Exhibit 10.1

Execution Version

CASA LEY CONTINGENT VALUE RIGHTS AGREEMENT

BY AND AMONG

AB ACQUISITION LLC,

SAFEWAY INC.

THE SHAREHOLDER REPRESENTATIVE, AS DEFINED HEREIN

AND

COMPUTERSHARE INC. AND COMPUTERSHARE TRUST COMPANY, N.A., AS RIGHTS AGENT

DATED AS OF JANUARY 30, 2015

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TABLE OF CONTENTS

 

     Page   ARTICLE I DEFINITIONS      1                Section 1.1  
Definitions      1    ARTICLE II CONTINGENT VALUE RIGHTS      9   
            Section 2.1   Appointment of the Rights Agent; Issuance of CVRs     
9                Section 2.2   Nontransferable      9                Section 2.3
  No Certificate; Registration; Registration of Transfer; Change of Address     
9                Section 2.4   Payment Procedures; Payment Amount      10   
            Section 2.5   No Voting, Dividends or Interest; No Equity or
Ownership Interest in Ultimate Parent or the Company      17   
            Section 2.6   Establishment of Casa Ley CVR Bank Account      17   
ARTICLE III THE RIGHTS AGENT AND SHAREHOLDER REPRESENTATIVE      17   
            Section 3.1   Certain Duties and Responsibilities      17   
            Section 3.2   Certain Rights of Rights Agent      18   
            Section 3.3   Indemnity and Expenses      20   
            Section 3.4   Resignation and Removal of Rights Agent and
Shareholder Representative; Appointment of Successor      22   
            Section 3.5   Acceptance of Appointment by Successor      23   
ARTICLE IV ADDITIONAL COVENANTS      23                Section 4.1   Operations
     23                Section 4.2   List of Holders      24   
            Section 4.3   Casa Ley Sale Process      24   
            Section 4.4   Books and Records      26    ARTICLE V AMENDMENTS     
27   

 

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            Section 5.1   Amendments Without Consent of Holders      27   
            Section 5.2   Amendments with Consent of the Shareholder
Representative      28                Section 5.3   Execution of Amendments     
28                Section 5.4   Effect of Amendments      28    ARTICLE VI
CONSOLIDATION, MERGER, SALE OR CONVEYANCE      28                Section 6.1  
Company Consolidation, Merger, Sale or Conveyance      28                Section
6.2   Successor Substituted      29    ARTICLE VII OTHER PROVISIONS OF GENERAL
APPLICATION      29                Section 7.1   Notices to Ultimate Parent, the
Company, the Shareholder Representative and the Rights Agent      29   
            Section 7.2   Notice to Holders      32                Section 7.3  
Counterparts; Headings      32                Section 7.4   Assignment;
Successors      32                Section 7.5   Benefits of Agreement      32   
            Section 7.6   Governing Law      33                Section 7.7  
Waiver of Jury Trial      33                Section 7.8   Remedies      34   
            Section 7.9   Severability Clause      34   
            Section 7.10   Termination      34                Section 7.11  
Entire Agreement      35                Section 7.12   Suits for Enforcement   
  35   

 

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CASA LEY CONTINGENT VALUE RIGHTS AGREEMENT

THIS CASA LEY CONTINGENT VALUE RIGHTS AGREEMENT, dated as of January 30, 2015
(this “Agreement”), is entered into by and among AB Acquisition LLC, a Delaware
limited liability company (“Ultimate Parent”), Safeway Inc., a Delaware
corporation (the “Company”), Computershare Inc. (“Computershare”) and its wholly
owned subsidiary, Computershare Trust Company, N.A. together as rights agent
(the “Rights Agent”) and the Shareholder Representative.

RECITALS

WHEREAS, the Parent Entities and the Company have entered into an Agreement and
Plan of Merger, dated as of March 6, 2014 (as amended, the “Merger Agreement”),
pursuant to which Merger Sub will merge with and into the Company, with the
Company surviving the Merger as a wholly-owned indirect Subsidiary of Ultimate
Parent; and

WHEREAS, pursuant to the Merger Agreement, the Parent Entities have agreed to
cause the Company to create and issue in respect of each Closing Company Share,
certain rights to the CVR Payment Amount if and when payable pursuant to this
Agreement;

NOW, THEREFORE, for and in consideration of the agreements contained herein and
the consummation of the transactions contemplated by the Merger Agreement, it is
mutually covenanted and agreed as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

(a) For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

(i) the terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;

(ii) the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision;

(iii) unless the context otherwise requires, words describing the singular
number shall include the plural and vice versa, words denoting any gender shall
include all genders and words denoting natural Persons shall include
corporations, partnerships and other Persons and vice versa;

(iv) all references to “including” shall be deemed to mean including without
limitation;

 

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(v) references to any Person include such Person’s successors and permitted
assigns; and

(vi) the Excluded Entities shall not be deemed to be Subsidiaries of the Company
or Company Subsidiaries.

(b) Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Merger Agreement. The following terms shall
have the meanings ascribed to them as follows:

“Agreement” has the meaning given to such term in the Preamble.

“Board of Directors” means the board of directors of the Company.

“Board Resolution” means a copy of a resolution certified by the secretary or an
assistant secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Rights Agent.

“By-Laws” means the By-Laws of Casa Ley.

“Casa Ley” means Casa Ley, S.A. de C.V., a Mexican company and the issuer of the
Casa Ley Series B Shares owned by the Company and any Company Subsidiary.

“Casa Ley Business” shall mean the business and operations carried on by Casa
Ley and its Subsidiaries.

“Casa Ley Net Proceeds” means, with respect to the Entire Casa Ley Sale, the sum
of (i) the gross cash proceeds actually received by the Company or any Company
Subsidiary from and after the Closing in consideration of any Partial Casa Ley
Sale or the Entire Casa Ley Sale (but excluding any escrow, holdback, deferred
cash consideration or similar amounts with respect thereto), plus (ii) any cash
amounts received (without duplication of any amounts (1) described in clause
(i), or (2) paid to the Company or any Company Subsidiary as a dividend or
distribution in connection with any Partial Casa Ley Sale or Entire Casa Ley
Sale) by the Company or any Company Subsidiary from and after January 1, 2014
through the consummation of the Entire Casa Ley Sale as a dividend or
distribution due to its direct or indirect ownership of Equity Interests in Casa
Ley, plus (iii) any interest or income received by the Company or any Company
Subsidiary pursuant to Section 2.6, minus (iv) the aggregate amount of the Casa
Ley Sale Expenses actually incurred from and after the Closing through the date
of payment hereunder in connection with the consummation of the Entire Casa Ley
Sale, minus (v) any amounts required to repay and discharge any shareholder
loans owed by the Company or any of its Subsidiaries to Casa Ley and not
incurred in violation of this Agreement, minus (vi) the income taxes incurred by
the Company or any Company Subsidiary in connection with the Entire Casa Ley
Sale consummated from and after the Closing which, for purposes of this
definition, are deemed to equal the product of (A) (1) the sum of the amounts
referenced in clauses (i), (ii) and (iii) of this paragraph, minus (2) the
Company’s and the Company Subsidiaries’ tax basis in their Equity Interests in
Casa Ley, calculated under U.S. federal income tax principles, minus (3) the sum
of the amounts referenced in clauses (iv), (v) and (vii) of this paragraph (but
only to the extent that such amounts are deductible and not capitalized into the
tax basis referenced in clause

 

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(vi)(A)(2) of this definition) multiplied by (B) 39.25%, minus (vii) if
applicable, any costs, fees or expenses incurred in connection with the currency
conversion referenced in Section 2.4(b) of this Agreement relating to any
Partial Casa Ley Sale and the Entire Casa Ley Sale consummated from and after
the Closing, and minus (viii) any Partial Casa Ley Net Proceeds actually paid to
the Holders from and after the Closing.

“Casa Ley Net Proceeds Per CVR” means an amount equal to (x) the Casa Ley Net
Proceeds divided by (y) the number of CVRs listed in the CVR Register as of the
date of such calculation; provided, that in the event such amount is negative,
the Casa Ley Net Proceeds Per CVR shall be zero; provided further, that any CVR
to which a Dissenting Stockholder would be entitled but for Section 2.3 of the
Merger Agreement shall be deemed to be outstanding and included in the number of
CVRs listed in the CVR Register for purposes of the calculation of Casa Ley Net
Proceeds Per CVR.

“Casa Ley Sale” means an Entire Casa Ley Sale or Partial Casa Ley Sale, as
applicable.

“Casa Ley Sale Agreement” means an executed binding definitive transaction
document providing for a Casa Ley Sale.

“Casa Ley Sale Expenses” means (a) any out-of-pocket transaction costs, fees or
expenses (including any broker fees, finder’s fees, advisory fees, accountant or
attorney’s fees and transfer or similar taxes imposed by any jurisdiction)
incurred in connection with the Entire Casa Ley Sale or a Partial Casa Ley Sale
(including any amounts expressly deemed to be Casa Ley Sale Expenses hereunder)
by the Company or any of its Subsidiaries (or any of its Affiliates pursuant to
Section 4.3(b)) and the Shareholder Representative, and (b) 50% of the fees and
expenses of the Rights Agent, the Neutral Auditor and the investment bank
pursuant to Section 2.4(d)(i), in each case, which are documented in reasonable
detail, prepared in good faith, and certified by the Shareholder Representative
or the Company, as applicable; provided, that Casa Ley Sale Expenses shall
exclude any Excluded Expenses.

“Casa Ley Series A Shares” means any issued and outstanding Series A shares of
Casa Ley.

“Casa Ley Series B Shares” means all of the issued and outstanding Series B
shares of Casa Ley.

“Company” has the meaning given to such term in the Preamble.

“CVRs” means the contingent value rights issued by the Company under this
Agreement.

“CVR Payment Amount” has the meaning set forth in Section 2.4(a).

“CVR Payment Date” means the date that any CVR Payment Amount is paid by the
Company to the Holders pursuant to Section 2.4.

“CVR Register” has the meaning given to such term in Section 2.3(b).

 

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“Entire Casa Ley Sale” means, as of any date of determination, a direct or
indirect sale, transfer or other disposition (including by means of a merger or
other business combination transaction) in one or more transactions (i) of all
of the then remaining consolidated assets of Casa Ley and its Subsidiaries
attributable to the Company’s direct or indirect ownership of Equity Interests
therein followed by a distribution to the Company or any Company Subsidiary of
the pro rata proceeds thereof, (ii) of 100% of the Company’s then remaining
Equity Interests in Casa Ley or (iii) the effect of which is to divest 100% of
the Company’s then remaining direct or indirect investment in Casa Ley.

“Entire CVR Payment Statement” has the meaning given to such term in Section
2.4(d)(ii).

“Excluded Expenses” means any costs, fees or expenses of the Company or any
Company Subsidiary arising out of or relating to any dispute with the
Shareholder Representative or otherwise with respect to the terms of this
Agreement other than the Shareholder Representative’s equal share of the fees
and expenses of the Neutral Auditor and the investment bank pursuant to
Section 2.4(d)(i) and except as otherwise set forth in Section 7.8.

“Fair Market Value” means the fair market value of any unsold Equity Interests
of Casa Ley owned by the Company and any Company Subsidiary determined in
accordance with Section 2.4(d)(i). The fair market value of any unsold Equity
Interests of Casa Ley shall not include, nor take into account, any minority,
liquidity or similar discount to the valuation of Casa Ley in its entirety.

“Holder” means a Person in whose name a CVR is registered in the CVR Register.

“Merger Agreement” has the meaning given to such term in the Recitals.

“Neutral Auditor” has the meaning given to such term in Section 2.4(d)(vi).

“Notice of Agreement” has the meaning given to such term in Section 2.4(c)(ii).

“Notice of Objection” has the meaning given to such term in Section 2.4(c)(ii).

“Objections” has the meaning given to such term in Section 2.4(c)(iv).

“Officer’s Certificate” means a certificate signed by the chief executive
officer, president, chief financial officer, any vice president, the controller,
the treasurer or the secretary of the Company, in his or her capacity as such an
officer.

