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SECURITIES AND EXCHANGE COMMISSION
Washnington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 11, 1996
SHOPKO STORES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 1-10876 41-0985054
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
700 Pilgrim Way
Green Bay, Wisconsin 54304
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 497-2211
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Item 5. Other Events.
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ShopKo Stores, Inc., a Minnesota corporation ("ShopKo"), Phar-Mor, Inc., a
Pennsylvania corporation ("Phar-Mor"), and Cabot Noble, Inc., a Delaware
corporation ("Cabot Noble"), have entered into a First Amendment dated as of
October 9, 1996 (the "Amendment") to the Agreement and Plan of Reorganization
(the "Plan of Reorganization") dated as of September 7, 1996, pursuant to which
ShopKo and Phar-Mor have agreed to combine their respective companies under a
new holding company (the "Reorganization"). SUPERVALU INC., a Delaware
corporation ("SUPERVALU") has entered into an Amended and Restated Stock
Purchase Agreement dated as of October 9, 1996 (the "Amended Stock Purchase
Agreement") with Cabot Noble.
Pursuant to the Amended Stock Purchase Agreement, SUPERVALU will sell 90%
of the Cabot Noble shares it receives in the Reorganization to Cabot Noble
immediately after the Reorganization for an aggregate purchase price of
$223,594,526, which represents a purchase price equivalent of $16.86 per share
for the ShopKo common stock held by SUPERVALU prior to the Reorganization. The
Amended Stock Purchase Agreement provides that SUPERVALU will receive
$183,194,526 in cash at closing and $40,400,000 in a short-term promissory note
due January 31, 1997. SUPERVALU will hold approximately 6% of Cabot Noble's
outstanding common stock after the repurchase is completed. The Amended Stock
Purchase Agreement also provides that SUPERVALU will have shelf and incidental
registration rights with respect to the Cabot Noble shares it receives in the
Reorganization.
The Amendment provides, among other things, that Dale P. Kramer, ShopKo's
President and Chief Executive Officer, will join the Cabot Noble Board of
Directors with two other individuals to be nominated by the ShopKo Board. The
Amendment also provides for a reduction in the financing contingency from $100
million to $75 million, and makes other technical corrections to the Plan of
Reorganization.
Certain additional information regarding the Amendment and the Amended
Stock Purchase Agreement is contained in ShopKo's press release (the "Press
Release") dated October 11, 1996 which is incorporated herein by reference.
The Amendment, the Amended Stock Purchase Agreement, and the Press Release
are attached hereto as exhibits and incorporated herein by reference. The
foregoing summary of such exhibits is qualified in its entirety by reference to
the complete text of such exhibits.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits
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2
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Exhibit Number Description
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2.1 First Amendment to the Agreement and Plan of
Reorganization dated as of October 9, 1996 by
and among Phar-Mor, Inc., ShopKo Stores, Inc.
and Cabot Noble, Inc. (with Exhibit B thereto).
10.1 Stock Purchase Agreement dated as of
September 7, 1996 by and between Cabot Noble,
Inc., SUPERVALUE INC., and Supermarket Operators
of America, Inc., as amended and restated as of
October 9, 1996 (with Exhibit C thereto).
99.1 Press Release dated October 11, 1996.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 11, 1996 SHOPKO STORES, INC.
By: /s/ Jeffrey A. Jones
---------------------------------
Jeffrey A. Jones, Chief Financial
Officer
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 First Amendment to the Agreement and Plan of Reorganization
dated as of October 9, 1996 by and among Phar-Mor, Inc., ShopKo
Stores, Inc. and Cabot Noble, Inc. (with Exhibit B thereto).
10.1 Stock Purchase Agreement dated as of September 7, 1996 by and
between Cabot Noble, Inc., SUPERVALU INC., and Supermarket
Operators of America, Inc., as amended and restated as of
October 9, 1996 (with Exhibit C thereto).
99.1 Press Release dated October 11, 1996.
5
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Exhibit 2.1
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (this
"Amendment"), is made and entered into as of the 9th day of October 1996, by
and among Phar-Mor, Inc., a Pennsylvania corporation ("Phar-Mor"), ShopKo
Stores, Inc., a Minnesota corporation ("ShopKo"), and Cabot Noble, Inc., a
Delaware corporation ("Parent").
RECITALS
WHEREAS, Phar-Mor, ShopKo and Parent (together, the "Parties") have entered
into an Agreement and Plan of Reorganization dated as of September 7, 1996
(the "Agreement") pursuant to which, among other things, Phar-Mor and ShopKo
have agreed, subject to the satisfaction of certain covenants and conditions,
to a business combination pursuant to which each would become separate wholly
owned subsidiaries of Parent; and
WHEREAS, the Parties wish to amend the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises and
agreements made herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties agree as follows:
I. DEFINITIONS. Unless otherwise defined in this Amendment, all
capitalized terms shall have the meanings given such terms in the
Agreement.
II. AMENDED EXHIBITS. Exhibit B to the Agreement, the Form of Revised
Certificate of Incorporation of Cabot Noble, and Exhibit H to the
Agreement, the Stock Purchase Agreement, are hereby deleted in their
entirety and replaced with Exhibit B and Exhibit H respectively, attached
hereto.
III. AMENDMENT TO ARTICLE I. Article I of the Agreement is hereby amended
by deleting Section 1.7 in its entirety and replacing it with the
following:
1.7 Board of Directors of Parent; Committees. The parties hereby agree
that (i) the current members of the Phar-Mor Board, (ii) Dale P. Kramer,
and (iii) two individuals selected by the ShopKo Board at least one of whom
(A) is not affiliated with ShopKo, Supervalu, Phar-Mor or Hamilton Morgan
(an "Independent Director") and (B) is selected in consultation with
Heidrick & Struggles, New York (or such other nationally recognized
executive search firm as may be approved by Phar-Mor and ShopKo)
(collectively, the "ShopKo Designees"), shall serve as members of the
Parent Board from and after the Effective Date (or from such later date as
ShopKo Designees are appointed pursuant to the provisions hereof), until
their respective successors are duly elected or appointed and qualified in
the manner provided in the By-Laws of Parent, or as otherwise provided by
law; provided that the ShopKo Board shall use reasonable efforts to
designate the ShopKo Designees before the Effective Date; and provided
further, that to the extent such ShopKo Designees are not designated on or
before the Effective Date, the right of ShopKo to appoint such designee as
contemplated by this Section 1.7 shall be enforceable by those Persons who
are members of the ShopKo Board as of the date of this Agreement. The
ShopKo Designees shall be subject to approval by the members of the Phar-
Mor Board who are not also officers or employees of Phar-Mor or affiliates
of Hamilton Morgan. Any individual selected by the Phar-Mor Board to fill
any vacancy on the Phar-Mor Board shall be selected in consultation with
Heidrick & Struggles, New York (or such other nationally recognized
executive search firm as may be approved by Phar-Mor and ShopKo), and shall
be an individual that (i) is neither an officer or employee of Phar-Mor nor
an affiliate of Hamilton Morgan, and (ii) is approved by the members of the
ShopKo Board who are not also officers or employees of ShopKo or Supervalu,
directors of Supervalu or otherwise affiliated with Supervalu. The Parent
Board shall be classified into three classes of approximately equal size,
with an equal number of Independent Directors serving in each class to the
extent possible. The Parent Board shall establish a Compensation Committee
and Audit Committee which shall consist of two or more Independent
Directors selected by the Parent Board. The entire Parent Board shall serve
as its Nominating Committee.
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IV. AMENDMENTS TO ARTICLE IV. Article IV of the Agreement is hereby
amended by deleting Subsection 4.2(b) in its entirety and replacing it with
the following:
(b) Phar-Mor shall, as soon as reasonably practicable after the date
hereof, (i) take all steps necessary to call, give notice of, convene
and hold a special meeting of its shareholders ("Phar-Mor Special
Meeting") for the purpose of securing the approval and adoption of the
Phar-Mor Plan by the holders of a majority of the Phar-Mor Common
Shares represented at the Phar-Mor Special Meeting (or any adjournments
thereof) at which a quorum is present, in person or by proxy, and
entitled to vote ("Phar-Mor Shareholders' Approval"), (ii) distribute
to its shareholders the Proxy Statement in accordance with applicable
federal and state law and its articles of incorporation and by-laws,
(iii) subject to the fiduciary duties of the Phar-Mor Board, recommend
to its shareholders the approval of the Phar-Mor Plan, and (iv)
cooperate and consult with ShopKo with respect to each of the foregoing
matters.
