Exhibit (c)(4)
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
BY AND AMONG
KONINKLIJKE AHOLD N.V.
AHOLD ACQUISITION, INC.
SMG-II HOLDINGS CORPORATION
and
PTK HOLDINGS, INC.
Dated as of March 9, 1999
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS..............................................................................................1
Section 1. Definitions.....................................................................1
ARTICLE II
PURCHASE AND SALE OF STOCK...............................................................................4
Section 2.1 Purchase and Sale of Stock......................................................4
Section 2.2 Purchase Price..................................................................4
Section 2.3 Payment of Purchase Price.......................................................4
Section 2.4 Closing.........................................................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS ...........................................................5
Section 3. Representations and Warranties of the Sellers....................................5
Section 3.1 DueOrganization, Good Standing and Corporate Power..............................5
Section 3.2 Authorizationand Validity of Agreement..........................................5
Section 3.3 Capitalization..................................................................6
Section 3.4 Consents and Approvals; No Violations...........................................6
Section 3.5 Public Reports..................................................................7
Section 3.6 Other Financial Statements......................................................7
Section 3.7 Absence of Certain Changes......................................................8
Section 3.8 Compliance with Laws............................................................8
Section 3.9 Employee Benefit Plan Triggering Events.........................................8
Section 3.10 Liabilities....................................................................9
Section 3.11 Broker's or Finder's Fee.......................................................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.........................................................9
Section 4.1 Due Organization; Good Standing and Corporate Power.............................9
Section 4.2 Authorization and Validity of Agreement........................................10
Section 4.3 Consents and Approvals; No Violations..........................................10
Section 4.4 Broker's or Finder's Fee.......................................................10
Section 4.5 Financing......................................................................10
(i)
ARTICLE V
COVENANTS................................................................................................11
Section 5.1 Access to Information Concerning Properties and Records.........................11
Section 5.2 Confidentiality.................................................................11
Section 5.3 Conduct of the Business of the Company and its Subsidiaries.....................12
Section 5.4 Best Efforts....................................................................14
Section 5.5 No Solicitation of Other Offers.................................................15
Section 5.6 Notification of Certain Matters.................................................15
Section 5.7 Antitrust Filings...............................................................16
Section 5.8 Transfer Taxes..................................................................17
Section 5.9 Employee Benefits...............................................................17
Section 5.10 Directors' and Officers' Insurance; Indemnification............................17
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUB...............................................................19
Section 6. Conditions Precedent to Obligations of Parent and Sub...........................19
Section 6.1 Truth of Representations and Warranties.........................................19
Section 6.2 Performance of Agreements.......................................................19
Section 6.3 HSR Act.........................................................................19
Section 6.4 Injunction......................................................................19
Section 6.5Statutes.............................................................................20
Section 6.6 No Material Adverse Effect......................................................20
ARTICLE VII
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE SELLERS...............................................................................20
Section 7. Conditions Precedent to Obligations of the Sellers..............................20
Section 7.1 Truth of Representations and Warranties.........................................20
Section 7.2 Performance of Agreements.......................................................20
Section 7.3 HSR Act Waiting Periods.........................................................20
Section 7.4 Injunction......................................................................20
Section 7.5 Statutes........................................................................20
ARTICLE VIII
TERMINATION AND ABANDONMENT..............................................................................21
Section 8.1 Termination.....................................................................21
Section 8.2 Automatic Termination...........................................................21
Section 8.3 Effect of Termination...........................................................21
(ii)
ARTICLE IX
TAX MATTERS..............................................................................................22
Section 9.1 Tax Returns.....................................................................22
Section 9.2 Payment of Taxes................................................................22
Section 9.3 Controversies...................................................................23
Section 9.4 Amended Returns.................................................................23
Section 9.5 Prior Tax Agreements............................................................24
Section 9.6 Post-Closing Access and Cooperation.............................................24
ARTICLE X
MISCELLANEOUS............................................................................................24
Section 10.1 Fees and Expenses.............................................................24
Section 10.2 Representations and Warranties................................................24
Section 10.3 Extension; Waiver.............................................................24
Section 10.4 Public Announcements..........................................................25
Section 10.5 Governing Law.................................................................25
Section 10.6 Captions......................................................................25
Section 10.7 Notices.......................................................................25
Section 10.8 Binding Effect; Benefit; Assignment...........................................26
Section 10.9 Counterparts..................................................................26
Section 10.10 Entire Agreement..............................................................26
Section 10.11 Amendments....................................................................27
Section 10.12 Severability..................................................................27
Section 10.13 Disclosure Letter.............................................................27
Section 10.14 Submission to Jurisdiction; Waiver of Jury Trial..............................27
(iii)
EXECUTION COPY
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 9, 1999 (this "Agreement"), by
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and among KONINKLIJKE AHOLD N.V., a company organized under the laws of the
Netherlands ("Parent"), AHOLD ACQUISITION, INC., a company organized under the
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laws of Delaware and an indirect wholly-owned subsidiary of Parent ("Sub"), SMG-
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II HOLDINGS CORPORATION, a company organized under the laws of Delaware ("SMG-
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II") AND PTK HOLDINGS, INC., a company organized under the laws of Delaware
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("PTK").
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W I T N E S S E T H :
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WHEREAS, Parent, Sub and SMG-II have entered into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which it is contemplated that Sub
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merges with and into SMG-II (the "Merger");
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WHEREAS, in contemplation of the Merger, Sub will make a tender offer (the
"Tender Offer") to purchase all of the issued and outstanding $3.52 Cumulative
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Exchangeable Preferred Stock, par value $0.01 per share, of Supermarkets General
Holdings Corporation, a company organized under the laws of Delaware, subject to
the terms and conditions of the Merger Agreement and certain other conditions,
at a price of $38.25 per share, net to the Seller in cash;
WHEREAS, the parties hereto have agreed that, in the event certain
conditions in connection with the Tender Offer set forth in the Merger Agreement
are not satisfied, SMG-II shall in the alternative cause PTK to sell, and Sub
shall in the alternative purchase, an aggregate of 100 shares of Common Stock,
par value $.10 per share (the "Stock"), of Pathmark Stores, Inc., a company
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organized under the laws of Delaware (the "Company"), being all of the issued
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and outstanding shares of capital stock of the Company, all in accordance with
this Agreement.
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
DEFINITIONS
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Section 1. Definitions. When used in this Agreement, the following terms
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shall have the respective meanings specified therefor below (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
"Acquisition Proposal" shall have the meaning assigned to such term in
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Section 5.5(a).
"Affiliate" of any Person shall mean any Person directly or indirectly
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controlling, controlled by, or under common control with, such Person; provided
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that, for the purposes of this definition, "control" (including, with
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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 and policies of such Person, whether through the
ownership of voting securities or partnership interests, by contract or
otherwise.
"Agreement" shall have the meaning assigned to such term in the preamble to
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this Agreement.
"Alcohol and Drug Laws" shall have the meaning assigned to such term in
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Section 3.4.
"Antitrust Law" shall have the meaning assigned to such term in Section
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5.7(d).
"Balance Sheet" shall have the meaning assigned to such term in Section
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3.6(a).
"Balance Sheet Date" shall have the meaning assigned to such term in
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Section 3.6(a).
A "business day" shall mean any day, other than a Saturday, Sunday or a day
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on which banks located in New York City and Amsterdam shall be authorized or
required by law to close.
"Closing" shall have the meaning assigned to such term in Section 2.4.
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"Closing Date" shall have the meaning assigned to such term in Section 2.4.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from time
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to time and the Treasury regulations promulgated and the rulings issued
thereunder.
"Commission" shall have the meaning assigned to such term in Section
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3.5(a).
"Company" shall have the meaning assigned to such term in the third recital
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to this Agreement.
"Condition" shall mean, with respect to any Person the business,
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properties, assets, liabilities, results of operations or condition (financial
or otherwise) of such Person.
"Credit Agreement" shall have the meaning assigned to such term in Section
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3.10.
"Disclosure Letter" shall mean that certain Disclosure Letter, dated the
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date hereof, delivered by the Company to the Purchaser concurrently with the
execution of this Agreement.
"Employee Benefit Plan" shall have the meaning assigned to such term in
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Section 3.9.
"ERISA" shall have the meaning assigned to such term in Section 3.9.
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"GAAP" shall mean generally accepted accounting principles of the United
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States of America.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended, and the rules and regulations thereunder.
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"Indemnified Parties" shall have the meaning assigned to such term in
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Section 5.10(b).
"Liens" shall mean, collectively, liens, security interests, options,
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rights of first refusal, easements, mortgages, charges, indentures, deeds of
trust, rights of way, restrictions on the use of real property, encroachments,
licenses to third parties, leases to third parties, security agreements, or any
other encumbrances and other restrictions or limitations on use of real or
personal property.
