<PAGE>
THIS SCHEDULE 13D WAS PREVIOUSLY FILED IN PAPER FORMAT AND IS NOW
BEING FILED (WITHOUT EXHIBITS) PURSUANT TO RULE 101(a)(2)(ii) OF
REGULATION S-T AND RULE 13d-2(c) UNDER THE SECURITIES EXCHANGE
ACT OF 1934.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D**
Under the Securities Exchange Act of 1934
(Amendment No. )*
ELXSI Corporation
- - ---------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
- - ---------------------------------------------------------------
(Title of Class of Securities)
268613106
- - ---------------------------------------------------------------
(CUSIP Number)
Mr. Ervin D. Cruce
2000 First City Bank Tower, Fort Worth, Texas 76102
(817) 877-0477
- - ---------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 31, 1989
- - ---------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
Check the following box if a fee is being paid with the statement
[X].
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
**The total number of shares reported herein is 54,100,000, which
constitutes approximately 38.0% of the total number of shares
outstanding, assuming, pursuant to Rule 13d-3(d)(1)(i), that
there are 142,536,696 shares outstanding. Unless otherwise
specifically stated, all ownership percentages set forth herein
assume that there are 88,436,696 shares outstanding.
PAGE
<PAGE>
13D
CUSIP No. 268613106 Page 2 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Airlie Group, L.P.
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
WC
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
PN
_________________________________________________________________
PAGE
<PAGE>
13D
CUSIP No. 268613106 Page 3 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
EBD, L.P.
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
Not Applicable
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
PN
_________________________________________________________________
PAGE
<PAGE>
13D
CUSIP No. 268613106 Page 4 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dort A. Cameron, III
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
Not Applicable
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Dort A. Cameron, III is a citizen of the United States
of America.
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
IN
_________________________________________________________________
<PAGE>
<PAGE>
13D
CUSIP No. 268613106 Page 5 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MHM Texas, Inc.
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
Not Applicable
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
CO
_________________________________________________________________
<PAGE>
<PAGE>
13D
CUSIP No. 268613106 Page 6 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Morton H. Meyerson
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
Not Applicable
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Morton H. Meyerson is a citizen of
the United States of America.
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
IN
_________________________________________________________________
<PAGE>
<PAGE>
13D
CUSIP No. 268613106 Page 7 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Milley & Company
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
00 - Contribution from Stockholder
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
CO
_________________________________________________________________
<PAGE>
<PAGE>
13D
CUSIP No. 268613106 Page 8 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alexander M. Milley
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
Not Applicable
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Alexander M. Milley is a citizen of the
United States of America.
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
See Item 5(a)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See Item 5(a)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
IN
_________________________________________________________________
<PAGE>
<PAGE>
13D
CUSIP No. 268613106 Page 9 of __ Pages
_________________________________________________________________
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ELX Limited Partnership
_________________________________________________________________
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
_________________________________________________________________
3) SEC USE ONLY
_________________________________________________________________
4) SOURCE OF FUNDS
00 - Contributions from Partners
_________________________________________________________________
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_________________________________________________________________
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_________________________________________________________________
NUMBER 7) SOLE VOTING POWER
OF See Item 5(b)
SHARES _______________________________________________
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY See Item 5(b)
EACH _______________________________________________
REPORTING 9) SOLE DISPOSITIVE POWER
PERSON See Item 5(b)
WITH _______________________________________________
10) SHARED DISPOSITIVE POWER
See Item 5(b)
_________________________________________________________________
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,000,000 (1)
_________________________________________________________________
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
_________________________________________________________________
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.9% (2)
_________________________________________________________________
14) TYPE OF REPORTING PERSON
PN
_________________________________________________________________
(1) Assumes the exercise in full of an option to acquire such
shares as described in Item 4
(2) Assumes, pursuant to Rule 13d-3(d)(1)(i) of the Act, that
there are 100,436,696 shares outstanding.
PAGE
<PAGE>
Item 1. Security and Issuer.
This statement relates to the Common Stock, par value $0.001
per share (the "Stock"), of ELXSI Corporation (the "Issuer").
The principal executive offices of the Issuer are located at 2334
Lundy Place, San Jose, California 95131.
Item 2. Identity and Background.
