SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report March 6, 1998
(Date of earliest event reported: February 24, 1998)
Family Steak Houses of Florida, Inc.
(Exact name of registrant as specified in its charter)
Florida
(State of other jurisdiction of incorporation)
0000784539 59-2597349
(Commission File Number) (IRS Employer Identification No.)
2113 Florida Boulevard, Neptune Beach, FL 32266
(Address principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 249-4197
Item 5. Other Events.
(a) See Press release dated March 2, 1998, copy attached, and
Standstill and Settlement Agreement dated February 24, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Registrant)
Date: March 6, 1998 By:____________________________________
(Signature)
Print Name: Edward B. Alexander
Its: Chief Financial Officer
Edward B. Alexander
Vice President of Finance
(904) 249-4197 March 2, 1998
FAMILY STEAK HOUSES OF FLORIDA, INC.
Announces Reverse Split and
Standstill and Settlement Agreement with Bisco
____________________
NEPTUNE BEACH, FLORIDA - Family Steak Houses of Florida,
Inc. (NASDAQ:RYFL), announced today that its shareholders
have approved a reverse split of its common stock, par value
$.01, at a ratio of 1-for-5. At a Special Meeting of
Shareholders held February 24, 1998, the Company's
shareholders approved the reverse split by a vote of
6,930,517 for, 1,162,674 against and 38,377 abstaining. The
reverse split should result in an approximate five-fold
increase in the Company's stock price. The reverse split was
necessary to boost the per share price so that the Company
will comply with amended listing requirements on the NASDAQ
stock exchange.
The Company announced that the effective date for the
reverse split will be March 4, 1998, the date of filing
Amended and Restated Articles of Incorporation with the
Florida Department of State.
In other news, the Company announced that it had executed a
one-year Standstill and Settlement Agreement with Bisco
Industries and its affiliates ("Bisco"), effectively
putting an end to the year-long dispute between the Company
and its largest shareholder. Lewis E. Christman, Jr,
President & CEO of the Company, stated "we are pleased to
reach this agreement with Bisco and glad to put an end to
this expensive and time consuming problem. We can now focus
all of our attention on improving our business. We look
forward to working with Mr. Ceiley in maximizing shareholder
value for all shareholders".
In accordance with the terms of the agreement, the Company
agreed to add two Bisco nominees to the Company's Board of
Directors. The two new Board members are Glen F. Ceiley,
President and CEO of Bisco Industries, and Jay Conzen, a CPA
and investment advisory consultant, as well as the former
vice president and chief financial officer of Bell
Industries, Inc. and the Impact Group, Inc. The Company also
agreed to dismiss its pending litigation against Bisco,
without prejudice.
Bisco agreed, for a period of one year: (i) limit its
ownership of the Company's stock to no more than 19.9% of
the total outstanding shares for the term of the agreement,
(ii) to cease its efforts to replace the Company's three
outside Directors with Bisco nominees; and (iii) to not
initiate or solicit proxies with respect to matters in
opposition to proposals by the current Board of Directors.
For further information, please contact Edward B.
Alexander, Chief Financial Officer, at (904) 249-4197.
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STANDSTILL AND SETTLEMENT AGREEMENT
THIS STANDSTILL AND SETTLEMENT AGREEMENT (this "Agreement") is
made and entered into as the 24th day of February, 1998, by and
among (i) FAMILY STEAK HOUSES OF FLORIDA, INC, a corporation
organized and existing under the laws of the State of Florida (the
"Company"), and (ii) BISCO INDUSTRIES, INC., an Illinois
corporation with its principal office located in Orange, California
("Bisco"), the BISCO INDUSTRIES, INC. PROFIT SHARING AND SAVINGS
PLAN ( the "Bisco Plan"), and GLEN F. CEILEY ("Ceiley" and,
together with Bisco and the Bisco Plan, the "Bisco Parties").
