EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
Between
ALBERTSON'S, INC.
STATER BROS. MARKETS
and
STATER BROS. HOLDINGS INC.
TABLE OF CONTENTS
TABLE OF CONTENTS
Section Page
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1. Agreement to Sell and Agreement to Purchase............................................. 2
1.1 Assets to be Conveyed............................................................. 2
1.2 Assets Excluded................................................................... 3
1.3 Closing........................................................................... 6
1.3.1 Initial Closing Date...................................................... 6
1.3.2 Escrow.................................................................... 6
1.3.3 Closing of Escrow......................................................... 6
1.4 Assets are Indivisible............................................................ 7
2. Consideration to be Paid by Buyer....................................................... 7
2.1 Purchase Price For Non-Inventory.................................................. 7
2.2 Purchase Price For Inventory...................................................... 8
2.3 Other Amounts..................................................................... 8
3. Assumption of Liabilities............................................................... 8
3.1 Liabilities Assumed by Buyer...................................................... 8
3.2 Liabilities Not Assumed by Buyer.................................................. 8
4. Possession; Store Leases................................................................ 9
4.1 Possession and Risk of Loss....................................................... 9
4.2 Store Leases...................................................................... 9
5. Inventory Condition and Computation of the Inventory Purchase Price..................... 9
5.1 Condition of Inventory............................................................ 9
5.2 Inventory Purchase Price.......................................................... 9
5.3 Inventory......................................................................... 10
5.4 Purchase Price Payment/Adjustment................................................. 10
6. Payments/Delivery of Documents.......................................................... 11
6.1 Payments.......................................................................... 11
6.2 Delivery of Documents............................................................. 11
6.3 Payment of Prorations............................................................. 12
7. Licenses and Permits.................................................................... 13
8. Inventory In Transit.................................................................... 14
9. Prorations.............................................................................. 14
9.1 Personal Property Taxes........................................................... 14
9.2 Real Property Taxes............................................................... 15
9.3 Payment of Prorated Taxes and Tax Responsibility.................................. 15
9.4 Sales and Use Taxes............................................................... 16
9.5 Purchase Price Allocation......................................................... 16
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9.6 Deposits; Prepaid Expenses........................................................ 16
9.7 Utilities......................................................................... 16
9.8 Prorations Generally; Percentage Rents............................................ 17
10. Conduct of Business...................................................................... 17
10.1 Seller Conduct of Business........................................................ 17
10.2 Maintenance....................................................................... 18
10.3 Third Parties..................................................................... 18
11. Access................................................................................... 18
11.1 Access to Records and Files....................................................... 18
11.2 Telecommunications................................................................ 19
11.2.1 Access to Telecommunications Equipment................................... 19
11.2.2 Telephone Numbers........................................................ 19
12. Bulk Transfer Laws........................................................................ 19
13. Accounts Receivable....................................................................... 19
14. Representations and Warranties of the Parties..................................... 19
14.1 Good Standing..................................................................... 19
14.2 Corporate Authority............................................................... 20
14.3 Binding Obligation................................................................ 20
15. Representations and Warranties of Seller.................................................. 20
15.1 "As Is" Condition................................................................. 20
15.2 Pending Litigation................................................................ 21
15.3 Store Leases...................................................................... 21
15.4 Zoning............................................................................ 21
15.5 Title to Personalty; Liens........................................................ 21
15.6 Environmental Laws................................................................ 21
15.7 Definitions....................................................................... 22
15.8 Buyers Representations and Warranties............................................. 22
16. Representations and Warranties of Buyer................................................... 22
16.1 Pending Litigation................................................................ 22
16.2 "As Is" Condition................................................................. 23
16.3 Financing......................................................................... 24
16.4 Competitive Capability............................................................ 24
16.5 Seller's Representations and Warranties........................................... 24
17. Indemnification........................................................................... 24
17.1 Seller's Indemnification.......................................................... 24
17.2 Buyer's Indemnification........................................................... 25
17.3 Procedure for Indemnification..................................................... 25
