RE: First Amendment to Agreement and Plan of Merger (“Amendment”)
Exhibit 10.1
September 9, 2005
The Board of Directors
ShopKo Stores, Inc.
000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxx 00000
ShopKo Stores, Inc.
000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxx 00000
RE: First Amendment to Agreement and Plan of Merger (“Amendment”) |
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger (the “Merger Agreement”) by and among Badger
Retail Holding, Inc. (“Parent”), Badger Acquisition Corp. (“Acquisition Sub”) and ShopKo Stores,
Inc. (the “Company”) dated as of April 7, 2005. The parties to the Merger Agreement wish to amend
the Merger Agreement on the terms set forth herein, and to clarify certain matters with respect to
the transactions contemplated in the Merger Agreement. All capitalized terms used in this
Amendment and not otherwise defined shall have the meanings ascribed to them in the Merger
Agreement.
In consideration of the warranties, covenants and agreements set forth in this Amendment, the
parties hereto agree as follows:
1. Section 2.7 of the Merger Agreement is hereby amended by deleting the reference to
“$24.00” in the first sentence thereof, and inserting “$25.00” in its place.
2. Section 7.1 of the Merger Agreement is hereby amended by deleting clause (h) in its
entirety, and inserting the following in its place:
“(h) by the Company if the Company Board makes a Company Subsequent Determination in accordance
with the terms of Section 5.4(c), and the Company
The Board of Directors
September 9, 2005
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September 9, 2005
Page 2
prior to or concurrently with such termination pays to Parent in immediately available funds the
Termination Fee.”
3. Section 7.3(a) of the Merger Agreement is hereby amended as follows:
(a) by deleting the first paragraph of Section 7.3(a) in its entirety up to, but not including
Section 7.3(a)(i), and inserting the following in its place:
“(a) The Company agrees to reimburse Parent (or its designees) for all
documented out-of-pocket expenses of Parent and its Affiliates (other than any
such expenses paid or payable by Parent or any of its Affiliates to any Affiliate
of Parent), including fees and expenses of financial advisors, outside legal
counsel, accountants, experts and consultants, incurred by Parent and its
Affiliates or on their respective behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated hereby (collectively,
“Expenses”), up to a maximum amount of $13.5 million, if this Agreement is
terminated:”
(b) by deleting the phrase “, and on or before the date of any such termination described in
this clause (iv), an Acquisition Proposal shall have been publicly announced, disclosed or
otherwise communicated to the Special Committee or the Company Board” in Section 7.3(a)(iv).
4. Section 7.3(b) of the Merger Agreement is hereby amended as follows:
(a) by deleting the reference to “$27 million” in Section 7.3(b)(x), and inserting “$13.5
million” in its place; and
(b) by deleting Section 7.3(b)(x)(iii) in its entirety and inserting the following in its
place:
“(iii) by the Company, Parent or Acquisition Sub pursuant to Section 7.1(b) or
Section 7.1(d), and within twelve (12) months of such termination, the Company Board shall
have recommended, the Company shall have entered into a definitive agreement with respect to, or
the Company shall have consummated, a Company Alternative Transaction or a Company Alternative
Transaction shall have occurred (in each case, with references to “20%” in clauses (i), (ii) and
(iii) of the definition of Company Alternative Transaction” deemed to be “50.1%”); or”.
The Board of Directors
September 9, 2005
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September 9, 2005
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5. Section 7.3(b)(x)(iv) is hereby amended by deleting “; or” at the end thereof and
inserting a period.
6. Section 7.3(b)(x)(v) is hereby deleted in its entirety.
7. Section 7.3(b)(y) is hereby amended by deleting the reference to “$15 million” and
inserting “$13.5 million” in its place.
8. The Company represents and warrants to Parent and Acquisition Sub as follows:
(a) The Company is duly organized, validly existing and in good standing under the laws of the
State of Wisconsin.
(b) The Company has the requisite corporate power and authority to execute and deliver this
Amendment and (subject to receipt of the Company Shareholder Approval) to perform its obligations
hereunder. The execution and delivery of this Amendment and the performance of its obligations
hereunder have been duly and validly authorized by all necessary corporate action (subject to
receipt of the Company Shareholder Approval). This Amendment has been duly executed and delivered
by the Company, and constitutes, assuming due authorization, execution and delivery of this
Amendment by Parent and Acquisition Sub, a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting the rights and remedies of
creditors generally and to general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
9. Each of Parent and Acquisition Sub hereby jointly and severally represents and warrants to
the Company as follows:
(a) Each Acquiror Entity is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.
(b) Each Acquiror Entity has the requisite corporate power and authority to execute and
deliver this Amendment and to perform its obligations hereunder. The execution and delivery of
this Amendment and the performance of its obligations hereunder have been duly and validly
authorized, and this Amendment has been approved and adopted by the Board of Directors of each
Acquiror Entity, and no other corporate proceedings on the part of either Acquiror Entity are
necessary to authorize the execution, delivery and performance of this Amendment. Concurrently
with the execution of this Amendment, Parent, as the
The Board of Directors
September 9, 2005
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September 9, 2005
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sole shareholder of Acquisition Sub, is approving this Amendment and the transactions
contemplated hereby, including the Merger. This Amendment has been duly executed and delivered by
each Acquiror Entity and constitutes, assuming due authorization, execution and delivery of this
Amendment by the Company, a valid and binding obligation of each Acquiror Entity, enforceable
against each Acquiror Entity in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting the rights and
remedies of creditors generally and to general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
10. For the avoidance of doubt, from and after the date of this Amendment, references in the
Merger Agreement to the “Agreement” or any provision thereof shall be deemed to refer to the Merger
Agreement or such provision as amended hereby unless the context otherwise requires, and references
in the Merger Agreement to the “date hereof” or the “date of this Agreement” shall be deemed to
refer to April 7, 2005.
11. The provisions of the Merger Agreement set forth in Sections 8.2, 8.4, 8.5, 8.6, 8.7,
8.8, 8.9, 8.10 and 8.12 are incorporated herein by reference, and are deemed to be part of this
Amendment.
12. Except as expressly set forth herein, this Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any
party under, the Merger Agreement, nor alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Merger Agreement, all of which
shall continue in full force and effect.
The Board of Directors
September 9, 2005
Page 5
September 9, 2005
Page 5
Please indicate your agreement with the forgoing by executing two copies of this Amendment and
returning one copy to the undersigned.
Yours truly, | ||||
BADGER RETAIL HOLDING, INC. | ||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||
Name: Xxxxxxx X. Xxxxxx | ||||
Title: Secretary and Treasurer | ||||
BADGER ACQUISITION CORP. | ||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||
Name: Xxxxxxx X. Xxxxxx | ||||
Title: Secretary and Treasurer |
Xxxxxx to and acknowledged by this 9th day of September, 2005:
SHOPKO STORES, INC. | ||
By:
|
/s/ Xxxxxx X. Xxxxxxx | |
Name: Xxxxxx X. Xxxxxxx | ||
Title: Senior Vice President Law and Human Resources |