“Partial Casa Ley Net Proceeds” means, as of any date of determination, with
respect to a Partial Casa Ley Sale, the sum of (i) the gross cash proceeds
actually received by the Company or any Company Subsidiary from and after the
Closing in consideration of such Partial Casa Ley Sale (but excluding any
escrow, holdback, deferred cash consideration or similar amounts to the extent
not released to the Company or any Company Subsidiary prior to the consummation
of the Partial Casa Ley Sale) (without duplication of any amounts previously
paid to the Holders with respect to a prior Partial Casa Ley Sale), plus
(ii) any cash amounts received

 

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(without duplication of any amounts (1) described in clause (i), (2) previously
paid to the Holders with respect to a prior Partial Casa Ley Sale or (3) paid to
the Company or any Company Subsidiary in connection with any Partial Casa Ley
Sale) by the Company or any Company Subsidiary from and after January 1, 2014
through the closing date of such Partial Casa Ley Sale as a dividend or
distribution due to its direct or indirect ownership of Equity Interests in Casa
Ley, minus (iii) the aggregate amount of the Casa Ley Sale Expenses actually
incurred from and after the Closing through the consummation of such Partial
Casa Ley Sale (without duplication of any amounts deducted from Partial Casa Ley
Net Proceeds previously paid to the Holders with respect to a prior Partial Casa
Ley Sale), minus (iv) any amounts required to repay and discharge any
shareholder loans owed by the Company or any of its Subsidiaries to Casa Ley,
minus (v) the income taxes incurred by the Company or any Company Subsidiary in
connection with such Partial Casa Ley Sale which, for purposes of this
definition, are deemed to equal the product of (A) (1) the sum of the amounts
referenced in clauses (i) and (ii) of this paragraph, minus (2) the portion of
the Company’s and the Company Subsidiaries’ tax basis in their Equity Interests
in Casa Ley, calculated under U.S. federal income tax principles, that is
allocable (as reasonably determined by the Company) to such Partial Casa Ley
Sale, minus (3) the sum of the amounts referenced in clauses (iii), (iv) and
(vi) of this paragraph (but only to the extent that such amounts are deductible
and not capitalized into the tax basis referenced in clause (v)(A)(2) of this
definition) multiplied by (B) 39.25%, and minus (vi), if applicable, any costs,
fees or expenses incurred in connection with the currency conversion referenced
in Section 2.4(b) of this Agreement reasonably allocated to such Partial Casa
Ley Sale.

“Partial Casa Ley Net Proceeds Per CVR” means an amount equal to (x) the Partial
Casa Ley Net Proceeds divided by (y) the number of CVRs listed in the CVR
Register as of the date of such calculation; provided, that in the event such
amount is negative, the Partial Casa Ley Net Proceeds Per CVR shall be zero;
provided further, that any CVR to which a Dissenting Stockholder would be
entitled but for Section 2.3 of the Merger Agreement shall be deemed to be
outstanding and included in the number of CVRs listed in the CVR Register for
purposes of the calculation of Partial Casa Ley Net Proceeds Per CVR.

“Partial Casa Ley Sale” means a direct or indirect sale, transfer or other
disposition (including by means of a merger or other business combination
transaction) (i) of less than all of the consolidated assets of Casa Ley and its
Subsidiaries attributable to the Company’s direct or indirect ownership of
Equity Interests therein followed by a distribution to the Company or any
Company Subsidiary of the pro rata proceeds thereof, (ii) of less than 100% of
the Company’s Equity Interests in Casa Ley or (iii) the effect of which is to
divest the Company of less than all of its direct or indirect investment in Casa
Ley.

“Partial CVR Payment Statement” has the meaning given to such term in Section
2.4(c)(i).

“Permitted Transfer” means (i) the transfer of any or all of the CVRs on death
by will or intestacy, (ii) transfer by instrument to an inter vivos or
testamentary trust in which the CVRs are to be passed to beneficiaries upon the
death of the trustee, (iii) transfers made pursuant to a court order (including
in connection with divorce, bankruptcy or liquidation), (iv) if the Holder is a
corporation, partnership or limited liability company, a distribution by the

 

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transferring corporation, partnership or limited liability company to its
stockholders, partners or members, as applicable (provided that (A) such
distribution does not subject the CVRs to a requirement of registration under
the Securities Act or the Exchange Act, or (B) in the case of a transferring
corporation, the Company shall have reasonably determined after consultation
with counsel that such distribution does not subject the CVRs to a requirement
of registration under the Securities Act or the Exchange Act), and (v) a
transfer made by operation of law (including a consolidation or merger) or
without consideration in connection with the dissolution, liquidation or
termination of any corporation, limited liability company, partnership or other
entity.

“Pre-Funded Amount” has the meaning given to such term in Section 3.3(b).

“Qualified Investment” means any (i) investment in a money market investment
program registered under the Investment Company Act of 1940, as amended, that
invests solely in direct obligations of the United States of America or
obligations the principal of and the interest on which are unconditionally
guaranteed by the United States of America or (ii) certificate of deposit issued
by any bank, bank and trust company or national banking association with a
combined capital and surplus in excess of $100,000,000 and insured by the
Federal Deposit Insurance Corporation or a similar governmental agency.

“Referral Notice” has the meaning given to such term in Section 2.4(d)(i).

“Remaining Asset Amount” means the Fair Market Value, as of the Sale Deadline,
of any unsold Equity Interests of Casa Ley owned by the Company and any Company
Subsidiary.

“Rights Agent” means the Rights Agent named in the Preamble, until a successor
Rights Agent shall have become such pursuant to the applicable provisions of
this Agreement, and thereafter “Rights Agent” shall mean such successor Rights
Agent.

“Sale Deadline” means the later of (i) the three (3) year anniversary of the
Effective Time and (ii) if one or more Casa Ley Sales Agreements is executed
prior to the three (3) year anniversary of the Effective Time but the Partial
Casa Ley Sale or Entire Casa Ley Sale contemplated thereby, as applicable, has
not closed, the Sale Deadline shall be the date on which sixty (60) days have
elapsed after the date all such Casa Ley Sales Agreements have either been
terminated or any and all closings under such Casa Ley Sales Agreements have
occurred.

“Sale Deadline Net Proceeds” means, as of the Sale Deadline, in the event there
is no Entire Casa Ley Sale, the sum of (i) the gross cash proceeds actually
received by the Company or any Company Subsidiary from and after the Closing in
consideration of any Partial Casa Ley Sale (but excluding any escrow, holdback,
deferred cash consideration or similar amounts pursuant thereto), plus (ii) any
cash amounts received (without duplication of any amounts (1) described in
clause (i) or (2) paid to the Company or any Company Subsidiary as a dividend or
distribution in connection with any Partial Casa Ley Sale) by the Company or any
Company Subsidiary from and after January 1, 2014 through the Sale Deadline as a
dividend or distribution due to its direct or indirect ownership of Equity
Interests in Casa Ley, plus (iii) any Remaining Asset Amount, plus (iv) any
interest or income received by the Company or any Company Subsidiary pursuant to
Section 2.6, minus (v) the aggregate amount of the Casa Ley

 

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Sale Expenses actually incurred from and after the Closing through date of
payment hereunder in connection with the occurrence of the Sale Deadline, minus
(vi) any amounts required to repay and discharge any shareholder loans owed by
the Company or any of its Subsidiaries to Casa Ley and not incurred in violation
of this Agreement, minus (vii) certain income taxes incurred by the Company or
any Company Subsidiary from and after the Closing which, for purposes of this
definition, are deemed to equal the product of (A) (1) the sum of the amounts
referenced in clauses (i), (ii), (iii) and (iv) of this paragraph, minus (2) the
Company’s and the Company Subsidiaries’ tax basis in their Equity Interests in
Casa Ley, calculated under U.S. federal income tax principles, minus (3) the sum
of the amounts referenced in clauses (v), (vi) and (viii) of this paragraph (but
only to the extent that such amounts are deductible and not capitalized into the
tax basis referenced in clause (vii)(A)(2) of this definition) multiplied by
(B) 39.25%, minus (viii) if applicable, any costs, fees or expenses incurred in
connection with the currency conversion referenced in Section 2.4(b) of this
Agreement relating to any Partial Casa Ley Sale consummated from and after the
Closing, and minus (ix) any Partial Casa Ley Net Proceeds actually paid to the
Holders consummated from and after the Closing and prior to the Sale Deadline.

“Sale Deadline Net Proceeds Per CVR” means an amount equal to (x) the Sale
Deadline Net Proceeds divided by (y) the number of CVRs listed in the CVR
Register as of the date of such calculation; provided, that in the event such
amount is negative, the Sale Deadline Net Proceeds Per CVR shall be zero;
provided further, that any CVR to which a Dissenting Stockholder would be
entitled but for Section 2.3 of the Merger Agreement shall be deemed to be
outstanding and included in the number of CVRs listed in the CVR Register for
purposes of the calculation of Sale Deadline Net Proceeds Per CVR.

“Shareholder Representative” means a committee, or Person controlled by a
committee, comprised of T. Gary Rogers and Arun Sarin, both of whom were
individual members of the Board of Directors immediately prior to the Effective
Time, who shall act by majority vote on behalf of the Holders as their sole and
exclusive representative in their capacities as Holders for all matters in
connection with this Agreement; provided, however, that the individual members
of the committee comprising or controlling the Shareholder Representative shall
act free of direction or instruction from any other members of the Board of
Directors immediately prior to the Effective Time, though the individual members
of the committee comprising or controlling the Shareholder Representative may
communicate with such former members regarding the status and substance of this
Agreement. Any instrument or document executed by a majority of the individual
members of the committee comprising or controlling the Shareholder
Representative, in the committee’s capacity as such, shall be deemed a valid
execution of such instrument or document on behalf of the Shareholder
Representative.

“Shareholder Representative Expense Amount” has the meaning given to such term
in Section 3.3(b).

“Shareholder Representative Persons” has the meaning given to such term in
Section 3.1(a).

“Shareholder Representative Reimbursement Amount” has the meaning given to such
term in Section 3.3(b).

 

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“Surviving Person” has the meaning given to such term in Section 6.1(a)(i).

“Ultimate Parent” has the meaning given to such term in the Preamble.

 

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ARTICLE II

CONTINGENT VALUE RIGHTS

Section 2.1 Appointment of the Rights Agent; Issuance of CVRs.

The Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company shall issue the CVRs at the Effective Time
pursuant to the terms of the Merger Agreement, and the CVRs shall represent the
right of the Holders to receive, in respect of each CVR held by such Holder, the
CVR Payment Amount (if any) if and when payable pursuant to this Agreement. The
administration of the CVRs shall be handled pursuant to this Agreement in the
manner set forth in this Agreement.

Section 2.2 Nontransferable.

The CVRs or any interest therein shall not be sold, assigned, transferred,
pledged, encumbered or in any other manner transferred or disposed of, in whole
or in part, other than through a Permitted Transfer.

Section 2.3 No Certificate; Registration; Registration of Transfer; Change of
Address.

(a) The CVRs shall not be evidenced by a certificate or other instrument.

(b) The Rights Agent shall keep a register (the “CVR Register”) for the
registration of CVRs in a book-entry position for each Holder, transfers of CVRs
as herein provided and any new issuances of CVRs in respect of any Reverted
Company Shares. The CVR Register shall set forth the name and address of each
Holder, the number of CVRs held by such Holder and the Tax Identification Number
of each Holder, which information, if not available to the Company’s transfer
agent or provided by the Holder, shall be provided in writing to the Rights
Agent by the Company. The CVR Register will be updated as necessary by the
Rights Agent to reflect the addition or removal of Holders (including pursuant
to any Reverted Company Shares or Permitted Transfers), upon the written receipt
of such information by the Rights Agent. Each of the Company and the Shareholder
Representative may receive and inspect a copy of the CVR Register, from time to
time, upon written request made to the Rights Agent. Within five (5) Business
Days after receipt of such request, the Rights Agent shall mail a copy of the
CVR Register, as then in effect, to the Company and the Shareholder
Representative at the address set forth in Section 7.1.

