EXHIBIT 10.2
ACCELERATION AND EXCHANGE AGREEMENT
This ACCELERATION AND EXCHANGE AGREEMENT is made as of the 5th day of
June, 1997 (this "Agreement"), among THE GRAND UNION COMPANY, a Delaware
corporation (the "Company"), TREFOIL CAPITAL INVESTORS II, L.P., a Delaware
limited partnership ("Trefoil"), and GE Investment Private Placement Partners
II, A Limited Partnership, a Delaware limited partnership ("GEI") (GEI
together with Trefoil, the "Purchasers").
WITNESSETH:
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of July 30,
1996, as amended by Amendment No. 1 thereto dated as of March 20, 1997, among
the Company and the Purchasers (as so amended, the "Purchase Agreement"), the
Company has agreed to sell to the Purchasers, and the Purchasers have agreed
to purchase from the Company, 2,000,000 shares of the Company's Class A
Convertible Preferred Stock, par value $1.00 per share, issuable in
denominations of $50 stated value per share (the "Class A Preferred Shares");
WHEREAS, the Company and the Purchasers desire, on the terms and subject
to the conditions set forth herein, to accelerate the Fourth Closing and the
Fifth Closing (as such terms are defined in the Purchase Agreement); and
WHEREAS, in order to induce the Purchasers to accelerate the Fourth
Closing and the Fifth Closing, the Company and the Purchasers have agreed to
certain other arrangements set forth herein;
NOW, THEREFORE, in consideration of the premises, obligations and
agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and subject to
and on the terms and conditions herein set forth, the parties hereto agree as
follows:
ARTICLE 1
ACCELERATION AND EXCHANGE; CLOSINGS
Section 1.1 Definitions. Certain capitalized terms used in this
Agreement have the meanings set forth, or referred to, in Sections 8.1 and 8.2
hereof.
Section 1.2 Purchase and Sale of Class A Preferred Shares. On the terms
and subject to the conditions set forth herein, the purchase and sale of the
800,000 Class A Preferred Shares to have occurred pursuant to the Purchase
Agreement at the Fourth Closing and the Fifth Closing (the "Accelerated
Shares") shall be accelerated, as contemplated pursuant to Section 5.15(b)(1)
of the Purchase Agreement. At the Class A Closing (as hereinafter defined),
the Company shall, in accordance with and pursuant to the Purchase Agreement,
sell, assign, transfer, convey and deliver to each of the Purchasers, and each
of the Purchasers shall purchase, acquire and accept, one-half of the
Accelerated Shares. At the Class A Closing, the Company shall deliver to the
Purchasers, against payment therefor as provided herein, certificates
representing the Accelerated Shares, in such denominations as shall be
requested by the Purchasers no less than one Business Day prior to the Class A
Closing Date.
Section 1.3 Purchase Price for Shares. The Purchase Price (as defined in
the Purchase Agreement) shall be paid to the Company at the Class A Closing,
against receipt of the Accelerated Shares, by wire transfer of immediately
available funds to an account designated by the Company in writing at least
two (2) days prior to the Class A Closing Date.
Section 1.4 Other Deliveries. At the Class A Closing, the parties shall
deliver executed copies of the other documents and instruments required by
Article 5 and such other documents and instruments as shall be reasonably
requested by any of the parties hereto.
Section 1.5. The Exchange. On the terms and subject to the conditions
set forth in this Agreement, at the Exchange Closing (as hereinafter defined):
(a) the Company shall issue and deliver to each of the Purchasers four
hundred thousand (400,000) Class B Preferred Shares. The Company shall
deliver to the Purchasers certificates representing the Class B Preferred
Shares to which the Purchasers are entitled in accordance with this Section,
in such denominations as shall be requested by the Purchasers no less than one
Business Day prior to the Exchange Closing Date; and
(b) following delivery by the Company of certificates representing the
number of shares of Class B Preferred Shares to which the Purchasers are
entitled pursuant to clause (a) of this Section, each of the Purchasers shall
assign, transfer, and convey to the Company the four hundred thousand
(400,000) Class A Preferred Shares acquired at the Class A Closing. The
Purchasers shall deliver at the Closing certificates representing such shares,
duly endorsed in blank or accompanied by stock powers duly endorsed in blank.
