EXCHANGE AGREEMENT dated as of __________, 2010 by and among BRAVO BRIO RESTAURANT GROUP, INC., BRAVO DEVELOPMENT HOLDINGS LLC and THE INDIVIDUAL SHAREHOLDERS OF BRAVO BRIO RESTAURANT GROUP, INC.
Exhibit 10.13
dated as of __________, 2010
by and among
BRAVO DEVELOPMENT HOLDINGS LLC
and
THE INDIVIDUAL SHAREHOLDERS OF BRAVO BRIO RESTAURANT GROUP, INC.
This Exchange Agreement (this “Agreement”) among Bravo Brio Restaurant Group, Inc., an
Ohio corporation (the “Company”), Bravo Development Holdings LLC, a Delaware limited
liability company (“Holdings”), and the individual shareholders of Bravo Brio Restaurant
Group, Inc. listed on the signature pages hereto (the “Individual Shareholders” and,
together with Holdings, the “Shareholders”) is dated as of ___, 2010.
RECITALS
WHEREAS, the Company is contemplating an initial public offering (the “Offering”) of
its Common Shares, no par value per share (such shares, the “New Common Shares”), pursuant
to a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (the
“Commission”) on July 1, 2010, as the same may be amended from time to time (the
“Registration Statement”);
WHEREAS, as of the date hereof, the Shareholders own of record the number of shares of the
Company’s Common Stock, par value $.001 per share (such shares, the “Existing Common
Shares”), and shares of the Company’s Series A 14% Cumulative Compounding Preferred Stock, par
value $.001 per share (such shares, the “Existing Preferred Shares”), as set forth opposite
each of the Shareholders’ names on Exhibit A hereto, which shares constitute as of the date
hereof, and will constitute immediately prior to the exchange transactions described below, all of
the issued and outstanding Existing Common Shares and Existing Preferred Shares;
WHEREAS, the parties hereto desire that, immediately prior to the consummation of the
Offering, (i) the Existing Common Shares will be exchanged for New Common Shares in accordance with
the terms hereof and (ii) immediately following the exchange of Existing Common Shares for New
Common Shares, the Existing Preferred Shares will be exchanged for New Common Shares in accordance
with the terms hereof;
WHEREAS, immediately prior to the consummation of the exchange transactions described above,
the Company will adopt and file with the Secretary of State of the State of Ohio a Second Amended
and Restated Articles of Incorporation (the “New Articles of Incorporation”) reflecting the
Company’s new capital structure, including the authorization of the New Common Shares, and certain
other changes necessitated by the Offering;
WHEREAS, it is contemplated that, immediately after the consummation of the exchange
transactions described above but immediately prior to the consummation of the Offering, Holdings
will effectuate (i) the dissolution of Holdings and (ii) the distribution of the New Common Shares
received by Holdings pursuant to the exchange transactions described above to its members in
proportion to their ownership of outstanding membership units of Holdings; and
WHEREAS, the above-referenced changes to the Company’s capital structure are intended to
constitute reorganizations pursuant to Section 368(a)(1) of the Internal Revenue
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Code of 1986, as amended (the “Code”), and this Agreement is being entered into in
connection with that certain Agreement and Plan of Reorganization,
dated as of the date hereof and attached as Exhibit C
hereto (the
“Plan of Reorganization”), which shall be deemed to constitute a “plan or reorganization”
within the meaning of Code Section 368(a) and Treasury Regulations Section 1.368-2(g).
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants, agreements and conditions herein contained, and intending to be legally bound, the
parties hereto agree as follows:
AGREEMENT
ARTICLE I
THE EXCHANGES
1.1 Exchange of Existing Common Shares for New Common Shares.
(a) At the Closing (as defined below), each Shareholder shall transfer and deliver to the
Company, free and clear of all liens, the number of Existing Common Shares held by such Shareholder
set forth opposite such Shareholder’s name on Exhibit A hereto, and, in exchange therefor,
the Company shall issue to such Shareholder a number of New Common Shares equal to (i) the number
of Existing Common Shares so transferred and delivered by such Shareholder multiplied
by (ii) the Common Shares Multiplier (as defined below) (such exchange, the “Common
Shares Exchange”). The Existing Common Shares so exchanged shall be cancelled.