PREAMBLE
Bisco launched an unsolicited tender offer to acquire
2,600,000 shares of common stock, par value $.01, of the Company,
on March 6, 1997 (the "Tender Offer"). The Board of Directors of
the Company opposed the Tender Offer and, on March 18, 1997, in
response to the Tender Offer, the Board of Directors adopted
Amended and Restated Bylaws and entered into a Shareholder Rights
Agreement with ChaseMellon Shareholder Services, Inc. (the "Rights
Agreement"). The Tender Offer was subsequently withdrawn.
On April 30, 1997, Bisco filed a Proxy Statement for a Consent
Solicitation (the "Consent Solicitation") seeking to (i) repeal
the Amended and Restated Bylaws, (ii) amend the bylaws of the
Company to opt out of the provisions of the Florida Control Share
Act, (iii) amend the bylaws of the Company to redeem the Rights
Agreement, and (iv) amend the bylaws to provide that the bylaws
would not be subject to amendment by the Board of Directors. The
Company opposed the Consent Solicitation. The Consent
Solicitation failed for lack of sufficient consents.
On July 23, 1997, the Bisco Parties delivered to the Company
a demand for a special meeting of shareholders to consider certain
proposals of the Bisco Parties. The Company contends that the
demand, and other similar demands later delivered by the Bisco
Parties, was legally insufficient. The Bisco Parties have advised
the Company that they seek to nominate their own slate of directors
at the 1998 annual meeting of shareholders.
On September 5, 1997, the Company filed a complaint against
the Bisco Parties, styled as Family Steak Houses of Florida, Inc.
v. Bisco Industries, Inc. et al., Civil Action No. 97-1101-CIV-J20-
C, in the United States District Court in and for the Middle
District of Florida, Jacksonville Division (the "Litigation").
In the Litigation, the Company alleges that the Bisco Parties
violated various provisions of state and federal law in connection
with the Tender Offer and the ensuing proxy contest and seeks
various forms of relief, including a preliminary and permanent
injunction against the exercise of voting rights by the Bisco
Parties with respect to certain of the shares of common stock of
the Company owned by them.
On or about January 15, 1998, the Company caused to be mailed
to its shareholders a Notice of Meeting and Proxy Statement for a
Special Meeting of Shareholders to consider a proposal to implement
a one-for-five reverse stock split (the "Reverse Split"), in order
to avoid de-listing of the Company's common stock from NASDAQ. The
Bisco Parties have advised that they will oppose the proposed
reverse stock split and filed a Proxy Statement in Opposition to
the Board of Directors (the "Opposition Proxy Statement") on
February 10, 1998.
The parties are aware of the costs and uncertainties attendant
to the Litigation and the ongoing proxy contest. The Company
desires to obtain the support of the Bisco Parties for the proposed
reverse stock split. Therefore, the parties have now reached an
agreement for the settlement of their differences and desire to
memorialize their agreement herein.
NOW, THEREFORE, for and in consideration of the mutual
warranties, representations, covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement and any amendments hereto, the
following terms shall have the following meanings respectively:
"Affiliate" shall have the meaning set forth in regulations of
the SEC included in 17 C.F.R. 230.405, or, if amended, then as
amended and in effect at the time in question.
"Associate" shall have the meaning set forth in regulations of
the SEC included in 17 C.F.R. 230.405, or, if amended, then as
amended and in effect at the time in question.
"Bankruptcy Exception" shall mean all applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally.
"Beneficial Owner" (and various derivations of such term such
as "beneficially owned") shall have the meaning set forth in the
regulations of the SEC included in 17 C.F.R. 240.13d-3, or, if
amended, then as amended and in effect at the time in question;
provided that for purposes of this Agreement, any option, warrant,
right, conversion privilege or arrangement to purchase, acquire or
vote Company Voting Securities regardless of the time period during
or at which it may be exercised and regardless of the consideration
paid shall be deemed to give the holder thereof beneficial
ownership of the Company Voting Securities to which it relates.