"Merger" shall have the meaning assigned to such term in the first recital
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to this Agreement.
"Merger Agreement" shall have the meaning set forth in the first recital to
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this Agreement.
"Merger Closing" shall mean the "Closing", as such term is defined in the
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Merger Agreement.
"October Balance Sheet" shall have the meaning assigned to such term in
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Section 3.6(a).
"Parent" shall have the meaning assigned to such term in the preamble to
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this Agreement.
"Person" shall mean and include an individual, a partnership, a joint
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venture, a corporation, a limited liability company, a limited liability
partnership, a trust, an incorporated organization and a government or other
department or agency thereof.
"PTK" shall have the meaning assigned to such term in the preamble to this
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Agreement.
"Pre-Closing Period" shall have the meaning assigned to such term in
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Section 9.1.
"Public Disclosure Date" shall have the meaning assigned to such term in
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Section 3.5(a).
"Public Reports" shall have the meaning assigned to such term in Section
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3.5(a).
"Purchase Price" shall have the meaning assigned to such term in Section
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2.2.
"Returns" shall have the meaning assigned to such term in Section 9.1.
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"Sellers" shall mean, collectively, SMG-II and PTK.
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"SMG-II" shall have the meaning assigned to such term in the preamble to
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this Agreement.
"SMG-II Group" shall have the meaning assigned to such term in Section 9.2.
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"Stock" shall have the meaning assigned to such term in the third recital
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to this Agreement.
"Sub" shall have the meaning assigned to such term in the preamble to this
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Agreement.
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"Supply Agreement" shall mean the First Amended and Restated Supply
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Agreement dated January 29, 1998, by and between the Company and C&S Wholesale
Grocers, Inc.
"Tax" or "Taxes" shall mean all taxes, assessments, charges, duties, fees,
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levies or other governmental charges including, without limitation, all Federal,
state, local, foreign and other income, franchise, profits, capital gains,
capital stock, transfer, sales, use, occupation, property, excise, severance,
windfall profits, stamp, license, payroll, withholding and other taxes,
assessments, charges, duties, fees, levies or other governmental charges of any
kind whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of a return), all estimated taxes, deficiency assessments,
additions to tax, penalties and interest and any liability for any such amounts
as a result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any Person.
"Tax Matter" shall have the meaning assigned to such term in Section 9.3.
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"Tender Offer" shall have the meaning assigned to such term in the second
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recital to this Agreement.
"Third Party Provisions" shall have the meaning assigned to such terms in
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Section 10.8.
"Transfer Taxes" shall have the meaning assigned to such term in Section
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5.8.
"Working Capital Facility" shall have the meaning assigned to such term in
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Section 3.10.
ARTICLE II
PURCHASE AND SALE OF STOCK
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Section 2.1 Purchase and Sale of Stock. Upon the terms and subject to the
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conditions set forth in this Agreement, PTK shall, and SMG-II shall cause PTK
to, sell, assign, transfer and deliver to Sub at the Closing, and Sub shall
purchase from PTK at the Closing, the Stock. The certificate or certificates
representing the Stock shall be duly endorsed in blank, or accompanied by stock
powers duly executed in blank, by PTK, with all necessary transfer tax and other
revenue stamps, acquired at the Sellers' expense, affixed and canceled. The
Sellers agree to cure any deficiencies with respect to the endorsement of the
certificates representing the Stock or with respect to the stock powers
accompanying any such certificates.
Section 2.2 Purchase Price. The purchase price to be paid by Sub for the
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Stock at the Closing shall be equal to an aggregate amount of Two Hundred and
Forty Two Million Eight Hundred Thousand Dollars ($242,800,000) (such amount,
the "Purchase Price").
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Section 2.3 Payment of Purchase Price. Sub shall pay the Purchase Price
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by wire transfer in immediately available funds to such account or accounts as
PTK shall designate in writing to Sub not less than three (3) business days
prior to the Closing Date.
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Section 2.4 Closing. The purchase and sale of the Stock (the "Closing")
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shall take place at 10:00 A.M. at the offices of White & Case LLP, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as soon as practicable, but in any
event upon the occurrence of the later of (i) three (3) business days after the
last of the conditions set forth in Articles VI and VII hereof is satisfied or
waived and (ii) the date of termination by Parent of the Merger Agreement
pursuant to Section 8.1 (d) thereof, or at such other time and date as the
parties hereto shall agree in writing. Such date is herein referred to as the
"Closing Date".
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
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Section 3. Representations and Warranties of the Sellers. Each of the
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Sellers hereby jointly and severally represents and warrants to Parent and Sub
as follows:
Section 3.1 Due Organization, Good Standing and Corporate Power. Each of
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the Sellers is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of the
Company and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
each of the Company and its subsidiaries has the corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted. Each of the Company and its subsidiaries is duly qualified or
licensed to do business as a foreign corporation and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except in
such jurisdictions where the failure to be so qualified or licensed and in good
standing would not have a material adverse effect on the Condition of the
Company and its subsidiaries taken as a whole. The Company has made available
to Parent complete and correct copies of the certificates of incorporation and
by-laws or other organizational documents of each of the Company and its
subsidiaries, in each case as amended to the date of this Agreement. Except as
set forth on Schedule 3.1 of the Disclosure Letter, the respective certificates
of incorporation and by-laws or other organizational documents of each of the
Company and its subsidiaries do not contain any provision limiting or otherwise
restricting the ability of such Person to control its subsidiaries.
Section 3.2 Authorization and Validity of Agreement. Each of the Sellers
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has the necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by each of the Sellers, and the consummation by it of the
transactions contemplated hereby, have been duly authorized and approved by its
Board of Directors and no other corporate or stockholder action on the part of
either Seller is necessary to authorize the execution, delivery and performance
of this Agreement by such Seller and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of the Sellers and is a valid and binding obligation of such Seller enforceable
against such Seller in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affect-
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ing the enforcement of creditors' rights generally and by general equitable
principles (whether considered in a proceeding at law or in equity).
Section 3.3 Capitalization. Schedule 3.3(a) of the Disclosure Letter sets
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forth (i) the authorized, issued and outstanding capital stock of each of the
Company and its subsidiaries and (ii) the owners of the issued and outstanding
shares of capital stock of each of the Company and its subsidiaries. All issued
and outstanding capital stock of each of the Company and its subsidiaries has
been duly authorized and validly issued and is fully paid and nonassessable, and
is not subject to, nor was issued in violation of, any preemptive rights.
Except as set forth on Schedule 3.3(b) of the Disclosure Letter, no shares of
capital stock of either the Company or any of its subsidiaries are authorized,
issued or outstanding and there are no outstanding or authorized options,
warrants, rights, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other commitments,
contingent or otherwise, relating to capital stock of the Company or any of its
subsidiaries, pursuant to which the Company or any of its subsidiaries is or may
become obligated to issue shares of its capital stock or any securities
convertible into, exchangeable for, or evidencing the right to subscribe for,
any shares of the capital stock of the Company or any of its subsidiaries.
Neither the Company nor any of its subsidiaries has authorized or outstanding
bonds, debentures, notes or other indebtedness the holders of which have the
right to vote (or convertible or exchangeable into or exercisable for securities
having the right to vote) with the stockholders of such Person on any matter.
Except as set forth on Schedule 3.3(c) of the Disclosure Letter, neither the
Company nor any of its subsidiaries owns, directly or indirectly, any capital
stock or other equity, ownership or proprietary interest in any Person. Except
as set forth on Schedule 3.3(d) of the Disclosure Letter, all of the outstanding
shares of capital stock of each of the subsidiaries of the Company are owned, of
record and beneficially, by the Company or its subsidiaries free and clear of
any Liens. Except as set forth on Schedule 3.3(e) of the Disclosure Letter,
there are no restrictions of any kind which prevent or restrict the payment of
dividends by the Company or any of its subsidiaries.
