SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Amendment No. 5
Under the Securities Exchange Act of 1934
PETRIE STORES CORPORATION
(Name of Issuer)
Common Stock, par value $1.00 per share
(Title of Class and Securities)
716434-10-5
(CUSIP Number of Class of Securities)
Peter A. Left
Vice Chairman, Chief Operating Officer,
Chief Financial Officer and Secretary
Petrie Stores Corporation
70 Enterprise Avenue
Secaucus, New Jersey 07084
201-866-3600
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Alan C. Myers, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
November 3, 1994
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Schedule 13D and is filing this schedule
because of Rule 13d-1(b)(3) or (4), check the following
box: ___
|___|
Check the following box if a fee is being paid with this
statement: ___
|___|
SCHEDULE 13D
CUSIP NO. 716434-10-5
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Estate of Milton Petrie
###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP.
(a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS*
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7 SOLE VOTING POWER
28,111,274
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 28,111,274
WITH
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
28,111,274
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
60.1%
14 TYPE OF REPORTING PERSON*
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
This statement on Schedule 13D amends and
supplements the statement on Schedule 13D (the
"Statement") filed with the Securities and Exchange
Commission by the decedent, Milton Petrie, in connection
with the ownership by his Estate of shares of common stock,
par value $1.00 per share (the "Common Stock"), of Petrie
Stores Corporation, a New York corporation (the "Company").
Unless otherwise defined herein capitalized terms shall
have the meanings ascribed to them in the Statement.
Item 2. Identity and Background
Item 2 is hereby amended and restated to be and read
in its entirety as follows:
This statement is filed on behalf of the Estate of
Milton Petrie (the "Estate"). The business address of
the Estate is c/o Skadden, Arps, Slate, Meagher & Flom,
919 Third Avenue, New York, NY 10002, Attention:
Jonathan Koslow, Esq.
Pursuant to the Preliminary Letters Testamentary,
issued on November 14, 1994, the Estate is administered
by eight executors: Joseph H. Flom, Hilda Kirschbaum
Gerstein, Jerome A. Manning, Bernard Petrie, Carroll
Petrie, Dorothy Fink Stern, Laurence A. Tisch and David
Zack. A copy of the Preliminary Letters Testamentary is
filed as Exhibit I to this Statement and is incorporated
herein by reference.
Mr. Flom is an attorney and a partner in Skadden,
Arps, Slate, Meagher & Flom, a law firm and counsel to
the Company. His principal business address is Skadden,
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York,
New York 10022.
Ms. Gerstein is the Vice Chairman of the Company.
Her principal business address is Petrie Stores
Corporation, 70 Enterprise Avenue, Secaucus, New Jersey
07084. Ms. Gerstein owns, in her own capacity, 293,878
shares of Common Stock.
Mr. Manning is an attorney and a partner in Stroock,
Stroock & Lavan, a law firm. His principal business
address is Stroock, Stroock & Lavan, 7 Hanover Square,
New York, New York 10004.
Mr. Bernard Petrie, the son of Milton Petrie, is an
attorney. His principal business address is Law Offices
of Bernard Petrie, 633 Battery Street, San Francisco,
California 94111. Mr. Bernard Petrie owns, in his own
capacity, 34,800 shares of Common Stock.
Mrs. Petrie, the wife of Milton Petrie at the time
of his death, is a private investor and philanthropist.
Her principal business address is 834 Fifth Avenue, New
York, New York 10021. Mrs. Petrie owns, in her own
capacity, 6,380 shares of Common Stock.
Ms. Stern, formerly the Company's Executive Vice
President, is a consultant to the Company. Her principal
business address is 303 East 57th Street, New York, New
York 10022. Ms. Stern owns, in her own capacity,
182,091 shares of Common Stock.
Mr. Tisch is Chairman of the Board of Directors and
Co-Chief Executive Officer of Loews Corporation, and
Chairman of the Board, President and Chief Executive
Officer of CBS Inc. His principal business address is
CBS Network, 51 West 52nd Street, 35th Floor, New York,
New York 10019. Mr. Tisch owns, in his own capacity,
1,000 shares of Common Stock.
Mr. Zack is an accountant and a former partner in
David Berdon & Co., an accounting firm. His principal
business address is David Berdon & Co., 415 Madison
Avenue, New York, New York 10017-1178.
During the past five years, none of Mr. Flom, Ms.