Any Company Voting Securities which are subject to such options,
warrants, rights, conversion privileges or other arrangements shall
be deemed to be outstanding for purposes of computing the
percentage of outstanding securities owned by such Person but shall
not be deemed to be outstanding for the purpose of computing the
percentage of outstanding securities owned by any other Person.
"Closing Date" shall mean the date of consummation of the
transactions contemplated by Section 2 hereof.
"Common Stock" shall mean the $.01 par value common stock of
the Company and any security which is exchanged for such common
stock.
"Company Voting Securities" shall mean all classes of capital
stock of the Company which are then entitled to vote generally in
the election of directors and any securities exchanged for such
classes of capital stock and any securities convertible into or
exchangeable or exercisable for such classes of capital stock. For
purposes of determining the amount or percentage of outstanding
Company Voting Securities beneficially owned by a Person, and for
purposes of calculating the aggregate voting power relating to such
Company Voting Securities, securities that are deemed to be
outstanding shall be included to the extent provided in the
definition of "Beneficial owner."
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, included in 15 U.S.C. 78a-78jj, or, if further
amended, then as amended and in effect at the time in question.
"Extraordinary Transaction" shall mean the consummation of any
tender offer or exchange offer for Company Voting Securities or any
merger, acquisition of all or substantially all of the stock or
assets of, or other business combination involving the Company.
"New Shares" shall mean the 706,700 shares of Common Stock to
be acquired by Bisco on the Closing Date, as specified in Section
4.1 hereof.
"Party" shall mean either the Company, on the one hand, or the
Bisco Parties, on the other hand, and "Parties" shall mean all of
the foregoing.
"Person" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"Restricted Stock" shall mean the New Shares, excluding any of
such that may have been (a) registered under the Securities Act
pursuant to an effective registration statement filed thereunder
and disposed of in accordance with the registration statement
covering them or (b) publicly sold pursuant to Rule 144 under the
Securities Act.
"SEC" shall mean the Securities and Exchange Commission, or
any successor agency which has primary authority to interpret and
enforce the provisions of the Securities Act and the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, included in 15 U.S.C. 77a-77z, or, if further amended,
then as amended and in effect at the time in question.
ARTICLE TWO
COVENANTS AND AGREEMENTS OF THE COMPANY
The Company hereby covenants and agrees with the Bisco Parties
as follows:
2.1 Board Representation. During the Term (as defined in
Section 6.1), (i) the Bisco Parties shall have the right to
designate two (2) individuals to serve as directors of the Company
and (ii) the Board of Directors of the Company shall consist of no
more than seven (7) individuals, unless otherwise consented to by
the Bisco Parties. The Company agrees to use its best efforts to
cause the nomination and election of the Bisco Parties' designees
as provided in this Section 2.1. The Board of Directors of the
Company, as evidenced by their unanimous adoption of resolutions
approving this Agreement and specifically this Article Two, agree
to:
(a) propose two nominees of the Bisco Parties, as designated
by Ceiley, to fill vacancies on the Board of Directors at the Board
of Directors meeting scheduled for February 24, 1998 (the "February
24 Meeting");
(b) vote in favor of such nominees;
(c) propose and support two nominees of the Bisco Parties, as
designated by Ceiley, to stand for election at the 1998 Annual
Meeting of Shareholders of the Company and include such nominees on
the Company's 1998 proxy statement; and
(d) oppose and vote against any proposal to increase the size
of the Board of Directors beyond seven (7) members during the term
of this Agreement, unless Bisco consents to such increase.
In any election of directors of the Company during the
Term, whether at the Company's 1998 Annual Meeting of Shareholders
or any special meeting of shareholders, each of the Directors
agrees to vote any Company Voting Securities owned by him to elect
the Bisco Parties' designees. Each Director further agrees not to
vote any Company Voting Securities owned by him, or to take any
other actions, that would be reasonably likely to defeat, impair,
be inconsistent with or adversely affect the rights of the Bisco
Parties under this Section 2.1.
