AGREEMENT
---------
THIS AGREEMENT is made as of the 30th day of October, 1995, by and among
Dairy Mart Convenience Stores, Inc., a Delaware corporation (the "Company"),
Xxxxxxx Xxxxxxxxx ("Xxxxxxxxx"), FCN Properties Corporation, a Connecticut
corporation ("FCN"), and The Xxxxxxxxx Family Charitable Foundation, Inc., a
Connecticut corporation (the "Foundation").
W I T N E S S E T H:
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WHEREAS, the parties wish to provide for the purchase by the Company from
Xxxxxxxxx, FCN and the Foundation of all of their direct interests in DM
Associates Limited Partnership, a Connecticut limited partnership ("DM
Associates"), and its general partners and to set forth their agreement as to
certain other matters, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth, the parties, intending to be legally bound, hereby agree
as follows:
1. Sale of DM Associates Interests; Payment of Purchase Price. (a) At
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the Closing referred to in Section 2 hereof, subject to the terms and conditions
set forth herein, Xxxxxxxxx, FCN and the Foundation shall assign, sell, transfer
and convey to the Company, and the company shall purchase and accept, the
following: (i) right, title and interest in and to Xxxxxxxxx'x general partner
interests in New DM Management Associates I, a Connecticut general partnership
("New DM Management I"), and New DM Management Associates II, a Connecticut
general partnership ("New DM Management II"); (ii) right, title and interest in
and to the limited
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partner interests of Xxxxxxxxx and the Foundation in DM Associates; (iii) FCN's
right, title and interest in and ownership of the 9% Secured Promissory Note,
dated March 12, 1992 (the "CDA Note"), in the principal amount of $7,100,000
made by DM Associates in favor of the Connecticut Development Authority (the
"CDA") and subsequently assigned by the CDA to FCN on or about September 30,
1994, and FCN's right, title and interest in 1,220,000 shares of the Class B
common stock, par value $.01 per share, of the Company pledged by DM Associates
as security for the payment of the CDA Note pursuant to a Stock Pledge
Agreement, dated March 12, 1992 (the "CDA Pledge Agreement"), between DM
Associates and CDA, and subsequently assigned by CDA to FCN on or about
September 30, 1994, and all of FCN's rights pursuant to the CDA Pledge Agreement
and any other agreement executed by DM Associates in favor of the CDA in
connection with the CDA Note and/or the loan evidenced thereby; and (iv) all
right, title and interest of Xxxxxxxxx, FCN and the Foundation pursuant to the
agreements, instruments and letters dated January 25, 1995 and entered into by
such parties with the Company and/or the other limited partners of DM Associates
and the other general partners of New DM Management I and New DM Management II
in connection with the reconstitution of DM Associates and its general partners.
The interests to be transferred to the Company pursuant to this Section 1(a)
hereinafter are collectively referred to as the "DM Associates Interests".
(b) As full payment for the DM Associates Interests, the Company shall
pay to Xxxxxxxxx, FCN and the Foundation at the Closing an aggregate cash
payment of $10,000,000 by wire transfer of
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immediately available federal funds as follows: (a) $3,500,000 plus accrued
and unpaid interest to an account designated by the CDA in full payment of FCN's
promissory note, dated on or about September 30, 1994, to the CDA (the "FCN
Note") and (b) the balance to one or more accounts designated by Xxxxxxxxx.
2. Closing. (a) The closing (the "Closing") of the transactions
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contemplated hereby shall take place at the offices of Weil, Gotshal & Xxxxxx,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the date which is no later than
November 29, 1995 or such earlier date as shall be the may before the last date
on which the 1995 annual meeting of stockholders of the Company may be held
pursuant to the Company's Restated Certificate of Incorporation, Amended and
Restated By-laws and Delaware law without any required change in the September
29, 1995 record date currently in effect with respect to such meeting and on
which all of the conditions to Closing specified herein have been satisfied or
at such other place and on such other date as shall be mutually agreeable to the
parties hereto.
(b) At the Closing, Xxxxxxxxx, FCN and the Foundation shall deliver to
the Company:
(i) instruments of transfer duly executed by Xxxxxxxxx, FCN and
the Foundation related to the transfer of the DM Associates Interests to
the Company in form and substance reasonably acceptable to the Company and
its counsel;
(ii) duly executed instruments in form and substance reasonably
acceptable to the Company and its counsel necessary to dismiss with
prejudice and without cost or expense to any opposing
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party claims against the defendants in the lawsuit entitled
Xxxxxxx Xxxxxxxxx and Xxxxxxxx X. Xxxxxxxxx vs. Xxxxx, et al., C.A.