Gerstein, Mr. Manning, Mr. Bernard Petrie, Mrs. Petrie,
Ms. Stern, Mr. Tisch and Mr. Zack has been convicted in a
criminal proceeding, or been a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding he
or she has been subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or finding any violations with respect to
such laws.
Mr. Flom, Ms. Gerstein, Mr. Manning, Mr. Bernard
Petrie, Mrs. Petrie, Ms. Stern, Mr. Tisch and Mr. Zack
are citizens of the United States.
Item 3. Source and Amount of Funds or Other
Consideration.
Item 3 is hereby amended and supplemented by adding
the following:
The shares of Common Stock of the Company which are
the subject of this Schedule 13D devolved to the Estate,
without consideration, as a result of the death of Milton
Petrie on November 6, 1994.
Item 4. Purpose of Transaction.
Item 4 is hereby amended and restated to be and read
in its entirety as follows:
On April 20, 1994, Milton Petrie, by act of his
attorneys-in-fact, entered into a Voting Agreement and
Proxy (the "Toys Voting Agreement") with Toys "R" Us,
Inc., a Delaware corporation ("Toys"), pursuant to which
Mr. Petrie agreed to vote the Common Stock held by him in
favor of the transactions (collectively, the
"Transaction") contemplated by the Acquisition Agreement,
dated as of April 20, 1994 and amended as of May 10, 1994
(the "Acquisition Agreement"), between the Company and
Toys. Mr. Petrie also granted to Toys an irrevocable
proxy to vote his Common Stock in favor of the
Transaction. The Toys Voting Agreement contains
restrictions on, among other things, Mr. Petrie's ability
to dispose of or pledge his Common Stock. Pursuant to
the Acquisition Agreement, the Company agreed to exchange
with Toys all of the shares of common stock, par value
$.10 per share (the "Toys Common Stock"), of Toys held by
the Company and certain subsidiaries of the Company
(currently, approximately 39.9 million shares) and cash
(presently, estimated to be approximately $180 million)
for a number of shares of Toys Common Stock equal to (i)
the number of shares of Toys Common Stock held by the
Company, less approximately 3.3 million shares of Toys
Common Stock, plus (ii) such amount of cash divided by
the market value of a share of Toys Common Stock (the
"Exchange"). The closing of the Exchange is conditioned
upon, among other things; (i) the approval thereof by the
holders of two-thirds of the outstanding Common Stock;
(ii) the consummation of the disposition of the Company's
retail operations; and (iii) the reasonable determination
by Toys that it will not become responsible for any
liabilities of the Company as a consequence of the
consummation of the Transaction. The Exchange may be
terminated if it is not consummated by January 28, 1995.
After the closing of the Exchange and the disposition of
the Company's retail operations, the Company will
liquidate and distribute to its shareholders the shares
of Toys Common Stock received in the Exchange, except an
amount to be held in a liquidating trust established to
provide for the Company's contingent liabilities as of
the time of the liquidation and dissolution of the
Company.
On August 23, 1994, Milton Petrie, by act of his
attorneys-in-fact, entered into a Voting Agreement and
Proxy (the "WP Voting Agreement") with WP Investors,
Inc., a Delaware corporation ("WP Investors"), pursuant
to which Mr. Petrie agreed to vote the Common Stock held
by him, or execute a consent with respect to such Common
Stock, in favor of the transactions contemplated by the
Stock Purchase Agreement, dated as of August 23, 1994,
between the Company and WP (the "Stock Purchase Agreement").
Milton Petrie, by act of his attorneys-in-fact, also granted
to WP Investors an irrevocable proxy to vote his Common Stock
in favor of the transactions contemplated by the Stock
Purchase Agreement. The WP Voting Agreement contains
restrictions on, among other things, Mr. Petrie's ability
to dispose of or pledge his Common Stock. Pursuant to
the Stock Purchase Agreement, as amended as of November 3, 1994,
WP and one or more of its non-affiliated designees (collectively,
the "Buyer") will purchase the shares of common stock (the
"Stock Purchase") in a Delaware subsidiary of the Company
("Retail Holding Company"), to which all of the retail
operations of the Company will have been transferred
prior to the closing date of the Stock Purchase. The
purchase price will be $190 million in cash (the
"Purchase Price"). The closing of the Stock Purchase is
conditioned upon, among other things, (i) the Buyer
having available to it for draw the financing
contemplated by a commitment letter, dated as of November
3, 1994 (the "Commitment Letter"), by and among Buyer, WP
Investors, Warburg Pincus Investors, L.P., Chemical Bank,
The Chase Manhattan Bank, N.A., Chemical Securities, Inc.
