Exhibit 10.2
VOTING, REPURCHASE AND SHAREHOLDERS AGREEMENT
VOTING, REPURCHASE AND SHAREHOLDERS AGREEMENT (this "Agreement"),
dated as of April 1, 1997, by and among Xxxxxxx'x Food Markets, Inc., a Texas
corporation (the "Company"), RFM Acquisition LLC, a Delaware limited liability
company ("Buyer"), and each of the undersigned shareholders (individually, a
"Shareholder" and collectively, the "Shareholders") of the Company.
W I T N E S S E T H :
WHEREAS, concurrently with the execution and delivery of this
Agreement, Buyer, the Company and Xxxxxx X. Xxxxxxx have entered into a
Subscription Agreement dated as of the date hereof (as such agreement may be
amended from time to time, the "Subscription Agreement"; capitalized terms used
but not defined herein shall have the meanings set forth in the Subscription
Agreement) which contemplates certain transactions (the "Transactions"),
including (i) the Company's issuance to Buyer of 18,579,686 newly-issued shares
of Common Stock and an option to purchase 3,606,881 shares of Common Stock (the
"Purchase"), (ii) the Company's incurrence of indebtedness and the making of the
Debt Prepayment and the Preferred Stock Redemption, and (iii) the Company's
repurchase of up to 1,104,336 shares of Common Stock from the Company's Employee
Stock Ownership Plan (the "ESOP"), up to 200,435 Putable Shares and up to
4,280,415 Non-ESOP Shares pursuant to a tender offer (the "Tender Offer")
(provided that the numbers of shares referenced in this clause (iii) shall be
subject to reduction pursuant to Section 5.06(c) of the Subscription Agreement)
and, if fewer than 4,280,415 Non-ESOP Shares (as such number may be reduced
pursuant to Section 5.06(c) of the Subscription Agreement) shall be purchased in
the Tender Offer, the Company's repurchase of the balance of such 4,280,415
Non-ESOP Shares pursuant to the conditional repurchase commitment of certain
Shareholders contained in this Agreement;
WHEREAS, each Shareholder desires to take certain actions to support
the Transactions and agrees to refrain from taking certain actions that are
inconsistent with the Transactions;
WHEREAS, the Shareholders listed on Schedule A (the "Schedule A
Shareholders") have agreed to sell, or cause to be sold, up to the number of
shares of Common Stock set forth opposite each such Shareholder's name on
Schedule A on the Closing Date to the extent the Company shall acquire less than
4,280,415 Non-ESOP Shares (the "Repurchase Target") pursuant to the Tender
Offer;
WHEREAS, the Shareholders and Buyer desire to make
certain arrangements regarding the composition of the Board of
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Directors of the Company following the Closing and the post- Closing transfer of
shares of Common Stock;
WHEREAS, prior to the date hereof, the Board of Directors of the
Company has approved this Agreement; and
WHEREAS, it is a condition and inducement to Buyer's willingness to
enter into the Subscription Agreement that the Shareholders execute and deliver
this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties
and covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
SECTION 1.01. Representations and Warranties of the Shareholders.
Each Shareholder hereby severally represents and warrants to Buyer as follows:
(a) Ownership of Common Stock. Such Shareholder is either (i) the
record holder and beneficial owner of, (ii) trustee of a trust that is the
record holder or beneficial owner of, and whose beneficiaries are the beneficial
owners (such trustee, a "Trustee") of, (iii) executor of an estate that is the
record holder or beneficial owner of, and whose beneficiaries are the beneficial
owners (such executor, an "Executor") of, (iv) director of a foundation that is
the record holder (such director, a "Foundation Director") of, or (v) the
beneficial owner but not the record holder of, the number of shares of Common
Stock as set forth opposite such Shareholder's name on Schedule B (the "Existing
Shares", and together with any shares of Common Stock acquired by such
Shareholder in any such capacities after the date hereof and prior to the
termination of this Agreement, whether upon exercise of options, conversion of
convertible securities, purchase, exchange or otherwise, the "Shares"). On the
date hereof, the Existing Shares set forth opposite such Shareholder's name on
Schedule B constitute all of the shares of Common Stock owned of record or
beneficially by such Shareholder. Except as set forth on Schedule D, such
Shareholder has sole power of disposition with respect to all of the Existing
Shares set forth opposite such Shareholder's name on Schedule B, with no
restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement.
(b) Power; Binding Agreement. Such Shareholder has the legal
capacity, power and authority to enter into and perform all of such
Shareholder's obligations under this Agreement. This
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Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a valid and binding agreement of such Shareholder, enforceable
against such Shareholder in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and general
equitable principles (whether considered in a proceeding in equity or at law).
There is no beneficiary of or holder of a voting trust certificate or other
interest of any trust of which a Shareholder is a Trustee, any estate in respect
of which a Shareholder is an Executor or any Foundation of which a Shareholder
is a Foundation Director whose consent is required for the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby. If such Shareholder is married and such Shareholder's Shares constitute
community property, this Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, such
Shareholder's spouse, enforceable against such person in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered in a
proceeding in equity or at law).
(c) No Conflicts. (i) No filing with, and no permit, authorization,
consent or approval of, any Governmental Entity or any other Person is necessary
for the execution or delivery of this Agreement by such Shareholder or the
consummation by such Shareholder of the transactions contemplated hereby and
(ii) none of the execution or delivery of this Agreement by such Shareholder,
the consummation of the transactions contemplated hereby nor compliance by such
Shareholder with any of the terms hereof shall (1) conflict with or result in
any breach of any applicable trust, estate, foundation or other organizational
documents applicable to such Shareholder, (2) conflict with or result in any
breach of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give rise to a right
of termination, amendment or acceleration under, any of the provisions of any
note, bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
such Shareholder is a party or by which such Shareholder or any of such
Shareholder's properties or assets may be bound, including any trust agreement,
will, testamentary document, voting agreement, shareholders agreement, voting
trust or other agreement, or (3) conflict with or result in a violation of any
Governmental Order applicable to such Shareholder or any of such Shareholder's
properties or assets.
(d) No Liens. Except as set forth on Schedule D, such Shareholder's
Shares and the certificates representing such Shares are now and at all times
during the term hereof shall be held by such Shareholder, or by a nominee or
custodian for the benefit of such Shareholder, free and clear of all liens,
claims,
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security interests, proxies, voting trusts or agreements, understandings or
arrangements or any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder.
(e) Information Supplied. None of the information specifically
supplied or to be supplied by such Shareholder with respect to such Shareholder
for inclusion in the Proxy/Tender Offer Statement will, as of the date it is
first mailed to the Common Shareholders, at the time of the Shareholders Meeting
or at the time any Shares are purchased pursuant to the Tender Offer or the
conditional repurchase commitment of the Schedule A Shareholders hereunder,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(f) No Brokers. No broker, investment banker, financial advisor or
other Person is entitled to any brokerage, finder's, financial advisor's or
other fee or commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of such Shareholder.
(g) Reliance by Buyer. Such Shareholder understands and acknowledges
that Buyer is entering into the Subscription Agreement in reliance upon such
Shareholder's execution and delivery of this Agreement.
SECTION 1.02. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to the Shareholders as follows:
(a) Power, Binding Agreement. Buyer is duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the power and authority to enter into this Agreement and perform all of its
obligations under this Agreement. This Agreement has been duly authorized,
executed and delivered by Buyer and constitutes a valid and binding agreement of
Buyer, enforceable against Buyer in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and general equitable principles (whether considered in a proceeding in equity
or at law).
