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: 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: Xxx X. Xxxxx
---------------------------------
Name: Xxx X. Xxxxx
Title: Executive Vice President
THE GRAND UNION COMPANY
By: Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President,
Chief Financial Officer and
Chief Administrator Officer
List of Exhibits
Exhibit A Certificate of Designation
Exhibit B Form of Opinion of Ropes & Xxxx
Exhibit C Form of Opinion of Xxxxx Xxxx & Xxxxxxxx
Exhibit D DLJ Waiver Letter
Exhibit E Registration Rights Amendment
Exhibit F Xxxxxxxxxx Waiver
Exhibit G Form of Voting and Ratification Agreement
Exhibit A
THE GRAND UNION COMPANY
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
Pursuant to Section 151 of the General Corporation Law of
the State of Delaware, The Grand Union Company (the
"Corporation"), a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance
with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors of the Corporation by Article Fourth of the Certificate
of Incorporation of the Corporation (the "Certificate of
Incorporation"), and in accordance with the provisions of Section
151 of the General Corporation Law of the State of Delaware, the
Board of Directors of the Corporation on June __, 1997, adopted
the following resolution creating a series of Preferred Stock
designated as Class B Convertible Preferred Stock (the "Class B
Stock"):
RESOLVED that, pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the General
Corporation Law of the State of Delaware and the provisions of
the Certificate of Incorporation, a class of authorized Preferred
Stock, par value $1.00 per share, of the Corporation is hereby
created and that the designation and number of shares thereof and
the voting powers, preferences and relative participating,
optional and other special rights of the shares of such class,
and the qualifications, limitations and restrictions thereof, are
as follows:
Section 1. Stated Value.
The Class B Stock shall consist of 1,400,000 shares, par
value $1.00 per share, each of which shall have a stated value of
$50 per share (the "Stated Value").
Section 2. Dividends and Distributions.
(a) The holders of shares of Class B Stock, in preference
to the holders of shares of Junior Dividend Stock (as defined in
Section 11 hereof), shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the
Corporation legally available therefor, dividends at an annual
rate of 8.50% of the Stated Value from and after the Issue Date
(as defined in Section 11 hereof) of such shares as long as
shares of Class B Stock remain outstanding. Dividends shall be
payable in cash, or additional shares of Class B Stock, as
provided in paragraph (c) of this Section 2, or shares of Common
Stock, as provided in paragraph (c) of this Section 2. Dividends
shall be computed on the basis of the Stated Value, and shall
accrue and be payable quarterly, in arrears, on the last Business
Day (as defined in Section 11) of March, June, September and
December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the Issue Date of such
shares. To the extent that dividends on the Class B Stock are
payable in cash, such dividends shall be cumulative. Accrued
dividends not paid on any Quarterly Dividend Payment Date shall
accrue additional dividends at an annual dividend rate of 8.50%
until paid in full.
(b) Dividends payable pursuant to paragraph (a) of this
Section 2 shall begin to accrue and be cumulative from the Issue
Date of each share of Class B Stock, whether or not earned or
declared. The amount of dividends so payable shall be determined
on the basis of twelve 30-day months and a 360-day year.
Dividends paid on the shares of Class B Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-
share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Class B Stock entitled to receive payment of
a dividend declared thereon, which record date shall be no more
than sixty days prior to the date fixed for the payment thereof.
(c) With respect to dividends paid on or prior to the third
anniversary of the Principal Issue Date (as defined in Section
11), the Corporation shall have the option to pay such dividends
in shares of Class B Stock valued at $50 per share or in whole
shares of Common Stock valued at Fair Market Value determined as
of the close of business on the third Business Day immediately
preceding the date of payment, instead of in cash. With respect
to dividends paid after the third anniversary of the Principal
Issue Date but on or prior to the fifth anniversary of the
Principal Issue Date, the Corporation shall have the option to
pay such dividends in shares of Class B Stock valued at $50 per
share or in whole shares of Common Stock valued at Fair Market
Value determined as of the close of business on the third
Business Day immediately preceding the date of payment, instead
of in cash, but only if the Corporation is prohibited from paying
such dividends in cash under the terms of its Bank Credit
Agreement or its Senior Notes. To the extent that the
Corporation elects to pay any dividends in shares of Common
Stock, it shall pay a premium in additional shares of Common
Stock equal to 33-1/3% of the total number of shares of Common
Stock that would otherwise be paid as the dividend. After the
fifth anniversary of the Principal Issue Date, all dividends
shall be paid in cash. The Corporation shall only have the right
to pay dividends in shares of Common Stock if, on the Quarterly
Dividend Payment Date in question, the Common Stock is listed and
traded on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market System. In connection
with any payment of dividends in shares of Common Stock pursuant
to this Section 2(c), no fractions of shares of Common Stock
shall be issued, but in lieu thereof the Corporation shall either
(i) deliver a whole share of Common Stock in respect of the
fractional share which the holder would otherwise have been
entitled to upon such dividend payment or (ii) pay a cash
adjustment in respect of such fractional interest in an amount
equal to such fractional interest multiplied by the Fair Market
Value of a share of Common Stock determined as of the close of
business on the third Business Day immediately preceding the date
of payment.
(d) The holders of shares of Class B Stock shall not be
entitled to receive any dividends or other distributions except
as provided herein.
Section 3. Voting Rights.
In addition to any voting rights provided by law, the
holders of shares of Class B Stock shall have the following
voting rights:
(a) In addition to voting rights provided elsewhere in this
Section 3, and as long as any of the Class B Stock is
outstanding, each share of Class B Stock shall entitle the holder
thereof to vote on all matters, including with respect to the
election of directors, voted on by holders of Common Stock voting
together as a single class with other shares entitled to vote at
all meetings of the stockholders of the Corporation. With
respect to any such vote, each share of Class B Stock shall
entitle the holder thereof to cast the number of votes determined
pursuant to the next sentence; provided, however, that if more
than one share of Class B Stock shall be held by any holder of
shares of Class B Stock, the total number of votes which such
holder shall be entitled to cast pursuant to this Section 3(a)
shall be computed on the basis of the total number of shares of
Class B Stock held by such holder, with any then remaining
fractional share disregarded for the purposes of this
Section 3(a). The number of votes which each share of the Class
B Stock shall entitle the holder thereof to cast shall be equal
to (i) 6.8966 from the First Issue Date until the Approval Date
(as defined herein), and (ii) from and after the Approval Date,
the number of whole votes which could be cast in such vote by a
holder of the shares of capital stock of the Corporation into
which such share of Class B Stock is convertible on the record
date for such vote.
(b) In addition to the voting rights provided elsewhere in
this Section 3, the affirmative vote of the holders of at least a
majority of the outstanding shares of Class B Stock, voting
separately as a single class, in person or by proxy, at a special
or annual meeting of stockholders called for the purpose, shall
be necessary to (A) except as contemplated by Section 2(c),
authorize, increase the authorized number of shares of, or issue
(including on conversion or exchange of any convertible or
exchangeable securities or by reclassification), any shares of
any class or classes, or any series of any class or classes, of
the Corporation's capital stock ranking pari passu with or prior
to (either as to dividends or upon a change in control of the
Corporation, voluntary or involuntary liquidation, dissolution or
winding up) the Class B Stock, (B) except as contemplated
pursuant to Section 2(c) or as permitted pursuant to Section
10(a), increase the authorized number of shares of, or issue
(including on conversion or exchange of any convertible or
exchangeable securities or by reclassification) any shares of,
Class B Stock, (C) alter, amend or repeal any of the provisions
of the Certificate of Incorporation of the Corporation which in
any manner would alter, change or otherwise adversely affect in
any way the powers, preferences or rights of the Class B Stock,
(D) approve the sale, lease or other disposition of all or
substantially all of the assets of the Corporation and its
Subsidiaries (as defined in Section 11), or (E) approve any
merger of the Corporation with or into any other entity or any
reorganization, recapitalization, liquidation or other similar
transaction (including any issuance of equity securities, or
securities convertible into equity securities by the Corporation,
to any person (other than the Purchasers and their Affiliates)
who would then own on a fully diluted basis more than 50% of the
total number of votes entitled to be cast (giving effect to such
issuance) by holders of the Corporation's capital stock on all
matters, including the election of directors) involving the
Corporation; provided, however, that the holders of the
outstanding shares of Class B Stock shall only have a class vote
on the transactions described in clauses (D) and (E) prior to the
earlier of the effectiveness of a registration statement under
the Securities Act of 1933 relating to all such shares and the
date on which less than half of the total shares of Class B Stock
originally issued (not including any shares issued in payment of
dividends pursuant to Section 2(c)) remain outstanding.