17.4 Survival.......................................................................... 26
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17.5 Indemnification as Exclusive Remedy................................................. 26
18. Consents................................................................................... 27
18.1 Consents and Approvals.............................................................. 27
18.2 Further Cooperation................................................................. 27
18.3 Financial Information............................................................... 28
18.4 Reasonable Efforts.................................................................. 28
19. Casualty................................................................................... 28
19.1 Damage.............................................................................. 28
19.2 Condemnation........................................................................ 30
19.3 Store Encumbrances; Leases.......................................................... 30
20. Employee Relations......................................................................... 31
21. Confidentiality and Access................................................................. 32
21.1 Access.............................................................................. 32
21.2 Confidentiality..................................................................... 33
21.3 Cooperation on Tax Matters.......................................................... 33
21.4 Notice.............................................................................. 33
22. Conditions to Closing...................................................................... 33
22.1 Conditions to Obligations of Each Party............................................. 33
22.1.1 No Order or Injunction..................................................... 33
22.1.2 Compliance with Law........................................................ 33
22.2 Conditions to Obligations of Buyer.................................................. 34
22.2.1 Representations and Warranties True........................................ 34
22.2.2 Seller's Performance....................................................... 34
22.2.3 Opinion of Seller's Counsel................................................ 34
22.2.4 Consents................................................................... 35
22.2.5 Closing Documentation...................................................... 35
22.2.6 Title Insurance............................................................ 35
22.2.7 FIRPTA Affidavit........................................................... 38
22.2.8 Condition of Stores........................................................ 38
22.2.9 Warranties and Guarantees.................................................. 40
22.2.10 Landlord Estoppels......................................................... 40
22.3 Conditions to Obligations of Seller................................................. 40
22.3.1 Merger Agreement........................................................... 40
22.3.2 Representations and Warranties............................................. 40
22.3.3 Buyer's Performance........................................................ 41
22.3.4 Opinion of Buyer's Counsel................................................. 41
22.3.5 Sales Tax Resale Exemption Certificate..................................... 41
22.3.6 Consents................................................................... 41
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23. Termination................................................................................. 42
24. Miscellaneous............................................................................... 42
24.1 Notices.............................................................................. 42
24.2 Assignability and Parties in Interest................................................ 43
24.3 Governing Law........................................................................ 44
24.4 Counterparts......................................................................... 44
24.5 Indemnification for Brokerage........................................................ 44
24.6 Publicity............................................................................ 44
24.7 Complete Agreement................................................................... 44
24.8 Modifications. Amendments and Waivers................................................ 44
24.9 Interpretation....................................................................... 45
24.10 Subsidiaries......................................................................... 45
24.11 Expenses............................................................................. 45
24.11.1 Transaction Expenses....................................................... 45
24.11.2 Litigation Expenses........................................................ 45
24.12 No Use of Names...................................................................... 45
24.13 Time is of the Essence............................................................... 45
24.14 Third Party Beneficiary Rights....................................................... 46
24.15 Further Assurance.................................................................... 46
24.16 1031 Exchange........................................................................ 46
24.17 Guarantee............................................................................ 47
Exhibits
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A Owned Stores
B Store Leases
C Collective Bargaining Agreements and Union Contracts
D Excluded Equipment
E Excluded Contracts
F Inventory Prices
G Form of Special Warranty (or Grant) Deeds
H Form of Bill of Sale
I Form of Estoppel Certificate
J Form of Assignment and Assumption Agreement (Store Leases)
K Form of Assignment and Assumption Agreement (Contracts)
L Form of Assignment and Assumption Agreement (Labor Agreements)
M Form of Assignment and Assumption Agreement (Guarantees)
N Form of Assignment and Assumption Agreement (Prepaid Expenses)
O Purchase Price Allocation
P Seller Disclosure Schedule
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Q Buyer Disclosure Schedule
R Permitted Exceptions/Title Policies
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as of
the 7th day of May, 1999, by and between ALBERTSON'S, INC., a Delaware
corporation, ("Seller"), STATER BROS. MARKETS, a California corporation and
STATER BROS. HOLDINGS INC., a Delaware corporation (collectively "Buyer").
Seller and Buyer are sometimes hereinafter referred to individually as "Party"
and collectively as "Parties".