(a) Pursuant to Rules 13d-l(f)(1)-(2) of Regulation 13D-G
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Act"),the undersigned
hereby file this Schedule 13D Statement on behalf of The Airlie
Group, L.P., a Delaware limited partnership ("TAG"), EBD, L.P., a
Delaware limited partnership ("EBD"), Dort A Cameron, III
("DAC"), MHM Texas, Inc., a Texas corporation ("MHM Texas"),
Morton H. Meyerson ("MHM"), Milley & Company, a Delaware
corporation ("MAC"), Alexander M. Milley ("AMM") and ELX Limited
Partnership, a Delaware limited partnership ("ELX"). TAG, EBD,
DAC, MHM Texas, MHM, MAC, AAM and ELX are sometimes hereinafter
referred to as the "Reporting Persons."
(b) - (c)
TAG
TAG is a Delaware limited partnership. The principal
business of TAG is the purchase, sale, exchange, acquisition and
holding of investment securities.The principal business address
of TAG, which also serves as its principal office,is 2000 First
City Bank Tower, Fort Worth, Texas 76102.Pursuant to Instruction
C to Schedule 13D of the Act,information with respect to EBD,the
sole general partner of TAG,is set forth below.
EBD
EBD is a Delaware limited partnership. The principal
business of EBD is serving as the sole general partner of TAG.
The principal business address of EBD, which also serves as its
principal office,is 2000 First City Bank Tower, Fort Worth, Texas
76102. Pursuant to Instruction C to Schedule 13D of the Act,
information with respect to DAC and MHM Texas, the general
partners of EBD, is set forth below.
DAC
DAC's principal occupation or employment is serving as one
of two general partners of EBD.DAC's business address is 115 East
Putnam Avenue, Greenwich, Connecticut 06830.
MHM Texas
MHM Texas is a Texas corporation.The principal business of
MHM Texas is serving as one of two general partners of EBD. The
principal business address of MHM Texas, which also serves as its
principal office, is 5310 Harvest Hill Road, Suite 200, Dallas,
Texas 75230. Pursuant to Instruction C to Schedule 13D of the
Act, information with respect to each director and executive
officer of MHM Texas are as follows:
Residence or Principal Occupation
Name Business Address or Employment
MHM See answers below See answers below.
Ervin D. Cruce 2000 First City Bank Executive with TAG
Tower
Fort Worth, Texas 76102
MHM
MHM's principal occupation or employment is investing for
his own account. MHM's business address is 5310 Harvest Hill
Road, Suite 200, Dallas, Texas 75230.
MAC
MAC is a Delaware corporation. The principal business of
MAC is the purchase, sale, exchange, acquisition and holding of
securities of the Issuer. The principal business address of MAC,
which also serves as its principal office, is 115 East Putnam
Avenue, Greenwich, Connecticut 06830. Pursuant to Instruction C
to Schedule 13D of the Act, information with respect to AMM, the
sole director, executive officer and stockholder of MAC, is set
forth below.
AMM
AMM's principal occupation or employment is serving as the
President of Winchester National, Inc. ("WNI"). AMM's business
address is 115 East Putnam Avenue, Greenwich, Connecticut 06830.
WNI, a Delaware corporation, is a private investment and
management consulting firm specializing in structuring and
arranging mergers and acquisitions. The principal business
address of WNI, which also serves as its principal office, is 115
East Putnam Avenue, Greenwich, Connecticut 06830.
ELX
ELX is a Delaware limited partnership. The principal
business of ELX is the purchase, sale, exchange, acquisition and
holding of securities of the Issuer. The principal business
address of ELX, which also serves as its principal office, is 115
East Putnam Avenue, Greenwich, Connecticut 06830. Pursuant to
Instruction C to Schedule 13D of the Act, information with
respect to AMM, the sole general partner of ELX, is set forth
above.