and Chase Securities, Inc., and all conditions to the
obligations of the lenders thereunder having been
satisfied or waived, substantially on the terms
contemplated thereby; provided, however, that Buyer shall
not be entitled to rely on this condition as grounds for
not consummating the Stock Purchase if Buyer shall not
have satisfied its covenants with respect to the
Commitment Letter; (ii) the Buyer being reasonably
satisfied that the Company shall have made or shall make
adequate provision for its remaining liabilities and
obligations, including the amount to be held in escrow
and trust in connection with the Company's liquidation;
(iii) Retail Holding Company and its subsidiaries, or a
subsidiary of Buyer which agrees to be bound by the terms
of the Stock Purchase Agreement, as applicable, having
and immediately following the closing of the Stock
Purchase continuing to have, on a consolidated basis, a
minimum net worth of not less than $150,000,000 as
determined in accordance with GAAP, but excluding
goodwill; and (iv) the approval of the Stock Purchase by
the holders of two-thirds of the Company's outstanding
Common Stock. As part of the Stock Purchase, Buyer will
assume a substantial portion of the Company's liabilities
and the Company will retain certain contingent
liabilities. The Stock Purchase may be terminated if it
is not consummated by January 31, 1995.
In connection with the execution of Amendment No. 1
to the Stock Purchase Agreement, dated as of November 3,
1994 ("Amendment No. 1"), between the Company and WP
Investors, Milton Petrie, by act of his attorneys-in-
fact, and WP Investors, executed a Confirmation
Agreement, dated as of November 3, 1994 ("Confirmation
Agreement"), to provide, among others, that all
references to the Stock Purchase Agreement in the WP
Voting Agreement shall be deemed to refer to the Stock
Purchase Agreement as amended by Amendment No. 1 and
that, except as provided in the Confirmation Agreement,
following the execution of the Confirmation Agreement,
the WP Voting Agreement shall remain unchanged and in
full force and effect.
On November 6, 1994, Milton Petrie died and, as a
result, his Common Stock devolved, without consideration,
to the Estate. Both the Toys Voting Agreement and the WP
Voting Agreement provide that the irrevocable proxies
granted thereby shall survive the death of Mr. Petrie,
and accordingly remain in full force and effect.
Except as set forth in this Item 4, the Toys Voting
Agreement, the WP Voting Agreement and the Confirmation
Agreement, the Estate does not have any plans or
proposals which relate to or would result in any of the
actions specified in clauses (a) through (j) of Item 4 of
Schedule 13D. The Estate reserves the right to acquire
or dispose of shares of Common Stock, or to formulate
other purposes, plans or proposals regarding the Company
to the extent deemed advisable in light of general
investment policies, market conditions and other factors.
A copy of the Toys Voting Agreement was previously
filed as an exhibit to this Statement and is incorporated
herein by reference. A copy of the Toys Agreement was
previously filed as an exhibit to this Statement and is
incorporated herein by reference. A copy of the WP
Voting Agreement was previously filed as an exhibit to
this Statement and is incorporated herein by reference.
A copy of the Stock Purchase Agreement was previously
filed as an exhibit to this Statement and is incorporated
herein by reference. A copy of the Confirmation
Agreement is filed as Exhibit J to this Statement and is
incorporated herein by reference. A copy of Amendment
No. 1 is filed as Exhibit K to this Statement and is
incorporated herein by reference.
Item 5. Interest and Securities of the Issuer.
Item 5 is hereby amended and restated to be and read
in its entirety as follows:
(a)-(b) The Estate beneficially owns, and has the
sole power to vote and dispose of, 28,111,274 shares of
the Common Stock, constituting 60.1% of the 46,838,776
shares of Common Stock that were issued and outstanding
as of October 31, 1994. Such amounts do not include any
Common Stock owned by the executors of the Estate in
their individual capacity. Each of the executors
disclaims beneficial ownership of the Common Stock held
by the Estate. The executors of the Estate share equally
the power to dispose of, and vote, the Common Stock held
by the Estate.
(c) Other than the devolvement of the Common Stock
to the Estate following the death of Milton Petrie on
November 6, 1994, neither Mr. Petrie nor the Estate has
effected any transaction in the Common Stock during the
past 60 days.