Notwithstanding the proviso to the preceding sentence, the
affirmative vote of the holders of at least a majority of the
outstanding shares of Class B Stock, voting separately as a
single class, in person or by proxy, at a special or annual
meeting of stockholders called for the purpose, shall be
necessary to approve any merger of the Corporation with or into
any other entity or any reorganization, recapitalization,
liquidation or other similar transaction involving the
Corporation where (i) the Class B Stock is not remaining
outstanding after such transaction under substantially the same
powers, preferences, rights, qualifications, limitations and
restrictions as are set forth in this Certificate of Designation
or (ii) the cash, stock, securities or other property to be
received on conversion of one share of Class B Stock following
such transaction and the application of Section 8(h) has a Fair
Market Value at the closing of such transaction less than 150% of
the Conversion Price. In addition, if the Corporation shall have
failed to pay in full dividends on the Class B Stock for six
consecutive quarters, then the size of the Board of Directors of
the Corporation shall be increased by two, and the holders of
shares of Class B Stock, voting together as a single class, shall
have the right to elect such two directors. The right to elect
such two directors under this Section 3(b) shall terminate upon
payment in full of all dividends payable on the Class B Stock, at
which time the Board of Directors shall return to its previous
size and the directors elected by the holders of the Class B
Stock shall be removed.
(c) (1) The rights of holders of shares of Class B Stock
to take any actions as provided in this Section 3 may be
exercised, subject to the DGCL (as defined in Section 11 hereof),
at any annual meeting of stockholders or at a special meeting of
stockholders held for such purpose as hereinafter provided or at
any adjournment or postponement thereof, or by the written
consent, delivered to the Secretary of the Corporation, of the
holders of the minimum number of shares required to take such
action.
As long as such right to vote continues (and unless such
right has been exercised by written consent of not less than the
minimum number of shares required to take such action), the
Chairman of the Board of the Corporation may call, and upon the
written request of holders of record of 20% of the outstanding
shares of Class B Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall
call, a special meeting of the holders of shares of Class B Stock
entitled to vote as provided herein. The Corporation shall use
its best efforts to hold such meeting as promptly as practicable,
but in any event not later than 120 days after delivery of such
request to the Secretary of the Corporation, at the place and
upon the notice provided by law and in the Bylaws of the
Corporation for the holding of meetings of stockholders.
(2) At each meeting of stockholders at which the
holders of shares of Class B Stock shall have the right, voting
separately as a single series, to take any action, the presence
in person or by proxy of the holders of record of a majority of
the total number of shares of Class B Stock then outstanding and
entitled to vote on the matter shall be necessary and sufficient
to constitute a quorum. At any such meeting or at any
adjournment or postponement thereof, in the absence of a quorum
of the holders of shares of Class B Stock, holders of a majority
of such shares present in person or by proxy shall have the power
to adjourn the meeting as to the actions to be taken by the
holders of shares of Class B Stock from time to time and place to
place without notice other than announcement at the meeting until
a quorum shall be present.
For the taking of any action as provided in Section 3(b) by
the holders of shares of Class B Stock, each such holder shall
have one vote for each share of Class B Stock standing in his
name on the transfer books of the Corporation as of any record
date fixed for such purpose or, if no such date be fixed, at the
close of business on the Business Day next preceding the day on
which notice is given, or if notice is waived, at the close of
business on the Business Day next preceding the day on which the
meeting is held.
Section 4. Certain Restrictions.
(a) As long as any shares of Class B Stock remain
outstanding, the Corporation shall not: (A) declare or pay
dividends, or make any other distributions, on any shares of
Junior Dividend Stock other than dividends or distributions
payable in Junior Dividend Stock; or (B) declare or pay
dividends, or make any other distributions, on any shares of
Parity Dividend Stock (as defined in Section 11 hereof), except
(1) dividends or distributions payable in Junior Dividend Stock
and (2) dividends or distributions paid ratably on the Class B
Stock and all Parity Dividend Stock on which dividends are
payable or in arrears, in proportion to the total amounts to
which the holders of all shares of the Class B Stock and such
Parity Dividend Stock are then entitled.
(b) As long as any shares of Class B Stock remain
outstanding, the Corporation shall not redeem, purchase or
otherwise acquire for consideration any shares of Junior Dividend
Stock or Junior Liquidation Stock (as defined in Section 11
hereof) or Parity Dividend Stock or Parity Liquidation Stock (as
defined in Section 11 hereof); provided, however, that (1) the
Corporation may at any time redeem, purchase or otherwise acquire
shares of Junior Liquidation Stock or Parity Liquidation Stock in
exchange for any shares of capital stock of the Corporation that
rank junior to the Class B Stock as to dividends and upon
liquidation, dissolution and winding up; (2) the Corporation may
accept shares of any Parity Liquidation Stock for conversion into
shares of capital stock of the Corporation that rank junior to
the Class B Stock as to dividends and upon liquidation,
dissolution and winding up; and (3) the Corporation may at any
time redeem, purchase or otherwise acquire shares as may be
required pursuant to the Corporation's employee and non-employee
director stock plans, as they may be amended from time to time,
or similar employee stock plans hereafter adopted; and provided
further, however, that the Corporation (A) may accept shares of
Class B Stock surrendered for conversion into shares of capital
stock of the Corporation pursuant to Section 8 hereof, and
(B) may redeem outstanding shares of Class B Stock pursuant to
Section 5 hereof. Whenever quarterly dividends payable on shares
of Class B Stock as provided in Section 2 hereof are not paid in
full, thereafter and until all unpaid dividends payable, whether
or not declared, on the outstanding shares of Class B Stock shall
have been paid in full, the Corporation shall not redeem or
purchase or otherwise acquire for consideration any shares of
Class B Stock; provided, however, that the Corporation (A) may
accept shares of Class B Stock surrendered for conversion into
shares of capital stock of the Corporation pursuant to Section 8
hereof, and (B) may elect to redeem outstanding shares of Class B
Stock pursuant to Section 5(a) hereof.
(c) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of capital stock of the Corporation unless the
Corporation could, pursuant to Section 4(b), purchase such shares
at such time and in such manner.
Section 5. Redemption.
(a) On and after the second anniversary of the Principal
Issue Date, the Corporation shall have the right, at its sole
option and election made in accordance with Section 5(c), to
redeem, out of funds legally available therefor, shares of Class
B Stock, in whole or in part, at any time and from time to time,
at a redemption price equal to the Stated Value (except as
described below), plus an amount per share equal to all accrued
and unpaid dividends, whether or not declared, to the date of
redemption (the "Redemption Price"); provided, however, that the
Corporation shall not have any such right unless (A) if the
redemption is to occur between the second and third anniversary
of the Principal Issue Date, the Redemption Fair Market Value (as
defined in Section 11 hereof) of the Common Stock, as of the
close of business on the third Business Day immediately preceding
the date on which notice of redemption is given, is equal to at
least 180% of the Conversion Price (as defined in Section 11
hereof), and (B) if the redemption is to occur between the third
and fifth anniversary of the Principal Issue Date, the Redemption
Fair Market Value (as defined in Section 11 hereof) of the Common
Stock, as of the close of business on the third Business Day
immediately preceding the date on which notice of redemption is
given, is equal to at least 200% of the Conversion Price (as
defined in Section 11 hereof). Notwithstanding the foregoing, if
the redemption is to occur between the fifth and sixth
anniversaries of the Principal Issue Date, the Redemption Price
shall be $51.5938; if the redemption is to occur between the
sixth and seventh anniversaries of the Principal Issue Date, the
Redemption Price shall be $51.0625; and if the redemption is to
occur between the seventh and eighth anniversaries of the
Principal Issue Date, the Redemption Price shall be $50.5313; in
each case plus an amount per share equal to all accrued and
unpaid dividends, whether or not declared, to the date of
redemption. If less than all shares of Class B Stock at the time
outstanding are to be redeemed, the shares to be redeemed shall
be selected pro rata.
(b) The Corporation shall redeem, at the Redemption Price,
all outstanding shares of Class B Stock on June 1, 2005.
(c) Notice of any redemption of shares of Class B Stock
pursuant to this Section 5 shall be mailed at least 30, but not
more than 60, days prior to the date fixed for redemption to each
holder of shares of Class B Stock to be redeemed, at such
holder's address as it appears on the transfer books of the
Corporation. Any such notice shall be irrevocable when given.