2.2. Dismissal of Litigation. The Company agrees to prepare
and file, within three (3) business days of execution and delivery
of this Agreement, a Dismissal Without Prejudice dismissing its
claims as set forth in the Litigation. The Company agrees not to
re-file the Litigation or any other litigation involving the same
or similar claims during the Term, provided the Bisco Parties shall
not be in breach of any of the provisions hereof.
2.3 Rights Agreement. At the February 24 Meeting, the Board
of Directors shall amend the Rights Agreement, as it applies to the
Bisco Parties, (and each Director agrees to vote in favor of such
amendment) to increase to 20% (i) the percentage of shares of
common Stock and Company Voting Securities set forth in Section
1(a) of the Rights Agreement (for purposes of determining whether
any Person is an "Acquiring Person," as defined in the Rights
Agreement), (ii) the percentage of shares of Common Stock and
Company Voting Securities as set forth in Section 3(a)(ii) of the
Rights Agreement (for purposes of determining whether any tender
offer or exchange offer would trigger the distribution of Rights
under the Rights Agreement), and (iii) the percentage of shares of
Common Stock and Company Voting Securities set forth in Section
11(a)(ii)(B) of the Rights Agreement (for purposes of determining
whether any Person is an "Adverse Person," as defined in the Rights
Agreement.
2.4 No Distribution of Rights. It is the intention of the
Parties that so long as the Bisco Parties comply with their
respective obligations under this Agreement and Beneficially Own
less than 20% of the Company Voting Securities, the Rights shall
neither be distributed nor utilized by the Company with respect to
the ownership by the Bisco Parties of Company Voting Securities
(whether during the Term or thereafter). The Company agrees, for
the Term of this Agreement and for so long as the Bisco Parties
shall not be in breach of any of their obligations hereunder, that
it will not exercise its discretionary authority to distribute the
Rights.
2.5 No Action to Impair Bisco Parties' Rights. During the
Term and so long as the Bisco Parties comply with their respective
obligations hereunder, the Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Agreement, and shall use its best efforts to
prevent any of its directors or shareholders from doing so, and in
good faith assist in taking of all such actions as may be necessary
or appropriate to protect the rights of the Bisco Parties under
this Section 2.1 against impairment. Without limiting the
generality of the foregoing, the Company agrees not to assert or
challenge the Bisco Parties' rights to own or vote, or seek to
restrict or limit the Bisco Parties rights to own or exercise
voting rights and privileges with respect to, any Company Voting
Securities presently owned by the Bisco Parties or acquired by them
pursuant to this Agreement. Provided, however, the Company does
not hereby waive its right to challenge any action by the Bisco
Parties in violation of their obligations under this Agreement. In
addition, the Company shall not initiate or institute, or
participate in the initiation or institution of any legal,
regulatory or administrative action or proceeding in any court of
competent jurisdiction or regulatory or administrative body or
agency with respect to the Bisco Parties or any of their
Affiliates, Associates, employees, accountants, legal counsel or
other advisors, which action or proceeding in any way contests, or
otherwise seeks to void, the validity of, or the enforceability of
any provision of this Agreement (provided, that nothing herein
shall prevent the Company from defending any such action or
proceeding brought by or on behalf of the Bisco Parties or their
Affiliates or Associates).
2.6 Limited Release. At the expiration of the Term, and
provided the Bisco Parties have complied with their obligations
under this Agreement, the Company shall execute and deliver to the
Bisco Parties a general release from and against all claims,
demands, damages, actions and causes of action of every kind and
nature whatsoever which the Company has or may have against the
Bisco Parties arising out of the acquisition and/or voting of
Company Voting Securities owned by the Bisco Parties as of the
date hereof; provided, such release shall not cover any rights of
the Parties arising under this Agreement or with respect to acts,
failures to act, facts, event, happenings, occurrences or omissions
occurring, or claims as to which the Company first learns of, after
the date hereof. Provided, further, the Company does not hereby
release any claims it may have against the Bisco Parties arising
out of, pursuant to, or in connection with (i) the 330,800 shares
acquired by certain of the Bisco Parties during but outside the
course of the Tender Offer, (ii) the Florida Control Share Act, or
(iii) the Rights Agreement.