The “Common Shares Multiplier” shall be determined in good faith by the Pricing
Committee of the Board of Directors of the Company (or, at the discretion of the Board of Directors
of the Company, by the Board of Directors or any other committee thereto) in connection with the
determination of the Offering Price.
(b) Prior to or at the Closing, each Shareholder shall surrender to the Company all stock
certificates evidencing Existing Common Shares owned by such Shareholder, free and clear of any
lien, claim or encumbrance, duly endorsed for transfer or accompanied by stock powers or
assignments duly executed with all necessary stock transfer stamps attached thereto.
1.2 Exchange of Existing Preferred Shares for New Common Shares.
(a) Prior to the consummation of the Offering and immediately subsequent to the Common Shares
Exchange, at the Closing, each Shareholder shall transfer and deliver to the Company, free and
clear of liens, the number of Existing Preferred Shares held by such Shareholder set forth
opposite such Shareholder’s name on Exhibit A hereto, and, in exchange therefor, the
Company shall issue to such Shareholder a number of New Common Shares equal to (i) the Liquidation
Preference (as defined in the Company’s Amended and Restated Articles of
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Incorporation) as of the Closing Date of the Existing Preferred Shares so transferred and
delivered by such Shareholder divided by (ii) the Offering Price (such exchange,
the “Preferred Shares Exchange”). The Existing Preferred Shares so exchanged shall be
cancelled.
(b) Prior to or at the Closing, each Shareholder shall surrender all stock certificates
evidencing Existing Preferred Shares owned by such Shareholder, free and clear of any lien, claim
or encumbrance, duly endorsed for transfer or accompanied by stock powers or assignments duly
executed with all necessary stock transfer stamps attached thereto.
1.3 No Fractional Shares. The Company will not issue fractional shares in connection
with the Common Shares Exchange or the Preferred Shares Exchange. Instead, the aggregate number of
New Common Shares that each Shareholder is entitled to receive shall be rounded up to the nearest
whole share.
1.4 Hypothetical Calculation. Exhibit B hereto sets forth a hypothetical
calculation of the New Common Shares to be received in the Common Shares Exchange and the Preferred
Shares Exchange assuming a certain Common Shares Multiplier and Offering Price.
1.5 Restrictive Legends. It is understood and agreed that the certificates evidencing
the shares of New Common Shares to be delivered at the Closing, and each certificate issued upon
transfer thereof, shall bear the following legend, in addition to any other legends required by
Ohio law:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND
SOLD ONLY IF SO REGISTERED OR IN A MANNER
EXEMPT FROM REGISTRATION UNDER SUCH ACT.
1.6 Transfer Taxes. The Company will assume and pay all transfer taxes (but not
income, franchise or other taxes measured by receipts or income) which are payable in connection
with the execution, delivery and performance of this Agreement or the authorization and issuance of
or exchange for New Common Shares hereunder or in connection with any modification of this
Agreement. Each Shareholder will cooperate with the Company to obtain a refund of any such taxes
from governmental authorities, if applicable.
ARTICLE II
THE CLOSING
2.1 Closing.
(a) Unless this Agreement shall have been earlier terminated in accordance with the terms of
this Agreement, the closing of the Preferred Shares Exchange shall take place on the date of but
immediately prior to the consummation of the Offering and the closing of the
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Common Shares Exchange shall occur, without any action on the part of any party hereto, on the
date of but immediately prior to the closing of the Preferred Shares Exchange and simultaneously
with the moment upon which the New Articles of Incorporation filed with the Secretary of State of
the State of Ohio shall become effective (together, the “Closing”). The Closing shall take
place at the offices of the Company, 000 Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxx, Xxxx 00000. The date
of the Closing is referred to herein as the “Closing Date.”