V. AMENDMENT TO ARTICLE V. Article V of the Agreement is hereby amended
by deleting Subsection 5.1(i) in its entirety and replacing it with the
following:
(i) Parent Buy Back. At the Effective Date, there shall exist no
condition of circumstance that would reasonably be expected to prevent
or delay the consummation of the transactions contemplated in that
certain Stock Purchase Agreement among Parent, Supervalu and
Supermarket, dated as of the date of this Agreement, a copy of which is
attached hereto as Exhibit H (the "Stock Purchase Agreement"), pursuant
to which, immediately following the consummation of the Reorganization,
Parent will on the Effective Date acquire 90% of the Parent Common
Shares received by Supermarket as a result of the Reorganization (the
"Parent Buy Back"). All documentation, payments and deliveries
necessary to consummate the Parent Buy Back pursuant to the terms of
the Stock Purchase Agreement shall be completed at or before Closing
and held in escrow pending the Effective Date. Without limiting the
foregoing, at the Effective Date, Parent shall have received a
financing commitment or other reasonable assurances from one or more
underwriters, placement agents, banks or other financing sources, which
may include the credit facilities referred to in Section 5.1(g) (on
terms and conditions reasonably acceptable to each of Parent, Phar-Mor
and ShopKo) that Parent (together with its Subsidiaries from and after
the Effective Date) may obtain financing of at least $75 million (the
"Parent Buy-Back Financing"), and all documents and deliveries
necessary to consummate such financing shall be completed at or before
Closing and held in escrow pending the Effective Date. Notwithstanding
any provisions to the contrary, the conditions set forth in this
Section 5.1(i) may not be waived without the prior written consent of
Supervalu, which consent may not be unreasonably withheld or delayed.
VI. RATIFICATION. Except as expressly amended by this Amendment, the
Agreement shall remain in full force and effect and the Agreement is hereby
ratified and confirmed as of the date first written above.
VII. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law of such state.
VIII. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
IX. RESTATEMENT. This Amendment may be incorporated into an amended and
restated version of the Agreement, which Agreement as amended and restated
shall be the Agreement and Plan of Reorganization dated as of September 7,
1997, as amended and restated as of October 9, 1996.
X. CORPORATE AUTHORITY. Each of Parent, ShopKo and Phar-Mor represents
that it has taken all necessary action to authorize the execution, delivery
and performance of this Amendment.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
ShopKo Stores, Inc.
/s/ Dale P. Kramer
By: _________________________________
Name:Dale P. Kramer
Title:President and Chief
Executive Officer
Phar-Mor, Inc.
/s/ Robert M. Haft
By: _________________________________
Name:Robert M. Haft
Title: Chairman of the Board and
Chief Executive Officer
Cabot Noble, Inc.
/s/ Robert M. Haft
By: _________________________________
Name:Robert M. Haft
Title: Chairman of the Board and
Chief Executive Officer
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Exhibit B
RESTATED CERTIFICATE OF INCORPORATION
OF
CABOT NOBLE, INC.
Cabot Noble, Inc., a corporation organized and existing under the laws of
the State of Delaware (the "Company"), hereby certifies that:
1. The name of the Company is Cabot Noble, Inc.
2. The date of filing of the Company's original Certificate of Incorporation
was .
3. The Restated Certificate of Incorporation of the Company (the "Restated
Certificate") attached hereto as Exhibit A was duly adopted in accordance with
the provisions of Section 245 of the General Corporation Law of the State of
Delaware.
4. The Restated Certificate so adopted reads in full as set forth in Exhibit
A attached hereto and is hereby incorporated by reference.
In Witness Whereof, Cabot Noble, Inc. has caused this Restated Certificate
to be signed by Robert M. Haft, its Chief Executive Officer, and attested by
John R. Ficarro, its Secretary this day of 1996, and the undersigned
hereby affirm and acknowledge under penalty of perjury that the filing of this
Restated Certificate is the act and deed of Cabot Noble, Inc.
_____________________________________
ROBERT M. HAFT
CHIEF EXECUTIVE OFFICER
Attest:
_____________________________________
JOHN R. FICARRO
ASSISTANT SECRETARY
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FORM OF
RESTATED CERTIFICATE OF INCORPORATION
OF
CABOT NOBLE, INC.
First. The name of the corporation is Cabot Noble, Inc. (the "Company").
Second. The address of the Company's registered office in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of the Company's registered agent at such address is
The Corporation Trust Company.
Third. The purpose of the Company is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
the State of Delaware ("DGCL").
Fourth. Section 1. Authorized Capital Stock. The Company is authorized to
issue two classes of capital stock, designated Common Stock and Preferred
Stock. The total number of shares of capital stock that the Company is
authorized to issue is 250,000,000 shares, consisting of 200,000,000 shares of
Common Stock, par value $0.01 per share, and 50,000,000 shares of Preferred
Stock, par value $0.01 per share.
Section 2. Preferred Stock. The Preferred Stock may be issued in one or more
series. The Board of Directors of the Company (the "Board") is hereby
authorized to issue the shares of Preferred Stock in each series and to fix
from time to time before issuance the number of shares to be included in any
such series and the designation, relative powers, preferences, and rights and
qualifications, limitations, or restrictions of all shares of such series. The
authority of the Board with respect to each such series will include, without
limiting the generality of the foregoing, the determination of any or all of
the following:
(a) the number of shares of each series and the designation to
distinguish the shares of such series from the shares of all other series;
(b) the voting powers, if any, and whether such voting powers are full or
limited in such series;
(c) the redemption provisions, if any, applicable to such series,
including the redemption price or prices to be paid;
(d) whether dividends, if any, will be cumulative or noncumulative, the
dividend rate of such series, and the dates and preferences of dividends on
such series;
(e) the rights of such series upon the voluntary or involuntary
dissolution of, or upon any distribution of the assets of, the Company;
(f) the provisions, if any, pursuant to which the shares of such series
are convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes of
stock, or any other security, of the Company or any other corporation or
other entity, and the price or prices or the rates of exchange applicable
thereto;
(g) the right, if any, to subscribe for or to purchase any securities of
the Company or any other corporation or other entity;
(h) the provisions, if any, of a sinking fund applicable to such series;
and
(i) any other relative, participating, optional, or other special powers,
preferences, rights, qualifications, limitations, or restrictions thereof;
all as may be determined from time to time by the Board and stated in the
resolution or resolutions providing for the issuance of such Preferred Stock
(collectively, a "Preferred Stock Designation").
Section 3. Common Stock. Except as may otherwise be provided in a Preferred
Stock Designation, the holders of Common Stock will be entitled to one vote on
each matter submitted to a vote at a meeting of
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stockholders for each share of Common Stock held of record by such holder as
of the record date for such meeting.
Fifth. The Board may make, amend, and repeal the By-Laws of the Company. Any
By-Law made by the Board under the powers conferred hereby may be amended or
repealed by the Board (except as specified in any such By-Law so made or
amended) or by the stockholders in the manner provided in the By-Laws of the
Company. Notwithstanding the foregoing and anything contained in this
Certificate of Incorporation to the contrary, By-Laws 1, 3(a), 8, 10, 11, 12,
13, and 39 may not be amended or repealed by the stockholders, and no
provision inconsistent therewith may be adopted by the stockholders, without
the affirmative vote of the holders of Voting Stock (as defined below) having
at least 75% of the votes of all Voting Stock, voting together as a single
class. The Company may in its By-Laws confer powers upon the Board in addition
to the foregoing and in addition to the powers and authorities expressly
conferred upon the Board by applicable law. For the purposes of this Restated
Certificate, "Voting Stock" means stock of the Company of any class or series
entitled to vote generally in the election of Directors. Notwithstanding
anything contained in this Certificate of Incorporation to the contrary, the
affirmative vote of the holders of Voting Stock having at least 75% of the
votes of all Voting Stock, voting together as a single class, is required to
amend or repeal, or to adopt any provisions inconsistent with, this Article
Fifth.
