SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities
Exchange Act of 1934
Giant Food Inc.
(Name of Subject Company)
The 1224 Corporation
(Name of Person(s) Filing Statement)
Class A Common Stock (Non-Voting), $1.00 par value
(Title of Class of Securities)
374478105
(Cusip Number of Class of Securities)
Samuel Kastner, Esq.
Ginsburg, Feldman and Bress
1250 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 637-9195
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
1
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This Amendment No. 2 amends and supplements Item 9 of the
Solicitation/Recommendation Statement on Schedule 14D-9 filed on May 19, 1998,
and as heretofore amended (the "Schedule 14D-9"), on behalf of The 1224
Corporation, a Delaware corporation ("1224"), relating to the tender offer by
Koninklijke Ahold N.V., a public company with limited liability incorporated
under the laws of The Netherlands (the "Purchaser"), to purchase for cash all of
the outstanding shares of Class A Common Stock (Non-Voting), par value $1.00 per
share (the "Shares"), of Giant Food Inc., a Delaware corporation (the
"Company"), at a price of $43.50 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase, dated May 19, 1998
(the "Offer to Purchase"), and the related Letter of Transmittal and Notice of
Guaranteed Delivery (which, as may be amended and supplemented from time to
time, collectively constitute the "Offer"). The Offer is being made pursuant to
a Stock Purchase Agreement, dated as of May 19, 1998, between the Purchaser and
1224 (the "Stock Purchase Agreement"). All capitalized terms not defined herein
are used as defined in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The information contained in Item 9 of the Schedule 14D-9 is hereby
amended by adding the following Exhibits, copies of which are filed herewith:
Exhibit 4 -- Copy of the Stock Purchase Agreement dated as of May 27,
1998 among J Sainsbury plc, JS Mass. Securities Corp., and
Koninklijke Ahold N.V.
Exhibit 5 -- Confidentiality Agreement, as of February 2, 1998, between
Koninklijke Ahold
Exhibit 6 -- Exclusivity Agreement, dated April 27, 1998, between
Koninklijke Ahold N.V. and The 1224 Corporation
2
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
THE 1224 CORPORATION
By: /s/ David W. Rutstein
------------------------------------
David W. Rutstein
Vice President
Dated: June 11, 1998
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EXHIBIT 4
STOCK PURCHASE AGREEMENT
Dated as of May 27, 1998
By and Among
J SAINSBURY PLC,
JS MASS. SECURITIES CORP.
and
KONINKLIJKE AHOLD N.V.
(Royal Ahold)
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS................................................................................................. 1
Section 1.1 Definitions....................................................................... 1
ARTICLE II
SALE OF STOCK AND TENDER OFFER.............................................................................. 4
Section 2.1 Sale of Transferred Shares........................................................ 4
Section 2.2 Purchase Price for Transferred Shares............................................. 4
Section 2.3 Closing........................................................................... 4
Section 2.4 Transfer Taxes.................................................................... 4
Section 2.5 Tender of Class A Shares.......................................................... 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE SELLER................................................. 5
Section 3. Representations and Warranties of the Parent and the Seller................................. 5
Section 3.1 Legal Status...................................................................... 5
Section 3.2 Power and Authority; Enforceability............................................... 5
Section 3.3 Ownership of Transferred Shares................................................... 5
Section 3.4 No Conflicts; Consents of Third Parties; Compliance with Laws..................... 6
Section 3.5 Broker's or Finder's Fees......................................................... 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................................. 6
Section 4. Representations and Warranties of the Purchaser............................................. 6
Section 4.1 Legal Status...................................................................... 6
Section 4.2 Power and Authority; Enforceability............................................... 6
Section 4.3 No Conflicts...................................................................... 7
Section 4.4 Broker's or Finder's Fees......................................................... 7
Section 4.5 Available Funds................................................................... 7
Section 4.6 Securities Act.................................................................... 7
ARTICLE V
EXCLUSIVE DEALING, OTHER COVENANTS.......................................................................... 8
Section 5.1 Exclusive Dealing................................................................. 8
Section 5.2 Further Assurances................................................................ 9
Section 5.3 Resignations...................................................................... 9
Section 5.4 Provisions Concerning Transferred Shares.......................................... 9
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Section 5.5 Restriction on Transfer, Proxies and Non-Interference............................ 9
Section 5.6 Changes in Shares................................................................ 10
Section 5.7 Changes in Tender Offer.......................................................... 10
Section 5.8 Tender Offer Conditions.......................................................... 10
Section 5.9 Purchase of the Class A Shares and the Transferred Shares........................ 10
ARTICLE VI
CONDITIONS TO THE PURCHASER'S OBLIGATIONS................................................................... 10
Section 6. Conditions to the Purchaser's Obligations................................................... 10
Section 6.1 Truth of Representations and Warranties.......................................... 10
Section 6.2 Performance of Agreements........................................................ 11
Section 6.3 Injunction....................................................................... 11
Section 6.4 Consents and Approvals........................................................... 11
Section 6.5 Tender Offer Conditions......................................................... 11
Section 6.6 Resignations..................................................................... 11
Section 6.7 Class AC Stock Purchase Agreement................................................ 12
Section 6.8 Tender Offer..................................................................... 12
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PARENT AND THE SELLER.................................................. 12
Section 7. Conditions to the Obligations of the Parent and the Seller.................................. 12
Section 7.1 Truth of Representations and Warranties.......................................... 12
Section 7.2 Performance of Agreements........................................................ 12
Section 7.3 Injunction....................................................................... 12
Section 7.4 Tender Offer..................................................................... 12
Section 7.5 Class AC Stock Purchase Agreement................................................ 13
ARTICLE VIII
MISCELLANEOUS............................................................................................... 13
Section 8.1 Representations and Warranties................................................... 13
Section 8.2 Expenses......................................................................... 13
Section 8.3 Governing Law.................................................................... 13
Section 8.4 Headings......................................................................... 14
Section 8.5 Publicity........................................................................ 14
Section 8.6 Notices.......................................................................... 14
Section 8.7 Binding Effect; Benefit; Assignment.............................................. 15
Section 8.8 Best Efforts..................................................................... 15
Section 8.9 Counterparts..................................................................... 16
Section 8.10 Entire Agreement................................................................. 16
Section 8.11 Amendments....................................................................... 16
Section 8.12 Severability..................................................................... 16
Section 8.13 Termination of Agreement......................................................... 16
Section 8.14 Specific Performance............................................................. 16
Section 8.15 Remedies Cumulative.............................................................. 17
Section 8.16 No Waiver........................................................................ 17
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of May 27, 1998, by
and among J Sainsbury plc, a corporation organized and existing under the laws
of England and Wales (the "Parent"), JS Mass. Securities Corp., a corporation
organized and existing under the laws of the State of Massachusetts and a
wholly-owned subsidiary of Parent (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 Zaanstad)
(the "Purchaser").
