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COSI INC filed this Form 8-K on 12/28/2016
Entire Document

WHEREAS, at any time prior to the Plan Effective Date, Operator shall have the right to cause Owner to consummate the Closing under the Cosi APA;
WHEREAS, at any time after a material default by Operator of this Agreement as set forth herein in Section 8, Owner shall have the rights set forth herein in Section 8;
WHEREAS, in furtherance of the foregoing, Owner and Operator have agreed to enter into this Agreement relating to (i) the implementation of the Plan Option and (ii) the operation, maintenance, benefits, losses, risks and costs of the Business following the Effective Date until the Closing under the Cosi APA or the Plan Effective Date; and
WHEREAS, the effectiveness of this Agreement is subject to approval of the Bankruptcy Court.
NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Cosi APA and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1.             Definitions.
For purposes of this Agreement, capitalized terms not otherwise defined herein shall have the same meanings given to them in the Cosi APA.
2.             Certain Implementing Transactions and Agreements.
(a)           On or before the Effective Date, Owner and Operator shall enter into that certain Amendment No. 4 to Asset Purchase Agreement in the form attached hereto as Exhibit A.
(b)           On or before the Effective Date, the following shall have occurred:
Operator shall pay, via wire transfer of immediately available funds to the accounts set forth on Schedule 1 hereto, the amounts set forth on Schedule 1, totaling $4,550,0001 (the “Cash Payment”).  The Cash Payment shall be held in segregated accounts controlled by the Debtors (including a separate account to be available exclusively for cure costs (the “Cure Cost Amount”) and shall not be subject to any claims, liens or interests whatsoever.  Subject to Section 8 herein, the Cash Payment shall be used solely to satisfy under the Cosi APA, if a Closing occurs, or the Plan Option, if consummated, (i) the obligation of Operator to pay applicable counterparties of the applicable Assigned Contracts Cure Costs of up to $1,500,000 as contemplated by Section 2.05(a)(ii) of the Cosi APA and (ii) the obligation of Operator to pay a cash portion of the Purchase Price as contemplated by Section 2.05(a)(iv) of the Cosi APA in the amount of (x) $4,650,000 less (y) certain reserves under Amendment No. 3 to the Cosi APA and the amount by which obligations under the DIP Facility exceed $4,100,000.   The payment of the Cash Payment shall fully satisfy and discharge Operator’s obligations under Sections 2.05(a)(ii) and 2.05(a)(iv) and Operator’s corresponding obligations under 2.10(b) of the Cosi APA.  The Cash Payment shall be held solely as security for Operator’s obligations to make payments required under Section 2.05(a) and 2.10(b) of the Cosi APA, and shall only be disbursed to the full control of the Debtors upon the earlier of (i) the Closing under the Cosi APA, (ii) the Plan Effective Date, or (iii) further order of the Bankruptcy Court.  For the avoidance of doubt, in no event shall any portion of the Cash Payment be disbursed or used for any purpose other than in connection with the Closing or the Plan Effective Date, without further order of the Bankruptcy Court; provided however, on or after the Effective Date, Owner shall be entitled without further order of the Bankruptcy Court to use the Cash Payment to pay the payments contemplated by Schedule 2;2

1 For the avoidance of doubt, this amount is calculated as follows (a) $4,650,000 cash component of Purchase Price, plus (b) maximum cure amount that is responsibility of Buyer ($1,500,000), minus (c) the reserves for Fast Casual and Dubai contemplated by the Third Amendment (which are $525K + $975K +$100K), minus (d) the amount (if any) by which the DIP Obligations on the Effective Date exceed $4,100,000.
2 For the avoidance of doubt, Schedule 2 identifies categories of administrative and priority claims which arose prior to the Effective Date or which are expected to arise after the Effective Date.

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