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Exhibit 1
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
OF
DOMINICK'S SUPERMARKETS, INC.
DATED AS OF
NOVEMBER 1, 1996
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TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS.......................................... 2
Section 1.1 Definitions.................................. 2
ARTICLE II RESTRICTIONS ON TRANSFERS............................ 9
Section 2.1 Transfers in Accordance with this Agreement.. 9
Section 2.2 Agreement to be Bound........................ 9
Section 2.3 Legend....................................... 10
Section 2.4 [Intentionally Omitted]...................... 10
Section 2.5 Transfer of Pecuniary Interests.............. 10
Section 2.6 Tag-Along Rights............................. 11
Section 2.7 Rights to Compel Sale........................ 13
Section 2.8 Offering Memorandum.......................... 16
Section 2.9 Deliveries at Closing: Method of Payment of
Purchase Price............................... 16
ARTICLE III SCOPE OF BUSINESS OF THE COMPANY..................... 16
Section 3.1 Scope of Business............................ 16
Section 3.2 Business Opportunities....................... 17
ARTICLE IV ADDITIONAL RIGHTS AND OBLIGATIONS OF
INVESTORS AND THE COMPANY............................ 17
Section 4.1 Management Fees.............................. 17
Section 4.2 Investment Banking Services.................. 17
Section 4.3 Access to Information; Confidentiality....... 17
Section 4.4 Furnishing of Information.................... 18
Section 4.5 Regulatory Problems, Etc..................... 19
ARTICLE V CORPORATE GOVERNANCE AND VOTING...................... 19
Section 5.1 Boards of Directors.......................... 19
Section 5.2 Action by the Board of Directors............. 23
Section 5.3 Charter Documents............................ 23
Section 5.4 Appointment of Representative................ 23
Section 5.5 Board Visitation Rights...................... 23
ARTICLE VI TERMINATION.......................................... 24
Section 6.1 Termination.................................. 24
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ARTICLE VII MISCELLANEOUS....................................... 24
Section 7.1 No Inconsistent Agreements.................. 24
Section 7.2 No Other Affiliate Stockholders............. 25
Section 7.3 Recapitalization, Exchanges, Etc............ 25
Section 7.4 Successors and Assigns...................... 25
Section 7.5 No Waivers; Amendments...................... 25
Section 7.6 Notices..................................... 26
Section 7.7 Inspection.................................. 27
Section 7.8 Governing Law............................... 27
Section 7.9 Section Headings............................ 27
Section 7.10 Entire Agreement............................ 27
Section 7.11 Severability................................ 28
Section 7.12 Counterparts................................ 28
Section 7.13 Required Approvals.......................... 28
Section 7.14 Consistency................................. 28
Section 7.15 Public Disclosure........................... 28
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement") dated as
of November 1, 1996, by and among (i) each of the purchasers listed on the
signature pages attached hereto (together with their Permitted Transferees
(defined below), the "Purchasers"), (ii) each of the investors listed on the
signature pages attached hereto, (iii) the Yucaipa Companies, a California
general partnership, Yucaipa Blackhawk Partners, L.P., a California limited
partnership, Yucaipa Chicago Partners, L.P., a California limited partnership,
Yucaipa Dominick's Partners, L.P., a California limited partnership and Xxxxxx
X. Xxxxxx (collectively, the "Yucaipa Affiliates"), (iv) Dominick's
Supermarkets, Inc., a Delaware corporation (the "Company"), (v) Dominick's Finer
Foods, Inc., a Delaware corporation and wholly owned subsidiary of the Company
("Dominick's"), and (vi) each other Person (defined below) who becomes a party
to this Agreement in accordance with the terms hereof.
WITNESSETH:
WHEREAS, the parties hereto have entered into that certain Stockholders
Agreement dated as of March 22, 1995 (the "Stockholders Agreement"), and desire
to amend and restate such Stockholders Agreement in conjunction with the
Qualified IPO (as defined in the Stockholders Agreement) of the Company being
consummated on the date hereof;
WHEREAS, this Agreement shall become effective (the "Effective Date")
on the date of, and simultaneously with, the closing under the Underwriting
Agreement, dated as of October 29, 1996, among the Company, the stockholders of
the Company named therein, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
Xxxxxx Xxxxxxx & Co. Incorporated, BT Securities Corporation and Chase
Securities, Inc., as the representatives of the several underwriters named
therein (the "Underwriting Agreement");
WHEREAS, on the Effective Date immediately after giving effect to the
transactions contemplated by the Underwriting Agreement (i) the authorized
capital stock of the Company will consist of 50,000,000 shares of voting common
stock, $.01 par value (the "Common Stock"), 10,000,000 shares of non-voting
common stock, $.01 par value, of which 8,500,000 shares will be designated as
Class B Common Stock (the "Class B Common Stock"), and 4,000,000 shares of
preferred stock, $.01 par value (the "Preferred Stock") of which 40,000 shares
have been designated as 15% Redeemable Exchangeable Cumulative Preferred Stock,
Series A, $.01 par value (the "Redeemable Preferred Stock"), and (ii) the issued
and outstanding capital stock of the Company will consist of 16,080,073 shares
of Common Stock, 5,278,962 shares of Class B Common Stock and 40,000 shares of
Redeemable Preferred Stock, with 996,835 shares of Common Stock reserved for
issuance upon the exercise of certain outstanding stock options. 1,000,000
shares reserved for issuance pursuant to the Company's 1996 Equity Participation
Plan and 3,874,492 shares of Common Stock reserved for issuance upon the
exercise of the Yucaipa Warrant (defined below);
WHEREAS, on the Effective Date after giving effect to the transactions
contemplated by the Underwriting Agreement (i) each Yucaipa Affiliate shall
beneficially own the number of shares of Common Stock set forth under its name
on the signature pages attached hereto, and the Yucaipa Affiliates shall
collectively beneficially own 2,934,909 shares of Common Stock, (ii) each
Purchaser shall beneficially own the number and kind of Shares (defined below)
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set forth under its name on the signature pages attached hereto, and the
Purchasers shall collectively beneficially own 3,511,540 shares of Common Stock
and 4,158,349 shares of Class B Common Stock; and (iii) Xxxx L.L.C. shall
beneficially own 40,000 shares of Redeemable Preferred Stock (which the company
has agreed to repurchase on January 2,1997); and
WHEREAS, the parties hereto desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Shares, including both issued
and outstanding Shares as well as Shares that may be issued or otherwise
acquired hereafter, to provide for certain rights and obligations in respect of
the Shares and the Company as hereinafter provided.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
"ACQUISITION DATE" shall mean March 22, 1996 (after giving effect to
the Company's acquisition of Dominick's on such date).
"ADDITIONAL SHARES" shall have the meaning set forth in Section 2.6(c).
"AFFILIATE," as applied to any specified Person, shall mean any other
Person directly or indirect controlling or controlled by or under direct or
indirect common control with such specified Person and, in the case of a Person
who is an individual, shall include (i) members of such specified Person's
immediate family (as defined in Instruction 2 of Item 404(a) of Regulation S-K
under the Securities Act) and (ii) trusts, the trustee and all beneficiaries of
which are such specified Person or members of such Person's immediate family as
determined in accordance with the forgoing clause (i). Notwithstanding, the
foregoing, the Purchasers and their respective Affiliates shall not be deemed
Affiliates of the Company.
"AFFILIATE TRANSACTION" shall mean (i) any sale, lease, transfer or
other disposition by the Company or its Subsidiaries of any of their respective
properties or assets to, (ii) any purchase of property or assets by the Company
or its Subsidiaries from (iii) any investment by the Company or its
Subsidiaries in, (iv) any agreement by the Company or its Subsidiaries with or
for the benefit of, or (v) any other transaction between the Company or its
Subsidiaries and, an Affiliate of the Company or of any Subsidiary of the
Company.
"APOLLO" shall mean Apollo Investment Fund, L.P. and any of its
Permitted Transferees to which Apollo has Transferred Shares.
"APOLLO NOMINEES" shall have the meaning set forth in Section 5.1(a).
"APPRAISAL NOTICE" shall have the meaning set forth in Section
2.7(c)(i).
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"Appraisal Request" shall mean a written request for an appraisal
pursuant to Section 2.7(i) sent by Other Purchasers holding at least 65% of the
Shares then held by the Other Purchasers to Yucaipa and Apollo on or prior to
the fifth business day following delivery of the Compelled Sale Notice, which
request shall identify five proposed Appraisers that are independent from the
Company, the stockholders of the Company or any of their respective Affiliates;
provided, that the right to deliver an Appraisal Request shall terminate on the
first date on which the Other Purchasers beneficially own fewer than 50% of the
Shares held by the Other Purchasers on the Acquisition Date.
"Appraised Value" shall mean, with respect to any Compelled Sale, the
per Share value of the Company immediately prior to such Compelled Sale
(without giving effect thereto or to the rights of Apollo contained in Section
2.7(c)(ii) hereof), as determined in good faith by the Appraiser.
"Appraiser" shall mean a nationally recognized investment bank,
appraisal firm or other Person with experience in valuing businesses chosen
pursuant to Section 2.7(i).
"beneficial owner" of a security shall mean any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise has (i) the power to vote, or to direct the voting of, such security
and (ii) the power to dispose, or to direct the disposition of, such security.
"Beneficially own" shall have a correlative meaning. Ownership of the Yucaipa
Warrant shall not constitute beneficial ownership of the Shares issuable upon
the exercise thereof.
"Board of Directors" shall mean the Board of Directors of the Company.
"Business Day" shall mean each day other than Saturdays, Sundays and
days when commercial banks are authorized to be closed for business in New
York, New York.
"Business Opportunity" shall have the meaning set forth in Section 3.2.
"Capitalized Lease Obligation," as applied to any Person, means
obligations under any lease of any property (whether real, personal or mixed)
by that Person as lessee, that, in conformity with GAAP, is accounted for as a
capital lease on the balance sheet of that Person, and the amount of
Indebtedness represented by such obligations shall be the capitalized amount of
such obligations, determined in accordance with GAAP.
"Charter Documents" shall mean the Certificate of Incorporation and
Bylaws of the Company, each as amended or restated, attached hereto as Exhibits
A and B, respectively.
"Class B Common Stock" shall have the meaning set forth in the recitals.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Common Stock" shall have the meaning set forth in the recitals.
"Compelled Sale" shall have the meaning set forth in Section 2.7(a).
"Company" shall have the meaning set forth in the preamble.
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"COMPELLED SALE ACCEPTANCE" shall have the meaning set forth in
Section 2.7(e).
"COMPELLED SALE AGREEMENT" shall have the meaning set forth in
Section 2.7(c).
