Exhbit 10.57
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 5, 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