W I T N E S S E T H :
WHEREAS, the Parent and the Seller own beneficially and the Seller will
prior to and at the Closing (as hereinafter defined) own of record 125,000
shares of Class AL Common Stock, par value $1.00 per share (the "Class AL
Shares"), and 11,779,931 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 AL Shares (such Class AL Shares, collectively, the "Transferred
Shares"), on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, the Purchaser has made 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 the Offer to Purchase dated May 19, 1998 (the "Offer to Purchase")
(including, without limitation, the conditions set forth in Section 14 thereof
(the "Tender Offer Conditions") (the "Tender Offer"), at a price per share equal
to $43.50 (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).
"Acquisition Proposal" shall have the meaning provided in Section 5.1(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 Person. A Person shall be deemed to control
another Person if such Person possesses, directly or
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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; provided that, for purposes of this
Agreement, the Corporation shall not be deemed an Affiliate of the Parent or the
Seller.
"Agents" shall have the meaning provided in Section 5.1(a) hereof.
"Agreement" shall have the meaning provided in the recitals hereto.
"Class AC Shares" shall mean the shares of Class AC Common Stock, par value
$1.00 per share, of the Corporation.
"Class AC Stock Purchase Agreement" shall mean the Stock Purchase Agreement
dated as of May 19, 1998 by and between the Purchaser and the Selling AC
Shareholder, as such agreement may be amended from time to time.
"Class AL Shares" shall have the meaning provided in the recitals hereto.
"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.
"Corporation" shall have the meaning provided in the recitals hereto.
"Director" shall have the meaning provided in Section 6.6 hereof.
"Existing Class A Shares" shall have the meaning provided in Section 2.5
hereof.
"HSR Act" shall have the meaning set forth in Section 4.3(b) hereof.
"Law" shall mean any constitution, treaty, statute, law, code, ordinance,
decree, order, rule, regulation, or judicial or arbitral decision or judgment.
"Liens" shall mean liens, security interests, options, rights of first
refusal, charges, adverse claims, security agreements, or any other
encumbrances; provided, however, that with respect to the Transferred Shares,
"Liens" shall not include any restrictions imposed upon such Transferred Shares
by this Agreement, the Certificate of Incorporation or By-Laws of the
Corporation or the provisions of the General Corporation Law of the State of
Delaware.
"Offer to Purchase" shall have the meaning provided in the recitals hereto.
"Parent" shall have the meaning provided in the preamble hereto.
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"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.
"Securities Act" shall have the meaning provided in Section 4.6 hereof.
"Seller" shall have the meaning provided in the preamble hereto.
"Seller's Class A Shares" shall have the meaning provided in Section 2.5
hereof.
"Selling AC Shareholder" shall mean The 1224 Corporation, a corporation
organized and existing under the laws of the State of Delaware. "Share Register"
shall mean, collectively, the register books maintained by the Corporation
setting forth the names and addresses of each of the owners of the shares of
capital 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.
"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 recitals
hereto.
"Tender Offer Documents" shall have the meaning provided in Section 2.6(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.
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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 and the Parent agrees
to cause the Seller, 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,
each of the Parent and 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 (or its designee) on the Closing Date One Hundred Million
Dollars ($100,000,000) 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"). 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, 601 Thirteenth Street, NW, Suite 600 South, Washington, DC, as soon as
practicable after the last of the conditions set forth in Articles VI and VII
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 validly
tendered pursuant to the Tender Offer (the "Closing Date"). On the Closing Date,
the Seller shall, and the Parent shall cause the Seller to, deliver to the
Purchaser, against payment as provided in Section 2.2 hereof, certificates
representing the Transferred 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, and the Parent
shall cause the Seller to, 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 Tender of Class A Shares. (a) The Seller hereby
agrees, and the Parent agrees to cause the Seller, to tender validly (and not to
withdraw) pursuant to and in accordance with the terms of the Tender Offer, in a
timely manner for acceptance by the Purchaser in the Tender Offer, the
11,779,931 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"). Each of the
Parent and 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
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A Shares, is subject to the terms and conditions of the Tender Offer. The
Purchaser agrees to use its reasonable best efforts to cause the depositary for
the Tender Offer to agree to use its reasonable best efforts to notify each
holder of Class A Shares tendered pursuant to the Tender Offer, if requested by
such holder, of any defect in the tender of such Class A Shares which could
result in such Class A Shares not being deemed validly tendered pursuant to the
Tender Offer.