Section 3.4 Consents and Approvals; No Violations. Other than in
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connection with or in compliance with the provisions of (i) the HSR Act and
other Antitrust Laws, (ii) the Securities Act, (iii) the Exchange Act, (iv) the
"blue sky" laws of various states, and (v) applicable alcohol beverage control
and licensing laws and drug and pharmacy laws and regulations ("Alcohol and Drug
Laws") and except as disclosed in Schedule 3.4 of the Disclosure Letter, the
execution and delivery of this Agreement by the Sellers and the consummation by
the Sellers of the transactions contemplated hereby will not: (1) violate any
provision of the certificate of incorporation or by-laws (or other
organizational document) of the Sellers or the Company or any of its
subsidiaries; (2) violate any statute, ordinance, rule, regulation, order or
decree of any court or of any governmental or regulatory body, agency or
authority applicable to the Sellers or the Company or any of its subsidiaries or
by which any of their respective properties or assets may be bound; (3) require
the Sellers or the Company or any of its subsidiaries to make or obtain any
filing with or permit, consent or approval or give any notice to, any
governmental or regulatory body, agency or authority; or (4) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
Lien upon any of the properties or assets of the Sellers or the Company or any
of its subsidiaries under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement, lease,
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franchise agreement, collective bargaining agreement or other agreement,
instrument or obligation to which the Sellers or the Company or any of its
subsidiaries is a party, or by which it or any of their respective properties or
assets is bound, except for such filings, permits, consents or approvals the
absence of which would not, or violations which would not, have a material
adverse effect on the Condition of the Company and its subsidiaries, taken as a
whole, or which could not reasonably be expected to prevent or materially delay
consummation of the transactions contemplated by this Agreement.
Section 3.5 Public Reports. (a) Since January 1, 1996 (the "Public
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Disclosure Date"), the Company has filed all forms, reports, registration
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statements and other filings with the Securities and Exchange Commission (the
"Commission") required to be filed by it pursuant to the federal securities laws
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and the Commission rules and regulations thereunder (such forms, reports,
registration statements and other filings, together with any amendments thereto,
are collectively referred to as the "Public Reports"), and the Public Reports
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filed with the Commission have complied in all material respects with all
applicable requirements of the federal securities laws and the Commission rules
and regulations thereunder.
(b) As of their respective dates, the Public Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. Each of the
audited consolidated balance sheets and the unaudited consolidated balance
sheets (including any related notes and schedules) included in the Public
Reports fairly present, in all material respects, the consolidated financial
position of the Company and its subsidiaries as of its date, and each of the
consolidated statements of operations, shareholders' deficiency and cash flows
included in the Public Reports (including any related notes and schedules)
fairly present, in all material respects, the consolidated results of operation,
cash flows and changes in financial position of the Company and its subsidiaries
for the period set forth therein (subject, where appropriate, to notes and
normal year-end audit adjustments), in accordance with GAAP consistently applied
throughout the periods indicated (except as may be indicated therein or in the
notes or schedules thereto).
Section 3.6 Other Financial Statements. (a) The Sellers have heretofore
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furnished Parent with the unaudited consolidated balance sheets of the Company
and its subsidiaries as at October 31, 1998 and the related consolidated
statements of operations, shareholders' deficiency and cash flows for the nine
month period then ended. The consolidated balance sheet of the Company and its
subsidiaries as at January 30, 1998 contained in the Public Reports is
hereinafter referred to as the "Balance Sheet" and January 30, 1998 as the
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"Balance Sheet Date" and the unaudited consolidated balance sheet of the Company
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and its subsidiaries as at October 31, 1998 is hereinafter referred to as the
"October Balance Sheet". The October Balance Sheet, including the footnotes
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thereto, except as indicated therein, has been prepared in accordance with GAAP
consistently applied throughout the nine month period indicated. Subject to
normal year end adjustments, the October Balance Sheet fairly presents, in all
material respects, the consolidated financial position of the Company and its
subsidiaries as at the date thereof and reflects all material claims and all
material debts and liabilities of the Company and its subsidiaries, fixed or
contingent, as at the date thereof and the related consolidated statements of
operations, shareholder's deficiency and cash flows fairly present, in all
material aspects, the results of operations
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and cash flows of the Company and its subsidiaries and the changes in financial
position for the nine month period indicated.
(b) The consolidated financial statements of the Company and its
subsidiaries delivered to Parent pursuant to Section 5.6(b)(i) will fairly
present, in all material respects, the consolidated financial condition of the
Company and its subsidiaries at the date thereof and will reflect all material
claims against and all material debts and liabilities of the Company and its
subsidiaries, fixed or contingent, as at the date thereof, and the related
consolidated statements of operations, shareholders' deficiency and cash flows
will fairly present, in all material respects, the results of operations and
cash flows of the Company and its subsidiaries and the changes in financial
position for the period indicated.
Section 3.7 Absence of Certain Changes. Except as previously disclosed in
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the Public Reports or in Schedule 3.7 of the Disclosure Letter or as otherwise
contemplated by this Agreement, since the Balance Sheet Date and up to and
including the date hereof (i) there has not been any material adverse change in
the Condition of the Company and its subsidiaries taken as a whole; (ii) the
businesses of the Company and each of its subsidiaries have been conducted only
in the ordinary course; (iii) neither the Company nor any of its subsidiaries
has incurred any material liabilities (direct, contingent or otherwise) or
engaged in any material transaction or entered into any material agreement other
than in the ordinary course of business; (iv) neither the Company nor any of its
subsidiaries has increased the compensation of any officer or granted any
general salary or benefits increase to any of their employees other than in the
ordinary course of business or pursuant to collective bargaining agreements; (v)
there has been no declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of the Company or any of its
subsidiaries; and (vi) there has been no change by the Company or any of its
subsidiaries in accounting principles, practices or methods.
Section 3.8 Compliance with Laws. Except as disclosed in the Public
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Reports filed on or prior to the date hereof, the Company and each of its
subsidiaries is in compliance with all applicable laws, regulations, orders,
judgments and decrees except where the failure to so comply would not,
individually or in the aggregate, have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole or could
reasonably likely prevent or materially delay consummation of the transactions
contemplated by this Agreement.
Section 3.9 Employee Benefit Plan Triggering Events. Except as set forth
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on Schedule 3.9 of the Disclosure Letter, the execution of this Agreement and
the consummation of the transactions contemplated hereby do not constitute a
triggering event under any Employee Benefit Plan, policy, arrangement,
statement, commitment or agreement, whether or not legally enforceable, which
will or may result in any payment, acceleration, vesting or increase in benefits
to any employee or former employee, officer or director of the Company or any
of its subsidiaries.
"Employee Benefit Plan" shall mean any domestic or foreign (i) "employee
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benefit plan," within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
thereunder ("ERISA"); (ii) bonus, stock option, stock purchase, restricted
stock, incentive, profit-sharing, pension or retirement, deferred compensation,
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medical, life, disability, accident, or welfare plans, programs, arrangements,
commitments or practices (whether or not insured); and (iii) employment,
consulting, termination and severance contracts or agreements for active,
retired or former employees or directors, whether or not any such plans,
programs, arrangements, commitments, contracts, agreements or practices referred
to in (i), (ii) or (iii) are in writing or are otherwise exempt from the
provisions of ERISA, established, maintained or contributed to (or with respect
to which an obligation to contribute has been undertaken) or with respect to
which any potential liability is borne by the Company or any of its subsidiaries
(including, for the purposes of this Section 3.9, all employers (whether or not
incorporated) that are by reason of common control treated together with the
Company or any of is subsidiaries as a single employer within the meaning of
Section 414 of the Code.
Section 3.10 Liabilities. Except (i) as set forth in the Balance Sheet or
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referred to in the footnotes thereto, (ii) as set forth in the October Balance
Sheet or referred to in the footnotes thereto, (iii) as set forth in the Public
Reports, (iv) as disclosed in Schedule 3.10 of the Disclosure Letter, or (v) as
otherwise contemplated by this Agreement, since the Balance Sheet Date and up to
and including the date hereof, neither the Company nor any of its subsidiaries
has incurred any material outstanding claims, liabilities or indebtedness (other
than trade payables incurred in the ordinary course of business), contingent or
otherwise, that would be required to be disclosed in the Company's consolidated
financial statements prepared in accordance with GAAP consistently applied,
other than (x) liabilities incurred subsequent to the Balance Sheet Date in the
ordinary course of business not involving borrowings by the Company or any of
its subsidiaries and (y) indebtedness incurred since the Balance Sheet Date
pursuant to the Company's working capital facility (the "Working Capital
---------------
Facility") as in effect as of the date hereof pursuant to the Credit Agreement
--------
among the Company, various banks, and The Chase Manhattan Bank, as Agent, dated
as of June 30, 1997, as amended and restated (the "Credit Agreement").