RECITALS
WHEREAS, Seller or its subsidiaries (the "Affiliated Sellers" and,
collectively with Seller, the "Sellers" and individually a "Seller") is (i) the
owner of certain real property identified on Exhibit A hereto (an "Owned Store";
collectively, the "Owned Stores") and (ii) the tenant of real property under
certain leases or subleases identified on Exhibit B hereto (a "Store Lease";
collectively, the "Store Leases"), each such property being referred to as a
"Store Property", and collectively as the "Store Properties";
WHEREAS, Seller has entered into an Agreement and Plan of Merger dated as
of August 2, 1998 by and between Seller, Abacus Holdings, Inc., a Delaware
corporation and a wholly owned subsidiary of Seller, and American Stores
Company, a Delaware corporation (the "Merger Agreement"), providing for, on the
terms and conditions thereof, the merger (the "Merger") of Abacus Holdings, Inc.
with and into American Stores Company, with American Stores Company surviving
the Merger as a wholly owned subsidiary of Seller;
WHEREAS, in connection with the consummation of the Merger, Seller
contemplates entering into a consent decree (the "Provisional Consent Decree")
with the Federal Trade Commission ("FTC") and/or certain state Attorneys General
that will require Seller to divest certain assets relating to the Store
Properties to resolve any issues relating to the preservation of competition
post-Merger;
WHEREAS, the Sellers desire to sell, cause to be sold or otherwise transfer
or assign to Buyer, and Buyer wishes to purchase, the Sellers' interest in the
Store Properties and certain related assets to the extent provided herein on the
terms and conditions hereof (including consummation of the Merger); and
WHEREAS, Buyer has agreed to assume certain liabilities of the Sellers as
more specifically provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the Parties covenant and agree as follows:
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1. Agreement to Sell and Agreement to Purchase.
1.1 Assets to be Conveyed.
On the terms and subject to the conditions set forth in this
Agreement, on the Initial Closing Date, and the respective Subsequent Closing
Dates, (both as hereinafter defined) Seller shall (and shall cause each
Affiliated Seller to) convey, transfer, assign, sell and deliver to Buyer, and
Buyer shall acquire, accept and purchase, to the extent transferable or
assignable by the Sellers all of the right, title and interest of the Sellers in
and to the following assets comprising or relating to the Store Properties
(hereinafter collectively referred to as the "Assets") as the same may exist on
the respective Closing Date, but excluding the Excluded Assets (as defined in
Section 1.2):
(a) Those parcels of land on which the Owned Stores are located,
together with the buildings, fixtures and improvements located on or attached to
such real property (the "Improvements"), and all rights arising out of the
ownership thereof including, without limitation, all leases and subleases of
such real property, in whole or part, all options and rights of first refusal,
together with and subject to all licenses, permits, easements and rights-of-way
which are appurtenant to such real property (all of which are hereinafter
collectively referred to as the "Real Property"), subject only to the Permitted
Exceptions (as defined in Section 22.2.6, below) and those liabilities, liens,
obligations and encumbrances which are expressly assumed by Buyer pursuant to
Section 3.1 hereof.
(b) The Store Leases and any sublease of all or any portion
thereof.
(c) All assignable guarantees and warranties for the benefit of
Seller, to the extent they relate specifically to the ownership or operation of
the Store Properties (and not to the extent they relate to other properties or
operations of the Sellers) (provided, however, that to the extent any guarantees
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and warranties relate to the ownership or operation of the Store Properties and
also to properties of the Sellers other than the Store Properties, such
guarantees and warranties shall be included in the Assets solely to the extent
the portion of such guarantees or warranties related to the ownership or
operation of the Store Properties is separately assignable) (the "Guarantees").
(d) Any and all union contracts and collective bargaining agreements,
relating to persons employed at, or in connection with, the Store Properties, to
the extent they relate to the Store Properties or the operation of the
supermarket business at the Store Properties, a list of which is attached hereto
as Exhibit C (the "Labor Agreements").
(e) Other than the Labor Agreements referred to above, any and all
contracts and agreements, including written Equipment (as defined below) leases,
relating exclusively to the Store Properties or the operation of the supermarket
business at the Store Properties (and not other properties or operations of the
Sellers) (the "Contracts").
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(f) All merchandise inventory (including private label inventory),
supplies (including private label supplies), containers, labels, packaging
material, maintenance supplies, food and other similar items (other than
consigned inventory) which are located in the Store Properties on the respective
Closing Date, (collectively, the "Inventory").