In order to facilitate the redemption of shares of Class B Stock,
the Board of Directors may fix a record date for the
determination of Class B Stock to be redeemed, or may cause the
transfer books of the Corporation for the Class B Stock to be
closed, not more than sixty days or less than thirty days prior
to the date fixed for such redemption.
(d) On the date of any redemption being made pursuant to
this Section 5 which is specified in a notice given pursuant to
Section 5(c), the Corporation shall, and at any time after such
notice shall have been mailed and before the date of redemption
the Corporation may deposit for the benefit of the holders of
shares of Class B Stock to be redeemed the funds necessary for
such redemption, including the amount necessary to pay all
accrued and unpaid dividends to the date of redemption, with a
bank or trust company in the City of New York having a capital
and surplus of at least $1,000,000,000. Any moneys so deposited
by the Corporation and unclaimed at the end of one year from the
date designated for such redemption shall revert to the general
funds of the Corporation. After such reversion, any such bank or
trust company shall, upon demand, pay over to the Corporation
such unclaimed amounts and thereupon such bank or trust company
shall be relieved of all responsibility in respect thereof and
any holder of shares of Class B Stock to be redeemed shall look
only to the Corporation for the payment of the Redemption Price.
In the event that moneys are deposited pursuant to this paragraph
(d) in respect of shares of Class B Stock that are converted in
accordance with the provisions of Section 8, such moneys shall,
upon such conversion, revert to the general funds of the
Corporation and, upon demand, such bank or trust company shall
pay over to the Corporation such moneys and shall be relieved of
all responsibility to the holders of such converted shares in
respect thereof. Any interest accrued on funds deposited
pursuant to this paragraph (d) shall be paid from time to time to
the Corporation for its own account.
(e) Notice of redemption having been given as aforesaid,
upon the deposit of funds pursuant to Section 5(d) in respect of
shares of Class B Stock to be redeemed pursuant to this Section
5, notwithstanding that any certificates for such shares shall
not have been surrendered for cancellation, from and after the
date of redemption designated in the notice of redemption (i) the
shares represented thereby shall no longer be deemed outstanding,
(ii) the rights to receive dividends thereon shall cease to
accrue, and (iii) all rights of the holders of shares of Class B
Stock to be redeemed shall cease and terminate, excepting only
the right to receive the Redemption Price therefor, and the right
to convert such shares into shares of Common Stock until the
close of business on the Fifth Business Day next preceding the
date of redemption, in accordance with Section 8 hereof.
Section 6. Reacquired Shares.
Any shares of Class B Stock converted, redeemed, purchased
or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition
thereof. All such shares of Class B Stock shall upon their
cancellation, in accordance with the DGCL, become authorized but
unissued shares of Preferred Stock of the Corporation and may be
reissued as part of another series of Preferred Stock of the
Corporation, subject to the conditions or restrictions on
issuance set forth herein.
Section 7. Liquidation, Dissolution or Winding Up.
(a) If the Corporation shall commence a voluntary case
under the Federal bankruptcy laws or any other applicable Federal
or state bankruptcy, insolvency or similar law, or consent to the
entry of an order for relief in an involuntary case under such
law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of
the Corporation or of any substantial part of its property, or
make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become
due, or if a decree or order for relief in respect of the
Corporation shall be entered by a court having jurisdiction in
the premises in an involuntary case under the Federal bankruptcy
laws or any other applicable Federal or state bankruptcy,
insolvency or similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its
property, or ordering the winding up or liquidation of its
affairs, and any such decree or order shall be unstayed and in
effect for a period of ninety consecutive days and on account of
any such event the Corporation shall liquidate, dissolve or wind
up, or if the Corporation shall otherwise liquidate, dissolve or
wind up, no distribution shall be made (i) to the holders of
shares of Junior Liquidation Stock unless, prior thereto, the
holders of shares of Class B Stock, subject to Section 8, shall
have received the Liquidation Preference (as defined in Section
11 hereof) with respect to each share, or (ii) to the holders of
shares of Parity Liquidation Stock, except distributions made
ratably to the holders of the Class B Stock and the Parity
Liquidation Stock in proportion to the total amounts to which the
holders of all such shares of Class B Stock and Parity
Liquidation Stock would be entitled upon such liquidation,
dissolution or winding up. Upon any such liquidation,
dissolution or winding up, the holders of shares of Class B Stock
shall be entitled to receive the Liquidation Preference with
respect to each such share and no more.
(b) Neither the merger or other business combination of the
Corporation with or into any other Person (as defined in Section
11 hereof) or Persons nor the sale of all or substantially all
the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for
purposes of this Section 7.
Section 8. Conversion.
(a) Subject to the provisions for adjustment hereinafter
set forth, each share of Class B Stock shall be convertible at
the option of the holder thereof into fully paid and
nonassessable shares of Common Stock. The number of shares of
Common Stock deliverable upon conversion of a share of Class B
Stock, adjusted as hereinafter provided, is referred to herein as
the "Conversion Ratio." The Conversion Ratio shall initially be
20.8333 and the Conversion Price shall initially be $2.40. Upon
the Reset Date, the Conversion Price shall be adjusted to equal
120% of the Reset Market Value and the Conversion Ratio shall be
adjusted to equal 50 divided by 120% of the Reset Market Value;
provided, however, if the Reset Market Value is (i) $2.71 or
greater, the Conversion Price shall be adjusted to equal $3.25
and the Conversion Ratio shall be adjusted to equal 15.3846 or
(ii) $1.25 or less, the Conversion Price shall be adjusted to
equal $1.50 and the Conversion Ratio shall be adjusted to equal
33.3333. The Conversion Ratio and the Conversion Price are
subject to further adjustment from time to time pursuant to
Section 8(g).
(b) Conversion of the Class B Stock may be effected by any
such holder upon the surrender to the Corporation at the
principal office of the Corporation in the State of Delaware (the
"Transfer Agent") or at the office of any agent or agents of the
Corporation, as may be designated by the Board of Directors of
the Corporation, of the certificate for such Class B Stock to be
converted accompanied by a written notice stating that such
holder elects to convert all or a specified whole number of such
shares in accordance with the provisions of this Section 8 and
specifying the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be
issued. In case such notice shall specify a name or names other
than that of such holder, such notice shall be accompanied by
payment of all transfer taxes payable upon the issuance of shares
of Common Stock in such name or names. Other than such taxes,
the Corporation will pay any and all issue and other taxes (other
than taxes based on income) that may be payable in respect of any
issue or delivery of shares of Common Stock on conversion of
Class B Stock pursuant hereto. As promptly as practicable, and
in any event within five Business Days after the surrender of
such certificate or certificates and the receipt of such notice
relating thereto and, if applicable, payment of all transfer
taxes (or the demonstration to the satisfaction of the
Corporation that such taxes have been paid), the Corporation
shall deliver or cause to be delivered (i) certificates
representing the number of validly issued, fully paid and
nonassessable full shares of Common Stock to which the holder of
shares of Class B Stock being converted shall be entitled and
(ii) if less than the full number of shares of Class B Stock
evidenced by the surrendered certificate or certificates is being
converted, a new certificate or certificates, of like tenor, for
the number of shares evidenced by such surrendered certificate or
certificates less the number of shares being converted. Such
conversion shall be deemed to have been made at the close of
business on the date of giving such notice and of such surrender
of the certificate or certificates representing the shares of
Class B Stock to be converted (the "Conversion Date") so that the
rights of the holder thereof as to the shares being converted
shall cease except for the right to receive shares of Common
Stock in accordance herewith, and the Person entitled to receive
the shares of Common Stock shall be treated for all purposes as
having become the record holder of such shares of Common Stock at
such time. The Corporation shall not be required to convert, and
no surrender of shares of Class B Stock shall be effective for
that purpose, while the transfer books of the Corporation for the
Common Stock are closed for any purpose (but not for any period
in excess of five days); but the surrender of shares of Class B
Stock for conversion during any period while such books are so
closed shall become effective for conversion immediately upon the
reopening of such books, as if the conversion had been made on
the date such shares of Class B Stock were surrendered, and at
the Conversion Ratio in effect at the date of such surrender.
(c) In case any shares of Class B Stock are to be redeemed
pursuant to Section 5, such right of conversion shall cease and
terminate as to the shares of Class B Stock to be redeemed at the
close of business on the fifth Business Day next preceding the
date fixed for redemption unless the Corporation shall default in
the payment of the Redemption Price.
(d) The Conversion Ratio shall be subject to adjustment
from time to time in certain instances as hereinafter provided.