(c) Subject to the restriction on transferability set forth in Section 2.2,
every request made to transfer a CVR must be in writing and setting forth in
reasonable detail the circumstances relating to the transfer, and must be
accompanied by (i) a written instrument of transfer duly executed by the
registered Holder thereof, the Holder’s attorney duly authorized in writing, the
Holder’s personal representative or survivor, (ii) the transfer certificate
attached hereto as Exhibit A duly completed and properly executed by both the
registered Holder thereof,

 

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the Holder’s attorney duly authorized in writing, the Holder’s personal
representative or survivor and the proposed transferee, and (iii) any other
requested documentation in form reasonably satisfactory to the Company and the
Rights Agent. Upon receipt of such written notice, the Rights Agent shall,
subject to its reasonable determination that the transfer instrument and the
transfer certificate are in proper form and the transfer otherwise complies with
the other terms and conditions herein including Section 2.2, register the
transfer of the CVRs in the CVR Register. The Rights Agent may rely on the
information contained in the transfer certificate and any of the documents
required to be provided with the transfer certificate. All duly transferred CVRs
registered in the CVR Register shall be the valid obligations of the Company,
evidencing the same right, and shall entitle the transferee to the same benefits
and rights under this Agreement, as those held immediately prior to the transfer
by the transferor. No transfer of a CVR shall be valid until registered in the
CVR Register, and any transfer not duly registered in the CVR Register will be
void ab initio (unless the transfer was permissible hereunder and such failure
to be duly registered is attributable to the fault of the Rights Agent). Any
transfer or assignment of the CVRs shall be without charge to the Holder;
provided, that the Company and the Rights Agent may require (i) payment of a sum
sufficient to cover any stamp, transfer or other similar tax or charge that is
imposed in connection with any such transfer or (ii) that the transferor
establish to the reasonable satisfaction of the Rights Agent that any such taxes
have been paid. The Rights Agent shall have no duty or obligation to take any
action under this Section 2.3(c) unless and until the Rights Agent is satisfied
that all such taxes or charges have been paid in full.

(d) A Holder may make a written request to the Rights Agent to change such
Holder’s address of record in the CVR Register. The written request must be duly
executed by the Holder. Upon receipt of such written notice, the Rights Agent
shall promptly record the change of address in the CVR Register.

Section 2.4 Payment Procedures; Payment Amount.

(a) The Holders shall be entitled to the following payments in respect of their
CVRs (any such payments, in the aggregate, the “CVR Payment Amount”):

(i) Payment for Partial Casa Ley Sales. Subject to the procedures set forth in
Section 2.4(c), upon the consummation of any Partial Casa Ley Sale, each Holder
of a CVR shall, in respect of such CVR, be entitled to and shall receive the
Partial Casa Ley Net Proceeds Per CVR with respect to such Partial Casa Ley
Sale.

(ii) Payment for Entire Casa Ley Sales. Subject to the procedures set forth in
Section 2.4(d), upon the consummation of the Entire Casa Ley Sale, each Holder
of a CVR shall, in respect of such CVR, be entitled to and shall receive the
Casa Ley Net Proceeds Per CVR.

(iii) Payment upon Sale Deadline. Subject to the procedures set forth in
Section 2.4(d), upon the Sale Deadline, each Holder of a CVR shall, in respect
of such CVR, be entitled to and shall receive the Sale Deadline Net Proceeds Per
CVR.

 

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(iv) Deferred Cash Consideration. To the extent that any consideration pursuant
to any Partial Casa Ley Sale or Entire Casa Ley Sale includes any deferred cash
consideration (including pursuant to any escrow, holdback or similar amount and
including any such deferred cash consideration in connection with a Partial Casa
Ley Sale or Entire Casa Ley Sale consummated prior to the Closing), each Holder
of a CVR shall be entitled to and shall receive an amount with respect to such
CVR equal to (x) the amount of such deferred cash consideration received by the
Company or any Company Subsidiary (minus the product of (A) 39.25% and (B) the
amount of such deferred cash consideration, less an allocable amount of the
Company and the Company Subsidiaries’ tax basis in their Equity Interests in
Casa Ley, calculated under U.S. federal income tax principles, but only to the
extent, if any, that such basis was not previously taken into account in
determining the amount of the payments in clauses (i), (ii) and (iii) of this
Section 2.4(a)), divided by (y) the number of CVRs listed in the CVR Register as
of the date of such calculation; provided that any CVR to which a Dissenting
Stockholder would be entitled but for Section 2.3 of the Merger Agreement shall
be deemed to be outstanding and included in the number of CVRs listed in the CVR
Register for purposes of the calculation of the number of CVRs listed in the CVR
Register in this Section 2.4(a)(iv)(y). Such deferred cash consideration amounts
received by the Company or any Company Subsidiary shall be paid by the Company,
within two (2) Business Days after its receipt thereof, directly to the Rights
Agent for payment to the Holders.

(b) Currency Conversion. To the extent that any proceeds described herein are
received in a currency other than U.S. dollars, the amount of such proceeds
shall be deemed to be the U.S. dollar amount actually received by the Company
upon the Company’s conversion of such proceeds into U.S. dollars at the
direction of the Shareholder Representative. To the extent any expenses, fees or
costs are incurred or paid in a currency other than U.S. dollars, the actual
U.S. dollar amount that was paid, that was funded by the Company into the
Shareholder Representative Expense Amount or that was a Pre-Funded Amount
(excluding any amount that remains unused on the consummation of the Casa Ley
Sale and that is distributed from the joint account to the Company on such date
in accordance with Section 3.3(b) below) shall be used in the calculation of the
“Casa Ley Sale Expenses”.

(c) Procedure for Partial Casa Ley Sales.

(i) Promptly following the closing of a Partial Casa Ley Sale but in no event
later than ten (10) Business Days thereafter, the Company shall deliver to the
Shareholder Representative (with a copy to the Rights Agent and Ultimate Parent)
the Company’s good faith written calculation, in reasonable detail and with
supporting documentation, work papers and receipts of the Partial Casa Ley Net
Proceeds and the resulting Partial Casa Ley Net Proceeds Per CVR (the “Partial
CVR Payment Statement”), which shall be certified by the Company. The Partial
CVR Payment Statement shall incorporate any Casa Ley Sale Expenses of the
Shareholder Representative set forth in writing by the Shareholder
Representative to the Company within such ten (10) Business Day period, which
shall be certified by the Shareholder Representative. Ultimate Parent and the
Company shall be protected in relying in good faith upon such certification.

(ii) Within five (5) Business Days after receipt of the Partial CVR Payment
Statement, the Shareholder Representative shall deliver to the Company and the

 

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Rights Agent (with a copy to Ultimate Parent) a notice specifying whether the
Shareholder Representative agrees with (a “Notice of Agreement”) or objects to
(a “Notice of Objection”) such Partial CVR Payment Statement.

(iii) If the Shareholder Representative delivers a Notice of Agreement, then any
Partial Casa Ley Net Proceeds Per CVR shall be due and payable to the Holders
pursuant to the procedures set forth in Section 2.4(e) below. If the Shareholder
Representative does not deliver either a Notice of Objection or a Notice of
Agreement within such five (5) Business Day period, then the Shareholder
Representative shall be deemed to have delivered a Notice of Agreement with
respect to such Partial CVR Payment Statement at the end of such period.

(iv) Any Notice of Objection shall contain the Shareholder Representative’s
calculation of the Partial CVR Net Proceeds and the resulting Partial Casa Ley
Net Proceeds Per CVR that such Shareholder Representative believes Holders are
entitled to receive. Such Notice of Objection must also be accompanied by a
description in reasonable detail of each of the objections to the calculations
reflected in the Notice of Objection (collectively, the “Objections”). For a
period of ten (10) Business Days after the delivery of the Notice of Objection,
the Company and the Shareholder Representative shall, in good faith, try to
resolve any Objections; provided, however, that to the extent that the Company
and the Shareholder Representative shall disagree, the Shareholder
Representative’s good faith calculation of the Partial CVR Net Proceeds and the
resulting Partial Casa Ley Net Proceeds Per CVR (as modified to give effect to
the results of any discussions and negotiations pursuant to this clause (iv))
shall control.

(d) Procedure for the Entire Casa Ley Sale or upon the Sale Deadline.

(i) For a period of ten (10) Business Days following the occurrence of the Sale
Deadline, the Company and the Shareholder Representative shall attempt in good
faith to agree on the Fair Market Value of any unsold Equity Interests in Casa
Ley then owned by the Company or any Company Subsidiary. If the Company and the
Shareholder Representative do not by mutual consent agree on the Fair Market
Value of any unsold Equity Interests of Casa Ley then owned by the Company or
any Company Subsidiary within such ten (10) Business Day period, then either the
Company or the Shareholder Representative may, by written notice to the other
(the “Referral Notice”), determine to refer such dispute to an independent
investment banking firm. In the event that either the Company or the Shareholder
Representative determines to refer such dispute to an independent banking firm,
then, within ten (10) Business Days following the date of delivery of the
Referral Notice, each of the Company and the Shareholder Representative shall
separately, by written notice to the other, select an internationally recognized
independent investment banking firm with expertise in valuing, selling or
providing financing with respect to companies engaged, publicly or privately, in
the food and drug retail business in Mexico and instruct such investment banks
to select and mutually agree upon another such independent investment banking
firm to be retained, which such independent investment banking firm shall be
instructed by the parties to, within twenty (20) Business Days from the date of
its retention, prepare and deliver to the Company and the Shareholder
Representative such investment banking firm’s written determination of the Fair
Market Value of such unsold Equity Interests of Casa Ley (which, for the
avoidance of doubt,

 

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shall not include, nor take into account, any minority, liquidity or similar
discount to the valuation of Casa Ley in its entirety). Notwithstanding anything
to the contrary contained in this Section 2.4, in the event that the Company or
any Company Subsidiary enters into an agreement to sell any unsold Equity
Interests in Casa Ley after the three (3) year anniversary of the Closing but
prior to the final payment of the Sale Deadline Net Proceeds, then the Fair
Market Value of any such unsold Equity Interests of Casa Ley for purposes of
this Section 2.4(d)(i) shall be the greater of (x) the Fair Market Value as
determined by either (A) the mutual consent of the Company and the Shareholder
Representative or (B) the independent investment banking firm and (y) the price
per Equity Interest of the Equity Interests of Casa Ley set forth in such
agreement (multiplied by the number of unsold Equity Interests of Casa Ley owned
by the Company as of the Sale Deadline). The determination of the Fair Market
Value of any unsold Equity Interests in Casa Ley then owned by the Company or
any Company Subsidiary in accordance with this Section 2.4(d)(i) shall be final
and binding upon the Company and the Shareholder Representative and any other
Persons for purposes of calculating the Remaining Asset Amount.

(ii) Promptly following the completion of the Entire Casa Ley Sale or the
occurrence of the Sale Deadline, but in no event later than the later of
(A) twenty (20) Business Days thereafter and (B) three (3) Business Days
following receipt of the calculation of the Fair Market Value referenced in
Section 2.4(d)(i) above, the Company shall deliver to the Shareholder
Representative (with a copy to the Rights Agent and Ultimate Parent) the
Company’s good faith written calculation of the Casa Ley Net Proceeds or the
Sale Deadline Net Proceeds (including any Partial Casa Ley Sales), and the
resulting Casa Ley Net Proceeds Per CVR or Sale Deadline Net Proceeds Per CVR,
as applicable (the “Entire CVR Payment Statement”). The Entire CVR Payment
Statement shall incorporate any Casa Ley Sale Expenses of the Shareholder
Representative set forth in writing by the Shareholder Representative to the
Company within such twenty (20) Business Day (or applicable later) period, which
shall be certified by the Shareholder Representative. Ultimate Parent and the
Company may rely in good faith upon such certification. For the avoidance of
doubt, the Company shall deliver an Entire CVR Payment Statement even if it
believes that there are no Casa Ley Net Proceeds Per CVR or Sale Deadline Net
Proceeds Per CVR due and payable. Such Entire CVR Payment Statement will be
accompanied by the Company’s calculation in reasonable detail of the components
of the Casa Ley Net Proceeds or the Sale Deadline Net Proceeds, as applicable,
including a good faith written calculation, in reasonable detail and with
supporting documentation, work papers and receipts, of the Casa Ley Sale
Expenses incurred by the Company and its Subsidiaries (other than the
Shareholder Representative Expense Amount and any Pre-Funded Amounts pursuant to
Section 3.3(b)), along with an Officer’s Certificate certifying such Casa Ley
Sale Expenses and that the CVR Payment Amount was calculated in the manner
required under this Agreement. The Shareholder Representative may rely in good
faith on such certification.

(iii) Within thirty (30) days after receipt of the Entire CVR Payment Statement,
the Shareholder Representative shall deliver to the Company and the Rights Agent
(with a copy to Ultimate Parent) a Notice of Agreement or a Notice of Objection
to such Entire CVR Payment Statement. During such thirty (30) day period, the
Company shall cooperate with and permit, and Ultimate Parent shall cause the
Company to cooperate with and permit, the Shareholder Representative and any
accountant or other consultant or advisor retained by the Shareholder
Representative access during normal business hours to such records

 

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and personnel (including the external auditors of the Company and its
Subsidiaries) as may be reasonably necessary to verify the accuracy of the
Entire CVR Payment Statement and the amounts underlying the calculation of the
entire CVR Payment Amount.

