SECOND AMENDMENT TO RIGHTS AGREEMENT
This Amendment, dated as of October 30, 1996 (the
"Amendment"), between Kash n' Karry Food Stores, Inc., a Delaware
corporation (the "Company"), and Fleet National Bank (successor
to Shawmut Bank Connecticut, N.A.), as rights agent (the "Rights
Agent").
WHEREAS, the Company and the Rights Agent are parties
to a Rights Agreement dated as of April 13, 1995 and as amended
as of June 13, 1995 (as so amended, the "Agreement"); and
WHEREAS, pursuant to Section 27 of the Agreement, the
Company and the Rights Agent desire to amend the Agreement as set
forth below.
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Amendments to Section 1.
(a) The definitions of "Beneficial Owner" and
"beneficially own" are amended by adding the following at the end
thereof:
"Notwithstanding anything contained in this Agreement to the
contrary, neither Parent, Sub, nor any of their Affiliates
or Associates shall be deemed to be the Beneficial Owner of,
nor to beneficially own, any of the Common Shares of the
Company (1) solely by virtue of the approval, execution or
delivery of the Merger Agreement or the execution and
delivery of the Stockholders Agreement or the Proxy or (2)
solely as a result of the undertaking as to the voting of
the Common Shares of the Company described in Section 2 of
the Stockholders Agreement or the granting of or the
exercise of voting rights under the Proxy."
(b) The following definitions are added to Section 1
of the Agreement:
""Sub" shall mean KK Acquisition Corp., a Delaware
corporation."
""Parent" shall mean Food Lion, Inc., a North Carolina
corporation."
""Merger" shall mean the merger of Sub with and into the
Company in accordance with the General Corporation Law of
the State of Delaware upon the terms and subject to the
conditions set forth in the Merger Agreement."
""Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of October 31, 1996, by and among Parent,
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Sub and the Company, as the same shall be amended from time
to time in accordance with the Merger Agreement."
""Offer" shall mean the tender offer to acquire all the
outstanding Common Shares contemplated by the Merger
Agreement."
""Stockholders Agreement" shall mean the Stockholders
Agreement, dated as of October 31, 1996, by and among
Parent, Sub and the owners of Common Shares that are
signatories thereto, as the same shall be amended from time
to time."
""Proxy" shall mean an Irrevocable Proxy executed and
delivered by the owners of Common Shares to Parent pursuant
to the Stockholders Agreement.
Section 2. Expiration Date.
Section 7(a) of the Agreement is hereby amended by
removing the word "or" immediately prior to the symbol "(iii)"
and by adding to the end thereof in place of the period the
following:
", (iv) immediately prior to the acceptance for payment and
payment for Common Shares pursuant to the Offer, (v)
immediately prior to the closing of the purchase of Common
Shares pursuant to the exercise of the Stock Option (as
defined in the Stockholders Agreement), or (vi) immediately
prior to the Effective Time (as defined in the Merger
Agreement) of the Merger; whereupon the Rights shall
expire."
Section 3. New Section 35.
The following is added as a new Section 35 to the
Agreement:
"Section 35. The Offer and the Merger, etc.
Notwithstanding anything in this Agreement to the
contrary, none of (a) the approval, execution or delivery of the
Merger Agreement or the Stockholders Agreement, (b) the making of
the Offer or the acceptance for payment of Common Shares pursuant
to the Offer or the giving of a Notice (as defined in the
Stockholders Agreement) to exercise the Stock Option or (c) the
exercise of voting rights granted under the Proxy shall cause (i)
Parent or Sub or any of their Affiliates or Associates to be an
Acquiring Person, (ii) a Shares Acquisition Date to occur or
(iii) a Distribution Date to occur in accordance with the terms
hereof, which Distribution Date, if any, shall instead be
indefinitely deferred until such time as the Board of Directors
may otherwise determine."
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Section 4. Severability. If any term, provision,
covenant or restriction of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Amendment shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 5. Governing Law. This Amendment shall be
deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed
in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 6. Counterparts. This Amendment may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 7. Effect of Amendment. Except as
expressly modified herein the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed all as of the day and year first
above written.
KASH N' KARRY FOOD STORES, INC.
By: /s/ Ronald E. Johnson
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Name: Ronald E. Johnson
Title: Chairman, President
and Chief Executive
Officer
FLEET NATIONAL BANK
By: /s/ Kenneth N. Caesar
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Name: Kenneth N. Caesar
Title: Vice President