(d)-(e) Inapplicable.
Item 6. Contracts, Agreements, Underwritings or
Relationships with Respect to Securities of the Issuer.
Item 6 is hereby amended and restated to be and read in
its entirety as follows:
On April 20, 1994, Milton Petrie entered into the
Toys Voting Agreement. The Toys Voting Agreement was
executed on behalf of Mr. Petrie by his attorneys-in-
fact, pursuant to a power of attorney ("Power of
Attorney") granted on March 15, 1983 to each of Bernard
Petrie, Joseph H. Flom, Jerome A. Manning and Albert
Ratner (the "Attorneys-In-Fact"). A copy of the Toys
Voting Agreement was previously filed as an exhibit to
this Statement and is incorporated herein by reference.
The Power of Attorney was previously filed as an exhibit
to this Statement and is incorporated herein by
reference.
On August 23, 1994, Milton Petrie entered into the
WP Voting Agreement. The WP Voting Agreement was
executed on behalf of Mr. Petrie by the Attorneys-In-
Fact. A copy of the WP Voting Agreement was previously
filed as an exhibit to this Statement and is incorporated
herein by reference.
On November 3, 1994, Milton Petrie, by act of the
Attorneys-In-Fact, executed the Confirmation Agreement.
A copy of the Confirmation Agreement is filed as Exhibit
J to this Statement and is incorporated herein by
reference.
Pursuant to Milton Petrie's will, the executors of
the Estate share equally the power to dispose of, and
vote, the Common Stock held by the Estate. There is no
understanding among the executors with respect to the
voting of the Common Stock held by them in their
individual capacities.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended and supplemented by adding
the following exhibits:
Exhibit I Preliminary Letters Testamentary,
issued on November 14, 1994.
Exhibit J Confirmation Agreement, dated as of
November 3, 1994, between Milton
Petrie and WP Investors, Inc.
Exhibit K Amendment No. 1 to Stock Purchase
Agreement, dated as of November 3,
1994, between Petrie Stores
Corporation and WP Investors, Inc.
SIGNATURES
After reasonable inquiry and to the best of my
knowledge and belief, the undersigned certify that the
information set forth in this Statement is true, complete
and correct.
Dated: November 22, 1994
ESTATE OF MILTON PETRIE
By: /s/ JOSEPH H. FLOM
Joseph H. Flom
Executor
By: *
Hilda Kirschbaum Gerstein
Executor
By: *
Jerome A. Manning
Executor
By: *
Bernard Petrie
Executor
By: *
Carroll Petrie
Executor
By: *
Dorothy Fink Stern
Executor
By: *
Laurence A. Tisch
Executor
By: *
David Zack
Executor
* By: /s/ JOSEPH H. FLOM
Joseph H. Flom
Attorney-in-fact
Date: November 22, 1994
EXHIBIT INDEX
Exhibit Page
I Preliminary Letters Testamentary, issued
on November 14, 1994.
J Confirmation Agreement, dated as of
November 3, 1994, between Milton Petrie
and WP Investors, Inc.
K Amendment No. 1 to Stock Purchase Agreement,
dated as of November 3, 1994, between Petrie
Stores Corporation and WP Investors, Inc.
The power and authority of the executor under these
preliminary letters testamentary are limited in
accordance with SCPA 1412
TY--680868 Form CR12397
The People of the State of New York,
4686/94
To all to whom these presents shall come or may concern,
PRELIMINARY LETTERS TESTAMENTARY
SEND GREETING:
Know Ye, that we, having inspected the records
of our Surrogate's Court in and for the County of New
York, do find that on the 14th day of November in the
year one thousand nine hundred and 94 by said Court
Letters Testamentary on the estate of MILTON PETRIE
late of the County
of New York, deceased, were granted unto
CARROLL PETRIE, BERNARD PETRIE, JOSEPH H. FLOM, LAURENCE
A. TISCH, HILDA KIRSCHBAUM GERSTEIN, DOROTHY FINK STERN,
JEROME A. MANNING AND DAVID ZACK the Executors named in
the last Will and Testament of said deceased, and that it
does not appear by said Records that said Letters have
been revoked.
In Testimony Whereof, we have caused the Seal
of the Surrogate's Court of the County of New York to be
hereunto affixed.