Sixth. Subject to the rights of the holders of any series of Preferred
Stock:
(a) any action required or permitted to be taken by the stockholders of
the Company must be effected at a duly called annual or special meeting of
stockholders of the Company and may not be effected by any consent in
writing of such stockholders; and
(b) special meetings of stockholders of the Company may be called only by
(i) the Chairman of the Board (the "Chairman"), (ii) the Secretary of the
Company (the "Secretary") within 10 calendar days after receipt of the
written request of a majority of the total number of Directors that the
Company would have if there were no vacancies (the "Whole Board"), acting
at a duly constituted meeting of the Board and (iii) as provided in By-Law
3.
At any annual meeting or special meeting of stockholders of the Company, only
such business will be conducted or considered as has been brought before such
meeting in the manner provided in the By-Laws of the Company. Notwithstanding
anything contained in this Certificate of Incorporation to the contrary, the
affirmative vote of the holders of Voting Stock having at least 75% of the
votes of all Voting Stock, voting together as a single class, shall be
required to amend or repeal, or adopt any provision inconsistent with, this
Article Sixth.
Seventh. Section 1. Number, Election, And Terms of Directors. Subject to the
rights, if any, of the holders of any series of Preferred Stock to elect
additional Directors under circumstances specified in a Preferred Stock
Designation, the number of the Directors of the Company will not be less than
three (3) nor more than sixteen (16) and will be fixed from time to time in
the manner described in the By-Laws of the Company. The Directors, other than
those who may be elected by the holders of any series of Preferred Stock, will
be classified with respect to the term for which they severally hold office
into three classes, as nearly equal in number as possible, designated Class I,
Class II, and Class III. A majority of the Directors shall be "Independent
Directors," as defined in Section 5 of this Article Seventh, and each Class of
Directors shall have a number of Independent Directors as nearly equal as
possible; provided, that such requirements shall not apply to the Board as
constituted pursuant to that certain Agreement and Plan of Reorganization
dated as of September 7, 1996, as amended and restated, by and among the
Company, Phar-Mor, Inc. and ShopKo Stores, Inc. (the "Initial Board"); and
provided further that any Director appointed or elected (i) to fill a vacancy
created on the Initial Board (other than a vacancy attributable to a Director
who is alos at the time such vacancy is created the Chief Executive Officer of
the Company) or (ii) upon any increase in the size of the Board, shall be an
Independent Director, until such time as a majority of the Directors are
Independent Directors. At any meeting of stockholders at which Directors are
to be elected, the number of Directors elected may not exceed the greatest
number of Directors then in office in any class of Directors. The Directors
first elected to Class I will hold office for a term expiring at the annual
meeting of stockholders to be held in 1997; the Directors first elected to
Class II will hold office for a term expiring at the annual meeting of
stockholders to be held in 1998; and the Directors first elected
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to Class III will hold office for a term expiring at the annual meeting of
stockholders to be held in 1999, with the members of each class to hold office
until their successors are elected and qualified. At each succeeding annual
meeting of the stockholders of the Company, the successors of the class of
Directors whose terms expire at that meeting will be elected by plurality vote
of all votes cast at such meeting to hold office for a term expiring at the
annual meeting of stockholders held in the third year following the year of
their election. Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect additional Directors under circumstances specified in
a Preferred Stock Designation, Directors may be elected by the stockholders
only at an annual meeting of stockholders. Election of Directors of the
Company need not be by written ballot unless requested by the Chairman or by
the holders of Voting Stock having a majority of the votes of all Voting Stock
present in person or represented by proxy at a meeting of the stockholders at
which Directors are to be elected.
Section 2. Nomination of Director Candidates. Advance notice of stockholder
nominations for the election of Directors must be given in the manner provided
in the By-Laws of the Company.
Section 3. Newly Created Directorships And Vacancies. Subject to the rights,
if any, of the holders of any series of Preferred Stock to elect additional
Directors under circumstances specified in a Preferred Stock Designation,
newly created directorships resulting from any increase in the number of
Directors and any vacancies on the Board resulting from death, resignation,
disqualification, removal, or other cause will be filled solely by the
affirmative vote of a majority of the remaining Directors then in office
acting at a duly constituted meeting of the Board, even though less than a
quorum of the Board, or by a sole remaining Director. Any Director elected in
accordance with the preceding sentence will hold office until the next annual
meeting of stockholders and until such Director's successor has been elected
and qualified. No decrease in the number of Directors constituting the Board
may shorten the term of any incumbent Director.
Section 4. Removal. Subject to the rights, if any, of the holders of any
series of Preferred Stock to elect additional Directors under circumstances
specified in a Preferred Stock Designation, any Director may be removed from
office by the stockholders only for cause and only in the manner provided in
this Section 4. At any annual meeting or special meeting of the stockholders,
the notice of which states that the removal of a Director or Directors is
among the purposes of the meeting, the affirmative vote of the holders of
Voting Stock having at least 75% of the votes of all Voting Stock, voting
together as a single class, may remove such Director or Directors for cause.
Section 5. Independent Director. "Independent Director" shall mean any
individual that (a) is not an affiliate (as defined in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act")) of the Company (except an individual who is
an affiliate of the Company solely because such individual is a Director) or
of any corporation, partnership, association or other entity with respect to
which the Company owns a majority of the common stock or other equity
interests or has the power to vote or direct the voting of a sufficient number
of securities or other governing body ("Subsidiary"), and (b) is not and has
not been an officer or employee, or any family member of an officer, director or
employee of the Company or any Subsidiary.
Section 6. Amendment, Repeal, Etc. Notwithstanding anything contained in
this Certificate of Incorporation to the contrary, the affirmative vote of
holders of Voting Stock having at least 75% of the votes of all Voting Stock,
voting together as a single class, is required to amend or repeal, or adopt
any provision inconsistent with, this Article Seventh.
Eighth. To the full extent permitted by the DGCL or any other applicable law
currently or hereafter in effect, no Director of the Company will be
personally liable to the Company or its stockholders for or with respect to
any acts or omissions in the performance of his or her duties as a Director of
the Company. Any repeal or modification of this Article Eighth will not
adversely affect any right or protection of a Director of the Company existing
prior to such repeal or modification.
Ninth. The Company will indemnify each person who is or was or had agreed to
become a Director or officer of the Company and, at the Company's option, may
indemnify any other person who is or was serving or
<PAGE>
who had agreed to serve at the request of the Board or an officer of the
Company as an employee or agent of the Company or as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust,
or other entity, whether for profit or not for profit (including the heirs,
executors, administrators, and estate of such person), to the full extent
permitted by the DGCL or any other applicable law as currently or hereafter in
effect. Without limiting the generality or the effect of the foregoing, the
Company may adopt By-Laws, or enter into one or more agreements with any
person, which provide for indemnification greater or different than that
provided in this Article Ninth or the DGCL. Any amendment or repeal of, or
adoption of any provision inconsistent with, this Article Ninth will not
adversely affect any right or protection existing hereunder, or arising out of
facts occurring, prior to such amendment, repeal, or adoption and no such
amendment, repeal, or adoption, will affect the legality, validity, or
enforceability of any contract entered into or right granted prior to the
effective date of such amendment, repeal, or adoption.
<PAGE>
Exhibit 10.1
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of the 7th day of
September, 1996, by and between Cabot Noble, Inc., a Delaware corporation
("Buyer"), SUPERVALU INC., a Delaware corporation ("SVU"), and Supermarket
Operators of America, Inc., a Delaware corporation and a wholly owned subsidiary
of SVU ("Seller") and is amended and restated as of this 9th day of October,
1996 (this "Agreement").
RECITALS
A. ShopKo, Inc., a Minnesota corporation ("ShopKo"), Phar-Mor, Inc., a
Pennsylvania corporation ("Phar-Mor"), and Buyer have entered into a certain
Agreement and Plan of Reorganization dated as of September 7, 1996 as amended
and restated as of October 9, 1996, pursuant to which the existing shareholders
of ShopKo, (including Seller) and Phar-Mor will exchange their shares of ShopKo
common stock and Phar-Mor common stock, respectively, for shares of the common
stock of Buyer (the "Reorganization Agreement"). (Shares of Buyer common stock
received by Seller pursuant to the Reorganization (as defined in the
Reorganization Agreement) are referred to as the "Shares".)
B. As an integral part of the Reorganization, Seller agrees to sell, and Buyer
agrees to purchase for the price and on the terms hereinafter set forth, the
Purchased Shares (as hereinafter defined).
AGREEMENTS
NOW, THEREFORE, in order to implement said sale and purchase, and in
consideration of the mutual agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
CLOSING shall have the meaning set forth in Section 2.4.