(b) No Conflicts. Except for the filings required under the HSR Act,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity or any other Person is necessary for the execution or
delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby and (ii) none of the execution or delivery of
this Agreement by Buyer, the consummation of the transactions contemplated
hereby nor compliance by Buyer with any
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of the terms hereof shall (1) conflict with or result in any breach of the
organizational documents of Buyer, (2) conflict with or result in any breach of
or constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, or give rise to a right of
termination, amendment or acceleration under, any of the provisions of any note,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, or other instrument or obligation of any kind to which Buyer is a
party or by which Buyer or any of its properties or assets may be bound or (3)
conflict with or result in a violation of any Governmental Order applicable to
Buyer or to any of Buyer's property or assets.
ARTICLE II
PRE-CLOSING COVENANTS
SECTION 2.01. Voting. Each Shareholder hereby severally agrees that,
from the date hereof until the Article II Termination Date (as defined in
Section 6.01), at any meeting of the Common Shareholders, however called, or in
connection with any written consent of the Common Shareholders, such Shareholder
shall vote (or cause to be voted) the Shares held of record or beneficially by
such Shareholder (a) in favor of the Transactions, including the Amendment, the
Purchase, the execution and delivery by the Company of the Subscription
Agreement and the approval of the terms thereof and each of the other actions
contemplated by the Subscription Agreement and this Agreement and any actions
required in furtherance thereof and hereof; (b) against any action or agreement
that would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Subscription Agreement or
this Agreement; and (c) except as specifically requested in writing by Buyer in
advance, against the following actions (other than the Transactions and other
than as contemplated by the Subscription Agreement): (i) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or any of the Subsidiaries; (ii) a sale, lease
or transfer of a material amount of assets of the Company or any of the
Subsidiaries or a reorganization, recapitalization, dissolution or liquidation
of the Company or any of the Subsidiaries; (iii) any change in the majority of
the Board of Directors of the Company; (iv) any material change in the present
capitalization of the Company or any amendment of the Company's articles of
incorporation; (v) any other material change in the Company's corporate
structure or business; or (vi) any other action which is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, discourage
or materially adversely affect the Transactions or the transactions contemplated
by the Subscription Agreement or the contemplated economic benefits of any of
the foregoing. No Shareholder shall enter into any agreement or understanding
with any Person to vote
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or give instructions in any manner inconsistent with this Section.
SECTION 2.02. PROXY. EACH SHAREHOLDER HEREBY GRANTS TO, AND
APPOINTS, BUYER AND ANY PARTNER OR MEMBER OF BUYER, IN THEIR RESPECTIVE
CAPACITIES AS REPRESENTATIVES OF BUYER, AND ANY INDIVIDUAL WHO SHALL HEREAFTER
SUCCEED TO ANY SUCH OFFICE OF BUYER, AND ANY OTHER DESIGNEE OF BUYER, EACH OF
THEM INDIVIDUALLY, SUCH SHAREHOLDER'S IRREVOCABLE (UNTIL THE ARTICLE II
TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION)
TO VOTE THE SHARES AS INDICATED IN SECTION 2.01 ABOVE. EACH SHAREHOLDER INTENDS
THIS PROXY TO BE IRREVOCABLE (UNTIL THE ARTICLE II TERMINATION DATE) AND COUPLED
WITH AN INTEREST AND SHALL TAKE SUCH FURTHER ACTION AND EXECUTE SUCH OTHER
INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH SHAREHOLDER WITH RESPECT TO
SUCH SHAREHOLDER'S SHARES.
SECTION 2.03. Voting Arrangements. Each Shareholder hereby severally
agrees that, from the date hereof until the Article II Termination Date, except
pursuant to this Agreement, such Shareholder shall not deposit any Shares into a
voting trust, enter into any voting agreement with respect to any Shares or
grant any proxies with respect to any Shares, other than proxies to vote Shares
at any annual or special meeting of the Common Shareholders on matters unrelated
to the matters set forth herein.
SECTION 2.04. No Dispositions. Each Shareholder hereby severally
agrees that, from the date hereof until the Article II Termination Date, such
Shareholder shall not, except pursuant to the Subscription Agreement or this
Agreement, sell, transfer, assign, pledge, hypothecate, encumber or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
hypothecation, encumbrance or other disposition of, any of or any interest in
any of the Shares. Notwithstanding the foregoing, (i) R. Xxxxxxx Xxxxxxx, Xx.
hereby agrees not to sell in the Tender Offer any shares held of record by him
other than the 8,545 Restricted Shares held of record by him and (ii) each of
Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxxx Xxxxxx Xxxxxxx may sell those
Shares set forth next to such Shareholder's name on Schedule 3.03(c) to the
Subscription Agreement but only pursuant to the provisions of the agreement
referenced next to such Shareholder's name on such Schedule.
SECTION 2.05. No Solicitation. Each Shareholder hereby severally
agrees that, from the date hereof until the Article II Termination Date, such
Shareholder shall not (whether directly or indirectly through advisors, agents
or other intermediaries), nor shall it authorize or permit any of its partners,
affiliates, employees, agents, investment bankers, attorneys, financial advisors
or other representatives, to (a) solicit, initiate or take any action knowingly
to facilitate the
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submission of inquiries, proposals or offers from any Person relating to a
Transaction Proposal, or (b) enter into or participate in any discussions or
negotiations regarding the foregoing, or furnish to any other Person any
information with respect to its business, properties or assets or any of the
foregoing, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to do or seek
any of the foregoing; provided, however, that, notwithstanding any other
provision of this Agreement, if such Shareholder is a director of the Company,
such Shareholder may take any action, including casting a vote or signing a
written consent, in such Person's capacity as a director that the Board of
Directors of the Company would be permitted to take in accordance with the
Subscription Agreement. Each Shareholder shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
ARTICLE III
CONDITIONAL REPURCHASE
SECTION 3.01. Conditional Agreement to Sell Shares. (a) Except as
otherwise provided in Section 3.01(b), each Schedule A Shareholder hereby
severally agrees to sell to the Company, and the Company hereby agrees to
purchase from such Schedule A Shareholder, on the Closing Date up to that number
of Shares set forth opposite such Shareholder's name on Schedule A (with respect
to each Schedule A Shareholder, the "Committed Shares"). The Company shall
purchase Committed Shares from the Schedule A Shareholders and the Schedule A
Shareholders shall sell Committed Shares to the Company only if the number of
Non- ESOP Shares purchased by the Company pursuant to the Tender Offer (the
"Tendered Shares") shall be less than the Repurchase Target. In such
circumstances, the Schedule A Shareholders shall sell to the Company an
aggregate number of shares of Common Stock equal to the difference between the
Repurchase Target and the Tendered Shares, subject to reduction to avoid the
sale of fractional shares as described in the following sentence (the "Sold
Shares"). Each Schedule A Shareholder shall participate in such sale on a pro
rata basis, based on such Shareholder's number of Committed Shares (for each
Schedule A Shareholder, rounded down to the nearest whole share).
(b) Notwithstanding anything to the contrary contained in Section
3.01(a), with respect to any Schedule A Shareholder, such Shareholder shall have
the right to cause any other holder or holders of Common Stock (other than R.
Xxxxxxx Xxxxxxx, Xx. or any other officer or employee of the Company) to sell
shares of Common Stock to the Company to satisfy, in whole or in part, such
Schedule A Shareholder's obligation hereunder to sell such Shareholder's
Committed Shares to the Company (any such holder, a
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"Designee"). Each Schedule A Shareholder may exercise this right by delivering
the following documents to the Company and Buyer no later than the 10th Business
Day prior to the consummation of the Tender Offer: (i) an irrevocable written
notice which shall disclose the name of each Designee who such Schedule A
Shareholder intends to cause to sell shares of Common Stock to the Company and
the number of shares which each such Designee shall sell and (ii) an agreement
of each such Designee to be bound by the provisions of this Agreement (including
the representations and warranties contained in Section 1.01) as if such
Designee were a Schedule A Shareholder hereunder, and (iii) an acknowledgement
by the Schedule A Shareholder that, notwithstanding the delivery of any such
notice or anything to the contrary contained in this Section 3.01(b), such
Schedule A Shareholder remains obligated to sell Committed Shares hereunder to
the extent any Designee of such Schedule A Shareholder shall fail to sell, in
accordance with the terms of this Agreement, the number of shares of Common
Stock indicated next to such Designee's name in the notice. Any notice,
agreement or acknowledgement delivered pursuant to this Section shall be in form
and substance satisfactory to the Company and Buyer.