The transactions contemplated by this Section are referred to herein as the
"Exchange."
Section 1.6 Consummation of the Sale of the Accelerated Shares and the
Exchange. The sale of the Accelerated Shares (the "Class A Closing") will be
consummated at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, xx June 16, 1997, or such other date prior to July 1, 1997 as
the parties hereto shall mutually agree (the "Class A Closing Date"), unless
this Agreement has been earlier terminated in accordance with its terms. The
Exchange (the "Exchange Closing") will be consummated at the same place as the
Class A Closing, commencing immediately following the completion of the Class
A Closing on the Class A Closing Date (the "Exchange Closing Date").
Section 1.7. The Reset Closing. On the Reset Date (as defined in the
Certificate of Designation):
(a) The Company shall issue to each of the Purchasers (the "Reset
Shares") a number of shares of the Company's Common Stock, par value $1.00 per
share (the "Common Stock") equal to one half of the aggregate number of Reset
Shares, determined in accordance with the following formula, rounded, in the
case of a fractional result, to the nearest whole share:
Aggregate
Number of = RCP - $1.50 x 2,000,000 shares
-------------
Reset Shares $3.25 - $1.50 of Common Stock
where "RCP" means the Conversion Price of the Class B Preferred
Shares on the Reset Date.
(b) The delivery of the Reset Shares (the "Reset Closing") will be
consummated at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, xx the Reset Date (the "Reset Closing Date"). At the Reset
Closing, the Company shall deliver to the Purchasers certificates representing
the Reset Shares to which the Purchasers are entitled in accordance with this
Section, in such denominations as shall be requested by the Purchasers no less
than one Business Day prior to the Reset Date.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 2.1. Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's subsidiaries
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation.
Section 2.2. Certificate of Incorporation and By-Laws. The
Company's Certificate of Incorporation and By-Laws as most recently restated
and subsequently amended to date are in full force and effect. The Company is
not in violation of any of the provisions of its Certificate of Incorporation
or By-Laws.
Section 2.3. Capitalization.
(a) On or prior to the Exchange Closing Date, the Certificate
of Designation will have been duly adopted and filed with the Secretary of
State of Delaware. The Class B Preferred Shares when issued on the Exchange
Closing Date will be validly issued, fully paid and nonassessable.
(b) On or prior to the Exchange Closing Date (i) the number of
shares of Common Stock equal to the number of such shares issuable upon the
conversion of all Class A Preferred Shares and Class B Preferred Shares (the
"Conversion Shares"), subject to paragraph (c) of this Section 2.3, shall have
been reserved for issuance upon such conversion and (ii) 2,000,000 shares of
Common Stock shall have been reserved for issuance pursuant to Section 1.7
hereof. All shares of Common Stock, including the Conversion Shares and the
Reset Shares, subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, subject to paragraph (c) of this Section 2.3, validly
issued, fully paid and nonassessable.
(c) The representations set forth in paragraph (b) of this Section 2.3
assume that if the total number of Common Shares reserved for issuance or
issued as (i) Reset Shares, plus (ii) Conversion Shares (including Conversion
Shares in respect of additional shares of Class A Preferred Shares and Class B
Preferred Shares paid as dividends on the Class A Preferred Shares and Class B
Preferred Shares), plus (iii) shares of Common Stock paid as dividends on the
Class A Preferred Shares and Class B Preferred Shares, plus (iv) 900,000
shares of Common Stock issued or to be issued upon exercise of certain
warrants pursuant to the Warrant Agreement, dated as of June 15, 1995, between
the Company and American Stock Transfer & Trust Company, plus (v) 1,000,000
shares of Common Stock issued or to be issued upon exercise of options granted
under the Company's 1995 Equity Incentive Option Plan or the Company's 1995
Non-Employee Directors' Stock Option Plan, shall exceed 50,000,000 (plus any
shares of Common Stock reacquired by the Company and canceled), then the
Company shall use its best efforts to cause an amendment to the Company's
Certificate of Incorporation, increasing the number of authorized shares of
authorized Common Stock pursuant to its Certificate of Incorporation at least
to the extent of such excess, to be properly authorized, approved, adopted,
filed, and made effective.