"COMPELLED SALE CLOSING" shall have the meaning set forth in
Section 2.7(a).
"COMPELLED SALE DATE" shall have the meaning set forth in
Section 2.7(b).
"COMPELLED SALE NOTICE" shall have the meaning set forth in
Section 2.7(b).
"COMPELLED SALE TRANSACTION DATE" shall have the meaning set
forth in Section 2.7(c).
"CONTROL," when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contact or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"CONTROLLING STOCKHOLDERS" shall mean the Yucaipa Affiliates
and any of their Permitted Transferees to which any Yucaipa Affiliate or any
other Controlling Stockholder has Transferred Shares.
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of
the date hereof, among Dominick's, the Company, the guarantors named therein,
and the lenders, arrangers, administrative agent and syndication agent named
therein.
"DISQUALIFIED INDEBTEDNESS" shall have the meaning set forth in
Section 2.7(h).
"DOMINICK'S" shall have the meaning set forth in the preamble.
"DOMINICK'S BOARD" shall mean the board of directors of
Dominick's.
"DOMINICK'S STOCK PURCHASE AGREEMENT" means the Stock Purchase
Agreement, dated January 17, 1995, by and among the Company, DFF Acquisition
Sub, Inc., Xxxx, L.L.C., Xxxx Family L.L.C. and Xxxx Developments, L.L.C.
"EBITDA" shall mean with respect to any Person for any period,
the net income (or loss) of such Person and its subsidiaries on a consolidated
basis for such period, determined in accordance with GAAP, excluding (to the
extent included therein), without duplication, (i) all net extraordinary gains
(or losses), (ii) total interest expense of such Person and its subsidiaries on
a consolidated basis with respect to outstanding indebtedness of such Person and
its subsidiaries, including without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under interest rate swap, cap, collar or
similar agreements, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, (vi) LIFO provision, and
(vii) other non-cash items reducing net income and other non-cash items
increasing net income, all of the foregoing as determined on a consolidated
basis for such Person and its subsidiaries in accordance with GAAP; provided,
that EBITDA of the Company for any period shall be calculated to give pro forma
effect to all acquisitions and divestitures during such period as if such
acquisitions and divestitures had
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occurred on the first day of such period, such calculations to be made in
accordance with GAAP and Rule 11-02 of Regulation S-X of the Commission.
"Effective Date" shall have the meaning set forth in the recitals.
"Employee Plans" shall mean the Company's 1995 Stock Option Plan, under
which 966,835 shares of Common Stock are reserved for issuance upon exercise of
options granted thereunder, the Company's 1996 Equity Participation Plan, under
which 1,000,000 shares of Common Stock are reserved for issuance, and any
employee or similar plans set forth in Schedule 3.23 to the Dominick's Stock
Purchase Agreement or approved by a majority of the Board of Directors then in
office.
"Enterprise Value" with respect to any proposed Compelled Sale, shall
mean (without duplication) the sum of (a) the aggregate value of the fully
diluted common equity of the Company, based on the price per Share proposed to
be paid in such Compelled Sale, net of the exercise, exchange or conversion
price, if any, with respect to any security exercisable or exchangeable for or
convertible into Common Stock of the Company, plus (b) the aggregate principal
amount of all Indebtedness of the Company and its consolidated Subsidiaries and
the aggregate liquidation preference of all preferred stock of the Company
(other than preferred stock included in clause (a) above), in each case as
reflected on the most recent balance sheet of the Company and its consolidated
subsidiaries that was (or was required to be) provided pursuant to Section 4.4
hereof on or prior to the date of the Compelled Sale Notice, less (c) all cash
and cash equivalents of the Company and its consolidated Subsidiaries as
reflected on such balance sheet.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Exchange Agreement" means the Stock Exchange Agreement, dated as of
March 22, 1995, by and between the Company and Apollo.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"Indebtedness" shall mean with respect to any Person, without
duplication, all liabilities of such Person (a) for borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), (b) evidenced by bonds, notes, debentures or
similar instruments or representing the balance deferred and unpaid of the
purchase price of any property (other than any such balance that represents an
account payable or any other monetary obligation to a trade creditor (whether
or not an Affiliate)), or (c) for the payment of money relating to a
Capitalized Lease Obligation.
"Independent Nominator" shall mean (a) Apollo until Apollo ceases to
beneficially own at least 1,463,795 Shares (25% of the Shares beneficially
owned by Apollo on the Acquisition Date) and (b) thereafter, Yucaipa.
"Investor Nominees" shall have the meaning set forth in Section 5.1 (a).
"Investors" shall mean each of the parties to the Agreement (other than
the Company and Controlling Stockholders), together with such party's Permitted
Transferees, including (without limitation) any Person who shall become a party
to or agree to be bound by the
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terms of this Agreement after the date hereof. For purposes of determining the
number of Shares held by any Investor, such Investor shall be deemed to hold
all Shares held by such Investor's Permitted Transferees.
"MD&A" shall mean a management's discussion and analysis of the
Company's financial condition and results of operation comparable to the
discussion that is required to be included in periodic reports filed under the
Exchange Act.
"Management Agreement" shall mean that certain Management Agreement,
dated as of the date hereof, by and among the Company, Dominick's and Yucaipa,
attached hereto as Exhibit D.
"Notices" shall have the meaning set forth in Section 7.6.
"Other Investors" shall mean the Investors other than the Purchasers.
"Other Purchasers" shall mean the Purchasers other than Apollo.
"Other Nominees" shall have the meaning set forth in Section 5.1(a).
"pecuniary interest" in any security shall mean the opportunity,
directly or indirectly, to profit or share in any profit derived from a
transaction in such security, and shall include securities owned by an
individual's spouse or issue or any trust solely for the benefit of such
individual, spouse or issue.
"Permitted Transferee" shall mean:
(a) in the case of any Purchaser (i) any officer, director or
partner of, or Person controlling, such Purchaser or any other Purchaser, or
(ii) any other Person that is (x) an Affiliate of the general partner(s),
investment manager(s) or investment advisor(s) of such Purchaser on the date
hereof. (y) an Affiliate of such Purchaser or a Permitted Transferee of such
Purchaser or (z) an investment fund, investment account or investment entity
whose investment manager, investment advisor or general partner thereof is such
Purchaser or a Permitted Transferee of such Purchaser, in each case in a bona
fide distribution or other transaction not intended to avoid the provisions of
this Agreement;
(b) in the case of any Controlling Stockholder, (i) any Person that
is controlled by Xxxxxx X. Xxxxxx, (ii) upon a bona fide liquidation of, or a
bona fide withdrawal from, such Controlling Stockholder, in each case, not
intended to avoid the provisions of this Agreement, the shareholders, partners
or principals, as the case may be, of such Controlling Stockholder, (iii) upon
a bona fide reduction (not intended to avoid the provisions of this Agreement)
in such Controlling Stockholder's interest in another Controlling Stockholder
(a "Specified Person"), and a corresponding increase in a Yucaipa Individual's
interest in such Specified Person, such Yucaipa Individual; provided, that
immediately after such Transfer, Xxxxxx X. Xxxxxx continues to control such
Specified Person, or (iv) if such Controlling Stockholder is an individual,
(x) any spouse or issue of such individual, or any trust solely for the benefit
of such individual, spouse or issue, and (y) upon such individual's death, any
Person to whom Shares are transferred in accordance with the laws of the
descent and/or testamentary distribution; and
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(c) in the case of any Other Investor, (i) any Subsidiary of such
Other Investor, (ii) any Person of which such Other Investor is a Subsidiary,
(iii) any Subsidiary of a Person described in the foregoing clause (ii), or
(iv) if such Other Investor is an individual, (x) any spouse or issue of such
Other Investor or any trust for the benefit of such individual, spouse or
issue, and (y) upon such Other Investor's death, any Person to whom Shares are
transferred in accordance with the laws of descent and/or testamentary
distribution.
"Person" shall mean an individual or a corporation, partnership,
limited liability company, trust, or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Preferred Stock" shall have the meaning set forth in the recitals.
"Proposed Purchaser" shall mean a Person or group of Persons to which
any Controlling Stockholder proposes to Transfer Shares in accordance with
Section 2.6.
"Public Offering" shall mean any bona fide underwritten public
distribution of equity securities of the Company pursuant to an effective
registration statement under the Securities Act.
"Purchasers" shall have the meaning set forth in the preamble.
"Redeemable Preferred Stock" shall have the meaning set forth in the
recitals.
"Registration Rights Agreement" shall mean (i) that certain
Registration Rights Agreement, dated as of March 22, 1995, by and among the
Company, the Purchasers and the other parties thereto and (ii) that certain
Registration Rights Agreement, dated as of the date hereof, by and among the
Company, certain Yucaipa Affiliates and the other parties thereto.
"Regulatory Problem" shall have the meaning set forth in Section 4.5.
"Remaining Holders" shall have the meaning set forth in Section 2.7(a).
"Requisite Holders" on any date shall mean the Other Purchasers that
own at least 65% of the Shares beneficially owned by the Other Purchasers on
such date.
"ROFO Acceptance" shall have the meaning set forth in Section 5.1(g).
"ROFO Closing Date" shall have the meaning set forth in Section 5.1(g).
"ROFO Notice" shall have the meaning set forth in Section 5.1(g).
"ROFO Shares" shall have the meaning set forth in Section 5.1(g).
"RPHC" shall mean any Person, if an interest in such Person is treated
as a "United States real property interest" within the meaning of section 897 of
the Internal Revenue Code of 1986, as amended.
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"Rule 144 Open Market Transaction" shall mean any bona fide public
sale of Shares in an open market transaction under Rule 144 of the Securities
Act (or any successor rule) if such sale is in compliance with the requirements
of paragraphs (c), (d), (e), (f) and (g) of such Rule (notwithstanding the
provisions of paragraph (k) of such Rule).
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Shares" shall mean, collectively, the Common Stock and the Class B
Common Stock. Whenever this Agreement refers to a number or percentage of
Shares, such number or percentage shall be calculated as if each of the Shares
had been exchanged or converted into shares of Common Stock immediately prior
to such calculation regardless of the existence of any restrictions on such
exchange or conversion.
"Stock Purchase Agreement" shall mean the stock purchase agreement,
dated as of March 22, 1995, among the Company, Yucaipa and the Purchasers.
"Subsidiary" shall mean, with respect to any Person, (a) a
corporation a majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by a Subsidiary of such Person, or by such Person and one or
more Subsidiaries of such Person, (b) a partnership in which such Person, or a
Subsidiary, of such Person is, at the date of determination, a general partner
of such partnership, or (c) any other Person (other than a corporation) in
which such Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (i) at least a majority ownership interest or (ii)
the power to elect or direct the election of the directors or other governing
body of such Person.