SECTION 3.02. Purchase Price and Payment. In consideration for the
Sold Shares, and subject to the terms and conditions of this Agreement, at the
Closing, each Schedule A Shareholder shall receive $16 per share in cash,
payable by the Company by check to the order of such Shareholder. In
consideration for such payment, at the Closing, each Schedule A Shareholder
shall deliver to the Company a certificate or certificates representing all of
such Schedule A Shareholder's Sold Shares together with stock powers duly
executed and endorsed in blank, in form satisfactory to the Company and with all
required stock transfer stamps affixed. The Company shall issue a new stock
certificate to any Schedule A Shareholder to the extent such Shareholder's Sold
Shares represent only a portion of the shares of Common Stock covered by any
stock certificated delivered by such Shareholder pursuant to the preceding
sentence.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 4.01. Certain Directors. During the term of this Agreement,
at any meeting of the Common Shareholders, however called, or in connection with
any written consent of the Common Shareholders, the Shareholders and Buyer shall
use their reasonable efforts to have nominated to the Board of Directors of the
Company and shall vote (or cause to be voted) all the shares of Common Stock
held of record or beneficially by them (a) in favor of the election of all
persons whom Buyer chooses to nominate to the Board of Directors of the Company,
(b) in favor of the election of Xxxxxx X. Xxxxxxx to the Board of Directors of
the Company for so long as he continues to hold 10% of the issued and
outstanding shares of Common Stock and is able to carry out
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the normal duties of a director, and (c) in favor of the election of R. Xxxxxxx
Xxxxxxx, Xx. to the Board of Directors of the Company for so long as he remains
an executive officer of the Company and is able to carry out the normal duties
of a director. At any time that the conditions relating to Xxxxxx X. Xxxxxxx or
R. Xxxxxxx Xxxxxxx, Xx. contained in clauses (b) and (c), respectively, of the
preceding sentence shall cease to be satisfied, such Shareholder agrees to
resign from the Board of Directors of the Company. In addition, Buyer agrees to
evaluate on a year-to-year basis whether it desires to have Xxxx X. Xxxxx
nominated to the Board of Directors of the Company and whether it desires to
vote the shares of Common Stock held of record or beneficially by it in favor of
the election of Xxxx X. Xxxxx to the Board of Directors of the Company, and
however Buyer so determines the Shareholders agree to act and vote (or cause to
be voted) their Shares in a manner consistent with Buyer's decision. The parties
acknowledge that the rights of Xxxxxx X. Xxxxxxx, R. Xxxxxxx Xxxxxxx, Xx. and
Xxxx X. Xxxxx to serve as directors are personal to such individuals and may not
be assigned or succeeded to by any other Person, provided, however, that upon
the death or incapacity of Xxxxxx X. Xxxxxxx the executor of his estate or his
guardian, as the case may be, shall have the right to appoint an individual to
succeed to Xxxxxx X. Xxxxxxx'x rights under this Section, but only (i) if such
individual is reasonably acceptable to Buyer, (ii) for so long as such estate or
Xxxxxx X. Xxxxxxx, as the case may be, shall continue to hold 10% of the issued
and outstanding shares of Common Stock, and (iii) if such executor or guardian
shall have agreed in writing to be bound by the terms of this Agreement as if it
were a "Shareholder" hereunder. The parties hereto shall not enter into any
agreement or understanding with any Person to vote or give instructions in any
manner inconsistent with this Section.
ARTICLE V
POST-CLOSING TRANSFER OF SHARES
SECTION 5.01. General. (a) Restriction on Transfer. From and after
the Closing, each Shareholder hereby severally agrees that such Shareholder
shall not sell, transfer, assign, pledge, hypothecate, encumber or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, assignment, pledge,
hypothecation, encumbrance or other disposition of, any of or any interest in
any of the Shares during the term of this Agreement, except for (i) a transfer
made pursuant to this Agreement, (ii) a transfer upon the death or permanent
disability of a Shareholder to such Shareholder's executors, administrators,
testamentary trustees, legatees or beneficiaries, (iii) a transfer by a
Shareholder made in compliance with the federal securities laws to a trust or
custodianship the beneficiaries of which may include only such Shareholder, his
or her spouse or lineal descendants; (iv) a bona fide pledge or pledges to a
financial
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institution of, in the aggregate, not more than the lesser of 125,000 Shares and
25% of the Shares held by a Shareholder, (v) a transfer upon the death of a
Shareholder by such Shareholder's executors, administrators or testamentary
trustees (a "Shareholder's Representatives") to pay estate and similar taxes and
costs; provided, that prior to any transfer described in clause (v) above, the
Shareholder's Representatives shall have offered Buyer the right of first
refusal described in Section 5.01(c); and provided, further, in no event shall
any transfer under any clause of this Section 5.01 be made to any Person who has
a right to require the transferred Shares to be repurchased by the Company,
either immediately or upon the happening of any contingency; and provided,
further, that prior to any transfer or pledge described in clause (ii), (iii),
(iv) or (v) above, the applicable transferee or pledgee shall have agreed in
writing to be bound by the terms of this Agreement as if such transferee were a
"Shareholder" hereunder and shall have acknowledged in writing that such
transferee or pledgee is not a Person who has any rights described in the
immediately preceding proviso. Notwithstanding the foregoing, each of Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxxx Xxxxxx Xxxxxxx may sell those Shares set
forth next to such Shareholder's name on Schedule 3.03(c) to the Subscription
Agreement but only pursuant to the provisions of the agreement referenced next
to such Shareholder's name on such Schedule. No transfer of any Shares in
violation hereof shall be made or recorded on the books of the Company and any
such transfer shall be void and of no effect.
(b) Permanent Disability. For purposes of this Agreement, a
Shareholder shall be deemed to have a "permanent disability" if such Shareholder
is unable to engage in the activities required by such Shareholder's job by
reason of any medically determined physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
(c) Right of First Refusal. Prior to effecting any transaction
described in clause (v) of Section 5.01(a), a Shareholder's Representatives
shall cause any bona fide offer to purchase any or all of the Shares held by the
Shareholder's Representatives (an "Offer") received by the Shareholder's
Representatives and which the Shareholder's Representatives wish to accept to be
reduced to writing, and the Shareholder's Representatives shall notify Buyer in
writing that the Shareholder's Representatives wish to accept the Offer. The
notice shall contain an irrevocable offer to sell such Shares to Buyer or its
designee (in the manner set forth below) at a purchase price equal to the price
contained in, and on the same terms and conditions of, the Offer, and shall be
accompanied by a true copy of the Offer (which shall identify the third party
who has made the Offer (the "Offeror")). At any time within 30 days after the
date of the receipt by Buyer of such notice, Buyer shall have the right and
option to purchase, or to arrange for a
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third party (including the Company) to purchase, all of the Shares covered by
the Offer either (i) at the same price and on the same terms and conditions as
the Offer or (ii) if the Offer includes any consideration other than cash, then
at the sole option of Buyer, at the equivalent all cash price, determined in
good faith by a duly authorized compensation committee of the Board of Directors
of the Company, by delivering a certified or bank check in the appropriate
amount to the Shareholder's Representatives against delivery of certificates
representing the Shares so purchased, appropriately endorsed by the
Shareholder's Representatives. If at the end of such 30 day period, Buyer or
such third party has not tendered the purchase price for such Shares in the
manner set forth above, the Shareholder's Representatives may during the
succeeding 30 day period sell not less than all of the Shares covered by the
Offer to the Offeror at a price and on terms no less favorable to such
Shareholder's Representatives than those contained in the Offer. Promptly after
such sale, such Shareholder's Representatives shall notify Buyer of the
consummation thereof and shall furnish such evidence of the completion and time
of completion of such sale and of the terms thereof as may reasonably be
requested by Buyer. If, at the end of 30 days following the expiration of the 30
day period for Buyer to purchase such Shares, such Shareholder's Representatives
have not completed the sale of such Shares as aforesaid, all the restrictions on
sale, transfer or assignment contained in this Agreement shall again be in
effect with respect to such Shares.