(g) All of the machinery, equipment, shopping carts, tools,
furniture, forklifts, fixtures, leasehold improvements, computer equipment and
order entry devices and construction in progress owned by Seller on the date of
this Agreement and located at the Store Properties (the "Equipment") but
excluding (x) motor vehicles (trucks, vans, and autos), and rail, truck and sea
containers, and (y) any such items which are disposed of in the ordinary course
of business prior to the respective Closing Date.
(h) All of the following books, records, files and papers, whether in
hard copy or computer format (or, at Seller's election, the underlying data
contained in such books, records, files and papers) to the extent they are in
Seller's possession, custody or control and to the extent used exclusively in
connection with the Store Properties: surveys (boundary and topographical),
construction drawings, soil reports, asbestos inspections, environmental reports
and assessments, fixture plans, warranties, information relating to Taxes (as
defined in Section 9.3), employee payroll records as reasonably required by
Buyer to promptly process payroll checks for employees currently employed by the
Sellers and thereafter hired by Buyer at each of the Store Properties (and by
Store Property) and all records and information relating to the Store Leases or
Real Property, including an unaudited depreciation schedule relating to the
Assets in such form as agreed to by the Parties (collectively the "Files and
Records").
(i) All transferable deposits, prepaid rent and prepaid expenses made
by Seller under the Store Leases or otherwise in respect of the Store Properties
(collectively the "Prepaid Expenses").
(j) The liquor licenses, in accordance with Section 7.
1.2 Assets Excluded.
Assets not described above, and notwithstanding anything to the
contrary contained in this Agreement, the property and assets described below
are expressly excluded from the transaction contemplated by this Agreement and
do not comprise the Assets being transferred hereunder (the "Excluded Assets"):
(a) Any Equipment owned by third parties who are not affiliated with
the Sellers, any pharmacy related computer equipment, and those items or
categories of Equipment set forth upon Exhibit D attached hereto (the "Excluded
Equipment"). Seller shall use reasonable efforts to remove the Excluded
Equipment from the Store Properties within five (5) days following the Closing
in relation to each Store Property; any Excluded Equipment not removed by the
Sellers shall be removed by Buyer at its expense.
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(b) Except as specifically provided in Section 24.12 hereof, any
signs or personal property which contain the name (or trade derivative thereof)
or logo of Seller or its affiliates including all uniforms supplied to the
Sellers' employees, which signs and personal property Seller shall use its best
efforts to remove from the Store Properties within five (5) days following the
respective Closing; any signs and personal property not removed by Sellers shall
be deemed abandoned by Seller and may be removed by Buyer at its own cost and
destroyed and Buyer shall neither use nor allow any third party to use such
signs or personal property.
(c) Currency and cash equivalents located in or at the Store
Properties at or prior to the Closing Date for such Store Properties.
(d) Undeposited or uncollected checks and food stamps.
(e) Subject to Section 9.6, accounts receivable relating to the Store
Properties or the operation of the business at the Store Properties which are
owed to the Sellers (or their affiliates) at the respective Closing including,
but not limited to, delinquent rent payments, tenant reimbursements, refunds of
insurance premiums or security deposits with utilities accruing to, or held for,
the benefit of the Sellers, and, except as may be provided to the contrary in
Section 19, insurance proceeds, condemnation awards or other compensation
payable upon any sale, destruction, damage, taking or other disposition of any
of the Assets (the "Accounts Receivable").
(f) Except as specifically provided in Section 1.2(b) and Section
24.12 hereof, trademarks, trade names, and similar intangibles including any
right to use or interest in any of the names of Seller, any Affiliated Seller,
or any other subsidiary, affiliate or division of Seller, or any similar name or
intangible registered or licensed to any of the foregoing, or any tradenames
used by Seller; provided, however, that the Buyer shall be entitled for a period
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of 120 days following the respective Closing of each of the Store Properties to
sell all items included in the Inventory notwithstanding that such items may be
labeled with the Sellers' trademark or similar intangible (acknowledging that
Buyer shall acquire no rights or interest in Sellers' trademark other than such
limited right to sell such Inventory).
(g) Claims, rebates, refunds and other general intangibles arising
from the operation of the Store Properties prior to the Closing with respect to
such Store Properties.
(h) Any and all rights to any software used in any computer equipment
included in the Assets, provided that, to the extent that the right to use any
software that is non-proprietary to the Sellers is separately assignable as to
such computer equipment without any third party consent, or if any consent is
required and can be obtained without any cost to Seller, such right will be
included in the Assets.