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No. 14462 pending in the Delaware Chancery Court;
(iii) all books and records of DM Associates and its general
partners in his or their possession;
(iv) control over the bank, stock and other accounts of DM
Associates and its general partners; and
(v) any proxies or other instruments reasonably requested by the
Company pursuant to Section 10(b) hereof.
(c) At the Closing, the Company shall:
(i) make the payments in the amounts and manner referred to in
this Agreement; and
(ii) make payments in the amounts and manner set forth in, and
otherwise comply fully with the terms of, that certain letter agreement
dated as of the date hereof from the Company to Xxxxxxxx Xxxxxxxxx relating
to Xx. Xxxxxxxxx'x severance arrangements with the Company.
3. Conditions. (a) The obligation of the Company to purchase and pay
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for the DM Associates Interests at the Closing and consummate the other
transactions contemplated hereby are subject to the satisfaction as of the
Closing of the following conditions:
(i) The representations and warranties of Xxxxxxxxx, FCN and the
Foundation contained herein shall be true and correct in all material
respects at and as of the Closing as though then made and Xxxxxxxxx, FCN
and the Foundation shall have complied with all of their agreements herein
set forth and
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Xxxxxxxxx shall have executed and delivered to the Company a certificate to
such effect;
(ii) The Company shall have obtained the requisite consents of the
holders of its Senior Subordinated Notes due 2004 (the "Debentures") and
its bank lenders to the transactions contemplated hereby;
(iii) The Company shall have obtained financing on terns and
conditions acceptable to the Company in amounts sufficient to fund the
purchase price set forth in Section 1 hereof;
(iv) The Company shall have obtained waivers from the Company's
bank lenders and the holders of the Debentures of any defaults or events of
default then existing or alleged to be in existence under the Company's
bank loan agreements or the indenture pursuant to which the Debentures were
issued; and
(v) There shall have been obtained all required waivers, consents
and releases of the partners of DM Associates and New DM Management I and
New DM Management II and CDA shall have acknowledged in writing that it has
no further interests in any of the DM Associates Interests.
(b) The obligation of Xxxxxxxxx, FCN and the Foundation to sell the
DM Associates Interests at the Closing and consummate the other transactions
contemplated hereby are subject to:
(i) The representations and warranties of the Company contained
herein being true and correct in all material respects at and as of the
Closing as though then made and the Company having complied with all of its
agreements herein set
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forth and a duly authorized officer of the Company shall have executed and
delivered to Xxxxxxxxx a certificate to such effect;
(ii) The Company shall have delivered a solvency opinion to
Xxxxxxxxx at the Company's sole cost and expense, in form and substance
reasonably acceptable to Xxxxxxxxx, from Houlihan, Lokey, Xxxxxx & Zukin or
another independent valuation firm reasonably acceptable to the Company and
Xxxxxxxxx;
(iii) The Company shall have obtained waivers from the Company's
bank lenders and the holders of the Debentures of any defaults or events of
default then existing or alleged to be in existence under the Company's
bank loan agreements or the indenture pursuant to which the debentures were
issued;
(iv) The Company shall have obtained the requisite consents of
the holders of its Debentures and its bank lenders to the transactions
contemplated hereby; and
(v) There shall have been obtained all required waivers, consents
and releases of the partners of DM Associates and New DM Management I and
New DM Management II.
(c) Any condition specified in this Section 3 may be waived if
consented to in writing by the Company in the case of the conditions specified
in Section 3(a) or by Xxxxxxxxx, FCN or the Foundation in the case of the
conditions specified in Section 3(b).
4. Termination. (a) This Agreement shall be terminated and the
-----------
transactions contemplated hereby shall be abandoned automatically and without
further action on the part of any party hereto, if (i) the
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purchase and sale of the DM Associates Interests shall not have been consummated
on or prior to November 29, 1995 or such earlier date as shall be the day before
the last day on which the 1995 annual meeting of stockholders of the Company may
be held pursuant to the Company's Restated Certificate of Incorporation, Amended
and Restated By-laws or Delaware law without any required change in the
September 29, 1995 record date or (ii) any governmental entity shall have issued
an order, decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated hereby and such
order, decree, ruling or other action shall have become final and
non-appealable. The date on which this Agreement shall have been terminated
pursuant to this Section 4(a) is herein referred to as the "Agreement
Termination Date".
(b) In the event of the termination of this Agreement pursuant to this
Section 4, no party hereto (or, in the case of the Company, any of its directors
or officers) shall have any liability or further obligation to the other party
to this Agreement, except that nothing herein will relieve any party from
liability for any breach of this Agreement.