CLOSING DATE shall have the meaning set forth in Section 2.3.
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INDEMNIFIED PARTY AND INDEMNIFYING PARTY shall have the meanings set
forth in Section 7.2 of this Agreement.
LIEN shall mean with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim or
restriction of any kind in respect of such property or asset. For purposes of
this Agreement, any restriction or limitation with respect to a security or
other ownership interest (including any restriction on the right to vote, sell
or otherwise dispose of such security or ownership interest) shall constitute a
"Lien" thereon. For the purposes of this Agreement, a Person shall be deemed to
own subject to a Lien any property or asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
relating to such property or asset.
PERSON shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or agency or instrumentality thereof.
PURCHASE PRICE shall have the meaning set forth in Section 2.2 of this
Agreement.
PURCHASED SHARES shall mean that number of Shares received in exchange
for 13,258,500 shares of ShopKo Common Stock.
REGISTRATION RIGHTS AGREEMENT shall mean that certain registration
rights agreement to be executed and delivered at Closing, substantially in the
form attached as Exhibit C.
SHORT-TERM PROMISSORY NOTE shall mean that certain promissory note to
be issued by Buyer to Seller at the Closing, to mature on January 31, 1997,
substantially in the form attached hereto as Exhibit A.
STOCK PLEDGE AGREEMENT shall mean that certain stock pledge agreement
to be executed and delivered at Closing, substantially in the form attached
hereto as Exhibit B.
1.2 OTHER DEFINITIONAL PROVISIONS. For purposes of this Agreement, the
-----------------------------
following additional rules of construction shall apply:
(a) All capitalized terms used herein and not defined herein shall
have the meaning set forth in the Reorganization Agreement.
(b) Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter; and
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(c) The term "including" shall not be limiting or exclusive, unless
specifically indicated to the contrary.
SECTION 2. PURCHASE AND SALE OF PURCHASED SHARES.
2.1 SALE OF PURCHASED SHARES.
-------------------------
Subject to the provisions of this Agreement, at the Closing, Seller
shall sell, and Buyer shall purchase, the Purchased Shares.
2.2 PURCHASE PRICE
--------------
The purchase price for the Purchased Shares (the "Purchase Price")
shall be $223,594,526, payable to Seller at the Closing as follows:
(a) Cash in the amount of $183,194,526 by wire transfer of immediately
available funds, to a bank account designated to Buyer in writing
at least two (2) business days prior to the Closing; and
(b) The Short-Term Promissory Note in a principal amount equal to
$40,400,000.
2.3 TIME AND PLACE OF CLOSING. Closing shall be held at the offices of
-------------------------
Swidler & Berlin, Chartered, 3000 K Street, N.W., Washington, D.C., on the
Effective Date of the Reorganization (the "Closing Date").
2.4 THE CLOSINGS. At the closing ("Closing"):
-----------
(a) Seller shall deliver to Buyer certificates representing the
Purchased Shares, duly endorsed (or accompanied by duly executed
stock powers), for transfer to Buyer;
(b) Buyer shall pay to Seller the cash portion of the Purchase Price
and shall deliver to Seller the Short-Term Promissory Note all as
set forth in Section 2.2 hereof;
(c) Seller and Buyer shall each execute and deliver the Stock Pledge
Agreement and any other documents and instruments contemplated
thereby;
(d) Seller and Buyer shall execute and deliver the Registration Rights
Agreement and any other documents and instruments contemplated
thereby; and
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(e) Buyer shall deliver to Seller a certificate or certificates
representing that number of Purchased Shares pledged pursuant to
the Stock Pledge Agreement.
2.5 FURTHER ASSURANCES. From and after the Closing Date, Buyer, SVU and
------------------
Seller shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
documents, instruments, transfers, conveyances, discharges, releases, assurances
and consents as Buyer, SVU or Seller may, from time to time, reasonably request
to confirm, perfect and evidence the transfers and transactions contemplated by
this Agreement and the Stock Pledge Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND SVU.
In order to induce Buyer to enter into this Agreement, Seller and SVU
hereby, jointly and severally, represent and warrant to Buyer that the following
statements are true, correct and complete as of the date on which made and will
be true, correct and complete as of the Closing Date.
3.1 INCORPORATION; AUTHORIZED SHARES. Each of Seller and SVU is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
3.2 SHARES. As of the date of this Agreement, Seller is the owner of
------
14,731,667 ShopKo Common Shares. As of the Closing, Seller will be the record
owner, and Seller and SVU will be the beneficial owners, of the Purchased
Shares, free and clear of all Liens. Other than this Agreement, the
Registration Rights Agreement, the Stock Pledge Agreement, and the
Reorganization Agreement, there are no agreements relating to the issuance,
sale, or transfer of the Purchased Shares or otherwise regarding the Purchased
Shares.
3.3 AUTHORITY OF SELLER. Each of Seller and SVU has the power to execute,
-------------------
deliver, and perform this Agreement and Seller has the power to execute, deliver
and perform the Stock Pledge Agreement. Each of Seller and SVU has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the Stock Pledge Agreement, and has full corporate power to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated by this Agreement and the Stock Pledge Agreement, in
each case, to the extent that Seller or SVU is a party hereto or thereto. The
execution and delivery of this Agreement and the Stock Pledge Agreement and
consummation of the transactions set forth herein and therein have been duly
authorized by its respective board of directors and no other proceedings on its
part are necessary to authorize the execution, delivery and performance of the
Agreement or the Stock Pledge Agreement or the transactions contemplated herein
or therein.
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3.4 BINDING EFFECT. This Agreement constitutes the legal, valid and
--------------
binding obligation of Seller and SVU enforceable against Seller and SVU in
accordance with its terms, and the Stock Pledge Agreement will constitute, when
duly executed and delivered in accordance with its terms, the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, in each case, subject to bankruptcy, insolvency and similar laws of
general application affecting rights and remedies of creditors and other
obligees and to general equitable principles.
3.5 NONCONTRAVENTION. Neither the execution and delivery of this
----------------
Agreement by SVU and Seller nor the execution and delivery of the Stock Pledge
Agreement by Seller, nor the consummation of any of the transactions
contemplated hereby or thereby, nor compliance with any of the provisions hereof
or thereof, will violate, conflict with, or result in a breach of any provisions
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination or
suspension of, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any Lien upon
any of the properties or assets of such party under, any of the terms,
conditions or provisions of the respective certificate of incorporation or by-
laws of such party or any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or instrument to which it is a party or to which it or
its properties may be subject, or any statute, rule, regulation, judgment,
order, decree or other legal requirement applicable to such party.
3.6 INVESTMENT INTENT. Seller is acquiring the Short-Term Promissory Note
-----------------
for its own account, for investment and without any present view to making a
public offering or distribution of the same. Neither Seller nor SVU shall
resell, transfer or dispose of the Short-Term Promissory Note in violation of
the Securities Act of 1933, as amended, or applicable state securities laws.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER.
In order to induce Seller and SVU to enter into this Agreement, Buyer
hereby represents and warrants to Seller and SVU that the following statements
are true, correct and complete as of the date on which made and will be true,
correct and complete as of the Closing Date.
4.1 ORGANIZATION, OWNERSHIP, ETC., OF BUYER. Buyer is a corporation duly
---------------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted.
4.2 AUTHORITY OF BUYER. Buyer has the power to execute, deliver, and
------------------
perform this Agreement, the Stock Pledge Agreement and the Registration Rights
Agreement. Buyer has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, the Stock Pledge Agreement, and the
Registration Rights Agreement and has full corporate power to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated by this Agreement, the Stock Pledge Agreement and the Registration
Rights Agreement. The
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execution and delivery of this Agreement, the Stock Pledge Agreement, and the
Registration Rights Agreement and consummation of the transactions set forth
herein and therein have been duly authorized by its board of directors and no
other proceedings on its part are necessary to authorize the execution, delivery
and performance of this Agreement, the Stock Pledge Agreement, or the
Registration Rights Agreement or the transactions contemplated herein or
therein.
4.3 BINDING EFFECT. This Agreement constitutes and, when executed and
--------------
delivered in accordance with its terms, the Stock Pledge Agreement and the
Registration Rights Agreement will constitute, the legal, valid, and binding
obligations of Buyer enforceable against it in accordance with its terms, in
each case, subject to bankruptcy, insolvency and similar laws of general
application affecting rights and remedies of creditors and other obligees and to
general equitable principles.