(i) The books and business records of the Sellers including, without
limitation, policy, compliance and procedures manuals, internal audit reports
and any information,
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books, records and files (whether in writing or electronic format) concerning
the financial performance, strategic plans, budgets, forecasts, projections and
competitive or capital spending analysis of the Store Properties or the Sellers'
operations, employee manuals, employee handbooks and employee personnel records.
(j) All property becoming upon installation or expiration of the
relevant Store Lease or other leases, the property of the landlord or lessor
thereof.
(k) All refunds and credits of Taxes (as defined in Section 9.3)
and other Tax attributes of the Sellers.
(l) All records relating to the employees of the Sellers or to
claims, obligations or liabilities against the Sellers or any of their
affiliates which do not constitute Assumed Liabilities (as defined in Section
3.1, below).
(m) Any lease, sublease, license, sublicense or other contract
relating to the installation, use or operation of ATM or similar banking
machines, in-store banking facilities, photo-finishing equipment, or slot
machines or other gaming devices ("In-Store Operations"), at the Store
Properties or as part of the operations of the Store Properties (and any
interest of the Sellers in such equipment), except to the extent assignment to
Buyer is required by the applicable agreement; provided, however, that Buyer
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shall allow each bank operating ATM's or other in-store banking facilities to
continue to operate in the relevant Store Property for up to 100 days after
receipt of notice by Seller informing each such bank of the transfer of the
relevant Store Property to Buyer. Seller agrees that it shall not object to
Buyer entering into any agreement relating to In-Store Operations and if
necessary, shall waive any exclusivity provisions in Sellers' agreements
relating thereto. Upon request, Seller shall provide Buyer with any names of
the appropriate contacts necessary to allow Buyer to pursue such agreements with
Sellers' operators relating to In-Store Operations.
(n) Any Store Properties excluded from sale under this Agreement
pursuant to Section 19.
(o) Subject to Section 7 hereof (dealing with liquor licenses), any
permits or licenses (or similar governmental approvals) issued to Seller or its
affiliates in connection with the ownership, use or operation of any Store
Properties.
(p) All audio and video tapes or devices that are available for sale
or rental at the Store Properties to the extent they are not owned by the
Sellers.
(q) All customer data and information derived from customer loyalty
cards, promotions, co-branded credit card programs and the like.
(r) All Contracts listed on Exhibit E hereto or which Seller has
notified the Buyer in writing prior to the Initial Closing Date will be excluded
from the Assets.
(s) All pharmacy merchandise (legend, non-legend and generic).
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(t) The customer lists, filled and unfilled prescriptions for each
such customer, and customer phone numbers relating to the Store Property
pharmacies.
(u) All Inventory in transit, in accordance with Section 8.
1.3 Closing.
1.3.1 Initial Closing Date.
The closing of the transactions herein contemplated shall, unless
another date, time, method or place is agreed to in writing by the Parties, take
place through an escrow as described below (the "Escrow"). The Escrow shall be
fully funded and established, as promptly as reasonably practicable, and no
later than forty-five (45) days, following the consummation of the Merger
subject to the satisfaction or waiver of the other conditions set forth in
Section 22. The date on which the first closing is held hereunder shall be
termed the "Initial Closing Date" or the "Initial Closing". The Initial Closing
shall occur within five (5) days following the funding of the Escrow.
1.3.2 Escrow
As soon as reasonably practicable after the date hereof, the
Parties shall open the Escrow with a mutually agreeable escrow holder (the
"Escrow Holder"). Within 5 days prior to the Initial Closing Date, Buyer shall
deposit the Purchase Price and the Estimated Inventory Purchase Price (both as
defined below) with the Escrow Holder (the "Escrow Amount") which Escrow Amount
shall be deposited by Buyer into the interest-bearing account selected by Buyer
as specified below and Buyer and Seller respectively shall deposit the closing
documents and other instruments necessary to close the transaction as
contemplated by this Agreement in respect of all of the Store Properties. The
Escrow Amount shall be invested by the Escrow Holder in an interest bearing
account selected by Buyer, and Buyer shall be entitled to any interest earned on
the Escrow Amount which shall be paid pro rata (proportional to the relevant
amount of the Purchase Price and the Estimated Inventory Purchase Price) (the
"Escrow Interest") to Buyer at the same time as the Purchase Price and the
Estimated Inventory Purchase Price are paid to Seller upon the closing of the
Escrow with respect to each Store Property. Buyer and Seller shall each pay one-
half (1/2) the cost of the Escrow Holder. Seller and Buyer both agree to execute
such additional agreements or other documents reasonably requested by Escrow
Holder to fully effectuate this Agreement. In the event of any conflict between
such agreements and this Agreement, the terms of this Agreement shall prevail.