Section 2.4. Authority Relative to this Agreement. The Company
has all necessary corporate power and authority to execute and deliver this
Agreement, the Certificate of Designation, and the Registration Rights
Amendment (collectively, the "Transaction Documents") and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated thereby have been duly and validly authorized by
all necessary corporate action, and no other corporate proceedings on the part
of the Company are necessary to authorize the Transaction Documents or to
consummate the transactions so contemplated, other than as contemplated by
Section 4.1. The Special Committee (the "Special Committee") of the Board of
Directors (all of such committee members being Disinterested Directors) and
the Board of Directors of the Company have each determined that it is
advisable and in the best interest of the holders of the Company's Common
Stock for the Company to consummate the transactions contemplated by this
Agreement upon the terms and subject to the conditions herein. Each of this
Agreement and each of the other Transaction Documents has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the Purchasers, constitutes a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Section 2.5. No Conflict; Required Filings and Consents.
(a) The execution and delivery of the Transaction Documents by the
Company do not, and the performance of the Transaction Documents by the
Company and the consummation of the transactions contemplated hereby and
thereby will not: (i) conflict with or violate the Certificate of
Incorporation or By-Laws of the Company; (ii) conflict with or violate any
federal, foreign, state or provincial law, rule, regulation, order, judgment
or decree (collectively, "Laws") applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties are bound
or affected; (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default under), or
impair the Company's or any of its subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any of
its subsidiaries pursuant to, (x) any note, bond, mortgage, indenture, real
property lease or other material lease, or (y) any material contract,
agreement, license, permit, franchise or other instrument or obligation, to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective
properties are bound or affected or (iv) assuming compliance with Sections 4.4
and 4.5 hereof, conflict with or violate the Company's obligations under Rule
4460(i) of the NASDAQ Stock Market Rules (the "NASDAQ Rules") of the NASDAQ
Stock Market (the "NASDAQ") or otherwise require the vote or consent of the
holders of the Company's Common Stock, except as required by Section 3(a) of
the Certificate of Designation.
(b) The execution and delivery of the Transaction Documents by the
Company does not, and the performance of the Transaction Documents by the
Company will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any federal, foreign, state or provincial
governmental or regulatory authority except (i) for applicable requirements, if
any, of the Securities Act, the Exchange Act, and Blue Sky Laws, (ii) as
contemplated by Section 4.2, and (iii) for any consent, approval,
authorization or permit of, or filing with or notification to, any other
federal, foreign, state or provincial governmental or regulatory authority
which will be obtained, filed or provided, as the case may be, prior to the
Exchange Closing.
Section 2.6. Absence of Litigation. There are no claims, actions,
suits, proceedings or investigations pending or, to the knowledge of the
Company, threatened against the Company before any federal, foreign, state or
provincial court, arbitrator or administrative, governmental or regulatory
authority or body relating to this Agreement or the transactions contemplated
by the Transaction Documents or the Purchase Agreement.
Section 2.7. Opinion of Financial Advisor. The Special Committee has
received from its financial advisor, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation ("DLJ"), its written opinion (the "Fairness Opinion"), in the form
previously delivered to the Purchasers.
Section 2.8. Brokers. Except for fees payable to DLJ pursuant to the
terms of that certain engagement letter dated May 22, 1997, between the
Company and DLJ, a true and complete copy of which has been provided to the
Purchasers prior to the date hereof, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company or its subsidiaries or affiliates, whether
pursuant to the letter dated January 17, 1996 between DLJ and the Company, in
the form filed as Exhibit 10.28 to the Company's annual report on Form 10-K
for the fiscal year ended March 30, 1996 (the "DLJ Engagement Letter") or
otherwise. The Company has obtained from DLJ an executed DLJ Waiver Letter
and has delivered a true and complete copy thereof to the Purchasers.
Section 2.9. Securities Laws. Assuming that the Purchasers'
representations and warranties contained in Section 3 hereof are, and continue
to be at each Closing hereunder, true and correct, the offer, issuance and
sale of the Accelerated Shares, the Class B Preferred Shares, and the Reset
Shares is, and will be as of each Closing hereunder, exempt from the
registration and prospectus delivery requirements of the Securities Act, and
have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable Blue Sky Laws.