(d) None of the entities or persons identified in this Item
2 has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the entities or persons identified in this Item
2 has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
(f) All of the natural persons identified in this Item 2
are citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
The source and amount of funds used or to be used by the
Reporting Persons to purchase shares of the Stock are as follows:
Reporting Person Source of Funds Amount of Funds
TAG Working Capital(1) $6,762,500.00(2)
EBD Not Applicable Not Applicable
DAC Not Applicable Not Applicable
MHM Texas Not Applicable Not Applicable
MHM Not Applicable Not Applicable
MAC Contribution from
Stockholder(3) $6,762,500.00(2)
AMM Not Applicable Not Applicable
ELX Contributions
from Partners(3) $1,500,000.00(4)
(1) As used herein, the term "Working Capital" includes
income from the business operations of the entity plus sums
borrowed from banks and brokerage firm margin accounts to operate
such business in general. None of the funds reported herein as
"Working Capital" were borrowed or otherwise obtained for the
specific purpose of acquiring, handling, trading or voting the
Stock.
(2) This figure represents the aggregate amount of funds to
be used by TAG and MAC to acquire 24,000,000 shares of the Stock
and to acquire 30,100,000 shares of the Stock issuable upon
exercise of the Issuer's Series A Warrants (assuming the exercise
in full of such Warrants), and does not reflect an aggregate
$50,000 placement fee to be paid to TAG and MAC by the Issuer.
The allocation of such shares between TAG and MAC and the amount
of funds to be used by each of them has not yet been determined.
See Item 4.
(3) None of the funds reported herein as "Contribution from
Stockholder" or "Contributions from Partners" were borrowed or
otherwise obtained for the specific purpose of acquiring,
handling, trading or voting the Stock.
(4) This figure assumes the exercise in full by ELX of its
option to acquire up to 12,000,000 shares of the Stock as
described in Item 4.
Item 4. Purpose of Transaction.
On August 31, 1989, TAG, MAC and the Issuer entered into a
Stock and Note Purchase Agreement (the "Purchase Agreement"),
pursuant to which the Issuer has agreed to sell and issue to TAG
and MAC (i) an aggregate of 24,000,000 shares (the "Purchased
Shares") of the Stock for $3,000,000 in cash, (ii) $2,000,000
face amount 15% senior subordinated ten-year notes (the "Notes"),
and Series A Warrants (the "Series A Warrants") to purchase
30,100,000 shares of the Stock (the "Series A Warrant Stock") at
an exercise price of $0.125 per share. The following description
of the Purchase Agreement and of the other documents to be
entered into in connection therewith, including without
limitation the forms of Registration Rights Agreement (the
"Registration Rights Agreement"), Note, Series A Warrant,
Management Agreement between the Issuer and Winchester National,
Inc. (the "Management Agreement"), Standstill Letter to be
executed by certain stockholders of the Issuer (the "Standstill
Letters") and the Option Agreement dated as of August 31, 1989,
between TAG and MAC (the "Option Agreement"), copies of which
documents are attached hereto as Exhibits B through H,
respectively, is not, and does not purport to be, complete, and
is qualified in its entirety by reference to the Purchase
Agreement and to such other documents.
Purchase Agreement
Pursuant to the Purchase Agreement, the Board of Directors
of the Issuer (the "Board"), at or prior to the closing of the
transactions contemplated by the Purchase Agreement (the
"Closing"), will increase the size of the Board to nine
directors, and five persons selected by TAG and MAC, including
AMM, will be elected by the Board to serve as directors of the
Issuer until the next annual meeting of the Issuer's
stockholders. In addition, one of the existing members of the
Board will resign and will be replaced by a new director
unaffiliated with TAG or MAC. In addition, as of the Closing
each officer of the Issuer who is requested by TAG and MAC to
resign his position shall have tendered his resignation,
effective immediately following the Closing.
Pursuant to the Purchase Agreement, MAC will direct the
allocation between TAG and MAC of the 24,000,000 shares of the
Stock to be purchased by them, of the Notes and the attached
Series A Warrants and of any fees payable to TAG and MAC by the
Issuer prior to the Closing.
At the request of the Board and provided that there is
no event of default under the Notes, TAG shall purchase from the
Issuer up to an additional $5,000,000 (the "Additional Debt
Commitment") in promissory notes (the "Additional Notes") of the
Issuer substantially in the form of the Notes, except that the
interest rate shall be 600 basis points above the highest of
(a) the three-month Treasury bill rate, (b) the 10-year Treasury
bill note rate, and (c) the 30-year Treasury bond rate. The
Additional Debt Commitment shall terminate on July 1, 1994, or if
TAG continues in existence beyond that date, such later date as
the partners of TAG may choose but in no event later than
September 30, 1999. The Issuer must pay TAG, in arrears on each
anniversary of the date of the Closing, a sum calculated at the
rate of 1% per annum on the amount of the Additional Debt
Commitment until the earlier of the date that the Additional
Notes are purchased and the date the Additional Debt Commitment
is terminated as provided above.