4.4 VALID ISSUANCE. The Short-Term Promissory Note, when issued and
--------------
delivered against delivery of the Shares as provided herein, will be duly
authorized and validly issued and will constitute the legal, valid and binding
obligation of Buyer, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and similar laws of general application
affecting rights and remedies of creditors and other obligees and to general
equitable principles.
4.5 NONCONTRAVENTION. Neither the execution and delivery of this
----------------
Agreement, the Stock Pledge Agreement, or the Registration Rights Agreement by
Buyer, nor the consummation of any of the transactions contemplated hereby or
thereby, nor compliance with any of the provisions hereof or thereof, will
violate, conflict with, or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or suspension
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any Lien (other
than that created by the Stock Pledge Agreement) upon any of the properties or
assets of Buyer under, any of the terms, conditions or provisions of Buyer's
certificate of incorporation or by-laws, or any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or instrument to which it is a party or
to which it or its properties may be subject, or any statute, rule, regulation,
judgment, order, decree or other legal requirement applicable to Buyer.
SECTION 5. CONDITIONS TO OBLIGATIONS OF SELLER AND SVU.
The obligations of Seller and SVU to proceed to Closing shall be subject to
the fulfillment (or waiver by Seller and SVU), on or prior to the Closing Date,
of each of the following conditions:
(a) The representations and warranties of Buyer contained herein shall
have been true and correct when made and shall be true and correct as
of the Closing Date; and Buyer shall have performed and complied with
all agreements, covenants and obligations hereunder which by the terms
hereof are to be performed or complied with on or before such Closing
Date;
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(b) All corporate and other proceedings of Buyer in connection with
the transactions contemplated by this Agreement, and all documents and
instruments incident to such corporate proceedings, shall be
reasonably satisfactory in substance and form to Seller, SVU and their
counsel, and Seller and SVU and their counsel shall have received all
such documents and instruments, or copies thereof, certified if
requested, as may be reasonably requested;
(c) The Reorganization shall have been consummated pursuant to the
Reorganization Agreement; and
(d) The Registration Rights Agreement shall have been executed
and delivered by Buyer
SECTION 6. CONDITIONS TO OBLIGATIONS OF BUYER.
The obligation of Buyer to proceed to Closing shall be subject to the
fulfillment (or waiver by Buyer), on or prior to the Closing Date, of each of
the following conditions:
(a) The representations and warranties of Seller and SVU contained
herein shall have been true and correct when made and shall be true
and correct as of the Closing Date; and Seller and SVU shall have
performed and complied with all agreements, covenants and conditions
hereunder which by the terms hereof are to be performed or complied
with on or before such Closing Date;
(b) All corporate and other proceedings of Seller and SVU in
connection with the transactions contemplated by this Agreement, and
all documents and instruments incident to such corporate proceedings,
shall be reasonably satisfactory in substance and form to Buyer and
its counsel, and Buyer and its counsel shall have received all such
documents and instruments, or copies thereof, certified if requested,
as may be reasonably requested;
(c) The Reorganization shall have been consummated pursuant to the
Reorganization Agreement; and
(d) Buyer shall have received a financing commitment or other
reasonable assurances from one or more underwriters, placement agents
or other financing sources (on terms and conditions reasonably
acceptable to each of Buyer, Phar-Mor and ShopKo) that Buyer (together
with its Subsidiaries from and after the Effective Date) may obtain
financing of at least $75 million, and all documents and deliveries
necessary to consummate such financing shall be completed at or before
Closing and held in escrow pending the Effective Date.
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SECTION 7. INDEMNIFICATION.
7.1 RIGHT TO INDEMNIFICATION.
Seller and SVU, jointly and severally, hereby indemnify, hold harmless
and agree to reimburse, Buyer from and against any and all claims, losses,
damages, costs (including, without limitation, court costs and attorneys' fees),
expenses and liabilities (collectively, "Claims") suffered, incurred, or
sustained by Buyer on account of any misrepresentation, breach of warranty, or
nonfulfillment of any agreement on the part of SVU or Seller under this
Agreement. Buyer hereby indemnifies, holds harmless and agrees to reimburse SVU
and Seller from and against any and all Claims suffered, incurred or sustained
by SVU or Seller on account of any misrepresentation, breach of warranty, or
nonfulfillment of any agreement on the part of Buyer under this Agreement.
7.2 RIGHT TO CONTEST. Before being required to make any payment pursuant
to Section 7.1 hereof, Seller and SVU, on the one hand, or Buyer, on the other
hand, whichever is the indemnifying party (the "Indemnifying Party"), may, at
its expense, elect to undertake and control the defense of, and take all
necessary steps properly to contest any claim, liability or action in respect
thereof involving third parties or to prosecute such contest or action to
conclusion or settlement satisfactory to the party to be indemnified (the
"Indemnified Party"), subject to the consent of the Indemnified Party. The
Indemnified Party shall notify the Indemnifying Party of any claims to
indemnification involving third parties it may wish to assert pursuant to
Section 7.1 hereof as soon as reasonably practicable; thereafter, the
Indemnified Party shall, at the expense of the Indemnifying Party, cooperate
fully with the Indemnifying Party in the conduct of any such contest or action.
If the Indemnifying Party does not make such election, it shall be bound by
whatever result is obtained by the Indemnified Party respecting such third party
matter.
SECTION 8. TERMINATION; BREACH.
8.1 TERMINATION. In the event the Reorganization Agreement is terminated
pursuant to Section 6.1 of the Reorganization Agreement, then this Agreement
shall terminate simultaneously therewith and neither party shall have any
further obligation hereunder; provided, however, that nothing in this section
shall release any party hereto from liability for any breach of this Agreement.
8.2 BREACH. The parties agree and understand that the transactions
contemplated herein are material parts of and integral to the Reorganization and
that, in the event a party breaches its obligations hereunder, monetary damages
may be insufficient to compensate the other party. Accordingly, the parties
agree that, in the event of a breach by a party of any of its obligations
hereunder, the other party shall be entitled to all remedies available at law or
in equity (including the remedies of injunction or specific performance.)
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<PAGE>
SECTION 9. MISCELLANEOUS.
9.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein shall survive Closing.
9.2 NOTICES. All notices and other communications hereunder shall be in
writing (including telex or similar writing) and shall be deemed given if
delivered in person or by messenger, cable, telegram or telex or facsimile
transmission or by a reputable overnight delivery service which provides for
evidence of receipt to the parties at the following addresses or telecopier
numbers (or at such other address, or telecopy number for a party as shall be
specified by like notice):
If to SVU or Seller, to:
11840 Valley View Road
Eden Prairie, MN 55440
Attn: General Counsel
with a copy to:
Elliott Stein, Esq.
Wachtel, Lipton, Rosen and Katz
51 West 52nd Street
New York, NY 10019
If to Buyer, to:
3000 K Street, N.W.
Suite 105
Washington, D.C. 20007-5116
Attn: Robert Haft, Chairman of the Board
with a copy to:
Morris F. DeFeo, Jr., Esq.
Swidler & Berlin, Chartered
3000 K Street, N.W.
Washington, D.C. 20007-5116
9.3 INTERPRETATION. When reference is made in this Agreement to Exhibits
or Sections, such reference shall be to an Exhibit to or Section of this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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9.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.5 ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein), together with the Reorganization Agreement,
constitute all of the agreements with respect to the subject matter set forth
herein and supersede all prior and contemporaneous agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
9.6 SEVERABILITY; SAVINGS. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law; provided, that
if any provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement.
9.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law of such state.
9.8 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any party hereto, whether by
operation of law or otherwise, without the express prior written consent of each
of the other parties hereto. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors, heirs, legal representatives and permitted
assigns.
9.9 AMENDMENT. This Agreement may be amended only by a written instrument
signed by Buyer, Seller and SVU.
[Signatures Appear on Next Page]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
signed by its respective officer thereunto duly authorized as of the date first
above written.
SuperValu Inc.
By:
-------------------------------------------
Name: Jeffrey Girard
Title: Executive Vice President
Supermarket Operators of America, Inc.
By:
-------------------------------------------
Name: Jeffrey Girard
Title: President
Cabot noble, inc.