Section 2.10. NASDAQ Approval. Prior to the date hereof, the Company
has prepared and filed with the NASDAQ a request for confirmation that the
Company may consummate the Closings without approval by the Company's
stockholders at a meeting without violating the NASDAQ Rules, except as
required by Section 3(a) of the Certificate of Designation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers severally represents and warrants to the Company
that:
Section 3.1. Organization. Such Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
Section 3.2. Due Authorization. Such Purchaser has all right, power and
authority to enter into the Transaction Documents to which it is a party and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of the Transaction Documents to which it is a party by such
Purchaser and the consummation by such Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary action on
behalf of such Purchaser. The Transaction Documents to which it is a party
have been duly executed and delivered by such Purchaser and, assuming the due
authorization, execution and delivery by the other parties thereto,
constitutes the valid and binding agreement of such Purchaser enforceable in
accordance with their respective terms, except that (i) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 3.3. Acquisition for Investment; Source of Funds. Such
Purchaser is acquiring the Shares for its own account for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, and such Purchaser has no present intention or plan to
effect any distribution of Shares other than in an offering registered under
the Securities Act or a disposition exempt from registration under the
Securities Act.
Section 3.4. Brokers or Finders. No agent, broker, investment banker or
other firm or Person acting on behalf of such Purchaser, including any of the
foregoing that is an affiliate of such Purchaser, is or will be entitled to
receive any broker's or finder's fee or any other commission or similar fee in
connection with any of the transactions contemplated by this Agreement, except
for the fees to be paid to Shamrock Capital Advisors, Inc. ("SCA") pursuant
to the Management Agreement.
Section 3.5. Accredited Investor. Such Purchaser is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act.
ARTICLE 4
COVENANTS
Section 4.1. Consent of Banks. The Company shall use its reasonable
efforts to promptly obtain from Bankers Trust Company, as Agent for the banks
party to the Company Credit Agreement, a consent of the Required Banks (as
defined in the Company Credit Agreement) to the transactions contemplated
hereby and a waiver of any defaults or required prepayments under the Company
Credit Agreement caused hereby; provided, however, no payment or accommodation
shall be made by the Company in connection with obtaining the foregoing
without the Purchasers' consent.
Section 4.2. Certificate of Designation. The Company shall, prior to
the Class A Closing, cause the Certificate of Designation to be filed with the
Secretary of State of Delaware.
Section 4.3. Issuances of Common Stock. Prior to the Reset Date, the
Company shall not (or set a record date in connection therewith) (i) pay a
dividend or make a distribution on its Common Stock, (ii) subdivide or combine
its Common Stock, (iii) issue shares of capital stock by reclassification of
its Common Stock, (iv) issue rights, options or warrants to all holders of
Common Stock entitling them to subscribe for or purchase Common Stock or any
other securities of the Company, or (v) issue or distribute to all holders of
its Common Stock any shares of its capital stock or securities convertible
into capital stock or evidence of its indebtedness or assets.
Section 4.4. Stockholder Notice . Upon delivery by the Purchasers to the
Company of the Voting and Ratification Agreements described in Section 4.5
hereof at the completion of the Class A Closing, the Company shall send to
each of its stockholders a Stockholder Notice, in form and substance
satisfactory to the Purchasers.
Section 4.5. Stockholder Approval. Immediately following the Class A
Closing, the Purchasers shall deliver to the Company, Voting and Ratification
Agreements, substantially in the form of Exhibit G hereto, approving the
transactions contemplated hereby.
Section 4.6. Company Action. The Company shall take all corporate
actions necessary to amend its Certificate of Incorporation to the extent
required as contemplated by Section 2.3(c) hereof.
