Exhibit 10.55
STOCKHOLDER AGREEMENT
Stockholder Agreement (this "Agreement"), dated as
of February 25, 1997, between Trefoil Capital Investors II,
L.P., a Delaware limited partnership ("Trefoil II"), GE
Investment Private Placement Partners II, A Limited
Partnership, a Delaware limited partnership ("GEIPPPII" and,
collectively with Trefoil II, the "Purchasers")), Xxxxx
Xxxxxxxxxx, an individual ("Xxxxxxxxxx" and, collectively
with the Purchasers, the "Stockholders"), and The Grand
Union Company, a Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, pursuant to a Stock Purchase Agreement of
even date herewith (the "Purchase Agreement") by and among
the Company and Xxxxxxxxxx, Xxxxxxxxxx will purchase an
aggregate of 60,000 shares (the "Xxxxxxxxxx Shares") of
Class A Convertible Preferred Stock, stated value $50.00 per
share (the "Preferred Stock"), of the Company;
WHEREAS, the Purchasers are parties to a
Stockholder Agreement (the "Purchasers Stockholder
Agreement"), and the Purchasers and the Company are parties
to a Stock Purchase Agreement (the "Purchasers Stock
Purchase Agreement") and a Registration Rights Agreement
(the "Purchasers Registration Rights Agreement"), each dated
as of July 30, 1996, creating certain rights and obligations
among the parties thereto; and
WHEREAS, in connection with the acquisition of the
Xxxxxxxxxx Shares, and any other shares of the Preferred
Stock and common stock, par value $1.00 per share, of the
Company (the "Common Stock") paid as dividends on such
Xxxxxxxxxx Shares (collectively with the Preferred Stock,
the "Xxxxxxxxxx Securities"), Xxxxxxxxxx will have the right
to participate in the registration by the Company of shares
of Preferred Stock and Common Stock to be sold by the
Purchasers to include all or any portion of the Xxxxxxxxxx
Securities for public sale in the United States as provided
herein (the "Xxxxxxxxxx Registration Rights"); and
WHEREAS, the Stockholders wish to provide for
certain arrangements with respect to their shares of
Securities;
NOW, THEREFORE, in consideration of the foregoing,
and the mutual agreements and covenants contained herein,
the parties hereto agree as follows:
1. Definitions. All terms defined herein in the
plural form shall have correlative meanings in the singular
form and vice versa. For purposes of this Agreement, the
following terms shall have the respective meanings given
below:
"Securities" means shares of the Preferred Stock and
Common Stock paid as dividends on shares of Preferred Stock
owned by any Stockholder.
"Voting Stock" means the Common Stock, the Preferred
Stock and any other capital stock of the Company that is
entitled to vote with the Common Stock on all matters
submitted to the stockholders of the Company for voting;
2. Tag-Along Rights.
(a) If, at any time, either Purchaser proposes to
sell shares of Securities representing 50% or more of such
Purchaser's aggregate Securities then held, in one
transaction or in any series of transactions (other than
through a sale of such shares in a public offering), then
such party (the "Selling Party") shall notify Xxxxxxxxxx
(the "Tag-Along Seller"), describing in such notification
the material terms of the proposed sale. The Tag-Along
Seller shall have the option, exercisable by written notice
to the Selling Party, within ten business days after the
Selling Party notifies the Tag-Along Seller of its intention
to effect such sale, to require the Selling Party to provide
as part of its proposed sale that the Tag-Along Seller be
given the right to participate, pro rata in proportion to
the respective number of shares of Securities owned by each
party, in such transaction or series of transactions on the
same terms and conditions (including but not limited to
obligations with respect to indemnification) as the Selling
Party, and, if such option is exercised by the Tag-Along
Seller, the Selling Party shall not proceed with such sale
unless the Tag-Along Seller is given the right so to
participate.
(b) The provisions of this Section 2 shall
terminate on the earlier of (i) the date that Xxxxxxxxxx
shall first own less than 30,000 shares of Preferred Stock,
or (ii) date that the Purchasers shall first collectively
own Securities (r) with a stated value, in the case of
Preferred Stock, or (s) valued at $7.25 per share, in the
case of shares of Common Stock, equal to less than an
aggregate of $50,000,000; provided, however, that if on such
date there shall be a sale of Securities previously
commenced in which Xxxxxxxxxx shall have delivered written
notice of his election to participate in such sale pursuant
to this Section, then the provisions of this Section shall
continue to apply and be enforceable until the earlier of
(x) the sale of Xxxxxxxxxx Shares pursuant to such
transaction, or (y) the termination of such transaction by
the Selling Party prior to its consummation.