5. Resignation. Simultaneously with the execution of this Agreement, (i)
-----------
Xxxxxxxxx and Xxxxxxxx X. Xxxxxxxxx are each executing and delivering to
Stanford X. Xxxxxxx, Xx., an Assistant Secretary of the Company, his resignation
as a director of the Company and as a director of any subsidiaries or affiliates
of the Company which he serves as a director, effective upon the Closing and
(ii) Xxxxxx X. Xxxxx, Xx. ("Xxxxx") and Xxxxxxx X. Xxxxxx ("Xxxxxx") are each
executing and delivering to
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Xx. Xxxxxxx his resignation as a director of the Company and as a director of
any subsidiaries or affiliates of the Company which he serves as a director,
effective upon the termination of this Agreement for any reason pursuant to
Section 4(a). If the Closing does not occur on or before the Agreement
Termination Date, then the resignations of Messrs. Xxxxxxxxx and Xxxxxxxxx shall
be null and void. If the Closing does occur, then the resignations of Messrs.
Xxxxx and Xxxxxx shall be null and void.
6. Non-Competition: Non-Solicitation. Provided that the Closing occurs,
---------------------------------
in consideration of the payment referred to in Section 6(e) below: (a)
Xxxxxxxxx agrees and covenants that for the period of time commencing on the
date of the Closing and ending on the fifth anniversary of such date (the
"Non-Compete Period") he will not, directly or indirectly: (i) for his own
account or as an employee, officer, director, partner, joint venturer,
shareholder, investor, consultant or otherwise (except as an investor in a
corporation whose stock is publicly traded and in which Xxxxxxxxx holds less
than 5% of the outstanding voting shares), engage in the business of owning,
managing or operating convenience stores in Massachusetts, Connecticut, Xxxxxx
Valley in New York State, Rhode Island, Ohio, Southern and Middle Michigan,
Kentucky, Southern Indiana, Western Pennsylvania, Tennessee or North Carolina
(the "Covered Areas"), such geographical areas constituting places in which the
Company conducts business as of the date hereof; (ii) solicit the employment of
any current employee of the Company or any employee who first enters the employ
of the Company during such period; provided, that such prohibition shall not
apply to any employee who has left the
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employ of the Company; (iii) induce or encourage any current employee of the
Company or any employee who first enters the employ of the Company during such
period to leave the employ of the Company; or (iv) interfere in a material
manner with any material business relationship in any Covered Area between the
Company and any third party, including any shareholder or any creditor of the
Company.
(b) The Company and Xxxxxxxxx acknowledge and agree that the
provisions of Section 6(a) hereof are reasonable because the scope thereof
encompasses only the business of the Company as conducted on the date hereof and
they are limited to the locations in which the Company does business as of the
date hereof.
(c) Notwithstanding anything contained in this Section 6 to the
contrary, if the period of time or the geographical areas specified in Section
6(a) hereof is determined to be unreasonable in any proceeding before any court
or agency legally empowered to enforce the provisions of this Section 6, then
the period of time and area of the restriction shall be reduced so that this
Agreement may be enforced in such area and during such period of time as shall
be determined to be reasonable; provided, however, that such reduction shall not
-----------------
extend to any period of time or jurisdiction where such reduction is unnecessary
to make the period of time or the geographical area specified in Section 6(a)
enforceable therein.
(d) Xxxxxxxxx agrees that during the Non-Compete Period the Company
shall be entitled to make use of Xxxxxxxxx'x name and likeness in its
advertising and marketing materials, subject to Xxxxxxxxx'x prior review and
consent.
(e) As compensation for the matters referred to in this Section 6, the
Company shall pay to Xxxxxxxxx at the Closing a non-refundable sum of $2,300,000
by wire transfer of federal funds to an account or accounts designated by
Xxxxxxxxx.
7. Non-Disclosure. Xxxxxxxxx shall not, directly or indirectly, at any
--------------
time use or disclose to any person, firm or corporation any trade secrets,
confidential or proprietary information of the Company that is not publicly
available.