(iv) If the Shareholder Representative delivers a Notice of Agreement, then any
Casa Ley Net Proceeds Per CVR or Sale Deadline Net Proceeds Per CVR, as
applicable, shall be due and payable to the Holders pursuant to the procedures
set forth in this Section 2.4(d) below, and, after delivery of any Casa Ley Net
Proceeds Per CVR or Sale Deadline Net Proceeds Per CVR, as applicable, with
respect to all Holders to the Rights Agent, Ultimate Parent and the Company
shall thereafter have no further obligations with respect to such Casa Ley Net
Proceeds Per CVR or Sale Deadline Net Proceeds Per CVR. If the Shareholder
Representative does not deliver either a Notice of Objection or a Notice of
Agreement within such thirty (30) day period, then the Shareholder
Representative shall be deemed to have delivered a Notice of Agreement with
respect to such Entire CVR Payment Statement at the end of such period.

(v) If the Shareholder Representative delivers a Notice of Objection to the
Company within such thirty (30) day period, such Notice of Objection shall
contain the Shareholder Representative’s calculation of the Casa Ley Net
Proceeds or the Sale Deadline Net Proceeds (including any Partial Casa Ley
Sales), and the resulting Casa Ley Net Proceeds Per CVR or Sale Deadline Net
Proceeds Per CVR, as applicable. Such Notice of Objection must also be
accompanied by a description in reasonable detail of each of the Objections, and
a certificate certifying that the CVR Payment Amount reflected in the Notice of
Objection was calculated in the manner required under this Agreement.

(vi) If the Company does not agree with any of the Objections, the Objections
that are in dispute shall be submitted to Grant Thornton LLP (the “Neutral
Auditor”). Such Neutral Auditor shall, within thirty (30) Business Days of such
submission, resolve any differences between the Company and the Shareholder
Representative and such resolution shall, in the absence of manifest error, be
final, binding and conclusive upon Ultimate Parent, the Company, the Shareholder
Representative, each of the other parties hereto and each of the Holders. The
costs, fees and expenses of such Neutral Auditor shall be borne equally by the
Company and the Shareholder Representative; with any such costs, fees and
expenses of the Shareholder Representative being offset against any Casa Ley Net
Proceeds or the Sale Deadline Net Proceeds (including any Partial Casa Ley
Sales), and the resulting Casa Ley Net Proceeds Per CVR or Sale Deadline Net
Proceeds Per CVR, as applicable. For the avoidance of doubt, and notwithstanding
anything to the contrary contained in this Agreement, any such costs, fees and
expenses of such Neutral Auditor to be borne by the Company shall not be
considered to be Casa Ley Sale Expenses. Upon such resolution, the Company and
the Shareholder Representative shall notify the Rights Agent in writing of such
resolution and any Casa Ley Net Proceeds Per CVR or Sale Deadline Net Proceeds
Per CVR, as applicable, shall be due and payable to the Holders in respect of
each CVR held by such Holder pursuant to the procedures set forth in this
Section 2.4 below, and, after delivery of any Casa Ley Net Proceeds Per CVR or
Sale Deadline Net Proceeds Per CVR, as applicable, with respect to all Holders,
the Rights Agent, Ultimate Parent and the Company shall thereafter have no
further obligations with respect to the Casa Ley Net Proceeds Per CVR or Sale
Deadline Net Proceeds Per CVR and shall, subject to Section 2.4(e), no longer be
entitled to (i) any amount to the extent reflected in any

 

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such finally resolved Casa Ley Net Proceeds or Sales Deadline Net Proceeds or
(ii) any further Casa Ley Sale Expenses. To the extent that the Casa Ley Net
Proceeds or the Sale Deadline Net Proceeds are less than zero, the Company shall
bear any such costs, fees, expenses or losses.

(e) Once any Partial Casa Ley Net Proceeds Per CVR, Casa Ley Net Proceeds Per
CVR, Sale Deadline Net Proceeds Per CVR or any deferred cash consideration per
CVR payable pursuant to Section 2.4(a)(iv) becomes due and payable pursuant to
Section 2.4(a)(iv), Section 2.4(c), Section 2.4(d) or Section 2.4(e), the
Company shall establish a CVR Payment Date with respect to the CVR Payment
Amount that is within five (5) Business Days thereafter and shall provide
written notice to the Rights Agent and Shareholder Representative of the same.
At least two (2) Business Days prior to such CVR Payment Date, the Company shall
cause all amounts to be paid to the Holders on such CVR Payment Date, whether
comprised of the Partial Casa Ley Net Proceeds, the Casa Ley Net Proceeds, the
Sale Deadline Net Proceeds and/or the aggregate amount of deferred cash
consideration payable pursuant to Section 2.4(a)(iv), as applicable, to be
delivered to the Rights Agent, who will in turn, on the CVR Payment Date, pay
the applicable Partial Casa Ley Net Proceeds Per CVR, Casa Ley Net Proceeds Per
CVR, Sale Deadline Net Proceeds Per CVR or deferred cash consideration per CVR
payable pursuant to Section 2.4(a)(iv) to each of the Holders (recalculated by
the Company and the Shareholder Representative as of each CVR Payment Date to
the extent needed to adjust for any Reverted Company Shares multiplied by the
number of CVRs held by such Holder as reflected on the CVR Register) by check
mailed to the address of each Holder as reflected in the CVR Register as of the
close of business on the last Business Day prior to such CVR Payment Date. Any
Casa Ley Sale Expenses to the extent not reflected in the finally resolved Casa
Ley Net Proceeds or Sale Deadline Net Proceeds shall be deducted from any such
deferred cash consideration. If no CVR Payment Amount is due and payable to the
Holders pursuant to any Partial Casa Ley Sale, the Entire Casa Ley Sale or at
the Sale Deadline, the Rights Agent, upon written request from the Company and
the Shareholder Representative, shall deliver notice of the same to the Holders
within five (5) Business Days of being notified that no such CVR Payment Amount
is owing to the Holders. Whenever a payment is to be made by the Rights Agent,
the Company shall deliver written instructions with respect to such payment that
includes the aggregate amount of such payment to be paid to the Holders, and the
amount per CVR to be paid to each such Holder. Until such written instructions
are received by the Rights Agent, the Rights Agent may presume conclusively that
no event has occurred that would require such payment.

(f) The Company shall be entitled to deduct and withhold, or cause to be
deducted or withheld, from the CVR Payment Amount otherwise payable pursuant to
this Agreement, such amounts as it may be required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign Tax Law. To the extent that amounts are so withheld or paid
over to or deposited with the relevant Governmental Entity, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the Holder in respect of which such deduction and withholding was made.

(g) Any funds comprising the cash deposited with the Rights Agent under Section
2.4(e) that remain undistributed to the Holders twelve (12) months after the CVR
Payment Date with respect to the Entire Casa Ley Sale or the Sale Deadline shall
be delivered to the Company by the Rights Agent, upon written demand by the
Company, and any Holders who have not theretofore received payment in exchange
for such CVRs shall thereafter look only to

 

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the Company for payment of their claim therefor; provided, that to the extent
any deferred cash consideration pursuant to Section 2.4(a)(iv) becomes due and
payable after such date, such deferred cash consideration shall be deposited
with the Rights Agent pursuant to Section 2.4(e) and any such funds that remain
undistributed shall only be delivered to the Company, upon written demand by the
Company, twelve (12) months after the Rights Agent’s receipt thereof, and upon
delivery of such funds to the Company, the escheatment obligations of the Rights
Agent with respect to such funds shall terminate. Notwithstanding anything to
the contrary herein, any portion of the consideration provided by the Company to
the Rights Agent that remains unclaimed immediately prior to such time as such
amounts would otherwise escheat to, or become property of, any Governmental
Entity shall, to the extent permitted by Law, become the property of the Company
free and clear of any claims or interest of any Person previously entitled
thereto, subject to any escheatment Laws.

(h) During the period that the Rights Agent is in possession of the funds
delivered to the Rights Agent for payment to Holders, the Rights Agent shall
identify, report and deliver all unclaimed portions of such amounts and related
unclaimed property to all states and jurisdictions for the Company in accordance
with applicable abandoned property law. None of the Company, the Shareholder
Representative or the Rights Agent shall be liable to any person in respect of
any funds delivered to a public official in compliance with any applicable
state, federal or other abandoned property, escheat or similar law. In
consideration of receiving compensation from the agents of the states for
processing and support services provided by the Rights Agent relating to initial
compliance with applicable abandoned property law, the Rights Agent shall not
charge the Company for such services. In connection with providing such
services, the Rights Agent may use the services of a locating service provider
selected by the Rights Agent to locate and contact Holders, if any, who have not
yet cashed their checks representing payment of the funds deposited with the
Rights Agent for payment to the Holders, which provider has agreed to compensate
the Rights Agent for processing and other services the Rights Agent provides in
connection with such locating services. Such provider shall inform any such
located Holders that they may choose either (i) to contact the Rights Agent
directly to receive a check for payment of such amounts at no charge other than
any applicable fees contemplated herein, or (ii) to utilize the services of such
provider for a fee to be specified in writing to such Holder, which may not
exceed the lesser of 15% of the total value of such payment amount or the
maximum statutory fee permitted by the applicable state jurisdiction. If the
Company requires the Rights Agent to work with a locating service provider other
than one selected by the Rights Agent, additional fees may apply.

(i) The Rights Agent shall not be obligated to perform wage or Form W-2 tax
reporting, and to the extent that any wage or W-2 reporting is required with
respect to the payment of any funds hereunder to Holders, the Company shall
promptly notify the Rights Agent of the person or entity responsible for such
wage or W-2 reporting.

(j) All funds received by the Rights Agent under this Agreement that are to be
distributed or applied by the Rights Agent in the performance of its duties,
obligations and responsibilities hereunder (the “Funds”) shall be held by
Computershare as agent for the Company and deposited in one or more bank
accounts to be maintained by Computershare in its name as agent for the Company.
Until disbursed pursuant to this Agreement, Computershare may hold or invest the
Funds through such accounts in obligations of, or guaranteed by, the

 

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United States of America. The Rights Agent shall have no responsibility or
liability for any diminution of the Funds that may result from any deposit or
investment made by the Rights Agent in accordance with this paragraph, including
any losses resulting from a default by any bank, financial institution or other
third party. Computershare may from time to time receive interest, dividends or
other earnings in connection with such deposits or investments. No interest
shall accrue on any funds deposited with the Rights Agent pursuant to this
Agreement. Computershare shall not be obligated to calculate or pay such
interest, dividends or earnings to the Company, any Holder or any other person
or entity. For the avoidance of doubt, the preceding three sentences are not
meant to cover any interest included in the Casa Ley Net Proceeds, Partial Casa
Ley Net Proceeds, Sale Deadline Net Proceeds and/or any amounts paid pursuant to
Section 2.4(a)(iv).

Section 2.5 No Voting, Dividends or Interest; No Equity or Ownership Interest in
Ultimate Parent or the Company.

(a) The CVRs shall not have any voting or dividend rights, and interest shall
not accrue on any amounts payable on the CVRs to any Holder (without prejudice
to the inclusion in Casa Ley Net Proceeds and Sale Deadline Net Proceeds of the
amounts referenced in Section 2.6).

(b) The CVRs shall not represent any equity or ownership interest in Ultimate
Parent, the Company or any of their Affiliates, or in any constituent company to
the Merger.

Section 2.6 Establishment of Casa Ley CVR Bank Account. Any amounts paid to the
Company or any of its Subsidiaries in connection with any Partial Casa Ley Sale,
any Entire Casa Ley Sale or in connection with any deferred cash consideration
with respect thereto shall be held in a segregated bank account at a banking
institution reasonably acceptable to the Shareholder Representative established
and maintained for the benefit of the Holders and invested in one or more
Qualified Investments until any CVR Payment Amount is required to be paid
pursuant to the terms hereof. Notwithstanding anything to the contrary contained
in this Agreement, other than in connection with any payment pursuant to
Section 2.4(e), the Company shall not withdraw any amounts from such bank
account without the prior written consent of the Shareholder Representative.

ARTICLE III

THE RIGHTS AGENT AND SHAREHOLDER REPRESENTATIVE

Section 3.1 Certain Duties and Responsibilities.