(b) Each of the Parent and the Seller hereby agrees to permit the Purchaser
to publish and disclose, and hereby consents to any prior publication and
disclosure, in the Tender Offer Statement on Schedule 14D-1 with respect to the
Tender Offer, the Offer to Purchase and form of related letter of transmittal as
well as all other information and exhibits and any supplements or amendments
thereto (the "Tender Offer Documents") its identity and the Seller's ownership
of Class A Shares and the Class AL Shares, and, to the extent required by the
Securities Exchange Act of 1934, as amended, an accurate summary of the material
terms of the agreements, arrangements and understandings among the Parent, the
Seller and the Purchaser under this Agreement.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE SELLER
Section 3. Representations and Warranties of the Parent and the Seller. In
order to induce the Purchaser to enter into this Agreement and to acquire the
Transferred Shares, each of the Parent and the Seller makes the following
representations and warranties.
Section 3.1 Legal Status. The Parent is a duly organized and validly
existing corporation under the Laws of England and Wales. The Seller is a duly
organized and validly existing corporation in good standing under the Laws of
the State of Massachusetts.
Section 3.2 Power and Authority; Enforceability. Each of the Parent and the
Seller has full requisite legal capacity, power and authority to execute,
deliver and perform its obligations pursuant to 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 Parent and
the Seller of their respective obligations pursuant to this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by each of the Parent and the Seller and
constitutes a valid and legally binding obligation of each of the Parent and the
Seller enforceable against each of the Parent and 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. Section 3.3
Ownership of Transferred Shares. The Parent and the Seller are the beneficial
owners of, and prior to and on the Closing Date the Seller will be the lawful
record owner of, all of the Class AL Shares and the Existing Class A Shares, in
each case free and clear of all Liens. Other than as specified in the preceding
sentence, as of the date of this Agreement none of the Parent, the Seller or any
Affiliate of the Parent owns 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 delivery to the
Purchaser of the
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Transferred Shares against payment therefor pursuant to this Agreement and of
the Seller's Class A Shares pursuant to the Tender Offer against payment
therefore will, in each case, transfer to the Purchaser on the Closing Date good
and valid title thereto, free and clear of any Liens.
Section 3.4 No Conflicts; Consents of Third Parties; Compliance with Laws.
(a) The execution, delivery and performance by the Parent and the Seller of this
Agreement and the consummation of the purchase of the Transferred Shares and the
other transactions contemplated hereby will not (i) conflict with the Memorandum
and Articles of Association and By-Laws of the Parent or the Articles of
Organization or By-Laws of the Seller, (ii) conflict with, or result in the
breach or termination of, or constitute a default 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 of competent authority, domestic or foreign, to which
the Parent or the Seller is a party or by which the Parent or the Seller or any
of their respective properties or assets are bound, (iii) constitute a violation
by the Parent or the Seller of any Law applicable to the Parent or the Seller or
any of their respective properties or assets, or (iv) result in the creation of
any Lien upon the Transferred Shares, except in the case of subclause (ii) above
such conflicts, breaches, terminations and defaults which would not prevent or
substantially delay the consummation of the transactions contemplated by this
Agreement.
(b) 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 Parent or the Seller in connection with
the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby.
Section 3.5 Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of the Parent, the Seller or any of their Affiliates is, or
will be, entitled to any commission or broker's or finder's fees from any of the
parties hereto, other than the Parent, the Seller or their Affiliates.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Section 4. Representations and Warranties of the Purchaser. In order to
induce the Parent and the Seller to enter into this Agreement and to sell the
Transferred Shares, the Purchaser makes the following representations and
warranties.
Section 4.1 Legal Status. The Purchaser is a duly organized and validly
existing public company with limited liability under the laws of the
Netherlands.
Section 4.2 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
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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 4.3 No Conflicts. (a) Assuming the receipts of the consents,
approvals, permits, authorizations, designations or declarations, or the making
of the filings, 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 which the Purchaser or any of its properties or assets are bound, or
(iii) constitute a violation by the Purchaser of any Law applicable to the
Purchaser any of its properties or assets. (b) Except (i) for filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) as required by the Securities Exchange Act of 1934, as amended, 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 4.4 Broker's or Finder's Fees. Except for Merrill Lynch, Pierce, Fenner
& Smith Incorporated (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 4.5 Available Funds. The Purchaser has or will have available to it
at the Closing all funds necessary to satisfy all of its obligations hereunder
and in connection with the transactions contemplated by this Agreement.
Section 4.6 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
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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.
ARTICLE V
EXCLUSIVE DEALING, OTHER COVENANTS
Section 5.1 Exclusive Dealing. (a) The Parent, the Seller and each of their
respective officers, directors and employees shall, and shall instruct their
respective representatives, consultants, investment bankers, attorneys,
accountants, agents and advisors (collectively "Agents") to, 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). Neither the Parent nor the Seller shall directly or
indirectly, take (and neither the Parent nor the Seller shall authorize or
permit its Agents to so take) any action to (i) encourage, solicit or 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 knowingly, or that such Person reasonably should have known
would 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 AL
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 involving
the Corporation or any of its securities or assets the consummation of which
could reasonably be expected to impede, interfere with, prevent or materially
delay the Tender Offer, the acquisition of the Transferred Shares pursuant to
this Agreement or the acquisition of the Class AC Shares pursuant to the Class
AC Stock Purchase Agreement.