ARTICLE THREE
COVENANTS AND AGREEMENTS OF BISCO PARTIES
The Bisco Parties hereby individually covenant and agree with
the Company as follows:
3.1. Reverse Split. The Bisco Parties agree to vote all
shares Beneficially Owned by them in favor of the Reverse Split.
Further, the Bisco Parties agree to notify, or cause their proxy
solicitors to notify, ADP and any brokers, nominees or shareholders
of the Company previously contacted by them that (a) the Bisco
Parties have withdrawn their proxy in opposition to the Reverse
Split, and (b) the Bisco Parties encourage and recommend such
persons vote their shares in support of the Reverse Split. The
Bisco Parties also agree to take such other and further action as
the Company may reasonably request in an effort to obtain approval
of the Reverse Split.
3.2 Voting of Company Voting Securities. Notwithstanding any
other provision of this Agreement, during the Term, the Bisco
Parties shall take or effect such action as may be necessary to
ensure that (i) the Company Voting Securities that are beneficially
owned by the Bisco Parties or any of their Affiliates or Associates
as of the appropriate record date for the 1998 Annual Meeting of
Shareholders are voted to elect the slate of Director Nominees duly
authorized and recommended to the Company's shareholders by the
Company's Board of Directors (which shall include Bisco's
designees), and (ii) all shares of Company Voting Securities
beneficially owned by the Bisco Parties or any of their Affiliates
or Associates are voted and deemed to be present, in person or by
proxy, at the 1998 Annual Meeting of Shareholders of the Company so
that all Company Voting Securities so beneficially owned may be
counted for the purpose of determining the presence of a quorum at
such meetings.
3.3 General Restrictions. During the Term, and so long as
neither the Company nor any Director breaches any of the provisions
of this Agreement, neither of the Bisco Parties nor any of their
Affiliates or Associates shall, directly or indirectly: (i) make or
participate in the making of any public announcement with respect
to, or submit or participate in the submission of a proposal for,
or offer of, any Extraordinary Transaction or any acquisition of
Company Voting Securities or of any significant portion of the
assets of the Company or any of its Affiliates; provided, that
nothing herein shall prevent the Bisco Parties from (x) submitting
any such proposals or offers to the Board of Directors for their
consideration, or (y) discussing any proposal or offer made by a
third party, provided the Bisco Parties inform such third party
that any such proposal or offer is subject to approval by the Board
of Directors; (ii) initiate the solicitation of or solicit proxies
or consents or become a "participant" in a "solicitation" (as such
terms are defined in the SEC's Regulation 14A under the Exchange
Act) with respect to any Company Voting Securities in opposition to
the recommendation of the Board of Directors of the Company with
respect to any matter, except that the foregoing shall not prevent
the Bisco Parties from soliciting proxies in opposition to any
proposal by the Board of Directors with respect to the adoption by
the shareholders of any "anti-takeover" measures (whether in the
form of an amendment to the Company's Articles of Incorporation by
Bylaws or otherwise) or other measures which have the purpose or
effect of restricting or limiting the voting rights and powers held
by the Bisco Parties; (iii) initiate or institute, or participate
in the initiation or institution of, any shareholder vote (whether
pursuant to Rule 14a-8 of the Exchange Act or otherwise) with
respect to any matter which is not required by the Company's
Articles of Incorporation or Bylaws, the rules of the National
Association of Securities Dealers, Inc. or any national securities
exchange on which Company Voting Securities are then traded, or by
any similar laws or rules to be submitted to the Company's
shareholders; (iv) initiate or institute, or participate in the
initiation or institution of any legal, regulatory or
administrative action or proceeding in any court of competent
jurisdiction or appropriate regulatory or administrative body or
agency with respect to the Company or any of its Associates,
employees, accountants, legal counsel or other advisors, which
action or proceeding in any way contests, or otherwise seeks to
void, the validity of, or the enforceability of any provision of
this Agreement (provided, that nothing herein shall prevent the
Bisco Parties from defending any such action or proceeding brought
by or on behalf of the Company or its Affiliates or Associates);
(v) nominate or cause others to nominate or otherwise seek to elect
directors of the Company other than those nominated by the Board of
Directors (which shall at all times during the Term include the
Bisco Parties' designees, as provided in Section 2.1); or (vi) join
or become a part of any group, or otherwise act in concert with any
other Person, for the purpose of acquiring, holding, voting, or
disposing of Company Voting Securities, or otherwise act as a
partnership, limited partnership, syndicate, or other group, with
any third party so as to be deemed to be a "person" within the
meaning of Section 13(d)(3) of the Exchange Act with respect to
Company Voting Securities, except as a member of a group consisting
solely of the Bisco Parties and their Affiliates and Associates
with respect to the ownership or voting of the Company Voting
Securities currently owned by them or acquired by them pursuant to
this Agreement.