Witness, Honorable RENEE R. ROTH
Surrogate of our said County, in the City of New York,
the 14th day of November in the year of our Lord one
thousand nine hundred and 94
[SEAL]
/s/ Robert M. Reaves
Clerk of the Surrogate's Court
As of November 3, 1994
CONFIRMATION
Reference is made to the Voting Agreement and
Proxy, dated as of August 23, 1994, between WP Investors,
Inc., a Delaware corporation (the "Buyer"), and Milton
Petrie, the record and beneficial owner of 28,111,274
shares of common stock of Petrie Stores Corporation, a
New York corporation (the "Seller"), as consented to and
agreed by Toys "R" Us, Inc. ("Toys") (the "Voting
Agreement") and to the Amendment to the Purchase
Agreement (as such term is defined in the Voting
Agreement) (the "Amendment") which the Buyer and the
Seller are entering into concurrently herewith.
In consideration of the premises and the
agreements set forth herein and for other good and
valuable consideration, receipt of which is hereby
acknowledged, the undersigned hereby agree as follows:
1) that the "Transaction" as defined in the Voting
Agreement shall include the transactions contemplated by
the Purchase Agreement, as amended by the Amendment, 2)
that all references to the Purchase Agreement in the
Voting Agreement shall hereafter be deemed references to
the Purchase Agreement as amended by the Amendment, and
3) that, except as otherwise provided herein, the Voting
Agreement shall remain unchanged and in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the date first above written.
WP INVESTORS, INC.
By: /s/ Errol M. Cook
Name: Errol M. Cook
Title: Vice President
MILTON PETRIE
By: /s/ Bernard Petrie
Bernard Petrie, as Attorney-in-Fact
By: /s/ Joseph H. Flom
Joseph H. Flom, as Attorney-in-Fact
By: /s/ Jerome A. Manning
Jerome A. Manning, as Attorney-in-Fact
By: /s/ Albert Ratner
Albert Ratner, as Attorney-in-Fact
Consented and Agreed:
TOYS "R" US, INC.
By: /s/ Louis Lipschitz
Name: Louis Lipschitz
Title: Senior V.P. Finance and CFO
AMENDMENT NO. 1 TO THE STOCK PURCHASE AGREEMENT
This AMENDMENT NO. 1 (the "Amendment") to the Stock
Purchase Agreement (the "Stock Purchase Agreement"), dated as of
August 23, 1994, by and between Petrie Stores Corporation, a New
York corporation ("Seller") and WP Investors, Inc., a Delaware
corporation ("Buyer") is being entered into as of November 3,
1994.
Whereas, Seller and Buyer desire to amend the Stock
Purchase Agreement to provide that Seller shall provide for the
payment by Seller and/or the Liquidating Trust of certain tax
liabilities arising out of or related to, certain past sales or
other dispositions by Seller or its subsidiaries of shares of
Toys Common Stock; and
Whereas, Seller and Buyer desire to amend the Stock
Purchase Agreement to waive certain conditions to each party's
respective obligations to consummate the Stock Purchase.
Now, Therefore, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as
follows:
Section 1. Definitions; References. Unless
otherwise specifically defined herein, each term used herein
shall have the meaning assigned to such term in the Stock
Purchase Agreement. Each reference to "hereof", "herein",
"hereunder", "hereby" and "this Agreement" shall from and after
the date hereof refer to the Stock Purchase Agreement as amended
by this Amendment.
Section 2. Amendment to Introduction. The
Introduction to the Stock Purchase Agreement is amended to be and
read in its entirety as follows:
"STOCK PURCHASE AGREEMENT, dated as of August 23,
1994, and amended as of November 3, 1994 (this
"Agreement"), by and between Petrie Stores Corporation,
a New York corporation ("Seller") and WP Investors,
Inc., a Delaware corporation ("Buyer")."
Section 3. Amendment to Time and Place of Closing.
Section 2.1 of the Stock Purchase Agreement is
amended to delete the reference therein to October 31,
1994 and to insert in its place December 9,1994.
Section 4. Amendment to Covenants of the Parties.
A. Section 5.9 of the Stock Purchase Agreement is
amended to be and read in its entirety as follows:
"Financing. (a) Any financing procured by the
Buyer to purchase the Shares pursuant to this
Agreement and to consummate the transactions
contemplated hereby shall include an equity
contribution by E.M. Warburg, Pincus & Co., Inc.
and/or one or more of its affiliates in the amount
of not less than $100 million; provided, however,
that such equity contribution may be reduced to
the extent not necessary for the Buyer to perform
the covenant set forth in Section 5.6.