(b) In addition to the obligations of the Parent and the Seller set forth
in paragraph (a), on the date of receipt thereof, each of the Parent and the
Seller shall 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 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 material changes thereto, and the identity of
the entity or person making any such inquiry or proposal.
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Section 5.2 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 5.3 Resignations. On the Closing Date, the Seller shall, and the
Parent shall cause the Seller to, 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 5.4 Provisions Concerning Transferred Shares. Each of
the Parent and 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 8.12 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, and the Parent shall cause the Seller to, vote (or cause to be voted) the
Transferred Shares whether issued, heretofore owned or hereafter acquired,
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 would reasonably be expected, to impede, interfere with,
prevent or materially delay the Tender Offer, the acquisition of the Transferred
Shares pursuant to this Agreement or the acquisition of the Class AC Shares
pursuant to the Class AC Stock Purchase Agreement. The Seller shall not enter
into any agreement or understanding with any Person the effect of which the
Seller knows or reasonably should have known would be to violate the provisions
and agreements contained in this Section 5.4.
Section 5.5 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 8.12 hereof, neither
the Parent nor the Seller shall (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 Transferred Shares or Existing Class A Shares into a voting trust or enter
into a voting agreement with respect to any Transferred Shares or Existing Class
A Shares, or (iii) take any action that would, to their knowledge, make any
representation or warranty of the Parent or the Seller contained herein untrue
or incorrect or have the effect of preventing or disabling the Parent or the
Seller from performing its obligations under this Agreement.
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Section 5.6 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 and equitably 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 5.7 Changes in Tender Offer. Without the consent of the Parent 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.
Section 5.8 Tender Offer Conditions. If the Purchaser waives any Tender
Offer Condition for purposes of Section 6.5 hereof or the Tender Offer, the
Purchaser shall waive such condition with respect to the Tender Offer or Section
6.5 hereof, as the case may be.
Section 5.9 Purchase of the Class A Shares and the Transferred Shares.
(a)The Purchaser agrees that if it purchases any Class A Shares validly tendered
pursuant to the Tender Offer and not withdrawn prior to the expiration of the
Tender Offer, it will waive all unsatisfied conditions to the Purchaser's
obligations set forth in Article VI hereof and will purchase the Transferred
Shares pursuant to this Agreement.
(b) The Purchaser agrees that if it purchases the Transferred Shares
pursuant to this Agreement, it will waive all unsatisfied Tender Offer
Conditions and will purchase any of the Seller's Class A Shares validly tendered
pursuant to the Tender Offer and not withdrawn prior to the expiration of the
Tender Offer.
ARTICLE VI
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
Section 6. 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 6.1 Truth of Representations and Warranties. (a) The
representations and warranties of the Parent and the Seller contained in this
Agreement 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 each of the Parent and the Seller,
dated the Closing Date, to such effect.
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Section 6.2 Performance of Agreements. All of the agreements of the Parent
and the Seller to be performed and all of the covenants of the Parent and 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 each of the Parent and the Seller, dated the Closing
Date, to such effect.
Section 6.3 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 6.4 Consents and
Approvals. All governmental and third-party consents, waivers and approvals, if
any, specifically disclosed in this Agreement 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
Class AC Shares under the Class AC Stock Purchase Agreement and the purchase of
the Transferred Shares under this Agreement 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 6.5 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 6.6 Resignations. Each Person who has been appointed 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
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delivered such written resignation has been removed from such position effective
as of the Closing Date.
Section 6.7 Class AC Stock Purchase Agreement. The purchase of all of the
Class AC Shares pursuant to the terms of the Class AC Stock Purchase Agreement
shall be consummated simultaneously with the purchase of the Transferred Shares
pursuant to this Agreement.
Section 6.8 Tender Offer. The purchase of any Class A Shares tendered
pursuant to the Tender Offer and not withdrawn prior to the expiration of the
Tender Offer shall be consummated simultaneously with the purchase of the
Transferred Shares pursuant to this Agreement.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PARENT AND THE SELLER
Section 7. Conditions to the Obligations of the Parent and the Seller. The
obligation of the Seller to, and of the Parent to cause 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 7.1 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 Parent and the Seller shall have received a certificate signed by an
authorized officer of the Purchaser, dated the Closing Date, to such effect.
Section 7.2 Performance of Agreements. All of the agreements of the
Purchaser 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 Parent and the
Seller shall have received a certificate signed by an authorized officer of the
Purchaser, dated the Closing Date, to such effect.
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 of competent jurisdiction 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 7.4 Tender Offer. The purchase of any Class A Shares tendered
pursuant to the Tender Offer and not withdrawn prior to the expiration of the
Tender Offer shall be consummated simultaneously with the purchase of the
Transferred Shares pursuant to this Agreement.
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Section 7.5 Class AC Stock Purchase Agreement. The purchase of all of the
Class AC Shares pursuant to the terms of the Class AC Stock Purchase Agreement
shall be consummated simultaneously with the purchase of the Transferred Shares
pursuant to this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Representations and Warranties. The respective representations
and warranties of the Parent, 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 Parent, 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 8.1 shall have no effect upon any other
obligation of the parties hereto. Section 8.2 Expenses. 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.