3.4 Acquisition of Voting Securities. During the Term, and
so long as neither Company nor any Director breaches any of the
provisions of this Agreement, neither the Bisco Parties or any of
their Affiliates or Associates shall, directly or indirectly,
acquire, or acquire beneficial ownership of, any Company Voting
Securities, except as contemplated by Section 4.1 hereof and
pursuant to any dividends or distributions of Company Voting
Securities made on or to the Company shares beneficially owned by
such Person, such that at all times during the term hereof, the
Bisco Parties and their Affiliates and Associates shall own no more
than 19.9% of the Company's Voting Securities.
ARTICLE FOUR
SALE OF NEW SHARES
4.1 Sale of Shares. The Company agrees to sell to Bisco,
and Bisco agrees to purchase, 706,700 shares of the Company's
Common Stock (the "New Shares"), subject to the terms and
conditions of this Agreement.
(a) The closing on the sale of the New Shares shall take
place at such time and place as the parties may agree, but not
later than February 27, 1998 (the "Closing Date").
(b) The purchase price for the New Shares (the "Purchase
Price") shall be the average of the closing price for the Company's
Common Stock for the ten (10) trading days ending on the day
immediately preceding the Closing Date.
(c) The Closing Date shall occur prior to the effective date
of the Reverse Split.
(d) On the Closing Date (i) Bisco shall pay the Purchase
Price to the Company by wire transfer of immediately available
funds to the Company's bank account or by such other means as the
Parties may mutually agree upon, and (ii) the Company shall deliver
or cause to be delivered to Bisco, against payment by Bisco of the
Purchase Price, a certificate representing the New Shares
registered in the name of Bisco.
4.2 Restrictive Legend. Each certificate representing the
New Shares shall, except as otherwise provided in Section 4.3 of
this Agreement, be stamped or otherwise imprinted with a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS SUCH SHARES HAVE BEEN
REGISTERED UNDER THAT ACT OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION
THEREUNDER IS AVAILABLE.
The Company may enter a stop transfer order with the transfer
agent or agents of Company Voting Securities against the transfer
of the New Shares except in compliance with the requirements of
this Agreement. The Company agrees to remove promptly any stop
transfer order with respect to, and issue promptly unlegended
certificates in substitution for, certificates for the New Shares
that are no longer subject to the restrictions contained in this
Agreement.
4.3 Notice of Proposed Transfer. Prior to any proposed
transfer of any of the New Shares, the holder thereof shall give
written notice to the Company of its intention to effect such
transfer. Each such notice shall describe the manner of the
proposed transfer and shall be accompanied by a written opinion of
counsel satisfactory to the Company (it being agreed that Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A. shall be satisfactory)
to the effect that the proposed transfer may be effected without
registration under the Securities Act, whereupon the holder of such
stock shall be entitled to transfer such stock in accordance with
the terms of its notice. Each certificate for the New Shares
transferred as above provided shall bear the legend set forth in
Section 4.2, except that such certificate shall not bear such
legend if (i) such transfer is in accordance with the provisions of
Rule 144 (or any other rule permitting public sale without
registration under the Securities Act) or (ii) the opinion of
counsel referred to above is to the further effect that the
transferee and any subsequent transferee (other than an Affiliate
of the Company) would be entitled to transfer such securities in a
public sale without registration under the Securities Act.