By:
------------------------------------------
Name: Robert M. Haft
Title: Chairman of the Board and
Chief Executive Officer
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Exhibit C
REGISTRATION RIGHTS
AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of ________, 1996 by Cabot Noble, Inc. a Delaware corporation (the
"Company"), and the Persons (as defined herein) listed on the signature pages
hereto who execute this Agreement and for the benefit of any Eligible
Transferees (as defined herein).
WHEREAS, the Company, ShopKo Stores, Inc., a Minnesota corporation
("ShopKo"), and Phar-Mor, Inc., a Pennsylvania corporation ("Phar-Mor") have
entered into that certain Agreement and Plan of Reorganization, dated as of
September 7, 1996, as amended and restated as of October 9, 1996 (the
"Reorganization Agreement"), pursuant to which the existing shareholders of
ShopKo and Phar-Mor shall exchange their shares of ShopKo common stock and Phar-
Mor common stock, respectively, for shares of the Company's Common Stock (the
"Reorganization");
WHEREAS, the Company, SUPERVALU INC., a Delaware corporation ("SuperValu"),
and Supermarket Operators of America, Inc., a Delaware corporation and wholly
owned subsidiary of SuperValu ("SOA"), have entered into that certain Stock
Purchase Agreement dated as of September 7, 1996, as amended and restated as of
October 9, 1996 (the "Stock Purchase Agreement"); and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing under the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereby agree as follows:
SECTION 1. DEFINITIONS.
The terms set forth below are used herein as so defined:
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities Act.
"Company" means Cabot Noble, Inc., a Delaware corporation.
"Effective Date" means the date the Reorganization becomes effective, as
set forth in the Reorganization Agreement.
<PAGE>
"Eligible Transferee" means (a) any transferee, in a single transaction of
all, but not less than all, of the Registrable Shares held by a Holder
(including Holders that are themselves Eligible Transferees) on the date of such
transfer, and (b) SuperValu or any subsidiary of SuperValu.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.
"Expiration Date" means the second anniversary of the Effective Date.
Rider 2-A
---------
"Form S-4" means the Registration Statement on Form S-4 filed by the
Company with the Commission that includes the joint proxy statement/prospectus
to be distributed to shareholders of Phar-Mor and Shopko in connection with the
Reorganization.
"Holders" means the holders of Registrable Shares named on the signature
pages of this Agreement and the Eligible Transferees.
"Indemnified Person" has the meaning assigned to that term in Section 9(a)
hereof.
"Inspectors" has the meaning assigned to that term in Section 7(e) hereof.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company.
"Participating Holder" means any Holder that has Registrable Shares
registered for sale pursuant to a Registration Statement.
"Person" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization, or other entity.
"Records" has the meaning assigned to that term in Section 7(e) hereof.
"Registrable Shares" means the shares of the Company's Common Stock issued
pursuant to the Reorganization to the Holders party hereto and held by the
Holder from time to time. A share of Common Stock will cease to be a Registrable
Share when (a) a Registration Statement covering a Registrable Share has been
declared effective by the Commission and such share has been disposed of by the
Holder pursuant to such effective Registration Statement, (b) such share is
transferred to a Person other than an Eligible Transferee, (c) such share is
held by the Company or one of its subsidiaries or otherwise ceases to be
outstanding, or (d) such share may be traded without restriction pursuant to
paragraph (k) of Rule 144, if applicable.
"Registration Expenses" has the meaning assigned that term in Section 8
hereof.
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<PAGE>
"Registration Statement" means any registration statement or comparable
document under the Securities Act through which a public sale or disposition of
the Registrable Shares may be registered, including the prospectus, amendments
and supplements to such registration statement, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
Registration Statement.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"Selling Holder" means a Holder who is selling Registrable Shares pursuant
to a Registration Statement under this Agreement.
"Shelf Registration" has the meaning assigned to that term in Section 2(a)
of this Agreement.
SECTION 2. SHELF REGISTRATION.
(a) Rider 3-A The Company shall cause the Form S-4, at the time it is
---------
declared effective, to contain a form of prospectus that can be used by the
holders to effect sales of Registrable Shares on a delayed basis after the
Effective Time and shall use its reasonable best efforts to cause, except as
otherwise provided for herein, such Form S-4, or as it may be subsequently
amended to be a registration statement on Form S-3(the "Shelf Registration"),
to be available for resales of Registrable Shares for a period expiring on the
Expiration Date. This Agreement shall constitute the consent of each Holder to
the inclusion of such Holder's Registrable Shares in the Shelf Registration upon
its effectiveness, except with respect to those Registrable Shares the Holder of
which notifies the Company in writing no later than thirty (30) days following
the Effective Date that it does not want to be included in the Shelf
Registration.
(b) The Company agrees that, if necessary, the Company will promptly
supplement or make amendments to the Shelf Registration, if required by the
registration form utilized by the Company for such Shelf Registration or by the
instructions applicable to such registration form or by the Securities Act or
the rules and regulations thereunder or as reasonably requested by a
Participating Holder in connection with any material change in the information
provided by such Participating Holder and the Company agrees to furnish to the
Participating Holders, on request, copies of any supplements or amendments. The
Company will pay all Registration Expenses in connection with such Shelf
Registration or any supplements or amendments thereto, whether or not it becomes
effective. The Shelf Registration may include securities other than Registrable
Shares.
(c) In connection with any underwritten offering of Registrable Shares
under the Shelf Registration, the Company shall have the right, with the consent
of the Holders of a majority in interest of
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<PAGE>
the Registrable Shares to be offered pursuant to such distribution (which
consent shall not be unreasonably withheld), to designate an investment banker
to act as managing underwriter with respect to such offering.
SECTION 3. [Intentionally Omitted.]
SECTION 4. SUSPENSION OF EFFECTIVENESS.
Nothing herein, including the Company's obligation under Section 2, shall
restrict its ability to suspend the effectiveness of the Shelf Registration at
any time, for such reasonable period of time which the Company believes is
necessary to prevent the premature disclosure of any events or information
having a material effect on the Company. In addition, the Company shall not be
required to keep the Shelf Registration effective, or may, without suspending
such effectiveness, instruct the holders of Registrable Shares included in the
Shelf Registration not to sell such shares, during any period during which the
Company is instructed, directed, ordered or otherwise requested by any
governmental agency or self-regulatory organization to stop or suspend such
trading or sales.
SECTION 5. INCIDENTAL REGISTRATION RIGHTS.
(a) If the Company, at any time prior to the Expiration Date, proposes to
register any Common Stock under the Securities Act (other than pursuant to
Section 2 of this Agreement or pursuant to a registration statement on a form
exclusively for the sale or distribution of securities by the Company to
employees of the Company or its subsidiaries or for use exclusively in
connection with a business combination) whether or not for sale for its own
account, and the registration form to be used may be used for the registration
of Registrable Shares, it will give prompt written notice to all Holders of the
Company's intention to effect such a registration and include in such
registration all Registrable Shares with respect to which the Company has
received written notice for inclusion therein within 20 days after the date of
the Company's notice; provided that:
(i) if, at any time after giving written notice of its intention to
register any shares and, prior to the effective date of the
Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to
register such shares, the Company may, at its election, give
written notice of such determination to each Holder requesting
inclusion therein, and, thereupon, the Company shall be relieved
of its obligation to register any Registrable Shares in
connection with such registration (but not of its obligation to
pay the Registration Expenses in connection therewith);
(ii) if such registration shall be in connection with an underwritten
public offering and the managing underwriter shall advise the
Company in writing that in its opinion the number of shares
requested to be included in such registration exceeds the number
of such securities which can be sold in such offering or would
have an adverse impact on the price of such securities, the
Company shall include in such registration (A) first, the
securities the Company proposes to sell and, if such
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<PAGE>
registration includes an underwritten secondary registration on
behalf of holders of the Company's securities exercising demand
registration rights, the securities requested to be included
therein by such holders requesting such registration, in such
proportions as the Company shall determine, and (B) second, the
number (if any) of other securities of the Company (including,
without limitation, Registrable Shares) requested to be included
pursuant to any incidental registration rights which in the
opinion of such underwriter can be sold (and if, in the opinion
of such underwriter, some but not all of such securities may be
so included, all holders of Common Stock requested to be included
therein shall share pro rata in the number of shares of Common
Stock included in such underwritten public offering on the basis
of the number of shares of Common Stock requested to be included
therein); and
(iii) the number of shares requested to be sold by the Holders is not
less than 2% of the outstanding Common Stock or the total
Registrable Shares if less.