Section 8.3 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 itself 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 federal 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 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 agrees to appoint an agent for service of process in the State of
Delaware within 10 business days of the date hereof;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law; and
(e) waives the right to require a trial by jury with respect
to any such action or proceeding.
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Section 8.4 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 8.5 Publicity. Except as required by applicable U.S.
federal securities law or the rules and regulations of any U.S. or foreign
securities exchange upon which the securities of the parties hereto are listed
for trading, 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 (which shall not be unreasonably
withheld).
Section 8.6 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.
Albert Heijnweg 1
1507 EH Zaandam
The Netherlands
Telecopier: 011 31 75 659 83 66
Attention: Paul P.J. Butzelaar, Esq.
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Telecopier: (212) 354-8113
Attention: Maureen Brundage, Esq.
If to the Parent or the Seller:
J Sainsbury plc
Stamford House
Stamford Street
London SE1 911
England
Telecopier: 011 44 171 695 7610
Attention: Nigel F. Matthews,
Corporate Secretary
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with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier: (212) 558-3588
Attention: Neil T. Anderson, Esq.
or to such other person as shall be designated in writing by any such party, and
such notice or communication shall be deemed to have been given as of the date
so delivered, sent by telecopier or mailed.
Section 8.7 Binding Effect; Benefit; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.
Notwithstanding anything in this Section 8.6 to the contrary, it is expressly
understood and agreed that the Purchaser may assign this Agreement and its
rights, interests and obligations hereunder to any wholly-owned subsidiary of
the Purchaser; provided, however, that no such assignment shall relieve the
Purchaser of any of its obligations hereunder. 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 8.8 Best Efforts. Subject to the terms and conditions provided
herein, each of the Purchaser, the Parent and the Seller shall, 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 Purchaser, the Parent, 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 any applicable laws or regulations. The Purchaser, the Parent and
the Seller shall 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, the Parent and the Seller shall 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 8.7, none of the Purchaser, the Parent,
the Seller, the Corporation or any of their respective
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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 Parent, 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
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 8.9 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 8.10 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
8.11 Amendments. This Agreement may not be changed, amended, waived, or modified
orally, but only by an agreement in writing signed by the Purchaser, the Parent
and the Seller.
Section 8.12 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 8.13 Termination of Agreement. All parties hereto agree to use
their best efforts to fulfill the requirements of Articles VI and VII 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 any
party may terminate this Agreement and thereafter this Agreement shall become
void and have no effect, without any liability hereunder of either party to the
other party except for any breach of this Agreement. This Agreement shall
terminate and become void and have no effect, without any liability hereunder of
either party to the other party except for any breach of this Agreement, if the
Class AC Stock Purchase Agreement or the Tender Offer shall be terminated
pursuant to their respective terms prior to the purchase of any Transferred
Shares hereunder.
Section 8.14 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
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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 8.15 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 8.16 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
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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IN WITNESS WHEREOF, each of the Purchaser, the Parent 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.
J SAINSBURY PLC
By: /s/ DAVID M. BREMNER
-----------------------
Name: David M. Bremner
Title: Deputy Group Chief Executive
JS MASS. SECURITIES CORP.
By: /s/ SANDRA J. DORAN
-----------------------
Name: Sandra J. Doran
Title: President
KONINKLIJKE AHOLD N.V.
By: /s/ Robert Zwartendijk
-----------------------
Name: R. Zwartendijk
Title: Executive Vice President
<PAGE>
EXHIBIT 5
CONFIDENTIALITY AGREEMENT
AGREEMENT made as of February 2, 1998, between Koninklijke Ahold N.V.,
a public company with limited liability, incorporated under the laws of The
Netherlands with its corporate seat in Zaandam (municipality Zaanstad), The
Netherlands ("Ahold"), and 1224 Corporation, a Delaware corporation ("1224
Corp.") (each, a "Party" and collectively, the "Parties").
WHEREAS, the Parties have expressed an interest in discussing the
possibility of an acquisition from 1224 Corp. of outstanding shares of capital
stock of Giant Food Inc., a Delaware corporation ("Giant") (the "Transaction");
WHEREAS, in connection therewith Ahold has requested oral and written
information with respect to Giant's business, assets, financial condition,
operations and prospects which Giant will provide to Ahold; and
WHEREAS, as conditions to the exchange of such information, Ahold is
required to agree, as set forth below, (i) to treat confidentially such
information and any other information that Ahold or any representative thereof
receives from 1224 Corp., Giant or any of their respective representatives,
whether received before or after the date of this Agreement, together with all
analyses, compilations, studies or other documents or records prepared by Ahold
or any of its representatives which contain or otherwise reflect or are
generated from such information (collectively, "Received Material") and (ii) to
take or abstain from taking certain other actions as set forth below. As used
herein with respect to any Party, the term "representatives" means its
affiliates, directors, officers, employees, agents and representatives,
including financial advisors, consultants and counsel and the term "affiliate"
has the meaning provided in Rule 12b-2 promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in any event, shall
include any person who on the date hereof or at the time of determination
thereof, directly or indirectly, owns 10% or more of such Party.
NOW, THEREFORE, in consideration of the mutual convenants and
agreements set forth herein, the Parties agree as follows:
1. Ahold acknowledges and agrees that Received Material is a valuable
and proprietary asset, has competitive value and is of a confidential nature.