----------------
Section 3.11 Broker's or Finder's Fee. Except as set forth on Schedule
------------------------
3.11 of the Disclosure Letter, no agent, broker, Person or firm acting on behalf
of the Sellers, the Company or any of their respective subsidiaries is, or will
be, entitled to any fee, commission or broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by, or under common
control with any of the parties hereto, in connection with this Agreement or any
of the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
------------------------------------------------
Section 4. Each of Parent and Sub hereby represents and warrants, jointly
and severally, to the Sellers as follows:
Section 4.1 Due Organization; Good Standing and Corporate Power. Parent is
---------------------------------------------------
a public company with limited liability duly organized and validly existing
under the laws of the Netherlands. Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
-9-
Section 4.2 Authorization and Validity of Agreement. Each of Parent and
---------------------------------------
Sub has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by each of Parent and Sub, and the consummation by each of them
of the transactions contemplated hereby, have been duly authorized by each of
the Executive and Supervisory Boards of Parent and the Board of Directors of
Sub. No other corporate action on the part of either of Parent or Sub is
necessary to authorize the execution, delivery and performance of this Agreement
by each of Parent and Sub and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by each of Parent
and Sub and is a valid and binding obligation of each of Parent and Sub,
enforceable against each of Parent and Sub in accordance with its terms, except
that such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, and general equitable principles (whether considered in a proceeding
at law or in equity).
Section 4.3 Consents and Approvals; No Violations. Other than in
-------------------------------------
connection with or in compliance with the provisions of (i) the HSR Act and
other Antitrust Laws, (ii) the Securities Act, (iii) the Exchange Act, (iv) the
"blue sky" laws of various states, and (v) applicable Alcohol and Drug Laws, the
execution and delivery of this Agreement by Parent and Sub and the consummation
by Parent and Sub of the transactions contemplated hereby will not: (1) violate
any provision of the certificate of incorporation or by-laws of Parent or Sub;
(b) violate any statute, ordinance, rule, regulation, order or decree of any
court or of any governmental or regulatory body, agency or authority applicable
to Parent or Sub or by which its properties or assets may be bound; (c) require
Parent or Sub to make or obtain any filing with, or permit, consent or approval
of, or give any notice to, any governmental or regulatory body, agency or
authority; or (d) result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, payment or acceleration) under, or
result in the creation of any Lien upon any of the properties or assets of
Parent or Sub under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or other instrument or obligation to which Parent or Sub is
a party or by which Parent or Sub or its properties or assets is bound, except
for such filings, permits, consents or approvals the absence of which could not
reasonably be expected to prevent or materially delay consummation of the
transactions contemplated by this Agreement.
Section 4.4 Broker's or Finder's Fee. No agent, broker, Person or firm
------------------------
acting on behalf of Parent or Sub is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by, or under common control with any of the parties
hereto, in connection with this Agreement or any of the transactions
contemplated hereby.
Section 4.5 Financing. Parent will provide, or cause to be provided to
---------
Sub, the funds necessary to consummate the purchase and sale of the Stock in
accordance with the terms hereof.
-10-
ARTICLE V
COVENANTS
---------
Section 5.1 Access to Information Concerning Properties and Records.
-------------------------------------------------------
During the period commencing on the date hereof and ending on the Closing Date,
the Sellers shall, and shall cause the Company and each of its subsidiaries to,
upon reasonable notice, afford Parent, Sub and good faith potential purchasers
of stores in connection with the obligations of the parties hereto pursuant to
Section 5.7(b), and their respective counsel, accountants, consultants and other
authorized representatives, reasonable access during normal business hours to
the employees, properties, books and records of the Company and each of its
subsidiaries in order that they may have the opportunity to make such reasonable
investigations as they shall desire of the affairs of the Company and each of
its subsidiaries and other information concerning the business, properties and
personnel of the Company and each of its subsidiaries as Parent and Sub may
reasonably request, provided that Parent and Sub shall not have the right to
-------- ----
conduct tests of the surface or subsurface soil and water beneath or about the
real property owned or used by the Company or any of its subsidiaries. The
Sellers shall, and shall cause the Company and each of its subsidiaries to,
cause its officers and employees to furnish such additional financial and
operating data and other information, and respond to such inquiries, as Parent
and Sub shall from time to time reasonably request. Notwithstanding anything in
this Section 5.1 to the contrary, neither the Company nor any of its
subsidiaries shall be required to provide such access to or otherwise disclose
such books, records or other information concerning their respective businesses
to Parent or Sub as would violate Antitrust Laws.
Section 5.2 Confidentiality. Each of Parent and Sub will hold and will
---------------
cause its officers, employees, auditors and other agents, representatives and
advisors to hold in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all documents and
information concerning the Company or any of its subsidiaries furnished to
Parent or Sub in connection with the transactions contemplated by this Agreement
(except to the extent that such information can be shown to have been (i)
previously known by Parent or Sub from sources other than the Company or any of
its subsidiaries, or its directors, officers, auditors or other agents,
representatives and advisors (ii) in the public domain through no fault of
Parent or Sub or (iii) later lawfully acquired by Parent or Sub on a non-
confidential basis from other sources who are not known by Parent or Sub to be
bound by a confidentiality agreement or otherwise prohibited from transmitting
the information to Parent or Sub by a contractual, legal or fiduciary
obligation) and will not release or disclose such information to any other
Person, except its auditors and other agents, representatives and advisors in
connection with this Agreement who need to know such information. If the
transactions contemplated by this Agreement are not consummated, such confidence
shall be maintained for a period of two years from the date hereof and, if
requested by or on behalf of Parent and Sub shall, and shall use all reasonable
efforts to cause their auditors and other agents, representatives and advisors
to, return to the Sellers or destroy all copies of written information furnished
by the Sellers or the Company or any of its subsidiaries or their respective
advisors to Parent and Sub or their auditors and other agents, representatives
and advisors. It is understood that Parent and Sub shall be deemed to have
satisfied their obligation to hold such information confidential if they
exercise the same care as they take to preserve confidentiality for their own
similar information.
-11-
Section 5.3 Conduct of the Business of the Company and its Subsidiaries.
-----------------------------------------------------------
Except as contemplated by this Agreement, during the period from the date of
this Agreement until the Closing, the Sellers shall cause the Company and each
of its subsidiaries to conduct its operations in the ordinary course of
business, consistent with past practice and to use its best efforts to (v)
preserve intact its business organization, (w) maintain its material rights and
franchises, (x) keep available the services of its officers and employees, (y)
maintain satisfactory relationships with suppliers, distributors, customers and
others having business relationships with it and (z) to take measures to reduce
to zero any excess loss account (as determined in accordance with Treasury
Regulations Sections 1.1502-14, 1.1502-19 and 1.1502-32) reflected on the books
and records of the Company and its subsidiaries or as subsequently determined by
the Company. Without limiting the generality of and in addition to the
foregoing, except as set forth on Schedule 5.3 of the Disclosure Letter and
except as otherwise contemplated by this Agreement, prior to the time specified
in the preceding sentence, the Sellers shall cause the Company and each of its
subsidiaries not to, without prior written consent of Parent:
(a) amend its certificate of incorporation or by-laws or other
organizational documents in any way;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities;
(c) split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock or redeem
or otherwise acquire any of its securities;
(d) (i) pledge or otherwise encumber shares of its capital stock; (ii)
except in the ordinary course of business consistent with past practices (x)
incur, assume or prepay any obligations with respect to any long-term debt,
letters of credit or short-term debt, other than indebtedness (A) incurred,
assumed or prepaid under the Working Capital Facility, (B) that is mandatorily
prepayable in accordance with its terms and (C) that is intercompany
indebtedness by and among any of the Company and any of its subsidiaries (other
than Pathmark Risk Management Corporation); (y) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for any material obligations of any other Person except any of its
wholly-owned subsidiaries; or (z) make any material loans, advances or capital
contributions to, or investments in, any other Person; or (iii) mortgage or
pledge any of its assets or create or permit to exist any material lien
thereupon that secures indebtedness for borrowed money;
(e) except as required by law or existing written agreements, enter into,
adopt or materially amend any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit agreements, trusts, plans, funds or other
arrangements of or for the benefit or welfare of any employee of the Company and
its subsidiaries, or (except for normal increases in the ordinary course of
business that are consistent with past practices) increase in any manner the
compensation or fringe benefits of any such employee or pay any benefit not
required by any existing plan and arrangement (including, without limitation,
the
-12-
granting of stock options, stock appreciation rights, shares of restricted stock
or performance units) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing;
(f) transfer, sell, lease, license or dispose of any lines of business,
subsidiaries, divisions, operating units or facilities outside the ordinary
course of business or enter into any material commitment or transaction outside
the ordinary course of business other than any such transactions between or
among any of the Company and its subsidiaries (other than Pathmark Risk
Management Corporation);
(g) other than any such transactions between or among any of the Company
and its subsidiaries (other than Pathmark Risk Management Corporation, except
with respect to any transaction intended to comply with Section 5.3(z)), acquire
or agree to acquire, by merging or consolidating with, by purchasing an equity
interest in or a portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization or
division thereof, or otherwise acquire or agree to acquire any assets of any
other Person (other than the purchase of assets in the ordinary course of
business and consistent with past practice), in each case where such action
would be material to the Condition of the Company and its subsidiaries taken as
a whole;
(h) except as may be required by law or existing written contractual or
collective bargaining agreements or in connection with the termination of any
employee, take any action to terminate or materially amend, in a manner adverse
to the Company or any of its subsidiaries, any of its pension plans or retiree
medical plans with respect to or for the benefit of any employee of the Company
or any of its subsidiaries;
(i) materially modify, amend or terminate any significant contract to
which it is a party or waive any of its material rights or claims except in the
ordinary course of business consistent with past practice;
(j) effect any material change in any of its methods of accounting, except
as may be required by law or generally accepted accounting principles;
(k) (i) take any action, engage in any transaction or enter into any
agreement which would cause any of the representations or warranties set forth
in Article III that are subject to, or qualified by, a "material adverse
effect", "material adverse change" or other materiality qualification to be
untrue as of the Closing, or any such representations and warranties that are
not so qualified to be untrue in any respect which would otherwise have a
material adverse effect on the Condition of the Company and its subsidiaries
taken as a whole or (ii) purchase or acquire, or offer to purchase or acquire,
any shares of capital stock of the Company;
(l) take any action including: without limitation, the adoption of any
shareholder rights plan or amendments to the Certificate of Incorporation, which
would, directly or indirectly, restrict or impair the ability of Sub to vote, or
otherwise to exercise the rights and receive the benefits of a stockholder with
respect to, securities of the Company that may be acquired or
-13-
controlled by Sub or permit any stockholder to acquire securities of the Company
on a basis not available to Sub in the event that Sub were to acquire any shares
of Stock; and
(m) enter into a legally binding commitment with respect to, or any
agreement to take, any of the foregoing actions.