3. Take-Along Rights.
(a) If, at any time, either Purchaser proposes to
sell shares of Securities representing 50% or more of such
Purchaser's aggregate Securities then held, in one
transaction or in any series of transactions (other than
through a sale of such shares in a public offering) to any
third party (the "Buyer"), then such party (the "Selling
Party") shall have the right (the "Take-Along Right") to
require Xxxxxxxxxx to participate, pro rata in proportion to
the respective number of shares of Securities owned by each
party, in such transaction or series of transactions on the
same terms and conditions (including but not limited to
obligations with respect to indemnification) as the Selling
Party. The Selling Party shall exercise the Take-Along
Right by delivering written notice thereof to Xxxxxxxxxx,
describing in such notification the material terms of the
proposed sale.
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(b) On the closing date of the sale of Securities
to the Buyer, the Selling Party and Xxxxxxxxxx shall deliver
the certificates representing the Securities owned by it and
him, in proper form for transfer with appropriate stock
powers executed in blank attached and all documentary and
transfer tax stamps affixed, against payment of the purchase
price therefor. By delivering such certificates, the
Selling Party and Xxxxxxxxxx each shall be deemed to
represent and warrant that the Buyer will receive good title
to the Securities transferred by them represented by such
certificates, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders
agreements, and voting trusts.
(c) The provisions of this Section 3 shall
terminate on the date that the Purchasers shall first
collectively own Securities (i) with a stated value, in the
case of Preferred Stock, or (ii) valued at $7.25 per share,
in the case of shares of Common Stock, equal to less than an
aggregate of $50,000,000; provided, however, that if on such
date there shall be a sale of Securities previously
commenced in which a Selling Party shall have delivered
written notice of its election to require Xxxxxxxxxx to
participate in such sale pursuant to this Section, then the
provisions of this Section shall continue to apply and be
enforceable until the earlier of (i) the sale of Securities
to the Buyer pursuant to such transaction, or (ii) the
termination of such transaction by the Selling Party prior
to its consummation.
4. Exercise of Demand Registration Rights.
(a) If, at any time, either Purchaser elects to
request or require the Company to register all or any of the
Securities then owned by such Purchaser for public sale
pursuant to the Purchasers Registration Rights Agreement
(whether a Demand Registration, in connection with a
registration of securities for sale by the Company, or a
registration on Form S-3), such party (the "Registering
Party") shall notify Xxxxxxxxxx (the "Tag-Along Registrant")
and the Tag-Along Registrant shall have the option,
exercisable by written notice to the Registering Party,
within ten business days after the Registering Party
notifies the Tag-Along Registrant of its intention to
exercise such Demand Registration Right, to require the
Registering Party to provide that the Tag-Along Registrant
be given the right to participate in such registration, pro
rata in proportion to the respective number of shares of
Securities owned by the Registering Party, the other
Purchaser, if such other Purchaser has elected to
participate in such registration, and the Tag-Along
Registrant, and, if such option is exercised by the
Tag-Along Registrant, the Registering Party shall not
proceed with such registration unless the Tag-Along
Registrant is given the right so to participate.
(b) The Company and Xxxxxxxxxx hereby agree that
if the provisions of clause (a) of this Section 4 are
complied with, that the Company will include the Securities
of the Tag-Along Registrant in such registration on the same
terms, and subject to the same conditions, including, among
other things, delays in the filing and effectiveness of the
registration, reductions and allocations of Securities among
participants in the registration, and the payment of
registration expenses, as the terms and conditions
applicable to the Purchasers pursuant to the Purchaser
Registration Rights Agreement, except as may be otherwise
expressly set forth herein.
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(c) The provisions of this Section 4 shall
terminate on the date that Xxxxxxxxxx shall first own less
than 30,000 shares of Preferred Stock; provided, however,
that if on such date there shall be a registration of
Securities previously commenced in which Xxxxxxxxxx shall
have delivered written notice of his election to participate
in such registration pursuant to this Section, then the
provisions of this Section shall continue to apply and be
enforceable until the earlier of (i) the sale of Xxxxxxxxxx
Shares pursuant to such registration, or (ii) the withdrawal
or abandonment of such registration prior to its
effectiveness.
5. Legend on Certificates. Except as set forth
herein to the contrary, the following legend shall be noted
conspicuously on all certificates representing shares of
Securities issued after the date hereof which are subject to
the terms of this Agreement:
The securities represented by this
certificate have not been registered under
the Securities Act of 1933 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 Grand Union Company (the "Company")
will furnish without charge to each
stockholder who so requests through the
Company's principal office, a statement of
the powers, designations, preferences and
relative, participating, optional or other
special rights of each class of stock or
series thereof and the qualifications,
limitations or restrictions of such
preferences and/or rights.