2. Ahold agrees that, except as 1224 Corp. may otherwise agree in
writing in advance, it will, and each of its representatives will, treat
confidentially, preserve and protect with the same standard of care afforded by
Ahold to any of its documents and not disclose any Received Material and will
use Received Material solely to evaluate the Transaction; provided, however,
that Ahold may disclose Received Material or portions thereof only to those
representatives who need to know such information solely for the purpose
described above (it being understood that (a) each such representative shall be
informed of the confidential nature of Received Material and shall be directed
to treat Received Material confidentially, not to use it other than for the
purpose described above and to otherwise comply with the provisions hereof
applicable to representatives and (b) that, in any event, Ahold shall be
responsible for any actions
<PAGE>
taken by any of its representatives which if such representative was a party
hereto would breach a provision of this Agreement applicable to
representatives).
3. The term "Received Material" shall not include information (i) which
was or becomes generally available to the public other than as a result of a
disclosure by Ahold or by any representative thereof in breach of this
Agreement, (ii) which was or becomes available on a non-confidential basis from
a source other than 1224 Corp. or Giant or any representative thereof, provided
that such source is not and was not known to Ahold to be bound by a
confidentiality agreement with 1224 Corp. or Giant or any representative thereof
or by any other contractual, legal or fiduciary obligation to 1224 Corp. or
Giant which would prohibit the disclosure of such information to Ahold, or (iii)
which was within the possession of Ahold or any affiliate thereof prior to such
receipt. The term "Received Material" shall also not include any analyses,
compilations, studies or other documents or records that have been prepared by
Ahold or its representatives solely from information of the nature described in
any of clauses (i), (ii) or (iii) of this paragraph 3.
4. Each Party agrees that, without the prior written consent of the
other Party, it will not, and will direct its representatives not to, disclose
to any person the fact that discussions regarding the Transaction (or any other
discussions between or involving the Parties) are taking or have taken place or
other facts with respect to such discussions, including the status thereof, or
the fact (if such becomes the case) that any confidential information has been
exchanged, nor otherwise make any public disclosure (whether written or oral)
with respect to this Agreement or the matters contemplated hereby, except and
only to the extent that such Party has been advised by legal counsel that such
disclosure is required by law and then, to the extent practicable, only after
prior notice to the other Party. The term "person" as used in this Agreement
shall be broadly defined to include, without limitation, any corporation,
partnership, company or individual, but shall not include (i) those officers of
Giant who are informed of the Transaction in order to provide the information
requested by Ahold, (ii) those directors of Giant who are members of the Special
Committee of the Board of Directors of Giant and (iii) with the prior written
consent of Ahold, the remaining members of the Board of Directors of Giant.
5. If Ahold or any representative thereof is requested or required (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose any Received Material, it will, to the
extent permitted by applicable law, notify 1224 Corp. promptly and, to the
extent practicable, prior to any disclosure, so that 1224 Corp. or Giant, as the
case may be, may seek any appropriate protective order and/or take any other
appropriate action. In the event such protective order is not obtained, or that
1224 Corp. waives compliance with the provisions hereof, (i) Ahold or its
representative, as the case may be, may disclose to any tribunal or regulatory
or administrative body with jurisdiction only that portion of the Received
Material which it is required to be disclosed, and shall exercise reasonable
best efforts to obtain assurance that confidential treatment will be accorded
such Received Material and (ii) Ahold shall not be liable for such disclosure
unless such disclosure to such tribunal or regulatory or administrative body was
caused by or resulted from a previous disclosure by Ahold or any representative
thereof not permitted by this Agreement.
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6. Each Party hereby acknowledges to the other Party that it is aware,
and will advise its representatives who are informed as to the matters which are
the subject of this Agreement, that the United States securities laws prohibit
any persons who are in possession of material, non-public information with
respect to an issuer from purchasing or selling securities of such issuer or,
subject to certain limited circumstances, from communicating such information to
any other person.
7. In the event that the Parties do not agree to a Transaction within
90 days of the date hereof (which period may be extended by the Parties by
mutual written agreement), or if either Party terminates discussions prior to
such 90-day period, Ahold and its representatives will, as promptly as practical
following a request from 1224 Corp., deliver to 1224 Corp. all Received Material
and any other material (whether in written, electronic, magnetic or other form)
containing or reflecting any information in the Received Material (whether
prepared by Ahold, its representatives or otherwise) and will not retain any
copy or other extract or reproduction in whole or in part thereof; except that,
all Received Material whether in written, electronic, magnetic or other form
whatsoever, prepared by Ahold or any representative thereof containing or
reflecting information in the Received Material may be destroyed and such
destruction shall be certified in writing to 1224 Corp. by an authorized officer
supervising such destruction.
8. Ahold understands that except as may be provided for in such
definitive agreement or agreements, if any, as may be entered into in connection
with a Transaction, none of 1224 Corp., Giant or any of their respective
representatives makes any representation or warranty as to the accuracy or
completeness of any Received Material and no liability (on any basis including,
without limitation, in contract, tort or otherwise) to Ahold or any
representative thereof shall result from its use.
9. Each party agrees that unless and until a definitive agreement
between the parties hereto with respect to a Transaction has been executed and
delivered, neither party will be under any legal obligation of any kind
whatsoever with respect to a Transaction by virtue of this or any written or
oral expression with respect to such a Transaction by any of its directors,
officers, employees, or other representatives or its advisors or representative
thereof except of the matters specifically agreed to in this letter.