8. Release and Waiver. Provided that the Closing occurs: (a)
------------------
Xxxxxxxxx, on behalf of himself and his affiliates, including, without
limitation, FCN and the Foundation, hereby agrees to waive all claims against
the Company, its subsidiaries and their respective former, current and future
officers, directors, employees, stockholders, agents, attorneys, and other
representatives (collectively, "Affiliates") and hereby releases and discharges
the Company and its Affiliates from any and all actions, causes of action,
suits, debts, dues, sums of money, accounts, covenants, contracts,
controversies, agreements, promises, judgments, demands, liability, claims and
damages whatsoever, in law or equity, that Xxxxxxxxx and/or his affiliates ever
had, now has, or hereafter can, shall or may have, for, upon or by reason of his
former employment with, service as an officer and director of, or direct or
indirect holding of equity securities of the Company, including, without
limitation, by virtue of the FCN Note or the agreements executed in connection
therewith, or in any other capacity
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relating to the Company, and the termination of the foregoing relationships,
including, but not limited to, any claims arising under any federal, state or
local law or ordinance, tort, employment contract (express or implied), public
policy, or any other obligation, including, without limitation, any claims
arising under Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, as amended, and all claims for wrongful
discharge, workers' compensation, wages, monetary or equitable relief, vacation,
compensation in lieu of vacation, disability, other employee fringe benefits,
benefit plans, medical plans, or attorneys' fees; provided, however, that
-------- -------
notwithstanding the foregoing, Xxxxxxxxx reserves and shall not be deemed to
have released (i) any rights he may have pursuant to the Company's 401(k) and
profit sharing plans, (ii) his ability to seek and obtain indemnification by the
Company to the extent he is entitled to be indemnified by the Company pursuant
to this
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Agreement and the Company's Restated Certificate of Incorporation and Amended
and Restated By-laws as in effect on the date hereof, (iii) all claims relating
to the performance of the Company's obligations under this Agreement, and (iv)
his ability to assert claims for contribution or other appropriate relief
against the Company or one or more Affiliates in any action in which he is a
defendant commenced by any third party, including but not limited to one or more
stockholders of the Company seeking to act on behalf of the Company.
(b) Xxxxxxxxx hereby agrees to waive all claims against DM Associates,
New DM Management I, New DM Management II, each of the partners of such
partnerships and any attorneys of the foregoing and hereby releases and
discharges them from any and all actions, causes of action, suits, debts, dues,
sums of money, accounts, covenants, contracts, controversies, agreements,
promises, judgments, demands, liability, claims and damages whatsoever, in law
or equity, that Xxxxxxxxx ever
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had, now has, or hereafter can, shall or may have, for, upon or by reason of his
interests in DM Associates, New DM Management I and New DM Management II and the
termination of such interests; provided, however, that notwithstanding the
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foregoing, Xxxxxxxxx reserves and shall not be deemed to have released his
ability to seek and obtain indemnification and/or contribution or other
appropriate relief from DM Associates, New DM Management I or New DM Management
II or any of the partners of such partnerships pursuant to such partnerships'
respective partnership agreements as in effect on the date hereof or pursuant to
applicable law.
(c) The Company hereby agrees to waive all claims against Xxxxxxxxx
and his affiliates and their respective former, current and future officers,
directors, employees, stockholders, agents, attorneys and other representatives
and hereby release, and discharges Xxxxxxxxx, his affiliates and such other
persons from any And all actions, causes of action, suits, debts, dues, sums of
money, accounts, covenants, contracts, controversies, agreements, promises,
judgments, demands, liability, claims and damages whatsoever, in law or equity,
that the Company ever had, now has, or hereafter can, shall or may have, for,
upon or by reason of Xxxxxxxxx'x former employment with, service as an officer
and director of, or direct or indirect holding of equity securities in, or in
any other capacity relating to the Company (including as a direct or indirect
general partner of DM Associates, New DM Management I or New DM Management II
and the transactions relating to the dissolution and/or reconstitution of DM
Associates and DM Management Associates and the replacement of DM Management
Associates as general partner of DM Associates by New DM Management I and New DM
Management II and
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any action taken by Xxxxxxxxx or any of the foregoing entities to effect a
change in the composition of the Board of Directors of the Company), including,
but not limited to, any claims arising under any federal, state or local law or
ordinance, tort, employment contract (express or implied), public policy, or any
other obligation, other than (i) those relating to the performance of
Xxxxxxxxx'x obligations under this Agreement and (ii) subject to Xxxxxxxxx'x
reservation of rights in Section 8(a) hereof and rights pursuant to Section 9
hereof, claims made prior to or after the date of this Agreement by one or more
stockholders of the Company seeking to act on behalf of the Company.
(d) Xxxxx and Xxxxxx, in their individual capacities and as general
partners of New DM Management I and New DM Management II, each hereby agrees
to waive all claims against Xxxxxxxxx in his capacity as general partner of New
DM Management I and New DM Management II and as an indirect general partner of
DM Associates and hereby releases and discharges him in such capacities from any
and all actions, causes of action, suits, debts, dues, sums of money, accounts,
covenants, contracts, controversies, agreements, promises, judgments, demands,
liability, claims and damages whatsoever, in law or equity, that he ever had,
now has, or hereafter can, shall or may have; provided, however, that
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notwithstanding the foregoing, each of Xxxxx and Xxxxxx reserves and shall not
be deemed to have released his ability to seek and obtain contribution or other
appropriate relief from Xxxxxxxxx pursuant to the respective partnership
agreements of DM Associates, New DM Management I or New DM Management II or
pursuant to applicable law. Consistent with the foregoing, Xxxxx and Xxxxxx
each hereby agrees that
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he will not vote or take action individually or with respect to his general
partner interests in New DM Management I or New DM Management II to assert, or
to cause New DM Management I or New DM Management II or DM Associates to assert
any claim against Xxxxxxxxx in the capacities specified and with respect to the
matters released in this Section 8(d).