(d) Other Sales to Buyer. Notwithstanding anything to the contrary
contained in Section 5.01(c) and notwithstanding the absence of an Offer, the
parties hereto acknowledge that any Shareholder's Representatives may approach
Buyer at any time regarding the sale of Shares held by such Shareholder's
Representatives to Buyer or its designee, provided that Buyer shall have no
obligation to purchase such Shares.
SECTION 5.02. (a) "Tag-Along" Right With Respect to Private Sales by
KKR Holders. (i) Private Sales of Shares by KKR Holders. Subject to the last
sentence of Section 5.03(a), with respect to any proposed Private Sale (as
defined in Section 5.04) of any Buyer Shares by a KKR Holder during the term of
this Agreement to a Person (a "Proposed Purchaser"), other than pursuant to an
Exempt Transaction (as defined in Section 5.04), each Shareholder shall have the
right and option, but not the obligation, to participate in such sale, on the
same terms and subject to the same conditions as the sale by the KKR Holder (as
defined in Section 5.04), for the number of Shares owned by such Shareholder
equalling the number derived by multiplying the total number of Buyer Shares (as
defined in Section 5.04) which the KKR Holder proposes to sell (the "Proposed
Number of Shares") by a fraction, the numerator of which is the total number of
Shares held by such Shareholder and the denominator of which is the sum of (A)
the total number of Shares held by such Shareholder, (B) the total number of
Buyer Shares, and (C) the total number of
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shares of Common Stock (determined on a fully diluted basis) owned by other
Persons entitled to the benefits of "tag-along" rights (including under this
Agreement) arising as a result of such sale.
(ii) Notices. The KKR Holder shall notify, or cause to be notified,
each Shareholder in writing of each proposed Private Sale that is subject to
Section 5.02(a)(i) above. Such notice shall set forth: (1) the Proposed Number
of Shares, (2) the name and address of the Proposed Purchaser, (3) the proposed
amount of consideration, the material terms and conditions of such sale (and if
the proposed consideration is not cash, the notice shall describe the terms of
the proposed consideration) and the proposed closing date of such sale, (4) the
total number of Buyer Shares and the total number of shares of Common Stock
(determined on a fully diluted basis) owned by Persons entitled to the benefits
of any other "tag-along" rights arising as a result of such sale and (5) an
indication that the Proposed Purchaser has been informed of the "tag-along"
right provided for in this Section 5.02 and has agreed to purchase Shares held
by such Shareholder in accordance with the terms hereof. The "tag- along" right
may be exercised by such Shareholder by delivery of a written notice from such
Shareholder to the KKR Holder (the "Tag-Along Notice") within 10 days following
receipt of the notice specified in the preceding sentence. The Tag-Along Notice
shall state the number of Shares that such Shareholder proposes to include in
such Private Sale to the Proposed Purchaser. If such Shareholder delivers a
Tag-Along Notice to the KKR Holder, such Shareholder shall (1) prior to the
closing of any such sale, execute and deliver (or cause to be executed and
delivered) any purchase agreement or other documentation required by the
Proposed Purchaser to consummate the sale (including all legal opinions,
cross-receipts and certificates), which purchase agreement and other
documentation shall be on terms no less favorable in respect of any material
term to such Shareholder than those executed by the KKR Holder and (2) at the
closing of any such sale, deliver to the Proposed Purchaser the certificate or
certificates representing the Shares to be sold pursuant to such sale by such
Shareholders, duly endorsed for transfer with signatures guaranteed, against
receipt of the purchase price thereof.
(iii) Number of Shares to be Sold. If a Tag-Along Notice is received
pursuant to Section 5.02(a)(ii), each Shareholder shall be permitted to sell to
the Proposed Purchaser up to the number of Shares determined as set forth in
Section 5.02(a)(i) above (with respect to each Shareholder, the "Proposed
Shares"), and the KKR Holder shall be permitted to sell to the Proposed
Purchaser up to a number of shares of Common Stock (the "Proposed Buyer Shares")
equal to the Proposed Number of Shares less the aggregate number of Proposed
Shares and all other shares of Common Stock being sold to such Proposed
Purchaser in such transaction pursuant to tag-along rights arising as a result
of such sale; provided, that the KKR Holder shall have the right to
13
sell a number of additional shares of Common Stock up to the excess of the
Proposed Number of Shares over the number of Proposed Buyer Shares, if the
Proposed Purchaser wishes to purchase such additional shares. If no Tag-Along
Notice is received by the KKR Holder pursuant to Section 5.02(a)(ii), such KKR
Holder shall have the right for a 120-day period to sell to the Proposed
Purchaser up to the Proposed Number of Shares on terms and conditions no more
favorable in any material respect to the KKR Holder than those stated in the
Tag-Along Notice.
(b) "Tag-Along" Right With Respect to Public Sales by KKR Holders.
(i) Public Sales of Shares by KKR Holders. Subject to the last sentence of
Section 5.03(a), with respect to any proposed sale of any Buyer Shares by a KKR
Holder during the term of this Agreement in a Public Offering, each Shareholder
shall have the right and option, but not the obligation, to participate in such
Public Offering on the same terms and subject to the same conditions as the sale
by the KKR Holder, for the number of Shares owned by such Shareholder as
determined pursuant to Section 5.02(b)(iii) below.
(ii) Notices. The KKR Holder shall notify, or cause to be notified,
each Shareholder in writing of each proposed Public Offering that is subject to
Section 5.02(b)(i) above (a "Proposed Registration"). Such notice may be given
before the filing of such registration statement and need not specify any price
or other terms or conditions of such sale. If within 5 days of the delivery of
such notice to such Shareholder, the KKR Holder receives from such Shareholder a
written request (a "Request"), which Request shall be irrevocable, to register
Shares held by such Shareholder (a "Requesting Shareholder"), Shares shall be so
registered as and to the extent provided in this Section 5.02(b) if Buyer Shares
are so registered. If a Requesting Shareholder delivers a Request to the KKR
Holder, such Requesting Shareholder shall participate in such Public Offering,
if any, at the same price and on the same terms and conditions as the KKR
Holder, which price and other terms and conditions shall be determined on behalf
of the KKR Holder and such Requesting Shareholder by the KKR Holder in its sole
discretion. Nothing in this Agreement shall create any obligation on the part of
the KKR Holder to cause a registration statement to become effective under the
Securities Act or to consummate a Public Offering.
(iii) Number of Shares to be Sold. The maximum number of Shares
which shall be registered pursuant to a Request shall equal the number derived
by multiplying the total number of Shares held by a Requesting Shareholder by a
fraction, the numerator of which is the total number of Buyer Shares which the
KKR Holder proposes to sell in the Public Offering and the denominator of which
is the total number of Buyer Shares; provided, that in the event that the
aggregate number of shares of Common Stock to be sold in any Public Offering is
increased or decreased (including any decrease resulting from the advice of the
managing underwriter in an underwritten offering that, in its
14
opinion, the number of Buyer Shares which the KKR Holder proposes to sell in the
Public Offering plus the aggregate number of Shares subject to Requests by the
Shareholders would be likely to have an adverse effect on the price, timing or
distribution of the shares of Common Stock offered in such Public Offering),
then the number of Shares which such Requesting Shareholder shall sell in such
Public Offering shall be increased or decreased by the product of (i) the number
of shares of Common Stock by which the total number of shares of Common Stock in
such Public Offering is increased or decreased and (ii) a fraction the numerator
of which equals the number of Shares subject to the Request of such Requesting
Shareholder and the denominator of which is the total number of shares of Common
Stock originally to be so registered.