(b) All obligations of the parties under this Agreement are subject to the condition precedent
that, prior to the Closing, the New Articles of Incorporation shall have been filed with the
Secretary of State of the State of Ohio and shall have become effective.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby represents and
warrants to the Shareholders, as of the date hereof and as of the Closing, as set forth below:
(a) Existence, Qualification and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Ohio. The Company has all
requisite power and authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the Company of this
Agreement have been duly authorized by all necessary action. This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except to the extent such
enforcement may be limited by applicable bankruptcy laws and other similar laws affecting
creditors’ rights generally.
(b) New Common Shares. The New Common Shares to be issued to the Shareholders
pursuant to this Agreement will be, when issued, (i) duly authorized, validly issued, fully paid
and nonassessable, (ii) free and clear of all liens, encumbrances, equities and claims (other than
securities law restrictions and restrictions under that certain (x) New Investors Securities
Holders Agreement, dated as of June 29, 2006, by and among the Company, Holdings and the other
investors and parties named therein (the “New Investors Securities Holders Agreement”) and
(y) Securities Holders Agreement, dated as of June 29, 2006, by and among the Company, Holdings,
Xxxxx X. Xxxxx III, Xxxx X. Xxxxx and the other investors and parties named therein (the
“Securities Holders Agreement”)) and (iii) issued without violation of any preemptive
rights.
3.2 Representations and Warranties of the Shareholders. Each Shareholder, severally
and not jointly, hereby represents and warrants to the Company, as of the date hereof and as of the
Closing, as set forth below:
(a) Existence, Qualification and Authority.
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(i) In respect of Holdings, Holdings is a limited liability company, duly organized, validly
existing and in good standing under the laws of Delaware. The execution, delivery and performance
by Holdings of this Agreement have been duly authorized by all necessary action. Holdings has the
requisite power, authority and legal right to execute and deliver this Agreement and to consummate
the transactions contemplated hereby.
(ii) In respect of each Individual Shareholder, such Individual Shareholder has the legal
capacity to execute and deliver this Agreement and to consummate the transactions contemplated
hereby.
(iii) This Agreement has been duly executed and delivered by such Shareholder and constitutes
the legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder
in accordance with its terms, except to the extent such enforcement may be limited by applicable
bankruptcy laws and other similar laws affecting creditors’ rights generally.
(b) Existing Common Shares and Existing Preferred Shares. Such Shareholder owns of
record 100% of the Existing Common Shares and Existing Preferred Shares set forth opposite such
Shareholder’s name on Exhibit A hereto, free and clear of any lien, claim or encumbrance,
and, other than, (x) the New Investors Securities Holders Agreement, (y) that certain Registration
Rights Agreement, dated as of June 29, 2006, by and among the Company, Holdings and the other
investors named therein and (z) the Securities Holders Agreement, as of the date hereof there are
no, and immediately prior to the Closing there will be no, shareholder agreements, voting trusts,
proxies or other agreements or understandings with respect to the outstanding shares of capital
stock of the Company to which such Shareholder is a party.
(c) Provisions Relating to Securities Laws. Such Shareholder acknowledges that the
shares of New Common Shares received pursuant to the Common Shares Exchange and/or the Preferred
Shares Exchange, as the case may be, have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), or under any applicable state securities laws, and are
being issued in reliance on exemptions from the registration requirements of the Securities Act and
any applicable state securities or blue sky laws. Each Shareholder agrees to refrain from
transferring or otherwise disposing of the New Common Shares (other than, in the case of Holdings,
to its members) or any interest therein in such manner as to cause the Company to violate the
registration requirements of the Securities Act or any applicable state securities or blue sky
laws.