4.4 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which
may at any time permit the sale of the Restricted Stock to the
public without registration, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities
Act;
(b) use its best efforts to file with the Commission in
a timely manner all reports and other documents required of The
Company under the Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith
upon request a written statement by the Company as to its
compliance with the reporting requirements of such Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock
without registration.
4.5 Stock Legend. The following legend shall be placed on
all certificates evidencing the New Shares, which legend will
remain thereon until the earlier of the expiration of the Term or
as long as such Company Voting Securities are subject to the
restrictions contained in this Agreement:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE PROVISIONS OF AN AGREEMENT, DATED AS OF FEBRUARY
24, 1998, BETWEEN FAMILY STEAK HOUSES OF FLORIDA, INC.,
BISCO INDUSTRIES, INC., THE BISCO INDUSTRIES PROFIT
SHARING AND SAVINGS PLAN AND GLEN F. CEILEY. A COPY OF
SUCH AGREEMENT IS ON FILE AT THE OFFICE OF THE SECRETARY
OF FAMILY STEAK HOUSES OF FLORIDA, INC. AND THE SECRETARY
WILL FURNISH TO ANY SHAREHOLDER, UPON REQUEST AND WITHOUT
CHARGE, A FULL STATEMENT OF THE RIGHTS, TERMS AND
CONDITIONS OF SUCH AGREEMENT."
ARTICLE FIVE
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of The Company. The
Company hereby represents and warrants to the Bisco Parties as
follows:
(a) The Company is a corporation in good standing under
the laws of the State of Florida. The Company has corporate power
and authority to execute and deliver this Agreement and to perform
its terms.
(b) The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated herein, have been duly and validly authorized by all
necessary corporate or other action in respect thereof on the part
of the Company. This Agreement has been duly and validly executed
by the Company and, assuming this Agreement constitutes a valid and
binding agreement of the Bisco Parties, represents a valid and
binding obligation of the Company, enforceable in accordance with
its terms subject to the Bankruptcy Exception. The execution,
delivery and performance of this Agreement by the Company the
consummation of the transactions contemplated hereby, will not
constitute a breach, violation or default, or create a lien, under
any law, rule or regulation or any judgment, decree, governmental
permit or license or permit, indenture or instrument of the Company
or to which the Company is subject.
(c) As of the date hereof, there are 11,132,140 shares
of Common Stock outstanding.
5.2 Representations and Warranties of the Bisco Parties. The
Bisco Parties hereby represent and warrant to the Company as
follows:
(a) Bisco is a corporation in good standing under the
laws of the State of Illinois. Bisco and the Bisco Plan each have
the power and authority to execute and deliver this Agreement and
to perform its terms.
(b) The execution and delivery of this Agreement by the
Bisco Parties and the consummation by the Bisco Parties of the
transactions contemplated herein, have been duly and validly
authorized by all necessary corporate or other action in respect
thereof on the part of Bisco and the Bisco Plan. This Agreement
has been duly and validly executed by each of the Bisco Parties
and, assuming this Agreement constitutes a valid and binding
agreement of the Company, represents a valid and binding obligation
of each of the Bisco Parties, enforceable against each of them in
accordance with its terms, subject to the Bankruptcy Exception.
The execution, delivery and performance of this Agreement by the
Bisco Parties, and the consummation by the Bisco Parties of the
transactions contemplated hereby, will not constitute a breach,
violation or default, or create a lien, under any law, rule or
regulation or any judgment, decree, governmental permit or license
or permit, indenture or instrument of any of the Bisco Parties or
to which any of the Bisco Parties is subject.
(c) As of the date hereof and the Closing Date (before
the purchase of the New Shares), the Bisco Parties own of record
and beneficially 1,649,914 shares of the Company's Common Stock.