(a) Neither (i) the Rights Agent nor (ii) the Shareholder Representative, the
Shareholder Representative’s direct or indirect holders of Equity Interests, any
individual member of the committee that comprises or controls the Shareholder
Representative or, as applicable, any of their respective managers, directors,
officers, employees, agents or other representatives (such Persons described in
this clause (ii) in their capacities as such, the “Shareholder Representative
Persons”) shall have any liability or responsibility to any

 

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Person (A) of any kind whatsoever for or in respect of its performance of any
duties imposed hereunder or for any actions taken, suffered or omitted to be
taken in connection with this Agreement (including, in the case of the Rights
Agent, its acceptance and administration of this Agreement and the exercise and
performance of its duties hereunder), (B) for any acts or omissions of the other
parties hereto or (C) for damages, losses or expenses arising out of this
Agreement, except (in the case of each of the foregoing clauses) to the extent
of their gross negligence, bad faith or willful or intentional misconduct (each
as determined by a final judgment of a court of competent jurisdiction). No
Shareholder Representative Person shall have any duties, fiduciary or otherwise,
under this Agreement except the duty to act in good faith and except as
expressly set forth herein. No provision of this Agreement shall require the
Rights Agent or any Shareholder Representative Person to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers. For
purposes of this Section 3.1 and Sections 3.2, 3.3 and 7.5 below, the term
“Rights Agent” shall include the Rights Agent’s managers, directors, officers,
employees, agents or other representatives in their capacity as such and, for
the avoidance of doubt, the Rights Agent shall be liable for breaches of this
Agreement by the Rights Agent’s managers, directors, officers, employees, agents
or other representatives.

(b) The Shareholder Representative shall have the exclusive authority to act on
behalf of the Holders in enforcing any of their rights hereunder, including the
delivery of a Notice of Objection, statement of Objections and negotiation. The
Shareholder Representative shall be under no obligation to institute any action,
suit or legal proceeding or to take any other action likely to involve material
expense. All rights of action under this Agreement may be (and shall only be)
enforced by the Shareholder Representative, and any action, suit or proceeding
instituted by the Shareholder Representative shall be brought in its name as
Shareholder Representative on behalf of the Holders, and any recovery of
judgment shall be for the ratable benefit of all the Holders, as their
respective rights or interests may appear in the CVR Register.

Section 3.2 Certain Rights of Rights Agent.

The Rights Agent undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied duties, covenants or
obligations shall be read into this Agreement against the Rights Agent. In
addition:

(a) the Rights Agent may rely in good faith upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;

(b) (i) whenever the Rights Agent shall reasonably require that a matter be
established or proved by the Company prior to taking, suffering or omitting to
take any action hereunder, the Rights Agent may request and rely upon a
certificate signed by the chief executive officer, president, chief financial
officer, any vice president, the controller, the treasurer or the secretary of
the Company on behalf of the Company, which certificate shall be, if signed by
the party or parties required to consent to such action, full authorization and
protection to the Rights Agent, and the Rights Agent shall, in the absence of
gross negligence, bad faith or

 

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willful or intentional misconduct (each as determined by a final judgment of a
court of competent jurisdiction) on its part, incur no liability, and shall be
protected and be held harmless by the Company, for or in respect of any action
taken, suffered or omitted to be taken by it under the provisions of this
Agreement in reliance upon such certificate; and (ii) whenever the Rights Agent
shall reasonably require that a matter be established or proved by the
Shareholder Representative prior to taking, suffering or omitting to take any
action hereunder, the Rights Agent may request and rely upon a certificate
signed by each then current individual member of the committee that comprises or
controls the Shareholder Representative on behalf of the Shareholder
Representative, which certificate shall be, if signed by the party or parties
required to consent to such action, full authorization and protection to the
Rights Agent, and the Rights Agent shall, in the absence of gross negligence,
bad faith or willful or intentional misconduct (each as determined by a final
judgment of a court of competent jurisdiction) on its part, incur no liability,
and shall be protected and be held harmless by the Company, for or in respect of
any action taken, suffered or omitted to be taken by it under the provisions of
this Agreement in reliance upon such certificate;

(c) the Rights Agent may engage and consult with counsel of its selection (who
may be legal counsel for the Rights Agent or an employee of the Rights Agent)
and the written advice of such counsel or any opinion of counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and in reliance
thereon;

(d) the permissive rights of the Rights Agent to do things enumerated in this
Agreement shall not be construed as a duty;

(e) the Rights Agent shall not be required to give any note or surety in respect
of the execution of such powers or otherwise in respect of the premises;

(f) except as otherwise set forth in this Agreement, the Rights Agent shall have
no liability and shall be held harmless by the Company in respect of the
validity of this Agreement, the statements of fact or recitals contained herein
(or be required to verify the same), or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent and the
enforceability of this Agreement against the Rights Agent assuming the due
execution and delivery hereof by the other parties hereto); nor shall it be
responsible for any breach by the Company or any other party of any covenant or
condition contained in this Agreement nor shall the Rights Agent be responsible
for, nor chargeable with, knowledge of, nor have any requirements to comply
with, the terms and conditions of any other agreement, instrument or document,
including, without limitation, the Merger Agreement, nor shall the Rights Agent
be required to determine if any person or entity has complied with any such
agreements, instruments or documents, nor shall any additional obligations of
the Rights Agent be inferred from the terms of such agreements, instruments or
documents even though reference thereto may be made in this Agreement;

(g) notwithstanding anything in this Agreement to the contrary, (i) the Rights
Agent shall in no event be liable for special, punitive or unforeseeable
consequential damages (unless such damages are to third parties with respect to
third party claims that result in a judgment against the Rights Agent for such
damages), and (ii) any liability of the Rights Agent,

 

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including, but not limited to, foreseeable consequential damages, shall be
limited to the amount of fees paid by the Company to the Rights Agent (excluding
amounts paid to the Rights Agent as reimbursement for expenses and other
charges);

(h) the Rights Agent and any of its affiliates may buy, sell or deal in any
securities of the Company or the Ultimate Parent or become peculiarly interested
in any transaction in which the Ultimate Parent or the Company may be
interested, or contract with or lend money to the Ultimate Parent or the Company
or otherwise act as fully and freely as though it were not the Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Ultimate Parent or the Company or for any other
Person; and

(i) the Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself (through its directors,
officers and employees) or by or through its attorneys or agents; provided that
the Rights Agent shall be liable for breaches of this Agreement by such
directors, officers, employees, attorneys or agents.

Section 3.3 Indemnity and Expenses.

(a) The Company agrees to indemnify, defend and hold harmless each Shareholder
Representative Person and the Rights Agent for, and to hold each Shareholder
Representative Person and the Rights Agent harmless against, any loss,
liability, judgment, fine, penalty, claim, demand, suit, cost, damage or
expense, including reasonable out-of-pocket expenses (including the reasonable
costs and expenses of legal counsel) arising out of or in connection with the
Rights Agent’s and the Shareholder Representative’s respective duties under this
Agreement, including the reasonable out-of-pocket costs and expenses of
defending the Rights Agent and each individual member of the Committee that
comprises or controls the Shareholder Representative against any claims,
charges, demands, investigations, suits or loss or liability, or enforcement of
its rights hereunder, unless it shall have been finally determined by a judgment
of a court of competent jurisdiction to be a direct result of the Rights Agent’s
or such Shareholder Representative Person’s, as applicable, gross negligence,
bad faith or willful or intentional misconduct. The right to indemnification
conferred in this Section 3.3(a) shall include the right to be paid or
reimbursed by the Company for the reasonable expenses incurred by such Person
entitled to be indemnified under this Section 3.3(a) who was, or is threatened
to be made a named defendant or respondent in a claim, charge, demand,
investigation or suit in advance of the final disposition thereof and without
any determination as to the Person’s ultimate entitlement to indemnification.
The rights granted pursuant to this Section 3.3(a) shall be deemed contract
rights, and no amendment, modification or repeal of this Section 3.3(a) shall
have the effect of limiting or denying any such rights with respect to claims,
charges, demands, investigations and suits arising prior to any such amendment,
modification or repeal. The Shareholder Representative Person’s aggregate
liability to any Person with respect to, arising from, or arising in connection
with this Agreement, or from all services provided or omitted to be provided
under this Agreement, whether in contract, or in tort, or otherwise, is limited
to, and shall not exceed, the amounts paid hereunder by the Company to the
Shareholder Representative as fees and charges, but not including reimbursable
expenses. Indemnification under this Section 3.3(a) shall continue as to a
Person who has ceased to serve in the capacity which initially entitled such
Person to indemnity hereunder. Any such amounts incurred by the Company in
connection with this Section 3.3(a) shall be a Casa Ley Sale Expense.

 

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(b) The Company or any of its Affiliates shall, if and as requested by the
Shareholder Representative at any time from and after the Effective Time through
the termination of this Agreement, pay to or at the direction of the Shareholder
Representative fees and expenses incurred at the direction of the Shareholder
Representative pursuant to this Agreement (“Shareholder Representative
Reimbursement Amount”). Subject to the next sentence, the Company or any of its
Affiliates shall, if and as requested by the Shareholder Representative at any
time from and after the Effective Time through the termination of this
Agreement, transfer to a joint account of the Company and the Shareholder
Representative funds in the amount of $25,000,000 less the Shareholder
Representative Reimbursement Amount actually paid through that date for use as
directed by the Shareholder Representative (the “Shareholder Representative
Expense Amount”) pursuant to this Agreement. If any amounts are required in
excess of $25,000,000 (and, to the extent the Shareholder Representative Expense
Amount has been funded, only after such amount has been fully expended), then at
the request of the Shareholder Representative from time to time, the Company or
an Affiliate of the Company will promptly pay such additional fees and expenses
incurred at the direction of the Shareholder Representative pursuant to this
Agreement and/or pre-fund to such joint account an amount reasonably specified
by the Shareholder Representative in respect of expected expenses in connection
with the Casa Ley Sale (including payments to such advisors as the Shareholder
Representative may choose to engage in connection with the Casa Ley Sale) and
performance of its obligations and duties hereunder (any such amount, a
“Pre-Funded Amount”). Any amounts held in such joint account shall be treated as
owned by the Company for all income tax purposes, any interest or other income
earned with respect to such joint account shall be reported as income of the
Company for tax purposes and, for the avoidance of doubt, no portion of the
Shareholder Representative Reimbursement Amount, the Shareholder Representative
Expense Amount or any Pre-Funded Amount shall be considered income to the
Shareholder Representative for tax purposes. The parties hereto will prepare all
Tax Returns in a manner consistent with the foregoing sentence. Any Shareholder
Representative Reimbursement Amount and any amounts (and only such amounts)
actually spent from the Shareholder Representative Expense Amount or Pre-Funded
Amounts shall be included in the calculation of Casa Ley Sale Expenses
hereunder. Any funds from the Shareholder Representative Expense Amount or
Pre-Funded Amounts that remain unused on the earlier of the consummation of the
Entire Casa Ley Sale and the Sale Deadline (taking into account the completion
of the procedures set forth in Section 2.4) shall be distributed from the joint
account to the Company five (5) Business Days after the payment of the Casa Ley
Net Proceeds Per CVR or the Sale Deadline Net Proceeds Per CVR. For the
avoidance of doubt, the Company or one of its Affiliates shall pay all Casa Ley
Sales Expenses, including any such Case Ley Sale Expenses incurred at the
direction of the Shareholder Representative, subject to the deduction of such
Casa Ley Sale Expenses from the payments to the Holders as is provided for
hereunder. Notwithstanding the foregoing, after the completion of an Entire Casa
Ley Sale, the Company’s consent, which shall not be unreasonably withheld, will
be required for any fees or expenses that the Shareholder Representative may
wish to incur pursuant to this Section 3.3(b), to the extent that the aggregate
amount of such fees and expenses would exceed the amount of deferred
consideration reasonably expected from such Entire Casa Ley Sale.

 

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(c) The Company agrees, in all events (i) to pay the fees and expenses of the
Rights Agent in connection with this Agreement as set forth on Schedule 3.3(c)
hereto and (ii) to reimburse the Rights Agent for all taxes and governmental
charges (other than taxes measured by the Rights Agent’s income) and reasonable
and customary out-of-pocket expenses (including reasonable and customary fees
and expenses of the Rights Agent’s counsel) paid or incurred by the Rights Agent
in connection with the preparation, delivery, amendment, administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. Any invoice for any out-of-pocket expenses and per item fees realized
will be rendered and payable by the Company within thirty (30) days after
receipt by the Company, except for postage and mailing expenses, which funds
must be received one (1) Business Day prior to the scheduled mailing date. For
the avoidance of doubt, 50% of such fees, expenses and reimbursements contained
in this Section 3.3 shall be Casa Ley Sale Expenses and the remaining 50% of
such fees, expenses and reimbursements shall not be Casa Ley Sale Expenses.