(b) Buyer hereby expressly acknowledges that
Seller, in agreeing to Buyer's conditions to
consummation of the Stock Purchase as set forth in
Section 7.3(d) hereof, has relied upon the
existence and terms of that certain commitment
letter and the Summary of Terms and Conditions, a
copy of which has been provided to Seller
(collectively, the "Commitment Letter"), dated as
of November 3, 1994, by and among Buyer, WP
Investors, Inc., Warburg Pincus Investors, L.P.,
Chemical Bank and The Chase Manhattan Bank, N.A.
(collectively, the "Managing Agents"), and
Chemical Securities Inc. and Chase Securities,
Inc. (collectively, the "Arrangers"). For the
benefit of Buyer and Seller, Buyer hereby
covenants and agrees that prior to the Closing
Buyer will comply fully with all of the terms,
provisions and conditions set forth in the
Commitment Letter, the Facility (as defined in the
Commitment Letter), the definitive documentation
for the Facility described therein or any
transaction contemplated thereby (collectively,
the "Financing") and any related fee letters. For
the benefit of Seller, Buyer hereby further
covenants and agrees that Buyer will not amend,
modify or waive any term or provision of the
Commitment Letter or waive any of its rights
thereunder, in any event so as to make it less
likely that the condition set forth in Section
7.3(d) hereof will be satisfied."
B. Section 5.17 of the Stock Purchase Agreement is
amended to be and read in its entirety as follows:
"On or prior to the Closing Date, Seller shall
provide in a manner reasonably satisfactory to
Buyer for the payment by Seller and the
Liquidating Trust to Buyer, the Company and its
subsidiaries of the Excluded Liabilities (to the
extent not previously paid) in a manner adequate
to provide for the collection of the Excluded
Liabilities, taking into account the assets and
other liabilities of the Liquidating Trust (which
in the case of the Excluded Liabilities arising
pursuant to Section 5.14 and Section
6.1(b)(y)(ii)(B) shall include the provision for
the payment thereof by means of an irrevocable
letter of credit, a holdback of a portion of the
Purchase Price, a first priority, perfected lien
in collateral with adequate assurances as to value
or comparable security or other comparable
arrangements reasonably acceptable to Buyer;
provided, however, that (i) such provision in the
case of liabilities arising pursuant to Section
5.14 shall provide for the payment thereof in
full, (ii) such provision shall neither limit the
liability of Seller and the Liquidating Trust not
otherwise limited by this Agreement nor shall such
provision enlarge any liability of Seller and the
Liquidating Trust otherwise limited by this
Agreement or otherwise, and (iii) such provision
shall be $67.5 million)."
Section 5. Amendment to Tax Matters.
A. Section 6.1(b) of the Stock Purchase Agreement is
amended to be and read in its entirety as follows:
"Seller and the Liquidating Trust shall, and
hereby do, indemnify and hold Buyer, the Company
and the Company's subsidiaries harmless against
(x) the failure to be true in any material respect
of any representations and statements of fact
included in the Ruling Request, to the extent that
they relate to the Seller or its subsidiaries, and
(y) (i) Taxes of Seller or its subsidiaries or any
reduction in losses, deductions, credits or
similar items of tax benefit but excluding any
reduction in the tax basis of assets ("Tax
Benefits") of the Company or any of its
subsidiaries arising from the transfer, as
contemplated by Section 3.16 hereof, to the
Company and its subsidiaries of assets and
liabilities of Seller and certain of its
subsidiaries and the stock of other subsidiaries
of Seller and (ii) any Taxes of Seller or its
subsidiaries or any reduction in Tax Benefits of
the Company or its subsidiaries arising out of or
relating to (A) the Toys Shares or the Toys
Transaction, (B) the federal examination of the
disposition during March and July of 1988 by
Seller or certain of its subsidiaries of shares of
Toys Common Stock in connection with the
conversion or redemption of certain debentures,
and (C) the sale or other disposition by Seller of
any Toys Common Stock or stock or assets of the
Seller or its subsidiaries subsequent to the
Closing not acquired or owned subsequent to the
Closing by Buyer, Company or Company's
subsidiaries. Buyer and the Company shall, and
hereby do, indemnify Seller and the Liquidating
Trust harmless against any and all other Taxes
imposed on the Seller, the Company, or any
subsidiaries of the Company, whether or not such
Taxes arose prior or subsequent to the Closing,
except Taxes imposed upon Seller or subsidiaries
of Seller subsequent to Closing that are
attributable to any taxable period after the
Closing Date. For purposes of this subsection, (x)
the amount of any Tax indemnified pursuant hereto
shall be equal to the excess of (A) the liability
for Taxes of the entity (or group) liable for such
Tax for any taxable period or periods affected by
the relevant item, over (B) the liability for
Taxes of such entity (or group) for such taxable
period or periods calculated without regard to the
item with respect to which the indemnification is
made, and (y) the taxable period to which any Tax
is deemed to be attributable will be determined by
treating the period ending on the Closing Date as
a separate taxable period for purposes of all
Taxes."