(iv) Upon delivery of a Request, each Requesting Shareholder will,
if requested by the KKR Holder, execute and deliver to the KKR Holder a custody
agreement and power of attorney in form and substance reasonably satisfactory to
the KKR Holder with respect to the Shares to be registered pursuant to this
Section 5.02(b) (a "Custody Agreement and Power of Attorney"). The custodian and
attorney-in-fact under the Custody Agreement and Power of Attorney shall be the
KKR Holder or its designee. The Custody Agreement and Power of Attorney shall
provide, among other things, that such Shareholder shall deliver to and deposit
in custody with the custodian and attorney-in-fact named therein a certificate
or certificates representing such Shares (duly endorsed in blank by the
registered owner or owners thereof or accompanied by duly executed stock powers
in blank) and irrevocably appoint said custodian and attorney-in-fact as such
Requesting Shareholder's agent and attorney-in-fact with full power and
authority to act under the Custody Agreement and Power of Attorney on such
Shareholder's behalf with respect to the matters specified therein (including
executing an underwriting agreement and cross-receipts).
(v) Each Shareholder agrees that, if such Shareholder shall be a
Requesting Shareholder, such Shareholder shall execute and deliver or cause to
be executed and delivered such other agreements and other documents (such as
legal opinions, cross- receipts and certificates) as the KKR Holder itself is
delivering or as the KKR Holder may otherwise reasonably request to implement
the provision of this Section 5.02(b).
(vi) Each Requesting Shareholder shall bear a proportionate amount
of the expenses (including filing fees, underwriting discounts and commissions
and attorneys and accountants fees) relating to such Public Offering (based on
the relative number of Shares of such Shareholder which are covered by the
applicable registration statement relative to the total number of shares covered
by such registration statement).
(vii) If a Proposed Registration involves an
underwritten offering, the investment banker(s), underwriter(s)
15
and manager(s) for such Public Offering shall be selected by the KKR Holder.
SECTION 5.03. "Drag-Along" Right With Respect to the Shares. (a)
Sales by KKR Holders. In the event that the KKR Holder determines, during the
term of this Agreement, to transfer either (i) at least 35% of the shares of
Common Stock (including shares subject to the Option in the event that the
Option is to be transferred) then outstanding on a fully diluted basis at the
time of such transfer or (ii) at least 15% of the shares of Common Stock
(including shares subject to the Option in the event that the Option is to be
transferred) then outstanding on a fully diluted basis at the time of such
transfer (provided that such percentage set forth in this clause (ii) equals
100% of the Buyer Shares at the time of such transfer) to a Proposed Purchaser
in a Private Sale, other than in an Exempt Transaction (a "Drag-Along Sale"),
then upon the request of the KKR Holder, each Shareholder shall transfer to such
Proposed Purchaser, at the same price and upon the same terms and conditions in
respect of any material term as such transfer by the KKR Holder, the percentage
of Shares held by such Shareholder that equals the percentage of shares to be
transferred by the KKR Holder (including shares subject to the Option in the
event that the Option is to be transferred) relative to the number of Buyer
Shares. In the event that both Sections 5.02 and 5.03 hereto apply to a single
transaction, the "drag-along" rights set forth in this Section 5.03 shall have
priority over the "tag-along" rights set forth in Section 5.02 above, and the
"tag-along" rights set forth in Section 5.02 shall not become exercisable by
such Shareholder unless the KKR Holder shall have determined not to exercise its
rights under this Section 5.03.
(b) Notice. Prior to making any Drag-Along Sale, the KKR Holder
shall, if it determines in its sole discretion that the Shareholders should
participate in such transfer, provide each Shareholder with written notice (the
"Drag-Along Notice") not less than 5 Business Days prior to the proposed date of
the Drag-Along Sale (the "Drag-Along Sale Date"). The Drag-Along Notice shall
set forth: (i) the name and address of the Proposed Purchaser; (ii) the proposed
amount and form of consideration to be paid per share of Common Stock and the
material terms and conditions of the transfer; (iii) the Drag-Along Sale Date
and the date upon which such Shareholder shall deliver to the KKR Holder the
certificates representing the Shares held by such Shareholder, duly endorsed,
and the power of attorney referred to below; and (iv) an indication that the
Proposed Purchaser has been informed of the Drag-Along Sale rights and has
agreed to acquire all of the Shares held by such Shareholder. Each Shareholder
shall (i) prior to the closing of any such transfer, execute any purchase
agreement or other documentation required by the Proposed Purchaser to
consummate the transfer, which purchase agreement and other documentation shall
be on terms no less favorable in respect of any material term to such
Shareholder than those executed by the KKR Holder, and (ii) at the closing of
16
any such transfer, deliver to the Proposed Purchaser the certificate or
certificates representing the Shares held by such Shareholder, duly endorsed for
transfer with signatures guaranteed, against receipt of the purchase price
thereof.
(c) Transaction Agreements. In the event that the KKR Holder owns at
least 15% of the shares of Common Stock (including shares subject to the Option)
then outstanding on a fully diluted basis and has signed an agreement, with
respect to all such Buyer Shares, to vote in favor of or tender in connection
with a business combination transaction entered into by the Company (a
"Transaction Agreement"), then, upon the request of the KKR Holder, each
Shareholder shall execute a Transaction Agreement with the same terms and
conditions in all material respects as the Transaction Agreement signed by the
KKR Holder. Prior to entering into a Transaction Agreement, the KKR Holder
shall, if it determines in its sole discretion that such Shareholder should
execute a Transaction Agreement, provide such Shareholder with written notice
(the "Transaction Agreement Notice") not less than 5 Business Days prior to the
proposed date of the execution of the Transaction Agreement (the "Transaction
Agreement Date"). The Transaction Agreement Notice shall set forth: (i) the name
and address of the counter-parties to the Transaction Agreement; (ii) the
proposed form of Transaction Agreement; and (iii) the material terms and
conditions of the business combination with the Company to which the Transaction
Agreement relates. Each Shareholder shall, at the signing and closing of such
Transaction Agreement, execute and deliver all other documentation required by
such Transaction Agreement, which documents shall be on terms no less favorable
in respect of any material term to such Shareholder than those executed by the
KKR Holder.
(d) Effect of Drag-Along Sale. If the Shareholders receive their
proportionate share of the purchase price from a Drag-Along Sale, but have
failed to deliver certificates representing their Shares as described in this
Section 5.03, they shall for all purposes be deemed no longer to be Common
Shareholders, shall have no voting rights, shall not be entitled to any
dividends or other distributions with respect to the Common Stock held by them,
and shall have no other rights or privileges granted to shareholders under law
or this Agreement.
SECTION 5.04. Certain Definitions. For purposes of this Agreement,
the term:
(a) "Buyer Shares" shall mean the sum of the shares of Common Stock
acquired by Buyer pursuant to the Subscription Agreement or on exercise of the
Option plus the shares of Common Stock that Buyer has the right to acquire
pursuant to the Option.