Under the Purchase Agreement, the Issuer has agreed
that, subject to fiduciary obligations under applicable law,
neither the Issuer nor ELXSI, a California corporation that is a
wholly-owned subsidiary of the Issuer (the "Subsidiary"), shall
take any action, directly or indirectly, to cause, promote or
authorize any transaction competing or interfering with any of
the transactions contemplated by the Purchase Agreement,
including without limitation any merger, consolidation or
reorganization, acquisition or disposition of assets, tender
offer or exchange offer.
The Purchase Agreement sets forth conditions to the parties'
respective obligations to consummate the Closing, including
conditions that there shall have not been made or publicly
proposed (except by TAG and MAC) any transactions competing or
interfering with the transactions contemplated by the Purchase
Agreement, that the Issuer shall have taken steps as to the
restructuring the Subsidiary which are reasonably satisfactory
to TAG and MAC, that the Board shall have been restructured
as set forth above and that each of the Notes, the Series A
Warrants, the Management Agreement, the Standstill Letters
and the Registration Rights Agreement shall have been duly
authorized (as applicable), executed and delivered.
The Purchase Agreement may be terminated, inter alia, by
either the Issuer or TAG and MAC if the Closing has not occured
on or before September 30, 1989, by the Issuer for any reason, or
by TAG and MAC if the Issuer engages in a transaction with a
third party that results in the utilization of $10,000,000 or
more of the Issuer's net operating losses.
The Purchase Agreement provides that the Issuer shall
reimburse TAG and MAC for legal fees and expenses of up to an
aggregate of $250,000 in certain circumstances, including the
Issuer's unilateral termination of the Purchase Agreement as set
forth above. The Issuer will also pay TAG and MAC a placement
fee of $50,000 at the Closing. The Closing is expected to occur
approximately September 21, 1989.
Registration Rights Agreement
At the Closing, the Issuer, TAG and MAC will enter into the
Registration Rights Agreement, pursuant to which the Issuer will
grant the registration rights described below to the holders of
any of the Purchased Shares, the Series A Warrant Stock, any of
the Series A Warrant Stock issuable upon exercise of the Series A
Warrants and, in certain circumstances, the Series A Warrants
(collectively, the "Registrable Securities").
Upon receipt of a written request from the holders of more than
50% of the Registrable Securities (for purposes of such
calculation, counting the Series A Warrants as if they were fully
exercised), the Issuer will file a registration statement on Form
S-1 or Form S-3 of the Securities and Exchange Commission (the
"Commission") to register under the Securities Act of 1933, as
amended (the "Securities Act"), all of the eligible Registrable
Securities requested to be included in the registration, subject
to such pro rata reduction, if any, that the underwriters of the
offering may recommend. The Issuer is not obligated to file more
than a total of seven such registration statements on Form S-1 or
more than one such registration statement on Form S-1 per year,
and the Issuer is not obligated to file any registration
statement on Form S-1 unless the aggregate offering price of
such registration is $1,500,000 or more. There is no limit on
the number of registrations or aggregate price for registrations
on Form S-3 that the holders of Registrable Securities may
request.
If at any time the Issuer proposes to file a registration
statement under the Securities Act on any form, except as
described below, registering securities to be sold for cash with
respect to its Common Stock or any other class of equity
security, it will give written notice to the holders of
Registrable Securities and include in such filing the number of
shares of Registrable Securities for which such holders request
registration, subject to such pro rata reduction, if any, that
the underwriters of the offering may recommend. The holders of
Registrable Securities will not have such incidental
registration rights with respect to any registration by the
Issuer on the Commission's Form S-4, S-8 or S-18 or a successor
form to any of them, or a registration pursuant to contractual
demand registration rights under which other shares of the Stock
may not be so registered. Except as described in the preceding
sentence, there is no limit on the number of incidental
registrations permitted.
The Issuer will pay all expenses of any such requested or
incidental registration, except that each holder of Registrable
Securities must pay all underwriting discounts and commissions
applicable to its Registrable Securities included in the
registration.
