Exhibit 10.6
MODIFICATION AGREEMENT
This MODIFICATION AGREEMENT (this "Modification Amendment") is made as of
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this 1st day of December, 1995, by and among Dairy Mart Convenience Stores,
Inc., a Delaware corporation (the "Company"), Charles Nirenberg ("Nirenberg"),
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FCN Properties Corporation, a Connecticut corporation ("FCN"), The Nirenberg
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Foundation, Inc., a Connecticut corporation formerly known as The Nirenberg
Family Charitable Foundation, Inc. (the "Foundation"), Robert B. Stein, Jr.
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("Stein") and Gregory G. Landry ("Landry").
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W I T N E S S E T H:
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WHEREAS, the Company, Nirenberg, FCN, the Foundation, Stein and Landry are
parties to that certain Agreement dated October 30, 1995 (the "Original
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Agreement"); and
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WHEREAS, the parties desire to amend and modify the Original Agreement in
certain respects.
NOW, THEREFORE, the parties hereto hereby agree to amend and modify the
Original Agreement as follows:
1. DEFINITIONS. Except to the extent amended, modified and/or
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supplemented by this Modification Agreement, capitalized terms used herein
without definition shall have the meaning ascribed to such terms in the Original
Agreement.
2. AMENDMENTS TO SECTION 1(a).
(a) Section 1(a) of the Original Agreement is hereby amended to
delete the words "(i) right, title and interest in and to Nirenberg's general
partner interests in New DM Management Associates I, a Connecticut general
partnership ("New DM Management I"), and New DM Management Associates II, a
Connecticut general partnership ("New DM Management II");" commencing on the
fifth line of such Section 1(a), and by renumbering clauses (ii), (iii) and (iv)
of such Section 1(a) as clauses (i), (ii) and (iii), respectively.
(b) Section 1(a) of the Original Agreement is hereby further amended
by deleting the words "New DM Management I and New DM Management II" on the 31st
line of such Section 1(a) and inserting in lieu thereof the words "New DM
Management Associates I, a Connecticut general partnership ("New DM Management
I"), and New DM Management Associates II, a Connecticut general partnership
("New DM Management II")".
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3. ADDITION OF NEW SECTION 1(c). Section 1 of the Original Agreement is
hereby amended by adding a new subparagraph (c) thereunder to read in its
entirety as follows:
"(c) At the Closing, Nirenberg shall withdraw as a partner of
New DM Management I and New DM Management II."
4. ADDITION OF NEW SECTION 1(d). Section 1 of the Original Agreement is
hereby amended by adding a new subparagraph (d) thereunder to read in its
entirety as follows:
"(d) In the event that the Closing occurs on a date after
November 29, 1995, then, in addition to the amount payable at the
Closing under each of Sections 1(b), 6(e) and 8(e), the Company
shall, at the Closing, pay to each of Nirenberg, FCN and the
Foundation, as applicable, interest at the rate of 8 3/4% per annum
on the amount payable to such person, if any, under each of Sections
1(b), 6(e) and 8(e), for the number of days from November 29, 1995
through and including the date of the Closing."
5. AMENDMENT OF SECTION 2. Section 2 of the Original Agreement is hereby
amended by changing the reference to November 29, 1995 to December 1, 1995.
6. AMENDMENT OF SECTION 4. Section 4 of the Original Agreement is hereby
amended by changing the reference to November 29, 1995 to December 1, 1995.
7. AMENDMENT OF SECTION 6(e). Section 6(e) of the Original Agreement is
hereby amended to delete the dollar figure "$2,300,000" on the third line of
such Section 6(e) and to insert in lieu thereof the dollar figure "$800,000."
Section 6(e) of the Original Agreement is hereby further amended by adding the
following sentence at the end thereof: "The amount payable by the Company to
Nirenberg pursuant to this Section 6(e) shall be subject to adjustment pursuant
to, and in accordance with, Section 1(d) hereof."
8. ADDITION OF NEW SECTION 8(e). Section 8 of the Original Agreement is
hereby amended by adding a new subparagraph (e) thereunder to read in its
entirety as follows:
"(e) The parties hereby acknowledge and agree that, without
limiting the generality of Section 8(a) above, among the claims being
released by Nirenberg pursuant to said Section 8(a) are claims that
Nirenberg may have against the Company (which the Company does not
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hereby acknowledge) for pain and suffering and damage to reputation
suffered by Nirenberg as a result of the Company's termination of
Nirenberg's employment with the Company and his position as Chairman.
The parties hereby further acknowledge and agree that, in
consideration of Nirenberg's agreement to release the Company from
any such claims for pain and suffering and damage to reputation, the
Company shall pay to Nirenberg at the Closing a non-refundable sum of
$1,500,000 by wire transfer of federal funds to an account or
accounts designated by Nirenberg. The amount payable by the Company
to Nirenberg pursuant to this Section 8(e) shall be subject to
adjustment pursuant to, and in accordance with, Section 1(d) hereof."