The securities represented by this
certificate are subject to restrictions on
transfer, as provided in: (i) a Stockholders
Agreement dated as of February 25, 1997 among
the Company and the purchasers executing the
agreement (the "Agreement"); and (ii) the
Company's Certificate of Designation of Class
A Convertible Preferred Stock Setting Forth
the Powers, Preferences, Rights,
Qualifications, Limitations and Restrictions
of Such Class of Preferred Stock (the
"Certificate"). Copies of the Agreement and
the Certificate are on file with the
Secretary of the Company and, upon request of
any stockholder of the Company, will be made
available to said stockholder.
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, a Stockholders Agreement dated as of
February 25, 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.
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6. Consent of Purchasers. Each of the
Purchasers agrees to provide its consent to Xxxxxxxxxx'x
acquisition of the Xxxxxxxxxx Shares on the terms and
conditions set forth in the Purchase Agreement and this
Agreement.
7. Election of Directors. Xxxxxxxxxx hereby
agrees, for as long as a majority of the Board of Directors
of the Company shall consist of directors designated (other
than disinterested directors) by the Purchasers, that
Xxxxxxxxxx shall not exercise any right to which Xxxxxxxxxx
would otherwise be entitled pursuant to the Company's
Certificate of Designation of Class A Convertible Preferred
Stock Setting Forth the Powers, Preferences, Rights,
Qualifications, Limitations and Restrictions of Such Class
of Preferred Stock to elect two directors voting separately
as a class due to defaults in dividend payments.
8. After Acquired Securities. The provisions of
this Agreement shall apply with equal force to any
additional shares of Common Stock or Preferred Stock
acquired by any Stockholder during the term of this
Agreement.
9. Binding Effect. The provisions of this
Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns,
heirs, and personal representatives. Xxxxxxxxxx shall not
sell, assign or otherwise transfer any interest in the
Securities owned by him (other than pursuant to Sections 2,
3 or 4 hereof) unless each such transferee becomes a party
to this Agreement and agrees to be bound by the terms
hereof.
10. Entire Agreement. This Agreement sets forth
the entire understanding between the parties with respect to
the subject matter hereof, and supersedes any existing
agreements between them concerning such subject matter.
11. Notices. Any notice under or relating to
this Agreement shall be given in writing and shall be deemed
sufficiently given when delivered by hand or by conformed
facsimile transmission, on the second business day after a
writing is consigned (freight prepaid) to a commercial
overnight courier, and on the fifth business day after a
writing is deposited in the mail, postage and other charges
prepaid, addressed as follows:
Trefoil II: 0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
with a copy to: Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
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GEIPPPII: GE Investment Management Incorporated
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to: Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Xxxxxxxxxx: Xxxxx Xxxxxxxxxx
c/o The Vons Companies, Inc.
000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
the Company: Chief Executive Officer
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Attention: Xxxxxx X. XxXxxx
Telecopy: (000) 000-0000
with a copy to: Counsel General
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
and
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address or facsimile number as either party
may, from time to time, designate in a written notice given
in like manner.
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12. Modification. This Agreement may only be
modified by a written instrument duly executed by each party
hereto.
13. Waiver. Any waiver by either party of a
breach of any provision of this Agreement shall not operate
as or be construed to be a waiver of any other breach of
such provision or of any breach of any other provision of
this Agreement. Any waiver of any provision of this
Agreement must be in writing.
14. Headings. The headings to the sections of
this Agreement are inserted for convenience only and shall
not constitute a part hereof or affect in any way the
meaning or interpretation of this Agreement.
15. Separability. If any provision of this
Agreement is invalid, illegal or unenforceable, the balance
of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons
and circumstances.
16. Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
17. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of
the State of New York.
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IN WITNESS WHEREOF, the parties have duly executed
this Agreement as of the date first written above.
TREFOIL CAPITAL INVESTORS II, L.P.
By: Trefoil Investors II, Inc.
its general partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Managing Director
GE INVESTMENT PRIVATE PLACEMENT
PARTNERS II, A LIMITED PARTNERSHIP
By: GE Investment Management Incorporated
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
/s/ Xxxxx Xxxxxxxxxx
--------------------------------------
Xxxxx Xxxxxxxxxx
THE GRAND UNION COMPANY
By: /s/ Xxxxxx X. XxXxxx
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: President and Chief Executive
Officer
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