ARTICLE 5
CONDITIONS TO THE CLASS A CLOSING AND THE EXCHANGE CLOSING
Section 5.1. Conditions to Obligation of Each Party to Effect the Class
A Closing and the Exchange Closing. The respective obligations of each party
to effect the Class A Closing and the Exchange Closing shall be subject to the
satisfaction at or prior to the Class A Closing Date of the following
conditions, unless waived by the Purchasers:
(a) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the sale of the Accelerated Shares, the Exchange or the
issuance of the Reset Shares shall be in effect, nor shall any proceeding
brought by any administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the
foregoing be pending; and there shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to
the sale of the Accelerated Shares, the Exchange, or the issuance of the Reset
Shares, which makes the consummation of the sale of the Accelerated Shares, the
Exchange, or the issuance of the Reset Shares, illegal.
(b) Governmental Actions. There shall not have been instituted, pending
or threatened any action or proceeding (or any investigation or other inquiry
that might result in such an action or proceeding) by any governmental
authority or administrative agency before any governmental authority,
administrative agency or court of competent jurisdiction, nor shall there be
in effect any judgment, decree or order of any governmental authority,
administrative agency or court of competent jurisdiction, in either case,
seeking to prohibit or limit the Purchaser from exercising all material rights
and privileges pertaining to its ownership of the Shares.
(c) NASDAQ Approval. The Company shall have received written
confirmation from NASDAQ that the Company may consummate the Closings without
approval by the Company's stockholders at a meeting without violating the
Company's obligations under the NASDAQ Rules, and all conditions to such
written confirmation, if any, shall have been satisfied.
(d) Fairness Opinion. The Fairness Opinion shall not have been
modified, amended, revoked or rescinded, and shall be in full force and effect.
Section 5.2. Additional Conditions to Obligation of the Purchasers at
the Class A Closing. The obligations of the Purchasers to effect the Class A
Closing are also subject to the following conditions, unless waived by the
Purchasers:
(a) Representations and Warranties. The representations and warranties
of the Company shall have been true and correct when made in all respects and
shall be true and correct in all respects at and as of the Class A Closing
Date as if made at and as of such time, except for (i) changes not prohibited
by this Agreement, or (ii) those representations and warranties which address
matters only as of a particular date (which shall have been true and correct
as of such date), and the Purchasers shall have received a certificate to such
effect signed by the President and the Chief Financial Officer of the Company.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required
by the Purchase Agreement, or this Agreement to be performed or complied with
by it at or prior to the Class A Closing Date, and the Purchasers shall have
received a certificate to such effect signed on behalf of the Company by the
President and the Chief Financial Officer of the Company.
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by the
Company for the due authorization, execution and delivery of this Agreement
and the consummation by it of the transactions contemplated hereby shall have
been obtained and made by the Company, including without limitation the
consent referred to in Section 4.1, except for consents required to be
obtained under contracts not material to the operation of the business of the
Company; the Company shall have obtained all required approvals and consents,
and shall have delivered all required notices, of the transfer of ownership or
control of the Company as contemplated by the Purchase Agreement, with respect
to material licenses and permits held by the Company or any of its
subsidiaries pursuant to any federal, state or local laws governing the sale
of alcoholic beverages, pharmaceutical products, and cigarettes.
(d) Opinion of Counsel. The Purchasers shall have received a written
opinion of each of Ropes & Xxxx and Xxxxx Xxxx & Xxxxxxxx, in form and
substance reasonably satisfactory to the Purchasers, substantially in the form
of Exhibits B and C hereto, respectively.
(e) Blue Sky Laws. The Company shall have received all permits and other
authorizations necessary under the Blue Sky Laws to issue the Shares.
(f) DLJ Waiver. The DLJ Waiver Letter shall be in full force and
effect, and shall not have been amended, modified, revoked or rescinded.
(g) Xxxxxxxxxx Waiver. The Xxxxxxxxxx Waiver shall be in full force and
effect, and shall not have been amended, modified, revoked or rescinded.
(h) Registration Rights Amendment. The Registration Rights Amendment
shall be in full force and effect, and shall not have been amended, modified,
revoked or rescinded.
(i) Delivery of Shares. At the Class A Closing, the Company shall have
delivered the Accelerated Shares against the payment of the Purchase Price.
(j) Bankruptcy. The Company shall not on the Class A Closing Date be a
party to any bankruptcy, insolvency, or reorganization proceedings, whether
voluntary or involuntary (other than the proceeding pursuant to the
Reorganization Plan), the Reorganization Plan shall not have been amended,
modified or rescinded, and shall be in full force and effect.