ARTICLE IV
OTHER MATTERS
4.1 Termination. Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated (and the transactions contemplated herein may be abandoned) at any time
before the Closing (a) by mutual written consent of Holdings, on the one hand, and the Company, on
the other hand or (b) by Holdings, on the one hand, or the Company, on the other
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hand, upon notice given to the other, if any governmental authority shall have issued an
order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement. In the event of any termination of
this Agreement as provided in this Section 4.1, (i) written notice thereof shall promptly be given
to the other parties hereto and this Agreement shall forthwith become wholly void and terminate and
of no further force and effect except for this Section 4.1 (Termination) and Sections 4.3 (Further
Assurances; Lock-up), 4.5 (Assignment and Binding Effect), 4.6 (Amendment and Waiver), 4.7
(Notices), 4.8 (Applicable Law; Consent to Jurisdiction), 4.9 (No Benefit to Others), 4.10
(Headings), 4.11 (Severability), 4.12 (Counterparts) and 4.13 (Independent Nature of Obligations
and Rights), and (ii) there shall be no liability on the part of any of the parties hereto, except
that such termination shall not preclude any party from pursuing judicial remedies for damages
and/or other relief as a result of the breach by the other party of any representation, warranty,
covenant or agreement contained herein prior to such termination.
4.2 Termination of Agreements. The Company and the Shareholders party to the New
Investors Securities Holders Agreement and/or the Securities Holders Agreement agree that,
effective as of the Closing, such agreements automatically shall be terminated in their entirety,
shall be null and void and shall no longer be in full force and effect and that all rights and
obligations thereunder shall cease upon the Closing.
4.3 Further Assurances. Each of the parties shall from time to time after the Closing
Date, at the reasonable request of any other party, execute, acknowledge and deliver to such other
party such other instruments of conveyance and transfer or assumption and will take such other
actions and execute and deliver such other documents, certifications and further assurances as such
other party may reasonably require in order to effect the transactions contemplated hereby and will
use commercially reasonable efforts to cooperate with the other parties and execute and deliver to
the other parties such other instruments and documents and take such other actions as may be
reasonably requested from time to time by such other party as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
4.4 Contents of Agreement. This Agreement, including the Exhibits hereto, and, with
respect to the Company and Holdings only, the Plan of Reorganization, sets forth the entire
understanding of the parties hereto with respect to the transactions contemplated hereby and
supersedes any and all previous agreements and understandings, oral or written, between or among
the parties regarding the transactions contemplated hereby.
4.5 Assignment and Binding Effect. This Agreement may not be assigned by any party
without the prior written consent of the other parties. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each party.
4.6 Amendment and Waiver. Except for as expressly set forth herein, this Agreement
shall not be amended or modified, and no provision hereof shall be waived, except by written
instrument duly executed by each of the parties hereto. The grant of a waiver in one instance does
not constitute a continuing waiver in all similar instances. No failure to exercise, and no
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delay in exercising, by any party, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof.
4.7 Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing and shall be deemed
given only if delivered personally, delivered by courier or sent by registered or certified mail or
by Federal Express or other overnight mail service, postage prepaid, or by facsimile, with written
confirmation to follow, as follows:
If to the Company, to:
Bravo Brio Restaurant Group, Inc.
000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, Xxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, Xxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
With a required copy to (which shall not itself constitute notice):
Dechert LLP
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq. and Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq. and Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Holdings:
x/x Xxxxxxxxx, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, XX
Facsimile No.: (000) 000-0000
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, XX
Facsimile No.: (000) 000-0000
With a required copy to (which shall not itself constitute notice):
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, XX
Facsimile No.: (000) 000-0000
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, XX
Facsimile No.: (000) 000-0000
Xxxxxx Xxxxxx, Inc.
000 Xxxx 00xx Xxxxxx
000 Xxxx 00xx Xxxxxx
0
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
Dechert LLP
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq. and Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq. and Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to any of the Individual Shareholders, to such Individual Shareholder’s address as set
forth on Exhibit A hereto,
or to such other address or facsimile numbers as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or
other communication will be deemed to have been given as of the date so delivered or, if such date
is not a business day, on the next business day.