1.3.3 Closing of Escrow
(a) There may be multiple closing dates for the closing of the
Escrow for each Store Property over a period of not longer than thirty (30) days
following the Initial Closing Date. The Parties shall use their best efforts to
close on all of the Store Properties as soon as possible after the Initial
Closing Date. The Parties acknowledge that they expect to close
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on at least one (1) Store Property on the Initial Closing Date and on no less
than three (3) Store Properties each business day commencing four (4) days
following the Initial Closing Date. The Parties agree to co-operate to
facilitate the prompt closing on all of the Store Properties, including giving
as much advance notice as possible of the intended date of closing for each
Store Property.
(b) On the closing date for each Store Property (each such
closing date on which either the Initial Closing or a Subsequent Closing occurs
shall be deemed to be a "Closing Date" with respect to the store properties
which are transferred at such "Closing" and each Closing Date after the Initial
Closing Date shall be deemed a "Subsequent Closing Date" or a "Subsequent
Closing"), the Escrow Holder shall transfer by wire transfer to Seller:
(i) that portion of the Escrow constituting the Purchase
Price for such Store Property, as set forth in Exhibit O; and
(ii) that portion of the Escrow constituting the Estimated
Inventory Purchase Price for such Store Property, as set forth in Exhibit O, and
the Escrow Holder shall transfer the Escrow Interest to Buyer by wire transfer.
(c) on each respective Closing Date, the Escrow Holder shall
release to Buyer (or Seller, as the case may be) the documents and instruments
referred to in Section 6.2 relating to such Store Property.
(d) The Parties agree that following the Initial Closing no
further conditions exist on each Party's obligation to consummate this
transaction, other than delivery by the Escrow Agent of the Funds and documents
held by the Escrow Holder and the payment by the Parties of any adjusted
payments required to then be paid, as set forth herein.
1.4 Assets are Indivisible.
Except as otherwise provided herein (including Section 19 hereof), the
rights to purchase the Assets are indivisible. Such Assets may not be
individually purchased without all of the others, unless expressly permitted or
required pursuant to the provisions of this Agreement.
2. Consideration to be Paid by Buyer.
2.1 Purchase Price For Non-Inventory.
Subject to adjustment as herein provided, in addition to the amounts
specified below, the purchase price payable hereunder for the Assets (other than
the Inventory) shall be ninety four million, nine hundred and thirteen thousand,
two hundred and thirty eight dollars ($94,913,238) which shall be paid by Buyer
to Seller in accordance with Section 1.3 (the "Purchase Price"). The Purchase
Price shall be allocated among the Assets in accordance with the provisions of
Section 9.5.
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2.2 Purchase Price For Inventory.
The purchase price for the Inventory (the "Inventory Purchase Price")
shall be determined in accordance with Article 5 herein.
2.3 Other Amounts.
Buyer shall also pay to Seller and Seller shall pay to Buyer by wire
transfer at or after the Initial Closing all other amounts specified to be paid
by Buyer or Seller at or after the Initial Closing under this Agreement. At
least three (3) days prior to the Initial Closing and each Subsequent Closing,
Seller will provide Buyer and the Escrow Holder with a preliminary closing
statement which identifies each amount due from Buyer to Seller, from Seller to
Buyer and each amount to be released from Escrow.
3. Assumption of Liabilities.
3.1 Liabilities Assumed by Buyer.
On the terms and subject to the conditions set forth in this
Agreement, on the respective Closing Date for each Store Property, Buyer shall
and hereby agrees to, subject to Section 3.2 herein, assume, and thereafter pay
when due, and discharge and indemnify, defend and hold Seller harmless with
respect to all liabilities or obligations of any kind, fixed and contingent,
known or unknown, relating to or arising in connection with the use, non-use,
ownership (whether by leasehold or fee) of the Assets or the operation of such
Store Property or compliance with any legal or contractual obligations with
respect to employees of the Store Properties (including, but not limited to,
obligations under the Store Leases, and any leases or subleases of all or any
portion of the Store Properties in which Seller or its affiliates is a lessor or
sublessor, the Contracts and the Guarantees, and the Labor Agreements, to the
extent such liabilities and obligations arise during, accrue during, or are
attributable to, the period from and after the Closing Date for each respective
Store Property (the "Assumed Liabilities").