B. Section 6.1 of the Stock Purchase Agreement is
amended to add a new subsection (g) which shall be
and read in its entirety as follows:
"(g) Seller agrees that if as the result of any
audit adjustment made by any taxing authority with
respect to any Taxes against which Buyer and the
Company have indemnified Seller and the
Liquidating Trust, Seller receives a Tax Benefit,
then Seller or the Liquidating Trust shall pay to
Buyer the amount of such Tax Benefit within 15
days of (i) the filing of a return in which such
Tax Benefit is actually utilized to reduce any
liability for Taxes, or (ii) the receipt of any
refund of Taxes arising out of the application of
such Tax Benefit."
C. Section 6.2(a) of the Stock Purchase Agreement is
amended to be and read in its entirety as follows:
"Buyer shall have the right, at its own expense,
to control any audit or examination by any Taxing
Authority, to initiate any claim for refund or
file any amended Tax Return, and to contest,
resolve and defend against any assessment, notice
of deficiency, or other adjustment or proposed
adjustment of Taxes for all taxable periods of the
Company and its subsidiaries; provided, however,
that Seller (or the Liquidating Trust or any agent
or successor thereof) shall have the exclusive
right to contest, resolve or defend against any
assessment, notice of deficiency, or other
proposed adjustment of Taxes with respect to any
liability for Tax for which Seller is liable
pursuant to subsection 6.1(b) hereof, including
the right to pay any such Tax to the relevant
taxing authority and thereafter to pursue
appropriate administrative or judicial action for
a refund. No party shall have the right to agree
to any assessment, deficiency, settlement, or
other adjustment of Taxes that would adversely
affect the interest of another party without such
other party's written consent, which consent
shall not be unreasonably withheld."
Section 6. Amendment to Conditions to Consummation
of the Stock Purchase.
A. Section 7.2 of the Stock Purchase Agreement is
amended as follows:
(i) Seller hereby waives the condition set forth
in Section 7.2(b), insofar as it relates to the
representation and warranty set forth in Section 4.3.
(ii) Seller hereby waives the condition set forth
in Section 7.2(d).
(iii) Seller hereby waives the condition set
forth in Section 7.2(e).
B. Section 7.3 of the Stock Purchase Agreement is
amended as follows:
(i) Buyer hereby waives the condition set forth
in Section 7.3(a).
(ii) Buyer hereby waives the condition set forth
in Section 7.3(b), except insofar as it relates to the
representations and warranties set forth in Sections
3.1, 3.2, 3.3, 3.15, 3.16, 3.17 and 3.19.
(iii) Section 7.3(d) is amended to be and read
as follows:
"Buyer shall have available to it for draw the
financing contemplated by the Commitment Letter, a
copy of which has previously been provided to
Seller, and all conditions to the obligations of
the lenders thereunder shall have been satisfied
or waived, substantially on the terms contemplated
thereby; provided, however, that Buyer shall not
be entitled to rely on this condition as grounds
for not consummating the Stock Purchase if Buyer
shall not have complied with Section 5.9(b) of the
Stock Purchase Agreement."