10. It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement and that the Parties shall be
entitled to specific performance and injunctive relief as remedies for any such
breach and neither the Parties nor their representatives will oppose the
granting of such relief. Such remedies shall not be deemed to be the exclusive
remedies for breach of this Agreement but shall be in addition to all other
remedies available at law or in equity to the Parties.
11. This Agreement shall inure to the benefit of and be enforceable by
the Parties and their successors.
12. The Parties agree and acknowledge that nothing contained herein
shall limit, restrict or otherwise affect the rights of the Parties to compete
with each other, provided that the
3
<PAGE>
Received Material will be used by Ahold solely to evaluate the Transaction and
not for any operating or other purpose.
13. It is further understood that no failure or delay by either Party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
14. This Agreement shall remain in effect until the earlier of (i)
three years from the date hereof and (ii) consummation of the Transaction.
15. This Agreement (a) shall be governed and construed in accordance
with the laws of the State of Delaware applicable to agreements made and to be
performed within such State and (b) may not be terminated or modified nor any of
its provisions waived, except in a writing signed by a duly authorized officers
of both Parties.
16. Each of the Parties agrees that any legal action or proceeding with
respect to this Agreement may be brought in the Courts of the State of Delaware
or the United States District Court for the District of Delaware, by execution
and delivery of this Agreement, each Party hereby irrevocably submits itself in
respect of its property, generally and unconditionally to be the non-exclusive
jurisdiction of the aforesaid courts in any legal action or proceeding arising
out of this Agreement. Each of the Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement brought in the courts referred to in the preceding sentence. Each
Party consents to process being served in any action or proceeding by the
mailing of a copy thereof to the address set forth opposite its name below and
agrees that such service upon receipt shall constitute good and sufficient
service of process or notice thereof. Nothing in this paragraph shall affect or
eliminate any right to serve process in any other matter permitted by law.
17. This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which shall be deemed the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Address: KONINKLIJKE AHOLD N.V. Albert
Heijnweg 1
1507 EH Zaandam, The Netherlands
By: /s/ A. M. Meurs
-----------------------------
Name: A. M. Meurs
Title: Executive Vice
President
1013 Centre Road, 1224 CORPORATION Wilmington,
DE 19805
By: /s/ Pete Manos
-----------------------------
Name: Pete Manos
Title: Chairman and President
5
<PAGE>
EXHIBIT 6
KONINKLIJKE AHOLD N.V.
Albert Heijnweg 1
1507 EH Zaandam
The Netherlands
April 27, 1998
The 1224 Corporation
6300 Sheriff Road
Landover, Maryland 20785
Attention: David W. Rutstein
Gentlemen:
This letter confirms our mutual understandings and intentions
concerning negotiations between Koninklijke Ahold N.V. (the "Purchaser") and The
1224 Corporation (the "Seller"), regarding the possible purchase by the
Purchaser, directly or through one of its affiliates, of all of the outstanding
Class AC Voting Common Stock (the "AC Shares") of Giant Food Inc. (the
"Company") from the Seller. It is the parties' intention that the negotiations
regarding such possible purchase and of definitive transaction documents
continue after the execution of this letter and the parties each agree to
negotiate in good faith.
During the period from the date hereof until May 31, 1998,
none of the Seller, or any of its officers, directors, employees,
representatives, agents or advisors (collectively "Agents") shall, directly or
indirectly, take any action (other than an action directly related to
negotiations with the Purchaser) to (i) encourage, initiate or solicit the
making of an Acquisition Proposal (as defined below), (ii) engage in discussions
or negotiations with, or provide any information to, any entity or person 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, or (iii) enter into an agreement with respect to
an Acquisition Proposal; provided, however, that, subject to compliance by the
Seller with the immediately succeeding sentence, (a) the Seller, in response to
an unsolicited Acquisition Proposal from J. Sainsbury (USA) Holdings Inc. or any
affiliate thereof (collectively "Sainsbury"), may participate in discussions or
negotiations with, or furnish information to, Sainsbury if the Board of
Directors of the Seller reasonably determines that the unsolicited Acquisition
Proposal proposed by Sainsbury is reasonably likely to result in a Sainsbury
Superior Proposal (as defined below) and believes (based upon the advice of
outside legal advisors of recognized standing in the state of Delaware) that
failing to take such action is reasonably likely to constitute a breach of its
fiduciary duties and (b) the Seller may enter into an agreement with respect to
a Sainsbury Superior Proposal if, within ten days of receipt of written notice
from the Seller with respect to such Sainsbury Superior Proposal pursuant to
subclause (i) of the next succeeding sentence, the Purchaser fails to have (1)
executed and delivered to the Seller a Stock Purchase Agreement in substantially
the form of the April 17, 1998 draft of the Stock Purchase Agreement by and
between the Purchaser and the Seller relating to the purchase by the Purchaser
from the Seller of the AC Shares (the "Draft AC
<PAGE>
The 1224 Corporation
April 27, 1998
Page 2
Stock Purchase Agreement"), but as modified (w) to eliminate the condition
contained in Section 6.6 of the Draft AC Stock Purchase Agreement and all
references to a stock purchase agreement by and between the Purchaser and
Sainsbury, (x) to change all references to the Agreement and Plan of Merger by
and among the Purchaser, a wholly-owned subsidiary thereof and the Company (the
"Merger Agreement") so as to refer instead to the agreement referred to in
subclause (2) of this sentence, (y) to include in Section 2.2 thereof as the
price to be paid per AC Share by the Purchaser to the Seller thereunder the