(b) If any Registration pursuant to this Section 5 is an underwritten
primary offering, the Company shall have the right to select the managing
underwriter to administer such offering.
SECTION 6. HOLDBACK AGREEMENT.
(a) In the event of an underwritten public distribution of Common Stock
under a Registration Statement, whether or not Registrable Shares are included,
each Holder agrees not to effect any public sale or distribution of Common Stock
(except as part of such underwritten public distribution), including a sale
pursuant to Rule 144 or Rule 144A under the Securities Act, during a period
designated by the Company in a written notice duly given to the Holders in
accordance with Section 11(b), which period shall commence approximately 14 days
prior to the effective date of any such post-effective amendment to the Shelf
Registration or filing of such prospectus supplement, as the case may be, or the
commencement of such underwritten public distribution of Common Stock under a
Registration Statement and shall continue for up to 104 consecutive days.
(b) The foregoing provisions shall not apply to any Holder to the extent
such Holder is prohibited by applicable law from agreeing to withhold from sale.
SECTION 7. REGISTRATION PROCEDURES.
Except as otherwise expressly provided herein, in connection with any
registration of Registrable Shares pursuant to this Agreement, the Company
shall, as expeditiously as possible, at its own expense:
(a) prepare and file with the Commission a Registration Statement on the
appropriate form with respect to such Registrable Shares and use its best
efforts to cause such Registration Statement to become effective as soon as
practicable thereafter; and before filing a Registration Statement or prospectus
or any amendments or supplements thereto, furnish to each Selling Holder, copies
of such Registration Statement and such other documents as proposed to be filed
(including copies of any document to be incorporated by reference therein), and
thereafter furnish to such Selling Holder such number of copies of such
Registration Statement, each amendment and supplement thereto (including copies
of any document to be incorporated by reference therein), in each case at the
written request of the Selling Holder, including all exhibits thereto,
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the prospectus included in such registration statement (including each
preliminary prospectus), and, promptly after the effectiveness of a Registration
Statement, the definitive final prospectus filed with the Commission, and such
other documents as such Selling Holder may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by such Selling
Holder;
(b) use its best efforts to register or qualify such Registrable Shares
under such other securities or blue sky laws of such jurisdictions within the
United States as any Selling Holder reasonably (in light of such Selling
Holder's intended plan of distribution) requests; provided that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 7(b),
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(c) notify each Selling Holder of such Registrable Shares, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of any event as a result of which the prospectus included
in such Registration Statement (including any document to be incorporated by
reference therein) contains an untrue statement of a material fact or omits any
fact necessary to make the statements therein not misleading and, at the request
of any such Selling Holder, the Company shall prepare a supplement or amendment
to such prospectus (and, in the case of any post-effective amendment, use its
reasonable best efforts to have such amendment declared effective by the
Commission) so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and promptly make
available to each Selling Holder any such supplement or amendment;
(d) in connection with an underwritten public offering, enter into
customary agreements (including, if requested, an underwriting agreement),
reasonably satisfactory in form and substance to the Company, and take such
other actions in connection therewith as the Holders of at least a majority in
interest of the Registrable Shares being sold or the underwriter shall
reasonably request in order to consummate the disposition of such Registrable
Shares;
(e) make available for inspection during business hours on reasonable
advance notice by any Selling Holder of such Registrable Shares, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other professional retained by any such Selling Holder
or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such Registration Statement. Records which the
Company determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records is necessary to avoid or correct a material
misstatement or omission in the Registration Statement or (ii) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. Each Selling Holder of such Registrable Shares further
agrees that it will, upon learning that disclosure of such Records is sought in
a court of competent jurisdiction, give written notice to the Company, and allow
the Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records it deemed confidential. Each Selling Holder of
such Registrable Shares
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further agrees that information obtained by it as a result of such inspections
which is deemed confidential by the Company shall not be used by it, and it
shall cause each of its Inspectors not to use such confidential information, as
the basis for any market transactions in securities of the Company or for any
purpose other than any due diligence review with respect to decisions regarding
such Selling Holder's investment in the Registrable Shares, unless and until
such information is made generally available to the public;
(f) in the event such sale is pursuant to an underwritten offering, use its
best efforts to obtain (i) a comfort letter or comfort letters from the
Company's independent public accountants in customary form and covering such
financial and accounting matters of the type customarily covered by comfort
letters as the Selling Holders of a majority in interest of the Registrable
Shares being sold or the managing underwriter reasonably request, and (ii) an
opinion or opinions from counsel for the Company, addressed to the underwriters,
covering the matters customarily covered in opinions given by counsel in similar
transactions; and
(g) notify the Selling Holders and the managing underwriters, if any,
promptly, and (if requested by any such Person) confirm such advice in writing,
(i) when the Registration Statement, the prospectus or any prospectus supplement
or post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose and the Company shall promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued and (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the Registrable Shares
for offer or sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose.
The Company may require each Selling Holder of Registrable Shares as to
which any registration is being effected to furnish to the Company such
information regarding the Selling Holder and the distribution of such
Registrable Shares as the Company may from time to time reasonably request in
writing and such other information as may be legally required in connection with
such registration. Each Selling Holder agrees, by its acquisition of Registrable
Shares and its acceptance of the benefits provided to it hereunder, to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Selling Holder
not materially misleading.
Each Holder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in Sections 7(c), (g)(ii) or
(g)(iii) hereof, such Holder will forthwith discontinue disposition of
Registrable Shares pursuant to the Registration Statement covering such
Registrable Shares until such Holder's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 7(c) hereof, or until it is
advised in writing by the Company that the use of the prospectus may be resumed,
and, if so directed by the Company, such Holder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Shares current
at the time of receipt of such notice. In the event the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective by the number of days during the period
from and including the date of the giving of such notice pursuant to Section
7(c) hereof to and including the date when each Holder of Registrable Shares
covered
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by such Registration Statement shall have received the copies of the
supplemented or amended prospectus contemplated by Section 7(c) hereof
SECTION 8. REGISTRATION EXPENSES.
All expenses incident to the Company's performance of or compliance with
this Agreement, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or "blue sky" laws (including
reasonable fees and disbursements of counsel of the Company and counsel for the
underwriters in connection with "blue sky" qualifications of the Registrable
Shares) and listing on any national securities exchange or exchanges which
listing may be sought, with filings required to be made with the National
Association of Securities Dealers, Inc., printing expenses, messenger and
delivery expenses, fees and expenses of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit or "cold comfort" letters required by or incident to such performance),
securities acts liability insurance (if the Company elects to obtain such
insurance), the fees and expenses of any special experts retained by the Company
in connection with such registration, and fees and expenses of other persons
retained by the Company (all such expenses being herein called "Registration
Expenses") will be borne by the Company whether or not any registration
statement becomes effective; provided that in no event shall Registration
Expenses include any (i) underwriting discounts, commissions, or fees
attributable to the sale of the Registrable Shares, (ii) fees and expenses of
any counsel, accountants, or other persons retained or employed by the Holders
or underwriters (other than the reasonable fees and expenses (of which the
Company shall only be obligated to pay up to an aggregate maximum of $15,000) of
one counsel for Participating Holders of Registrable Shares included in the
Registration Statement, which counsel shall be selected by a majority in
interest of the Participating Holders included in the Registration Statement),
or (iii) transfer taxes, if any.
SECTION 9. INDEMNIFICATION; CONTRIBUTION
(a) INDEMNIFICATION BY COMPANY. The Company agrees to indemnify and hold
harmless each Selling Holder of Registrable Shares, its officers, directors,
partners and agents and each Person, if any, who controls such Selling Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (each such person being sometimes hereinafter referred to as an
"Indemnified Person") from and against any and all losses, claims, damages,
liabilities and judgments (including, the reasonable legal expenses incurred in
connection with any action, suit or proceeding) arising out of or based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a registration hereunder or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which they were made, not
misleading, or (ii) any violation by the Company of any federal state or common
law rule or regulation applicable to the Company and relating to action or
inaction required by the Company in connection with any such registration;
provided, however, that the Company shall not be liable for any losses, claims,
damages, liabilities or judgments arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon information
furnished in writing to the Company by such Selling Holder or on such Selling
Holder's behalf expressly for use therein, or by any Holder's failure to deliver
a copy of the Registration Statement or prospectus or any amendment or
supplement thereto after being furnished with a sufficient number of copies
thereof by the Company.