9. Indemnification. Provided the Closing occurs, the Company agrees to
---------------
the fullest extent permitted under Delaware law to indemnify and hold Xxxxxxxxx
harmless from and against any costs, expenses (including, without limitation,
reasonable legal fees and expenses), judgments, fines, penalties and amounts
paid in settlement (collectively "Costs") which he may incur or to which he may
become subject by reason of (i) the transactions contemplated hereby, and (ii)
his service as an officer, director and/or employee of the Company (to the
fullest extent permitted under section 145 of the Delaware General Corporation
Law), including, without limitation, costs in connection with the Xxxx
litigation, (iii) the transactions relating to the reconstitution of DM
Associates and the dissolution and replacement of DM Management Associates as
the general partner of DM Associates by New DM Management I and New DM
Management II and (iv) private causes of action by reason of the actions taken
by Xxxxxxxxx and/or any of the foregoing entities to effect a change in the
composition of the Board of Directors of the Company. Upon its receipt of any
notice from Xxxxxxxxx with respect to any matter for which indemnification is
available, the Company shall have the right to assume the defense thereof with
counsel of its choice and thereafter the Company shall not be responsible for
any legal fees incurred by Xxxxxxxxx in respect thereof; provided, that if
--------
Xxxxxxxxx is advised by counsel that
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there may be defenses available to him that differ from those available to the
Company or other indemnified parties or otherwise that the potential exists for
a conflict between Xxxxxxxxx and the Company and/or such other indemnified
persons, then Xxxxxxxxx shall be entitled to retain one firm of legal counsel on
his behalf at the Company's expense. Xxxxxxxxx shall not compromise or settle
any action for which indemnification may be available without the Company's
prior written consent, which shall not be unreasonably withheld. Such
indemnification shall be conditional on Xxxxxxxxx reasonably cooperating with
the Company with respect to any matter for which indemnification is available.
10. Certain Additional Agreements. (a) The Company shall reimburse
-----------------------------
Xxxxxxxxx and FCN for their previously unreimbursed fees and expenses incurred
in connection with their activities relating to the Company following January
25, 1995, including the negotiation and execution of this Agreement and the
transactions contemplated hereby; provided, that the Company shall not be
required to reimburse Xxxxxxxxx and FCN for any amounts in excess of an
aggregate of $850,000. As promptly as practical following the execution of this
Agreement, the Company will cause a wire transfer of $500,000 to be made to an
account or accounts designated by Xxxxxxxxx as a non-refundable reimbursement
of a portion of such fees and expenses. The balance of $350,000 shall be
reimbursed to Xxxxxxxxx if the Closing occurs and upon the Company's receipt of
appropriate documentation therefor.
(b) So long as this Agreement is in effect, Xxxxxxxxx will take no
action before the Delaware Chancery Court to make effective the written consent,
dated September 29, 1995, executed by New DM
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Management I on behalf of DM Associates and agrees that if the Closing occurs
Xxxxxxxxx shall withdraw such written consent such that it shall be deemed to be
null and void ab initio. Xxxxxxxxx further agrees that so long as this Agreement
is in effect, neither he nor his affiliates will (i) vote or purport to take
action by consent with respect to any of the Company's capital stock, (ii)
conduct any discussions with any creditor of the Company or any representative
thereof or (iii) object before the Delaware Chancery Court to any action
proposed by the Company in connection with the financing of the cash purchase
price provided in section 1 hereof. Immediately prior to the Closing Xxxxxxxxx
will, to the extent requested by Xxxxx and Xxxxxx as general partners of New DM
Management I, take action as a general partner of New DM Management I (as of the
September 29, 1995 record date for the 1995 annual meeting of stockholders) to
cause the shares of Class B common stock of the Company held by DM Associates
and over which New DM Management I has voting control to be voted in favor of
the election of the slate of persons nominated by the Board of Directors of the
Company for election as directors of the Company and in accordance with the
recommendation of the Board of Directors with respect to the other matters to be
considered at the 1995 annual meeting of stockholders of the Company.