Upon conversion, the holder of shares of Class B Stock shall be
entitled to receive any accrued and unpaid dividends on the
shares of Class B Stock surrendered for conversion to the
Conversion Date. Such accrued and unpaid dividends shall be
payable by the Corporation, at its option, in cash (to the extent
funds are legally available therefor) or in shares of Common
Stock valued at the Fair Market Value as of the third Business
Day prior to the Conversion Date, instead of in cash.
(e) In connection with the conversion of any shares of
Class B Stock, no fractions of shares of Common Stock shall be
issued, but in lieu thereof the Corporation shall either
(i) deliver a whole share of Common Stock in respect of the
fractional share to which the holder would otherwise have been
entitled upon such conversion or (ii) pay a cash adjustment in
respect of such fractional interest in an amount equal to such
fractional interest multiplied by the Current Market Price per
share of Common Stock on the Trading Day on which such shares of
Class B Stock are deemed to have been converted. If more than
one share of Class B Stock shall be surrendered for conversion by
the same holder at the same time, the number of full shares of
Common Stock issuable on conversion thereof shall be computed on
the basis of the total number of shares of Class B Stock so
surrendered.
(f) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Class B Stock,
free from any preemptive rights, such number of its authorized
but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of
Class B Stock, and shall take all action required to increase the
authorized number of shares of Common Stock if necessary to
permit the conversion of all outstanding shares of Class B Stock.
(g) The Conversion Ratio will be subject to adjustment from
time to time as follows:
(1) In case the Corporation shall at any time or from
time to time after the First Issue Date (A) pay a dividend, or
make a distribution, on the outstanding shares of Common Stock in
shares of Common Stock, (B) subdivide the outstanding shares of
Common Stock, (C) combine the outstanding shares of Common Stock
into a smaller number of shares or (D) issue by reclassification
of the shares of Common Stock any shares of capital stock of the
Corporation, then, and in each such case, the Conversion Ratio in
effect immediately prior to such event or the record date
therefor, whichever is earlier, shall be adjusted so that the
holder of any shares of Class B Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of
Common Stock or other securities of the Corporation which such
holder would have owned or have been entitled to receive after
the happening of any of the events described above, had such
shares of Class B Stock been surrendered for conversion
immediately prior to the happening of such event or the record
date therefor, whichever is earlier. An adjustment made pursuant
to this clause (i) shall become effective (x) in the case of any
such dividend or distribution, immediately after the close of
business on the record date for the determination of holders of
shares of Common Stock entitled to receive such dividend or
distribution, or (y) in the case of such subdivision,
reclassification or combination, at the close of business on the
day upon which such corporate action becomes effective. No
adjustment shall be made pursuant to this clause (i) in
connection with any transaction to which paragraph (h) applies.
(2) In case the Corporation shall at any time or from
time to time after the First Issue Date declare, order, pay or
make a dividend or other distribution (including, without
limitation, any distribution of stock or other securities or
property or rights or warrants to subscribe for securities of the
Corporation or any of its Subsidiaries by way of dividend or
spinoff), on its Common Stock, other than dividends or
distributions of shares of Common Stock which are referred to in
clause (1) of this paragraph (g), then the Conversion Ratio shall
be adjusted so that the holder of each share of Class B Stock
shall be entitled to receive, upon the conversion thereof, the
number of shares of Common Stock determined by multiplying (1)
the applicable Conversion Ratio on the day immediately prior to
the record date fixed for the determination of stockholders
entitled to receive such dividend or distribution by (2) a
fraction, the numerator of which shall be the Current Market
Price per share of Common Stock for the period of 20 Trading Days
preceding such record date, and the denominator of which shall be
such Current Market Price per share of Common Stock less the Fair
Market Value (as defined in Section 11 hereof) per share of
Common Stock (as determined in good faith by the Board of
Directors of the Corporation, a certified resolution with respect
to which shall be mailed to each holder of shares of Class B
Stock) of such dividend or distribution; provided, however, that
in the event of a distribution of capital stock of a Subsidiary
of the Corporation (a "Spin-Off") made to holders of shares of
Common Stock, the numerator of such fraction shall be the sum of
the Current Market Price per share of Common Stock for the period
of 20 Trading Days preceding the 35th Trading Day after the
effective date of such Spin-Off and the Current Market Price of
the number of shares (or the fraction of a share) of capital
stock of the Subsidiary which is distributed in such Spin-Off in
respect of one share of Common Stock for the period of 20 Trading
Days preceding such 35th Trading Day and the denominator of which
shall be the Current Market Price per share of Common Stock for
the period of 20 Trading Days preceding such 35th Trading Day.
An adjustment made pursuant to this clause (2) shall be made upon
the opening of business on the next Business Day following the
date on which any such dividend or distribution is made and shall
be effective retroactively immediately after the close of
business on the record date fixed for the determination of
stockholders entitled to receive such dividend or distribution;
provided, however, that if the proviso to the preceding sentence
applies, then such adjustment shall be made and be effective as
of such 35th Trading Day after the effective date of such Spin-
Off. No adjustment shall be made pursuant to this clause (2) in
connection with any transaction to which paragraph (h) applies.
(3) For purposes of this paragraph (g), the number of
shares of Common Stock at any time outstanding shall not include
any shares of Common Stock then owned or held by or for the
account of the Corporation.
(4) The term "dividend," as used in this paragraph (g)
shall mean a dividend or other distribution upon Common Stock of
the Corporation.
(5) Anything in this paragraph (g) to the contrary
notwithstanding, the Corporation shall not be required to give
effect to any adjustment in the Conversion Ratio unless and until
the net effect of one or more adjustments (each of which shall be
carried forward), determined as above provided, shall have
resulted in a change of the Conversion Ratio by at least one one-
hundredth of one share of Common Stock, and when the cumulative
net effect of more than one adjustment so determined shall be to
change the Conversion Ratio by a least one one-hundredth of one
share of common Stock, such change in Conversion Ratio shall
thereupon be given effect.
(6) The certificate of any firm of independent public
accountants of recognized standing selected by the Board of
Directors of the Corporation (which may be the firm of
independent public accountants regularly employed by the
Corporation) shall be presumptively correct for any computation
made under this paragraph (g).
(7) If the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution, and shall thereafter
and before the distribution to stockholders thereof legally
abandon its plan to pay or deliver such dividend or distribution,
then thereafter no adjustment in the number of shares of Common
Stock issuable upon exercise of the right of conversion granted
by this paragraph (g) or in the Conversion Ratio then in effect
shall be required by reason of the taking of such record.
(8) There shall be no adjustment of the Conversion
Ratio in case of the issuance of any stock of the Corporation in
a merger, reorganization, acquisition or other similar
transaction except as set forth in paragraphs (g)(1) and (h) of
this Section 8.
(h) In case of any capital reorganization or
reclassification of outstanding shares of Common Stock (other
than a reclassification covered by Section 8(g)(1)), or in case
of any merger of the Corporation with or into another
Corporation, or in case of any sale or conveyance to another
Corporation of all or substantially all of the assets or property
of the Corporation (each of the foregoing being referred to as a
"Transaction"), each share of Class B Stock then outstanding
shall thereafter be convertible into, in lieu of the Common Stock
issuable upon such conversion prior to consummation of such
Transaction, the kind and amount of shares of stock and other
securities and property receivable (including cash or securities
of the Surviving Person (as defined in Section 11 hereof)) upon
the consummation of such Transaction by a holder of that number
of shares of Common Stock into which one share of Class B Stock
was convertible immediately prior to such Transaction (including,
on a pro rata basis, the cash, securities or property received by
holders of Common Stock in any tender or exchange offer that is a
step in such Transaction). In any such case, if necessary,
appropriate adjustment (as determined by the Board of Directors)
shall be made in the application of the provisions set forth in
this Section 8 with respect to rights and interests thereafter of
the holders of shares of Class B Stock to the end that the
provisions set forth herein for the protection of the conversion
rights of the Class B Stock shall thereafter be applicable, as
nearly as reasonably may be, to any such other shares of stock
and other securities and property deliverable upon conversion of
the shares of Class B Stock remaining outstanding (with such
adjustments in the conversion price and number of shares issuable
upon conversion and such other adjustments in the provisions
hereof as the Board of Directors shall determine to be
appropriate). In case securities or property other than Common
Stock shall be issuable or deliverable upon conversion as
aforesaid, then all references in this Section 8 shall be deemed
to apply, so far as appropriate and as nearly as may be, to such
other securities or property.