"Tag-Along Notice" shall have the meaning set forth in Section 2.6(c).
"Tag-Along Sale" shall mean a bona fide Transfer of a Controlling
Stockholder's pecuniary interest in any Shares (except in accordance with
Section 2.7), including, without limitation, (a) by means of such Controlling
Stockholder's Transfer of an interest in any Person owning such Shares or (b) a
Transfer of a pecuniary interest in any Shares by such Controlling
Stockholder's spouse or issue, or by any trust solely for the benefit of such
Controlling Stockholder's spouse or issue.
"Tag-Along Stockholder" shall have the meaning set forth in Section
2.6(a).
"Third Party" shall mean any prospective purchaser of Shares (that is
not an Affiliate or Permitted Transferee of the transferor or of any Yucaipa
Affiliate) in an arm's length purchase from such transferor.
"Transfer" shall mean (i) when used as a noun: any direct or indirect
transfer, sale, assignment, pledge, hypothecation, encumbrance or other
disposition and (ii) when used as a verb: to directly or indirectly transfer,
sell, assign, pledge, hypothecate, encumber, or otherwise dispose of.
"Transferee" shall mean any Person to whom Shares have been Transferred
in compliance with the terms of this Agreement.
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"Transfer Allotment" of any Tag-Along Stockholder with respect to any
Tag-Along Sale shall mean the product of (i) the total number of Shares proposed
to be Transferred in such Tag-Along Sale multiplied by (ii) a fraction, the
numerator of which is the total number of Shares owned by such Tag-Along
Stockholder as of the close of business on the second day immediately preceding
the mailing date of the Transfer Notice and the denominator of which is the
total number of Shares then owned by the Controlling Stockholders, the
Investors, and all other stockholders of the Company having tag-along or other
contractual rights to participate in the proposed Transfer.
"Transfer Date" shall have the meaning set forth in Section 2.6(b).
"Transfer Notice" shall have the meaning set forth in Section 2.6(b).
"Yucaipa" shall mean The Yucaipa Companies, a California general
partnership, until a successor controlled by Xxxxxx X. Xxxxxx replaces such
Person, and thereafter means such successor; provided that the rights set forth
in Section 5.1 of this Agreement as belonging to Yucaipa initially shall be
exercisable personally by Yucaipa Management L.L.C., a California limited
liability company, or Xxxxxx X. Xxxxxx and neither the Yucaipa Companies nor
any other Yucaipa Affiliate shall have any right or interest in the exercise of
such rights; provided further that Xxxxxx X. Xxxxxx may assign such rights to
any successor controlled by him, and for purposes of Section 5.1, "Yucaipa"
thereafter shall mean such successor so long as it remains controlled by Xxxxxx
X. Xxxxxx.
"Yucaipa Affiliate" shall have the meaning set forth in the preamble.
"Yucaipa Individual" shall mean (a) a full-time employee of a Yucaipa
Affiliate or the Company or (b) a partner of a Yucaipa Affiliate who devotes
substantially all of his business efforts to such Yucaipa Affiliate.
"Yucaipa Nominees" shall have the meaning set forth in Section 5.1(a).
"Yucaipa Warrant" shall mean the warrant to purchase up to 3,874,492
shares of Common Stock issued by the Company to Yucaipa on March 22, 1995, as
amended.
ARTICLE II
RESTRICTIONS ON TRANSFERS
Section 2.1 Transfers in Accordance with this Agreement. Any attempt
to Transfer, or purported Transfer of, any Shares in violation of the terms of
this Agreement shall be null and void and neither the Company nor any transfer
agent shall register upon its books any such Transfer. A copy of this Agreement
shall be filed with the Secretary of the Company and kept with the records of
the Company.
Section 2.2 Agreement to be Bound. No party hereto shall Transfer any
Shares (other than Transfers to the Company. Transfers constituting a bona fide
public distribution pursuant to (i) the registration rights included in the
Registration Rights Agreements, (ii) any shelf registration pursuant to Rule
415 under the Securities Act or any Public Offering or (iii) Rule 144 Open
Market Transactions, or Transfers constituting a bona fide pledge to a
broker-dealer or other institutional lender), unless (x) the certificates
representing such Shares issued to the Transferee
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bear the legend provided in Section 2.3, if required by such Section, and (y)
the Transferee (if not already a party hereto) has executed and delivered to
each other party hereto, as a condition precedent to such Transfer, an
instrument or instruments, reasonably satisfactory to such parties, confirming
that the Transferee agrees to be bound by the terms of this Agreement in the
same manner as such Transferee's transferor, except as otherwise specifically
provided in this Agreement.
Section 2.3 Legend. Each Investor and Controlling Stockholder hereby
agrees that each outstanding certificate representing Shares issued to any of
them, or any certificate issued in exchange for or upon conversion of any
similarly legended certificate, shall, unless sold in a transaction exempted
from the operation of Section 2.2 above, bear a legend reading substantially as
follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE. THE HOLDER OF THESE SHARES MAY BE REQUIRED TO DELIVER
TO THE COMPANY, IF THE COMPANY SO REQUESTS, AN OPINION OF COUNSEL (REASONABLY
SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY) TO THE EFFECT THAT AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (OR QUALIFICATION UNDER
STATE SECURITIES LAWS) IS AVAILABLE WITH RESPECT TO ANY TRANSFER OF THESE
SHARES THAT HAS NOT BEEN SO REGISTERED (OR QUALIFIED).
THE SHARES REPRESENTED BY THIS CERTIFICATE ALSO ARE SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AND OBLIGATIONS, TO WHICH ANY TRANSFEREE
AGREES BY HIS ACCEPTANCE HEREOF, AS SET FORTH IN THE AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT, DATED AS OF NOVEMBER 1, 1996, COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY. NO TRANSFER OF SUCH SHARES WILL BE MADE ON THE BOOKS
OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF
SUCH AGREEMENT AND BY AN AGREEMENT OF THE TRANSFEREE TO BE BOUND BY THE
RESTRICTIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT.
Section 2.4 [Intentionally Left Blank].
Section 2.5 Transfer of Pecuniary Interests. Prior to a Transfer of a
pecuniary interest in any Shares by Xxxxxx X. Xxxxxx or any Controlling
Stockholder controlled by Xxxxxx X. Xxxxxx to a Permitted Transferee (including,
without limitation, by means of a Transfer of an interest in any Person owning
Shares) Xxxxxx X. Xxxxxx shall provide each of the Purchasers with a written
notice specifying the number of Shares in which a pecuniary interest is being
Transferred.
Without the prior written consent of (a) the holders of a majority of
the Shares held by the Purchasers and (b) at least two unrelated Purchasers,
neither Xxxxxx X. Xxxxxx nor any Controlling Stockholder controlled by Xxxxxx
X. Xxxxxx shall Transfer a pecuniary interest in any Shares to a Permitted
Transferee (including, without limitation, by means of a Transfer of an
interest in any Person owning Shares), if immediately after giving effect to
such Transfer Xxxxxx X. Xxxxxx would have a pecuniary interest in a number of
Shares less than (i) 85% of the number
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of Shares in which Xxxxxx X. Xxxxxx had a pecuniary interest on the Acquisition
Date minus (ii) any Shares as to which Xxxxxx X. Xxxxxx had a pecuniary
interest on the Acquisition Date that are Transferred in a Tag-Along Sale
exempt from the provisions of Section 6.2 pursuant to Section 2.6(e)(w).
The provisions of this Section 2.5 shall not apply to any Transfer to
(x) any spouse or issue of Xxxxxx X. Xxxxxx, or any trust solely for the
benefit of Xxxxxx X. Xxxxxx or any such spouse or issue, and (y) upon Xxxxxx X.
Xxxxxx'x death, any Person to whom Shares are transferred in accordance with
the laws of descent and/or testamentary distribution.
Section 2.6 Tag-Along Rights. (a) Each Controlling Stockholder who
proposes to effect a Tag-Along Sale shall afford each of the Investors (each, a
"Tag-Along Stockholder") the opportunity to participate therein in accordance
with this Section 2.6.
Each Controlling Stockholder represents to the Investors that it has
not entered into any agreement providing for any rights inconsistent with the
rights provided to the Investors in this Section 2.6 and that it has not
otherwise directly or indirectly granted any such rights. No Controlling
Stockholder shall enter into any agreement providing for, or otherwise directly
or indirectly grant, any tag-along or other contractual rights (other than
customary registration rights) to participate, directly or indirectly, in any
Tag-Along Sale without the prior unanimous written approval of the Investor
Nominees and, so long as the Other Purchasers, in the aggregate, beneficially
own at least 33% of the Shares beneficially owned by the Other Purchasers on
the Acquisition Date, the Requisite Holders.
(b) With respect to each Tag-Along Sale, each Tag-Along Stockholder
shall have the right to Transfer, at the same price and upon identical terms and
conditions as such proposed Transfer (except as set forth below), the number of
Shares owned by such Tag-Along Stockholder equal to such Tag-Along Stockholder's
Transfer Allotment; provided, however, that (i) a Tag-Along Stockholder may
Transfer Shares of a different kind than those transferred by a Controlling
Stockholder pursuant to a Tag-Along Sale; and (ii) in the event of a Tag-Along
Sale pursuant to a Transfer by a Controlling Stockholder of an interest in a
Person that directly or indirectly owns Shares, the price and other terms and
conditions of such Tag-Along Sale applicable to each Tag-Along Stockholder and
the Shares to be sold by such Tag-Along Stockholder, shall as closely
approximate those of the proposed Transfer as is reasonably practicable.
At the time any Tag-Along Sale is proposed, the Controlling
Stockholders shall give written notice to each Tag-Along Stockholder of its
rights to sell Shares hereunder (the "Transfer Notice"), which notice shall
identify the Proposed Purchaser and state the number of Shares proposed to be
Transferred, the proposed offering price (including the form and terms of any
non-cash consideration to be received in connection therewith), the proposed
date of any such Transfer (the "Transfer Date") and any other material terms
and conditions of the proposed Transfer. The Transfer Notice shall also contain
a complete and correct copy of any offer to, or agreement with, the Controlling
Stockholders by the Proposed Purchaser to purchase such Shares. The Controlling
Stockholders shall use their best efforts to deliver the Transfer Notice at
least 30 days prior to the Transfer Date and in no event shall the Controlling
Stockholders provide such Transfer Notice later than 21 days prior to the
Transfer Date.
(c) Each Tag-Along Stockholder that wishes to participate in the
Tag-Along Sale shall provide written notice (or oral notice confirmed in
writing) (the "Tag-Along Notice")
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to the Controlling Stockholders no less than 7 days prior to the Transfer Date.
The Tag-Along Notice shall set forth the number and kind of Shares that such
Tag-Along Stockholder elects to include in the Transfer, which shall not exceed
such Tag-Along Stockholder's Transfer Allotment; provided that the failure of a
Tag-Along Stockholder to correctly specify a number or kind of Shares not
exceeding its Transfer Allotment shall not affect the rights such Tag-Along
Stockholder may otherwise have under this Section 2.6 (and any specified Shares
in excess of such Tag-Along Stockholder's Transfer Allotment shall be treated as
Additional Shares). The Tag-Along Notice shall also specify the aggregate number
and kind of additional Shares owned of record by such Tag-Along Stockholder as
of the close of business on the second day immediately preceding the date on
which the Tag-Along Notice is given by such Tag-Along Stockholder, if any, which
such Tag-Along Stockholder desires also to include in the Transfer ("Additional
Shares") in the event there is any under-subscription for the entire amount of
all Tag-Along Transfer Allotments. In the event there is an under-subscription
by the Tag-Along Stockholders for any portion of the aggregate Tag-Along
Stockholders' Transfer Allotments, the Controlling Stockholders shall apportion
the unsubscribed Tag-Along Stockholders' Transfer Allotments to Tag-Along
Stockholders whose Tag-Along Notices specified an amount of Additional Shares,
which apportionment shall be on a pro rata basis among such Tag-Along
Stockholders in accordance with the number of Additional Shares specified by all
such Tag-Along Stockholders in their Tag-Along Notices. The Tag-Along Notices
given by the Tag-Along Stockholders shall constitute their binding agreements to
sell such Shares on the terms and conditions applicable to the Transfer.
If a Tag-Along Notice is not received by the Controlling Stockholders
from a Tag-Along Stockholder prior to the 7-day period specified above, the
Controlling Stockholders shall have the right to sell or otherwise Transfer the
number of Shares specified in the Transfer Notice to the Proposed Purchaser
specified in the Transfer Notice without any participation by such Tag-Along
Stockholder (subject to the right of other Tag-Along Stockholders to sell
Additional Shares in the event of an under-subscription by Tag-Along
Stockholders, as described above), but only on terms and conditions with respect
to the consideration paid by the Proposed Purchaser no more favorable (and other
material terms and conditions which a reasonable investor would consider
significant to the decision to include Shares in the Transfer no more favorable
in any material respect) to the Controlling Stockholders than as stated in the
Transfer Notice to the Tag-Along Stockholders, and only if such Transfer occurs
on a date within 45 Business Days of the Transfer Date.
(d) No Tag-Along Stockholder shall be required to make any
representations and warranties to any Person in connection with such Tag-Along
Sale except as to (i) good title and the absence of liens with respect to such
Tag-Along Stockholder's Shares, (ii) the corporate or other existence of such
Tag-Along Stockholder and (iii) the authority for and the validity and binding
effect of, and the absence of any conflicts under the charter documents and
material agreements of such Tag-Along Stockholder as to, any agreements emerged
into by such Tag-Along Stockholder in connection with such Transfer. No
Tag-Along Stockholder shall be required to provide any indemnities in
connection with such Tag-Along Sale except for a breach of such representations
and warranties.
(e) The provisions of this Section 2.6 shall not apply to any
Transfers (i) by a Controlling Stockholder to a Permitted Transferee of such
Controlling Stockholder (provided that such Permitted Transferee has agreed to
be bound by this Agreement as contemplated by Section 2.9 hereof), (ii)
pursuant to a Public Offering, (iii) pursuant to a Rule 144 Open Market
Transaction of which each of the Investor Nominees and each Purchaser who
beneficially owns at
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least 731,897 Shares, has been provided at least two Business Days prior
written notice, (iv) on or after March 22, 1996, by Xxxxxx X. Xxxxxx or
Controlling Stockholders controlled by Xxxxxx X. Xxxxxx; provided, that the
aggregate number of Shares transferred pursuant to this clause (iv) by all such
Persons does not exceed 73,365 (2.5% of the number of Shares beneficially owned
by the Yucaipa Affiliates on the Acquisition Date), (v) of limited partnership
interests in Yucaipa Dominick's Partners, L.P. by Xxxxxx X. Xxxxxx as of the
Acquisition Date and representing an indirect pecuniary interest in not more
than 178,583 Shares, (vi) of limited partnership interests in Crescent Shared
Opportunity Fund II, L.P. or (vii) constituting a bona fide pledge to a
broker-dealer or other institutional lender.
Section 2.7 Rights to Compel Sale. (a) If at any time the
Controlling Stockholders shall enter into a written agreement with a Third
Party to acquire solely for cash all, but not less than all, of the issued and
outstanding Shares in a bona fide transaction (a "Compelled Sale Agreement"),
the Controlling Stockholders shall have the right, subject to the terms and
conditions set forth below, to require each of the Investors (the "Remaining
Holders") to sell all, but not less than all, of the Shares held by each such
Remaining Holder (a "Compelled Sale"). Subject to the terms and conditions set
forth below, the Remaining Holders shall (and hereby agree to) sell such Shares
on the same terms and conditions and for the same per Share consideration as
the Controlling Stockholders sell their Shares.
As soon as is reasonably practicable after the commencement of
material discussions regarding a proposed sale of the Company (whether through
a merger, sale of stock or assets or otherwise), business combination, or
similar transaction, the Controlling Stockholders shall provide each of the
Investor Nominees with notice thereof, which shall include reasonable details
with respect thereto. The Controlling Stockholders shall provide each of the
Investor Nominees with prompt notice of all material developments in such
discussions.
(b) Within two Business Days following execution of any
Compelled Sale Agreement, the Controlling Stockholders shall provide each
Remaining Holder with written notice thereof (the "Compelled Sale Notice"). The
Compelled Sale Notice shall attach a copy of the Compelled Sale Agreement and
shall set forth: (i) the name and address of the Third Party; (ii) the amount
of consideration to be paid per Share and the terms and conditions of payment
offered by the Third Party; and (iii) all other material terms of such
Compelled Sale, including the proposed date of the Compelled Sale (the
"Compelled Sale Date"), which shall be not less than 20 days following the
delivery of the Compelled Sale Notice, and the outside termination date of the
Compelled Sale Agreement (the "Compelled Sale Termination Date"), which shall
be not more than 150 days following the delivery of the Compelled Sale Notice.
(c) The provisions of this Section 2.7(c) shall only apply if
the aggregate consideration to be paid for all outstanding Shares in such
Compelled Sale implies an Enterprise Value on the date of delivery of the
Compelled Sale Notice of less than the product of (x) 6.5 times (y) EBITDA of
the Company for the latest four fiscal quarters of the Company for which
information was (or was required to be) provided to Investors pursuant to
Section 4.4 hereof.
(i) If the Other Purchasers holding at least 65% of the
Shares then held by the Other Purchasers deliver an Appraisal Request,
Appollo and Yucaipa shall choose an Appraiser from the list of proposed
Appraisers contained in the Appraisal Request, and notify such Other
Purchasers of such choice on or prior to the fifth Business Day
following delivery of the Appraisal Request. Such Other Purchasers
shall retain such
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Appraiser and cause the Appraiser to calculate an Appraised Value as promptly
as practicable (but in any event prior to the 20th Business Day following
selection of the Appraiser) and to provide written notice thereof to the
Controlling Stockholders and the Purchasers (the "Appraisal Notice").
If the per Share consideration to be paid in such Compelled
Sale is less than the Appraised Value, then (A) the Controlling Stockholders
shall pay all fees and expenses of the Appraiser arising in connection with the
calculation of the Appraised Value and (B) no purchaser shall be required to
sell its Shares in the Compelled Sale. Otherwise, the Other Purchasers shall
pay all fees and expenses of the Appraiser arising in connection with the
calculation of the Appraised Value and shall be required to sell their Shares
in the Compelled Sale subject to the terms and conditions of this Section 2.7.
(ii) If (A) an Appraisal Request is not delivered on or prior
to the fifth Business Day following delivery of the Compelled Sale Notice or
the per Share consideration to be paid in such Compelled Sale is not less than
the Appraised Value and (B) Apollo delivers to Yucaipa a written notice (a
"Compelled Sale Acceptance") within 15 days following the delivery of the
Compelled Sale Notice (or, if an Appraisal Request was delivered, within 15
days following delivery of the Appraisal Notice), which Compelled Sale
Acceptance sets forth the binding commitment of Apollo (or its designee) to
purchase all of the issued and outstanding Shares at the price per Share and
on all of the other terms and subject to all of the conditions set forth in the
Compelled Sale Agreement and the other terms and conditions set forth herein
(including, without limitation, the condition that Apollo (or its designee)
obtain financing, within the time periods set forth below, on terms and
conditions satisfactory to Apollo (or such designee)), then the Controlling
Stockholders and such Remaining Holders shall, and the Controlling Stockholders
shall cause the other participating stockholders to, sell, and Apollo (or its
designee) shall purchase, such Shares on the terms and subject to the
conditions set forth therein as if Apollo (or its designee) is (and for
purposes of this Section 2.7 will be deemed to be) the Third Party, and the
Compelled Sale Date is (and for purposes of this Section 2.7 will be deemed to
be) the later of (1) 60 days following the delivery of the Compelled Sale
Notice or the Appraisal Notice, as the case may be, (2) if on the date of the
Compelled Sale Notice, the Company and its Subsidiaries have, in the aggregate,
greater than $100 million of outstanding Disqualified Indebtedness, 90 days
following the delivery of the Compelled Sale Notice or the Appraisal Notice, as
the case may be, and (3) the Compelled Sale Date specified in the Compelled
Sale Notice; provided, that (A) the right of Apollo (or its designee) to
purchase Shares pursuant to this Section 2.7(c) shall terminate if (x) it has
not satisfied or waived its financing contingencies on or prior to the date all
financing contingencies contained in the Compelled Sale Agreement were required
to be so satisfied or waived (or, if later, on or prior to the date set forth
in clause (1) or (2) above, as applicable) or (y) such purchase has not been
consummated on or prior to the Compelled Sale Termination Date (or, if later,
the date set forth in clause (1) or (2) above, as applicable) and (B) subject
to its ability to obtain financing on satisfactory terms and conditions within
the time periods set forth above, the obligation of Apollo (or its designee) to
purchase Shares shall terminate only in accordance with the terms of the
Compelled Sale Agreement (or similar agreement by which Apollo (or such
designee) has become bound).
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(d) Notwithstanding anything contained in this Agreement to the
contrary in connection with a Transfer (which otherwise complies with the terms
of this Agreement) of at least 66 2/3% of the Shares held by Apollo on the
Acquisition Date to a single Transferee (whether by a single transaction or a
series of transactions) Apollo may, by written notice to the Company, assign
all of its rights under this Section 2.7 to such Transferee including, without
limitation, the right to purchase all of the issued and outstanding Shares
under Section 2.7(c).
(e) Subject to the satisfaction or waiver of the terms and conditions
of the Compelled Sale Agreement (other than any condition relating to the
delivery of Shares by the Remaining Holders), the Compelled Sale shall occur at
a closing (the "Compelled Sale Closing") on the Compelled Sale Date during
normal business hours at a time and place reasonable designated by the
Controlling Stockholders and the Third Party; provided, that if the Compelled
Sale Closing has not occurred on or prior to the Compelled Sale Termination
Date, the Remaining Holders will be released from their obligation under this
Section 2.7, unless and until the Controlling Stockholders deliver a new
Compelled Sale Notice in compliance with this Section 2.7.
(f) If any Person fails to deliver certificates representing its
Shares as required by this Section 2.7 and the Compelled Sale in question is
consummated, then such Person (i) shall not be entitled to the consideration it
is to receive under this Section 2.7 until it cures such failure (provided,
that after curing such failure it shall be so entitled to such consideration
without interest), (ii) shall for all purposes be deemed no longer to be a
stockholder of the Company and have no voting rights with respect to such
Shares, (iii) shall not be entitled to any dividends or other distributions
with respect to the Shares held by it, (iv) shall have no other rights or
privileges granted to stockholders under this or any other agreement and (v) in
the event of liquidation of the Company, shall have rights subordinated to the
rights of any equity holder with respect to any consideration it would have
received if it had complied with this Section 2.7, if any, until it cures such
failure (provided, that after curing such failure it shall be so entitled to
such consideration without interest). If any party so fails to deliver such
certificates as so required it shall execute, acknowledge and deliver all such
further agreements and take all such further actions as may be necessary or
desirable to give effect to the provisions of this Section 2.7(f).
(g) No Remaining Holder shall be required to make any representations
and warranties to any Person in connection with such Transfer except as to (i)
good title and the absence of liens with respect to such Remaining Holder's
Shares, (ii) the corporate or other existence of such Remaining Holder and
(iii) the authority for and the validity and binding effect of, and the absence
of any conflicts under the charter documents and material agreements of such
Remaining Holder as to, any agreements entered into by such Remaining Holder in
connection with such Transfer. The Remaining Holders shall not be required to
provide any indemnities in connection with such Transfer except for a breach of
a such representations and warranties.
(h) The Company shall, and shall cause its Subsidiaries to, use their
respective best efforts to ensure that the terms of all Indebtedness and
preferred stock created, incurred, assumed or guaranteed by the Company or any
of its Subsidiaries after the Effective Date (and all agreements and
instruments relating thereto) do not (directly or indirectly) prohibit, or
provide for a default, right to accelerate, acceleration, put, mandatory
redemption, repurchase or repayment, or similar event, directly or indirectly,
due to, upon, in anticipation of, or following. Apollo's exercise of its rights
pursuant to this Section 2.7 or any other transaction pursuant to which Apollo
obtains or may obtain control of the Company. Any Indebtedness or preferred
stock (including,
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without limitation, the Redeemable Preferred Stock) containing any of such
terms is referred to herein as "Disqualified Indebtedness."
Section 2.8 Offering Memorandum. The Company shall cooperate with the
Investors and make available on a timely basis such information as the
Investors may reasonably request (to the extent that such information can be
provided without unreasonable expense or disruption of the Company's affairs)
to facilitate (i) Transfer of 5% or more of the issued and outstanding Shares
to a Third Party or (ii) in the case of Apollo, the financing of a Compelled
Sale, including, in the case of (A) any Transfer of 5% or more of the issued
and outstanding Shares not registered pursuant to the Securities Act or (B) in
the case of Apollo, the financing of a Compelled Sale, (x) at any time the
Company is not filing periodic reports under the Exchange Act, prompt
preparation of an offering memorandum relating to the Shares, the financing (if
applicable) and the Company and its Subsidiaries that contains such information
as is required by the Securities Act and other applicable laws to be provided
to "accredited investors" and such other information reasonably requested by
the Investors, and (y) making available to any proposed purchaser of such
Shares or proposed source of financing reasonable access to management of the
Company and its Subsidiaries.
The Company shall provide customary representations and warranties
to the selling Investors and any purchaser of such Shares or source of
financing, as the case may be, to the effect that the information contained in
any such offering memorandum that has been provided by the Company does not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and shall indemnify
each of the Investors, the purchaser or source of financing, as the case may
be, and their respective representatives and agents from and against any loss,
claim, damage, liability or expense incurred by any of them as a result of any
breach of such representation and warranty.
Section 2.9 Deliveries at Closing; Method of Payment of Purchase
Price. Each Tag-Along Stockholder, Controlling Stockholder and Remaining
Holder, as applicable, shall deliver to the Proposed Purchaser, Apollo or the
Third Party, as applicable, against delivery of the purchase price for the
Shares being sold by it, (i) certificates appropriately endorsed and
representing the Shares being sold, free and clear of any lien, claim or
encumbrance, and (ii) such other documents, including, without limitation,
executed stock powers and evidence of ownership and authority, as the
purchasers may reasonably request. The purchase price shall be paid by wire
transfer of immediately available funds to the bank account designated by each
Tag-Along Stockholder, Controlling Stockholder and Remaining Holder, or by
certified check if the amount payable to the recipient thereof is less than
$1,000,000.
ARTICLE III
SCOPE OF BUSINESS OF THE COMPANY
Section 3.1 Scope of Business. As of the Effective Date, the Company
legally and beneficially will own 100% of the outstanding shares of capital
stock of Dominick's. Dominick's and its Subsidiaries are engaged primarily in
the operation of conventional retail supermarkets, warehouse format
supermarkets and grocery warehouse facilities located principally in Illinois
and Indiana.
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Section 3.2 Business Opportunities. None of Yucaipa, its partners nor
any Person controlled by any of them (other than the Company or its
Subsidiaries) shall, directly or indirectly, enter into, or agree or commit to
enter into, any material investments in or otherwise exploit any business
opportunity primarily related to the operation of conventional retail
supermarkets, warehouse format supermarkets and grocery warehouse facilities
within the States of Illinois, Indiana, Iowa or Wisconsin or in any other market
in which the Company or any of its Subsidiaries does business (other than an
investment in the shares of any public company representing less than 5% of
such company's fully diluted common equity) (a "Business Opportunity") except
with the approval of Apollo and the holders of a majority of the Shares held by
the Other Purchasers, so long as the Other Purchasers beneficially own at least
50% of the Shares owned by the Other Purchasers as of the Acquisition Date.
ARTICLE IV
ADDITIONAL RIGHTS AND OBLIGATIONS OF
INVESTORS AND THE COMPANY
Section 4.1 Management Fees. Neither the Company nor any of its
Subsidiaries shall pay to Yucaipa or any of its Affiliates compensation for
providing services to the Company and its Subsidiaries (or reimbursement of
expenses in connection therewith) other than pursuant to (a) the Management
Agreement, (b) customary compensation and expense reimbursement arrangements
between the Company and Xxxxxx X. Xxxxx in his capacity as an officer or
employee of the Company, or (c) any similar agreement or arrangement approved
by a majority of the disinterested members of the Board of Directors with
respect to such agreement or arrangement.
Section 4.2 Consulting Services. Neither the Company nor any of its
Subsidiaries may retain or employ Yucaipa or any of its Affiliates as a
financial advisor or consultant other then solely in accordance with the terms
of the Management Agreement or any similar agreement or arrangement approved by
the Board of Directors and a majority of the Investor Nominees.
Section 4.3 Access to Information; Confidentiality. Upon the request
of any single Investor owning more than 10% of the outstanding Shares or of any
Purchaser, the Company shall afford such Person and its accountants, counsel
and other representatives reasonable access to all of the properties, books,
contracts, commitments and records (including, but not limited to, tax returns)
of the Company and its Subsidiaries that are reasonably requested. Such Person
will, and will cause its agents to, conduct any such investigations on
reasonable advance notice, during normal business hours, with reasonable
numbers of persons and in such a manner as not to interfere unreasonably with
the normal operations of the Company and its Subsidiaries.
Except as otherwise required by applicable law, neither the Company nor
any of its Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of any customer or other Person, would jeopardize the attorney-client
privilege of the Person in possession or control of such information, or would
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date hereof. The parties hereto
will make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
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The Investors shall, and shall use their best efforts to cause their
representatives to, keep confidential all such information to the same extent
such information is treated as confidential by the Company, and shall not
directly or indirectly use such information for any competitive or other
commercial purpose. The obligation to keep such information confidential shall
not apply to (i) any information that (x) was already in the investors'
possession prior to the disclosure thereof by the Company (other than through
disclosure by any other Person subject to a duty of confidentiality), (y) was
then generally known to the public, or (z) was disclosed to the investors by a
third party not bound by an obligation of confidentiality or (ii) disclosures
made as required by law or legal or regulatory process. If in the absence of a
protective order or the receipt of a waiver hereunder the investors are
nonetheless, in the opinion of their counsel, compelled to disclose information
concerning the Company to any tribunal or governmental body or agency or else
stand liable for contempt or suffer other censure or penalty, the Investors may
disclose such information to such tribunal or governmental body or agency
without liability hereunder.
Section 4.4 Furnishings of Information. (a) The Company
shall deliver to such Investor, as long as such Investor shall own any Shares:
(i) as promptly as practical, but in no event later
than 60 days after the close of each of its first three
quarterly accounting periods during any fiscal year of the
Company, the consolidated balance sheet of the Company as at the
end of such quarterly period, and the related consolidated
statements of operations, stockholders' equity and cash flows
for such quarterly period, and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period,
and in each case setting forth comparative figures for the
related periods in the prior fiscal year (if such comparative
figures are available without unreasonable expense), all of
which shall be certified by the chief financial officer of the
Company, to have been prepared in accordance with generally
accepted accounting principles, subject to year-end audit
adjustments, together with an MD&A;
(ii) as promptly as practical, but in no event later
than 105 days after the close of each fiscal year of the
Company, the consolidated balance sheet of the Company as of the
end of such fiscal year and the related consolidated statements
of operations, stockholders' equity and cash flows for such
fiscal year, in each case setting forth comparative figures for
the preceding fiscal year, and certified by independent
certified public accountants as recognized national standing,
together with an MD&A; and
(iii) all reports, if any, filed by the Company or any
Subsidiary of the Company with the Commission under the Exchange
Act, as promptly as practical, but in no event later than 15
days after the filing of any such reports with the Commission.
(b) The provisions of Sections 4.4(a)(i) and (ii) above shall
be deemed to have been satisfied if the Company delivers the reports timely
filed by the Company with the Commission on Form 10-Q or 10-K, as applicable,
for such periods promptly, but in no event later than 15 days after filing of
any such Form with the Commission.
(c) The Company shall deliver to Apollo and each Other
Purchaser holding not less than 1,397,925 Shares a copy of all notices,
statements and information sent to the Agent or the Lenders pursuant to Section
6.1 of the Credit Agreement, but in no event later than 15 days after each such
delivery to the Agent or Lenders, as the case may be.
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Section 4.5 Regulatory Problems, Etc. (a) Each Investor that
has a potential Regulatory Problem shall notify the Company of the existence
thereof and of the percentage amount of the Company's equity securities that
would cause it to have such Regulatory Problem. A Person shall be deemed to
have a "Regulatory Problem" when such Person and its Affiliates would own,
control or have the power over a greater number or percentage of securities of
any kind issued by the Company or any other Person than are permitted under any
requirement of any governmental authority.
(b) Before the Company or any of its Subsidiaries redeems,
purchases or otherwise acquires, directly or indirectly, or converts or takes
any action with respect to the voting rights of, any shares of any of its
capital stock or any securities convertible into or exchangeable for any shares
of any class of its capital stock, the Company shall give prompt written notice
of such pending action to any Investor that would, according to the terms of
any such prior notice, have a Regulatory Problem as a result of such action.
(c) Before the Company or any of its Subsidiaries directly or
indirectly takes any action that would result in the Company being treated as a
RPHC, the Company shall give prompt written notice to each Purchaser that has
advised the Company it desires to receive such notice.
(d) Upon the written request of any Investor so notified
pursuant to clauses (b) or (c), above, made within 10 days after its receipt
thereof, the Company shall (or shall cause its Subsidiaries to) defer taking
such action for such period (not to extend beyond 45 days after such investor's
receipt of the Company's original notice) as such Investor requests.
ARTICLE V
CORPORATE GOVERNANCE AND VOTING
Section 5.1 Boards of Directors. (a) The Board of Directors
and the Dominick's Board shall each be composed of 11 members (or such lesser
number of members as actually shall have been designated by the parties hereto
in accordance with the provisions of this Section 5.1). Yucaipa shall be
entitled, but not required, to designate 6 members to each such board of
directors (collectively, the "Yucaipa Nominees"). Apollo (or any representative
thereof designated by Apollo) shall be entitled to designate two members to each
such board of directors (collectively, the "Apollo Nominees") and the
Independent Nominator shall be entitled to designate one member to each such
board of directors (the "Other Nominees" and, together with the Apollo
Nominees, the "Investor Nominees"). The remaining two members of each such
board of directors shall be selected by the Board of Directors and shall be
"independent directors" as required by the rules and regulations of the New
York Stock Exchange, Inc. (each, an "Independent Director").
On the Effective Date, the Board of Directors shall be divided
into three classes designated as "Class I", "Class II" and "Class III." Subject
to the provisions of this Section 5.1, Class I shall be comprised of two Yucaipa
Nominees and one Apollo Nominee; Class II shall be comprised of two Yucaipa
Nominees, one Apollo Nominee and one Independent Director; and Class III shall
be comprised of two Yucaipa Nominees, one Other Nominee and one Independent
Director. The terms of office of the respective classes of directors will be as
follows: Class I will expire at the annual meeting of stockholders to be held in
1997; Class II will expire at the annual meeting of stockholders to be held in
1998; and Class III will expire at the annual meeting of
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stockholders to be held in 1999. At each annual meeting of stockholders
beginning in 1997, the successors to directors whose terms will then expire
will be elected to serve for a three-year term (i.e., from the time of election
until the third annual meeting following such election).
If Yucaipa is the Independent Nominator, each Other Nominee shall be an
individual who has no other relationship with the Company, any stockholder of
the Company or any of their respective Affiliates and who is qualified by
reason of such individual's expertise in financial and investment matters (as
distinct from the operation of business concerns) to serve as a member of such
Board; provided, that any Other Purchaser that holds not less than 35% of the
Shares then held by the Other Purchasers may assert to Yucaipa that any
individual so appointed as an Other Nominee does not meet the qualifications
set forth in this sentence, and any dispute as to such matter shall be resolved
by arbitration upon terms reasonably acceptable to Yucaipa and the Requisite
Holders, and such individual shall continue to serve as an Other Nominee during
the pendency of such dispute.
(b) The Investors and the Controlling Stockholders shall vote all
of the Shares (other than shares of Class B Common Stock) owned or held of
record by them at all regular and special meetings of the stockholders of the
Company called or held for the purpose of filing positions on the Board of
Directors, and in each written consent executed in lieu of such a meeting of
stockholders, and each party hereto shall take all actions otherwise necessary,
to ensure (to the extent within the parties' collective control) the election
to the Board of Directors and the Dominick's Board of the Yucaipa Nominees and
Investor Nominees.
(c) The Company, Dominick's, the Controlling Stockholders and the
Investors shall use their respective best efforts to call, or cause the
appropriate officers and directors of the Company or Dominick's, as applicable,
to call, a special meeting of stockholders of the Company or Dominick's, as
applicable, and to vote all of the Shares (other than shares of Class B Common
Stock) or shares of capital stock of Dominick's, as applicable, owned or held
of record by them for, or to take all actions by written consent in lieu of any
such meeting necessary to cause, the removal (with or without cause) of (A) any
Yucaipa Nominee if Yucaipa requests such director's removal in writing for any
reason, (B) any Apollo Nominee if Apollo requests such director's removal in
writing for any reason and (C) any Other Nominee if the Independent Nominator
requests such director's removal in writing for any reason. Yucaipa, Apollo and
the Independent Nominator, respectively, shall have the right to designate a
new nominee in the event any Yucaipa Nominee, Apollo Nominee or Other Nominee,
respectively, shall be so removed under this Section 5.1(c) or shall vacate his
directorship for any reason.
Except as provided in this Section 5.1(c), each party hereto agrees that
at any time that it is then entitled to vote for the election or removal of
directors, it will not vote in favor of the removal of any Yucaipa Nominee or
Investor Nominee unless (i) such removal shall be at the request of the party
who nominated such director pursuant to the provisions of Section 5.1(a) or
(ii) the right of the party who nominated such director to do so has terminated
in accordance with Section 5.1(f).
(d) The Company shall not, and shall not permit any of its
Subsidiaries to, without the consent of holders of a majority of the Shares
(other than shares of Class B Common Stock) held by Yucaipa, Apollo or the
Independent Nominator, as the case may be, take any action that under the
Charter Documents or this Agreement requires the approval of one or more
Yucaipa Nominees, Apollo Nominees or Other Nominee, as the case may be, if any
of the Yucaipa
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Nominees, Apollo Nominees or Other Nominee, as the case may be, approving such
action are Persons whose removal from the Board of Directors has been requested
at or prior to the time of such action by the party who nominated such director
pursuant to Section 5.1(a). Each party hereto shall use reasonable efforts to
prevent any action from being taken by the Board of Directors or the Dominick's
Board, as the case may be, during the pendency of any vacancy due to death,
resignation or removal of a director, unless the Person entitled to have a
person nominated by it elected to fill such vacancy shall have failed, for a
period of 10 days after notice of such vacancy, to nominate a replacement;
provided that the provisions of this Section 5.1(d) shall not apply in
circumstances in which action must be taken by the Board of directors or the
Dominick's Board, as the case may be, to protect the best interests of the
Company or Dominick's Board, as the case may be. If such vacancy relates to an
Other Nominee, the Independent Nominator shall use its best efforts to nominate
a replacement Other Nominee during such 10-day period.
(e) As of the Effective Date, the Yucaipa Nominees shall be Xxxxxx
X. Xxxxxx, Xxxxx XxXxxxxxxx Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx, Xxxxxx
X. Xxxxxxx and Xxxx X. Xxxxxx; the Apollo Nominees shall be Xxxxx X. Xxxxxx and
Xxxxx X. Xxxxxx; and the Other Nominee shall be Xxxxxx X. Xxxxxxx.
(f) (i) The right of Yucaipa to designate members to the Board of
Directors and the Dominick's Board under this Section 5.1 shall (A) be
decreased by three with respect to each Board (which, in the case of the Board
of Directors, shall mean one director in each of the three classes) if Xxxxxx
X. Xxxxxx ceases to beneficially own at least 978,298 Shares (33 1/3% of the
Shares beneficially owned by the Yucaipa Affiliates on the Acquisition Date)
and (B) shall terminate if Xxxxxx X. Xxxxxx ceases to beneficially own at least
733,727 Shares (25% of the Shares beneficially owned by the Yucaipa Affiliates
on the Acquisition Date); provided, that if the termination of Yucaipa's rights
pursuant to this Section 5.1(f) is due to the death of Xxxxxx X. Xxxxxx, such
termination will not become effective until 60 days after the date hereof.
(ii) the right of Apollo to designate members to the Board of
Directors and the Dominick's Board under this Section 5.1 shall (A) be
decreased by one with respect to each Board if Apollo ceases to
beneficially own at least 1,951,722 Shares (33 1/3% of the Shares
beneficially owned by Apollo on the Acquisition Date) and (B) shall
terminate if Apollo ceases to beneficially own at lest 1,463,795 shares
(25% of the Shares beneficially owned by Apollo on the Acquisition
Date).
(iii) the right of the Independent Nominator to designate a
member to the Board of Directors and the Dominick's Board under this
Section 5.1 shall terminate if the Other Purchasers cease to
beneficially own at least 1,949,278 Shares (33 1/3% of the Shares
beneficially owned by the Other Purchasers on the Acquisition Date).
(g) (i) Notwithstanding anything in this Agreement to the contrary,
in connection with a Transfer of at least 66 2/3% of the Shares held by Apollo
on the Acquisition Date to a single Transferee (other than any of the Yucaipa
Affiliates) whether by a single transaction or a series of transactions, Apollo
may, by written notice to the Company, assign all of its rights under this
Section 5.1 (other than any such rights it may have as an Independent Nominator)
to such Transferee and without limiting the foregoing, such Transferee's rights
to designate directors under this Section 5.1 shall not be reduced until such
Transferee and its Permitted Transferees collectively cease to beneficially own
at least 33 1/3% or 25%, as the case may be, of the number of Shares
beneficially owned by Apollo on the Acquisition Date; provided, that such
directors shall
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not be deemed Investor Nominees unless Apollo has provided Yucaipa the
opportunity to purchase such Shares pursuant to clause (ii) below and such
Shares are transferred to a Transferee other than any of the Yucaipa Affiliates.
(ii) Apollo may (but shall not be required to) provide
Yucaipa with written notice of its desire to effect a proposed Transfer
of at least 66 2/3% of the Shares beneficially owned by Apollo on the
Acquisition Date (the "ROFO Notice"), which notice shall set forth: (1)
the proposed price to be paid per Share; (2) the minimum number of
Shares proposed to be Transferred (the "ROFO Shares"); and (3) the names
of up to five proposed Transferees. If Apollo delivers a ROFO Notice and
Yucaipa delivers to Apollo, within 15 days following the delivery
thereof, a written acceptance setting forth the binding commitment
(subject to the receipt of all required governmental approvals and
financing on terms and conditions satisfactory to Yucaipa) of Yucaipa to
purchase all (but not less than all) of the ROFO Shares at the price per
Share set forth in the ROFO Notice (a "ROFO Acceptance"), then Apollo
shall sell, and Yucaipa shall purchase, all the ROFO Shares on a date no
later than 90 days after deliver of the ROFO Notice (the "ROFO Closing
Date"). If Yucaipa timely elects not to purchase the ROFO Shares, fails
to deliver a ROFO Acceptance within 15 days following delivery of the
ROFO Notice, or fails to purchase the ROFO Shares on or prior to the
ROFO Closing Date (which failure shall not relieve Yucaipa of its
binding commitment, subject to the receipt of all required governmental
approvals and financing on terms and conditions satisfactory to Yucaipa,
to purchase such Shares), then in connection with a Transfer by Apollo
of a number of Shares not less than the number of ROFO Shares to any one
of the Transferees specified in the ROFO Notice for a price per Share
not less than that specified in the ROFO Notice. Apollo may assign its
rights to designate directors in accordance with the terms of clause (i)
above, and thereafter directors designated by such Transferee under
Section 5.1 shall be deemed Investor Nominees; provided that, if Yucaipa
has timely elected not to purchase the ROFO Shares or failed to deliver
a ROFO Acceptance within 15 days following delivery of the ROFO Notice,
such Transfer is consummated on or before the later of (i) the 90th day
following delivery of the ROFO Notice and (ii) if Apollo and such
Transferee have entered into a binding agreement with respect to such
Transfer on or prior to such 90th day, the date on which all regulatory
approvals with respect to such Transfer have been obtained.
(h) (i) The Bylaws of each of the Company and
Dominick's shall authorize the establishment of an Executive Committee of the
Board of Directors and the Dominick's Board, and may authorize the
establishment of other committees of the Board of Directors or the Dominick's
Board, as the case may be, comprised in any case of such persons as a majority
of the Board of Directors or the Dominick's Board, as the case may be, shall
approve, and having authority, subject to applicable law, to take all actions
that (A) are ancillary to or arise in the normal course of the businesses of
the Company or Dominick's, as the case may be, (B) implement and are consistent
with resolutions of the Board of Directors or the Dominick's Board, as the case
may be, or (C) in the case of any Compensation Committee or Audit Committee, are
customary for such committee of a public company to perform. Any other
delegations of authority to the Executive Committee or any other committee of
the Board of Directors or the Dominick's Board, as the case may be, shall
require the prior written approval of a majority of the Investor Nominees. At
least one of the Apollo Nominees shall be entitled to be a member of any Audit
Committee.
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(ii) Each committee of the Board of Directors or the
Dominick's Board, as the case may be, to which authority has been
delegated, shall keep complete and accurate minutes and records of all
actions taken by such committee, prepare such minutes and records in a
timely fashion and promptly distribute such minutes and records to each
member of the Board of Directors or the Dominick's Board, as the case
may be.
Section 5.2 Action by the Board of Directors. All decisions
of the Board of Directors shall require the affirmative vote of a majority of
the directors of the Company then in office, or a majority of the members of an
Executive Committee, or any other committee, of the Board of Directors, to the
extent such decisions may be lawfully delegated to an Executive Committee, or
any other committee, pursuant to Section 5.1(h).
Section 5.3 Charter Documents. (a) Exhibits A and B set
forth copies of the Charter Documents, each in the form in which it is to be in
effect on the Effective Date.
(b) The Company covenants that it will act, and each
Controlling Stockholder and Investor agrees to use its best efforts to cause
the Company to act, in accordance with its Charter Documents in all material
respects. Each Controlling Stockholder and Investor shall vote all the Shares
(other than shares of Class B Common Stock) owned or held of record by it at
any regular or special meeting of stockholders of the Company or in any written
consent executed in lieu of such a meeting of stockholders, and shall take all
action necessary, to ensure (to the extent within the parties' collective
control) that (i) the Charter Documents of the Company do not, at any time,
conflict with the provisions of this Agreement, and (ii) unless an amendment is
approved by the Board of Directors, the Charter Documents of the Company
continue to be in effect in the form attached hereto as Exhibits A and B.
Section 5.4 Appointment of Representative. Until the
termination of this Agreement, each Other Investor shall and shall cause its
Permitted Transferees (jointly with the transferor, if it retains any Shares)
to appoint one proxy to vote all Shares owned by such Other Investor and its
Permitted Transferees. If requested by the Company, each of Apollo, the Yucaipa
Affiliates and the Controlling Stockholders shall designate one Person (which
designated Person may be changed from time to time by notice to the Company) to
make, on their respective behalf, any and all elections and designations and to
give and receive any and all notices required or permitted hereunder.
Section 5.5 Board Visitation Rights. The Company shall (a)
provide notice of each meeting of the Board of Directors and of the Dominick's
Board concurrently with, and in the same manner as, the notice of such meeting
provided to the members of such board (but not less than one Business Day prior
to such meeting) to (i) each Purchaser, as long as such Purchaser shall
beneficially own at least 698,962 Shares and (ii) each Investor owning more
than 10% of the outstanding Shares, (b) provide each such Person a copy of
all materials and written information provided to members of each such board
and any committee thereof in connection with any such meeting concurrently with
the distribution thereof to such members, and (c) permit a single
representative of each such Person to attend and observe each such board
meeting (in person or telephonically); provided, that (x) the Company may
redact or withhold all or any portion of such materials and/or (y) exclude any
such representative from all or any portion of any such meeting, if the members
of such board or committee reasonably determine in good faith that such
redaction, withholding or exclusion is required in order to preserve the
attorney-client privilege with respect to any matter before the Board of
Directors or the Dominick's Board, as the case may be.
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ARTICLE VI
TERMINATION
Section 6.1 Termination. Except as otherwise provided herein with
respect to certain specific provisions, this Agreement shall terminate upon the
earlier to occur of:
(i) the mutual agreement of the parties hereto,
(ii) with respect to any party hereto other than the Company, such
party (or its Permitted Transferees) ceasing to own any Shares,
(iii) such time as less than 10% of the Shares continue to be subject
to the provisions of this Agreement, or
(iv) March 22, 2005.
If this Agreement has not otherwise terminated prior to March 22,
2003, the Investors and the Controlling Stockholders shall undertake to renew
provisions of this Agreement relating to the voting of Shares for a successive
10-year period, or such shorter period as this Agreement is in effect.
Notwithstanding the foregoing, Section 4.3 shall survive to the later of March
22, 2005 or the termination of this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 No Inconsistent Agreements. Each party hereto hereby
consents to the termination of any other prior written or oral agreement or
understanding restricting, conditioning or limiting the ability of any party to
transfer or vote Shares and of any registration rights agreements entered into
pursuant to or in connection therewith, other than the Registration Rights
Agreements.
Each of the Company and the Controlling Stockholders represent and
agree that, as of the Effective Date, there is no (and from and after the
Effective Date they will not, and will cause their respective Subsidiaries and
Affiliates not to, enter into any) agreement with respect to any securities of
the Company or any of its Subsidiaries (and from and after the Effective Date
neither the Company nor any Controlling Stockholder shall take, or permit any of
their Subsidiaries or Affiliates to take, any action) that is inconsistent in
any material respect with the rights granted to the Investors in this Agreement.
Without limiting the foregoing, the Company represents that, (a)
except for (i) this Agreement, (ii) the Company's 1995 Stock Option Plan, (iii)
the Company's 1995 Management Equity Plan and those certain Management
Stockholders Agreements entered into thereunder, (iv) the Company's 1996 Equity
Participation Plan, and (v) the Registration Rights Agreements, there are no
other existing agreements relating to the voting or registration of any equity
securities of the Company or any of its subsidiaries and (b) except for (i) the
agreements specified in clause (a), above, there are no other existing
agreements between the Company and any other holder of Shares relating to the
transfer of any equity securities of the Company or any of its Subsidiaries.
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Section 7.2 NO OTHER AFFILIATE STOCKHOLDERS. Each Yucaipa Affiliate
represents to the Investors that, as of the Acquisition Date, except for
2,934,909 shares of Common Stock owned collectively by the Yucaipa Affiliates,
the Yucaipa Warrant, limited partnership interests in Crescent Shared
Opportunity Fund II, L.P., and options to purchase 109,784 shares of Common
Stock owned collectively by Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxxx, no Yucaipa
Affiliate or Affiliate of any Yucaipa Affiliate is the beneficial or record
owner of (or has any pecuniary interest in) any Shares or any rights, options
or warrants to purchase Shares or securities convertible into Shares.
Section 7.3 RECAPITALIZATION, EXCHANGES, ETC. If any capital stock
or other securities are issued in respect of, in exchange for, or in
substitution of, any Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Shares or any other change in capital
structure of the Company, then appropriate adjustments shall be made with
respect to the relevant provisions of this Agreement so as to fairly and
equitably preserve, as far as practicable, the original rights and obligations
of the parties hereto under this Agreement and the terms "Common Stock," "Class
B Common Stock," and "Shares," each as used herein, shall be deemed to include
shares of such capital stock or other securities, as appropriate. Without
limiting the foregoing, whenever a particular number of Shares is specified
herein, such number shall be adjusted to reflect stock dividends, stock-splits,
combinations or other reclassifications of stock or any similar transactions.
Section 7.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, and their respective
successors and permitted assigns; provided that (i) neither this Agreement nor
any rights or obligations hereunder may be transferred or assigned by the
Company (except by operation of law in any merger); (ii) neither this Agreement
nor any rights or obligations hereunder may be transferred or assigned by the
Controlling Stockholders or any Investor except to any Person to whom it has
Transferred Shares in compliance with this Agreement and who has become bound
by this Agreement pursuant to Section 2.2 hereof; and (iii) the rights of the
parties under Article V hereof may not be assigned to any Person except as
explicitly provided therein. If any party hereto shall acquire additional
Shares, such Shares shall, except as otherwise expressly provided herein, be
held subject to (and entitled to all the benefits of) all of the terms of this
Agreement.
Section 7.5 NO WAIVERS; AMENDMENTS. (a) No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(b) This Agreement may not be amended or modified, nor may any
provision hereof be waived, other than by a written instrument signed by (x)
Yucaipa, (y) the holders of a majority of the Shares held by the Purchasers and
(z) so long as the Other Purchasers beneficially own at least 50% of the Shares
beneficially owned by them as of the Acquisition Date, at least two unrelated
Purchasers; provided, however, that
(i) so long as Apollo beneficially owns at least 25% of the Shares
beneficially owned by Apollo on the Acquisition Date, without the consent of
Apollo, no amendment,
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modification or waiver that adversely affects the rights or duties of
Apollo hereunder may be effected,
(ii) so long as Apollo beneficially owns at least 10% of the Shares
beneficially owned by Apollo on the Acquisition Date, without the
consent of Apollo, no amendment, modification or waiver of Section 2.7,
6.1 or this Section 7.5 that adversely affects the rights or duties of
Apollo thereunder may be effected.
(iii) so long as any Other Purchaser beneficially owns at least 25% of
the Shares beneficially owned by it on the Acquisition Date and not less
than 698,962 Shares without the consent of such Other Purchaser, no
amendment, modification or waiver that adversely affects the rights or
duties of such Other Purchaser hereunder may be effected.
(iv) so long as the Investors, in the aggregate, beneficially own at
least 25% of the Shares beneficially owned by such Persons on the
Acquisition Date, without the consent of a majority of the Shares then
held by the Investors no amendment, modification or waiver that
adversely affects the rights or duties of the Investors hereunder may be
effected, and
(v) without the consent of each Investor adversely affected thereby,
no amendment, modification or waiver of Sections 4.5 or 7.15 may be
effected.
The parties hereto shall use their best efforts not to effect any
amendments to the Charter Documents that would circumvent the provisions of
this Section 7.5(b).
Section 7.6 Notices. All notices, demands, requests, consents or
approvals (collectively, "Notices") required or permitted to be given hereunder
or which are given with respect to this Agreement shall be in writing and shall
be personally delivered or mailed, registered or certified, return receipt
requested, postage prepaid (or by a substantially similar method), or delivered
by a reputable overnight courier service with charges prepaid, or transmitted
by hand delivery, telegram, telex or facsimile, addressed as set forth below,
or such other address (and with such other copy) as such party shall have
specified most recently by written notice. Notice shall be deemed given or
delivered on the date of service or transmission if personally served or
transmitted by telegram, telex or facsimile. Notice otherwise sent as provided
herein shall be deemed given or delivered on the third Business Day following
the date mailed or on the next Business Day following delivery of such notice
to a reputable overnight courier service.
To the Company, Dominick's or the Controlling Stockholders:
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
x/x Xxx Xxxxxxx Xxxxxxxxx
00000 Xxxxx Xxxxxx Boulevard
Fifth Floor
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Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
and
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
To the Purchasers:
To the address specified on the signature page executed by each
such Purchaser.
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
To the Other Investors:
To the address specified on the signature page executed by each
such Other Investor.
Section 7.7 Inspection. So long as this Agreement shall be in
effect, this Agreement and, amendments hereto and waivers hereof shall be
distributed to all parties hereto after becoming effective and shall be
available upon the request of any Investor.
Section 7.8 GOVERNING LAW. THIS AGREEMENT SHALL GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS, EXCEPT AS TO MATTERS OF CORPORATE GOVERNANCE,
WHICH SHALL BE INTERPRETED IN ACCORDANCE WITH THE GENERAL CORPORATION LAW OF THE
STATE OF DELAWARE.
Section 7.9 Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
Section 7.10 Entire Agreement. This Agreement, together with the
Stock Purchase Agreement and the Registration Rights Agreements attached as
Exhibit C hereto, constitutes the entire agreement and understanding among the
parties hereto with respect to the
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subject matter hereof and thereof and supersedes any and all prior agreements
and understandings, written or oral, relating, to the subject matter hereof.
Section 7.11 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdictions, it
being intended that all rights and obligations of the panics hereunder shall be
enforceable to the fullest extent permitted by law.
Section 7.12 Counterparts. This Agreement may be signed in
counterparts, each of which constitute an original and which together shall
constitute one and the same agreement.
Section 7.13 Required Approvals. If approval of this Agreement or any
of the transactions contemplated hereby shall be required by any governmental
or supra-governmental agency or instrumentality or is considered to be
necessary or advisable to all the parties hereto, all parties hereto shall use
their best efforts to obtain such approval. If any required approval is not
obtained or it becomes clear that such approval will not be granted, any party
shall immediately give the other parties hereto notice and the parties hereto
shall promptly meet and negotiate in good faith to modify their respective
obligations as necessary.
Section 7.14 Consistency. In the event of a conflict between this
Agreement on the one hand and the Charter Documents or any agreement relating
to the securities of the Company, or its Subsidiaries on the other hand, the
terms and provisions of this Agreement shall be deemed to set forth the true
intentions of the parties (to the extent permitted by applicable law) and shall
supersede the terms of any other agreement.
Section 7.15 Public Disclosure. The Company shall not, and shall not
permit any of its Subsidiaries to, make any public announcement or disclosures
relating to referring to any Investor, any of its affiliates, or any of their
respective directors, officers, partners, employees or agents (including,
without limitation, any Person designated as a director of the Company or
Dominick's pursuant to the terms hereof) unless such Investor has consented to
the form and substance thereof, which consent shall not be unreasonably
withheld except to the extent such disclosure is, in the opinion of counsel,
required by law or by stock exchange regulation, provided that (i) any such
required disclosure shall only be made, to the extent consistent with law,
after consultation with such Investor and (ii) no such announcement or
disclosure (except as required by law or by stock exchange regulation) shall
identify any such Person without such Investor's prior consent.
(signature pages follow)
28
32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
DOMINICK'S SUPERMARKETS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
DOMINICK'S FINER FOODS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
S-1
33
THE YUCAIPA AFFILIATES
YUCAIPA BLACKHAWK PARTNERS, L.P.
By: Yucaipa Management L.L.C., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Number of Shares of
Common Stock: 2,018,106
YUCAIPA CHICAGO PARTNERS, L.P.
By: Yucaipa Management L.L.C., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Number of Shares of
Common Stock: 253,470
YUCAIPA DOMINICK'S PARTNERS, L.P.
By: Yucaipa Management L.L.C., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
Number of Shares of
Common Stock: 663,333
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
S-2
34
THE PURCHASERS
APOLLO INVESTMENT FUND, L.P.
By: Apollo Advisors, L.P.
Its General Partner
By: Apollo Capital Management, Inc.
Its Managing General Partner
By: /s/
-----------------------------------
Name:
Title:
Address for notice:
c/o Apollo Advisors, L.P.
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn:
Fax:
Number of Shares of
Common Stock:
Number of Shares of
Class B Common Stock:
X-0
00
XXXXXX XXXXXXXXXX XXXX XXX, L.P.
By: Apollo Advisors II, L.P.
Its General Partner
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/
--------------------------------------
Name:
Title:
Address for notice:
c/o Apollo Advisors II, L.P.
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn:
Fax:
Number of shares of
Common Stock:
Number of Shares of
Class B Common Stock:
S-4
36
APOLLO OVERSEAS PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
Its Managing General Partner
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/
--------------------------------------
Name:
Title:
Address for notice:
c/o Apollo Advisors II, L.P.
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn:
Fax:
Number of Shares of
Common Stock:
Number of Shares of
Class B Common Stock:
S-5
37
APOLLO (UK) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.
Its Managing General Partner
By: Apollo Capital Management II, Inc.
Its General Partner
By: /s/
--------------------------------------
Name:
Title:
Address for notice:
c/o Apollo Advisors II, L.P.
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn:
Fax:
Number of Shares of
Common Stock:
Number of Shares of
Class B Common Stock:
S-6
38
BT INVESTMENT PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------
Name: Xxxxxx X. Xxxx
Title: Managing Director
Address for Notice:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-7
39
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners
Its: General Partner
By: /s/
-----------------------------
General Partner
Address for Notice:
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: L Xxxxxx Xxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
X-0
00
XXXXXXXX/XXXX 1 PARTNERS, L.P.
By: /s/
------------------------------------
Name:
Title:
By: /s/
------------------------------------
Name:
Title:
Address for Notice:
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Fax: (000) 000-0000
Number of Shares of Common Stock:
Number of Shares of Class B Common Stock:
TCW SHARED OPPORTUNITY
FUND II, L.P.
By: /s/
------------------------------------
Name:
Title:
By: /s/
------------------------------------
Name:
Title:
Address for Notice:
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Fax: (000) 000-0000
Number of Shares of Common Stock:
Number of Shares of Class B Common Stock:
X-0
00
XXX-XXXX XXXXXXXXXXXXXXXXXX
By: /s/ /s/
------------------------
Name:
Title:
Address for Notice:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-10
42
CONTINENTAL CASUALTY COMPANY
By: /s/ Xxxxxxx X. Dubborke
-------------------------
Name: Xxxxxxx X. Dubborke
Title: Vice President
Address for Notice:
c/o Loews Holding Corp.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-11
43
FLEET NATIONAL BANK
By: /s/
---------------------
Name: /s/
Title: MD
Address for Notice:
Fleet National Bank
0 Xxxxxxx Xxxxxx
Xxxx Xxxx XXXXX00X
Xxxxxx, XX 000000
Attention: Xxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-12
44
FSC CORP.
By: /s/ Xxxx Xxxxxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxxx Xxxxxx
Title: Vice President
Address for Notice:
x/x Xxxx Xxxxxx Xxxxxxx
000 Xxxxxxx Xxxxxx, XX 00-00-00
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx Xxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-13
45
INDOSUEZ DOMINICK'S PARTNERS
By: Indosuez XX XX, Inc., its
Managing General Partner
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx, Vice President
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Xxxxxx Xxxxxx, Vice President
Address for Notice:
x/x Xxxxxxxx Xxxxxxx
0000 Xxxxxx of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
X-00
00
XXXXXXXXXXXXXX XXXXXXXXXXX (U.S.)
CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: SVP
Address for Notice:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-15
47
MIDLAND MONTAGU PRIVATE EQUITY
INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
Address for Notice:
000 Xxxxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-16
48
OKGBD & CO.
By: /s/
-------------------------
Name:
Title:
Address for Notice:
Xxx Xxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
Number of Shares of
Class B Common Stock:
S-17