(c) The parties hereto agree that the Company's 1995 annual meeting of
stockholders will be convened on October 31, 1995 solely for the purpose of
adjourning such meeting to November 30, 1995 with the previously-determined
record date of September 29, 1995 unchanged, all in accordance with the
procedures made available pursuant to Section 222(C) of the Delaware General
Corporation Law. To
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the extent required, Xxxxxxxxx will affirm his consent to such adjournment
before the Delaware Chancery Court. Notwithstanding the foregoing, the annual
meeting will be held on such earlier date as may be necessary pursuant to the
Company's Restated Certificate of Incorporation, Restated By-laws or Delaware
law in order to preserve the record date of September 29, 1995.
(d) The Company's Board of Directors has voted to increase its
size effective with the execution of this Agreement to nine and has elected
M. Xxxxxx Xxxxxxxx and Xxxxxx X'Xxxxx to fill such vacancies. Messrs. Xxxxxxxx
and O'Brien has each delivered to Stanford X. Xxxxxxx, Xx., an Assistant
Secretary of the Company, his resignation as a director to be effective upon the
Closing. If the Closing for whatever reason does not occur on or before the
Agreement Termination Date, then such resignations by their terms shall be null
and void and without force or effect.
(e) Xxxxxxxxx, FCN and the Foundation each hereby acknowledges that as
promptly as practicable following the execution of this Agreement the Company
will fund a "rabbi trust" in respect of amounts aggregating $2,488,000 that may
in the future be due and owing by the Company to Xxxxx and Xxxxxx pursuant to
employment agreements between the Company and such individuals. Xxxxxxxxx will
not oppose such funding and will take all reasonable action consistent with his
agreements in this Section 10(e) before the Delaware Chancery Court.
(f) The Company, Xxxxx and Xxxxxx shall not take any action (x) that
would impair, impede, prevent or otherwise frustrate the ability of Xxxxxxxxx to
vote the shares of Class B Common Stock presently
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held by DM Associates over which New DM Management I exercises voting control at
the 1995 annual meeting of stockholders to be reconvened on November 30, 1995 or
such earlier date as is required pursuant to Section 10(c) hereof in a manner
determined by Xxxxxxxxx in his sole discretion in the event the Closing does not
occur on or prior to the Agreement Termination Date, including, without
limitation, by taking action to dissolve DM Associates or either of its general
partners or (y) to change the record date for the 1995 annual meeting of
stockholders.
(g) Simultaneously with the execution of this Agreement, Xxxxxxxxx
will be elected the Chairman of the Board of Directors of the Company and will
be entitled to the use of his office at the Company's headquarters through the
Closing, after which, if the same shall occur, he shall vacate such office.
(h) Following the date of this Agreement and until the Closing, the
Company will not issue any voting securities other than pursuant to (x) options
granted on or prior to the date hereof pursuant to the Company's stock option
plan, (y) the securities issued to finance the payments to be made to Xxxxxxxxx,
FCN and the Foundation hereunder or (z) shares issued pursuant to the Company's
employee stock purchase plan. Xxxxxx and Xxxxx each hereby agrees that from and
after the date hereof until the earlier of the Closing or the Agreement
Termination Date, he will not exercise any Company stock options.
(i) If after the date hereof and prior to the Closing the Company
files a voluntary petition seeking protection under the federal bankruptcy laws,
then the Company's directors, other than Messrs.
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Nirenberg, Kupperman, Xxxxxxxx and O'Brien, shall resign as directors of the
Company, effective with the filing of such voluntary petition.
(j) At the Closing, the Company shall at its sole cost and expense
transfer unrestricted ownership and legal title, free and clear of any liens or
other encumbrances, to the automobile made available by the Company for
Xxxxxxxxx'x use as of the date hereof, including, without limitation, payment or
reimbursement by the Company of any sales or other similar taxes due and owning
as a result of such transfer.