3.2 Liabilities Not Assumed by Buyer.
It is expressly agreed that Buyer is not assuming and shall in no
event be liable for any liabilities or obligations of any kind, fixed and
contingent, known or unknown, relating to or arising in connection with the use,
non-use, ownership (whether by leasehold or by fee) of the Assets or the
operation of the Store Properties or compliance with any legal or contractual
obligations with respect to employees at the Store Properties (including, but
not limited to, obligations under the Store Leases, and any leases or subleases
of all or any portion of the Store Properties in which Seller or its affiliates
is a lessor or sublessor, the Contracts, the Guarantees, and the Labor
Agreements and consent decrees relating to employees at the Store Properties) to
the extent such liabilities and obligations arise during, accrue during, or are
attributable to the period prior to the Closing Date for such respective Store
Property (the "Excluded Liabilities"). It is agreed that the Assumed
Liabilities include, and the Excluded Liabilities do not include,
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matters for which Seller makes no representation or warranty and which Buyer
accepts pursuant to Section 16.2 hereof.
4. Possession; Store Leases.
4.1 Possession and Risk of Loss.
Buyer shall take possession of the Store Properties together with the
other Assets being transferred hereunder at the Closing of such respective Store
Property, and shall assume all risk of loss by fire or other casualty and all
risks relating to the operation of the business with respect thereto upon the
taking of such possession, excluding any risk of loss of Excluded Equipment or
other property of Seller's which remains on the Store Properties after each
respective Closing. The keys to the Store Properties and the combinations to all
safes at the Store Properties shall be delivered to the designated Buyer
representative at such time and Buyer shall immediately make its own
arrangements to have the locks changed.
4.2 Store Leases.
Buyer will (and will cause its assignees and successors to) fully and
promptly perform all of the obligations of the Sellers assumed by Buyer pursuant
to this Agreement accruing and attributable to the period from and after the
Closing Date for each respective Store Property including, but not limited to,
the obligations of the tenant under the Store Leases and as lessor or sublessor
of any leases or subleases.
5. Inventory Condition and Computation of the Inventory Purchase Price.
5.1 Condition of Inventory.
The Assets constituting the Inventory shall be sold to Buyer under
this Agreement in "AS IS" condition "WITH ALL FAULTS" (and without any warranty
of any kind as set forth in Sections 15.1 and 16.2) as of the Closing for the
respective Store Property and shall be conveyed to Buyer by the Bill of Sale (as
hereinafter defined). Notwithstanding anything herein to the contrary, Seller
shall not be released and shall remain fully liable (and indemnify Buyer from)
any product liability claims arising out of the sale of Seller's private label
products, except to the extent that such claim relates to the acts or omissions
of Buyer or its affiliates, assignees, agents, contractors or employees. In the
event of such a product liability claim, Buyer shall use reasonable commercial
efforts to assist Seller in any claim Seller may have against a manufacturer or
other third party.
5.2 Inventory Purchase Price.
The "Inventory Purchase Price" shall be the aggregate of the Sales
Floor Price for each item on display or on the sales floor of the Store
Properties at the Closing for the respective Store Property and the Backroom
Price for each item in storage at the Store Properties, as determined in
accordance with the schedule set forth on Exhibit F hereto. Prior to the
Initial Closing, Seller shall make a reasonable estimate of the Inventory
Purchase Price for all of the
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Store Properties (the "Estimated Inventory Purchase Price") which amount shall
be paid by Buyer at the Initial Closing into the Escrow in accordance with
Section 1.3.