Section 3.4 Resignation and Removal of Rights Agent and Shareholder
Representative; Appointment of Successor.

(a) The Rights Agent may resign at any time by giving written notice thereof to
the Company (with a copy to Ultimate Parent) and the Shareholder Representative
specifying a date when such resignation shall take effect, which notice shall be
sent at least thirty (30) days prior to the date so specified. Any individual
members of the committee that comprises or controls the Shareholder
Representative may resign at any time by giving written notice thereof to the
Company (with a copy to Ultimate Parent), the Rights Agent and the Holders
specifying a date when such resignation shall take effect, which notice shall be
sent at least thirty (30) days prior to the date so specified.

(b) If at any time the Rights Agent shall resign, be removed or become incapable
of acting, the Company, by a Board Resolution, shall promptly appoint a
qualified successor Rights Agent reasonably satisfactory to the Shareholder
Representative. The successor Rights Agent so appointed shall, upon its
acceptance of such appointment in accordance with this Section 3.4(b), become
the successor Rights Agent.

(c) If (i) a successor Rights Agent has not been appointed pursuant to
Section 3.4(b) and has not accepted such appointment within thirty (30) days
after the initial Rights Agent delivers notice of its resignation pursuant to
Section 3.4(a) or (ii) at any time the Rights Agent shall become incapable of
acting, the incumbent Rights Agent, the Shareholder Representative or the
Company may petition any court of competent jurisdiction for the removal of the
Rights Agent, if applicable, and the appointment of a successor Rights Agent.

(d) If at any time any individual members of the committee that comprises or
controls the Shareholder Representative shall resign, be removed or become
incapable of acting, the remaining members of the committee that comprises or
controls the Shareholder Representative shall promptly appoint a qualified
successor individual member to such committee. If the individual members of the
committee that comprises or controls the Shareholder Representative unanimously
determine that a third committee member would be appropriate, then the members
of the committee that comprises or controls the Shareholder Representative shall
appoint, upon unanimous agreement, a qualified individual member to such

 

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committee. The successor or additional individual member so appointed shall,
forthwith upon its acceptance of such appointment in accordance with this
Section 3.4(d), become a successor or additional individual member of the
committee comprising the Shareholder Representative; provided, that (x) such
successor or additional individual member of the committee comprising the
Shareholder Representative may not be a director, officer or employee of the
Company or any of its Affiliates and (y) the Company agrees to indemnify the
Shareholder Representative for any and all actions taken in connection with this
Section 3.4(d).

(e) The Company shall give written notice of each resignation and each removal
of a Rights Agent or individual member of the committee comprising the
Shareholder Representative and each appointment of a successor Rights Agent or
individual member of the committee comprising the Shareholder Representative to
the then acting members of the committee comprising the Shareholder
Representative or then acting Rights Agent, as applicable, within ten (10) days
after acceptance of appointment by a successor Rights Agent or individual member
of the committee comprising the Shareholder Representative. If requested, the
Rights Agent (or successor Rights Agent) shall mail notice of each resignation
and each removal of a Rights Agent or individual member of the committee
comprising the Shareholder Representative and each appointment of a successor
Rights Agent or individual member of the committee comprising the Shareholder
Representative to the Holders within ten (10) days after receipt of notice
thereof and all necessary information from the Company. Each such notice
provided to the Rights Agent, Shareholder Representative, or Holders shall
include the name and address of the successor Rights Agent or Shareholder
Representative, as applicable.

Section 3.5 Acceptance of Appointment by Successor.

Every successor Rights Agent or Shareholder Representative appointed hereunder
shall execute, acknowledge and deliver to the Company and to the retiring Rights
Agent or Shareholder Representative, as applicable, an instrument accepting such
appointment and a counterpart of this Agreement, and thereupon such successor
Rights Agent or Shareholder Representative, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Rights Agent or Shareholder Representative (as applicable); but,
on request of the Company or the successor Rights Agent, such retiring Rights
Agent shall execute and deliver an instrument transferring to such successor
Rights Agent all the rights, powers and trusts of the retiring Rights Agent.

ARTICLE IV

ADDITIONAL COVENANTS

Section 4.1 Operations.

(a) From and after the Effective Time until the payment of the Entire Casa Ley
Net Proceeds or the Sale Deadline Net Proceeds, (i) the Company shall, to the
extent legally permissible (and subject to the Shareholder Representative’s
entry into a customary non-disclosure agreement to the extent required by
applicable Law or any agreements binding on the Company with respect to Casa
Ley), reasonably promptly provide to the Shareholder Representative all
information received by the Company or any of its Subsidiaries relating to

 

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Casa Ley or any of its Subsidiaries, (ii) the Company shall vote (and shall
cause its Subsidiaries to vote) their respective direct or indirect Equity
Interests in Casa Ley and its Subsidiaries as directed by the Shareholder
Representative, provided that such direction would not reasonably be expected to
result in a violation of applicable Law, a violation of Casa Ley’s governing
documents or any material liability or obligation of the Company, any Company
Subsidiary or any of their Affiliates, (iii) the Company shall use commercially
reasonable efforts to procure that (A) the Casa Ley Business will be operated
substantially in the ordinary course of business consistent with past practice
and (B) Casa Ley and each of its Subsidiaries will distribute any proceeds
received with respect to any Partial Casa Ley Sale or the Entire Casa Ley Sale
to the Company or any Company Subsidiary such that it may be distributed to the
Holders, (iv) the Company shall not (and shall cause its Subsidiaries not to)
enter into any material transaction, agreement or commitment with Casa Ley or
any of its Subsidiaries without the Shareholder Representative’s prior written
consent (such consent not to be unreasonably withheld, conditioned or delayed),
other than the continuation, in accordance with their respective terms, of any
such transaction, agreement or commitment between Casa Ley or any of its
Subsidiaries, on the one hand, and the Company or any of its Subsidiaries, on
the other, that are in effect as of the Effective Time and (v) the Company shall
not, shall cause its Subsidiaries not to, and shall use reasonable best efforts
to cause Casa Ley not to, as applicable, issue, sell, pledge, dispose of, grant,
transfer or encumber, or authorize the issuance, sale, pledge, disposition,
grant, transfer or encumbrance of, any shares of capital stock of, or other
Equity Interests in Casa Ley or any of its Subsidiaries. The Company agrees that
it shall designate to the board of directors or similar governing body of Casa
Ley and any of its Subsidiaries, a designee reasonably acceptable to and
approved in writing in advance by the Shareholder Representative; provided that
any appointees to the board of directors or similar governing body of Casa Ley
and any of its Subsidiaries as of the Effective Time shall be deemed to have
been approved in writing in advance by the Shareholder Representative.

Section 4.2 List of Holders.

The Company shall furnish or cause to be furnished to the Rights Agent, in such
form as the Company receives from the transfer agent of the Company, or from
such other agent performing similar services for the Company, or from the
Company’s internal records with regard to Company Options, Restricted Shares,
Performance Share Awards, Restricted Stock Units and shares credited in the
“stock credit accounts” to the extent no records from a third party agent are
maintained in the ordinary course, the names and addresses of the Holders and
the number of CVRs held by each such Holder, within five (5) Business Days of
the Effective Time.

Section 4.3 Casa Ley Sale Process.

(a) From and after the Effective Time until the consummation of the Entire Casa
Ley Sale or the Sale Deadline, whichever is earlier, the Shareholder
Representative shall be responsible for conducting the sale process of Casa Ley
(or, to the extent a Casa Ley Sale involving a sale of Casa Ley Series A Shares
is contemplated, responsible for overseeing and making any decisions on behalf
of the Company with respect to such sale process of Casa Ley, and the Company
hereby agrees that it will act at the direction of the Shareholder
Representative with respect to the voting of its Equity Interests in respect of
any matters

 

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concerning the Casa Ley Sale) and shall be empowered to take all actions
necessary or advisable in order to consummate a Casa Ley Sale, including
retaining advisors in connection with the Casa Ley Sale, soliciting potential
purchasers for the Equity Interests owned by the Company and any Company
Subsidiary and determining which purchaser to select, negotiating the terms and
conditions of any Casa Ley Sale Agreement, including the purchase price for the
Equity Interests owned by the Company and any Company Subsidiary, complying with
any applicable provisions of Casa Ley’s governing documents (including the
By-Laws), including with respect to rights of first refusal or similar
provisions, and effectuating the consummation of such Casa Ley Sale.

(b) During the period from and after the Effective Time until the consummation
of the Entire Casa Ley Sale or the Sale Deadline, whichever is earlier, the
Company shall, and shall cause its Affiliates to, use commercially reasonable
efforts to provide or cause to be provided to the Shareholder Representative all
assistance reasonably requested by the Shareholder Representative in the
preparation of the sales process, the negotiation and consummation of the
transactions contemplated by the Entire Casa Ley Sale or any Partial Casa Ley
Sale, including the use of commercially reasonable efforts (i) to provide such
information, financial or otherwise, with respect to Casa Ley, its Subsidiaries
or the Casa Ley Business as the Shareholder Representative may reasonably
request, to the extent such information is reasonably available to, or can be
reasonably obtained by, the Company or any Company Subsidiary, (ii) to assist in
the preparation of disclosure schedules, exhibits and ancillary agreements
contemplated in the applicable sales agreement relating to the Entire Casa Ley
Sale or any such Partial Casa Ley Sale to the extent such information is
reasonably available to, or can reasonably be attained by, the Company or any
Company Subsidiary and (iii) to assist in obtaining approvals from Governmental
Entities and consents and notices required to be obtained from or made to other
Persons under the sales agreement relating to the Entire Casa Ley Sale or any
such Partial Casa Ley Sale; provided, that, for the avoidance of doubt, all
out-of-pocket costs, fees and expenses of the Company or its Affiliates in
complying with this Section 4.3(b) shall be Casa Ley Sale Expenses, other than
Excluded Expenses (which, for the avoidance of doubt, shall not be Casa Ley Sale
Expenses). The Company shall, and shall cause its Affiliates to, afford to the
Shareholder Representative reasonable access, upon reasonable prior notice and
during normal business hours to the Company’s officers, employees, properties,
books, contracts and records as the Shareholder Representative may reasonably
request relating to Casa Ley or its Subsidiaries; provided, that the Shareholder
Representative shall conduct any such activities in such a manner as not to
interfere unreasonably with the business or operations of the Company. During
the period from and after the Effective Time until the consummation of the
Entire Casa Ley Sale or the Sale Deadline, whichever is earlier, the Company
shall, and shall cause its Affiliates to, use commercially reasonable efforts to
cooperate in good faith with the Shareholder Representative in connection with
any proposed initial public offering of Casa Ley or the Casa Ley Series B
Shares. The Shareholder Representative shall seek in good faith to complete the
sale process of the Equity Interests in Casa Ley by the Sale Deadline (including
any such Equity Interests that are publicly traded).

(c) The Shareholder Representative shall consult with the Company in the Entire
Casa Ley Sale or any Partial Casa Ley Sale and shall keep the Company and
Ultimate Parent reasonably informed on a current basis of the status, details
and progress of any negotiations for the Entire Casa Ley Sale or any Partial
Casa Ley Sale, including by providing

 

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copies of any marketing or information materials, the prospective purchaser’s
financial statements and the current interim drafts of any Casa Ley Sale
Agreement, and shall provide reasonable time to the Company and Ultimate Parent
for review of such documents.