The Registration Rights Agreement includes certain other
customary terms, including indemnification and standstill
provisions.
Notes
At the Closing, the Issuer will issue to TAG and MAC an
aggregate of $2,000,000 face amount of Notes. The Notes bear
interest at the rate of the lesser of 15% per annum or the
maximum amount permitted by law, payable quarterly in arrears
commencing November 15, 1989. Overdue principal will bear
interest at the rate of 16% per annum.
On each of the sixth, seventh, eighth and ninth
anniversaries of the date of the Closing and at maturity,
September 30, 1999, the Issuer will make a mandatory principal
payment of $400,000. In the event the Issuer, other than in the
ordinary course of business, sells assets worth, in the
aggregate, $2,000,000 or more in any fiscal year, the proceeds of
such sale will be applied first to the prepayment of principal
and accrued interest on any indebtedness or guarantee of or by
the Issuer that is senior to the Notes (the "Senior Debt") and
then to a mandatory prepayment of principal of the Notes. As
long as the Issuer has no outstanding Senior Debt, the Issuer may
voluntarily prepay, in whole or in part, the principal of the
Notes with accrued interest thereon at any time; provided,
however, that on the date of such prepayment the Issuer will also
pay a prepayment charge, such amount to decline ratably each year
until maturity, at which time no such prepayment charge will be
due. Voluntary prepayments will be applied first to interest and
then to principal.
Pursuant to the terms of the Notes, the Issuer has agreed
that, as long as any indebtedness is outstanding under the Notes,
it will, among other things, provide each holder of the Notes
with certain information and use the proceeds of the sale of the
Notes solely to fund the purchase price and certain expenses of
proposed acquisitions.
In addition, the Issuer has agreed that, without the prior
written consent of the holders of the Notes, neither it nor the
Subsidiary will (i) create, incur or become liable for any new
debt (as defined in the Notes) unless certain financial tests are
met, (ii) permit the consolidated net worth of the Issuer and its
subsidiaries to fall below certain defined amounts, (iii) incur
operating lease rental obligations of the Issuer above certain
defined amounts, (iv) declare, pay or make any dividend or
distribution on any shares of the Issuer's capital stock unless
certain financial tests are met, (v) merge, consolidate or sell,
lease, transfer or otherwise dispose of all or any substantial
portion of its assets, (vi) make loans or advances to directors,
officers or employees of the Issuer who are "affiliates" (as such
term is defined in the Act) of MAC, or (vii) issue or sell
redeemable stock which is exchangeable for debt of the Issuer
unless such debt has a maturity which is longer than the maturity
of the Notes.
The holders of the Notes may, by written notice to the
Issuer, declare the Notes due and payable if, inter alia, a
majority of the Issuer's Board of Directors consists of directors
whose election MAC has not approved in advance in writing.
Until the payment in full of any Senior Debt, payment of
interest or principal on the Notes is subordinated to payment of
Senior Debt.
Series A Warrants
At the Closing, the Issuer will issue TAG and MAC the Series
A Warrants.
The Series A Warrants are exercisable, in whole or in part,
at any time from the date of the Closing until the seventh
anniversary thereof, to purchase an aggregate of 30,100,000
shares of the Stock at a price of $0.125 per share, subject to
antidilution adjustment.
If, as a consequence of any restriction imposed by any
governmental authority under United States antitrust law, any
holder of the Series A Warrants is unable to exercise all or any
portion thereof without significant delay or loss of rights and
the holder is unable to sell the Series A Warrants, on terms
reasonably acceptable to such holder, to a third party who would
not be subject to such restriction or law, then, upon written
notice to the Issuer, the Issuer will repurchase from such holder
all or the portion of the Series A Warrants designated in the
notice for an amount equal to the "spread" on the warrants
purchased.
Management Agreement
At the Closing, the Issuer and WNI will enter into the
Management Agreement, pursuant to which the Issuer will retain
WNI to render advice and services to the Issuer with respect to
its business and financial management and long-range planning.
The term of the Management Agreement will be from the date of
Closing until September 30, 1992. Thereafter, the Management
Agreement will continue in effect at the option of WNI if a
majority of the Issuer's disinterested directors approve, but may
be terminated by either party upon 90 days prior written notice.