(b) "Exempt Transaction" shall mean (i) sales by Buyer to any
Affiliate of Buyer, (ii) sales by any Affiliate of Buyer to another Affiliate of
Buyer or to Buyer and (iii) transfers by Buyer and its respective Affiliates to
its partners or members
17
(and any subsequent sales by such partners or members) in the form of dividends
or distributions (whether upon liquidation or otherwise); provided, that prior
to any transfer described in clauses (i) and (ii) above, the applicable
transferee shall have agreed in writing to be bound by the terms of this
Agreement as if such transferee were "Buyer" hereunder; and provided, further,
that prior to any transfer described in clause (iii) above, if the transferee is
an Affiliate of KKR, such transferee shall have agreed in writing to be bound by
the provisions of this Agreement as if such transferee were "Buyer" hereunder.
(c) "KKR Holder" shall mean Buyer and any Person to whom a KKR
Holder transfers shares of Common Stock which Person is required by this
Agreement to be bound by the provisions of this Agreement.
(d) "Private Sale" shall mean any sale of shares of Common Stock
other than a sale made in a Public Offering.
(e) "Public Offering" shall mean any sale of shares of Common Stock
made in a public distribution pursuant to an effective registration statement
under the Securities Act.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Termination. Except with respect to the provisions
contained in Article I, Article II and Article VI, this Agreement shall
terminate (a) if prior to the Closing, upon the termination of the Subscription
Agreement and (b) if subsequent to the Closing, at such time as Buyer and its
Affiliates no longer own at least 10% of the shares of Common Stock (including
shares subject to the Option) then outstanding on a fully diluted basis. The
provisions contained in Article II hereof shall terminate upon the earlier to
occur of (a) the Closing and (b) the two-year anniversary of the termination of
the Subscription Agreement (the "Article II Termination Date"). The provisions
contained in Section 6.02 shall terminate (a) if prior to the Closing, upon the
termination of the Subscription Agreement and (b) if subsequent to the Closing,
the two-year anniversary of the date on which Buyer shall no longer own at least
10% of the shares of Common Stock (including shares subject to the Option) then
outstanding on a fully diluted basis. The provisions contained in Article I and
Article VI (other than Section 6.02) shall survive any of the termination events
described in this Section.
SECTION 6.02. Covenant Not to Compete. Each
Shareholder whose name is set forth on Schedule C (the "Schedule
C Shareholders") hereby severally agrees that for the period
commencing on the date hereof and (i) in the case of Xxxxxx X.
Xxxxxxx and R. Xxxxxxx Xxxxxxx, Xx., ending on the later of the
18
five-year anniversary of the Closing and the two-year anniversary of the date
such Shareholder shall cease to be employed by the Company, (ii) in the case of
Xxx Xxxxxxx Xxxx and Xxxx Xxxxxxx, ending on the five-year anniversary of the
Closing and (iii) in the case of all other Schedule C Shareholders, the two-year
anniversary of the date such Shareholder shall cease to be employed by the
Company (the "Non-Compete Period"), such Shareholder shall not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected in any manner with
(including as a consultant), any business which shall be engaged in the retail
selling of food, beverages or other products under the names "Randall's", "Xxx
Thumb" or "Xxxxx Xxxxx", or under any other name which uses any of the foregoing
names as a component or which is (or includes a component which is) confusingly
similar to any such names (the "Trade Names"), in the United States. In addition
to the foregoing, each of the Schedule C Shareholders hereby severally agrees
that during the Non-Compete Period, such Shareholder shall not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected in any manner with
(including as a consultant), any business which shall be engaged in the retail
selling of food, beverages or other related products under any name, including
the Trade Names, in Texas, provided, that (i) unless such business shall own,
lease or operate a Supercenter (as defined below), the retail selling of food,
beverages or other related products shall be the primary business of such
business and (ii) this sentence shall not be applicable to restaurant or
catering businesses. For purposes hereof, "Supercenter" shall mean any store of
at least 50,000 square feet at which general merchandise as well as groceries
are sold at retail. For illustrative purposes only, Wal-Mart Supercenters and
Super Kmart Centers are examples of Supercenters. In the event that this
covenant not to compete is held by any court of competent jurisdiction to be
unenforceable because it is too extensive in scope or time or territory, it
shall be deemed to be and shall be amended without any further act by the
parties hereto to conform to the scope and period of time and geographical area
which would permit it to be enforced. If this covenant is breached or threatened
to be breached, such Schedule C Shareholder expressly consents that, in addition
to any other remedy Buyer may have, Buyer shall be entitled to apply for and
receive injunctive relief in order to prevent the continuation of any existing
breach or the occurrence of any threatened breach.
SECTION 6.03. Legends. Each Shareholder agrees that (i) the
certificates representing the Shares owned by such Shareholder shall bear a
legend indicating that such Shares are subject to this Agreement, which legend
may be removed upon termination of this Agreement, (ii) any attempted or
purported transfer of any Shares in violation of this Agreement shall be null
and void and without effect and (iii) the Company shall not be required to enter
in its stock or other records, or reflect,
19
recognize or give effect to for any purpose, any transfer of Shares in violation
of this Agreement.
SECTION 6.04. Registration Rights Agreement. At the Closing, the
Company and Buyer agree to execute and deliver the Registration Rights Agreement
attached as Exhibit A.
SECTION 6.05. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to the Company and
Buyer in accordance with Section 9.02 of the Subscription Agreement and to the
Shareholders at their respective addresses set forth on the signature pages
hereto (or at such other address for a party as shall be specified by like
notice).
SECTION 6.06. Interpretation. (a) When a reference is made in this
Agreement to a Section, Schedule or Exhibit, such reference shall be to a
Section of this Agreement or a Schedule or Exhibit to this Agreement, as
applicable, unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
(b) For purposes of this Agreement, the term "ESOP" includes any
plan, entity or other Person who succeeds the ESOP as holder of the Common Stock
held by the ESOP.
SECTION 6.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 6.08. Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter of this
Agreement. This Agreement, other than as provided in Sections 3.01(b), 5.01(a),
5.04(b), 6.12 and 6.14, is not intended to confer upon any Person other than the
parties any rights or remedies.
SECTION 6.09. Amendment. This Agreement (including the Exhibits and
Schedules hereto) may not be amended except by an instrument in writing signed
on behalf of the Company, Buyer and any Shareholder whose rights or obligations
hereunder are adversely affected by such amendment; provided that as to the
rights or obligations of any Shareholder, this Agreement may be amended by such
Shareholder, the Company and Buyer.
20
SECTION 6.10. Extension; Waiver. At any time, any party may (a)
extend the time for the performance of any of the obligations or other acts of
the other parties, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) subject to Section 6.09, waive compliance with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 6.11. GOVERNING LAW; ARBITRATION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, APPLICABLE TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN
THAT STATE. ANY CONTROVERSY, DISPUTE, OR CLAIM OF WHATEVER NATURE ARISING OUT
OF, IN CONNECTION WITH, OR RELATING TO THIS AGREEMENT, INCLUDING THE EXISTENCE,
VALIDITY, INTERPRETATION OR BREACH THEREOF AND ANY CLAIM BASED ON CONTRACT, TORT
OR STATUTE, SHALL BE RESOLVED AT THE REQUEST OF ANY PARTY, BY FINAL AND BINDING
ARBITRATION CONDUCTED IN WASHINGTON, D.C. PURSUANT TO THE FEDERAL ARBITRATION
ACT AND IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION ("AAA"). ARBITRATION HEREUNDER SHALL BE CONDUCTED BY A
SINGLE ARBITRATOR SELECTED JOINTLY BY BUYER AND XXXXXX X. XXXXXXX, ON BEHALF OF
THE SHAREHOLDERS (PROVIDED THAT IF HE SHALL CEASE TO HAVE THE CAPACITY TO SERVE
AS A DIRECTOR, THEN THE COMPANY SHALL JOINTLY SELECT THE ARBITRATOR WITH BUYER).
IF WITHIN 30 DAYS AFTER A DEMAND FOR ARBITRATION IS MADE, BUYER AND XXXXXX X.