(k) If the Closing occurs, Xxxxxxxxx agrees that for a period
commencing at the Closing and ending at the termination of the Non-Compete
Period, neither he nor any of his affiliates (as defined in Rule 12b-2
promulgated pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act)) will, unless specifically invited in writing by the Company,
directly or indirectly, in any manner:
(i) acquire, offer or propose to acquire, solicit an offer to
sell or agree to acquire, directly or indirectly, alone or in concert with
others, by purchase or otherwise, any direct or indirect beneficial
interest in any voting securities or direct or indirect rights, warrants or
options to acquire, or securities convertible into or exchangeable for, any
voting securities of the Company;
(ii) make, or in any way participate in, directly or indirectly,
alone or in concert with others, any "solicitation" of "proxies" to vote
(as such terms are used in the proxy rules of the Securities and Exchange
Commission promulgated pursuant to Section 14 of the Exchange Act) or seek
to advise or influence in any
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manner whatsoever any person or entity with respect to the voting of any
voting securities of the Company;
(iii) form, join or any way participate in a "group" within the
meaning of Section 13(d)(3) of the Exchange Act with respect to any voting
securities of the Company;
(iv) acquire, offer to acquire or agree to acquire, directly or
indirectly, alone or in concert with others, by purchase, exchange or
otherwise, (A) any of the assets, tangible or intangible, of the Company or
any of its affiliates or (B) direct or indirect rights, warrants or options
to acquire any assets of the Company or any of its affiliates, except for
such assets as are then being offered for sale by the Company, or any of
its affiliates;
(v) arrange, or in any way participate, directly or indirectly,
in any financing for the purchase of any voting securities or securities
convertible or exchangeable into or exercisable for any voting securities
or assets of the Company, or any of its affiliates, except for such assets
as are then being offered for sale by the Company or any of its affiliates;
(vi) otherwise act, alone or in concert with others, to seek to
propose to the Company or any of its stockholders any merger, business
combination, restructuring, recapitalization or other transaction to or
with the Company or otherwise seek, alone or in concert with others, to
control, change or influence the management, board of directors or policies
of the Company or nominate any person as a director who is not nominated by
the then
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incumbent directors, or propose any matter to be voted upon by the
stockholders of the Company;
(vii) make any public announcement relating to a request or
proposal to amend, waive or terminate any provision of this Section 10(k);
or
(viii) take any action that might result in the Company having to
make a public announcement regarding any of the matters referred to in
clauses (i) through (vii) of this section 10(k), or announce an intention
to do, or enter into any arrangement or understanding or discussions with
others to do, any of the actions restricted or prohibited under such
clauses (i) through (vii).
11. Equitable Relief. The Company, Xxxxx, Xxxxxx and Xxxxxxxxx each
----------------
hereby expressly covenants and agrees that the other will suffer irreparable
damage in the event any of the provisions of Sections 1, 2, 6, 7 or 10 hereof
are not performed or are otherwise breached and that such other party shall be
entitled as a matter of right (without the need to prove actual damages) to an
injunction or injunctions and other relief to prevent a breach or violation by
such other party and to secure the enforcement of such provisions. Resort to
such equitable relief, however, shall not constitute a waiver of any other
rights or remedies which the party seeking such relief may have.
12. Representations and warranties. (a) Xxxxxxxxx, FCN and the
------------------------------
Foundation represent and warrant to the Company as follows: (i) they have the
full legal right, power and authority to enter into and perform all of their
obligations under this Agreement and to perform the actions to be
-22-
performed by them pursuant to this Agreement; (ii) the execution and delivery of
this Agreement by them and the performance of their obligations hereunder will
not violate any other agreement to which they are a party (other than in respect
of the agreements with the CDA referred to in Sections 1 and 2 hereof and the
transfer of their interests in New DM Management I, New DM Management II and DM
Associates); (iii) no consent of any third party is required for the execution
and performance of this Agreement by them, other than consents that may be
required from DM Associates, New DM Management I, as the general partner of DM
Associates, and from the other partners of DM Associates, New DM Management I
and New DM Management II or from the holders of the Debentures or the Company's
bank lenders; (iv) this Agreement has been duly executed and delivered by them
and constitutes their legal, valid and binding agreement, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws, now or hereafter in
effect, affecting creditors' rights and remedies generally and the general
principles of equity; and (v) upon consummation of the transactions contemplated
hereby, the Company shall have acquired good and valid title to the DM
Associates Interests, free and clear of any lien, encumbrance, or other right of
any third party.
(b) The Company represents and warrants to Xxxxxxxxx, FCN and the
Foundation as follows: (i) the Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby; (ii) the execution, delivery and performance of this
Agreement has been duly authorized and
-23-
approved by all required corporate action on the part of the Company, including
approval by its Board of Directors; (iii) this Agreement has been duly executed
and delivered by the Company and is a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws, now or hereafter in effect, affecting creditors' rights and
remedies generally and to general principles of equity; (iv) the execution and
delivery of this Agreement by the Company and the performance of its obligations
hereunder will not constitute a breach under (with or without notice or the
passage of time or both) or violate the Company's Restated Certificate of
Incorporation or by-laws, any agreement to which the Company is a party (except
for the indenture pursuant to which its senior Subordinated Notes due 2004 were
issued and its agreements with its bank lenders), or any law, regulation, rule
or ordinance to which the Company is subject; (v) except for the consent of the
holders of its Senior Subordinated Notes due 2004 and its bank lenders, no
consent of any third party is required for the execution and performance of this
Agreement by the Company; and (vi) after giving effect to the transactions
contemplated hereby, the Company will be Solvent. For purposes hereof, the term
"Solvent" means, with reference to the Company and its consolidated
subsidiaries, that the value of the properties and interests in property of the
Company (both at fair value and present fair saleable value) is, on the date of
determination, greater than the aggregate amount of the liabilities, including,
without limitation, contingent and unliquidated liabilities, of the
-24-
Company as of such date and that, as of such date, the Company is able to pay
all liabilities of the Company as such liabilities mature and the Company does
not have unreasonably small capital. In calculating the amount of contingent or
unliquidated liabilities of the Company at any date, such liabilities shall be
calculated at the amount that, after accounting for all of the facts and
circumstances existing at such date, reflects the amount that may reasonably be
expected to become an actual or matured liability.