(d) In the event a definitive agreement is to be entered into prior to the Sale
Deadline with respect to the Entire Casa Ley Sale or one or more Partial Casa
Ley Sales, such agreement shall not, without the consent of the Company (which
such consent shall not be unreasonably withheld, delayed or conditioned),
(i) require the Company or any Company Subsidiary to agree to any material
operating restrictions applicable to the Company or any Company Subsidiary
(other than customary (A) confidentiality and/or employee non-solicitation
restrictions that survive for no more than two (2) years from and after the
Effective Time and, (B) restrictions relating to Casa Ley, any of its
Subsidiaries, any of their respective properties or assets, the Casa Ley
Business, any portions thereof or, to the extent such restrictions are
reasonable, the Company’s or any Company Subsidiary’s management, operation or
oversight thereof), (ii) require the Company or any Company Subsidiary to agree
to any recourse applicable to the Company or any Company Subsidiary in excess of
any escrow amount, holdback or similar amount after the closing of such
agreement other than with respect to any customary indemnity obligations that
are shared proportionately (based on their respective Equity Interests) among
all of the participating Casa Ley shareholders for (A) any breaches by the
Company or any Company Subsidiaries of (x) its covenants or agreements contained
in such agreement or (y) any customary representations in such agreement
relating to organization, qualification, capitalization, title to assets,
authority, no conflicts, brokers, taxes, or employee benefits or (B) pre-closing
taxes relating to Casa Ley, any of its Subsidiaries, any of their respective
properties or assets, the Casa Ley Business, or any portions thereof,
(iii) require the Company or any Company Subsidiary to retain any material
excluded or retained liabilities (other than in connection with the matters
described in (ii) above) relating to the securities or assets of Casa Ley or any
of its Subsidiaries being directly or indirectly sold, transferred or otherwise
disposed of in connection with such Entire Casa Ley Sale or Partial Casa Ley
Sale after the closing of such agreement or (iv) be sold for a price that is
payable in consideration other than cash or that, in the good faith judgment of
the Shareholder Representative, would cause the Casa Ley Net Proceeds or the
Partial Casa Ley Net Proceeds from such sale agreement to be less than zero. For
the avoidance of doubt, and notwithstanding anything in any definitive agreement
with respect to the Entire Casa Ley Sale or any Partial Casa Ley Sale, the
Shareholder Representative shall control any third party claims relating to or
arising under any such definitive agreement to the extent that any damages
claimed thereunder are reasonably likely to be covered in full by any escrow,
holdback or similar amount thereunder without direct liability of the Company or
any Company Subsidiary and any costs, fees or expenses incurred by such
Shareholder Representative in connection therewith shall be included in Casa Ley
Sale Expenses.

(e) Upon the consummation of the Entire Casa Ley Sale or any Partial Casa Ley
Sale, unless otherwise agreed to between the Company and the purchaser under
such Casa Ley Sale Agreement, all intercompany arrangements and obligations
between the Company and Casa Ley will be terminated and the Company shall take
all actions necessary or advisable to cause such termination.

Section 4.4 Books and Records.

 

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The Company shall, and shall cause its Subsidiaries to, use commercially
reasonable efforts to keep true, complete and accurate records in sufficient
detail to enable the Shareholder Representative and its consultants or
professional advisors to determine the amounts payable hereunder.

ARTICLE V

AMENDMENTS

Section 5.1 Amendments Without Consent of Holders.

(a) Without the consent of any Holders, the Rights Agent, or the Shareholder
Representative, the Company (when authorized by a Board Resolution), at any time
and from time to time, may enter into one or more amendments hereto, subject to
Section 6.1, to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein.

(b) Without the consent of any Holders, the Company (when authorized by a Board
Resolution), the Shareholder Representative and the Rights Agent, at any time
and from time to time, may enter into one or more amendments hereto, for any of
the following purposes:

(i) to evidence the removal or replacement of the Rights Agent or any individual
member of the committee comprising the Shareholder Representative and the
succession of another Person as a successor Rights Agent or individual member of
the committee comprising or controlling the Shareholder Representative, as
applicable, and the assumption by any successor of the obligations of the Rights
Agent or Shareholder Representative, as applicable, herein, in accordance with
Sections 3.4 and 3.5;

(ii) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Company, the Rights Agent and the
Shareholder Representative shall consider to be for the protection of the
Holders; provided, that, in each case, such provisions shall not adversely
affect the interests of the Holders as determined by the Shareholder
Representative;

(iii) to cure any ambiguity, to correct or supplement any provision herein that
may be defective or inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Agreement; provided, that, in each case, such provisions shall not adversely
affect the interests of the Holders as determined by the Shareholder
Representative; or

(iv) as may be necessary to ensure that the CVRs are not subject to registration
under the Securities Act or the Exchange Act.

(c) Promptly after the execution by the Company (and the Rights Agent, as
applicable), of any amendment pursuant to the provisions of this Section 5.1,
the Company will mail (or cause the Rights Agent to mail) a notice thereof by
first class mail to the Holders at their addresses as they appear on the CVR
Register, setting forth such amendment.

 

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Section 5.2 Amendments with Consent of the Shareholder Representative.

(a) With the written consent of the Shareholder Representative, the Company
(when authorized by a Board Resolution), the Shareholder Representative and the
Rights Agent may enter into one or more amendments hereto for the purpose of
adding, eliminating or changing any provisions of this Agreement, even if such
addition, elimination or change is adverse to the interest of the Holders.

(b) Promptly after the execution by the Company, the Shareholder Representative
and the Rights Agent of any amendment pursuant to the provisions of this
Section 5.2, the Company will mail (or cause the Rights Agent to mail) a notice
thereof by first class mail to the Holders at their addresses as they appear on
the CVR Register, setting forth such amendment.

Section 5.3 Execution of Amendments.

In executing any amendment permitted by this ARTICLE V, the Rights Agent will be
entitled to receive, and will be fully protected in relying upon, an opinion of
counsel selected by the Company stating that the execution of such amendment is
authorized or permitted by this Agreement. The Rights Agent may, but is not
obligated to, enter into any such amendment that affects the Rights Agent’s own
rights, privileges, covenants or duties under this Agreement or otherwise.

Section 5.4 Effect of Amendments.

Upon the execution of any amendment permitted under this ARTICLE V, this
Agreement shall be modified in accordance therewith, such amendment shall form a
part of this Agreement for all purposes and each Holder, Ultimate Parent, the
Company, the Shareholder Representative and the Rights Agent shall be bound
thereby.

ARTICLE VI

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 6.1 Company Consolidation, Merger, Sale or Conveyance.

(a) From and after the Effective Time until such time as all of the Company’s
payment obligations shall have been discharged, the Company shall not
consolidate with or merge into any other Person or convey, assign, transfer or
lease its properties and assets substantially as an entirety to any Person,
unless:

(i) in the case that the Company shall consolidate with or merge into any other
Person or convey, assign, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person that acquires by
conveyance or transfer, or that leases, the properties and assets of the Company
substantially as an entirety (the “Surviving Person”) shall expressly assume
payment of amounts on all the CVRs and the performance of every duty and
covenant of this Agreement on the part of the Company to be performed or
observed; and

 

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(ii) prior to such transaction, the Company has delivered to the Shareholder
Representative an Officer’s Certificate stating that such consolidation, merger,
conveyance, transfer or lease complies with this ARTICLE VI and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

(b) For purposes of this Section 6.1, “convey, transfer or lease its properties
and assets substantially as an entirety” shall mean properties and assets
contributing in the aggregate at least a majority of the Company’s and its
Subsidiaries’ total consolidated revenues as reported in the last available
periodic financial report (quarterly or annual, as the case may be).

(c) In the event the Company conveys, transfers or leases its properties and
assets substantially as an entirety in accordance with the terms and conditions
of this Section 6.1, the Company and the Surviving Person shall be jointly and
severally liable for the payment of the CVR Payment Amount and the performance
of every duty and covenant of this Agreement on the part of the Company to be
performed or observed. Notwithstanding anything to the contrary contained
herein, no consolidation, merger, sale, conveyance or assignment involving the
Company shall relieve the Company of its obligations and liabilities to the
Rights Agent hereunder, unless by written consent of the Rights Agent, such
consent not to be unreasonably withheld, conditioned or delayed.

Section 6.2 Successor Substituted.

Upon any consolidation of or merger by the Company with or into any other
Person, or any conveyance, transfer or lease of the properties and assets
substantially as an entirety to any Person in accordance with Section 6.1, the
Surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Agreement with the same effect
as if the Surviving Person had been named as the Company herein; provided, that
notwithstanding any such transaction, if the Company is a surviving entity in
the transaction, the Company shall also remain liable for the performance by the
“Company” hereunder.

ARTICLE VII

OTHER PROVISIONS OF GENERAL APPLICATION

Section 7.1 Notices to Ultimate Parent, the Company, the Shareholder
Representative and the Rights Agent.

All communications, notices and disclosures required or permitted by this
Agreement shall be in writing and will be deemed to have been given when
delivered by first class mail or one (1) Business Day after having been
dispatched for next-day delivery by a nationally recognized overnight courier
service to the appropriate party at the address specified below:

If to the Company, to:

 

29

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Safeway Inc.

5918 Stoneridge Mall Road

Pleasanton, California 94588

Attn: General Counsel

Facsimile: (925) 467-3231

If to Ultimate Parent, to:

AB Acquisition LLC

250 Parkcenter Blvd.

Boise, ID 83706

Attention: Robert G. Miller

Email: Robert.Miller@albertsons.com

Facsimile: (208) 395-4625

with a copy (which shall not constitute notice) to:

Cerberus Capital Management, L.P.

875 Third Avenue, 11th Floor

New York, NY 10022

Attention: Lenard Tessler, Mark Neporent, Lisa Gray

Email: LTessler@cerberuscapital.com;

MNeporent@cerberuscapital.com

LGray@cerberuschicago.com

Facsimile: (212) 891-1540

with a copy (which shall not constitute notice) to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, NY 10022

Attention: Stuart D. Freedman; Robert B. Loper, John M. Pollack

Email: Stuart.Freedman@srz.com;

Robert.Loper@srz.com;

John.Pollack@srz.com

Facsimile: (212) 593-5955

If to the Shareholder Representative, to:

Saturn Shareholder Rep, LLC

10 Clay Street, Suite 201

Oakland, California 94607

Attention: T. Gary Rogers

Email: tgrogers@ssrllc.net

 

30

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Facsimile: (510) 899-7915

and

Saturn Shareholder Rep, LLC

10 Clay Street, Suite 201

Oakland, California 94607

Attention: Arun Sarin

Email: asarin@ssrllc.net

Facsimile: (510) 899-7915

With copies (which shall not constitute notice) to:

Latham & Watkins LLP

505 Montgomery Street

Suite 2000

San Francisco, CA 94111-6538

Tel: (415) 391-0600

Attention: Scott R. Haber

Email: scott.haber@lw.com

Facsimile: (415) 395-8095

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Tel: (212) 906-1200

Attention:  M. Adel Aslani-Far

                  Eli G. Hunt

Email:  adel.aslanifar@lw.com

            eli.hunt@lw.com

Facsimile (212) 751-4864

If to the Rights Agent, to:

Computershare Trust Company, N.A.

480 Washington Boulevard

Jersey City, NJ 07310

Attention: Relationship Manager

With a copy to:

Computershare Trust Company, N.A.

480 Washington Boulevard

Jersey City, NJ 07310

 

31

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Computershare Trust Company, N.A.

480 Washington Boulevard

Jersey City, NJ 07310

Attention: Relationship Manager

Attention: Legal Department

Section 7.2 Notice to Holders.

Where this Agreement provides for notice to Holders, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing,
sent by overnight courier (providing proof of delivery) or mailed, first-class
postage prepaid, to each Holder affected by such event, at his, her or its
address as it appears in the CVR Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.

Section 7.3 Counterparts; Headings.

This Agreement may be executed in one or several counterparts (whether by
facsimile, pdf or otherwise), each of which shall be deemed an original, but
such counterparts shall together constitute but one and the same Agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties (including by facsimile or other electronic
image scan transmission). The Article and Section headings in this Agreement are
inserted for convenience of reference only and shall not constitute a part
hereof.

Section 7.4 Assignment; Successors.

(a) Subject to Section 6.1, neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned by any of the
parties (whether by operation of Law or otherwise) without the prior written
consent of the other parties; provided, that any entity into which the Rights
Agent may be merged or consolidated, or any entity resulting from any merger or
consolidation to which the Rights Agent shall be a party, or any entity to which
the Rights Agent shall sell or otherwise transfer all or substantially all of
its assets and business, shall be the successor Rights Agent under this
Agreement upon the delivery of notice to the other parties hereto. Subject to
the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by all of the parties and their respective
successors and assigns; provided, that this Agreement may not be enforced
directly by any Holder but may only be enforced on behalf of the Holders by the
Shareholder Representative.

Section 7.5 Benefits of Agreement.

Except as set forth in ARTICLE III with respect to the Shareholder
Representative Persons or the Rights Agent, nothing in this Agreement, is
intended to or be deemed to confer upon any Person other than the parties hereto
and their respective successors

 

32

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and permitted assigns any rights or remedies hereunder. The Shareholder
Representative shall be the sole and exclusive representative of the Holders for
all matters in connection with this Agreement and this Agreement may not be
enforced directly by any Holder but may only be enforced on behalf of the
Holders by the Shareholder Representative.