As compensation for its services under the Management
Agreement, WNI will receive from the Issuer $500,000 per annum
commencing, and continuing thereafter, as soon as the Issuer has
Operating Income (as defined in the Management Agreement) of
$1,250,000 as at the end of any fiscal quarter. Such fee will be
discontinued as of the month immediately following a fiscal year
in which the Issuer's Operating Income is less than $4,000,000
and will be reinstated in the month immediately following the
first fiscal quarter after such discontinuance in which the
Issuer has Operating Income of at least $1,250,000 as at the end
of such fiscal quarter. The Issuer will reimburse WNI monthly
for all reasonable expenses.
WNI will operate and perform as an independent contractor to
the Issuer, which will indemnify WNI and hold it harmless against
any and all loss, damage or liability incurred by WNI in
connection with or as a result of its rendering the services
under the Management Agreement, except losses, damages or
liability resulting from WNI's gross negligence or willfull
misconduct.
Standstill Letters
At or prior to the Closing, TAG and MAC shall have received
Standstill Letters executed by certain stockholders of the Issuer
pursuant to which each of such stockholders generally agrees not
to sell, transfer or otherwise dispose of any shares of the
Issuer's capital stock held by it or to acquire any such shares
or any rights to acquire such shares for a period of three years
after the Closing.
Option Agreement
Pursuant to the Option Agreement, ELX has the option to
acquire from TAG up to an aggregate of 12,000,000 shares of the
Stock for the per share purchase price of $0.125, subject to
antidilution adjustment (the "Option"). The Option is
exercisable in whole or in part (subject to a minimum aggregate
exercise price of $100,000) from time to time prior to September
30, 1996; provided, that if the existence of TAG terminates on or
after July 1, 1994 and prior to September 30, 1996, then the
Option shall terminate on such termination date so long as TAG
has given ELX 60 days prior written notice of such termination.
Pursuant to the Option Agreement, any encumbrance or
disposition of shares of the Stock by TAG that would result in
TAG's holding less than the aggregate number of shares of the
Stock then subject to the Option shall be null and void.
The Option shall terminate immediately upon AMM's ceasing to
hold at least $250,000 principal amount of Notes (so long as the
Notes remain outstanding), or upon a majority of the Issuer's
Board consisting of directors whose election has not been
approved by AMM.
Following the transactions described above, TAG and MAC will
control the Issuer's Board of Directors. TAG and MAC have
informed the Issuer that they intend to cause the Issuer to
pursue an active program of acquiring and managing middle market
manufacturing and distribution companies, utilizing the Issuer as
an acquisition vehicle. TAG and MAC intend to cause the Issuer
to seek to acquire businesses with established market positions
and a history of steady profitability.
Because the Issuer has entered into the Purchase Agreement
without stockholder approval, shares of the Stock may cease to be
listed on the National Market System ("NMS") of the National
Association of Securities Dealers Automated Quotation System
under the terms of the NMS Listing requirements (as revised in
February, 1989).
Except as set forth in this Item 4, the Reporting Persons
have no present plans or proposals that relate to or that would
result in any of the actions specified in clauses (a) through (j)
of Item 4 of Schedule 13D of the Act.
Item 5. Interest in Securities of the Issuer.
(a) The aggregate number of shares of the Stock that the
Reporting Persons (other than ELX) own beneficially, pursuant to
Rule 13d-3 of the Act, is 54,100,000, which constitutes
approximately 38.0% of the 142,536,696 shares of the Stock deemed
outstanding pursuant to Rule 13d-3(d)(1)(i) of the Act. TAG and
MAC have entered into a binding commitment to purchase 24,000,000
of such shares of the Stock and will obtain the right to acquire
30,100,000 of such shares of the Stock upon the due
authorization, issuance and delivery to them of the Series A
Warrants as described in Item 4. The allocation of such shares
of the Stock between TAG and MAC has not yet been determined.
Pursuant to Rule 13d-4 of the Act, each Reporting Person
disclaims beneficial ownership of all such shares.
TAG
The aggregate number of shares of the Stock that TAG owns
beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act, has not
yet been determined.