Section 5.3. Additional Conditions to Obligation of the Purchasers at
the Exchange Closing. The obligation of the Purchasers to effect the Exchange
at the Exchange Closing is also subject to the following condition:
(a) Delivery of Shares. At the Exchange Closing, the Company shall have
delivered the Class B Preferred Shares.
(b) Stockholder Notice. Upon completion of the Class A Closing, the
Company shall have mailed to its stockholders the Stockholder Notice described
in Section 4.4 hereof.
Section 5.4. Additional Conditions to Obligation of the Company at the
Exchange Closing. The obligation of the Company to effect the Exchange at the
Exchange Closing is also subject to the following conditions, unless waived by
the Company:
(a) Representations and Warranties. The representations and warranties
of the Purchasers contained in this Agreement shall have been true and correct
in all respects when made and shall be true and correct in all respects on and
as of the Exchange Closing Date, except for (i) changes contemplated by this
Agreement and (ii) those representations and warranties which address matters
only as of a particular date (which shall have been true and correct in all
material respects as of such date), with the same force and effect as if made
on and as of the Closing Date, and the Company shall have received a
certificate to such effect signed by the President and the Chief Financial
Officer of the general partner of each of the Purchasers.
(b) Agreements and Covenants. The Purchasers shall have performed or
complied in all material respects with all agreements and covenants required
by the Purchase Agreement or this Agreement to be performed or complied with
by them on or prior to the Closing Date, and the Company shall have received a
certificate to such effect signed by the President and the Chief Financial
Officer of the general partner of each of the Purchasers.
(c) Consents Obtained. All consents, waivers, approvals, authorizations
or orders required to be obtained, and all filings required to be made, by the
Purchasers for the due authorization, execution and delivery of this Agreement
and the consummation by it of the transactions contemplated hereby shall have
been obtained and made by the Purchasers.
(d) Delivery of Class A Preferred Shares. After delivery to the
Purchasers of the Class B Preferred Shares, the Purchasers shall have
delivered the Class A Preferred Shares to be delivered by the Purchasers
pursuant to Section 1.5 hereof.
ARTICLE 6
TERMINATION; FEES AND EXPENSES
Section 6.1. Termination. Subject to Section 6.2, this Agreement may be
terminated at any time prior to the Class A Closing Date:
(a) by mutual written consent duly authorized by the Disinterested
Directors and the Purchasers; or
(b) by either the Purchasers or the Disinterested Directors if the
Class A Closing and Exchange Closing have not been consummated by June 30,
1997 (provided that the right to terminate this Agreement under this Section
6.1(b) shall not be available to any party whose failure to fulfill any
obligation under the Purchase Agreement or this Agreement has been the cause
of or resulted in the failure of the Class A Closing and Exchange Closing to
occur on or before such date); or
(c) by either the Purchasers or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a nonappealable final order, decree or ruling or
taken any other action having the effect of permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement.
Section 6.2. Fees and Expenses. All reasonable fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Company, whether or not the sale of the
Accelerated Shares and the Exchange is consummated; provided, however, that
with respect to the Purchasers, such reasonable fees and expenses of legal
counsel shall not exceed $400,000. Notwithstanding anything to the contrary
herein, this Section 6.2 shall survive any termination of this Agreement.
ARTICLE 7
GENERAL PROVISIONS
7.1. Effectiveness of Representations and Warranties. The
representations, warranties, and agreements of each party hereto in this
Agreement and in any certificates delivered at or prior to any Closing
hereunder shall survive indefinitely; provided, however, that all of such
representations, warranties, and agreements shall terminate upon the
termination of this agreement in accordance with Section 6.1 hereof except
that the agreements set forth in Section 6.2 hereof shall survive such
termination indefinitely.
7.2. Captions. The captions or headings in this Agreement are for
convenience and reference only, and in no way define, describe, extend or
limit the scope or intent of this Agreement.
