Corporation to
the effect that such transaction is exempt from the applicable registration
requirements of such Act."
Each offer, sale, transfer, distribution, assignment or other disposal of
shares of the Class A or any interest therein shall be subject to compliance
with the terms of the foregoing legend, and the Corporation may refuse to
register or otherwise recognize any transfer of shares of Class A not in
compliance therewith.
(b) The restrictions imposed under Section 9(a) hereof shall terminate
as to any particular shares of the Class A: (i) when, if and so long as such
shares shall have been effectively registered under the Securities Act and
disposed of pursuant thereto, or (ii) when and if the Corporation shall have
received an opinion of counsel reasonably satisfactory to it that such legend is
not required in order to ensure compliance with the Securities Act. Whenever the
restrictions imposed by Section 9(a) shall terminate as to any shares of the
Class A as hereinabove provided, the holder thereof shall be entitled to receive
from the Corporation, at its expense, a new Class A stock certificate without
the legend called for hereunder.
(c) Each certificate representing shares of the Class A shall also be
stamped or otherwise imprinted with a legend in the form provided for in the
proviso in the first sentence of Section 151(f) of the General Corporation Law
of the State of Delaware (or any successor provisions thereto).
EXHIBIT D-PAGE 7
(to Contribution Agreement)
SECTION 10. LIQUIDATION, DISSOLUTION AND WINDING UP. (a) In the event of
any liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, the holders of outstanding shares of the Class A shall be
entitled to receive, for each such share, $1,000 (the "LIQUIDATION VALUE") plus
an amount equal to all Dividends accrued (whether or not accumulated) and unpaid
thereon, whether or not declared, to and including the date of payment, and no
more, before any distribution of assets shall be made to the holders of shares
of the Common Stock or any other Junior Stock; and if the distributable assets
of the Corporation are insufficient to make such payment in full to the holders
of all outstanding shares of the Class A and any outstanding Parity Stock, such
assets shall be distributed among the holders of the outstanding shares of the
Class A and any such Parity Stock ratably per share in proportion to the full
per share amounts to which they are respectively entitled. Prior to the time of
any liquidation, dissolution or winding up of the Corporation, the Corporation
shall declare for payment in cash all accrued and unpaid Dividends. The
Corporation shall mail (postage prepaid) or otherwise deliver written notice of
such liquidation, dissolution or winding up, not less than 60 days prior to the
payment date stated therein, to each holder of record of the Class A.
(b) For purposes of this Section 10, unless and to the extent otherwise
specifically approved by the holders of a majority of the shares of the Class A
at the time outstanding, the consolidation or merger of the Corporation with or
into another Person and the sale, assignment, conveyance, exchange, lease,
transfer or other disposition (excluding any of the foregoing in the nature of
an assignment as collateral to secure contractual obligations) of all or
substantially all of the property and assets of the Corporation shall be deemed
to be a liquidation, dissolution and winding up of the Corporation, and the
holders of the Class A shall be entitled to receive payment of the amount
payable with respect to the Class A upon a liquidation, dissolution or winding
up in cancellation of their shares of Class A upon the consummation of any such
transaction; provided, however, that such a consolidation, merger, sale,
assignment, conveyance, exchange, lease, transfer or other disposition shall not
be deemed to be a liquidation, dissolution or winding up of the Corporation if:
(i) no Change of Control shall result from such transaction, and (ii) holders of
the Class A are offered shares of senior preferred stock of the resulting,
surviving, purchasing or transferee Person (as the case may be) with powers,
preferences and special rights, and ranking (relative to the other outstanding
capital stock of such Person), substantially the same (or better) than those of
the Class A immediately prior to such transaction.
SECTION 11. AMENDMENTS. Any provision of this Certificate of Designations
may be amended by the Corporation with the written consent or vote of the Board
of Directors of the Corporation and the written consent or vote of the holders
of a majority of the shares of the Class A at the time outstanding, voting
separately as a single class.
SECTION 12. DEFINITIONS. For the purpose of this Certificate of
Designations, the following terms, not defined elsewhere herein, have the
following meanings:
"CERTIFICATE OF INCORPORATION" means the Certificate of Incorporation of
the Corporation, as amended from time to time.