4.8 Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without giving effect to such State’s
laws and principles regarding the conflict of laws. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any federal court located in the State of Ohio or any
Ohio state court in connection with any dispute that arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such court, (c) agrees
that it will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting in the State of Ohio
or an Ohio state court unless venue would not be proper under rules applicable in such courts and
(d) waives any right to which it may be entitled, on account of place of residence or domicile.
4.9 No Benefit to Others. The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the parties hereto and their respective
heirs, executors, administrators, legal representatives, successors and permitted assigns, and they
shall not be construed as conferring any rights on any other persons.
4.10 Headings. The headings in this Agreement are solely for convenience of reference
and shall not limit or otherwise affect the meaning of this Agreement.
4.11 Severability. Any provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining provisions hereof, and such
invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provisions in any other jurisdiction.
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4.12 Counterparts. This Agreement may be executed in any number of counterparts and
any party hereto may execute any such counterpart, each of which when executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall constitute but one
and the same instrument. This Agreement shall become binding when one or more counterparts taken
together shall have been executed and delivered by all of the parties.
4.13 Independent Nature of Obligations and Rights. The obligations of each Shareholder
under this Agreement are several and not joint with the obligations of each other party, and no
Shareholder shall be responsible in any way for the performance of the obligations of any other
party under this Agreement. The decision of each Shareholder to participate in the transactions
contemplated hereby has been made by such Shareholder independently of any other person. Nothing
contained herein, and no action taken by any Shareholder pursuant hereto, shall be deemed to
constitute the Shareholders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that any Shareholder(s) are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated hereby.
4.14 Remedies. Each party to this Agreement acknowledges and agrees that in the event
of any breach of this Agreement by such party, any of the other parties hereto would be irreparably
harmed and could not be made whole by monetary damages. Each party accordingly agrees (i) to waive
the defense in any action for specific performance that a remedy at law would be adequate and (ii)
any of the other parties hereto, in addition to any other remedy to which it may be entitled at law
or in equity, shall be entitled to compel specific performance of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first
written above.
| BRAVO BRIO RESTAURANT GROUP, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| BRAVO DEVELOPMENT HOLDINGS LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Xxxxx Xxxxx | ||||
| Xxxx Xxxxxxx | ||||
| Xxxxx X’Xxxxxx | ||||
[Signature Page to Exchange Agreement]
| Xxxx Xxxxx | ||||
| Xxxxxxxx Xxxxx | ||||
| Xxxx Xxxxxxx | ||||
| Xxx Xxx | ||||
| Xxxxx Xxxxx | ||||
| Xxxxx Xxxxxx | ||||
| Xxxx Xxxx | ||||
| Xxxxxxxx Xxxxx | ||||
| Xxxx Xxxxxxx | ||||
| Xxx Xxxxxx | ||||
[Signature Page to Exchange Agreement]
| Xxxxx Xxxxx | ||||
| Xxx Xxxxxxx | ||||
| Xxxxxxx Xxxxx | ||||
| Xxxxx X’Xxxxxx | ||||
| Xxxx Xxxxxxxxxx | ||||
| Xxxx Xxxx | ||||
| Xxxxx Xxxx | ||||
| Xxx Xxxx | ||||
| Xxxxxx Xxxxx | ||||
| Xxxxxx Xxxxxxxxx | ||||
[Signature Page to Exchange Agreement]
| Xxxxx Xxxxxx | ||||
| Xxxxxx Xxxxxxx | ||||
| Xxx Xxxxx | ||||
| Xxxx Xxxxxxxx | ||||
| Xxxx Xxxxxxxxx | ||||
[Signature Page to Exchange Agreement]
Exhibit A
Shareholders of the Company
A-1
Exhibit B
Hypothetical Calculation of New Common Shares
B-1
Exhibit C
Plan
of Reorganization
C-1