Agreed Upon Price (as defined below) or, if there is no Agreed Upon Price, the
price per AC Share offered by Sainsbury to the Seller pursuant to the Sainsbury
Superior Proposal and (z) to reflect the mutually acceptable resolution of the
issues that have been raised by the Purchaser or the Seller with respect to the
Draft AC Stock Purchase Agreement and that have not been resolved prior to the
date hereof which resolution the Purchaser and the Seller agree to negotiate in
good faith, and (2) executed and delivered to the Company an agreement
containing the representations, warranties and covenants contained in the April
17, 1998 draft of the Merger Agreement (the "Draft Merger Agreement") as
modified to reflect the mutually acceptable resolution of the issues that have
been raised by the Purchaser, the Seller or the Company with respect to the
Draft Merger Agreement and that have not been resolved prior to the date hereof,
which resolution the Purchaser and the Seller agree (and the Seller agrees to
use its best efforts to cause the Company) to negotiate in good faith. The
Seller promptly shall advise the Purchaser (i) orally and in writing of the
receipt of any Acquisition Proposal (including from or otherwise involving
Sainsbury) and of the identity of the entity or person making such Acquisition
Proposal and of the material terms thereof and of any changes thereto and (ii)
orally prior to commencing any discussions or negotiations between the Seller or
any of its Agents, on the one hand, and Sainsbury or any of its Agents, on the
other hand, (x) regarding an Acquisition Proposal by Sainsbury or (y) which
could reasonably lead to a Sainsbury Superior Proposal, and subsequently
regarding the progress of any such negotiations or discussions.
As used herein the term "Acquisition Proposal" means any
proposal to purchase or acquire, directly or indirectly, all or any of the AC
Shares of the Company, a substantial amount of the assets of the Company or any
of its subsidiaries or more than 10% of any class of equity securities of the
Company 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
class of equity securities of the Company or any of its subsidiaries, any
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any other transaction, the consummation of which could
reasonably be expected to dilute materially the benefits to the Purchaser of the
acquisition of the AC Shares. As used herein the term "Sainsbury Superior
Proposal" means any bona fide proposal from or otherwise involving Sainsbury to
purchase all of the AC Shares of the Company in cash at a price per share that
is either (x) greater than the price per AC Share agreed upon at the time by the
Purchaser and the Seller (the "Agreed Upon Price") or (y) if the Purchaser and
the Seller have not reached an agreement on the price to be paid per AC Share,
greater than the price per AC Share most recently proposed to the Seller by the
Purchaser, and on terms which the Board of Directors of the Seller determines in
its good faith reasonable judgment (based upon the advice of
<PAGE>
The 1224 Corporation
April 27, 1998
Page 3
outside financial and legal advisors) to be as or more favorable to the Seller
and the Company than the transactions contemplated by the Draft AC Stock
Purchase Agreement (i) which is not subject to a financing condition and as to
which Sainsbury has represented and warranted to the Seller in writing that
financing is or will be available and (ii) which does not provide for any
breakup fee or other inducement to Sainsbury other than reimbursement of
documented out-of-pocket expenses incurred in connection with the Sainsbury
Superior Proposal.
Except as otherwise required by law, neither of the parties
hereto (nor any affiliate, or Agent thereof) shall issue any press release or
make any other statement intended for public distribution relating to, or
connected with, this letter or the matters contained herein without obtaining
the prior approval of the other party hereto.
Each of the parties hereto recognizes and acknowledges that a
breach by it of any agreements contained in this letter 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 agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
Except for the agreements set forth in the three immediately
preceding paragraphs), this letter does not represent any binding commitment or
legal obligation of any kind whatsoever by the Purchaser or the Seller in
connection herewith with respect to the transaction contemplated hereby. Such
binding commitment or legal obligation shall arise only when and if the
definitive transaction documents, developed as a result of the negotiations
between the parties are in fact executed by the parties.
Notwithstanding anything contained in this letter to the
contrary, this letter may be terminated by either the Purchaser or the Seller
upon delivery of written notice to the other party to such effect if the
Purchaser and Seller have not agreed on or prior to May 4, 1998 upon the price
per AC Share that would be paid by the Purchaser to the Seller pursuant to the
AC Stock Purchase Agreement. In the event of such termination, this letter shall
become void and have no further effect.
This letter shall not be amended or modified except in writing
signed by the parties hereto.
This letter shall be governed by, and construed in accordance
with, the laws of the State of Delaware. The parties agree that any legal action
or proceeding relating to this letter, or for recognition and enforcement of any
judgment in respect thereof, shall be instituted in the courts of the State of
Delaware, the courts of the United States of America located in Delaware and
appellate courts of any thereof.
<PAGE>
The 1224 Corporation
April 27, 1998
Page 4
This letter may be executed in one or more counterparts, each
of which shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
If the foregoing correctly sets forth our mutual understanding
with respect to the proposed negotiations, please so indicate by signing the
enclosed copy of this letter and returning it to us.
KONINKLIJKE AHOLD N.V.
By /s/ Robert Zwartendijk
-------------------------------
Name: Robert Zwartendijk
Title: Executive Vice
President
Acknowledged and Agreed, this
27 day of April, 1998
THE 1224 CORPORATION
By /s/ David W. Rutstein
---------------------------------------
Name: David W. Rutstein
Title: Vice President and Secretary
<PAGE>