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(b) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or proceeding
(including any governmental investigation) shall be brought or asserted against
any Indemnified Person in respect of which indemnity may be sought from the
Company, such Indemnified Person shall promptly notify the Company in writing,
and the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person and the payment of
all reasonable expenses. Such Indemnified Person shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Company has agreed to pay such fees and
expenses or (ii) the named parties to any such action or proceeding (including
any impleaded parties) include both such Indemnified Person and the Company, and
such Indemnified Person shall have been advised in writing by the counsel
employed by the Company in accordance with the provisions of this Section 9(b)
that there may exist a conflict of interest between such Indemnified Person and
the Company with respect to such claim (in which case, if such Indemnified
Person notifies the Company in writing that it elects to employ separate counsel
at the expense of the Company, the Company shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Person,
it being understood, however, that the Company shall not, in connection with any
one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for such Indemnified Person
and any other Indemnified Persons, which firm shall be designated in writing by
a majority of such Indemnified Persons). The Company shall not be liable for any
settlement of any such action or proceeding effected without the Company's
written consent, but if settled with its written consent, or if there be a
final, unappealable judgment for the plaintiff in any such action or proceeding,
the Company agrees to indemnify and hold harmless such Indemnified Persons from
and against any loss or liability (to the extent stated above) by reason of such
settlement or judgment.
(c) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SHARES. Each Selling Holder
agrees severally and not jointly to indemnify and hold harmless the Company, its
directors, officers and agents and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Selling Holder, but only with respect to information furnished in
writing by such Selling Holder or on such Selling Holder's behalf expressly for
use in any Registration Statement or prospectus or any amendment or supplement
thereto, or any preliminary prospectus. In case any action or proceeding shall
be brought against the Company or its directors, officers or agents or any such
controlling person, in respect of which indemnity may be sought against such
Selling Holder, such Selling Holder shall have the rights and duties given to
the Company, and the Company or its directors, officers or agents or such
controlling person shall have the rights and duties given to such Selling Holder
by the preceding Section 9(b).
(d) CONTRIBUTION. If the indemnification provided for in this Section 9 is
unavailable to or unenforceable by the Company or the Indemnified Persons in
respect of any losses, claims, damages, liabilities or judgments referred to
herein, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
judgments in such proportions as is appropriate to reflect the relative fault of
the Company and the Indemnified Persons in connection with the actions or
inactions which resulted in such losses, claims, damages, liabilities and
judgments, as well as any other relevant equitable
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considerations (including the relative fault and indemnification or contribution
obligations of other relevant parties). The relative fault of the indemnifying
party on the one hand and of the indemnified person on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or by
the indemnified party, and by such party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Indemnified Persons agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
No Person may participate in any underwritten registration hereunder unless
such Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and (c) agrees to pay
such Person's pro rata portion of all underwriting discounts, commissions and
fees.
SECTION 11. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of at least a majority of the Registrable Shares.
Notwithstanding the foregoing, (i) if a waiver or consent to departure from the
provisions hereof does not adversely affect the rights of all of the Holders,
the Company shall not be required to obtain the consent of any such Holder not
adversely affected thereby, and (ii) if such waiver or consent to departure
relates exclusively to the rights of Holders whose Registrable Shares are being
sold pursuant to a Registration Statement and does not directly or indirectly
affect the rights of other Holders, such waiver or consent to departure may be
given by Holders of a least a majority in interest of the Registrable Shares
being sold by such Holders pursuant to such Registration Statement; provided
that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(b) NOTICES. All notices and other communications provided for or permitted
hereunder shall be in writing and shall be delivered personally or by first-
class mail, telecopier or overnight courier:
(i) if to a Holder of Registrable Shares, at the most current address
set forth on the books of the Company, and
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(ii) if to the Company, initially at Cabot Noble, Inc., Suite 105,
3000 K Street, N.W., Washington, D.C. 20007-5116, Attention:
General Counsel, and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section
11(b), with a copy to Morris F. DeFeo, Jr. , Esq. , Swidler &
Berlin, Chartered, 3000 K Street, N.W., Washington, D.C. 20007-
5116.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail (postage prepaid), if mailed; upon
receipt of a telecopy confirmation sheet, if telecopied; and on the day
delivered if sent by an air courier guaranteeing overnight delivery.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and, to the extent set forth herein, the
assigns of each of the parties, including without limitation and without the
need for an express assignment, Eligible Transferees.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof
(f) GOVERNING LAW. This Agreement shall be governed by and construed under
and interpreted in accordance with the internal laws of the state of Delaware,
without regard to conflicts of law principles.
(g) CONSENT TO JURISDICTION SERVICE OF PROCESS. All judicial proceedings
brought against any party hereto arising out of or relating to this Agreement
shall be brought in any state or Federal Court of competent jurisdiction in the
State of Delaware, and by execution and delivery of this Agreement each party
hereto accepts for itself and in connection with its properties, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts and waives
any defense of forum non conveniens and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. Each party hereto
hereby agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt requested, to
the applicable address provided in Section 11(b), such service being hereby
acknowledged by each party hereto to be sufficient for personal jurisdiction in
any action against such party in any such court and to be otherwise effective
and binding service in every respect.
(h) SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable any such provision in any other
jurisdiction.
(i) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration
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rights granted by the Company with respect to
the Registrable Shares. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(j) EFFECTIVENESS. This Agreement shall become effective on the Effective
Date.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company and the Holders have executed this
Agreement as of the date first written above.
COMPANY:
CABOT NOBLE, INC.
By: _________________________
Name:
Title:
HOLDERS:
SUPERMARKET OPERATORS OF AMERICA, INC.
By: _________________________
Name:
Title:
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Exhibit 99.1
[LETTERHEAD OF SHOPKO STORES, INC. APPEARS HERE]
ShopKo Stores, Inc. and Phar-Mor, Inc. Announce Changes In
Proposed Business Combination
Companies Announce Plans To Consolidate Headquarters Operations In Green Bay
YOUNGSTOWN, Ohio and GREEN BAY, Wis., Oct. 11 /PRNewswire/ -- Phar-Mor,
Inc. (Nasdaq: PMOR) and ShopKo Stores., Inc. (NYSE: SKO), today announced
certain changes in their previously announced business combination. These
changes will be disclosed in the companies' registration statement, which they
expect to jointly file with the Securities and Exchange Commission on or about
October 11, 1996. The transaction, which is expected to close in December 1996
or January 1997, would combine ShopKo and Phar-Mor under a new holding company,
Cabot Noble, Inc.
SUPERVALU, INC. (NYSE: SVU) which currently owns 46% of ShopKo's common
stock, has agreed to retain 10% of the Cabot Noble common stock it will receive
in the transaction. SUPERVALU's remaining Cabot Noble stock will be repurchased
by Cabot Noble immediately after the transaction for approximately $223.6
million (or $16.86 per ShopKo share). After the repurchase, SUPERVALU will
hold approximately six percent of the shares of Cabot Noble, depending upon the
exchange ratio.
The companies also announced that they will close the Phar-Mor
headquarters in Youngstown and consolidate their headquarters operations at one
location in Green Bay in order to improve operating savings under the
combination. The companies will share many administrative functions now located
in ShopKo's headquarters in Green Bay. The headquarters consolidation is
expected to occur in phases over the next 6-12 months.
ShopKo and Phar-Mor also announced that Dale P. Kramer, ShopKo's
president and chief executive officer, will become a member of the Cabot Noble
board of directors. ShopKo has the right to nominate two additional directors
to the Cabot Noble board.
Shopko Stores, Inc. is a leading retailer operating 130 stores in 15
states, concentrated in the Upper Midwest, Mountain, and Pacific Northwest
states; and ProVantage, Inc., its wholly owned subsidiary, which specializes in
prescription benefit management (PBM), vision benefit management (VBM) and
health decision support services (DSS).
Phar-Mor is a retail drug store chain operating 102 stores in 18 states,
concentrated in Ohio, Pennsylvania, and Virginia.
This press release contains forward-looking statements. The actual
results of ShopKo, Phar-Mor and Cabot Noble may differ materially from those
contained in the forward-looking statements. Factors that may cause such
differences are identified in ShopKo's Current Report on Form 8-K dated
September 7, 1996 and Phar-Mor's Annual Report on 10-K dated September 27, 1996.