Notwithstanding anything else contained in this Section 5.3 to the
contrary, the following shall be permitted: (1) the acquisition of direct or
indirect interests in real property intended for the operation of stores of the
Company or any of its subsidiaries (other than Pathmark Risk Management
Corporation), the improvement of real property, the remodeling of stores of the
Company or any of its subsidiaries (other than Pathmark Risk Management
Corporation) and the obtaining of financing therefor in the ordinary course of
business consistent with past practice, (2) the negotiation and entering into by
the Company or any of its subsidiaries (other than Pathmark Risk Management
Corporation) of amendments to existing leases for real property in the ordinary
course of business, (3) the negotiation in good faith and entering into new
collective bargaining agreements by the Company that replace agreements that
have expired or will expire pursuant to their terms within 90 days from the date
of the commencement of negotiations, (4) the marketing and sale of certain real
estate not used in the supermarket business by the Company or any of its
subsidiaries (other than Pathmark Risk Management Corporation) as set forth on
Schedule 5.3 of the Disclosure Letter, provided that no such sale (other than a
-------- ----
sale pursuant to a binding agreement that the Company is a party to on the date
hereof) shall be agreed to without prior adequate consultation with Parent, (5)
entering into amendments to the Credit Agreement to modify covenants as required
(other than modifications, except for a possible increase in the interest rate,
which will make any one or more covenants more restrictive), (6) entering into
an agreement implementing the amendments to the Supply Agreement agreed to in a
memorandum of understanding effective December 27, 1998 by and between the
Company and C&S Wholesale Grocers, Inc. and (7) the Company may distribute that
certain indebtedness of PTK owed to the Company evidenced by a promissory note
dated May 12, 1998 in the face amount of $53,302,328.52 as a dividend to PTK.
Section 5.4 Best Efforts. Subject to the terms and conditions provided
------------
herein, each of the Sellers, Parent and Sub shall, and the Sellers shall cause
the Company and each of its subsidiaries to, cooperate and use their respective
best efforts to take, or cause to be taken, all appropriate action, and to make,
or cause to be made, all filings necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, their respective
best efforts to obtain, prior to the Closing Date, all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and parties to contracts with the Sellers, the Company or any of
their respective subsidiaries as are necessary for consummation of the
transactions contemplated by this Agreement; provided, however, that no loan
-------- ------- ----
agreement or contract for borrowed money shall be repaid except as currently
required by its terms, in whole or in part, and no material contract shall be
amended to increase the amount payable thereunder or otherwise to be materially
more burdensome to the Company or any of its subsidiaries in order to obtain any
such consent, approval or authorization without first obtaining the written
approval of Parent.
-14-
Section 5.5 No Solicitation of Other Offers. (a) The Sellers shall not,
-------------------------------
and the Sellers shall cause the Company and each of its subsidiaries not to,
directly or indirectly, take (or authorize or permit their respective officers,
directors, employees, representatives, consultants, investment bankers,
attorneys, accountants or other agents or Affiliates, to so take) any action to
(i) solicit, initiate or encourage the submission of any Acquisition Proposal,
(ii) enter into an agreement of merger or other business combination or an
agreement for the sale or other disposition by the Company or any of its
subsidiaries of a material amount of assets or a sale of shares of capital stock
whether by merger or other business combination or tender or exchange offer or
(iii) participate in any way in discussions or negotiations with, or furnish any
information to, any Person (other than Parent or Sub) in connection with, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal.
"Acquisition Proposal" shall mean any proposed merger or other business
--------------------
combination, sale or other disposition of any material amount of assets, sale of
shares of capital stock, tender offer or exchange offer or similar transactions
involving the Company or any of its subsidiaries.
(b) The Board of Directors of each of the Sellers and the Company shall not
take any action to withdraw or modify in a manner adverse to Parent or Sub, or
take a position inconsistent with, its approvals or recommendation of this
Agreement or to recommend another Acquisition Proposal and shall not resolve to
do any of the foregoing.
(c) In addition to the obligations of the Sellers set forth in paragraph
(a), the Sellers shall, and the Sellers shall cause the Company and each of its
subsidiaries to, promptly advise Parent of any request for information or of any
Acquisition Proposal, or any proposal with respect to any Acquisition Proposal,
the material terms and conditions of such Acquisition Proposal, and the identity
of the Person making any such Acquisition Proposal or inquiry.
(d) Immediately following the execution of this Agreement, the Sellers
shall, and shall cause the Company and each of its subsidiaries and each of
their respective officers, directors, employees, representatives, consultants,
investment bankers, attorneys, accountants or other agents or Affiliates to,
cease any existing discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal and request each Person
which has heretofore executed a confidentiality agreement in connection with its
consideration of acquiring the Company or any of its subsidiaries or any portion
thereof to return all confidential information heretofore furnished to such
Person by or on behalf of the Company or any of its subsidiaries.
Section 5.6 Notification of Certain Matters. (a) The Sellers shall give
-------------------------------
prompt notice to Parent of any notice of, or other communication relating to, a
material default or event that, with notice or lapse of time or both, would
become a material default, received by the Sellers subsequent to the date of
this Agreement and prior to the Closing, under any material contract to which
the Company or any of its subsidiaries is a party or is subject. The Sellers
and Parent shall give prompt notice to each other of (i) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement and (ii) the occurrence or non-occurrence of any events the occurrence
or non-occurrence of which would cause either (w) a representation or warranty
con-
-15-
tained in this Agreement, in any Schedule to the Disclosure Letter or in any
certificate delivered pursuant to this Agreement and not qualified by any
materiality standard, to be untrue or inaccurate in any material respect, (x)
any other representation or warranty contained in this Agreement, in any
schedule to the Disclosure Letter or in any certificate delivered pursuant to
this Agreement, to be untrue or inaccurate in any respect, (y) any of the
conditions set forth in Article VI or VII to be unsatisfied in any material
respect at the Closing; provided that the parties hereto need not give notice
-------- ----
with respect to events that are reported in the financial or general interest
newspapers that do not specifically relate to the Sellers, the Company or any of
its subsidiaries or Parent or their respective businesses or (z) any failure to
comply with or satisfy any covenants, condition or agreement to be complied with
or satisfied by it hereunder.
(b) The Sellers shall provide Parent with (i) the audited consolidated
balance sheet of the Company and its subsidiaries as of January 30, 1999 and the
related statements of operations, shareholder's deficiency and cash flows for
the fiscal year then ended, all as certified by the Company's independent
accountants, within three (3) business days after preparation and certification
thereof, (ii) the unaudited consolidated balance sheet of the Company and its
subsidiaries, and the related consolidated statements of operations,
shareholders' deficiency and cash flows of the Company and its consolidated
subsidiaries, for each fiscal quarter ending prior to the Closing, within forty-
five days after the end of each such fiscal quarter and (iii) the unaudited
statement of operations of the Company for each fiscal month ending prior to the
Closing, within thirty days after the end of each such fiscal month. In
addition, subject to compliance with the Antitrust Laws, the Sellers shall cause
the Company to deliver to Parent on a weekly basis its internal sales overview
reports promptly as they are prepared by the Company for each such week.