"CHANGE OF CONTROL" means any of the following events: (A) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d) of the Exchange Act),
other than Permitted Holders, is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of Voting Securities carrying 50%
or more of the aggregate voting power of all classes of Voting Stock of the
Corporation; (B) the Corporation merges or consolidates with or into another
Person, or sells, assigns, conveys, exchanges, leases, transfers or otherwise
disposes of all of substantially all of its property and assets to any Person,
in any such event pursuant to a transaction in which the outstanding Voting
Stock of all classes and series of the Corporation is converted into or
exchanged for cash, securities or other property, other than any such
transaction where: (i) the outstanding Voting Stock of each class and series of
the Corporation is converted into or exchanged for Voting Stock of the surviving
or transferee Person (as the case may be), and (ii) the holders of each class
and series of Voting Stock of the Corporation immediately prior to such
transaction own, directly or indirectly, Voting Stock carrying 50% or more of
EXHIBIT D-PAGE 8
(to Contribution Agreement)
the aggregate voting power of all classes of Voting Stock of the surviving or
transferee Person (as the case may be) immediately after such transaction; or
(C) at any time, individuals who constituted the Board of Directors of the
Corporation on the Original Issue Date (together with any new directors whose
election by such Board of Directors, or whose nomination for election by the
stockholders of the Corporation, was approved by a vote of 66-2/3% of the
directors then still in office who were either directors on the Original Issue
Date or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of the
Corporation then in office.
"DEEMED ISSUE DATE" means, for any particular shares of the Class A, the
date on or as of which such shares are first issued (or deemed to be issued) by
the Corporation; provided that (i) Dividends paid by the issuance of PIK Shares
shall have a "Deemed Issue Date" of the relevant Dividend Payment Date, and (ii)
the "Deemed Issue Date" of any shares of the Class A issued pursuant to a
separate agreement of the Corporation shall be such date, if any, as may be
specified in such separate agreement.
"DIVIDEND PAYMENT DATE" means the last day of December in each year,
commencing with December 31, 2001, unless (in each case) any such day is not a
business day, in which case such Dividend Payment Date shall be the first
business day after such day.
"DIVIDEND PERIOD" means the period from but excluding January 1 to and
including December in each year; provided, however, that for any particular
shares of the Class A issued (or deemed to have been issued): (i) prior to the
first Dividend Payment Date, the first Dividend Period shall be the period from
but excluding the Deemed Issue Date of such shares to and including the first
Dividend Payment Date, and (ii) on any other date not constituting a Dividend
Payment Date, the first Dividend Period shall be the period from but excluding
the Deemed Issue Date of such shares to and including the next Dividend Payment
Date.
"DIVIDEND RECORD DATE" means, for each Dividend Payment Date, the close of
business on the immediately preceding business day.
"ELXSI CORP." means ELXSI Corporation, a Delaware corporation.
"ELXSI CORP. RIGHTS PLAN" means that certain Rights Agreement, dated as of
June 4, 1997 (as amended from time to time), between ELXSI Corp. and Continental
Stock Transfer & Trust Company, as Rights Agent.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"JUNIOR STOCK" means the Common Stock and each class or series of Other
Preferred Stock that is not Senior Stock or Parity Stock.
"MANDATORY REDEMPTION" means a redemption of shares of the Class A pursuant
to Section 3(b) hereof.
"OPTIONAL REDEMPTION" means a redemption of shares of the Class A pursuant
to Section 3(a) hereof.
"ORIGINAL ISSUE DATE" means December 30, 2000, the first date on or as of
which shares of the Class A are to be (or were) issued.
"PARITY STOCK" means any Other Preferred Stock that, with respect to
dividends and upon liquidation, dissolution or winding up of the Corporation,
ranks on a parity with the Class A.
"PERSON" means any individual, firm, corporation, limited liability
company, partnership or other entity, and shall include any successor (by merger
or otherwise) of such entity.
"PERMITTED HOLDER" means and includes: (i) ELXSI Corp; ELXSI, a California
corporation and wholly owned subsidiary of ELXSI Corp.; and any other subsidiary
of ELXSI Corp.; and (ii) any ▇▇▇▇▇▇ Group Member and any Affiliate and Associate
of any ▇▇▇▇▇▇ Group Member (as such terms are defined in the ELXSI Corp. Rights
Agreement).
EXHIBIT D-PAGE 9
(to Contribution Agreement)
"PUT REDEMPTION" means a redemption of shares of the Class A pursuant to
Section 3(d) hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR STOCK" means any Other Preferred Stock that, with respect to
dividends and upon liquidation, dissolution or winding up of the Corporation,
ranks senior to the Class A.
"VOTING STOCK" means, of any Person, outstanding securities of all classes
of such Person ordinarily (and apart from rights accruing under special
circumstances) having the right to elect directors of such Person.
IN WITNESS WHEREOF, this Certificate of Designations has been executed by
the Corporation this day of December, 2000.
▇▇▇▇▇▇▇▇'▇ HOLDINGS COMPANY, INC.
By:
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Name:
Title: