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STOCK PURCHASE AGREEMENT
Dated as of May 19, 1998
By and Between
KONINKLIJKE AHOLD N.V.
(Royal Ahold)
and
THE 1224 CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................ 1
Section 1.1 Definitions........................................................ 1
ARTICLE II SALE OF STOCK AND TENDER OFFER........................................................ 6
Section 2.1 Sale of Transferred Shares......................................... 6
Section 2.2 Purchase Price for Transferred Shares.............................. 6
Section 2.3 Closing............................................................ 6
Section 2.4 Transfer Taxes..................................................... 6
Section 2.5 The Tender Offer................................................... 6
Section 2.6 Corporation Actions................................................ 7
Section 2.7 Tender of Class A Shares........................................... 10
Section 2.8 Stock Option and Other Plans. ..................................... 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER......................................... 11
Section 3. Representations and Warranties of the Seller....................... 11
Section 3.1 Legal Status....................................................... 11
Section 3.2 Power and Authority; Enforceability................................ 11
Section 3.3 Ownership of Transferred Shares.................................... 12
Section 3.4 No Conflicts; Consents of Third Parties; Compliance with Laws...... 12
Section 3.5 Disclosure......................................................... 13
Section 3.6 Broker's or Finder's Fees.......................................... 13
Section 3.7. Tender Offer Documents and Schedules 14D-9 ........................ 13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING
THE CORPORATION....................................................................... 14
Section 4. Representations and Warranties of the Seller Regarding the
Corporation........................................................ 14
Section 4.1 Due Organization, Good Standing and Corporate Power................ 14
Section 4.2 Capitalization..................................................... 14
Section 4.3 Consents and Approvals; No Violations.............................. 15
Section 4.4 Company Reports; Financial Statements and 1998 Budget.............. 16
Section 4.5 Absence of Certain Changes......................................... 17
Section 4.6 Compliance with Laws............................................... 17
Section 4.7 Employee Benefit Plans............................................. 17
Section 4.8 Employee Benefit Plan Triggering Events............................ 22
Section 4.9 Liabilities........................................................ 22
Section 4.10 Litigation........................................................ 22
Section 4.11 Taxes............................................................. 22
(i)
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Section 4.12 Intellectual Properties........................................... 23
Section 4.13 Environmental Laws and Regulations................................ 23
Section 4.14 Labor Relations................................................... 24
Section 4.15 Tender Offer Documents and Corporation's Schedule 14D-9 .......... 24
Section 4.16 State Takeover Statutes........................................... 25
Section 4.17 Rights Agreements................................................. 25
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ....................................... 25
Section 5. Representations and Warranties of the Purchaser.................... 25
Section 5.1 Legal Status....................................................... 25
Section 5.2 Power and Authority; Enforceability................................ 25
Section 5.3 No Conflicts....................................................... 25
Section 5.4 Broker's or Finder's Fees.......................................... 26
Section 5.5 Available Funds.................................................... 26
Section 5.6 Securities Act..................................................... 26
Section 5.7 Schedules l4D-9.................................................... 26
ARTICLE VI CONDUCT OF BUSINESS, EXCLUSIVE DEALING,REVIEW, OTHER COVENANTS........................ 26
Section 6.1 Access to Information Concerning Properties and Records............ 26
Section 6.2 Confidentiality.................................................... 27
Section 6.3 Conduct of Business of the Corporation............................. 27
Section 6.4 Approval by Purchaser of Changes................................... 29
Section 6.5 Exclusive Dealing.................................................. 29
Section 6.6 Notification of Certain Matters.................................... 31
Section 6.7 Directors' and Officers' Insurance ................................ 31
Section 6.8 Employee Benefits.................................................. 32
Section 6.9 Further Assurances................................................. 32
Section 6.10 Resignations...................................................... 32
Section 6.11 Provisions Concerning Transferred Shares.......................... 32
Section 6.12 Restriction on Transfer, Proxies and Non-Interference............. 33
Section 6.13 Changes in Shares................................................. 33
Section 6.14 Broker's and Finder's Fees........................................ 33
ARTICLE VII CONDITIONS TO THE PURCHASER'S OBLIGATIONS............................................ 34
Section 7. Conditions to the Purchaser's Obligations........................... 34
Section 7.1 Truth of Representations and Warranties............................ 34
Section 7.2 Performance of Agreements.......................................... 34
Section 7.3 Injunction......................................................... 34
Section 7.4 Consents and Approvals............................................. 35
Section 7.5 Tender Offer Conditions........................................... 35
Section 7.6 Resignations....................................................... 35
Section 7.7 Approval of Tender Offer........................................... 35
(ii)
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ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE SELLER......................................... 35
Section 8. Conditions to the Obligations of the Seller........................ 35
Section 8.1 Truth of Representations and Warranties............................ 35
Section 8.2 Performance of Agreements.......................................... 36
Section 8.3 Injunction......................................................... 36
Section 8.4 HSR................................................................ 36
Section 8.5 Tender Offer....................................................... 36
ARTICLE IX MISCELLANEOUS......................................................................... 36
Section 9.1 Representations and Warranties; Knowledge of the Seller............ 36
Section 9.2 Expenses........................................................... 37
Section 9.3 Governing Law...................................................... 37
Section 9.4 Headings........................................................... 38
Section 9.5 Publicity.......................................................... 38
Section 9.6 Notices............................................................ 38
Section 9.7 Binding Effect; Benefit; Assignment................................ 39
Section 9.8 Best Efforts....................................................... 40
Section 9.9 Counterparts....................................................... 41
Section 9.10 Entire Agreement.................................................. 41
Section 9.11 Amendments........................................................ 41
Section 9.12 Severability...................................................... 41
Section 9.13 Termination of Agreement.......................................... 41
Section 9.14 Specific Performance.............................................. 41
Section 9.15 Remedies Cumulative............................................... 41
Section 9.16 No Waiver......................................................... 41
EXHIBITS
Exhibit A 1997 10-K
(iii)
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of May
19, 1998, by and between The 1224 Corporation, a corporation organized and
existing under the laws of the State of Delaware (the "Seller"), and Koninklijke
Ahold N.V. (Royal Ahold), a public company with limited liability organized
under the laws of the Netherlands with its corporate seat in Zaandam
(Municipality Zanstaad) (the "Purchaser").
W I T N E S S E T H :
WHEREAS, the Seller owns, beneficially and of record, 125,000
shares of Class AC Common Stock, par value $1.00 per share (the "Class AC
Shares"), and 500 shares of Class A Common Stock, par value $1.00 per share (the
"Class A Shares"), in each case of Giant Food Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation");
WHEREAS, the Seller desires to sell, and the Purchaser desires
to purchase, all of the Class AC Shares (such Class AC Shares, collectively, the
"Transferred Shares"), on the terms and subject to the conditions set forth in
this Agreement; and
WHEREAS, as required by the Certificate of Incorporation of
the Seller, it is proposed that the Purchaser will make a tender offer to
purchase any and all of the issued and outstanding Class A Shares, subject to
the terms and conditions set forth in this Agreement (including, without
limitation, the conditions set forth in Section 2.5 hereof) (the "Tender
Offer"), at a price per share equal to the per share price to be paid to the
Seller hereunder for the Transferred Shares (as such price may be increased in
accordance with Section 2.2, the "Tender Offer Price").
NOW, THEREFORE, in consideration of the premises and of the
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. When used in this Agreement, the
following terms shall have the respective meanings specified therefor below
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined).
"Action" shall have the meaning provided in Section 6.4
hereof.
"Acquisition Proposal" shall have the meaning provided in
Section 6.5(a) hereof.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such
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Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, or the power to appoint or
dismiss the managing directors of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agents" shall have the meaning provided in Section 6.5(a)
hereof.
"Agreement" shall have the meaning provided in the recitals
hereto.
"Alcohol and Drug Laws" shall have the meaning provided in
Section 4.3 hereof.
"Budget" shall have the meaning provided in Section 4.4(c)
hereof.
"Cash Payment" shall have the meaning provided in Section 2.8
hereof.
"Claims" shall have the meaning provided in Section 4.13
hereof.
"Class AC Shares" shall have the meaning provided in the
recitals hereof.
"Class AL Shares" shall have the meaning provided in Section
2.2 hereof.
"Class A Shares" shall have the meaning provided in the
recitals hereto.
"Closing" shall have the meaning provided in Section 2.3
hereof.
"Closing Date" shall have the meaning provided in Section 2.3
hereof.
"Code" shall have the meaning provided in Section 4.7(a)
hereof.
"Corporation" shall have the meaning provided in the recitals
hereto.
"Corporation Property" shall have the meaning provided in
Section 4.13 hereof.
"Corporation's Schedule 14D-9" shall have the meaning provided
in Section 2.6(c) hereof.
"DGCL" shall have the meaning provided in Section 2.6(b)
hereof.
"Director" shall have the meaning provided in Section 7.6
hereof.
"Directors' Schedule 14D-9" shall have the meaning provided in
Section 2.6(f) hereof.
"EBS Plan" shall have the meaning provided in Section 6.8
hereof.
"Employee Benefit Plans" shall have the meaning provided in
Section 4.7(a) hereof.
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"Environmental Claims" shall have the meaning provided in
Section 4.13 hereof.
"Environmental Law" shall have the meaning provided in Section
4.13 hereof.
"ERISA" shall have the meaning provided in Section 4.7(a)
hereof.
"Exchange Act" shall have the meaning provided in Section
2.5(a) hereof.
"Existing Class A Shares" shall have the meaning provided in
Section 2.7 hereof.
"GAAP" shall mean generally accepted accounting principles in
the United States consistently applied during a relevant period.
"Hazardous Materials" shall have the meaning provided in
Section 4.13 hereof.
"HSR Act" shall have the meaning set forth in Section 3.4(b)
hereof.
"Indemnified Parties" shall have the meaning provided in
Section 6.7(b) hereof.
"IRS" shall have the meaning provided in Section 4.7(c)
hereof.
"Law" shall mean any constitution, treaty, convention,
statute, law, Environmental Law, code, ordinance, decree, order, rule,
regulation, guideline, interpretation, direction, policy or request, or judicial
or arbitral decision or judgment.
"Letter of Transmittal" shall have the meaning provided in
Section 2.5(b) hereof.
"Liens" shall mean liens, security interests, options, rights
of first refusal, easements, mortgages, charges, claims, indentures, deeds of
trust, rights of way, restrictions on the use of real property, encroachments,
licenses to third parties, leases to third parties, security agreements, or any
other encumbrances and other restrictions or limitations on use of real or
personal property or irregularities in title thereto; provided, however, that
with respect to the Transferred Shares, "Liens" shall not include any
restrictions imposed upon such Transferred Shares by the Certificate of
Incorporation or By-Laws of the Corporation or by the DGCL.
"Material Adverse Effect" shall mean an effect that is, or is
reasonably likely to be, materially adverse to the business, properties, assets,
liabilities, condition (financial or otherwise), operations, results of
operations or prospects of the Corporation and its subsidiaries taken as a
whole.
"Multiemployer Plan" shall have the meaning provided in
Section 4.7(c) hereof.
"Non-Union Employees" shall have the meaning provided in
Section 6.8 hereof.
"Offer to Purchase" shall have the meaning provided in Section
2.5(b) hereof.
"Options" shall have the meaning provided in Section 2.8
hereof.
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"PaineWebber" shall have the meaning provided in Section 3.6
hereof.
"PaineWebber Agreement" shall have the meaning provided in
Section 3.6 hereof.
"PaineWebber Obligations" shall have the meaning provided in
Section 6.14 hereof.
"PBGC" shall have the meaning provided in Section 4.7(c)
hereof.
"Permitted Liens" shall mean (i) Liens consisting of zoning or
planning restrictions or regulations, easements, and other restrictions or
limitations on the use of real property or irregularities in, or exceptions to,
title thereto which do not materially detract from the value of, or materially
impair the use of, such property by the Corporation in the operation of its
business, (ii) Liens for taxes, assessments or governmental charges or levies on
property not yet due and payable or due but not delinquent or being contested in
good faith by appropriate proceedings, and (iii) Liens individually identified
and disclosed in the 1997 10-K.
"Person" shall mean any individual, partnership, limited
liability company, corporation, trust, unincorporated association or other
entity which is recognized as having legal personality under national or
international Law.
"Purchase Price" shall have the meaning provided in Section
2.2 hereof.
"Purchaser" shall have the meaning provided in the preamble
hereto.
"Schedule 14D-1" shall have the meaning provided in Section
2.5(b) hereof.
"SEC" shall have the meaning provided in Section 2.5(b)
hereof.
"SEC Filings" shall have the meaning provided in Section
4.4(a) hereof.
"Securities Act" shall have the meaning provided in Section
5.6 hereof.
"Seller" shall have the meaning provided in the preamble
hereto.
"Seller System" shall have the meaning provided in Section
4.12 hereof.
"Seller's Class A Shares" shall have the meaning provided in
Section 2.7 hereof.
"Seller's Schedule 14D-9" shall have the meaning provided in
Section 2.6(e) hereof.
"Shares" shall have the meaning provided in Section 4.2(a)
hereof.
"Share Register" shall mean, collectively, the register book
maintained by the Corporation setting forth the names and addresses of each of
the owners of the shares of capital
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stock of the Corporation and the number of such shares owned by each such owner,
and indicating each transfer or encumbrance of such shares by any owner thereof.
"Single Employer Plan" shall have the meaning provided in
Section 4.7(e) hereof.
"Special Committee" shall have the meaning provided in Section
2.6(a) hereof.
"Stock Incentive Plans" shall have the meaning provided in
Section 2.8 hereof.
"Stock Plans" shall have the meaning provided in Section 2.8
hereof.
"subsidiary" shall mean each subsidiary of the Corporation
that is a "subsidiary" within the meaning of Regulation S-X promulgated by the
SEC.
"Tax" or "Taxes" shall mean any net income, alternative or
add-on minimum tax, advance corporation, gross income, gross receipts, sales,
use, ad valorem, franchise, profits, license, value-added, withholding, payroll,
employment, excise, transfer, stamp or occupation tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest or
any penalty imposed by any governmental authority with respect thereto and any
liability for such amounts as a result of either being a member of an affiliated
group or of a contractual obligation to indemnify any other entity.
"Tender Offer" shall have the meaning provided in the recitals
hereto.
"Tender Offer Conditions" shall have the meaning provided in
Section 2.5(a) hereof.
"Tender Offer Documents" shall have the meaning provided in
Section 2.5(b) hereof.
"Tender Offer Price" shall have the meaning provided in the
recitals hereto.
"Transferred Shares" shall have the meaning provided in the
recitals hereto.
"WARN Act" shall have the meaning provided in Section 4.14
hereof.
"▇▇▇▇▇▇▇▇▇▇▇" shall have the meaning provided in Section 2.6
hereof.
"1997 10-K" shall have the meaning provided in Section 4.4(a)
hereof.
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ARTICLE II
SALE OF STOCK AND TENDER OFFER
Section 2.1 Sale of Transferred Shares. On the terms and
subject to the conditions set forth in this Agreement, the Seller agrees to sell
and transfer to the Purchaser at the Closing, and the Purchaser agrees to
purchase from the Seller at the Closing, the Transferred Shares, free and clear
of all Liens. At or immediately following the Closing, the Seller shall use its
reasonable best efforts to cause the Corporation to duly enter the transfer of
the Transferred Shares in the Share Register.
Section 2.2 Purchase Price for Transferred Shares. In full
consideration for the purchase by the Purchaser of the Transferred Shares, the
Purchaser shall pay to the Seller on the Closing Date Forty-Three Dollars
($43.00) per Transferred Share (Five Million Three Hundred Seventy Five Thousand
Dollars ($5,375,000) in the aggregate) by wire transfer in immediately available
funds to the account specified by the Seller to the Purchaser at least two
business days prior to the Closing (the "Purchase Price"). Notwithstanding the
foregoing, if the Purchaser or any Affiliate of the Purchaser acquires, or
enters into a binding agreement to acquire, all of the shares of Class AL Common
Stock, par value $1.00 per share (the "Class AL Shares"), before the expiration
of the Tender Offer, then the Purchase Price of $43.00 per Transferred Share
shall be increased to $43.50 per Transferred Share. For purposes of this Section
2.2, "business day" shall mean any day other than a Saturday, a Sunday or a day
on which the banks in the United States or the Netherlands are authorized or
obligated by Law to close.
Section 2.3 Closing. The sale referred to in Section 2.1 (the
"Closing") shall take place at the offices of White & Case LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇, as soon as practicable after the
last of the conditions set forth in Articles VII and VIII hereof is fulfilled or
waived (subject to applicable law) but (a) in no event later than the fifth
business day thereafter, or at such other time and place and on such other date
as the Purchaser and the Seller shall mutually agree and (b) in any case
simultaneously with the purchase of Class A Shares pursuant to the Tender Offer
(the "Closing Date"). On the Closing Date, the Seller shall deliver to the
Purchaser, against payment as provided in Section 2.2 hereof, certificates
representing the Class AC Shares, duly endorsed in blank, or accompanied by
stock powers duly endorsed in blank, with all necessary transfer tax and other
revenue stamps, acquired at the Purchaser's expense, affixed thereto.
Section 2.4 Transfer Taxes. The Seller shall pay all Taxes
charged to grantors, transferors or assignors under applicable Law, provided
that the Purchaser shall pay any stock transfer and stamp taxes which become
payable in connection with the purchase of the Transferred Shares hereunder.
Section 2.5 The Tender Offer. (a) So long as none of the
events set forth in Annex A hereto (the "Tender Offer Conditions") shall have
occurred and are continuing, as promptly as practicable, but in no event later
than the fifth business day (within the meaning of Rule 14d-1 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) after the
date of this Agreement, the Purchaser shall commence (within the meaning of Rule
14d-2 promulgated under the Exchange Act) the Tender Offer. The obligations of
the
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Purchaser to accept for payment and to pay for any Class A Shares tendered shall
be subject to the Tender Offer Conditions, any of which may be waived by the
Purchaser in its sole discretion. The Tender Offer Conditions are for the sole
benefit of the Purchaser and may be asserted by the Purchaser regardless of the
circumstances giving rise to any such Tender Offer Conditions or may be waived
by the Purchaser in whole or in part. The Purchaser expressly reserves the right
to modify the terms of the Tender Offer, including, without limitation, to
extend the Tender Offer beyond any scheduled expiration date; provided; however,
(i) without the consent of the Corporation and the Seller, the Purchaser shall
not (A) reduce the number of Class A Shares to be purchased in the Tender Offer,
(B) reduce the Tender Offer Price, (C) modify or add to the Tender Offer
Conditions in a manner that is materially adverse to the holders of Class A
Shares or (D) change the form of consideration payable in the Tender Offer and
(ii) if any Tender Offer Condition is waived for purposes of Section 7.5 hereof,
the Purchaser shall waive such condition with respect to the Tender Offer.
(b) As soon as reasonably practicable on the date the Tender
Offer is commenced, the Purchaser shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 (together with
all amendments and supplements thereto, the "Schedule 14D-1") with respect to
the Tender Offer. The Schedule 14D-1 shall contain (included as an exhibit) or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and a form of the related letter of transmittal (the "Letter of Transmittal"),
as well as all other information and exhibits required by Law (which Schedule
14D-1, Offer to Purchase, Letter of Transmittal and such other information and
exhibits, together with any supplements or amendments thereto, are referred to
herein collectively as the "Tender Offer Documents"). The Schedule 14D-1 will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and the date first
published, sent or given to the holders of the Class A Shares, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by the Purchaser with respect
to any information supplied by the Corporation or the Seller or their respective
officers, directors or affiliates for inclusion in the Schedule 14D-1. The
Purchaser agrees promptly to correct any information provided by it for use in
the Tender Offer Documents that shall be, or have become, false or misleading in
any material respect, and the Purchaser further agrees to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Tender Offer Documents as so corrected to be disseminated to
holders of Class A Shares, in each case as and to the extent required by
applicable federal securities laws. The Purchaser agrees to provide the Seller,
the Corporation and their respective counsel with copies of any written comments
the Purchaser or its counsel may receive from the SEC or its staff with respect
to the Tender Offer Documents promptly after the receipt of such comments.
Section 2.6 Corporation Actions. (a) The Seller hereby
represents that (i) ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. ("▇▇▇▇▇▇▇▇▇▇▇") has
delivered to the Special Committee its opinion that, as of the date of this
Agreement, the consideration to be received by the holders of Class A Shares
pursuant to the Tender Offer is fair to the holders of Class A Shares from a
financial point of view, subject to the assumptions and qualifications contained
in such opinion,
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and a complete and correct signed copy of such opinion has been, or promptly
upon receipt thereof by the Special Committee will be, delivered to the
Purchaser and (ii) the Strategic Planning Committee of the Board of Directors of
the Corporation (the "Special Committee"), at a meeting duly called and held,
has (A) determined unanimously that the Tender Offer is fair to, and in the best
interests of, the holders of Class A Shares and (B) recommended to the Board of
Directors of the Corporation that it approve and recommend acceptance of the
Tender Offer by the holders of the Class A Shares.
(b) The Seller hereby further represents that the President of
the Corporation has called, or will call no later than the date hereof, a
special meeting of the Board of Directors of the Corporation, such meeting to
take place on or before May 26, 1998, and has given, or will give no later than
the date hereof, notice in writing of such special meeting to all the directors
of the Corporation on or before the date hereof, in each case, in accordance
with the Certificate of Incorporation and By-Laws of the Corporation and the
provisions of the General Corporation Law of the State of Delaware (the "DGCL").
The Seller shall cause the directors of the Corporation who are also directors
of the Seller, and shall use its reasonable best efforts to cause the other
directors of the Corporation who were appointed by the Seller, to vote to
approve and recommend acceptance of the Tender Offer by the holders of the Class
A Shares. The Seller has been advised that each of the directors of the
Corporation appointed by the Seller intends to vote to approve and recommend
acceptance of the Tender Offer by the holders of the Class A Shares.
(c) The Seller shall use its reasonable best efforts to cause
the Corporation to file with the SEC, as soon as practicable after the date of
the commencement of the Tender Offer, a Solicitation/Recommendation Statement on
Schedule 14D-9 of the Corporation (the "Corporation's Schedule l4D-9")
containing the recommendation of the Board of Directors of the Corporation with
respect to the Tender Offer and to disseminate the Corporation's Schedule 14D-9
as required by Rule 14d-9 promulgated under the Exchange Act. The Seller shall
use its reasonable best efforts to cause the Corporation to give the Purchaser
and its counsel the opportunity to review and comment upon the Corporation's
Schedule l4D-9 prior to its filing with the SEC. The Seller shall use its
reasonable best efforts to cause the Corporation's Schedule 14D-9 to comply in
all material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent or
given to the holders of the Class A Shares, not to contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Seller with respect to information supplied by the
Purchaser in writing for inclusion in the Corporation's Schedule 14D-9. The
Seller agrees to use its reasonable best efforts to cause the Corporation
promptly to correct any information provided by it for use in the Corporation's
Schedule 14D-9 that shall be, or have become, false or misleading in any
material respect, and the Seller further agrees to use its reasonable best
efforts to cause the Corporation to take all steps necessary to cause the
Corporation's Schedule 14D-9 as so corrected to be filed with the SEC as
required by applicable federal securities laws. The Seller agrees to use its
reasonable best efforts to cause the Corporation to provide the Purchaser and
its counsel with any comments the Corporation or its counsel may receive from
the SEC or its staff with respect to the Corporation's Schedule 14D-9 promptly
after the receipt of such comments
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and to provide the Purchaser and its counsel an opportunity to participate,
including by way of discussions with the SEC or its staff, in the response of
the Corporation to such comments.
(d) In connection with the Tender Offer, the Seller will use
its reasonable best efforts to cause the Corporation promptly to furnish the
Purchaser with mailing labels, security position listings and any available
listing or computer list containing the names and addresses of the record
holders of the Class A Shares as of the most recent practicable date and to
furnish the Purchaser with such additional information (including, but not
limited to, updated lists of holders of Class A Shares and their addresses,
mailing labels and lists of security positions) and such other assistance as the
Purchaser or its agents may reasonably request in communicating the Tender Offer
to the holders of the Class A Shares.
(e) The Seller shall file with the SEC, as soon as practicable
on the date hereof, a Solicitation/Recommendation Statement on Schedule 14D-9
(the "Seller's Schedule l4D-9") containing its recommendation of the Tender
Offer and shall disseminate the Seller's Schedule 14D-9 as required by Rule
14d-9 promulgated under the Exchange Act. The Purchaser and its counsel shall be
given the opportunity to review and comment upon the Seller's Schedule l4D-9
prior to its filing with the SEC. The Seller's Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the holders of the Class A Shares, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Seller with respect to information supplied by the
Purchaser in writing for inclusion in the Seller's Schedule 14D-9. The Seller
agrees promptly to correct any information provided by it for use in the
Seller's Schedule 14D-9 that shall be, or have become, false or misleading in
any material respect, and the Seller further agrees to take all steps necessary
to cause the Seller's Schedule 14D-9 as so corrected to be filed with the SEC as
required by applicable federal securities laws. The Seller agrees to provide the
Purchaser and its counsel with any comments the Seller or its counsel may
receive from the SEC or its staff with respect to the Seller's Schedule 14D-9
promptly after the receipt of such comments and shall provide the Purchaser and
its counsel an opportunity to participate, including by way of discussions with
the SEC or its staff, in the response of the Seller to such comments.
(f) To the extent required by the Exchange Act and the rules
promulgated thereunder, the Seller shall use its reasonable best efforts to
cause the directors of the Corporation appointed by the Seller and officers of
the Corporation to file with the SEC, as soon as practicable on the date hereof,
a Solicitation/Recommendation Statement on Schedule 14D-9 of the Corporation
(the "Directors' Schedule l4D-9") containing the recommendation of such
directors and officers of the Corporation with respect to the Tender Offer and
to disseminate the Directors' Schedule 14D-9 as required by Rule 14d-9
promulgated under the Exchange Act. The Seller shall use its reasonable best
efforts to cause such directors and officers to give the Purchaser and its
counsel the opportunity to review and comment upon the Directors' Schedule l4D-9
prior to its filing with the SEC. The Seller shall use its reasonable best
efforts to cause the Directors' Schedule 14D-9 to comply in all material
respects with the provisions of applicable federal
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securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the holders of the Class A Shares, not to contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Seller with respect to
information supplied by the Purchaser in writing for inclusion in the Directors'
Schedule 14D-9. The Seller agrees to use its reasonable best efforts to cause
such directors and officers promptly to correct any information provided by it
for use in the Directors' Schedule 14D-9 that shall be, or have become, false or
misleading in any material respect, and the Seller further agrees to cause such
directors and officers to take all steps necessary to cause the Directors'
Schedule 14D-9 as so corrected to be filed with the SEC as required by
applicable federal securities laws. The Seller agrees to use its reasonable best
efforts to use its reasonable best efforts to cause such directors and officers
to provide the Purchaser and its counsel with any comments such directors and
officers or their counsel may receive from the SEC or its staff with respect to
the Directors' Schedule 14D-9 promptly after the receipt of such comments and to
provide the Purchaser and its counsel an opportunity to participate, including
by way of discussions with the SEC or its staff, in the response of such
directors and officers to such comments.
Section 2.7 Tender of Class A Shares. (a) The Seller hereby
agrees to validly tender (and not to withdraw) pursuant to and in accordance
with the terms of the Tender Offer (provided that the Tender Offer is not
amended in a manner prohibited under Section 2.5), in a timely manner for
acceptance by the Purchaser in the Tender Offer, the 500 Class A Shares owned by
the Seller on the date hereof (the "Existing Class A Shares") and any Class A
Shares that may be acquired by the Seller after the date hereof and prior to the
termination of this Agreement whether upon the exercise of options, warrants or
rights, the conversion or exchange of convertible or exchangeable securities, or
by means of purchase, dividend, distribution or otherwise (such Class A Shares,
together with the Existing Class A Shares, are referred to herein as the
"Seller's Class A Shares"). The Seller hereby acknowledges and agrees that the
Purchaser's obligation to accept for payment and pay for Class A Shares tendered
in the Tender Offer, including the Seller's Class A Shares, is subject to the
terms and conditions of the Tender Offer.
(b) The Seller hereby agrees to permit the Purchaser to
publish and disclose in the Tender Offer Documents its identity and ownership of
Class A Shares and the nature of its commitments, arrangements and
understandings under this Agreement.
(c) The Seller has been advised that each of the directors of
the Corporation who are also directors of the Seller intends to tender pursuant
to the Tender Offer all Class A Shares owned of record and beneficially by him
or her.
Section 2.8 Stock Option and Other Plans. Prior to the Closing
Date, the Seller shall cause appropriate resolutions to be voted on by the Board
of Directors of the Corporation (or, if appropriate, any committee thereof),
shall cause the directors of the Corporation who are also directors of the
Seller to vote in favor of the adoption of such resolutions and shall otherwise
use its reasonable best efforts to cause such resolutions to be adopted, and use
its reasonable best
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efforts to take all other actions necessary including, but not limited to, using
its reasonable best efforts to cause the Corporation to obtain the consent and
release of all of the holders of all the outstanding stock options and other
rights to purchase Class A Common Stock (the "Options") heretofore granted under
any stock option plan of the Corporation or otherwise (the "Stock Plans"), to
(i) provide for the cancellation, effective at the Closing Date, subject to the
payment provided for in the next sentence being made, of all Options, (ii)
terminate, as of the Closing Date, the Stock Plans and any other plan, program
or arrangement providing for the issuance or grant of any other interest in
respect of the capital stock of the Corporation or any subsidiary (collectively
with the Stock Plans, referred to as the "Stock Incentive Plans") with respect
to any interest in the capital stock of the Corporation and (iii) amend, as of
the Closing Date, the provisions in any other Employee Benefit Plan providing
for the issuance, transfer or grant of any capital stock of the Corporation or
any interest in respect of any capital stock of the Corporation to provide no
continuing rights to acquire, hold, transfer or grant any capital stock of the
Corporation or any interest in the capital stock of the Corporation (other than
in respect of cash payments through the Offer). Immediately prior to the Closing
Date, each Option, whether or not then vested or exercisable, shall no longer be
exercisable for the purchase of shares of Class A Common Stock but shall entitle
each holder thereof, in cancellation and settlement therefor, to payments by the
Corporation in cash, subject to any applicable withholding taxes (the "Cash
Payment"), at the Closing Date, equal to the product of (x) the total number of
shares of Class A Common Stock subject to such Option, whether or not then
vested or exercisable and (y) the excess of the Tender Offer Price over the
exercise price per share of Class A Common Stock subject to such Option, each
such Cash Payment to be paid to each holder of an outstanding Option at the
Closing Date. Incident to the foregoing, any then outstanding stock appreciation
rights or limited stock appreciation rights shall be cancelled immediately prior
to the Closing Date without any payment therefor. The Seller shall use its
reasonable best efforts to cause the Corporation to take all steps to ensure
that neither the Corporation nor any of its subsidiaries is or will be bound by
any Options, other options, warrants, rights or agreements which would entitle
any Person, other than the Purchaser or its affiliates, to own any capital stock
of the Corporation or any of its subsidiaries or to receive any payment in
respect thereof. Notwithstanding any other provision of this Section 2.8 to the
contrary, payment of the Cash Payment may be withheld with respect to any Option
until necessary consents and releases are obtained.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 3. Representations and Warranties of the Seller. In
order to induce the Purchaser to enter into this Agreement, to acquire the
Transferred Shares and to make the Tender Offer, the Seller makes the following
representations and warranties.
Section 3.1 Legal Status. The Seller is a duly organized and
validly existing corporation in good standing under the Laws of the State of
Delaware.
Section 3.2 Power and Authority; Enforceability. The Seller
has full requisite legal capacity, power and authority to execute, deliver and
perform the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby and has taken all
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necessary corporate action to authorize the execution, delivery and performance
by the Seller of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Seller and constitutes a valid and legally binding obligation
of the Seller enforceable against the Seller in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws of general applicability relating to or affecting
creditors' rights and to general equitable principles. The sale by the Seller of
the Transferred Shares to the Purchaser pursuant to this Agreement has been duly
authorized by a resolution adopted by the holders of at least 60% of the
outstanding Class AV Common Stock of the Seller in compliance with the
provisions of Article Sixth of the Certificate of Incorporation of the Seller.
Section 3.3 Ownership of Transferred Shares. The Seller is the
lawful record and beneficial owner of all of the Class AC Shares and the
Existing Class A Shares, in each case free and clear of all Liens. Other than as
specified in the preceding sentence, the Seller does not own any shares of
capital stock of the Corporation. The Seller has full legal right, power and
authority to sell, assign, transfer and convey the Transferred Shares pursuant
to this Agreement. The Seller has sole power of disposition and sole power to
agree to all of the matters set forth in this Agreement with respect to all of
the Transferred Shares and all of the Seller's Class A Shares, with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement. The delivery to the
Purchaser of the Transferred Shares pursuant to this Agreement and of the
Seller's Class A Shares pursuant to the Tender Offer will, in each case,
transfer to the Purchaser on the Closing Date good and marketable title thereto,
free and clear of any Liens. The Transferred Shares and the certificates
representing the Transferred Shares and the Seller's Class A Shares are now, and
at all times during the term hereof will be, held by the Seller or by a nominee
or custodian for the benefit of the Seller, free and clear of all Liens,
proxies, voting trusts or agreements, understandings or arrangements, except for
any Lien arising hereunder. The transfer by the Seller of the Transferred Shares
to the Purchaser hereunder and the Seller's Class A Shares pursuant to the
Tender Offer shall pass to and unconditionally vest in the Purchaser good and
valid title to all the Transferred Shares and the Seller's Class A Shares, as
the case may be, free and clear of all Liens.
Section 3.4 No Conflicts; Consents of Third Parties;
Compliance with Laws. (a) Assuming the receipts of the consents, approvals, etc.
specified in clause (b) below and except as set forth on Schedule 3.4(a)
attached hereto, the execution, delivery and performance by the Seller of this
Agreement and the consummation of the purchase of the Transferred Shares, the
Tender Offer and the other transactions contemplated hereby will not (i)
conflict with the Certificate of Incorporation or By-Laws of the Seller, (ii)
conflict with, or result in the breach or termination of, or constitute a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under, any lease, charter, note, bond,
mortgage, license, permit, indenture, contract, agreement, commitment,
arrangement or other instrument or obligation, or any order, judgment, decree,
injunction, regulation or ruling of any governmental authority or regulatory
organization, domestic or foreign, to which the Seller is a party or by which
the Seller or any of its properties or assets are bound, (iii) constitute a
violation by the Seller of any Law applicable to the Seller or any of its
properties or assets, or (iv) result in the creation of any Lien upon the
Transferred Shares.
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(b) Except (i) as set forth on Schedule 3.4(b) attached
hereto, (ii) for filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and (iii) as required by the Exchange Act
and the rules and regulations thereunder in connection with the Tender Offer, no
consent, approval, permit or authorization of, or designation, declaration or
filing with, any governmental authorities or third parties is required on the
part of the Seller or the Corporation in connection with the execution and
delivery of this Agreement and the performance of the transactions contemplated
hereby.
Section 3.5 Disclosure. None of this Agreement, any Schedule
attached hereto, certificate delivered pursuant to this Agreement or any
document or statement in writing which has been supplied by or on behalf of the
Seller or any of its directors or officers in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact,
or omits any statement of a material fact necessary in order to make the
statements contained herein or therein not misleading. There is no fact known to
the Seller which materially and adversely affects the business, operations,
condition (financial or otherwise) or prospects of the Corporation or any of its
subsidiaries or their respective properties or assets, which has not been set
forth in (a) this Agreement, (b) the financial statements referred to in this
Agreement (including the footnotes thereto), (c) any Schedule attached hereto or
delivered pursuant to this Agreement or (d) any document or statement in writing
which has been supplied by or on behalf of the Seller or by any of the
Corporation's or any of its subsidiaries' directors or officers in connection
with the transactions contemplated by this Agreement.
Section 3.6 Broker's or Finder's Fees. Except for ▇▇▇▇▇▇▇▇▇▇▇
(whose fees and expenses will be paid by the Corporation in accordance with the
Corporation's agreement with such firm, a copy of which has been previously
provided to the Purchaser) and PaineWebber Incorporated ("PaineWebber") (whose
fees and expenses will be paid as provided in Section 6.14 hereof in accordance
with the Seller's agreement with such firm, a copy of which has been previously
provided to the Purchaser (the "PaineWebber Agreement")), no agent, broker,
person or firm acting on behalf of the Seller or any of its Affiliates (other
than the Corporation) or, to the best knowledge of the Seller, the Corporation
or any of its Affiliates is, or will be, entitled to any commission or broker's
or finder's fees from any of the parties hereto, or from any Person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the transactions contemplated by this Agreement.
Section 3.7. Tender Offer Documents and Schedules 14D-9 . None
of the information supplied by the Seller for inclusion or incorporation by
reference in the Tender Offer Documents, the Corporation's Schedule 14D-9 or the
Directors' Schedule 14D-9, at the respective times the Tender Offer Documents,
the Corporation's Schedule 14D-9 or the Directors' Schedule 14D-9 are filed with
the SEC and the date first published, sent or given to the holders of the Class
A Shares, will contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made, in light of
the circumstances under which they are made, not misleading. The Seller agrees
promptly to correct any information provided by it for use in the Tender Offer
Documents, the Corporation's Schedule 14D-9 or the Directors' Schedule 14D-9
that shall be, or shall have become, false or misleading in any material
respect.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE CORPORATION
Section 4. Representations and Warranties of the Seller
Regarding the Corporation. In order to induce the Purchaser to enter into this
Agreement, to acquire the Transferred Shares and to make the Tender Offer, the
Seller makes the following representations and warranties to the best of its
knowledge:
Section 4.1 Due Organization, Good Standing and Corporate
Power. Each of the Corporation and each of its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and each such corporation has the corporate
power and authority to own, lease and operate its properties and assets and to
carry on its business as now being conducted. Each of the Corporation and its
subsidiaries is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so qualified or licensed and in good standing would not
have a Material Adverse Effect and set forth on Schedule 4.1 attached hereto is
a list of each such jurisdiction. The Purchaser has been provided with complete
and correct copies of the Certificates of Incorporation and By-Laws or other
organizational documents of each of the Corporation and each of its
subsidiaries, in each case as amended to the date of this Agreement. The
respective Certificates of Incorporation and By-Laws or other organizational
documents of the subsidiaries of the Corporation do not contain any provision
limiting or otherwise restricting the ability of the Corporation to control such
subsidiaries.
Section 4.2 Capitalization. (a) On the Closing Date, the
Corporation will have an authorized capitalization consisting of 75,000,000
Class A Shares, 125,000 Class AC Shares and 125,000 Class AL Shares (the Class A
Shares, the Class AC Shares and the Class AL Shares, collectively the "Shares").
As of May 13, 1998, (A) 59,914,510 Class A Shares, 125,000 Class AC Shares and
125,000 Class AL Shares are issued and outstanding, (B) 100,627 Class A Shares
are held in the Corporation's treasury and (C) 3,422,994 Class A Shares are
reserved for issuance pursuant to outstanding Options granted under the Stock
Plans. On the Closing Date, all issued and outstanding shares will have been
duly authorized, validly issued, fully paid and nonassessable and were not
issued in violation of any preemptive rights. Except as set forth in this
Section 4.2(a) or on Schedule 4.2(a) attached hereto, no Shares of the
Corporation are, or on the Closing Date will be, reserved for issuance or held
in the treasury of the Corporation and there are or, on the Closing Date, will
be no outstanding options, warrants, rights, calls, subscriptions, claims,
agreements, obligations, convertible or exchangeable securities or other
commitments, contingent or otherwise, relating to the Shares of the Corporation
or pursuant to which the Corporation is or may become obligated to issue or
exchange any shares of capital stock, other than as contemplated by this
Agreement. Other than as provided in the Certificate of Incorporation of the
Corporation, no shareholder of the Corporation has or, on the Closing Date, will
have any preemptive or other rights to acquire any of the Shares. Other than
pursuant to the Certificate of Incorporation of the Corporation and under the
provisions of the DGCL, there are or, on the Closing Date, will be no
restrictions on (i) transfers of the Shares, (ii) voting of the Shares, or (iii)
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the declaration or payment of any dividend or distribution in respect of the
Shares. The Corporation has no authorized or outstanding bonds, debentures,
notes or other indebtedness the holders of which have the right to vote (or
convertible or exchangeable into or exercisable for securities having the right
to vote) with the stockholders of the Corporation or any of its subsidiaries on
any matter.
(b) Schedule 4.2(b) attached hereto lists all of the
Corporation's subsidiaries. All of the outstanding shares of capital stock of
each subsidiary of the Corporation have been duly authorized and validly issued,
are fully paid and nonassessable and are not subject to, nor were they issued in
violation of, any preemptive rights, and, except as set forth in Schedule 4.2(b)
attached hereto, are owned, of record and beneficially, by the Corporation, free
and clear of any Liens. Except as set forth on Schedule 4.2(b) attached hereto,
no shares of capital stock of any subsidiary of the Corporation are or, on the
Closing Date, will be reserved for issuance or held in the treasury of such
subsidiary and there are or, on the Closing Date, will be no outstanding
options, warrants, rights, calls, subscriptions, claims, agreements,
obligations, convertible or exchangeable securities or other commitments,
contingent or otherwise, relating to the capital stock of any subsidiary of the
Corporation or pursuant to which any subsidiary of the Corporation is or may
become obligated to issue or exchange any shares of capital stock.
(c) Neither the Corporation nor any subsidiary of the
Corporation owns, directly or indirectly, any capital stock or other equity or
ownership or proprietary interest in any corporation, limited liability company,
partnership, association, trust, joint venture or other entity except as set
forth on Schedule 4.2(c) attached hereto.
(d) Other than restrictions imposed or permitted by existing
indebtedness agreements or under applicable corporate law, there are no
restrictions of any kind which prevent the payment of dividends by any of the
Corporation's subsidiaries.
Section 4.3 Consents and Approvals; No Violations . Other than
in connection with or in compliance with the specific provisions of (a) the HSR
Act regarding the purchase of the Class AC Shares pursuant to this Agreement,
(b) the Exchange Act and the rules and regulations promulgated thereunder as may
be applicable to the Tender Offer, (c) the "blue sky" laws of various states,
(d) applicable alcohol beverage control and licensing laws and drug and pharmacy
laws and regulations ("Alcohol and Drug Laws"), and (e) applicable local permit
laws, rules and regulations pertaining to the operation of the business of the
Corporation and its subsidiaries, and except as disclosed in Schedule 4.3
attached hereto, the execution, delivery and performance by the Seller of this
Agreement and the consummation of the purchase of the Transferred Shares, the
Tender Offer and the other transactions contemplated hereby will not: (1)
violate any provision of the Certificate of Incorporation or By-Laws (or other
organizational document) of the Corporation or any of its subsidiaries, (2)
violate any Law applicable to the Corporation or any of its subsidiaries or by
which any of their respective properties or assets may be bound, (3) require any
filing with, or permit, consent or approval of, or the giving of any notice to,
any governmental or regulatory body, agency or authority, or (4) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the
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creation of any Lien upon any of the properties or assets of the Corporation or
any of its subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or other instrument or obligation to which the Corporation
or any of its subsidiaries is a party, or by which it or any of their respective
properties or assets, except in the case of clauses (2), (3) or (4) above for
such filings, permits, consents, approvals or violations, which would not have a
Material Adverse Effect or could not be reasonably likely to prevent or
materially delay consummation of the transactions contemplated by this
Agreement.
Section 4.4 Company Reports; Financial Statements and 1998
Budget. (a) Since January 1, 1997, the Corporation has filed all forms, reports
and documents with the SEC required to be filed by it pursuant to the federal
securities laws and the SEC rules and regulations thereunder, and all forms,
reports and documents filed with the SEC have complied in all material respects
with all applicable requirements of the federal securities laws and the SEC
rules and regulations promulgated thereunder. The Corporation has, prior to the
date of this Agreement, made available to the Purchaser true and complete copies
of all forms, reports, registration statements and other filings filed by the
Corporation with the SEC since January 1, 1997 (such forms, reports,
registration statements and other filings and financials, together with any
exhibits, any amendments thereto and information incorporated by reference
therein, are sometimes collectively referred to as the "SEC Filings"). Attached
hereto as Exhibit A is the Corporation's Annual Report on Form 10-K for the
fiscal year ended February 28, 1998 (the "1997 10-K"), filed or to be filed with
the SEC on the date hereof. As of their respective dates, the SEC Filings and
the 1997 10-K did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the consolidated balance sheets included in the SEC
Filings and in the 1997 10-K were prepared in accordance with GAAP (except as
may be indicated therein or in the notes or schedules thereto) and fairly
present in all material respects the consolidated financial position of the
Corporation and its consolidated subsidiaries as of the dates thereof and the
results of their operations and their cash flows for the periods then ended.
(b) The Seller will use its reasonable best efforts to cause
the Corporation to deliver to the Purchaser as soon as they become available
true and complete copies of any report or statement mailed by it to its
stockholders generally or filed by it with the SEC subsequent to the date hereof
and prior to the Closing Date. As of their respective dates, such reports and
statements (excluding any information therein provided by the Purchaser, as to
which the Seller makes no representation) will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading and will comply in all
material respects with all applicable requirements of the federal securities
laws and the SEC rules and regulations thereunder. The consolidated financial
statements of the Corporation to be included in such reports and statements
(excluding any information therein provided by the Purchaser or Seller, as to
which the Seller makes no representation) will be prepared in accordance with
GAAP (except as may be indicated therein or in the notes or schedules thereto)
and will fairly present in all material respects the consolidated financial
position of the Corporation and its consolidated
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subsidiaries as of the dates thereof and the results of their operations and
their cash flows for the periods then ended (subject, in the case of any
unaudited financial statements, to normal year-end audit adjustments).
(c) The Seller will use its reasonable best efforts to cause
the Corporation to deliver to the Purchaser simultaneously with the execution
and delivery of this Agreement a true and complete copy of its 1998 Fiscal Year
Annual Budget (the "Budget").
Section 4.5 Absence of Certain Changes. Except as previously
disclosed in the SEC Filings or as otherwise disclosed in Schedule 4.5 attached
hereto or as otherwise contemplated by this Agreement, since February 23, 1997
and up to the Closing Date, (i) there has not been and will not be any Material
Adverse Change, (ii) the businesses of the Corporation and each of its
subsidiaries have been and will be conducted only in the ordinary course, (iii)
neither the Corporation nor any of its subsidiaries has incurred or will incur
any material liabilities (direct, contingent or otherwise) or engaged in any
material transaction or entered into any material agreement outside the ordinary
course of business, (iv) the Corporation and its subsidiaries have not and will
not increase the compensation of any officer or grant any general salary or
benefits increase to their employees other than in the ordinary course of
business or pursuant to collective bargaining agreements, (v) there has been no,
and will not be any, declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Corporation other
than regular annual cash dividends by the Corporation on its capital stock in an
amount not in excess of $0.80 per share per fiscal annum which have been or will
be declared and paid at the same time such dividends are customarily declared
and paid, (vi) there has been no, and will not be any, change by the Corporation
in accounting principles, practices or methods, and (vii) neither the
Corporation nor any of its subsidiaries has agreed or will agree, whether or not
in writing, to do any of the foregoing.
Section 4.6 Compliance with Laws. Except as previously
disclosed in the SEC Filings, the Corporation and its subsidiaries are in
compliance with all applicable Laws, except where the failure to so comply would
not have a Material Adverse Effect or could be reasonably likely to prevent or
materially delay consummation of the transactions contemplated by this
Agreement.
Section 4.7 Employee Benefit Plans.
(a) List of Plans. Set forth on Schedule 4.7 attached hereto
is an accurate and complete list of all domestic and foreign (i) "employee
benefit plans," within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
thereunder ("ERISA"), (ii) bonus, stock option, stock purchase, restricted
stock, incentive, fringe benefit, profit-sharing, pension, or retirement,
deferred compensation, medical, life, disability, accident, salary continuation,
severance, accrued leave, vacation, sick pay, sick leave, supplemental
retirement and unemployment benefit plans, programs, arrangements, commitments
and/or practices (whether or not insured), and (iii) employment, consulting,
termination, and severance contracts or agreements; for active, retired or
former employees or directors, whether or not any such plans, programs,
arrangements, commitments, contracts, agreements and/or practices (referred to
in (i), (ii) or (iii) above) are in writing or are otherwise
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exempt from the provisions of ERISA, that have been established, maintained or
contributed to (or with respect to which an obligation to contribute has been
undertaken) or with respect to which any potential liability is borne by the
Corporation or any of its subsidiaries (including, for this purpose and for the
purpose of all of the representations in this Section 4.7, any predecessors to
the Corporation or to any of its subsidiaries and all employers (whether or not
incorporated) that would be treated together with the Corporation and/or any of
its subsidiaries as a single employer (A) within the meaning of Section 414 of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder (the "Code") or (B) as a result of the Corporation or any of its
subsidiaries being or having been a general partner of any such employer) since
September 2, 1974 ("Employee Benefit Plans").
(b) Status of Plans. Each Employee Benefit Plan (including any
related trust) complies in form with the requirements of all applicable laws,
including, without limitation, ERISA and the Code, and has at all times been
maintained and operated in substantial compliance with its terms and the
requirements of all applicable laws, including, without limitation, ERISA and
the Code. No complete or partial termination of any Employee Benefit Plan has
occurred or is expected to occur, and no proceedings have been instituted, and
no condition exists and no event has occurred that could constitute grounds,
under Title IV of ERISA to terminate, or appoint a trustee to administer, any
Employee Benefit Plan. Neither the Corporation nor any of its subsidiaries has
any commitment, intention or understanding to create, modify or terminate any
Employee Benefit Plan. Except as required to maintain the tax-qualified status
of any Employee Benefit Plan intended to qualify under Section 401(a) of the
Code, no condition or circumstance exists that would prevent the amendment or
termination of any Employee Benefit Plan. No event has occurred and no condition
or circumstance has existed that could result in a material increase in the
benefits under or the expense of maintaining any Employee Benefit Plan from the
level of benefits or expense incurred for the most recent fiscal year ended
thereof. No Employee Benefit Plan is a plan described in Section 4063(a) of
ERISA.
(c) Liabilities. No Employee Benefit Plan subject to Section
412 or 418B of the Code or Section 302 of ERISA has incurred any accumulated
funding deficiency within the meaning of Section 412 or 418B of the Code or
Section 302 of ERISA, respectively, or has applied for or obtained a waiver from
the Internal Revenue Service ("IRS") of any minimum funding requirement or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA. Except for payments of premiums to the Pension Benefit
Guaranty Corporation ("PBGC"), which have been timely paid in full, neither the
Corporation nor any of its subsidiaries has incurred any liability (including,
for this purpose and for the purpose of all of the representations in this
Section 4.7 any indirect, contingent, or secondary liability) to the PBGC in
connection with any Employee Benefit Plan covering any active, retired or former
employees or directors of the Corporation or any of its subsidiaries, including,
without limitation, any liability under Section 4069 or 4212(c) of ERISA or any
penalty imposed under Section 4071 of ERISA, or ceased operations at any
facility or withdrawn from any such Employee Benefit Plan in a manner which
could subject it to liability under Section 4062, 4063 or 4064 of ERISA, or
knows of any facts or circumstances that might give rise to any liability of the
Corporation or any of its subsidiaries to the PBGC under Title IV of ERISA that
could reasonably be anticipated to result in any claims being made against the
Purchaser by the PBGC.
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Neither the Corporation nor any of its subsidiaries has
incurred any withdrawal liability (including any contingent or secondary
withdrawal liability) within the meaning of Section 4201 or 4204 of ERISA to any
Employee Benefit Plan which is a "multiemployer plan" (as such term is defined
in Section 4001(a)(3) of ERISA) ("Multiemployer Plan") which has not been
satisfied in full, and no event has occurred and no condition or circumstance
has existed, that presents a material risk of the occurrence of any withdrawal
from or the partition, termination, reorganization or insolvency of any such
Multiemployer Plan which could result in any liability of the Corporation or any
of its subsidiaries to any such Multiemployer Plan.
Except as disclosed on Schedule 4.7 attached hereto, neither
the Corporation nor any of its subsidiaries maintains any Employee Benefit Plan
which is a "group health plan" (as such term is defined in Section 5000(b)(1) of
the Code or Section 607(1) of ERISA) that has not been administered and operated
in all respects in compliance with the applicable requirements of Part 6 of
Title 1 of ERISA and Section 4980B of the Code and neither the Corporation nor
any of its subsidiaries is subject to any liability, including, without
limitation, additional contributions, fines, taxes, penalties or loss of tax
deduction as a result of such administration and operation. Each Employee
Benefit Plan that is intended to meet the requirements of Section 125 of the
Code meets such requirements, and each program of benefits for which employee
contributions are provided pursuant to elections under any Employee Benefit Plan
meets the requirements of the Code applicable thereto. Neither the Corporation
nor any of its subsidiaries maintains any Employee Benefit Plan which is an
"employee welfare benefit plan" (as such term is defined in Section 3(1) of
ERISA) that has provided any "disqualified benefit" (as such term is defined in
Section 4976(b) of the Code) with respect to which an excise tax could be
imposed.
Except as disclosed on Scheduled 4.7 attached hereto, neither
the Corporation nor any of its subsidiaries maintains any Employee Benefit Plan
(whether qualified or non-qualified under Section 401(a) of the Code) providing
for post-employment or retiree health, life insurance and/or other welfare
benefits and having unfunded liabilities, and neither the Corporation nor any of
its subsidiaries have any obligation to provide any such benefits to any retired
or former employees or active employees following such employees' retirement or
termination of service. Neither the Corporation nor any of its subsidiaries has
any unfunded liabilities pursuant to any Employee Benefit Plan that is not
intended to be qualified under Section 401(a) of the Code.
Except as disclosed on Schedule 4.7 attached hereto, neither
the Corporation nor any of its subsidiaries has incurred any liability for any
tax or excise tax arising under Chapter 43 of the Code, and no event has
occurred and no condition or circumstance has existed that could give rise to
any such liability.
No asset of the Corporation or any of its subsidiaries is
subject to any lien arising under Section 302(f) of ERISA or Section 412(n) of
the Code, and no event has occurred and no condition or circumstance has existed
that could give rise to any such lien. Neither the Corporation nor any of its
subsidiaries has been required to provide any security under Section 307 of
ERISA or Section 401(a)(29) or 412(f) of the Code, and no event has occurred and
no condition or circumstance has existed that could give rise to any such
requirement to provide any such security.
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There are no actions, suits, claims or disputes pending or, to
the best knowledge and belief of the Corporation, threatened, anticipated or
expected to be asserted against or with respect to any Employee Benefit Plan or
the assets of any such plan (other than routine claims for benefits and appeals
of denied routine claims). No civil or criminal action brought pursuant to the
provisions of Title I, Subtitle B, Part 5 of ERISA is pending, threatened,
anticipated, or expected to be asserted against the Corporation or any of its
subsidiaries or any fiduciary of any Employee Benefit Plan, in any case with
respect to any Employee Benefit Plan. No Employee Benefit Plan or any fiduciary
thereof is the direct or indirect subject of an audit, investigation or
examination by any governmental or quasi-governmental agency.
(d) Contributions. Full payment has been timely made of all
amounts which the Corporation or any of its subsidiaries is required, under
applicable law or under any Employee Benefit Plan or any agreement relating to
any Employee Benefit Plan to which the Corporation or any of its subsidiaries is
a party, to have paid as contributions or premiums thereto as of the last day of
the most recent fiscal year of such Employee Benefit Plan ended prior to the
date hereof. All such contributions and/or premiums have been fully deducted for
income tax purposes and no such deduction has been challenged or disallowed by
any governmental entity, and to the best knowledge and belief of the Corporation
no event has occurred and no condition or circumstance has existed that could
give rise to any such challenge or disallowance. The Corporation has made
adequate provision for reserves to meet contributions and premiums and any other
liabilities that have not been paid or satisfied because they are not yet due
under the terms of any Employee Benefit Plan, applicable law or related
agreements. Benefits under all Employee Benefit Plans are as represented and
have not been increased subsequent to the date as of which documents have been
provided.
(e) Funded Status; Withdrawal Liability. As of the date of
this Agreement, the current value of the accumulated benefit obligations (based
upon actuarial assumptions which are in the aggregate reasonable in all respects
and which have been furnished to and relied upon by Parent) under each Employee
Benefit Plan which is covered by Title IV of ERISA and which is a "single
employer plan" (as such term is defined in Section 4001(a)(15) of ERISA)
("Single Employer Plan") did not exceed the current fair value of the assets of
each such Single Employer Plan allocable to such accrued benefits, and since the
date of the 1997 10-K, there has been (A) no material adverse change in the
financial condition of any Single Employer Plan, (B) no change in the actuarial
assumptions with respect to any Single Employer Plan, and (C) no increase in
benefits under any Single Employer Plan as a result of plan amendments, written
interpretations or announcements (whether written or not), change in applicable
law or otherwise, which individually or in the aggregate, would result in the
current value of any Single Employer Plan's accrued benefits exceeding the
current value of all such Single Employer Plan's assets. No Employee Benefit
Plan holds as an asset any interest in any annuity contract, guaranteed
investment contract or any other investment or insurance contract, policy or
instrument issued by an insurance company that, to the best knowledge and belief
of the Corporation, is or may be the subject of bankruptcy, conservatorship,
insolvency, liquidation, rehabilitation or similar proceedings.
As of the date of this Agreement, using actuarial assumptions
and computation methods consistent with Part 1 of Subtitle E of Title IV of
ERISA, (A) the Corporation and its
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subsidiaries would have no liability to the FELRA and UFCW Pension Fund, the
Warehouse Employees Union Local No. 730 Pension Trust, and the Bakers and
Confectionary and Industry International Health Benefits and Pension Fund in the
event of a complete withdrawal therefrom, as of the close of the most recent
fiscal year of each such Multiemployer Plan ended prior to the date hereof and
(B) the aggregate liabilities of the Corporation and its subsidiaries to all
other Multiemployer Plans in the aggregate in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan ended prior to the date hereof, would not result in a
material liability. To the best knowledge of the Corporation, there has been no
material change in the financial condition of any Multiemployer Plan, in any
such actuarial assumption or computation method or in the benefits under any
Multiemployer Plan as a result of collective bargaining or otherwise since the
close of each such fiscal year which, individually or in the aggregate, would
materially increase such liability.
(f) Tax Qualification. Except as disclosed on Schedule 4.7
attached hereto, each Employee Benefit Plan intended to be qualified under
Section 401(a) of the Code has, as currently in effect, been determined to be so
qualified by the IRS. Each trust established in connection with any Employee
Benefit Plan which is intended to be exempt from Federal income taxation under
Section 501(a) of the Code has, as currently in effect, been determined to be so
exempt by the IRS. Since the date of each most recent determination referred to
in this paragraph (vi), no event has occurred and no condition or circumstance
has existed that resulted or is likely to result in the revocation of any such
determination or that could adversely affect the qualified status of any such
Employee Benefit Plan or the exempt status of any such trust.
(g) Transactions. No "reportable event" (as such term is
defined in Section 4043 of ERISA) for which the 30-day notice requirement has
not been waived by the PBGC has occurred or is expected to occur with respect to
any Employee Benefit Plan. Neither the Corporation nor any of its subsidiaries
nor any of their respective directors, officers, employees or, to the best
knowledge and belief of the Corporation, other persons who participate in the
operation of any Employee Benefit Plan or related trust or funding vehicle, has
engaged in any transaction with respect to any Employee Benefit Plan or breached
any applicable fiduciary responsibilities or obligations under Title I of ERISA
that would subject any of them to a tax, penalty or liability for prohibited
transactions or breach of any obligations under ERISA or the Code or would
result in any claim being made under, by or on behalf of any such Employee
Benefit Plan by any party with standing to make such claim.
(h) Documents. The Corporation has delivered or caused to be
delivered to the Purchaser and its counsel true and complete copies of all
material documents in connection with each Employee Benefit Plan, including,
without limitation (where applicable): (i) all Employee Benefit Plans as in
effect on the date hereof, together with all amendments thereto, including, in
the case of any Employee Benefit Plan not set forth in writing, a written
description thereof; (ii) all current summary plan descriptions, summaries of
material modifications, and material communications; (iii) all current trust
agreements, declarations of trust and other documents establishing other funding
arrangements (and all amendments thereto and the latest financial statements
thereof); (iv) the most recent IRS determination letter obtained with respect to
each Employee Benefit Plan intended to be qualified under Section 401(a) of the
Code or exempt under Section
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501(a) of the Code; (v) the annual report on IRS Form 5500-series for each of
the last three years for each Employee Benefit Plan required to file such form;
(vi) the most recently prepared actuarial valuation report for each Employee
Benefit Plan covered by Title IV of ERISA; (vii) the most recently prepared
financial statements; and (viii) all contracts and agreements relating to each
Employee Benefit Plan, including, without limitation, service provider
agreements, insurance contracts, annuity contracts, investment management
agreements, subscription agreements, participation agreements, and recordkeeping
agreements and collective bargaining agreements.
Section 4.8 Employee Benefit Plan Triggering Events. Except as
disclosed on Schedule 4.8 attached hereto, the Tender Offer does not constitute
a triggering event under any Employee Benefit Plan, policy, arrangement,
statement, commitment or agreement, whether or not legally enforceable, which
(either alone or upon the occurrence of any additional or subsequent event) will
or may result in any payment (whether of severance pay or otherwise), "parachute
payment" (as such term is defined in Section 280G of the Code), acceleration,
vesting or increase in benefits to any employee or former employee or director
of the Corporation or any of its subsidiaries. No Employee Benefit Plan provides
for the payment of severance, termination, change in control or similar-type
payments or benefits.
Section 4.9 Liabilities. Except as set forth in the SEC
Filings or as disclosed in Schedule 4.9 attached hereto or as otherwise
contemplated by this Agreement, since February 23, 1997 to the date of this
Agreement, neither the Corporation nor any of its subsidiaries has incurred any
material outstanding claims, liabilities or indebtedness, contingent or
otherwise, that would be required to be disclosed in the Corporation's
consolidated financial statements prepared in accordance with GAAP, other than
liabilities incurred subsequent to February 23, 1997 in the ordinary course of
business not involving borrowings by the Corporation or any of its subsidiaries.
Section 4.10 Litigation. (a) Except as set forth on Schedule
4.10 attached hereto, there is no action, suit, proceeding at law or in equity,
arbitration or administrative or other proceeding by or before (or to the best
knowledge of the Corporation any investigation by) any governmental or other
instrumentality or agency, pending or, to the best knowledge of the Corporation,
threatened, against or affecting the Corporation or any of its subsidiaries, or
any of their properties or rights which, individually or in the aggregate, could
have a Material Adverse Effect.
(b) Except as set forth on Schedule 4.10 attached hereto,
neither the Corporation nor any of its subsidiaries is subject to any judgment,
order or decree entered in any lawsuit or proceeding which could have a Material
Adverse Effect.
Section 4.11 Taxes. (a) Tax Returns. Except as set forth on
Schedule 4.11 attached hereto, the Corporation has timely filed or caused to be
timely filed or will timely file or cause to be timely filed with the
appropriate taxing authorities all returns, statements, forms and reports for
Taxes that are required by Law to be filed by, or which include, the Corporation
or any of its subsidiaries on or prior to the Closing Date. Such tax returns
accurately reflect all liability for Taxes of the Corporation and each of its
subsidiaries for the periods covered thereby.
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(b) Payment of Taxes. Except as set forth on Schedule 4.11
attached hereto, all Taxes and Tax liabilities of the Corporation due for all
taxable years or periods that end on or before the Closing Date and, with
respect to any taxable year or period beginning before and ending after the
Closing Date, the portion of such taxable year or period ending on and including
the Closing Date, have been timely paid or are reserved in accordance with GAAP
in financial statements of the Corporation on or prior to the Closing Date.
(c) Tax Audits. Except as set forth on Schedule 4.11 attached
hereto, no examination of any tax return of the Corporation is currently in
progress and there are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of the Corporation.
Section 4.12 Intellectual Properties. The costs to the
Corporation and its subsidiaries of ensuring that the equipment and software and
other computer programs used by the Corporation or any of its subsidiaries (each
a "Seller System") will be Year 2000 compliant (a) are estimated to be
approximately $15,000,000, (b) are expensed as incurred, and (c) the balance of
such cost is not expected to have a material adverse impact on the Corporation's
financial position, results of operations or cash flows in future periods. For
purposes of this paragraph, "Year 2000 compliant" means that a change of,
reference to or use after December 31, 1999 of date-related data for dates
before, on or after December 31, 1999 in the operation of that Seller System,
whether alone or in conjunction with each other Seller System or item of
equipment, software or other computer program under the control of a third party
with whom the Corporation or any of its subsidiaries routinely exchanges date
information, will not have a material adverse effect on, nor give rise to a
material increased inconvenience in, the operation of that Seller System.
Section 4.13 Environmental Laws and Regulations. There are no
facts or circumstances, conditions or occurrences regarding any Corporation
Property (as defined below) that could reasonably be anticipated (a) to form the
basis of an Environmental Claim (as defined below) against the Corporation or
any of its subsidiaries or any Corporation Property or (b) to cause such
Corporation Property to be subject to any restrictions on its ownership,
occupancy, use or transferability under any Environmental Law (as defined
below).
For purposes of this Agreement, the following terms shall have
the following meanings: (a) "Corporation Property" means any real property and
improvements owned, leased, used, operated or occupied by the Corporation or any
of its subsidiaries; (b) "Hazardous Materials" means (i) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas,
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," or words of similar import, under any applicable
Environmental Law, and (iii) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental authority; (c)
"Environmental Law" means any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of
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common law in effect and in each case as amended as of the date hereof and
Closing Date, and any judicial or administrative interpretation thereof as of
the date hereof and Closing Date, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3808 et seq.; and state
and local equivalent statutes and regulations; and (d) "Environmental Claims"
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law (for
purposes of this subclause (d), "Claims") or any permit issued under any such
Environmental Law, including without limitation (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
Section 4.14 Labor Relations. Except as set forth on Schedule
4.14 attached hereto, there is no strike, labor dispute, slowdown or stoppage
pending or, to the best knowledge of the Corporation, threatened against the
Corporation or any of its subsidiaries which would be reasonably likely to have
a Material Adverse Effect on the Corporation. The Corporation and its
subsidiaries have complied with the Worker Adjustment and Retraining
Notification Act (the "WARN Act"). None of the present or former employees of
the Corporation or its subsidiaries has suffered an employment loss or mass
layoff as that term is defined in the WARN Act in the 6-month period ending on
the Closing Date.
Section 4.15 Tender Offer Documents and Corporation's Schedule
14D-9 . None of the information supplied by the Corporation for inclusion or
incorporation by reference in the Tender Offer Documents will at the respective
times the Tender Offer Documents are filed with the SEC contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made, in light of the circumstance under which they
are made, not misleading. None of the information in the Corporation's Schedule
14D-9, at the respective times the Corporation's Schedule 14D-9 is filed with
the SEC and first published, sent or given to the holders of the Class A Shares,
will contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under
which they are made, not misleading. Notwithstanding the foregoing, no
representation or warranty is made with respect to any information with respect
to the Purchaser or its officers, directors or affiliates provided to the
Corporation by the Purchaser in writing for inclusion in the Corporation's
Schedule 14D-9. The Corporation's Schedule 14D-9 will comply in all material
respects with the Exchange Act and the rules and regulations thereunder and any
other applicable laws. If at any time prior to the expiration or termination of
the Tender Offer any event occurs which should be described in an amendment or
supplement to the Corporation's Schedule 14D-9 or any amendment or supplement
thereto, the Seller will use its reasonable best
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efforts to cause the Corporation to file and disseminate, as required, an
amendment or supplement which complies in all material respects with the
Exchange Act and the rules and regulations thereunder and any other applicable
laws. The Seller shall use its reasonable best efforts to cause the Corporation
to deliver any amendment or supplement to the Purchaser and its counsel prior to
its filing with the SEC.
Section 4.16 State Takeover Statutes. The provisions of
Section 203 of the DGCL are not applicable to the Corporation and, as a result,
no action by the Board of Directors of the Corporation is required under such
Section in respect of the Tender Offer. No other state takeover statute or
similar statute or regulation applies or purports to apply to the Tender Offer.
Section 4.17 Rights Agreements. The Corporation has no
stockholder rights plan or similar agreement in effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Section 5. Representations and Warranties of the Purchaser. In
order to induce the Seller to enter into this Agreement and to sell the
Transferred Shares, the Purchaser makes the following representations and
warranties.
Section 5.1 Legal Status. The Purchaser is a duly organized
and validly existing public company with limited liability under the laws of the
Netherlands.
Section 5.2 Power and Authority; Enforceability. The Purchaser
has full requisite legal capacity, power and authority to execute, deliver and
perform the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary corporate action to
authorize the execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Purchaser and
constitutes a valid and legally binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditor's rights and to general
equitable principles.
Section 5.3 No Conflicts. (a) Assuming the receipts of the
consents, approvals, etc. specified in clause (b) below, the execution, delivery
and performance of this Agreement by the Purchaser and the performance of the
provisions regarding the Tender Offer will not (i) conflict with the Articles of
Association of the Purchaser, (ii) conflict with, result in the breach or
termination of, or constitute a default (or give rise to any third party right
of termination, cancellation, material modification or acceleration) under, any
lease, charter, note, bond, mortgage, license, indenture, contract, agreement,
commitment, arrangement or other instrument or obligation or any order,
judgment, decree, injunction, regulation or ruling of any governmental authority
or regulatory organization, domestic or foreign, to which the Purchaser is a
party or by
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which the Purchaser or any of its properties or assets are bound, or (iii)
constitute a violation by the Purchaser of any Law or regulation applicable to
the Purchaser any of its properties or assets.
(b) Except (i) for filings under the HSR Act, (ii) as required
by the Exchange Act and the rules and regulations thereunder in connection with
the Tender Offer, (iii) the "blue sky" laws of various states, (iv) applicable
Alcohol and Drug Laws and (v) applicable local permit laws, rules and
regulations pertaining to the operation of the business of the Corporation and
its subsidiaries, no consent, approval, permit, or authorization of, or
designation, declaration or filing with, any governmental authorities or third
parties is required on the part of the Purchaser in connection with the
execution and delivery of this Agreement and the performance by the Purchaser of
the transactions contemplated hereby.
Section 5.4 Broker's or Finder's Fees. Except for ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co. (whose fees and expenses will be paid by the Purchaser), no agent,
broker, person or firm acting on behalf of the Purchaser or any Affiliate
thereof is, or will be, entitled to any commission or broker's or finder's fees
from any of the parties hereto, or from any Person controlling, controlled by or
under common control with any of the parties hereto, in connection with any of
the transactions contemplated by this Agreement.
Section 5.5 Available Funds. The Purchaser has or will have
available to it all funds necessary to satisfy all of its obligations hereunder
and in connection with the transactions contemplated by this Agreement.
Section 5.6 Securities Act. The Purchaser is acquiring the
Transferred Shares solely for the purpose of investment and not with a view to,
or for sale in connection with, any distribution thereof in violation of the
Securities Act of 1933, as amended (the "Securities Act"). The Purchaser
acknowledges that the Transferred Shares are not registered under the Securities
Act or any applicable state securities law, and that the Transferred Shares may
not be transferred or sold except pursuant to the registration provisions of the
Securities Act or pursuant to an applicable exemption therefrom and pursuant to
state securities laws and regulations as applicable.
Section 5.7 Schedules l4D-9. The written information supplied
or to be supplied by the Purchaser for inclusion in the Corporation's Schedule
l4D-9, the Seller's Schedule 14D-9 or the Directors' Schedule 14D-9 will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made, in light of the
circumstances under which they are made, not misleading.
ARTICLE VI
CONDUCT OF BUSINESS, EXCLUSIVE DEALING,
REVIEW, OTHER COVENANTS
Section 6.1 Access to Information Concerning Properties and
Records. During the period commencing on the date hereof and ending on the
Closing Date, the Seller shall use its reasonable best efforts to cause the
Corporation and each of its subsidiaries to, upon reasonable notice, afford the
Purchaser, and its counsel, accountants, consultants and other authorized
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representatives, full access during normal business hours to the employees,
properties, books and records of the Corporation and its subsidiaries in order
that they may have the opportunity to make such investigations as they shall
desire of the affairs of the Corporation and its subsidiaries and all other
information concerning its or its subsidiaries' business, properties and
personnel as the Purchaser may request; such investigation shall not, however,
affect the representations and warranties made by the Seller in this Agreement.
The Seller shall use its reasonable best efforts to cause the Corporation to
furnish promptly to the Purchaser (a) a copy of each report, schedule,
registration statement and other document filed by the Corporation or its
subsidiaries during such period pursuant to the requirements of Federal or state
securities laws and (b) such additional financial and operating data and all
other information concerning the Corporation's or its subsidiaries' business,
properties and personnel in the possession of the Seller as the Purchaser may
reasonably request.
Section 6.2 Confidentiality. Information obtained by the
Purchaser pursuant to Section 6.1 hereof or otherwise pursuant to this Agreement
shall be subject to the provisions of the Confidentiality Agreement between the
Seller and the Purchaser dated as of February 2, 1998.
Section 6.3 Conduct of Business of the Corporation. (a) During
the period from the date of this Agreement to the Closing Date, except as
permitted, required or specifically contemplated by, or otherwise described in,
this Agreement or otherwise consented to or approved in writing by the
Purchaser, the Seller (i) shall not vote the Class AC Shares in favor of any
action that would cause, or that is part of a transaction that would cause, (ii)
shall cause the directors of the Corporation who are also directors of the
Seller not to vote in favor of any action that would cause, or that is a part of
a transaction that would cause, and (iii) shall otherwise use its reasonable
best efforts to cause the Corporation and each of its subsidiaries not to take
any action that would cause, any of the representations or warranties with
respect to the Corporation set forth in Article IV of this Agreement to be
untrue or incorrect.
(b) During the period from the date of this Agreement to the
Closing Date, except as permitted, required or specifically contemplated by, or
otherwise described in, this Agreement or otherwise consented to or approved in
writing by the Purchaser, the Seller (i) shall vote the Class AC Shares in favor
of any action that would cause, or that is part of a transaction that would
cause, (ii) shall cause the directors of the Corporation who are also directors
of the Seller to vote in favor of any action that would cause, or that is a part
of a transaction that would cause, and (iii) shall otherwise use its reasonable
best efforts to cause, in each case, the Corporation and each of its
subsidiaries to do the following:
(A) conduct their respective operations only according to
their ordinary and usual course of business consistent with past
practice; and
(B) use their best efforts to preserve intact their respective
business organization, keep available the services of their officers
and employees and maintain satisfactory relationships with licensors,
suppliers, distributors, clients, landlords, joint venture partners,
employees, agents and others having business relationships with them.
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(c) During the period from the date of this Agreement to the
Closing Date, except as permitted, required or specifically contemplated by, or
otherwise described in, this Agreement or otherwise consented to or approved in
writing by the Purchaser, the Seller (i) shall not vote the Class AC Shares in
favor of, and shall affirmatively vote the Class AC Shares against, any action
that would cause, or that is part of a transaction that would cause, (ii) shall
cause the directors of the Corporation who are also directors of the Seller not
to vote in favor of, and to affirmatively vote against, any action that would
cause, or that is a part of a transaction that would cause, and (iii) shall
otherwise use its reasonable best efforts to cause, in each case, the
Corporation and each of its subsidiaries not to do any of the following:
(A) make any change in or amendment to the Certificate of
Incorporation or By-Laws (or comparable governing documents) of the
Corporation or any subsidiary, (B) issue, sell or acquire any shares of
its capital stock (other than in connection with the exercise of
Options outstanding on the date hereof) or any of its other securities,
or issue any securities convertible into, or options, warrants or
rights to purchase or subscribe to, or enter into any arrangement or
contract with respect to the issuance or sale of, any shares of its
capital stock or any of its other securities, or make any other changes
in its capital structure, (C) sell or pledge or agree to sell or pledge
any stock owned by it in any of its subsidiaries, (D) declare, pay, set
aside or make any dividend or other distribution or payment with
respect to, or split, combine, redeem or reclassify, or purchase or
otherwise acquire any shares of its capital stock or its other
securities, other than dividends and distributions by a direct or
indirect wholly-owned subsidiary to its parent and regular annual cash
dividends by the Corporation on its capital stock in an amount not in
excess of $0.80 per share per fiscal annum at the same time such
dividends are customarily declared and paid, (E) (1) except as set
forth on Schedule 6.3 attached hereto, enter into any contract or
commitment with respect to (x) any individual capital expenditure in
excess of $7,500,000 in the case of capital expenditures provided for
in the Corporation's Budget or $2,000,000 in the case of capital
expenditures not provided for in the Budget or (y) capital expenditures
that in the aggregate exceed $40,000,000 in any thirteen week period,
(2) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business or division
thereof, or (3) enter into, amend, modify, supplement or cancel any
other material contract, (F) acquire a material amount of assets or
securities or release or relinquish any material contract rights other
than in the ordinary course of business in accordance with past
practice and the Corporation's short term investment program, (G)
except to the extent required under existing employee and director
benefit plans, agreements or arrangements as in effect on the date of
this Agreement, increase the compensation or fringe benefits of any of
its directors, officers or employees, except for increases in salary or
wages of employees of the Corporation or its subsidiaries in the
ordinary course of business in accordance with past practice, or grant
any severance or termination pay not currently required to be paid
under existing severance plans or enter into any employment, consulting
or severance agreement or arrangement with any present or former
director, officer or other employee of the Corporation or any of its
subsidiaries, or establish, adopt, enter into or amend or terminate any
collective bargaining (except for the termination of the collective
bargaining agreements which will expire in accordance with their terms
prior to the Closing Date, all
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of which are listed on Schedule 6.3(c) attached hereto), bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the
benefit of any directors, officers, employees or former employees
and/or directors, (H) transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of, encumber or subject to any lien, any
material assets or incur or modify any indebtedness or other liability
or issue any debt securities or assume, guarantee or endorse or
otherwise as an accommodation become responsible for the obligations of
any person or, other than in the ordinary course of business consistent
with past practice, make any loan or other extension of credit, (I)
agree to the settlement of any material claim or litigation (including,
but not limited to any claim or litigation in respect of or related to
any Environmental Law), (J) make any material tax election or settle or
compromise any material tax liability, (K) permit any insurance policy
naming it as beneficiary or a loss payable payee to be canceled without
notice to the Purchaser unless (1) such insurance policy is immediately
replaced, with no gaps or lapses in coverage, with an insurance policy
issued by a financially sound and reputable insurance company in at
least such amounts and against at least such risks as the canceled
policy or (2) such cancellation would not have a Material Adverse
Effect, (L) make any material change in its method of accounting, (M)
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization
of the Corporation or any of its subsidiaries not constituting an
inactive subsidiary, (N) take any action, including, without
limitation, the adoption of any stockholder rights plan or amendments
to its Certificate of Incorporation (or other organizational or
governing documents), which would, directly or indirectly, restrict or
impair the ability of the Purchaser to vote, or otherwise to exercise
the rights and receive the benefits of a stockholder with respect to,
securities of the Corporation that may be acquired or controlled by the
Purchaser or permit any stockholder to acquire securities of the
Corporation on a basis not available to the Purchaser in the event that
the Purchaser were to acquire securities of the Corporation, or (O)
agree, in writing or otherwise, to take any of the foregoing actions.
Section 6.4 Approval by Purchaser of Changes. If the Seller
makes a request in writing to the Purchaser for the Purchaser's approval of an
action or inaction enumerated in Section 6.3(b) or (c) of this Agreement (an
"Action"), the Purchaser will use all reasonable efforts to approve or reject
such request within five business days of receipt thereof. If the Seller does
not receive notice from the Purchaser within such five business day period, the
action or inaction specified in such written request shall be deemed to be
approved by the Purchaser. No approval or consent of a single Action shall
constitute an approval or consent to any Action not specified in the request to
which the Purchaser was responding.
Section 6.5 Exclusive Dealing. (a) The Seller and each of its
officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants, agents or advisors (collectively "Agents")
shall immediately cease any discussions or negotiations with any other parties
that may be ongoing with respect to any purchase of the Transferred Shares or
any Acquisition Proposal (as defined below). The Seller shall not, directly or
indirectly, take (and the Seller shall not authorize or permit its Agents to so
take) any action to (i) encourage, solicit or
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initiate the making of any offer to purchase the Transferred Shares or any
Acquisition Proposal, (ii) enter into any agreement with respect to any offer to
purchase the Transferred Shares or any Acquisition Proposal, or (iii)
participate in any way in discussions or negotiations with, or furnish or
disclose any information to, any Person (other than the Purchaser) in connection
with, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any offer
to purchase the Transferred Shares or any Acquisition Proposal.
"Acquisition Proposal" shall mean any inquiry, proposal or
offer from any Person (other than the Purchaser) relating to any direct or
indirect acquisition or purchase of all or any of the Class AC Shares, of a
substantial amount of assets of the Corporation or any of its subsidiaries or of
more than 10% of any class of equity securities of the Corporation or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning more than 10% of any other class of
equity securities of the Corporation or any of its subsidiaries, any merger,
consolidation, business combination, sale of substantially all the assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Corporation or any of its subsidiaries, other than the transactions contemplated
hereby, or any other transaction the consummation of which could reasonably be
expected to impede, interfere with, prevent or materially delay the Tender Offer
or which would reasonably be expected to dilute materially the benefits to the
Purchaser of the transactions contemplated hereby.
(b) During the period from the date of this Agreement to the
Closing Date, except as permitted, required or specifically contemplated by, or
otherwise described in, this Agreement or otherwise consented to or approved in
writing by the Purchaser, the Seller (i) shall use its reasonable best efforts
to cause (A) the Corporation and its Agents immediately to cease any discussions
or negotiations with any other parties that may be ongoing with respect to any
Acquisition Proposal and (B) the Corporation and its subsidiaries not to take,
directly or indirectly, (and the Corporation not to authorize or permit its or
its subsidiaries' Agents to take) any action to (1) encourage, solicit or
initiate the making of any Acquisition Proposal, (2) enter into any agreement
with respect to any Acquisition Proposal, or (3) participate in any way in
discussions or negotiations with, or furnish or disclose any information to, any
Person (other than the Purchaser) in connection with, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Acquisition Proposal, (ii) shall not
vote the Class AC Shares in favor of any Acquisition Proposal, (iii) shall cause
the directors of the Corporation who are also directors of the Seller not to
vote to approve or recommend, or propose to approve or recommend, any
Acquisition Proposal or in favor of the Corporation entering into any agreement
with respect to any Acquisition Proposal, and (iv) shall otherwise use its
reasonable best efforts to cause the Board of Directors of the Corporation not
to approve, recommend or propose to approve or recommend any Acquisition
Proposal or the entering into by the Corporation of any Acquisition Proposal.
(c) In addition to the obligations of the Seller set forth in
paragraphs (a) and (b), on the date of receipt thereof, the Seller shall, or
shall use its reasonable best efforts to cause the Corporation to, advise the
Purchaser of any request for information or of any offer to purchase the
Transferred Shares or any Acquisition Proposal, or any inquiry or proposal with
respect to any
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offer to purchase the Transferred Shares or any Acquisition Proposal, the
material terms and conditions of such request, offer or Acquisition Proposal and
of any changes thereto, and the identity of the entity or person making any such
inquiry or proposal.
Section 6.6 Notification of Certain Matters. The Seller shall
(to the extent known by the Seller), and shall use its reasonable best efforts
to cause the Corporation to, give prompt notice to the Purchaser of: (a) any
notice of, or other communication relating to, a default or event that, with
notice or lapse of time or both, would become a default, received by the
Corporation or any of its subsidiaries subsequent to the date of this Agreement
and prior to the Closing Date, under any material contract to which the
Corporation or any of its subsidiaries is a party or is subject; (b) any change
that might have a Material Adverse Effect on the Corporation and its
subsidiaries taken as a whole or the occurrence of any event which is reasonably
likely to result in a Material Adverse Effect; (c) the occurrence, or
non-occurrence, of any events the occurrence, or non-occurrence, of which would
cause either (i) a representation or warranty of the Seller contained in this
Agreement to be untrue or inaccurate in any respect at any time from the date
hereof to the date Class A Shares are accepted for payment pursuant to the
Tender Offer or (ii) any of the Tender Offer Conditions to be unsatisfied in any
material respect at any time from the date hereof to the date Class A Shares are
purchased pursuant to the Tender Offer. The Seller shall (to the extent known by
the Seller), and shall use its reasonable best efforts to cause the Corporation
to, and the Purchaser shall give prompt notice to the other party of any notice
or other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement.
Section 6.7 Directors' and Officers' Insurance . (a) For a
period of six years from the Closing Date, the Purchaser shall cause the
directors of the Corporation elected by the Purchaser to the Board of Directors
of the Corporation not to vote to, and shall otherwise use its reasonable best
efforts to cause the Corporation not to, amend, repeal or otherwise modify the
provisions with respect to indemnification and exculpation from liability set
forth in the Corporation's Certificate of Incorporation and By-Laws on the date
of this Agreement in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the Closing Date were directors,
officers, employees or agents of the Corporation, unless such modification is
required by law.
(b) For a period of three years from the Closing Date, the
Purchaser (i) shall cause the directors of the Corporation elected by the
Purchaser to the Board of Directors of the Corporation to vote to, and shall
otherwise use its reasonable best efforts to cause the Corporation to, maintain
in effect the Corporation's current directors' and officers' liability insurance
covering those persons who are currently covered on the date of this Agreement
by the Corporation's directors' and officers' liability insurance policy (a copy
of which has been heretofore delivered to the Purchaser) (the "Indemnified
Parties"); provided, however, that in no event shall the Corporation be required
to expend in any one year an amount in excess of 150% of the annual premiums
currently paid by the Corporation for such insurance which the Seller represents
to be $200,160 for the most recent twelve month period; provided further, that
if the annual premiums of such insurance coverage exceed such amount, the
Corporation shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such
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amount; provided further that the Corporation may substitute for such
Corporation policies, policies with at least the same coverage containing terms
and conditions which are no less advantageous and provided that said
substitution does not result in any gaps or lapses in coverage with respect to
matters occurring prior to the Closing Date or, alternatively, (ii) shall cause
the Purchaser's directors' and officers' liability insurance then in effect to
cover those persons who are covered on the date of this Agreement by the
Corporation's directors' and officers' liability insurance policy with respect
to those matters covered by the Corporation's directors' and officers' liability
policy.
Section 6.8 Employee Benefits. The Purchaser currently intends
that, during the period commencing at the Closing Date and ending on December
31, 1999, the active employees of the Corporation and its subsidiaries who are
not covered by collective bargaining agreements ("Non-Union Employees") will be
provided with employee benefits (other than stock option and other
non-tax-qualified plans or arrangements involving the potential issuance of
securities of the Corporation or of the Purchaser) which are in the aggregate
not materially less favorable to those currently provided by the Corporation and
its subsidiaries to such Non-Union Employees; provided, that (i) the covenants
contained in this subsection (a) shall only be effective to the extent permitted
under laws and regulations in force from time to time and (ii) the Purchaser
reserves the right to review all employee benefit plans and arrangements of the
Corporation after the Closing Date and to make such changes of an administrative
or investment management nature as it, in its discretion, deems appropriate.
Notwithstanding the foregoing, Non-Union Employees who are currently accruing
benefits under Section 3.8 of Article III and Article VI of the [Green] Excess
Benefit Savings Plan (the "EBS Plan") on the Closing Date shall continue to
participate in the EBS Plan and to accrue benefits under those provisions at the
same accrual rates in effect on the Closing Date. The preceding sentence shall
not apply to any other benefits under the EBS Plan including, without
limitation, benefits under Article IV therein. Non-Union Employees who meet the
minimum eligibility requirements under the stock option plans maintained by the
Purchaser after the Closing Date shall be eligible to be granted stock options
thereunder in accordance with the terms of such plans.
Section 6.9 Further Assurances. Each of the parties shall
execute, acknowledge, deliver and file, without further consideration, all such
additional documents and take such other actions as may be necessary or
reasonably requested by the other party to consummate or evidence the
transactions and fulfill the obligations contemplated by this Agreement.
Section 6.10 Resignations. On the Closing Date, the Seller
shall cause each Person who has been elected by the Seller to the Board of
Directors of the Corporation to resign effective as of the Closing Date.
Section 6.11 Provisions Concerning Transferred Shares. The
Seller hereby agrees that during the period commencing on the date hereof and
continuing until the earlier of (i) the Closing Date or (ii) the termination
date set forth in Section 9.13 hereof, at any meeting of the holders of capital
stock of the Corporation, however called, or in connection with any written
consent of the holders of capital stock of the Corporation, the Seller shall
vote (or cause to be voted) the Transferred Shares whether issued, heretofore
owned or hereafter acquired, (x) in
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favor of each of the actions contemplated by this Agreement and any actions
required in furtherance hereof, (y) against any action or agreement that would
result in a breach in any respect of any covenant, representation or warranty or
any other obligation or agreement of the Seller under this Agreement, and (z)
except as otherwise agreed to in writing in advance by the Purchaser, against
the following actions: (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Corporation or
its subsidiaries; (B) a sale, lease or transfer of a material amount of assets
of the Corporation or its subsidiaries, or a reorganization, recapitalization,
dissolution or liquidation of the Corporation or its subsidiaries; or (C) (1)
any change in a majority of the persons who constitute the Board of Directors of
the Corporation, (2) any change in the present capitalization of the Corporation
or any amendment of the Corporation's Certificate of Incorporation or By-Laws,
(3) any other material change in the Corporation's corporate structure or
business, or (4) any other action involving the Corporation or its subsidiaries
which is intended, or could reasonably be expected, to impede, interfere with,
delay, postpone, or materially adversely affect the transactions contemplated by
this Agreement. The Seller shall not enter into any agreement or understanding
with any Person the effect of which would be to violate the provisions and
agreements contained in this Section 6.11.
Section 6.12 Restriction on Transfer, Proxies and
Non-Interference. Beginning on the date hereof and ending on the earlier of the
Closing Date or the termination date set forth in Section 9.13 hereof, the
Seller shall not (i) directly or indirectly, offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to or
consent to the offer for sale, transfer, tender, pledge, encumbrance, assignment
or other disposition of, any of the Transferred Shares or any of the Existing
Class A Shares or any interest therein, (ii) except as contemplated by this
Agreement, grant any proxies or powers of attorney, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares, or
(iii) take any action that would make any representation or warranty of the
Seller contained herein untrue or incorrect or have the effect of preventing or
disabling the Seller from performing its obligations under this Agreement.
Section 6.13 Changes in Shares. In the event of a stock
dividend or distribution, or any change in the capital stock of the Corporation
by reason of any stock dividend, split-up, recapitalization, combination,
exchange of shares or the like, the term "Transferred Shares" shall be deemed to
refer to and include the Transferred Shares as well as all such stock dividends
and distributions and any shares into which or for which any or all of the
Transferred Shares may be changed or exchanged and the Purchase Price shall be
appropriately adjusted. The Seller shall be entitled to receive any cash
dividend paid during the term of this Agreement by the Corporation on the
Transferred Shares until the Transferred Shares are purchased hereunder and on
the Seller's Class A Shares as and to the extent provided in the Tender Offer
Documents.
Section 6.14 Broker's and Finder's Fees. The Seller shall use
its reasonable best efforts to cause the President of the Corporation to call a
special meeting of the Board of Directors of the Corporation, in accordance with
the Certificate of Incorporation and Bylaws of the Corporation and the
provisions of the DGCL, for the purpose of considering the assumption by the
Corporation of the obligations of the Seller to PaineWebber under the
PaineWebber Agreement as a result of the purchase of the Transferred Shares and
the consummation of the
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Tender Offer as contemplated by this Agreement (the "PaineWebber Obligations").
The Seller shall cause the Directors of the Corporation who are also Directors
of the Seller, and shall use its reasonable best efforts to cause the other
Directors of the Corporation, not to abstain and to vote to approve the
assumption by the Corporation of the PaineWebber Obligations.
ARTICLE VII
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
Section 7. Conditions to the Purchaser's Obligations. The
obligation of the Purchaser to purchase the Transferred Shares on the Closing
Date is subject to the satisfaction, at or prior to the Closing, of the
following conditions:
Section 7.1 Truth of Representations and Warranties. (a) The
representations and warranties of the Seller contained in this Agreement or in
any Schedule attached hereto shall be true and correct in all material respects
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, and the
Purchaser shall have received a certificate signed by an executive officer of
the Seller, dated the Closing Date, to such effect and (b) the representations
and warranties of the Seller with respect to the Corporation contained in this
Agreement or in any Schedule attached hereto shall be true and correct in all
material respects, without regard to the knowledge of the Seller, on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date.
Section 7.2 Performance of Agreements. (a) All of the
agreements of the Seller to be performed and all of the covenants of the Seller
to be complied with prior to the Closing pursuant to the terms of this Agreement
shall have been duly performed or complied with, as applicable, in all material
respects and the Purchaser shall have received a certificate signed by an
executive officer of the Seller, dated the Closing Date, to such effect and (b)
the Corporation and each of its subsidiaries shall not have (i) failed to act in
accordance with Section 6.3(b)(iii)(A) and (B) and Section 6.5(b)(i)(B) and (iv)
of this Agreement or (ii) taken any of the actions listed in Section
6.3(c)(iii)(A)-(O) or Section 6.5(b)(i)(A) of this Agreement and the Purchaser
shall have received a certificate signed by an executive officer of the Seller,
dated the Closing Date, to such effect but which certificate can be based upon
the reasonable best knowledge of the Seller after due inquiry.
Section 7.3 Injunction. No preliminary or permanent injunction
or other order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation of the
Tender Offer, the purchase of the Transferred Shares or any of the other
transactions contemplated by this Agreement and which is in effect at the
Closing Date, provided, however, that, in the case of a decree, injunction or
other order, each of the parties shall have used reasonable efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered.
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Section 7.4 Consents and Approvals. All governmental and
third-party consents, waivers and approvals, if any, disclosed on any Schedule
attached hereto or necessary to permit the consummation of the transactions
contemplated by this Agreement shall have been received. All time periods under
the HSR Act applicable to the purchase of the Transferred Shares hereunder shall
have expired or been terminated. No governmental or other instrumentality or
agency shall have required that, in exchange for approval of the transactions
contemplated by this Agreement, the Purchaser, the Corporation or any of their
respective Affiliates sell or otherwise dispose of, or hold separate (through
the establishment of a trust or otherwise) particular assets or categories of
assets, or businesses of the Purchaser, the Corporation or any of their
respective Affiliates or withdraw from doing business in a particular
jurisdiction or take any other action that, in the aggregate, in the sole
judgment of the Purchaser, would reasonably be expected to substantially impair
or substantially reduce the Purchaser's ability to control, direct or manage on
a day-to-day basis the business or affairs of the Corporation or to
substantially impair or substantially reduce the overall benefits expected, as
of the date hereof, to be realized by the Purchaser from the consummation of the
transactions contemplated by this Agreement or would have a material adverse
effect on the business, properties, assets, liabilities, condition (financial or
otherwise), prospects, operations or results of operations of the Purchaser and
its subsidiaries taken as a whole or the Corporation and its subsidiaries taken
as a whole.
Section 7.5 Tender Offer Conditions. At any time on or after
the date hereof and at or before the time of payment for the Transferred Shares
hereunder, none of the Tender Offer Conditions shall have occurred.
Section 7.6 Resignations. Each Person who has been elected by
the Seller to the Board of Directors of the Corporation (each a "Director")
shall have delivered to the Purchaser their written resignation from such
position effective as of the Closing Date or the Purchaser shall have received
written evidence satisfactory to it that any Director who has not delivered such
written resignation has been removed from such position effective as of the
Closing Date.
Section 7.7 Approval of Tender Offer. The Board of Directors
of the Corporation shall have approved the Tender Offer and recommended
acceptance of the Tender Offer by the holders of Class A Shares.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLER
Section 8. Conditions to the Obligations of the Seller. The
obligation of the Seller to sell the Transferred Shares on the Closing Date is
subject to satisfaction, at or prior to such date, of the following conditions:
Section 8.1 Truth of Representations and Warranties. The
representations and warranties of the Purchaser contained in this Agreement
shall be true and correct in all respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date, and the Seller shall have received a certificate signed by an
authorized officer of the Purchaser, dated the Closing Date, to such effect.
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Section 8.2 Performance of Agreements. All of the agreements
of the Purchaser, including without limitation compliance with Section 2.5
hereof, to be performed and all of the covenants of the Purchaser to be complied
with prior to the Closing pursuant to the terms of this Agreement shall have
been duly performed or complied with, as applicable, and the Seller shall have
received a certificate signed by an authorized officer of the Purchaser, dated
the Closing Date, to such effect.
Section 8.3 Injunction. No preliminary or permanent injunction
or other order shall have been issued by any court or by any governmental or
regulatory agency, body or authority which prohibits the consummation of the
Tender Offer, the purchase of the Transferred Shares or any of the other
transactions contemplated by this Agreement and which is in effect at the
Closing Date, provided, however, that, in the case of a decree, injunction or
other order, each of the parties shall have used reasonable efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered.
Section 8.4 HSR. All applicable time periods under the HSR Act
shall have expired or been terminated.
Section 8.5 Tender Offer. The purchase of the Class A Shares
pursuant to the Tender Offer shall be consummated simultaneously with the
purchase of the Transferred Shares pursuant to this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Representations and Warranties; Knowledge of the
Seller. The respective representations and warranties of the Seller and the
Purchaser contained herein or in any certificates or other documents delivered
prior to or at the Closing shall not be deemed waived or otherwise affected by
any investigation made by any party. Each and every such representation and
warranty shall serve solely as a condition to closing and shall expire with, and
be terminated and extinguished by, the Closing and thereafter none of the
Seller, the Purchaser nor any of their respective officers, directors,
employees, representatives, consultants, investment bankers, attorneys,
accountants or other agents shall be under or subject to any liability
whatsoever with respect to any such representation or warranty. This Section 9.1
shall have no effect upon any other obligation of the parties hereto. Where any
representation or warranty contained in this Agreement is expressly qualified by
reference to the best knowledge of the Seller, (i) the Seller confirms that it
has made due and diligent inquiry of appropriate officers or employees of the
Corporation as to the matters that are the subject of such representations and
warranties and (ii) the Seller will be deemed to have knowledge of any matter if
it is known by any director or officer of the Seller. If in the course of its
investigation of the Corporation, the Purchaser discovers any fact or
circumstance which would cause any of the representations or warranties of the
Seller set forth in this Agreement to be untrue, incorrect or breached and of
which the Purchaser believes that none of the Seller's or the Corporation's
officers, directors, employees, representatives, consultants, investment
bankers, attorneys, accountants and/or other agents are aware, the Purchaser
will use its reasonable efforts to notify the Seller of such fact or
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circumstance, provided that the failure by the Purchaser to so notify the Seller
shall not have any effect upon such representation or warranty or any rights
that the Purchaser may have hereunder or in respect of the Tender Offer.
Section 9.2 Expenses. (a) Except as provided in paragraph (b)
below, the parties hereto shall pay all of their own expenses relating to the
transactions contemplated by this Agreement, including, without limitation, the
fees and expenses of their respective counsel and financial advisers.
(b) If (i) the transactions contemplated by this Agreement are
not consummated due to the non-satisfaction of the conditions enumerated in (A)
Section 7.1, (B) Section 7.2 (other than in respect of a breach of Section 6.5
of this Agreement) or (C) Section 7.5 due to (x) the occurrence of any of the
events set forth in clause (iii) (e) of Annex A hereto or (y) the occurrence of
any of the events set forth in clause (iii) (g) or (h) of Annex A hereto (other
than in respect of a breach of Section 6.5 of this Agreement) and (ii) the
Seller sells all or any portion of the Class AC Shares and/or the Class A Shares
within two years from the date of this Agreement then in any such case the
Seller shall pay to the Purchaser, in lieu of reimbursement of the Purchaser's
out-of-pocket expenses, $2,500,000 or such lesser amount as the Seller shall
receive in the aggregate from all sales of the Class AC Shares and Class A
Shares during such two year period, such amount to be paid by or on behalf of
the Seller in same day funds within two business days after each sale of the
Class AC Shares and/or Class A Shares until the amount so received by the
Purchaser equals $2,500,000.
(c) If (i) the transactions contemplated by this Agreement are
not consummated due to the non-satisfaction of the conditions enumerated in (A)
Section 7.2 (but only in respect of a breach of Section 6.5 of this Agreement)
or (B) Section 7.5 due to (1) the occurrence of any of the events set forth in
clause (iii) (f) of Annex A hereto or (2) the occurrence of any of the events
set forth in clause (iii) (g) or (h) of Annex A hereto (but only in respect of a
breach of Section 6.5 of this Agreement), and (ii) the Seller sells all or any
portion of the Class AC Shares or the Class A Shares within two years from the
date of this Agreement then in any such case, as a condition to such sale, the
Seller shall pay or cause to be paid to the Purchaser $10,000,000, such amount
to be paid by or on behalf of the Seller in same day funds within two business
days after the first such sale of the Class AC Shares and/or Class A Shares.
Section 9.3 Governing Law. This Agreement shall be construed
in accordance with, and be governed by, the Laws of the State of Delaware. Each
of the parties hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the general
jurisdiction of the courts of the State of Delaware, the courts of the
United States of America located in Delaware and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or
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proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the
same;
(c) agrees that service of process in any such action or
proceeding will be in accordance with the laws of the State of Delaware
and, in the case of the Purchaser, agrees to appoint an agent for
service of process in the State of Delaware within 20 business days of
the date hereof; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law.
Section 9.4 Headings. The headings in this Agreement are
intended solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
Section 9.5 Publicity. Except as required by Law or as
otherwise provided for in this Agreement, no announcement or other publicity
relating to this Agreement or the Corporation shall be made or issued directly
or indirectly by or on behalf of any party hereto without the prior approval of
the other parties hereto.
Section 9.6 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when delivered in person, or when
sent by telex or telecopy or other facsimile transmission (with receipt
confirmed), or when sent via express delivery service and addressed as follows
(or at such other addresses as the parties may designate by written notice in
the manner aforesaid):
If to the Purchaser:
Koninklijke Ahold N.V.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopier: 011 31 75 659 83 66
Attention: ▇▇▇▇ ▇.▇. Butzelaar
with a copy to:
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
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If to the Seller:
The 1224 Corporation
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
If to the Corporation:
Giant Food Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ , ▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
with a copy to:
Jorden, Burt, Berenson & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
or to such other person as shall be designated in writing by any such party, and
such notice or communication shall be deemed to have been given as of the date
so delivered, sent by telecopier or mailed.
Section 9.7 Binding Effect; Benefit; Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and, with respect to the provisions of Section 6.7 hereof, shall inure to the
benefit of the Persons benefiting from the provisions thereof who are intended
to be third party beneficiaries thereof and, in each such case, their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.
Notwithstanding anything in this Section 9.7 to the contrary, it is
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expressly understood and agreed that the Purchaser may assign this Agreement and
its rights, interests and obligations hereunder to any Affiliate of the
Purchaser. Nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto or their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 9.8 Best Efforts. Subject to the terms and conditions
provided herein, each of the Purchaser and the Seller shall, and the Seller
shall use its reasonable best efforts to cause the Corporation to, with respect
to matters within their respective control, cooperate and use their respective
best efforts to, (i) take, or cause to be taken, all appropriate action, and do,
or cause to be done, all reasonable things necessary and proper under applicable
law to consummate the transactions contemplated hereby as promptly as
practicable, (ii) obtain from any governmental authority, regulatory
organization or other instrumentality or agency or any other third party any
licenses, permits, consents, waivers, approvals, authorizations, qualifications,
or orders required to be obtained or made by the Corporation, the Purchaser, the
Seller or any of their subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, and (iii) as promptly as practicable, make, or
cause to be made, all filings and other submissions necessary, proper or
advisable with respect to this Agreement and the transactions contemplated
hereby under (x) the HSR Act and any related governmental request thereunder and
(y) any other applicable laws or regulations; provided, however, that no loan
agreement or contract for borrowed money shall be repaid except as currently
required by its terms, in whole or in part, and no contract shall be amended to
increase the amount payable thereunder or otherwise to be more burdensome to the
Corporation or any of its subsidiaries in order to obtain any such consent,
approval or authorization without first obtaining the written approval of the
Purchaser. The Purchaser and the Seller shall, and the Seller shall use its
reasonable best efforts to cause the Corporation to, cooperate with each other
in connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing and,
if requested, to accept all reasonable additions, deletions or changes suggested
in connection therewith. The Purchaser and the Seller shall, and the Seller
shall use its reasonable best efforts to cause the Corporation to, use their
respective best efforts to furnish to each other all information required for
any application or other filing to be made pursuant to the rules and regulations
of any applicable law in connection with the transactions contemplated by this
Agreement. Notwithstanding anything to the contrary in this Section 9.8, none of
the Purchaser, the Seller or the Corporation or any of their respective
subsidiaries shall be required to sell or otherwise dispose of, or hold separate
(through the establishment of a trust or otherwise) particular assets or
categories of assets, or business of the Purchaser, the Seller, the Corporation
or any of their affiliates or withdraw from doing business in a particular
jurisdiction or take any other action that, in the aggregate, in the sole
judgment of the Purchaser, would reasonably be expected to substantially impair
or substantially reduce the Purchaser's ability to control, direct or manage on
a day-to-day basis the business or affairs of the Corporation or to
substantially impair or substantially reduce the overall benefits expected, as
of the date hereof, to be realized by the Purchaser from the consummation of the
transactions contemplated by this Agreement or would have a material adverse
effect on the business, properties, assets, liabilities, condition (financial or
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45
otherwise), prospects, operations or results of operations of the Purchaser and
its subsidiaries taken as a whole or the Corporation and its subsidiaries taken
as a whole.
Section 9.9 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute the same Agreement.
Section 9.10 Entire Agreement. This Agreement, including the
other documents referred to herein which form a part hereof, contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
Section 9.11 Amendments. This Agreement may not be changed,
amended, waived, or modified orally, but only by an agreement in writing signed
by the Purchaser and the Seller.
Section 9.12 Severability. If any term, provision, covenant or
restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
Section 9.13 Termination of Agreement. All parties hereto
agree to use their best efforts to fulfill the requirements of Articles VII and
VIII as soon as practicable. If any precondition to the completion of the
transactions contemplated hereby is not fulfilled on or prior to December 31,
1998, then this Agreement shall terminate and become void and have no effect,
without any liability hereunder of either party to the other party.
Section 9.14 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the aggrieved party shall be entitled to the remedy of specific performance of
such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
Section 9.15 Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise of
any thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
Section 9.16 No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance by
any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof shall not constitute a
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46
waiver by such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
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47
IN WITNESS WHEREOF, each of the Purchaser and the Seller has
caused its corporate name to be hereunto subscribed by its officer thereunto
duly authorized all as of the day and year first above written.
KONINKLIJKE AHOLD N.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
THE 1224 CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
48
ANNEX A
The capitalized terms used in this Annex A shall have the
meanings set forth in the Stock Purchase Agreement to which this Annex A is
annexed (the "Agreement").
Notwithstanding any other provision of the Tender Offer or the
Agreement, the Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1c under
the Exchange Act, pay for any Class A Shares tendered pursuant to the Tender
Offer and may terminate or amend the Tender Offer and may postpone the
acceptance of and payment for Class A Shares (i) if there shall not have been
validly tendered and not withdrawn prior to the expiration of the Tender Offer a
number of Class A Shares which represents at least sixty-five percent (65%) of
the total Class A Shares outstanding on a fully diluted basis, (ii) if the
Agreement shall have been terminated in accordance with its terms or the
purchase and sale of the Class AC Shares pursuant to the Agreement shall not
have been consummated prior to or simultaneously with the consummation of the
purchase of the Class A Shares pursuant to the Tender Offer, or (iii) if, at any
time on or after the date of the Agreement and at or before the time of payment
for any such Class A Shares (whether or not any Class A Shares have theretofore
been accepted for payment or paid for pursuant to the Tender Offer), any of the
following shall occur:
(a) there shall be threatened, instituted or pending any
action or proceeding by any government or governmental authority or agency,
domestic or foreign, or by any other Person, domestic or foreign, before any
court or governmental authority or agency, domestic or foreign, other than the
routine application of the waiting period provisions of the HSR Act (including a
request for additional information or documentary material pursuant to 16 C.F.R.
Sec. 803.20) to the purchase of the Class AC Shares pursuant to the Agreement,
without the consent of the Purchaser, (i) challenging or seeking to, or which
could reasonably be expected to make illegal, impede, materially delay or
otherwise directly or indirectly restrain, prohibit or make more costly the
acquisition of the Class AC Shares or the Tender Offer or seeking to obtain
material damages, (ii) seeking to prohibit or limit the ownership or operation
by the Purchaser of all, or, in the sole judgment of the Purchaser, a portion
that would reasonably be expected to substantially impair or substantially
reduce the Purchaser's ability to control, direct or manage on
49
Annex A
Page 2
a day-to-day basis the business or affairs of the Corporation or to
substantially impair or substantially reduce the overall benefits expected, as
of the date hereof, to be realized by the Purchaser from the consummation of the
transactions contemplated by the Agreement or would have a material adverse
effect on the business, properties, assets, liabilities, condition (financial or
otherwise), prospects, operations or results of operations of the Purchaser and
its subsidiaries taken as a whole or the Corporation and its subsidiaries taken
as a whole (a "significant portion"), of the business or assets of the
Corporation or any of its subsidiaries or to compel the Purchaser to dispose of
or hold separately all, or, in the sole judgment of the Purchaser, a significant
portion of the business or assets of the Purchaser or the Corporation or any of
its subsidiaries, or seeking to impose any limitation on the ability of the
Purchaser to conduct such business or own such assets which limitation, in the
sole judgment of the Purchaser, would reasonably be expected to substantially
impair or substantially reduce the Purchaser's ability to control, direct or
manage on a day-to-day basis the business or affairs of the Corporation or to
substantially impair or substantially reduce the overall benefits expected, as
of the date hereof, to be realized by the Purchaser from the consummation of the
transactions contemplated by the Agreement or would have a material adverse
effect on the business, properties, assets, liabilities, condition (financial or
otherwise), prospects, operations or results of operations of the Purchaser and
its subsidiaries taken as a whole or the Corporation and its subsidiaries taken
as a whole, (iii) seeking to impose limitations on the ability of the Purchaser
effectively to acquire, hold or exercise full rights of ownership of any Shares,
which limitations, in the sole judgment of the Purchaser, are significant, or
(iv) seeking to require divestiture by the Purchaser of any Shares;
(b) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i) the
Purchaser, the Corporation or any subsidiary of the Corporation or (ii) the
Tender Offer or the acquisition of any Shares, by any legislative body, court,
government or governmental, administrative or regulatory authority or agency,
domestic or foreign, other than the routine application of the waiting period
provisions of the HSR Act (including a request for additional information or
documentary material pursuant to 16 C.F.R. Sec. 803.20) to the purchase of the
Class AC Shares pursuant to the Agreement, which could reasonably be expected to
directly or indirectly, result in any of the consequences referred to in clauses
(i) through (iv) of paragraph (a) above;
(c) any change shall have occurred or been threatened (or any
condition, event or development shall have occurred or been threatened involving
a prospective change), or the Purchaser shall have become aware of any fact,
that is reasonably likely to have a Material Adverse Effect on the Corporation;
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market (excluding any coordinated trading
halt triggered solely as a result of a specified decrease in a market index),
(ii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, the Netherlands or any other jurisdiction
of incorporation or organization of any bank or other financial institution in
any manner involved with the financing of the purchase of the Class AC Shares
pursuant to the Agreement or the Tender Offer, (iii) any material limitation
(whether or not mandatory) by any U.S. Federal, state or foreign governmental
50
Annex A
Page 3
authority or agency on the extension of credit by banks or other lending
institutions, (iv) a commencement or escalation of a war or armed hostilities or
other national or international calamity directly or indirectly involving the
United States or the Netherlands or (v) in the case of any of the foregoing
existing at the time of the commencement of the Tender Offer, a material
acceleration or worsening thereof;
(e) any of the representation or warranties made by the Seller
in the Agreement (in the case of any representations or warranties with respect
to the Corporation, without regard to the knowledge of the Seller) that are
qualified as to materiality shall be untrue or incorrect in any respect or any
such representations and warranties that are not so qualified shall be untrue or
incorrect in any respect which would have a Material Adverse Effect, in each
case as of the date of the Agreement and the scheduled expiration date of the
Tender Offer as if such representation or warranty were made at the time of such
determination and except as to any such representation or warranty which speaks
as of a specific date or for a specific period, which must be untrue or
incorrect in the foregoing respects as of such specific date or period;
(f) (i) the Board of Directors of the Corporation shall have
failed to approve or recommend the Tender Offer, (ii) the Board of Directors of
the Corporation shall have withdrawn or modified in a manner adverse to the
Purchaser the approval or recommendation of the Tender Offer or approved or
recommended any Acquisition Proposal, (iii) any corporation, partnership, person
or other entity or group shall have entered into a definitive agreement or an
agreement in principle with the Corporation with respect to any Acquisition
Proposal, or (iv) the Board of Directors of the Corporation or any committee
thereof shall have resolved to do any of the things set forth in clauses (ii) or
(iii) of this paragraph (f);
(g) the Seller shall have failed to perform in any material
respect any obligation or to comply in any material respect with any agreement
or covenant of the Seller to be performed or complied with by it under the
Agreement and, in the case only of failures to perform any agreement or covenant
of the Seller pursuant to Section 6.3 of the Agreement, such failure to perform
would have a Material Adverse Effect or materially adversely affect the ability
of the Purchaser to consummate the transactions contemplated by the Agreement or
have a material adverse effect on the value of the Corporation and its
subsidiaries taken as a whole; or
(h) the Corporation or any of its subsidiaries shall have (i)
failed to act in accordance with Section 6.3(b)(iii)(A) and (B) and Section
6.5(b)(i)(B) and (iv) of the Agreement or (ii) taken any of the actions listed
in Section 6.3(c)(iii)(A)-(O) or Section 6.5(b)(i)(A) of the Agreement;
which, in the reasonable judgment of the Purchaser, in any such case and
regardless of the circumstances giving rise to any such condition, makes it
inadvisable to proceed with such payment.
The foregoing conditions (including those set forth in clauses
(i)-(iii) above) are for the sole benefit of the Purchaser and may be asserted
by the Purchaser, or may be waived by
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Annex A
Page 4
the Purchaser, in whole or in part at any time and from time to time in its sole
discretion. The failure by the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Purchaser concerning the events
described in this Annex A will be final and binding upon all parties.