Section 5.7 Antitrust Filings. (a) Parent, Sub and the Sellers shall (i)
-----------------
take promptly all actions necessary to make the filings required of Parent, Sub
or any of their Affiliates under the applicable Antitrust Laws (as such term is
defined in Section 5.7(d)), (ii) comply at the earliest practicable date with
any request for additional information or documentary material received by
Parent, the Sellers or any of their respective Affiliates from the Federal Trade
Commission or the Antitrust Division of the Department of Justice pursuant to
the HSR Act and (iii) cooperate in connection with any filing under applicable
Antitrust Laws and in connection with resolving any investigation or other
inquiry concerning the transactions contemplated by this Agreement commenced by
any of the Federal Trade Commission, the Antitrust Division of the Department of
Justice or state attorneys general.
(b) Each of the Sellers, Parent and Sub shall use all best efforts to
resolve such objections, if any, as may be asserted with respect to any
transaction contemplated by this Agreement under any Antitrust Law. If any
administrative, judicial or legislative action or proceeding is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any Antitrust Law, the Company, Parent and Sub shall
cooperate to contest and resist any such action or proceeding, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) that is in effect and
that restricts, prevents or prohibits consummation of the any transaction
contemplated by this Agreement, including, without limitation, by pursuing all
reasonable avenues of administrative and judicial appeal.
-16-
(c) Each of the Sellers, Parent and Sub shall promptly inform each other of
any material communication made to, or received by such party from, the Federal
Trade Commission, the Antitrust Division of the Department of Justice or any
other governmental or regulatory authority regarding any of the transactions
contemplated hereby.
(d) "Antitrust Law" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
-------------
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal and state statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
Section 5.8 Transfer Taxes. The Sellers and Parent shall cooperate in the
--------------
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement (together with
any related interest, penalties or additions to tax, "Transfer Taxes"). All
--------------
Transfer Taxes shall be paid by the Company and expressly shall not be a
liability of the Sellers.
Section 5.9 Employee Benefits. During the period commencing at the
-----------------
Closing and ending on the first anniversary thereof, Parent shall cause the
current and former employees of the Company and its subsidiaries who are on the
Closing Date entitled to receive compensation or any benefits from Pathmark or
any of its subsidiaries to be provided with compensation and employee benefit
plans (other than stock option or other plans involving the potential issuance
of securities of the Company, Parent or any of their respective subsidiaries,
and incentive compensation or similar programs) which in the aggregate are not
materially less favorable than those currently provided to such employees by the
Company and its subsidiaries, to the extent permitted under laws and regulations
in force from time to time, provided that employees covered by collective
-------- ----
bargaining agreements need not be provided with such benefits, and provided,
--------
further, that Parent reserves the right to review all employee benefits after
------- ----
the Closing and to make such changes as it deems appropriate.
Section 5.10 Directors' and Officers' Insurance; Indemnification. (a) The
---------------------------------------------------
certificate of incorporation and the by-laws of the Company shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's certificate of incorporation and by-laws on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Closing in any manner that would
adversely affect the rights thereunder of individuals who on or prior to the
Closing were directors, officers, employees or agents of the Company, unless
such modification is required by law. Parent agrees that all rights of
indemnification now existing in favor of any director, officer, employee, or
agent of the subsidiaries of the Company as provided in their respective
charters or by-laws on the date of this Agreement shall survive the Merger and
shall continue in full force and effect for a period of six years from the
Effective Time
(b) The Company shall for the six year period commencing at the Closing
either (x) maintain in effect the Company's current directors' and officers'
liability insurance covering those
-17-
Persons who are currently covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy (a copy of which has been
heretofore delivered to Parent) (the "Indemnified Parties"); provided, however,
------------------- -------- -------
that in no event shall Parent be required to expend in any one year an amount in
excess of 150% of the annual premiums currently paid by the Company for such
insurance which the Company represents to be $323,000; provided further, that if
---------------- ----
the annual premiums of such insurance coverage exceed such amount, the Company
shall be obligated to obtain a policy with the greatest coverage available for a
cost not exceeding such amount; provided further, that the Company may
---------------- ----
substitute for the Company policies, policies with at least the same coverage
containing terms and conditions which are no less advantageous and provided that
said substitution does not result in any gaps or lapses in coverage with respect
to matters occurring prior to the Closing or (y) cause the Parent's directors'
and officers' liability insurance then in effect to cover those Persons who are
covered on the date of this Agreement by the Company's directors' and officers'
liability insurance policy with respect to those matters covered by the
Company's directors' and officers' liability policy.
(c) Parent agrees to indemnify, and to cause the Company to indemnify, all
Indemnified Parties to the fullest extent permitted by applicable law with
respect to all acts and omissions arising out of such individuals' services as
officers, directors, employees or agents of the Company or any of its
subsidiaries or as trustees or fiduciaries of any plan for the benefit of
employees of the Company or any of its subsidiaries, occurring prior to the
Closing including, without limitation, the transactions contemplated by this
Agreement. Without limitation of the foregoing, in the event any such
Indemnified Party is or becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter, including without
limitation, the transactions contemplated by this Agreement, occurring prior to,
and including, the Closing, Parent, from and after the Closing, will pay as
incurred such Indemnified Party's reasonable legal and other expenses (including
the cost of any investigation and preparation) incurred in connection therewith.
Subject to Section 5.11(d) below, Parent shall pay all reasonable expenses,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing this Section 5.11 or any action involving an Indemnified Party
resulting from the transactions contemplated by this Agreement. If the
indemnity provided for in this Section 5.11 is not available with respect to any
Indemnified Party, then the Company and the Indemnified Party shall contribute
to the amount payable in such proportion as is appropriate to reflect relative
faults and benefits.
(d) Any Indemnified Party wishing to claim indemnification under paragraph
(a) or (c) of this Section 5.11, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Parent thereof. In the event
of any such claim, action, suit, proceeding or investigation (whether arising
before or after the Closing), (i) Parent or the Company shall have the right,
from and after the Closing, to assume the defense thereof (with counsel engaged
by Parent or the Company to be reasonably acceptable to the relevant Indemnified
Party) and Parent shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, (ii) such Indemnified
Party will cooperate in the defense of any such matter and (iii) Parent or the
Company shall not be liable for any settlement effected without its prior
written consent; and provided further that Parent shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall ultimately determine, and such determination
-18-
shall have become final, that the indemnification of such Indemnified Party in
the manner contemplated hereby is prohibited by applicable law.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUB
------------------------------------------
Section 6. Conditions Precedent to Obligations of Parent and Sub. The
-----------------------------------------------------
respective obligations of Parent and Sub to purchase the Stock is subject to the
satisfaction or waiver (subject to applicable law) at or prior to the Closing of
each of the following conditions:
Section 6.1 Truth of Representations and Warranties. Each representation
---------------------------------------
or warranty of the Sellers contained in this Agreement that is subject to, or
qualified by, "material adverse effect", "material adverse change" or other
materiality qualification shall be true and correct, in each case as if such
representation or warranty was made at the Closing, any representation or
warranty that is not so qualified shall be true and correct in any respect which
would otherwise have a material adverse effect on the Condition of the Company
and its subsidiaries taken as a whole, in each case as if such representation or
warranty was made at the Closing except as to any such representation or
warranty which speaks as of a specific date or for a specific period, which must
be true and correct in the foregoing respects as of such specific date or
period, and Parent shall have received a certificate signed by an executive
officer of the Company, dated the Closing Date, to such effect.
Section 6.2 Performance of Agreements. Each of the Sellers shall have
-------------------------
performed in all material respects all obligations and complied in all material
respects with all agreements and covenants to be performed or complied with by
it under this Agreement and, in the case only of failures to perform any
agreement or covenant of the Sellers pursuant to Section 5.3 (other than clause
(c) thereof), such failure to perform did or would not have a material adverse
effect on the Condition of the Company and its subsidiaries taken as a whole or
materially adversely effect the ability of Parent or Sub to consummate the
transactions contemplated by this Agreement or have a material adverse effect on
the value of the Company and its subsidiaries taken as a whole and Parent shall
have received a certificate signed by an executive officer of the Company, dated
the Closing Date, to such effect.
Section 6.3 HSR Act. Any waiting period (and any extension thereof) under
-------
the HSR Act applicable to the transactions contemplated by this Agreement shall
have expired or been terminated.