XXXXXXX OR THE COMPANY, AS THE CASE MAY BE, ARE UNABLE TO AGREE ON A SINGLE
ARBITRATOR, THREE ARBITRATORS SHALL BE APPOINTED. BUYER AND XXXXXX X. XXXXXXX OR
THE COMPANY, AS THE CASE MAY BE, SHALL EACH SELECT ONE ARBITRATOR AND THOSE TWO
ARBITRATORS SHALL THEN SELECT WITHIN 30 DAYS A THIRD NEUTRAL ARBITRATOR. IF THE
ARBITRATORS SO SELECTED CANNOT AGREE ON THE THIRD ARBITRATOR, THE SELECTION
SHALL BE IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF AAA. THE PARTIES
AGREE TO SHARE EQUALLY THE FEES AND EXPENSES OF THE ARBITRATOR(S) HEREUNDER. ANY
DISCOVERY IN CONNECTION WITH ARBITRATION HEREUNDER SHALL BE LIMITED TO
INFORMATION DIRECTLY RELEVANT TO THE CONTROVERSY OR CLAIM IN ARBITRATION.
JUDGMENT UPON ANY ARBITRATION AWARD RENDERED MAY BE ENTERED IN ANY COURT OF
COMPETENT JURISDICTION. AN ARBITRATION AWARD HEREUNDER CANNOT INCLUDE PUNITIVE
DAMAGES. EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.
SECTION 6.12. Assignment. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement
shall be assigned, in whole or in part, by operation of Law or
otherwise by any of the parties without the prior written consent
of the other party, provided, that Buyer may assign, in whole or
21
in part, any of its rights and obligations hereunder and under the Registration
Rights Agreement to one or more of its Affiliates or to any Person to whom Buyer
transfers shares in a transaction that would qualify as a Drag-Along Sale
pursuant to Section 5.03, but only if, in each case, such assignee shall have
agreed in writing to be bound by the terms hereof as if it were "Buyer"
hereunder. Subject to the foregoing, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 6.13. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement.
SECTION 6.14. Indemnity. Whether or not any of the Transactions are
consummated, the Company agrees to indemnify and hold harmless Buyer and each
other KKR Holder, and all current and future directors, officers, employees,
general and limited partners, members, Affiliates (including KKR) and assignees
of Buyer, of each other KKR Holder and of any of the foregoing (each, an
"Indemnified Party") from and against any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses and disbursements of any kind which may be imposed upon, incurred by or
asserted against any Indemnified Party in any manner relating to or arising out
of (a) any Indemnified Party's purchase and/or ownership of any shares of Common
Stock, the Option or any other securities of the Company, (b) the operations of
the Company or any current or future Subsidiary, (c) any of the Transactions,
(d) any litigation to which any Indemnified Party is made a party in its
capacity as a shareholder or owner of securities (or a current or future
director, officer, employee, limited or general partner, Affiliate or assignee
of a shareholder or owner of securities) of the Company or (e) any litigation to
which any Indemnified Party is made a party relating to or arising out of any
transaction between any Indemnified Party, on the one hand, or the Company or
any current or future Subsidiary, on the other hand.
SECTION 6.15. No Recourse. Notwithstanding anything that may be
expressed or implied in this Agreement, the Company and the Shareholders
covenant, agree and acknowledge that, no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement or any of
the Transactions shall be had against any current or future director, officer,
employee, general or limited partner, member, Affiliate (including KKR) or
assignee of Buyer or any of the foregoing, whether by the enforcement of any
assessment or by any legal or
22
equitable proceeding, or by virtue of any statute, regulation or other
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any current or future officer, agent or employee of Buyer or any current or
future member of Buyer or any current or future director, officer, employee,
general or limited partner, member, Affiliate (including KKR) or assignee of any
of the foregoing, as such for any obligation of Buyer under this Agreement or
any documents or instruments delivered in connection with this Agreement or any
of the Transactions or for any claim based on, in respect of or by reason of
such obligations or their creation.
23
IN WITNESS WHEREOF, each of the parties hereto has duly executed and
delivered this Agreement or caused this Agreement to be duly executed and
delivered as of the day and year first above written.
XXXXXXX'X FOOD MARKETS, INC.
By: /s/ R. Xxxxxxx Xxxxxxx, Xx.
----------------------------------
Name: R. Xxxxxxx Xxxxxxx, Xx.
Title: President and CEO
RFM ACQUISITION LLC
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
SHAREHOLDERS:
RKO MANAGEMENT LTD.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
By: /s/ R. Xxxxxxx Xxxxxxx, Xx.
----------------------------------
Name: R. Xxxxxxx Xxxxxxx, Xx.
Title: General Partner
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
XXXXXX X. XXXXXXX
24
XXXXXXX FOUNDATION
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, Trustee
By: /s/ Xxx Xxxxxxx Xxxx
----------------------------------
Xxx Xxxxxxx Hill, Trustee
By: /s/ R. Xxxxxxx Xxxxxxx, Xx.
----------------------------------
R. Xxxxxxx Xxxxxxx, Xx.,
Trustee
By: /s/ Xxxx Xxxxxxx
----------------------------------
Xxxx Xxxxxxx, Trustee
By: /s/ Xxxxxxx Xxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxx Xxxxxxx,
Trustee
XXXXXXX CHARITABLE REMAINDER UNITRUST
By: ABILENE CHRISTIAN UNIVERSITY,
TRUSTEE
By: /s/ Xxxx X. Xxxx
----------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President
XXXXXXX FAMILY TRUST FOR
R. XXXXXXX XXXXXXX, XX.
By: /s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx, Trustee
25
XXXXXXX FAMILY TRUST FOR
XXX XXXXXXX HILL
By: /s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx, Trustee
XXXXXXX FAMILY TRUST FOR
XXXX XXXXXXX
By: /s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx, Trustee
XXXXXXX FAMILY TRUST FOR
XXXXXXX XXXXXXX
By: /s/ Xxx X. Xxxxxxx
----------------------------------
Xxx X. Xxxxxxx, Trustee
/s/ Xxx Xxxxxxx Xxxx
----------------------------------------
XXX XXXXXXX HILL
/s/ R. Xxxxxxx Xxxxxxx, Xx.