Notwithstanding anything contained herein to the contrary,
the Corporation will not effect any Transaction unless, prior to
the consummation thereof, the Surviving Person thereof shall
assume, by written instrument mailed to each holder of shares of
Class B Stock, the obligation to deliver to such holder such
cash, property or securities to which, in accordance with the
foregoing provisions, such holder is entitled.
(i) In case at any time or from time to time the
Corporation shall pay any dividend or make any other distribution
to the holders of its Common Stock, or shall offer for
subscription pro rata to the holders of its Common Stock any
additional shares of stock of any class or any other right, or
there shall be any capital reorganization or reclassification of
the Common Stock of the Corporation or merger of the Corporation
with or into another Corporation, or any sale or conveyance to
another Corporation of the property of the Corporation as an
entirety or substantially as an entirety, or there shall be a
voluntary or involuntary dissolution, liquidation or winding up
of the Corporation, then, in any one or more of said cases the
Corporation shall give at least 20 days prior written notice (the
time of mailing of such notice shall be deemed to be the time of
giving thereof) to the registered holders of the Class B Stock at
the addresses of each as shown on the books of the Corporation
maintained by the transfer agent thereof as of the date on which
(i) the books of the Corporation shall close or a record shall be
taken for such stock dividend, distribution or subscription
rights or (ii) such reorganization, reclassification, merger,
sale or conveyance, dissolution, liquidation or winding up shall
take place, as the case may be, provided that in the case of any
Transaction to which paragraph (h) applies the Corporation shall
give at least thirty days prior written notice as aforesaid.
Such notice shall also specify the date as of which the holders
of the Common Stock of record shall participate in said dividend,
distribution or subscription rights or shall be entitled to
exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, merger,
sale or conveyance or participate in such dissolution,
liquidation or winding up, as the case may be. Failure to give
such notice shall not invalidate any action so taken.
Section 9. Reports As to Adjustments.
Upon any adjustment of the Conversion Ratio then in effect
and any increase or decrease in the number of shares of Common
Stock issuable upon the operation of the conversion set forth in
Section 8 hereof, then, and in each such case, the Corporation
shall promptly deliver to the transfer agent of the Class B Stock
and Common Stock, a certificate signed by the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Corporation setting
forth in reasonable detail the event requiring the adjustment and
the method by which such adjustment was calculated and specifying
the Conversion Ratio then in effect following such adjustment and
the increased or decreased number of shares issuable upon the
conversion set forth in Section 8 hereof. The Corporation shall
also promptly after the making of such adjustment give written
notice to the registered holders of the Class B Stock at the
address of each holder as shown on the books of the Corporation
maintained by the Transfer Agent thereof, which notice shall
state the Conversion Ratio then in effect, as adjusted, and the
increased or decreased number of shares issuable upon the
exercise of the right of conversion granted by Section 8 hereof,
and shall set forth in reasonable detail the method of
calculation of each and a brief statement of the facts requiring
such adjustment. Where appropriate, such notice to holders of
the Class B Stock may be given in advance and included as part of
the notice required under the provisions of Section 8(i) hereof.
Section 10. Certain Covenants.
(a) Following the First Issue Date, and except in payment
of dividends pursuant to Section 2(c), the Corporation shall not
issue additional shares of Class B Stock.
(b) Any registered holder of Class B Stock may proceed to
protect and enforce its rights and the rights of such holders by
any available remedy by proceeding at law or in equity to protect
and enforce any such rights, whether for the specific enforcement
of any provision in this Certificate of Designation, or in aid of
the exercise of any power granted herein, or to enforce any other
proper remedy.
Section 11. Definitions.
The following terms shall have the meanings indicated:
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person.
For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person,
whether through the ownership of voting securities or by
agreement or otherwise.
"Approval Date" shall mean the earlier of (i) the tenth day
following the mailing by the Company of a notice to stockholders
of receipt by the Company of written confirmation of waiver by
the NASDAQ of its shareholder voting requirements with respect to
the right of the holders of the Class B Stock to vote such shares
on an as-converted basis, or (ii) the date of approval by the
Company's stockholders of the right of the holders of the Class B
Stock to vote such shares on an as converted basis.
"Bank Credit Agreement" shall mean the Credit Agreement,
dated as of June 15, 1995, among the Company, the banks party
thereto, and Bankers Trust Company as Agent for the bank parties
thereto, as amended from time to time, and any refinancings,
renewals and replacements thereof.
"Business Day" shall mean any day other than Saturday,
Sunday or a day on which banking institutions in the State of
Delaware are authorized or obligated by law or executive order to
close.
"Class A Stock" shall mean the Class A Convertible Preferred
Stock, par value $1.00 per share, of the Corporation.
"Conversion Price" shall mean an amount equal to the Stated
Value divided by the Conversion Ratio (as adjusted pursuant to
paragraph (g) of Section 8 hereof).
"Current Market Price," when used with reference to shares
of Common Stock or other securities on any date, shall mean the
volume weighted average of the sales prices for shares of Common
Stock or such other securities on such date and, when used with
reference to shares of Common Stock or other securities for any
period shall mean the volume weighted average of the sale prices
for shares of Common Stock or such other securities for such
period. If the Common Stock is not listed or admitted to trading
on a national securities exchange or an automated quotation
system that permits determination of weighted average sale prices
over a period of time, then "Current Market Price" for any period
shall mean the average of the last quoted sale price or, if not
so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date
the Common Stock or such other securities are not quoted by any
such organization, the average of the closing bid and asked
prices are furnished by a professional market maker making a
market in the Common Stock or such other securities selected by
the Board of Directors of the Corporation. If the Common Stock
or such other securities are not publicly held or so listed or
publicly traded, "Current Market Price" shall mean the fair
market value per share of Common Stock or of such other
securities as determined in good faith by the Board of Directors
of the Corporation based on an opinion of an independent
investment banking firm with an established national reputation
as a valuer of securities, which opinion may be based on such
assumptions as such firm shall deem to be necessary and
appropriate.
"DGCL" shall mean the Delaware General Corporation Law, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar Federal statute, and the rules
and regulations of the Securities and Exchange Commission
thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act shall
include reference to the comparable section, if any, of any such
similar Federal statute.
"Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the
Corporation or any other issuer which are publicly traded, the
Current Market Price of such shares or securities for the 30
Trading Day period preceding the date as of which the Fair Market
Value is to be determined. The "Fair Market Value" of any
security which is not publicly traded or of any other property
shall mean the fair value thereof as determined by an independent
investment banking or appraisal firm experienced in the valuation
of such securities or property selected in good faith by the
Board of Directors of the Corporation or a committee thereof, or,
if no such investment banking or appraisal firm is in the good
faith judgment of the Board of Directors or such committee
available to make such determination, as determined in good faith
by the Board of Directors of the Corporation or such committee.
"First Issue Date" shall mean the first date that any shares
of Class B Stock are issued.
"Issue Date" shall mean, with respect to any share of Class
B Stock, the date on which such share of Class B Stock is issued.
"Junior Dividend Stock" shall mean (i) the Common Stock and
(ii) any other capital stock of the Corporation which ranks
junior as to dividends to the Class B Stock.
"Junior Liquidation Stock" shall mean (i) the Common Stock
and (ii) any other capital stock of the Corporation which ranks
junior upon liquidation, dissolution or winding up to the Class B
Stock.
"Liquidation Preference" with respect to a share of Class B
Stock shall mean the Stated Value per share, plus an amount equal
to all accrued but unpaid dividends.
"NASDAQ" shall mean the NASDAQ Stock Market.
"NASDAQ Rules" shall mean Rule 4460(i) of the NASDAQ Stock
Market Rules of the NASDAQ Stock Market.
"Parity Dividend Stock" shall mean (i) the Class A Stock and
(ii) any other capital stock of the Corporation ranking on a
parity as to dividends with the Class B Stock.
"Parity Liquidation Stock" shall mean (i) the Class A Stock
and (ii) any other capital stock of the Corporation ranking on a
parity upon liquidation, dissolution or winding up with the Class
B Stock.
"Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Principal Issue Date" shall mean September 17, 1996.
"Purchasers" shall mean Trefoil Capital Investors II, L.P.,
a Delaware limited partnership, and GE Investment Private
Placement Partners II, A Limited Partnership, a Delaware limited
partnership.