9. AMENDMENT OF SECTION 9. Section 9 of the Original Agreement is hereby
amended to read in its entirety as follows:
"9. Indemnification. Provided the Closing occurs, the Company
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agrees to the fullest extent permitted under Delaware law to
indemnify and hold Nirenberg harmless from and against any costs,
expenses (including, without limitation, reasonable legal fees and
expenses), judgments, fines, penalties and amounts paid in settlement
(collectively "Costs") which he may incur or to which he may become
subject by reason of (i) the transactions contemplated hereby, (ii)
his service as an officer, director and/or employee of the Company
(to the fullest extent permitted under Section 145 of the Delaware
General Corporation Law), including, without limitation, Costs in
connection with the Kahn litigation, (iii) the transactions relating
to the reconstitution of DM Associates and the dissolution and
replacement of DM Management Associates as the general partner of DM
Associates by New DM Management I and New DM Management II, (iv)
private causes of action by reason of the actions taken by Nirenberg
and/or any of the foregoing entities to effect a change in the
composition of the Board of Directors of the Company, (v) any claim
made by, or any action, suit, arbitration or other proceeding
commenced or threatened by any partner of DM Associates or any
stockholders or other affiliates of such partner against Nirenberg,
FCN, the Foundation, any other
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affiliate of Nirenberg, DM Associates, New DM Management I or New DM
Management II that is based on or predicated on a claim or allegation
that (A) the consummation of the transactions contemplated under this
Agreement caused, gave rise to or have resulted in a breach of any
provision of the partnership agreement of DM Associates, (B) the
consummation of the transactions contemplated under this Agreement
gave rise to, have resulted in, or were in breach of any fiduciary
duty owed by Nirenberg, FCN, the Foundation, any other affiliate of
Nirenberg, DM Associates, New DM Management I or New DM Management II
to any such partner of DM Associates, any stockholders or other
affiliates of such partner or DM Associates or (C) the failure of New
DM Management I to exercise (or the failure of Nirenberg to cause New
DM Management I to exercise), whether for the account of New DM
Management I or the account of DM Associates, the right of first
refusal contemplated under Section 10.4 of the partnership agreement
of DM Associates as in effect on the date hereof was a breach of such
Section 10.4 or a breach of a fiduciary duty owed by New DM
Management I or Charles Nirenberg, as the case may be, or (vi) any
claim made by, or any action, suit, arbitration or other proceeding
commenced or threatened by, any person (including, without
limitation, any partner of DM Associates or any stockholders or other
affiliates of such partner) against Nirenberg or the Foundation that
is based on or predicated on (A) any action taken or failure to act
by either Nirenberg or the Foundation as a limited partner of DM
Associates at any time from and after the Closing or (B) any action
taken or failure to act by the Company and/or its assignees in their
capacities as attorneys-in-fact of Nirenberg or the Foundation in
their respective capacities as limited partners of DM Associates.
Upon its receipt of any notice from Nirenberg with respect to any
matter for which indemnification is available, the Company shall have
the right to assume the defense thereof with counsel of its choice
and thereafter the Company shall not be responsible for any legal
fees incurred by Nirenberg in respect thereof; provided, that if
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Nirenberg is advised by counsel that there may be defenses available
to him that differ from those available to the Company or other
indemnified parties or otherwise that the potential exists for a
conflict between Nirenberg shall be entitled to retain one firm of
legal counsel on his behalf at the Company's expense. Nirenberg shall
not compromise or settle any action for which indemnification may be
available without the Company's prior written consent, which shall
not be unreasonably withheld. Such indemnification shall be
conditional on Nirenberg reasonably cooperating with the Company with
respect to any matter for which indemnification is available."
10. AMENDMENT TO SECTION 10(c). Section 10(c) of the Original Agreement
is hereby amended by deleting the text thereof in its entirety and substituting
therefor the following:
"(c) [INTENTIONALLY DELETED]"
11. AMENDMENT TO SECTION 10(f). Section 10(f) of the Original Agreement
is hereby amended by deleting the words "to be reconvened on
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November 30, 1995 or such earlier date as is required pursuant to Section 10(c)
hereof" commencing on the 6th line of said Section 10(f). Section 10(f) of the
Original Agreement is hereby further amended by inserting the words "in the
event the Closing does not occur on or prior to the Agreement Termination Date"
immediately after the word "stockholders" on the last line of said Section
10(f).
12. GENERAL.
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12.1. Ratification. Except to the extent modified, supplemented and/or
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amended by this Modification Agreement, all of the terms, provisions and
conditions of the Original Agreement are hereby ratified and confirmed and shall
remain in full force and effect.
12.2. Entire Agreement. The Original Agreement and this Modification
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Agreement contain the entire agreement among the parties with respect to the
subject matter thereof and hereof. The Original Agreement and this Modification
Agreement shall be read and construed together as a single agreement, and the
term "Agreement", as used throughout the Original Agreement, is hereby modified
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to mean, and shall hereinafter be deemed to make reference to, the Original
Agreement as amended by this Modification Agreement.
12.3. Counterparts. This Modification Agreement may be executed in any
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number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
12.4. Governing Law. This Modification Agreement shall be governed by and
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construed, interpreted and enforced in accordance with the laws of the State of
Connecticut, excluding the choice of laws rules thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Modification
Agreement under seal as of the date and year first above written.
/s/ Charles Nirenberg
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CHARLES NIRENBERG
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FCN PROPERTIES CORPORATION
By: /s/ Charles Nirenberg
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Charles Nirenberg, President
THE NIRENBERG FOUNDATION, INC.
By: /s/ Charles Nirenberg
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Charles Nirenberg, President
DAIRY MART CONVENIENCE STORES, INC.
By: /s/ Robert B. Stein, Jr.
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Robert B. Stein, Jr., President
/s/ Robert B. Stein, Jr.
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ROBERT B. STEIN, JR.
/s/ Gregory G. Landry
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GREGORY G. LANDRY