(iv) Section 7.3(e) is amended to be and read as
follows:
"Either (i) Seller shall have received the IRS
Ruling in a form reasonably satisfactory to Buyer,
to the effect that the Toys Transaction will not
give rise to the recognition by Seller or its
shareholders of a material amount of taxable
income (an "Acceptable Ruling"), and the
representations made by Seller and Toys in the
request for such private letter ruling (and any
supplements or amendments thereto) shall be true
and correct in all material respects or (ii) in
the event that the IRS Ruling has not been
received by the Closing Date, Seller shall have
covenanted pursuant to an agreement reasonably
satisfactory to Buyer that it will not consummate
the Toys Transaction or any other transaction
involving the direct or indirect disposition of
all or any portion of the Toys Shares (whether or
not intended to be a tax-free reorganization with
respect to Seller) within the taxable year of
Seller in which the Closing occurs except with the
consent of Buyer, or pursuant to an Acceptable
Ruling; and"
(v) Section 7.3(f) is amended to delete the text
following the semicolon therein and to insert a period
in place of such semicolon.
Section 7. Amendment to Termination and
Abandonment.
A. Section 8.1(b) of the Stock Purchase Agreement is
amended by deleting all text that follows "by Seller or Buyer at
any time after January 31, 1995" and nothing shall be added in
lieu thereof.
B. Section 8.1(c) of the Stock Purchase Agreement is
amended by deleting the entire text of Section 8.1(c) and nothing
shall be added in lieu thereof.
Section 8. Amendment to Entire Agreement;
Assignment; Alternate Structure.
Section 9.4 of the Stock Purchase Agreement is
amended by adding the following at the end thereof:
"Subject to the foregoing, as of the Closing,
Buyer and any Designees may assign all of their
respective rights and obligations under this
Agreement to a newly formed entity ("Holding
Company") owned by Buyer and other persons or
entities in such manner and proportions that
neither E.M. Warburg, Pincus & Co., Inc. nor any
of its affiliates shall be treated as a single
employer, within the meaning of Section 4001(b)(1)
of ERISA, with Holding Company. Thereafter, all
references in this Agreement to Buyer and the
Designees, other than such references in Section
5.11 or this Section 9.4 shall be deemed to refer
to Holding Company."
Section 9. Amendment to Expenses.
Section 9.10 of the Stock Purchase Agreement is amended
to be and read in its entirety as follows:
"Whether or not this Agreement and the
transactions contemplated hereby are consummated,
all costs and expenses (including legal fees and
expenses) incurred in connection with this
Agreement and the transactions contemplated hereby
shall be paid by the party incurring such
expenses. Notwithstanding the foregoing, if this
Agreement is terminated pursuant to Section 8.1
following the occurrence of one of the following:
(i) a material breach by Seller; (ii) the failure
to be satisfied of any of the conditions which are
set forth in Sections 7.3(b), (c) or (e)(ii); or
(iii) the failure to be satisfied of the condition
set forth in Section 7.2(f) by December 14, 1994,
then, so long as Buyer is not in material breach
of its obligations hereunder, Seller shall,
promptly following such termination, reimburse
Buyer for its reasonable, documented out-of-pocket
expenses, paid, incurred or assumed, by or on
behalf of Buyer or its affiliates (including,
without limitation, fees and expenses of its
advisors, financing sources, counsel and
accountants) in connection with or relating to the
transactions contemplated hereby, provided,
however, that Buyer has not been previously
reimbursed for such expenses and that the amount
payable under this Section 9.10 shall not exceed
$5.625 million.
Section 10. No Further Amendment. Except as
otherwise provided herein, the Stock Purchase Agreement shall
remain unchanged and in full force and effect.
Section 11. Effect of Amendment. From and after the
execution of this Amendment by the parties hereto, any references
to the Stock Purchase Agreement shall be deemed a reference to
the Stock Purchase Agreement as amended hereby.
Section 12. Governing Law. This Amendment shall be
governed by, enforced under and construed in accordance with the
laws of the State of New York, without giving effect to any
choice or conflict of law provision or rule
thereof.
Section 13. Counterparts. This Amendment may be
executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
Section 14. Descriptive Headings. The descriptive
headings herein are inserted for convenience of reference only
and shall in no way be construed to define, limit, describe,
explain, modify, amplify, or add to the interpretation,
construction or meaning of any provision of, or scope or intent
of, this Amendment or the Stock Purchase Agreement nor in any way
affect this Amendment or the Stock Purchase Agreement.
In Witness Whereof, each of the undersigned has caused
this Amendment to be signed by its duly authorized officer as of
the date first above written.
Petrie Stores Corporation
By: /s/ Allan Laufgraben
Name: Allan Laufgraben
Title: CEO--President
WP Investors, Inc.
By: /s/ Errol M. Cook
Name: Errol M. Cook
Title: Vice President