EBD
Because of its position as the sole general partner of TAG,
EBD may, pursuant to Rule 13d-3 of the Act, be deemed to be the
beneficial owner of such shares of the Stock as are beneficially
owned by TAG. The aggregate number of shares of the Stock that
TAG owns beneficially, pursuant to Rule 13d-3(d)(1)(i) of the
Act, has not yet been determined.
DAC
Because of his position as one of two general partners of
EBD, the sole general partner of TAG, DAC may, pursuant to Rule
13d-3 of the Act, be deemed to be the beneficial owner of such
shares of the Stock as are beneficially owned by TAG. The
aggregate number of shares of the Stock that TAG owns
beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act, has not
yet been determined.
MHM Texas
Because of its position as one of two general partners of
EBD, the sole general partner of TAG, MHM Texas may, pursuant to
Rule 13d-3 of the Act, be deemed to be the beneficial owner of
such shares of the Stock as are beneficially owned by TAG. The
aggregate number of shares of the Stock that TAG owns
beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act, has not
yet been determined.
MHM
Because of his position as the President and sole
shareholder of MHM Texas, MHM may, pursuant to Rule 13d-3 of the
Act, be deemed to be the beneficial owner of such shares of the
Stock as are beneficially owned by TAG. The aggregate number of
shares of the Stock that TAG owns beneficially, pursuant to Rule
13d-3(d)(1)(i) of the Act, has not yet been determined.
MAC
The aggregate number of shares of the Stock that MAC owns
beneficially, pursuant to Rule 13d-3 of the Act, has not yet been
determined.
AMM
Because of his position as the President and sole
stockholder of MAC and as the sole general partner of ELX, AMM
may, pursuant to Rule 13d-3 of the Act, be deemed to be the
beneficial owner of such shares of the Stock as are beneficially
owned by MAC and of the 12,000,000 shares of the Stock
beneficially owned by ELX. The aggregate number of shares of the
Stock that MAC owns beneficially, pursuant to Rule 13d-3 of the
Act, has not yet been determined.
ELX
The aggregate number of shares of the Stock that ELX owns
beneficially, pursuant to Rule 13d-3 of the Act, is 12,000,000,
which constitutes approximately 11.9% of the 100,436,696 shares
of the Stock deemed outstanding pursuant to Rule 13d-3(d)(1)(i)
of the Act.
Except as set forth above, to the best of the knowledge of
the Reporting Persons, none of the persons named in Item 2 herein
is the beneficial owner of any shares of the Stock.
(b)
TAG and MAC have entered into a binding commitment to
purchase 24,000,000 shares of the Stock and will obtain the right
to acquire 30,100,000 shares of the Stock upon the delivery to
them of the Series A Warrants as described in Item 4. Although
the Reporting Persons are deemed to beneficially own such shares
pursuant to Rule 13d-3(d)(1)(i) of the Act, the Reporting Persons
possess only the right to acquire such shares and do not,
therefore, exercise voting or dispositive power over such shares,
as set forth below.
TAG
Acting through its sole general partner, TAG has no power to
vote or to direct the vote and to dispose or to direct the
disposition of any shares of the Stock.
EBD
As the sole general partner of TAG, EBD has no power to vote
or to direct the vote and to dispose or direct the disposition of
any shares of the Stock.
DAC
As one of two general partners of EBD, which is the sole
general partner of TAG, DAC has no power to vote or to direct the
vote and to dispose or to direct the disposition of any shares of
the Stock.
MHM Texas
As one of two general partners of EBD, which is the sole
general partner of TAG, MHM Texas has no power to vote or to
direct the vote and to dispose or to direct the disposition of
any shares of the Stock.
MHM
As the President and sole shareholder of MHM Texas, which is
one of two general partners of EBD, which is the sole general
partner of TAG, MHM has no power to vote or to direct the vote
and to dispose or to direct the disposition of any shares of the
Stock.
MAC
Acting through its President, MAC has no power to vote or to
direct the vote and to dispose or to direct the disposition of
any shares of the Stock.
AMM
As the President and sole stockholder of MAC and as the sole
general partner of ELX, AMM has no power to vote or to direct the
vote and to dispose or to direct the disposition of any shares of
the Stock.
ELX
Acting through its sole general partner, ELX has no power to
vote or to direct the vote and to dispose or to direct the
disposition of any shares of the Stock.
(c) Other than as set forth in Item 4 above, none of the
persons named in response to paragraph (a) has effected any
transactions in shares of the Stock during the past sixty (60)
days.