Section 6.4 Injunction. No preliminary or permanent injunction or other
----------
order shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits, restrains, enjoins or restricts the
consummation of the transactions contemplated by this Agreement and which is in
effect at the Closing, provided that, in the case of a decree, injunction or
-------- ----
other order, each of the parties shall have used all reasonable efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any decree, injunction or other order that may be entered.
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Section 6.5 Statutes. No statute, rule, regulation, executive order,
--------
decree or order of any kind shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which prohibits, restrains,
enjoins or restricts the consummation of the transactions contemplated by this
Agreement or has the effect of making any of the transactions contemplated by
this Agreement illegal.
Section 6.6 No Material Adverse Effect. Since the date hereof, no event
--------------------------
shall have occurred such that there would be a material adverse change in the
Condition of the Company and its subsidiaries taken as a whole.
ARTICLE VII
CONDITIONS PRECEDENT TO THE
----------------------------
OBLIGATIONS OF THE SELLERS
--------------------------
Section 7. Conditions Precedent to Obligations of the Sellers. The
--------------------------------------------------
obligations of the Sellers to sell the Stock to Sub is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
Section 7.1 Truth of Representations and Warranties. The representations
---------------------------------------
and warranties of Parent and Sub contained in this Agreement shall be true and
correct in all material respects as if such representations and warranties were
made at the Closing, and the Company shall have received a certificate signed by
an executive officer of Parent, dated the Closing Date, to such effect.
Section 7.2 Performance of Agreements. Each of Parent and Sub shall have
-------------------------
performed in all material respects all obligations and complied in all materials
respects with all agreements and covenants to be performed and complied with by
it under this Agreement, and the Company shall have received a certificate
signed by an executive officer of Parent, dated the Closing Date, to such
effect.
Section 7.3 HSR Act Waiting Periods. All applicable waiting periods under
-----------------------
the HSR Act with respect to the transactions contemplated by this Agreement
shall have expired or been terminated.
Section 7.4 Injunction. No preliminary or permanent injunction or other
----------
order shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits, restrains, enjoins or restricts the
consummation of the transactions contemplated by this Agreement and which is in
effect at the Closing, provided that, in the case of a decree, injunction or
-------- ----
other order, each of the parties shall have used all reasonable efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any decree, injunction or other order that may be entered.
Section 7.5 Statutes. No statute, rule, regulation, executive order,
--------
decree or order of any kind shall have been enacted, entered, promulgated or
enforced by any court or governmental authority which prohibits, restrains,
enjoins or restricts the consummation of the transactions
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contemplated by this Agreement or has the effect of making any of the
transactions contemplated by this Agreement illegal.
ARTICLE VIII
TERMINATION AND ABANDONMENT
Section 8.1 Termination. This Agreement may be terminated and the
-----------
transactions contemplated hereby may be abandoned, at any time prior to the
Closing:
(a) by mutual written consent of SMG-II, on the one hand, and of Parent,
on the other hand;
(b) by either Parent, on the one hand, or SMG-II, on the other hand, if
any governmental or regulatory agency shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree or ruling or other action shall have become final and nonappealable;
(c) by either Parent, on the one hand, or the Company, on the other hand,
if the Closing shall not have occurred by December 15, 1999, unless the Closing
shall not have occurred because of a material breach of any representation,
warranty, obligation, covenant, agreement or condition set forth in this
Agreement on the part of the party seeking to terminate this Agreement; and
(d) by Parent, at any time within 30 days after delivery to it pursuant to
Section 5.7(b)(i) of the audited consolidated financial statements of each of
the Company and of Pathmark for the fiscal year ended January 30, 1999, in the
event that such financial statements disclose (i) a consolidated shareholder's
deficiency of (x) the Company greater than $1,453,000,000 or (y) Pathmark
greater than $1,188,400,000, in each case as of the end of such fiscal year or
(ii) net losses of (x) the Company materially greater than $29,321,000 or (y)
Pathmark materially greater than $28,420,000, in each case for the fiscal year
then ended.
Section 8.2 Automatic Termination. This Agreement shall automatically be
---------------------
terminated and the transactions contemplated hereby shall automatically be
abandoned if, at any time prior to the Closing, all of the conditions set forth
in Articles VI and VII of the Merger Agreement are satisfied immediately prior
to the Merger Closing.
Section 8.3 Effect of Termination. In the event of the termination of
---------------------
this Agreement pursuant to Section 8.1 or Section 8.2 (other than in the case of
termination pursuant to Section 8.1(a)) hereof by Parent, on the one hand, or
SMG-II, on the other hand, written notice thereof shall forthwith be given to
the other party specifying the provision hereof pursuant to which this Agreement
is terminated, and this Agreement shall become void and have no effect, and
there shall be no liability hereunder on the part of Parent, Sub or SMG-II,
except that Sections 3.12, 5.2, 5.3(l), 9.1, 9.5 and this Section 8.3 shall
survive any termination of this Agreement. Nothing
-21-
in this Section 8.3 shall relieve any party to this Agreement of liability for
breach of this Agreement.
ARTICLE IX
TAX MATTERS
-----------
Section 9.1 Tax Returns. SMG-II shall have the obligation to prepare and
-----------
timely file, or cause to be prepared and timely filed, all returns, statements,
forms and reports for Taxes ("Returns") that are required by law to be filed
-------
by, or with respect to, the Company or any of its subsidiaries with respect to
any taxable year or period ending on or before and, with respect to any taxable
year or period beginning before and ending after the Closing Date, the portion
of such taxable year or period ending on and including the Closing Date ("Pre-
Closing Period"); provided, however, with respect to Returns to be filed by SMG-
-------- -------
II pursuant to this Section 9.1 for the Pre-Closing Period, (i) SMG-II shall
provide Parent with draft Federal, state, local and foreign income tax returns
that include the Company or any of its subsidiaries at least thirty (30) days
prior to the due date for filing such Returns, (ii) at least fifteen (15) days
prior to the due date for the filing of such Returns, Parent shall notify SMG-II
of the existence of any objection Parent may have to any items set forth on such
draft Returns, and (iii) if, after consulting in good faith, SMG-II and Parent
are unable to resolve such objection(s), such objection(s) shall be resolved by
treating items on such Returns in a manner consistent with the past practices of
the Company and its subsidiaries, if any, with respect to such items unless
otherwise required by law (and if no past practice exists the issue shall be
resolved in favor of the party that would bear the relevant Tax liability
hereunder). At the request of SMG-II, the Company will prepare the Returns
described in this Section 9.1 (or any such Return specified), including any
Returns required to be filed by SMG-II (or any of its subsidiaries) that
includes the Company or any of its subsidiaries for the tax year of the SMG-II
consolidated group that includes the Closing Date, in a manner consistent with
this Section 9.1. Parent and SMG-II agree to the extent permitted by applicable
law to elect with the relevant taxing authority to treat for all purposes the
Closing Date as the last day of a taxable period of the Company and its
subsidiaries.
Section 9.2 Payment of Taxes. (a) SMG-II and its subsidiaries other than
----------------
the Company and its subsidiaries (the "SMG-II Group") shall be responsible and
liable for the timely payment of any and all Taxes imposed on or with respect to
the properties, income and operations of the SMG-II Group, including any gain to
the SMG-II Group resulting from the sale of the Stock.
(b) The Company shall pay SMG-II the amount of any Taxes allocated to the
Company and its subsidiaries in connection with the filing of a Return pursuant
to Section 9.1 above (including Taxes that may become payable as the result of
an adjustment by any taxing authority in respect of a Pre-Closing Period) to the
extent not already paid by the Company or any of its subsidiaries on or before
the Closing Date. To the extent reasonably practicable, at least ten (10) days
prior to the due date for the filing of any such Return, SMG-II shall provide to
Parent its calculation of the amount of such Taxes allocable to the Company and
its subsidiaries pursuant to this Section 9.2(b). No later than five (5) days
prior to the due date for the filing of such Return, Parent shall notify SMG-II
of any reasonable objections Parent may have to SMG-II's calculation
-22-
of the amount of such Taxes allocable to the Company and its subsidiaries
pursuant to this Section 9.2(b), and, at such time, the Company and its
subsidiaries shall pay to SMG-II the amount of Taxes allocable to the Company
and its subsidiaries pursuant to this Section 9.2(b) as determined by SMG-II.
Any objection Parent may have with respect to SMG-II's calculation of the amount
of such Taxes allocable to the Company and its subsidiaries pursuant to this
Section 9.2(b) shall not be cause for any failure of the Company and its
subsidiaries to make payments to Parent pursuant to this Section 9.2(b). Parent
and SMG-II agree to consult and resolve in good faith any such objection, it
being understood and agreed that in the absence of any such resolution, any and
all objections shall be resolved by treating items, wherever possible, in a
manner consistent with the past practices of the Company and its subsidiaries
with respect to such items unless otherwise required by law. In the event Parent
shall receive SMG-II's calculation of the amount of such Taxes allocable to the
Company and its subsidiaries pursuant to this Section 9.2(b) and a draft of the
relevant portions of such Return less than ten (10) days prior to the due date
for filing such Return, the Company and its subsidiaries shall nevertheless
endeavor in good faith to make payment to SMG-II by such due date.