7.3 Restrictive Legends. No restricted shares may be transferred
without registration under the Securities Act and applicable state securities
laws unless in the opinion of Xxxxx Xxxx & Xxxxxxxx or other counsel to the
Company such transfer may be effected without such registration. Each
certificate representing restricted shares of Class B Preferred Shares or
Common Stock issued pursuant to this Agreement shall bear legends in
substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or the
securities laws of any state and may not be sold or otherwise
disposed of except pursuant to an effective registration statement
under such Act and applicable state securities laws or an applicable
exemption to the registration requirements of such Act or such laws.
The securities represented by this certificate were issued pursuant
to, and the holder hereof is entitled to certain rights and subject
to certain obligations contained in, an Acceleration and Exchange
Agreement, dated as of June 5, 1997, a copy of which is available for
inspection at the principal office of the issuer hereof, and will be
furnished without charge to the holder of such securities upon
written request.
7.4. Further Assurances. The Purchasers and the Company agree to take,
or cause to be taken, all reasonable actions as may be necessary to make
effective and consummate the transactions contemplated by this Agreement.
7.5. Failure or Indulgence Not Waiver. No failure or delay on the part
of any party hereto in the exercise of any right hereunder shall impair such
right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty, or agreement herein, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or of
any other right.
7.6. Modification and Amendment. This Agreement may not be changed,
modified, discharged or amended, except by an instrument signed by all of the
parties hereto.
7.7. Successors and Assigns. This Agreement shall be binding upon and
inure solely to the benefit of each of the parties hereto.
7.8. Entire Agreement. The Purchase Agreement, the Exhibits and
Schedules thereto, this Agreement and the Exhibits hereto, are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein. There
are no restrictions, premises, warranties or undertakings, other than those
set forth or referred to in the Purchase Agreement or herein and the documents
or instruments executed or delivered in connection therewith or herewith.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to the acceleration of the purchase of Class A Preferred
Shares, the exchange of Class A Preferred Shares for Class B Preferred Shares
and the issuance of the Reset Shares.
7.9. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
7.10. Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
7.11. Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed to have
been duly given or made if and when delivered personally, or by overnight
courier to the parties at the following addresses or sent by electronic
transmission, with confirmation received, to the telecopy numbers specified
below (or such other address or telecopy number for a party as shall be
specified by like notice):
(a) If to the Purchasers:
Trefoil Capital Investors II, L.P.
c/o Shamrock Capital Advisors, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Gold, President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
GE Investment Private Placement Partners II, A Limited Partnership
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) if to the Company,
Chief Executive Officer
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Section 7.12. The Purchase Agreement. The acceleration of the purchase
and sale of the Class A Preferred Shares as contemplated herein shall for all
purposes be deemed to be the purchase and sale of Class A Preferred Shares
pursuant to the Purchase Agreement except that the Fourth and Fifth Closings
have been accelerated. For purposes of the indemnification provisions
contained in Section 8.1 of the Purchase Agreement, in determining damages
sustained by the Purchasers, such damages shall include any diminution in
value of the Class B Preferred Shares arising with respect to a breach of a
representation, warranty, covenant or agreement in the Purchase Agreement.
ARTICLE 8
CERTAIN DEFINITIONS
8.1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
"Business Day" means any day other than a Saturday, Sunday or any other
day on which commercial banks are authorized to close in New York, New York.
"Certificate of Designation" means the Certificate of Designation of
Class B Convertible Preferred Stock setting forth the Powers, Preferences,
Rights, Qualifications, Limitations, and Restrictions of such Class of
Preferred Stock, substantially in the form attached hereto as Exhibit A.
"Class B Preferred Shares" means the Class B Convertible Preferred Stock
having the Powers, Preferences, Rights, Qualifications, Limitations, and
Restrictions set forth in the Certificate of Designation.
"Closing" or "Closings" means one or all, as applicable, of the Class A
Closing, the Class B Closing, and/or the "Reset Closing."
"Company Credit Agreement" means the amended and restated Credit
Agreement, dated as of June 15, 1995, as from time to time in effect among the
Company, the banks party thereto, and Bankers Trust Company as Agent for the
banks party thereto, and the consent and waiver secured pursuant to Section
4.1 hereof.
"Disinterested Director" shall have the meaning given in the Purchase
Agreement.