13. Notice. All notices, requests and other communications to any party
------
hereunder shall be given or made in writing and mailed (by registered or
certified mail or by overnight courier) or delivered by hand as follows:
(a) if to the Company, to it at:
Xxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Block, Esq.
(b) if to Xxxxxxxxx, FCN and the Foundation to Xxxxxxxxx at:
x/x Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx
Xxxxx 000
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
-25-
Attention: Xxxxxx X. Xxxxxxxx, Esq.
or such address as such party may hereafter specify for the purpose of notice to
the other party hereto. Each such notice, request or other communication shall
be effective when, if delivered by hand, received by the party to which it is
addressed or, if mailed in the manner described above, on the third business day
after the date of mailing.
14. Successors and Assigns. The rights and obligations of the Company
----------------------
under this Agreement shall inure to the benefit and be binding upon its
successors and assigns and any entity to which its assets and business may be
transferred by operation of law or otherwise. The Company may assign its right
to acquire some or all of the DM Associates Interests to one or more of its
designees; provided, that no such assignment shall relieve the Company of its
obligations hereunder. This Agreement is personal to Xxxxxxxxx and Xxxxxxxxx
shall not, without the written consent of the Company, assign his rights or
obligations hereunder, except that this Agreement will be binding upon
Xxxxxxxxx'x estate and legal representatives upon his death and his
beneficiaries thereafter will have the benefits hereof.
15. Governing Law. This Agreement shall be construed in accordance with
-------------
and governed by the substantive laws of the State of Connecticut, without regard
to the choice of law rules thereof.
16. Press Release. Xxxxxxxxx and the Company shall agree on the text of a
-------------
press release announcing the execution of this Agreement.
17. Complete Understanding. This Agreement supersedes any prior
----------------------
contracts, understandings, discussions and agreements among the
-26-
parties and constitutes the complete understanding between them with respect to
the subject matter hereof. No statement, representation, warranty or covenant
has been made by any party with respect hereto except as expressly set forth
therein.
18. Modification; Waiver. (a) This Agreement may be amended or waived
--------------------
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by the Company on the one hand and Xxxxxxxxx, FCN and the
Foundation on the other or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and shall not be exclusive of any rights or
remedies provided by law or at equity.
19. Headings. The section headings in this Agreement are for convenience
--------
of reference only and shall not control or affect the meaning or construction of
this Agreement.
20. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
21. Further Assurances. The parties hereto shall, at the request of any
------------------
other party, execute and deliver any further instruments or documents and take
all such further actions as such party reasonably may
-27-
request in order to consummate and make effective the foregoing provisions of
this Agreement, including, without limitation, the taking of any action
following the Closing necessary to substitute a new managing general partner of
New DM Management I and New DM Management II as designated by the remaining
partners of such partnerships, the waiver on behalf of New DM Management I of
any rights of first refusal in favor of New DM Management I to the transfer of
the limited partner interests in DM Associates contemplated hereby or the
rendering inapplicable to the transactions contemplated hereby of any special
approval requirements pursuant to the Company's Restated Certificate of
Incorporation.
IN WITNESS WHEREOF, the Company, FCN and the Foundation have caused this
Agreement to be duly executed in their names by one of their respective officers
duly authorized to enter into and execute this Agreement, and Xxxxxxxxx has
manually signed his name hereto, as of the date first written above.
/s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------
XXXXXXX XXXXXXXXX
FCN PROPERTIES CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
THE XXXXXXXXX FAMILY
CHARITABLE FOUNDATION, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
-00-
XXXXX XXXX CONVENIENCE
STORES, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President and Chief
Executive Officer
The undersigned each acknowledges their agreement to the provisions of
Section 8, 10(f), 10(h), 10(I) and 11 of the attached Agreement.
/s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Xxxxxx X. Xxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