(c) The SMG-II Group shall pay the Company the amount of any Taxes that
are refunded, or in respect of which the SMG-II Group obtains a credit usable by
the SMG-II Group as an offset against taxes owed by the SMG-II Group, as the
result of an adjustment by any taxing authority that are allocable to the
Company or any of its subsidiaries (net of any Taxes that are owed to any taxing
authority as the result of an adjustment by such authority relating to a Pre-
Closing Period that are allocable to the Company or any of its subsidiaries).
Section 9.3 Controversies. (a) Each party shall promptly notify the
-------------
other in writing upon receipt by such party or any Affiliate of such party of
written notice of any inquiries, claims, assessments, audits or similar events
with respect to Taxes for which the other party may be liable (any such inquiry,
claim, assessment, audit or similar event, a "Tax Matter").
----------
(b) Parent shall have the sole right to control any Tax Matter, initiate
any claim for refund with respect to the Company or any of its subsidiaries, and
contest, resolve and defend against any assessment for additional Taxes, notice
of Tax deficiency or other adjustment of Taxes of, or relating to, the income,
assets or operations of the Company or any of its subsidiaries for all taxable
periods to the extent that such Tax Matter or claim does not have an adverse
impact on the SMG-II Group (or any of its members). SMG-II shall have the sole
right to control any Tax Matter, initiate any claim for refund with respect to
the SMG-II Group, and contest, resolve and defend against any assessment for
additional Taxes, notice of Tax deficiency or other adjustment of Taxes of, or
relating to, the income, assets or operations of the SMG-II Group (or any of its
members) for all taxable periods to the extent that such Tax Matter or claim
does not have an adverse impact on the Company or any of its subsidiaries.
Section 9.4 Amended Returns. Neither party shall file or cause to be
---------------
filed any amended Return or claims for refund that would result in an increased
Tax liability of the other party without the prior written consent of such other
party, which consent shall not be unreasonably withheld.
-23-
Section 9.5 Prior Tax Agreements. This Agreement terminates and
--------------------
supersedes any and all of the tax sharing, allocation, indemnification or
similar agreements, arrangements or undertakings in effect on the Closing Date
as between the SMG-II Group or any predecessor or Affiliate thereof, on the one
hand, and the Company and any of its subsidiaries, on the other hand, for all
Taxes imposed by any government or taxing authority, regardless of the period in
which such Taxes are imposed.
Section 9.6 Post-Closing Access and Cooperation. (a) From and after the
-----------------------------------
Closing Date, SMG-II agrees, and agrees to cause each of its subsidiaries, to
permit Parent or a representative of Parent to have reasonable access, during
normal business hours, to the books and records of the SMG-II Group, to the
extent that such books and records relate to a Pre-Closing Period, and
personnel, for the purpose of enabling Parent to (i) prepare the Returns
specified in Section 9.1 and (ii) investigate or contest any Tax Matter which
Parent has the authority to conduct under Section 9.3.
(b) From and after the Closing Date, Parent agrees, and agrees to cause the
Company and each of its subsidiaries, to permit SMG-II to have reasonable
access, during normal business hours, to the books and records of the Company
and its subsidiaries, to the extent that such books and records relate to a Pre-
Closing Period, and personnel, for the purpose of enabling SMG-II to (i) prepare
the Returns specified in Section 9.1 and (ii) investigate or contest any Tax
Matter which SMG-II has the authority to conduct under Section 9.3.
ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses. All costs and expenses incurred in
-----------------
connection with this Agreement and the consummation of the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, except that the Company shall pay the costs and expenses of SMG-II and
PTK.
Section 10.2 Representations and Warranties. The respective
------------------------------
representations and warranties of the Sellers, on the one hand, and Parent and
Sub, on the other hand, contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Sellers, Parent or Sub
shall be under any liability whatsoever with respect to any such representation
or warranty. This Section 10.2 shall have no effect upon any other obligation
of the parties hereto, whether to be performed before or after the Closing.
Section 10.3 Extension; Waiver. At any time prior to the Closing, the
-----------------
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of SMG-II, PTK, Parent or Sub, may (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other applicable party or in any document, certificate or writing
delivered pursuant hereto by any other applicable party or (iii) waive
compliance with any of the agreements or
-24-
conditions contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
Section 10.4 Public Announcements. The Sellers, on the one hand, and
--------------------
Parent and Sub, on the other hand, agree to consult promptly with each other
prior to issuing any press release or otherwise making any public statement with
respect to the transactions contemplated hereby, and shall not issue any such
press release or make any such public statement prior to such consultation and
review by the other party of a copy of such release or statement, unless
required by applicable law.
Section 10.5 Governing Law. This Agreement, and the legal relations
-------------
between the parties hereto, shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements executed and to
be performed solely within such State.
Section 10.6 Captions. The Article and Section captions used herein are
--------
for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 10.7 Notices. Any notice, delivery or other communication
-------
required or permitted under this Agreement shall be sufficiently given if
delivered in person or sent by telecopy (with receipt confirmed) or by
registered or certified mail, postage prepaid, addressed as follows:
If to either Parent or Sub:
Koninklijke Ahold NV
Xxxxxx Xxxxxxxx 0
0000 XX Xxxxxxx, X.X. Xxx 00
0000 XX Xxxxxxx, Xxx Xxxxxxxxxxx
Telecopier: 00-00-000-00-00
Attention: Xxxx X.X. Butzelaar, Esq.
Ton van Tielraden, Esq.
and
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
-25-
If to the Sellers:
c/o SMG-II Holdings Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxx
Xxxx X. Xxxxxxxxx, Esq.
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxxx Xxxxxxxxxxx, Esq.
or to such other person as shall be designated in writing by any such party, and
such notice or communication shall be deemed to have been given as of the date
so delivered, sent by telecopier or mailed.
Section 10.8 Binding Effect; Benefit; Assignment. This Agreement shall
-----------------------------------
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties; provided, however, that Sub may assign and
-------- -------
delegate, in its sole discretion, its rights, interests and obligations
hereunder to any direct or indirect wholly-owned subsidiary of Parent.
Notwithstanding anything contained in this Agreement to the contrary, except for
the provisions of Section 5.10 (the "Third Party Provisions"), nothing in this
----------------------
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto or their respective successors and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement. The Third Party Provisions may be enforced by the beneficiaries
thereof.
Section 10.9 Counterparts. This Agreement may be executed in two or more
------------
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
Section 10.10 Entire Agreement. This Agreement, including the other
----------------
documents entered into in connection herewith, contains the entire understanding
of the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
-26-
Section 10.11 Amendments. This Agreement may not be changed, amended,
----------
waived, or modified orally, but only by an agreement in writing signed by the
parties hereto.
Section 10.12 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the maximum extent
possible.
Section 10.13 Disclosure Letter. The parties hereto acknowledge that
-----------------
certain matters set forth in the Disclosure Letter are included for
informational purposes only, notwithstanding the fact that, because they do not
rise above applicable materiality thresholds or otherwise, they would not be
required to be set forth therein by the terms of this Agreement and that
disclosure of such matters shall not be taken as an admission by the Sellers
that such disclosure is required to be made under the terms of any provision of
this Agreement.
Section 10.14 Submission to Jurisdiction; Waiver of Jury Trial. The
------------------------------------------------
parties hereby submit to the jurisdiction of the United States District Court
for the Southern District of New York and of any New York State Court sitting in
the City of New York for purposes of all legal proceedings which may arise
hereunder or under any of the other documents entered into in connection
herewith. The parties irrevocably waive, to the fullest extent permitted by
law, any objection which it may have or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
The parties hereby consent to process being served in any such proceeding by the
mailing of a copy thereof by registered or certified mail, postage prepaid, to
their respective addresses specified in Section 10.7 or in any other manner
permitted by law. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER DOCUMENTS ENTERED INTO IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OF ANY
PARTY.
-27-
IN WITNESS WHEREOF, each party has caused its corporate name to be hereunto
subscribed by its officer thereunto duly authorized, all as of the day and year
first above written.
KONINKLIJKE AHOLD N.V.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: X.X. Xxxxx
Title: Executive Vice President
AHOLD ACQUISITION, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: X.X. Xxxxx
Title: President
SMG-II HOLDINGS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
PTK HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
-28-