"Qualified Person" shall mean any Person that, immediately
after giving effect to the applicable Transaction, (i) is a
solvent corporation or other entity organized under the laws of
any State of the United States of America having its common stock
or, in the case of an entity other than a corporation, equivalent
equity securities, listed on the New York Stock Exchange or the
American Stock Exchange or quoted by the Nasdaq National Market
System or any successor thereto or comparable system, and such
common stock or equivalent equity security continues to meet the
requirements for such listing or quotation and (ii) is required
to file, and in each of its three fiscal years immediately
preceding the consummation of the applicable Transaction (or
since its inception) has filed, reports with the Securities and
Exchange Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
"Redemption Fair Market Value" shall mean, as to shares of
Common Stock, the Current Market Price of such shares or
securities for the 60-day period preceding the date as of which
the Redemption Fair Market Value is to be determined. The
"Redemption Fair Market Value" of the Common Stock if it is not
publicly traded shall mean its Fair Market Value.
"Required Issue Date" shall mean December 31, 1996.
"Reset Date" shall mean the first Trading Day after the end
of the 20 Trading Day period utilized to determine the Reset
Market Value.
"Reset Market Value" shall mean the Current Market Price of
Common Stock for the 20 Trading Day period following the earlier
of (i) the date which is three Trading Days after public
announcement of the Corporation's results for its fiscal quarter
ending January 3, 1998 and (ii) February 2, 1998.
"Senior Notes" shall mean the Corporation's 12% Senior Notes
due 2004 and any other senior indebtedness of the Corporation the
net proceeds of which are used in full to pay principal,
prepayment penalty and accrued interest on such principal, the
incurrence of which is approved by the vote of the holders of a
majority of the outstanding shares of Class B Stock.
"Subsidiary" of any Person means any corporation or other
entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or
indirectly, by such Person.
"Surviving Person" shall mean the continuing or surviving
Person of a merger or other business combination, the Person
receiving a transfer of all or a substantial part of the
properties and assets of the Corporation, or the Person merging
into the Corporation in a merger or other business combination in
which the Corporation is the continuing or surviving Person, but
in connection with which the Class B Stock or Common Stock of the
Corporation is exchanged or converted into the securities of any
other Person or cash or any other property; provided, however, if
such surviving Person is a direct or indirect Subsidiary of a
Qualified Person, the parent entity that is a Qualified Person
shall be the Surviving Person.
"Survivor Common Stock" with respect to any Surviving Person
shall mean any shares of such Surviving Person of any class or
series which has no preference or priority in the payment of
dividends or in the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such
Surviving Person and which is not subject to redemption by such
Surviving Person; provided, however, that if at any time there
shall be more than one such class or series, the shares of each
such class and series issuable upon conversion of the Class B
Stock then being converted shall be substantially in the
proportion to the total number of shares of each such class and
series.
"Trading Day" means a day on which the principal national
securities exchange (including, if applicable, the Nasdaq Stock
Market) on which the Common Stock is listed or admitted to
trading is open for the transaction of business or, if the Common
Stock is not listed or admitted to trading on any national
securities exchange, a Business Day.
IN WITNESS WHEREOF, the officers set forth below, acting for
and on behalf of The Grand Union Company, have hereunto
subscribed their names on this ___ day of June 1997.
THE GRAND UNION COMPANY
By:
-------------------------
Name:
Title:
Attest:
By:
---------------------------
Name:
Title:
Exhibit B
Form of Opinion to be rendered by Ropes & Xxxx in connection
with the Fourth and Fifth Closings under the Stock Purchase
Agreement, dated as of July 30, 1996 (the "Purchase Agreement"),
among The Grand Union Company (the "Company"), Trefoil Capital
Investors II, L.P. ("Trefoil") and GE Investment Private
Placement Partners II, A Limited Partnership ("GEI" and,
collectively with Trefoil, the "Purchasers"), as accelerated
pursuant to the terms of the Acceleration and Exchange Agreement
between the Company, Trefoil, and GEI. Capitalized terms used
herein without definition have the meanings given in the Opinion
Letter of Ropes & Xxxx delivered in connection with the Third
Closing on February 25, 1997.
1. The Company is duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, with
corporate power and authority under such laws perform its
obligations under the Purchase Agreement, including without
limitation to issue and sell the Shares and to issue the shares
of Common Stock issuable upon conversion of the Shares.
2. The Shares delivered at this Closing (the "Accelerated
Shares") have been duly authorized and validly issued and are
fully paid and non-assessable; and the shares of Common Stock
issuable upon the conversion of the Accelerated Shares (the
"Conversion Shares") have been duly authorized and reserved for
issuance and, when issued in accordance with the provisions of
the Company's Certificate of Incorporation, will be validly
issued, fully paid and nonassessable.
Exhibit C
Form of Opinion to be rendered by Xxxxx Xxxx & Xxxxxxxx.
Capitalized terms used herein without definition have the
meanings given in the Acceleration and Exchange Agreement.
1. The Company is a validly existing corporation in good
standing under the laws of the State of Delaware, with all
requisite corporate power and authority to own its properties and
assets and to carry on its business.
2. The Certificate of Designation has been duly authorized
and adopted by the Company, has been filed with the Secretary of
State for the State of Delaware and is in full force and effect.
3. The Company has all requisite corporate power and
authority to execute and deliver the Transaction Documents to
which it is a party and all other agreements therein contemplated
to be executed by the Company, to perform its obligations
thereunder, to consummate the transactions contemplated thereby
and to sell, assign, transfer and deliver the Class B Preferred
Shares and the Reset Shares to the Purchasers pursuant to the
terms of the Acceleration and Exchange Agreement.
4. The Transaction Documents have been duly authorized,
executed and delivered by the Company, and are the legal, valid
and binding obligations of the Company and (subject to applicable
bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally and general
equitable principles) are enforceable against the Company in
accordance with their respective terms.
5. The Class B Preferred Shares have been validly
authorized and, upon delivery to Purchasers pursuant to the
Exchange Agreement, will be validly issued, fully paid and
nonassessable.
6. The shares of (A) Common Stock to be issued (i) on the
Reset Date, (ii) upon the conversion of the Class B Preferred
Stock, and (iii) as dividends on the Preferred Shares in
accordance with the terms of the Certificate of Designation, and
(B) Class B Preferred Stock to be issued as dividends on the
Preferred Shares in accordance with the terms of the Certificate
of Designation have been validly authorized and, when such (x)
Reset Shares are issued in accordance with the Acceleration and
Exchange Agreement, and (y) such shares of Common Stock are
delivered in accordance with the terms of the Certificate of
Designation upon the conversion of the Class B Preferred Stock or
the payment of dividends on the Preferred Stock, or (z) shares of
Class B Preferred Stock are delivered in accordance with the
terms of the Certificate of Designation as payment of dividends
thereon, such shares of Common Stock and shares of Preferred
Stock will be validly issued, fully paid and non-assessable.
Depending on a number of factors, including the time of the
conversion of the Class B Preferred Stock and the form in which
dividends thereon are paid, the number of shares of Common Stock
currently authorized may be insufficient to permit the conversion
of all securities of the Company convertible into or exercisable
for shares of Common Stock and the payment of all dividends on
the Preferred Shares in the form of shares of Common Stock.
7. The consummation of the Exchange and the issuance of
the Reset Shares pursuant to the Acceleration and Exchange
Agreement and the fulfillment of and compliance with the terms
and conditions contained in the Acceleration and Exchange
Agreement with respect to the Exchange and the issuance of the
Reset Shares will not (a) conflict with any terms, conditions or
provisions of the Certificate of Incorporation or Bylaws of the
Company; (b) result in a termination or breach of, or constitute
a default under, or accelerate or permit the acceleration of any
performance required by, any of the agreements listed on Schedule
A hereto; or (c) violate any federal law or laws of the state of
New York or the state of Delaware.
8. To our knowledge after due inquiry, the Company is not
a party to, subject to or bound by any judgment, award, judicial
or administrative order, writ, prohibition, or decree (including
a consent decree) of any court, governmental body or arbitrator,
which would prevent the execution, delivery, or performance of
the Transaction Documents by the Company and all other agreements
therein contemplated to be entered into by the Company or the
transfer, conveyance or sale of the Shares by the Company to the
Purchasers pursuant to the Acceleration and Exchange Agreement.
9. After due inquiry, we have no knowledge of any
litigation, arbitration, or governmental proceeding with respect
to the Company that seeks to prohibit or otherwise challenge the
consummation of the transactions contemplated by the Transaction
Documents, or to obtain substantial damages with respect thereto.
With respect to the opinions expressed in paragraph 8
hereof, "after due inquiry" means that we have made inquiry of
Xxxx Xxxxxxxx of the Company.