Section 7.6 Governing Law.

This Agreement shall be governed by and construed in accordance with the Laws of
the State of Delaware, without regard to Laws that may be applicable under
conflicts of laws principles (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than the State of Delaware. Other than with respect to disputes submitted
to an independent investment banking firm under Section 2.4(d)(i) or the Neutral
Auditor under Section 2.4(d)(vi), each party hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Court of Chancery in the State of Delaware and any appellate
court thereof, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby or for recognition or
enforcement of any judgment relating thereto, and each of the parties hereby
irrevocably and unconditionally (i) agrees not to commence any such action or
proceeding except in such court, (ii) agrees that any claim in respect of any
such action or proceeding may be heard and determined in such Delaware court,
(iii) waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
action or proceeding in such Delaware court, and (iv) waives, to the fullest
extent permitted by Law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in such Delaware court. Each of the parties agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.1. Nothing in
this Agreement will affect the right of any Party to this Agreement to serve
process in any other manner permitted by Law.

Section 7.7 Waiver of Jury Trial.

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH
WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.7

 

33

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Section 7.8 Remedies.

The parties hereto agree that irreparable damage would occur in the event that
the parties hereto do not perform their obligations under the provisions of this
Agreement (including failing to take such actions as are required of them
hereunder) in accordance with its specified terms or otherwise breach such
provisions. The parties acknowledge and agree that prior to the termination of
this Agreement in accordance with Section 7.10, (a) the Parties shall be
entitled to an injunction, specific performance, or other equitable relief, to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof without proof of damages or the posting of any collateral,
bond or other security, this being in addition to any other remedy available at
law, in equity, under this Agreement or otherwise and (b) the right of
injunctive relief, specific enforcement and other equitable relief is an
integral part of this Agreement and transactions related hereto. The parties
also agree that the non-prevailing party (as determined by a court of competent
jurisdiction in a final, non-appealable order) in any litigation relating to the
enforcement of this Agreement shall reimburse the prevailing party for all costs
incurred by the prevailing party (including reasonable legal fees in connection
with any litigation). To the extent the Shareholder Representative is the
non-prevailing party, its reimbursement obligation under this Section 7.8 shall
be a Casa Ley Sale Expense.

Section 7.9 Severability Clause.

If any term or other provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced by
any rule of Law or public policy, all other terms, provisions and conditions of
this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable Law in an acceptable
manner to the end that the transactions contemplated by the Merger Agreement and
this Agreement are fulfilled to the extent possible.

Section 7.10 Termination.

This Agreement and each CVR shall be terminated and of no further force or
effect, and the parties hereto shall have no liability hereunder, upon (i) the
one (1) year anniversary of the later of (a) the payment of all Partial Casa Ley
Net Proceeds, Casa Ley Net Proceeds, Sale Deadline Net Proceeds and the payment
of all deferred cash consideration pursuant to Section 2.4(a)(iv), or (b) the
Sale Deadline, or (ii) the written agreement of the Company and the Shareholder
Representative to terminate this Agreement. Notice of any such termination will
be promptly mailed by the Rights Agent, upon the written request of the Company
and the Shareholder Representative and accompanied by the form of such notice,
to the Holders. Notwithstanding anything to the contrary contained in this
Agreement, Section 3.1, Section 3.2, Section 3.3, and this ARTICLE VII shall
survive the termination of this Agreement indefinitely and the resignation,
replacement or removal of the Rights Agent.

 

34

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Section 7.11 Entire Agreement.

This Agreement, the Merger Agreement, all documents and instruments referenced
herein and therein, and all exhibits and schedules attached to the foregoing,
constitute the entire agreement of the parties (other than the Rights Agent) and
supersede all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof and
thereof. If and to the extent that any provision of this Agreement is
inconsistent or conflicts with the Merger Agreement, this Agreement shall govern
and be controlling. Notwithstanding the foregoing, as between the Rights Agent,
on the one hand, and any other person or entity, on the other hand, this
Agreement alone constitutes the entire understanding and agreement of such
parties with respect to the subject matter of this Agreement.

Section 7.12 Suits for Enforcement.

In a case where breach has occurred, has not been waived and is continuing, the
Shareholder Representative may in its discretion proceed to protect and enforce
the rights vested in it by this Agreement by such appropriate judicial
proceedings as the Shareholder Representative shall deem most effectual to
protect and enforce any of such rights (unless authorization and/or appearance
of each of the Holders is required by applicable Law), either at Law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Agreement or in aid of the exercise
of any power granted in this Agreement or to enforce any other legal or
equitable right vested in the Shareholder Representative by this Agreement or by
Law. Notwithstanding anything to the contrary contained in this Agreement, any
liability of any of the parties hereunder (including the Shareholder
Representative) for breach of its obligations under this Agreement shall not
(other than in connection with fraud or willful misconduct, or third party
claims from third parties arising out of such party’s breach of this Agreement)
include any unforeseeable and remote indirect or consequential damages, or any
special or punitive damages. Subject to the immediately preceding sentence, any
liability of the Company may include the benefit of the bargain lost by the
Holders to the extent proximately caused by such breach (taking into
consideration relevant matters, including the total amount payable to such
Holders under this Agreement but for such breach, the time value of money, and
any costs, fees and expenses incurred by the Shareholder Representative Persons
in connection therewith) which shall be deemed in such event to be damages
recoverable by the Shareholder Representative for the benefit of the Holders.
With respect to any party other than the Company, under no circumstances shall
such party be liable for monetary damages hereunder.

[Remainder of Page Intentionally Left Blank]

 

35

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its duly authorized officers as of the day and year first above
written.

 

SAFEWAY INC. By:

/s/ Robert A. Gordon

Name: Robert A. Gordon Title:

Senior Vice President

Secretary & General Counsel

 

[Signature Page to Casa Ley CVR Agreement]

--------------------------------------------------------------------------------

AB ACQUISITION LLC By:

/s/ Paul Rowan

Name: Paul Rowan Title:

Executive Vice President

General Counsel & Secretary

 

[Signature Page to Casa Ley CVR Agreement]

--------------------------------------------------------------------------------

SATURN SHAREHOLDER REP, LLC

By:

/s/ T. Gary Rogers

Name: T. Gary Rogers Title: Member By:

/s/ Arun Sarin

Name: Arun Sarin Title: Member

 

[Signature Page to Casa Ley CVR Agreement]

--------------------------------------------------------------------------------

COMPUTERSHARE TRUST COMPANY, N.A. By:

/s/ Neda Sheridan

Name: Neda Sheridan Title: Vice President COMPUTERSHARE INC. By:

/s/ Neda Sheridan

Name: Neda Sheridan

Title:

Vice President

 

[Signature Page to Casa Ley CVR Agreement]

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EXHIBIT A

Form of Transfer Certificate

See attached.

--------------------------------------------------------------------------------

TRANSFER CERTIFICATE

Safeway Inc.

5918 Stoneridge Mall Road

Pleasanton, California 94588

Attn: General Counsel

Computershare Trust Company, N.A.

480 Washington Boulevard

Jersey City, New Jersey 07310

Attention: Relationship Manager

 

  Re: CVRs issued by Safeway Inc.

Ladies and Gentlemen:

                                          as Holder intends to transfer the
above captioned CVR to                                          (“Permitted
Transferee”), for registration in the name of
                                        .

1. In connection with such transfer and in accordance with Section 2.3(c) of the
CASA LEY CONTINGENT VALUE RIGHTS AGREEMENT, dated as of January 30, 2015,
entered into by and among AB Acquisition LLC, a Delaware limited liability
company, Safeway Inc., a Delaware corporation, Computershare Inc. and its wholly
owned subsidiary, Computershare Trust Company, N.A., together as rights agent,
and the Shareholder Representative (the “Agreement”), the Holder hereby
certifies that this transfer is a Permitted Transfer and that the Permitted
Transferee is permitted to hold the CVRs in accordance with the terms of the
Agreement.

2. The transfer is a Permitted Transfer for the following reason:

[Check the appropriate box and initial any applicable substatement]

¨    The CVRs are being transferred as a result of the death of a Holder by will
or intestacy.

             An official copy of the death certificate of the Holder and such
Holder’s last will and testament and a signed copy of Letters Testamentary,
Letters of Administration or equivalent document dated within 60 days are being
provided herewith.

             An official copy of the death certificate of the Holder is being
provided herewith; the Holder has no will and the CVRs are passing via the rules
of intestacy.

¨    The CVRs are being transferred by instrument to an inter vivos or
testamentary trust in which the CVRs are to be passed to beneficiaries upon the
death of the trustee. The trustee is the Holder immediately prior to the
transfer. Official copies of the death certificates and applicable trust
documents authorizing distribution to the named beneficiaries are being provided
herewith.

 

A-1

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¨    The CVRs are being transferred pursuant to a court order (including a court
order issued in connection with divorce, bankruptcy or liquidation). A copy of
the court order and, if appointed, evidence of appointment as: Tutor, Guardian,
Conservator, Committee, Attorney or Agent dated within 60 days are being
provided herewith.

¨    The Holder is a corporation and the CVRs are being transferred pursuant to
a distribution by the Holder to its stockholders. Such distribution does not
subject the CVRs to a requirement of registration under the Securities Act or
the Exchange Act and the company has reasonably determined after consultation
with counsel that such distribution does not subject the CVRs to a requirement
of registration under the Securities Act or the Exchange Act. A copy of the
unanimous written consent of the board of the company or an executed copy of the
corporate resolution dated within 180 days authorizing and approving such
distribution (and authorizing the signing officer to effect the transaction) and
a certificate by or on behalf of the company stating that that such distribution
does not subject the CVRs to a requirement of registration under the Securities
Act or the Exchange Act are being provided herewith. Evidence of such Permitted
Transferee being a shareholder of the Holder is also being provided herewith.
The corporate resolution, if provided, is not executed solely by the signing
officer.

¨    The Holder is a partnership and the CVRs are being transferred pursuant to
a distribution by the Holder to its partners. Such distribution does not subject
the CVRs to a requirement of registration under the Securities Act or the
Exchange Act. A copy of the current partnership agreement is being provided
herewith, together with evidence of the authority of any signatory on behalf of
the partnership.

¨    The Holder is a limited liability company and the CVRs are being
transferred pursuant to a distribution by the Holder to its members. Such
distribution does not subject the CVRs to a requirement of registration under
the Securities Act or the Exchange Act. A copy of the operating agreement is
being provided herewith, together with an executed copy of the resolution dated
within 180 days authorizing the signing managing member/manager to effect the
transaction. If the limited liability company has more than one managing
member/manager, this resolution is not executed solely by the signing managing
member/manager.

¨    The CVRs are being transferred by a transfer made by operation of law
(including a consolidation, dissolution or merger) or without consideration in
connection with the dissolution, liquidation or termination of any corporation,
limited liability company, partnership or other entity. Documents sufficiently
evidencing such activities are being provided herewith, together with, if such
transfer by operation of law requires shareholder or board of director or
similar approval, an executed copy of the resolution dated within 180 days
authorizing the signing officer, managing member/manager or other signatory to
effect the event. If such entity has more than one signing officer, managing
member/manager or other signatory, this resolution is not executed solely by the
signing officer, managing member/manager or other signatory.

 

A-2

--------------------------------------------------------------------------------

3. If not previously provided to the Rights Agent and if requested by the Rights
Agent, a fully completed and executed Form W-9 or Form W-8, as applicable, of
the Permitted Transferee is being provided herewith.

4. All capitalized terms used but not defined herein shall have such meanings as
are ascribed to such terms in the Agreement.

5. By execution hereof the Permitted Transferee agrees to be bound, as Holder,
by all of the terms, covenants and conditions of the Agreement.

6. This document may be executed in one or more counterparts and by the
different parties hereof on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document. The Holder and the Permitted Transferee
both understand that the Rights Agent may require a Medallion Guarantee of
Signature at a level acceptable to the Rights Agent.

IN WITNESS WHEREFORE, each of the parties have caused this document to be
executed individually or by their duly authorized officers or representatives as
of the date set forth below.

 

 

   

 

      Holder           Permitted Transferee By:  

 

    By:  

 

      Name:           Name:       Title:           Title:       Taxpayer
Identification           Taxpayer Identification       No.
                                               No.
                                     Date:  

 

    Date:  

 

 

A-3