----------------------------------------
R. XXXXXXX XXXXXXX, XX.
/s/ Xxxx Xxxxxxx
----------------------------------------
XXXX XXXXXXX
/s/ Xxxxxxx Xxxxxx Xxxxxxx
----------------------------------------
XXXXXXX XXXXXX XXXXXXX
X. X. XXXXXXX FAMILY TRUST
By: /s/ Xxx X. Xxxxxxx
------------------------------------
XXX X. XXXXXXX, TRUSTEE
00
XXXXXXX X. XXXXXXX XXXXXX
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx,
Co-Executor
By: /s/ Xxxx Xxxxxxxxx
----------------------------------
Xxxx Xxxxxxxxx,
Co-Executor
/s/ Xxxxxx X. Xxxxxxx
----------------------------------------
XXXXXX X. XXXXXXX
/s/ Xxxx Xxxxxxxxx
----------------------------------------
XXXX XXXXXXXXX
/s/ Xxxx X. Xxxxxx
----------------------------------------
XXXX X. XXXXXX
XXXXXX X. XXXXXX, XX. ESTATE
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx, Executor
By: /s/ Xxxxxxxx Xxxxxx Xxxxxxx
----------------------------------
Xxxxxxxx Xxxxxx Xxxxxxx,
Executor
/s/ Xxxx Xxxxxxx
----------------------------------------
XXXX XXXXXXX
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
XXXXXX X. XXXXXX
27
/s/ Xxxxxxxx Xxxxxx Xxxxxxx
----------------------------------------
XXXXXXXX XXXXXX XXXXXXX
/s/ Xxxxx X. Xxxxxx
----------------------------------------
XXXXX X. XXXXXX
/s/ Xxx Xxxxxxx
----------------------------------------
XXX XXXXXXX
/s/ Xxxx X. Xxxxxxx
----------------------------------------
XXXX X. XXXXXXX
/s/ Xxx Xxxxxx
----------------------------------------
XXX XXXXXX
/s/ Xxxxx Xxxxxx
----------------------------------------
XXXXX XXXXXX
/s/ Xxxx Xxxxxxxxx
----------------------------------------
XXXX XXXXXXXXX
/s/ Xxx Xxxxxxx
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XXX XXXXXXX
SCHEDULE A
Number of
Schedule A Shareholder Committed Shares
---------------------- ----------------
RKO Management Ltd. 7,536,848
Xxxxxx X. Xxxxxxx 418,656
Xxxxxxx Foundation 125,000
Xxxxxxx Charitable Remainder Unitrust 312,500
Xxx X. Xxxxxxx, Trustee
Xxxxxxx Family Trust for
Xxx Xxxxxxx Xxxx 106,265
Xxx X. Xxxxxxx, Trustee
Xxxxxxx Family Trust for
Xxxx Xxxxxxx 106,265
Xxx X. Xxxxxxx, Trustee
Xxxxxxx Family Trust for
Xxxxxxx Xxxxxxx 106,265
Xxx Xxxxxxx Hill 217,380
Xxxx Xxxxxxx 223,948
Xxxxxxx Xxxxxx Xxxxxxx 269,257
Xxx X. Xxxxxxx, Trustee
X.X. Xxxxxxx Family Trust 219,047
Xxxxxxx X. Xxxxxxx Estate 1,506,390
Xxxx Xxxxxxxxx 367,811
Xxxx X. Xxxxxx 146,819
Xxxxxx X. Xxxxxx, Xx. Estate 48,009
Xxxx Xxxxxxx 48,712
Xxxxxx X. Xxxxxx 182,140
Xxxxxxxx Xxxxxx Xxxxxxx 141,966
SCHEDULE B
Name and Address of Number of Shares of
Schedule B Shareholder Common Stock Owned
---------------------- ------------------
RKO Management Ltd. 7,536,848
c/o Xxxxxx X. Xxxxxxx
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
c/o R. Xxxxxxx Xxxxxxx, Xx.
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 418,656
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Xxxxxxx Foundation 125,000
c/o Xxxxxx X. Xxxxxxx, Trustee
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
c/o Xxx Xxxxxxx Xxxx, Trustee
0000 Xxx Xxx Xxxxx
Xxxxx Xxxx, XX 00000
c/o R. Xxxxxxx Xxxxxxx, Xx., Trustee
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
c/o Xxxx Xxxxxxx, Trustee
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
x/x Xxxxxxx X. Xxxxxxx, Xxxxxxx,
0000 Mordred
Xxxxxx, XX 00000
Xxxxxxx Charitable Remainder Unitrust 312,500
c/o Abilene Christian University, Trustee
111 Xxxxxx Administration Bldg.
ACU Xxx 00000
Xxxxxxx, XX 00000-0000
2
Name and Address of Number of Shares of
Schedule B Shareholder Common Stock Owned
---------------------- ------------------
Xxxxxxx Family Trust for
R. Xxxxxxx Xxxxxxx, Xx. 106,265
c/o Xxx X. Xxxxxxx, Trustee
Looper, Reed, Xxxx & XxXxxx
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx Family Trust for
Xxx Xxxxxxx Xxxx 106,265
c/o Xxx X. Xxxxxxx, Trustee
Looper, Reed, Xxxx & XxXxxx
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx Family Trust for
Xxxx Xxxxxxx 106,265
c/o Xxx X. Xxxxxxx, Trustee
Looper, Reed, Xxxx & XxXxxx
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxx Family Trust for
Xxxxxxx Xxxxxxx 106,265
c/o Xxx X. Xxxxxxx, Trustee
Looper, Reed, Xxxx & XxXxxx
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxx Xxxxxxx Hill 217,380
0000 Xxx Xxx Xxxxx
Xxxxx Xxxx, XX 00000
R. Xxxxxxx Xxxxxxx, Xx. 203,336
000 Xxxxxx Xx.
Xxxxx Xxxx, XX 00000
Xxxx Xxxxxxx 223,948
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Xxxxxxx Xxxxxx Xxxxxxx 269,257
0000 Xxxxxxx
Xxxxxx, XX 00000
X.X. Xxxxxxx Family Trust 219,047
c/o Xxx X. Xxxxxxx, Trustee
Looper, Reed, Xxxx & McGraw
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
3
Name and Address of Number of Shares of
Schedule B Shareholder Common Stock Owned
---------------------- ------------------
Xxxxxxx X. Xxxxxxx Estate 1,506,390
c/o Xxxxxx X. Xxxxxxx
00 Xxxx Xxxxxxxxxx
Xxxxxxx, XX 00000
c/o Xxxx Xxxxxxxxx
000 Xxxxxxxxxx
Xxx Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 323,529
00 Xxxx Xxxxxxxxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxxxxx 367,811
000 Xxxxxxxxxx
Xxx Xxxxxxx, XX 00000
Xxxx X. Xxxxxx 146,819
32402 Watersmeat
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx, Xx. Estate 48,009
c/o Xxxx Xxxxxx
32402 Watersmeat
Xxxxxxxx, XX 00000
x/x Xxxxxxxx Xxxxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Xxxx Xxxxxxx 48,712
0000 Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 182,140
000 Xxxxxxxxx Xx.
Xxxxx Xxxx, XX 00000
Xxxxxxxx Xxxxxx Xxxxxxx 141,966
X.X. Xxx 000
Xxxxxxxx, XX 00000
Xxxxx X. Xxxxxx 103,358
0000 Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Xxx Xxxxxxx 4,821
00 Xxxxxx Xxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
4
Name and Address of Number of Shares of
Schedule B Shareholder Common Stock Owned
---------------------- ------------------
Xxxx X. Xxxxxxx 30,728
0000 Xxxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Xxx Xxxxxx 3,857
000 Xxxxxxxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxx 4,098
00000 Xxxxxxxxxx
Xxxxxxx, XX 00000
Xxxx Xxxxxxxxx 1,000
0000 XxXxxxxx
Xxxxx, XX 00000
Xxx Xxxxxxx 689
00000 Xxxx Xxxxx
Xxxxxx, XX 00000
SCHEDULE C
Schedule C Shareholder
----------------------
Xxxxxx X. Xxxxxxx
Xxx Xxxxxxx Xxxx
R. Xxxxxxx Xxxxxxx, Xx.
Xxxx Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxxxx
Xxxx X. Xxxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxx
Xxxx Xxxxxxxxx
Xxx Xxxxxxx
Schedule D
Pledged Shares
Shareholder Class of Shares # of shares Lender
------------------------- -------------------- --------------- ----------------------
Xxxx Xxxxxxx Common 15,544.0 Xxxxxxx'x Food Markets
Xxxxxxx X. Xxxxxxx Estate Common 123,967.0 Xxxxxxx'x Food & Drugs
Xxxxxx X. Xxxxxx Estate Common 48,009.0 Xxxxxxx'x Food & Drugs
Class A Preferred 168.5 Xxxxxxx'x Food & Drugs
Xxxxxxxx Xxxxxx Xxxxxxx Common 17,577.0 Texas Commerce Bank
Xxx Xxxxxxx Hill Common 21,000.0 Xxxxx Fargo
Xxxx Xxxxxxxxx Common 45,671.0 Texas Commerce Bank
Xxxxxxx Xxxxxxx Common 16,900.0 Texas Commerce Bank
Xxxx Xxxxxxx Common 28,678.0 Texas Commerce Bank
Xxxxxxx Xxxxxxx Common 27,828.0 Texas Commerce Bank