Exhibit D
[Letterhead of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation]
June 5, 1997
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Chief Financial Officer
Re: Fee Waiver
Gentlemen:
This letter is written in connection with our engagement
letter with The Grand Union Company (the "Company") dated January
17, 1996 (the "Engagement Letter") and the Company's proposed
transaction (the "Proposed Transaction") to issue $40,000,000 of
Class B Convertible Preferred Stock of the Company and, under
certain circumstances, up to 2 million shares of Common Stock of
the Company, pursuant to the Acceleration and Exchange Agreement
dated June 5, 1997, by and between the Company and Trefoil
Capital Investors II, L.P. and GE Investment Private Placement
Partners II, A Limited Partnership.
The purpose of this letter is to acknowledge and agree that
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation hereby waives
any additional fee or other payment to which it may be entitled
in connection with the Proposed Transaction pursuant to the
Engagement Letter.
Sincerely,
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
-------------------------
Xxxxxx X. Xxxxxx
Managing Director
EXHIBIT E
AMENDMENT NO. 1 TO THE REGISTRATION RIGHTS
AGREEMENT DATED AS OF JULY 30, 1996, AMONG
THE GRAND UNION COMPANY, TREFOIL CAPITAL
INVESTORS II, L.P., AND GE INVESTMENT PRIVATE
PLACEMENT PARTNERS II, A LIMITED PARTNERSHIP
Amendment (this "Amendment"), dated as of June 5, 1997, to
the Registration Rights Agreement (the "Registration Rights
Agreement"), dated as of July 30, 1996, among each of (i) The
Grand Union Company, a Delaware corporation (the "Company"), and
(ii) 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," and together with Trefoil, the "Purchasers").
Capitalized terms used herein without definitions shall have the
meanings given them in the Registration Rights Agreement.
WHEREAS, the Company has entered into an Acceleration and
Exchange Agreement, dated as of June 5, 1997 (the "Acceleration
Agreement"), among the Company, Trefoil, and GEI;
WHEREAS, the Company and the Purchasers desire to amend the
Registration Rights Agreement for the purpose of facilitating the
transactions contemplated by the Acceleration Agreement;
NOW, THEREFORE, in consideration of the foregoing, and the
mutual agreements and covenants contained herein, the parties
hereto agree as follows:
Section 1. Preamble. (a) The second paragraph of the
preamble is hereby amended to read as follows:
"WHEREAS, pursuant to a Stock Purchase Agreement among the
Company and the Purchasers (the "Purchase Agreement"), the
Company is selling to the purchasers up to 2,000,000 shares of
the Company's Class A Convertible Preferred Stock, issuable in
denominations of $50 stated value per share, dividends on which
may be paid in additional shares of such preferred stock
(collectively, the "Class A Preferred Shares"), which Class A
Preferred Shares are convertible into shares of the Company's
common stock, par value $1.00 per share (the "Common Stock");"
(b) The Preamble of the Registration Rights Agreement is
hereby amended to add a new third paragraph to read as follows:
"WHEREAS, pursuant to an Acceleration and Exchange Agreement
(the "Acceleration Agreement"), dated as of June 5, 1997, the
Company has agreed to issue (i) 800,000 shares of the Company's
Class B Convertible Preferred Stock, issuable in denominations of
$50 stated value per share, dividends on which may be paid in
additional shares of such preferred stock (collectively, the
"Class B Preferred Shares," and collectively with the Class A
Preferred Shares, the "Preferred Shares"), which Class B
Preferred Shares are convertible into shares of Common Stock, and
(ii) up to 2,000,000 shares of Common Stock under certain
circumstances (such shares of the Common Stock, together with
shares of Common Stock into which the Preferred Shares are
convertible and shares of Common Stock which may be issued as
dividends on the Preferred Shares, the "Common Shares" and,
collectively with the Preferred Shares, the "Securities");
Section 2. Definitions. The definition of the term
"Registrable Securities" in Section 1.1 of the Registration
Rights Agreement is hereby amended to read as follows:
""Registrable Securities" shall mean any Securities issued
at any time to any of the Purchasers pursuant to the Purchase
Agreement or the Acceleration Agreement and any Securities issued
at any time as dividends upon or on conversion of any of the
Securities. As to any proposed offer or sale of Registrable
Securities, such securities shall cease to be Registrable
Securities with respect to such proposed offer or sale when (i) a
registration statement with respect to the sale of such
securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance
with such registration statement or (ii) such securities are
permitted to be disposed of pursuant to Rule 144(k) (or any
successor provision to such Rule) under the Securities Act as
confirmed in a written opinion of counsel to the Company
addressed to the Holders, or (iii) such securities shall have
been otherwise transferred pursuant to an applicable exemption
under the Securities Act, new certificates for such securities
not bearing a legend restricting further transfer shall have been
delivered by the Company and such securities shall be freely
transferable to the public without registration or qualification
under the Securities Act or any state securities or blue sky law
then in place.
Section 3. Miscellaneous.
(a) Notices. Any notice under or relating to this
Amendment 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
GEI: 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
the Company: Chief Executive Officer
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Telecopy: (000) 000-0000
with a copy to: General Counsel
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxxxx 00000-0000
Telecopy: (000) 000-0000
and
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, 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
and
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, 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.
(b) Binding Effect. The provisions of this Amendment
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns, heirs, and
personal representatives.
(c) Modification. This Amendment may only be modified
by a written instrument duly executed by each party hereto.
(d) Waiver. Any waiver by either party of a breach of
any provision of this Amendment 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 Amendment. Any
waiver of any provision of this Amendment must be in writing.
(e) Headings. The headings to the sections of this
Amendment are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or
interpretation of this Amendment.
(f) Separability. If any provision of this Amendment
is invalid, illegal or unenforceable, the balance of this
Amendment 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.
(g) Counterparts. This Amendment 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.
(h) Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New York applicable to contracts executed and to be fully
performed within the State of New York.
IN WITNESS WHEREOF, the parties have duly executed this
Amendment No. 1 to the Registration Rights Agreement dated as of
July 30, 1996 as of the date first written above.
TREFOIL CAPITAL INVESTORS II, L.P.
By: Trefoil Investors II, Inc.
its general partner
By:
----------------------------------
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:
----------------------------------
Name: Xxx X. Xxxxx
Title: Executive Vice President
THE GRAND UNION COMPANY
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President,
Chief Financial Officer and
Chief Administrator Officer
EXHIBIT F
THE XXXXXXXXXX FAMILY LIMITED PARTNERSHIP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
June 5, 1997
Trefoil Capital Investors II, L.P. The Grand Union Company
0000 Xxxxxxxx Xxxxx 000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000 Wayne, New Jersey 07470-0966
Attn: Xxxxxxxx X. Xxxxx Attn: Xxxxx Xxxxxxxxxx
GE Investment Private Placement
Partners II, A Limited Partnership
c/o GE Investment Management
Incorporated
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx, Esq.
Dear Messrs. Xxxxx, Xxxxxxx and Xxxxxxxxxx:
Reference is made to the Stockholder Agreement (the
"Stockholder Agreement"), dated February 25, 1997, among 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"), The
Xxxxxxxxxx Family Limited Partnership, a California limited
partnership, as successor to all of the rights and obligations of
Xxxxx Xxxxxxxxxx pursuant to an Addendum to Stockholder Agreement
dated March 20, 1997 ("Xxxxxxxxxx") and The Grand Union Company
(the "Company"), and to the Acceleration and Exchange Agreement,
dated the date hereof, among the Company and the Purchasers (the
"Acceleration and Exchange Agreement").
Xxxxxxxxxx hereby acknowledges that the transactions
contemplated by the Acceleration and Exchange Agreement will not
create any Tag-Along Rights in favor of Xxxxxxxxxx, individually
or collectively, pursuant to Section 2 of the Stockholder
Agreement.
Very truly yours,
THE XXXXXXXXXX FAMILY LIMITED PARTNERSHIP,
a California limited partnership
By: THE XXXXX AND XXXXX XXXXXXXXXX
LIVING TRUST
Its: General Partner
By:
-----------------------------
Xxxxx Xxxxxxxxxx, Co-Trustee
By:
-----------------------------
Xxxxx Xxxxxxxxxx, Co-Trustee
Exhibit G
RATIFICATION AND VOTING AGREEMENT
RATIFICATION AND VOTING AGREEMENT (the "Agreement"),
dated as of June --, 1997, among 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 (together with Trefoil II, the
"Purchasers"), and the shareholders of The Grand Union Company, a
Delaware corporation (the "Company") named on Schedule I hereto
(each, a "Stockholder" and collectively, the "Stockholders").