(d) No persons other than the Reporting Persons have the
right to receive or to direct the receipt of dividends from, or
the proceeds from the sale of, the shares of the Stock owned by
them.
(e) It is inapplicable for the purposes herein to state the
date on which the Reporting Persons ceased to be the beneficial
owners of more than five percent (5%) of the outstanding shares
of the Stock.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Except as set forth herein or in the Exhibits filed or to be
filed herewith, there are no understandings or relationships with
respect to the shares of the Stock owned by the Reporting
Persons.
Item 7. Material to be Filed as Exhibits.
Exhibit A -- Agreement Pursuant to Rule 13d-l(f)(1)(iii), at
page 28.
Exhibit B -- Stock and Note Purchase Agreement, at page 31.
Exhibit C -- Form of Registration Rights Agreement, at page
170.
Exhibit D -- Form of Senior Subordinated Note, at page 183.
Exhibit E -- Form of Series A Warrant, at page 203.
Exhibit F -- Form of Management Agreement, at page 238.
Exhibit G -- Form of Standstill Letter, at page 246.
Exhibit H -- option Agreement, at page 248.
Exhibit I -- Agreement of Limited Partnership of ELX Limited
Partnership , at page 259.
Exhibit J -- Press Release, at page 279.
After reasonable inquiry and to the best of our knowledge
and belief, we certify that the information set forth in this
statement is true, complete and correct.
Dated: September 8, 1989
THE AIRLIE GROUP, L.P.,
a Delaware limited partnership
By: EBD, L.P.,
a Delaware limited
partnership, General
Partner
By: MHM TEXAS, INC.,
a Texas corporation,
General Partner
By: /s/ Ervin D. Cruce
Ervin D. Cruce,
Vice President
EBD, L.P.,
a Delaware limited partnership
By: /s/ Ervin D. Cruce
Ervin D. Cruce,
Vice President
MHM TEXAS, INC.,
a Texas corporation
By: /s/ Ervin D. Cruce
Ervin D. Cruce,
Vice President
/s/ Ervin D. Cruce
Ervin D. Cruce,
attorney-in-fact for:
DORT A. CAMERON, III (1)
MORTON H. MEYERSON (2)
MILLEY & COMPANY,
a Delaware corporation
By: /s/ Alexander M. Milley
Alexander M. Milley,
President
/s/ Alexander M. Milley
ALEXANDER M. MILLEY
ELX LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: /s/ Alexander M. Milley
Alexander M. Milley,
General Partner
<PAGE>
(1) A Power of Attorney authorizing Ervin D. Cruce, et al., to
act on behalf of Dort A. Cameron, III, previously has been
filed with the Securities and Exchange Commission.
(2) A Power of Attorney authorizing Ervin D. Cruce, et al., to
act on behalf of Morton H. Meyerson previously has been
filed with the Securities and Exchange Commission.
<PAGE>
EXHIBIT "A"
Pursuant to Rule 13d-l(f)(iii) of Regulation 13D-G of the
General Rules and Regulations of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended,
the undersigned agree that the statement to which this
Exhibit is attached is filed on behalf of them in the capacities
set forth herein below.
THE AIRLIE GROUP, L.P.,
a Delaware limited partnership
By: EBD, L.P.,
a Delaware limited
partnership, General
Partner
By: MHM TEXAS, INC.,
a Texas corporation,
General Partner
By: /s/ Ervin D. Cruce
Ervin D. Cruce,
Vice President
EBD, L.P.,
a Delaware limited partnership
By: /s/ Ervin D. Cruce
Ervin D. Cruce,
Vice President
MHM TEXAS, INC.,
a Texas corporation
By: /s/ Ervin D. Cruce
Ervin D. Cruce,
Vice President
/s/ Ervin D. Cruce
Ervin D. Cruce,
attorney-in-fact for:
DORT A. CAMERON, III (1)
MORTON H. MEYERSON (2)
MILLEY & COMPANY,
a Delaware corporation
By: /s/ Alexander M. Milley
Alexander M. Milley,
President
/s/ Alexander M. Milley
ALEXANDER M. MILLEY
ELX LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: /s/ Alexander M. Milley
Alexander M. Milley,
General Partner