"DLJ Waiver Letter" means a letter from DLJ substantially in the form
attached hereto as Exhibit D.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time, and a
reference to a particular section thereof shall be deemed to include a
reference to the comparable section, if any, of any such similar federal
statute.
"Management Agreement" has the meaning given in the Purchase Agreement.
"Person" means an individual, a partnership (general or limited),
corporation, joint venture, business trust, cooperative, association or other
form of business organization, whether or not regarded as a legal entity under
applicable law, a trust (inter vivos or testamentary), an estate of a
deceased, insane or incompetent person, a quasi-governmental entity, a
government or any agency, authority, political subdivision or other
instrumentality thereof, or any other entity.
"Registration Rights Amendment" means the Amendment No. 1, of even date
herewith, to the Registration Rights Agreement, dated as of July 30, 1996,
among the Company, Trefoil, and GEI, substantially in the form attached hereto
as Exhibit E.
"Reorganization Plan" has the meaning given in the Purchase Agreement.
"SEC" means the Securities and Exchange Commission or its successor.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
"Shares" means the Accelerated Shares, the Class B Preferred Shares,
and/or the Reset Shares, as applicable.
"Xxxxxxxxxx Partnership" means the Xxxxx and Xxxxx Xxxxxxxxxx Family
Limited Partnership.
"Xxxxxxxxxx Waiver" means the waiver letter, of even date herewith, by
the Xxxxxxxxxx Partnership to the Company and the Purchasers, relating to the
Stockholder Agreement, dated as of February 25, 1997, as amended by the
Amendment No. 1 thereto dated as of March 20, 1997, among Trefoil, GEI, the
Xxxxxxxxxx Partnership and the Company, substantially in the form attached
hereto as Exhibit F.
"Stockholder Notice" means the form of notice to all stockholders of the
Company describing the transactions contemplated hereby and announcing receipt
of the written consent of the holders of at least a majority of the Company's
total voting power outstanding, and the approval of the NASDAQ to consummate
the transactions contemplated hereby, without the approval of the Company's
stockholders at a meeting held for such purpose, substantially in the form
attached hereto as Exhibit G.
Section 8.2. Other Definitions. Each of the following terms shall have
the meanings given them in the Section listed opposite such term below:
Term Section
---- -------
"Accelerated Shares" 1.2
"Agreement" Preamble
"Blue Sky Laws" 2.5(b)
"Class A Closing" 1.6
"Class A Closing Date" 1.6
"Class A Preferred Shares" Preamble
"Common Stock" 1.7(a)
"Company" Preamble
"Conversion Shares" 2.3
"DLJ" 2.7
"DLJ Engagement Letter" 2.8
"Exchange" 1.5
"Exchange Closing" 1.6
"Exchange Closing Date" 1.6
"Fairness Opinion" 2.7
"Fifth Closing" Preamble
"Fourth Closing" Preamble
"GEI" Preamble
"Laws" 2.5(a)
"NASDAQ" 2.5(a)
"NASDAQ Rules" 2.5(a)
"Purchase Agreement" Preamble
"Purchase Price" 1.3
"Purchasers" Preamble
"RCP" 1.7(a)
"Reset Closing" 1.7(b)
"Reset Closing Date" 1.7(b)
"Reset Date" 1.7
"Reset Shares" 1.7(a)
"SCA" 3.4
"Special Committee" 2.4
"Transaction Documents" 2.4
"Trefoil" Preamble
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this Acceleration
and Exchange Agreement or caused this Acceleration and Exchange Agreement to
be executed as of the day and year first above written.
TREFOIL CAPITAL INVESTORS II, L.P.
By: TREFOIL INVESTORS II, INC.,
its managing general partner
By: /s/ Xxxxxxx X. XxXxxxxxx
----------------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: Vice President
GE INVESTMENT PRIVATE PLACEMENT
PARTNERS II, A LIMITED PARTNERSHIP
By: GE INVESTMENT MANAGEMENT
INCORPORATED, its general partner
By: /s/ Xxx X. Xxxxx
----------------------------------
Name: Xxx X. Xxxxx
Title: Executive Vice President
THE GRAND UNION COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President,
Chief Financial Officer and
Chief Administrator Officer