PREAMBLE
The Company and the Purchasers are parties to a Stock
Purchase Agreement (the "Purchase Agreement"), dated as of
July 30, 1996, which provided, among other things, for the
acquisition by the Purchasers of shares of the Company's Class A
Convertible Preferred Stock (the "Class A Preferred Stock"). A
copy of the Purchase Agreement has previously been made available
to the Stockholders.
The Company and the Purchasers are parties to an
Acceleration and Exchange Agreement (the "Acceleration and
Exchange Agreement"), dated as of June 5, 1997, which provides,
among other things, for the acquisition by the Purchasers of
shares of the Company's Class B Convertible Preferred Stock (the
"Class B Preferred Stock"). A copy of the Acceleration and
Exchange Agreement has previously been made available to the
Stockholders.
As of the date hereof, each of the Stockholders named
on Schedule I hereto is the beneficial owner of and holds sole
voting power with respect to shares of Class A Preferred Stock of
the Company entitled to the number of votes, or the number of
shares of the common stock of the Company, par value $1.00 per
share (the "Common Stock" and, together with the number of votes
represented by the shares of Class A Preferred Stock set forth on
Schedule I hereto, the "Voting Securities") set forth opposite
such Stockholder's name on Schedule I (the "Subject Shares").
In order to induce the Purchasers to consummate the
transactions contemplated by the Acceleration and Exchange
Agreement (the "Transactions") and for other good and valuable
consideration, each Stockholder agrees to take reasonable steps
to facilitate the Transactions and to vote the Subject Shares
held by it as contemplated by this Agreement.
ACCORDINGLY, the parties hereto agree as follows:
1. Voting in Favor of Acceleration and Exchange
Agreement. Each Stockholder agrees to support the Acceleration
and Exchange Agreement and the Transactions in any reasonable
manner, including by taking any reasonable action requested by
the Purchasers; provided, however, that the foregoing shall not
be deemed to restrict such Stockholder's ability to transfer or
dispose of such Subject Shares. Each Stockholder will vote all
of the Subject Shares held by it in favor of the Acceleration and
Exchange Agreement and the Transactions, and against any
agreement or course of action that would prohibit, delay,
interfere with or otherwise be inconsistent with the Acceleration
and Exchange Agreement or the Transactions, (a) at any annual or
special meeting (or any adjournment or postponement thereof) of
the stockholders of the Company at which the Acceleration and
Exchange Agreement or the Transactions are submitted to a vote or
(b) at the request of the Purchasers, by its written consent.
2. Granting of Irrevocable Proxy. Upon the request
of the Purchasers, each Stockholder will deliver to one or more
persons an irrevocable proxy (the "Proxy") with respect to all of
the Subject Shares held by it, which such Proxy shall be deemed
to be coupled with an interest, to vote all of the Subject Shares
held by it in favor of the Acceleration and Exchange Agreement
and the Transactions at any annual or special meeting of the
stockholders of the Company at which the Acceleration and
Exchange Agreement or the Transactions are submitted to a vote in
the same manner and with the same effect as if such Stockholder
was personally present at such meeting. Any such Proxy shall
expire upon the Expiration Date as defined in Section 5 hereof.
3. Third Party Offers. Between the date hereof and
the Expiration Date, each Stockholder agrees that it shall not
directly or indirectly solicit, initiate or encourage inquiries
or proposals, or participate in any negotiations leading to any
proposal, concerning any transaction involving the Company that
would cause the Company to fail to consummate the Transactions or
that would otherwise be inconsistent with, violate or breach the
terms of this Agreement or the Acceleration and Exchange
Agreement. Each Stockholder will promptly advise the Purchasers
of any offers or proposals it may receive relating to any such
transaction.
4. Representations and Warranties of the Stockholder.
Each Stockholder hereby severally, not jointly, represents and
warrants to each of the Purchasers as follows:
4.1. The Stockholder is validly existing and in
good standing under the laws of the jurisdiction of its
organization.
4.2. The Stockholder is the sole true and lawful
record and beneficial owner of the Subject Shares set forth
opposite its name on Schedule I hereto and has all necessary
power and authority to enter into this Agreement and to perform
such Stockholder's obligations hereunder.
4.3. None of the Subject Shares owned by any
Stockholder other than the Purchasers and the Xxxxx and Xxxxx
Xxxxxxxxxx Family Limited Partnership (the "Xxxxxxxxxx
Partnership") is subject to any voting trust or, except pursuant
to this Agreement, other agreement or arrangement with respect to
the voting of such Subject Shares. None of the Subject Shares
owned by the Purchasers or the Xxxxxxxxxx Partnership is subject
to any voting trust or, except pursuant to this Agreement, the
Stockholders Agreement dated as of February 25, 1997, and the
Addendum thereto, among the Company, the Purchasers and the
Xxxxxxxxxx Partnership (the "Xxxxxxxxxx Stockholder Agreement")
or the Stockholder Agreement dated as of July 30, 1996 between
the Purchasers, as amended (the "Purchasers Stockholder
Agreement"), other agreement or arrangement with respect to the
voting of such Subject Shares.
4.4. The execution, delivery and performance of
this Agreement by the Stockholder and the consummation by it of
the transactions contemplated hereby have been approved by all
necessary action on the part of the Stockholder.
4.5. This Agreement is the legal, valid and
binding agreement of the Stockholder.
4.6. The execution, delivery and performance of
this Agreement by the Stockholder does not and will not
constitute a violation of, conflict with or result in a default
under (a) any contract, understanding or arrangement to which the
Stockholder is a party or by which such Stockholder is bound, or
require the consent of any other person or any party pursuant
thereto, or (b) any judgment, decree or order applicable to the
Stockholder.
4.7. The number of Subject Shares set forth
opposite such Stockholder's name on Schedule I hereto are the
only Voting Securities of the Company beneficially owned by the
Stockholder and the Stockholder owns no options to purchase or
rights to subscribe for or otherwise acquire any other Voting
Securities of the Company except for (i) pursuant to the
Acceleration and Exchange Agreement, or (ii) certain warrants of
the Company issued pursuant to the Warrant Agreement between the
Company and American Stock Transfer & Trust Company, dated as of
June 15, 1995.
5. Termination. This Agreement shall terminate on
the earlier of (a) the date of the Exchange Closing (as defined
in the Acceleration and Exchange Agreement) and (b) the tenth
(10th) day following termination of the Acceleration and Exchange
Agreement in accordance with its terms (the "Expiration Date").
6. Remedies. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of the
provisions of this Agreement and that, in addition to any other
remedy available at law, the obligations of the Stockholder shall
be specifically enforceable.
7. Miscellaneous.
7.1. Assignment. This Agreement shall not be
assignable by the parties hereto, except by operation of law and
except that any Proxy granted pursuant to the terms of this
Agreement may be assigned by the Purchasers to any person
affiliated with the Purchasers.
7.2. Amendments. This Agreement may not be
modified, amended, altered or supplemented, except upon the
execution and delivery of a written agreement executed by the
Purchasers and the Stockholder.
7.3. Notices. All notices, requests, claims,
demands and other communications hereunder 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:
(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
With copies to:
Chief Executive Officer
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Xxxxx Xxxx &Wardwell
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) If to the Stockholder, to the address set
forth on Schedule I hereto.
With copies to:
Chief Executive Officer
The Grand Union Company
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000-0000
Telecopier No.:
Telephone No.: (000) 000-0000
and
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
or to such other address as the Purchasers may have furnished to
the Stockholders or a Stockholder may have furnished to the
Purchasers, in either case in writing in accordance herewith,
except that notices of change of address shall be effective only
upon receipt.
7.4. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of New York.
7.5. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of
this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
7.6. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be an original, but
all of which together shall constitute one and the same
Agreement.
IN WITNESS WHEREOF, the Purchasers and the Stockholders
have caused this Ratification and Voting Agreement to be duly
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:
-----------------------------
Name:
Title:
GE INVESTMENT PRIVATE PLACEMENT
PARTNERS II, A LIMITED PARTNERSHIP
By: GE INVESTMENT MANAGEMENT
INCORPORATED, a general
partner
By:
----------------------------
Name:
Title:
Stockholder's Signature Page to Ratification and Voting
Agreement:
------------------------------
Stockholder
By:
--------------------------
Name:
Title:
SCHEDULE I
Currently
Outstanding
Number of Voting
Voting Securities
Name and Address of Securities of the
Stockholder Held Company
Trefoil Capital Investors II, 7,035,994 28.74%
L.P.
c/o Shamrock Capital Advisors,
Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
GE Investment Private 7,035,994 28.74%
Placement Partners
II, A Limited Partnership
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