(d) Prior to the date of this Agreement, neither Bisco
nor any of its Affiliates or Associates has acted in concert with
any other Person, for the purpose of acquiring, holding, voting, or
disposing of Company Voting Securities, or otherwise acted as a
partnership, limited partnership, syndicate, or other group, with
a third party so as to be deemed to be a "person" within the
meaning of Section 13(d)(3) of the Exchange Act with respect to any
Company Voting Securities.
ARTICLE SIX
TERM OF AGREEMENT
6.1 Term of Agreement. Except as otherwise expressly
provided in this Agreement, the respective rights and obligations
of the Parties under this Agreement become effective on the date of
this Agreement is executed by each of the parties hereto and shall
continue in full force and effect through the earlier of (i) the
first anniversary of the Closing Date and (ii) the occurrence of an
Extraordinary Transaction (the "Term").
6.2 Survival of Covenants. From and after the expiration of
the Term, none of the Parties shall have any continuing liability
or obligation to perform any of their covenants or agreements
pursuant to this Agreement.
6.3 Remedies. The Parties recognize and hereby acknowledge
that it may be difficult to accurately measure the amount of
damages that would result to a Party by reason of a failure of the
other Party to perform any of the obligations imposed on it by this
Agreement. The Parties accordingly agree that each such Party
shall be entitled to an injunction to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, in addition to any other remedies to which such Party
may be entitled at law or in equity in accordance with this
Agreement.
ARTICLE SEVEN
MISCELLANEOUS
7.1 Notices. Any notices or other communications required or
permitted under this Agreement shall be effective only if it is in
writing and delivered personally, by facsimile transmission, or by
registered or certified mail, postage pre-paid, addressed as
follows:
The Company: Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
Telecopy: (904) 249-1466
Attention: President
Copy to Counsel: G. Alan Howard, Esq.
Milam, Otero, Larsen, Dawson &
Traylor, P.A.
1301 Riverplace Blvd., Suite 1301
Jacksonville, FL 32207
Bisco Parties: Bisco Industries, Inc.
704 W. Southern Ave.
Orange, California 92665
Telecopy: (714) 283-7140
Attention: President
Copy to Counsel: Kenneth C. Hoffman, Esq.
Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
or such other address as shall be furnished in writing by any of
the Parties. Any such notice or communication shall be deemed to
have been given as of the date so personally delivered or mailed.
7.2 Amendments. This Agreement may be amended by a
subsequent writing signed by both Parties upon the approval of each
of the Parties.
7.3 Counterparts. This Agreement may be executed in two or
more counterparts all of which shall be one and the same Agreement
and shall become effective when one or more counterparts have been
signed by each Party and delivered to the other Party.
7.4 Headings. The headings in this Agreement are for
convenience only and shall not affect the construction or
interpretation of this Agreement.
7.5 Successors and Assigns. All terms and conditions of this
Agreement shall be binding upon and inure to the benefit of and be
enforceable by any successor to any of the Bisco Parties and any
successor to the Company. Any assignment of the rights and
obligations of the Parties under this Agreement shall be effective
upon a written agreement signed by all the Parties.
7.6 Severability. If any provision of this Agreement shall
be held to be illegal, invalid or unenforceable, such illegality,
invalidity or unenforceability shall attach only to such provision
and shall not in any manner affect or render illegal, invalid or
unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
7.7 Entire Agreement. This Agreement constitutes the entire
understanding between and among the Parties with respect to the
subject matter hereof and shall supersede any prior agreements and
understandings among the Parties with respect to such subject
matter.
7.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be duly executed and delivered as of the date above
written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:___________________________________
Lewis E. Christman, Jr.
President and Chief Executive
Officer
BISCO INDUSTRIES, INC.
By:___________________________________
Glen F. Ceiley
President and Chief Executive
Officer
BISCO INDUSTRIES PROFIT SHARING
AND SAVINGS PLAN
By:___________________________________
Glen F. Ceiley
Trustee
___________________________________
Glen F. Ceiley, Individually
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