5.3 Inventory.
A physical count of the Inventory designated for inventory pursuant to
Section 5.2 above shall be made by Buyer, Seller and an independent inventory
service mutually agreed to by the Parties (the "Inventory Service"). The
Inventory Service shall make a physical accounting of the Inventory on the day
prior to the Closing Date for the respective Store Property, or such other time
period before such Closing mutually agreeable to Buyer and Seller, in accordance
with mutually agreed upon instructions. Both Parties shall be entitled to have
representatives present during the inventory. These representatives will
attempt, in good faith, to resolve any disputes respecting out of date, spoiled
or distressed inventory and quantity or pricing which may arise during the
inventory. Out of date, spoiled or distressed Inventory shall be identified at
the taking of the inventory. Any such Inventory will be transferred to Buyer at
no cost. All Inventory other than perishable Inventory (such as Inventory
offered for sale in the produce, bakery, dairy, delicatessen and meat
departments ("Perishable Inventory")), shall be considered out of date if such
Inventory has a remaining shelf life of less than three (3) days at the Closing
Date for the respective Store Property. Perishable Inventory shall be
considered out of date if it has expired at the Closing for the respective Store
Property. Buyer and Seller shall each pay one half (1/2) the cost of the
Inventory Service. Departments, such as Perishable Inventory departments, not
inventoried by the Inventory Service shall be inventoried by appropriate Store
personnel at mutually agreed upon times and in the presence of representatives
of Buyer and Seller. It is hereby agreed by Buyer and Seller that the Store
Properties will close at 6:00 p.m. local time on the day of such inventory,
unless otherwise agreed.
5.4 Purchase Price Payment/Adjustment.
Based on the physical accounting by the Inventory Service pursuant to
Section 5.3, above, Seller shall issue a revised estimate of the Inventory
Purchase Price (the "Revised Estimated Inventory Purchase Price"). The
difference between the Estimated Inventory Purchase Price (as computed as of the
Initial Closing) and the Revised Estimated Inventory Purchase Price shall be
paid by Buyer to Seller or by Seller to Buyer, as the case may be, in cash via
wire transfer in immediately available U.S. funds on the Closing Date in
relation to the respective Store Property. The Revised Inventory Purchase Price
shall be adjusted between the Parties within thirty (30) days after receipt of
final inventory documentation based on the inventory performed pursuant to
Section 5.3 above, and based on the Inventory Purchase Price calculations made
pursuant to Section 5.2 above (the "Final Inventory Purchase Price"). The Party
owing funds, if any, to the other Party as a result of such adjustment shall
promptly transmit via wire transfer, in immediately available funds, such amount
owing to the other Party or, if there is a dispute, the
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amount which is not disputed. In the event Buyer and Seller are unable to agree
on such adjustment within five (5) business days after receipt of final
inventory documentation, Buyer and Seller shall submit the items remaining for
resolution in writing, together with such written evidence as Buyer or Seller
may elect, to a big five accounting firm agreed upon by the Parties not then
employed by Buyer or Seller or any of their material affiliates (the
"Independent Accounting Firm"), which shall, within twenty (20) business days of
such submission, resolve any differences between the Parties and report to
Seller and Buyer upon such remaining disputed items, and such report shall be
final, binding and conclusive upon Seller and Buyer. Buyer and Seller shall each
be responsible for one-half (1/2) of the fees and disbursements of the
Independent Accounting Firm. Any amount that is subject to dispute under this
Section 5.4 shall be paid by Seller or Buyer, as the case may be, in immediately
available funds within three (3) business days following a resolution of such
dispute and in an amount in accordance with such resolution.
6. Payments/Delivery of Documents.
6.1 Payments.
On the Initial Closing Date, as a condition to closing, Buyer shall
pay to the Escrow Holder the Escrow Amount (including the Purchase Price, the
Estimated Inventory Purchase Price, and the amounts provided for in this Section
6).
6.2 Delivery of Documents.
On the Initial Closing Date, as a condition to closing, Buyer and each
Seller shall deliver, to the Escrow Holder for the benefit of the other, all
documents necessary to transfer to Buyer all of each Sellers' right, title and
interest in and to the Assets being purchased hereunder or required by this
Agreement to be delivered on the relevant Closing Date including, but not
limited to, the following:
(a) Special Warranty (or Grant) Deeds substantially in the form
attached hereto as Exhibit G (the "Deeds") conveying fee simple title to the
Real Property to Buyer, subject only to the Permitted Exceptions, to be dated as
of the Closing Date for the relevant Store Property.
(b) Bill of Sale substantially in the form attached hereto as Exhibit
H conveying title to the Equipment and Inventory to Buyer free and clear of all
liens and encumbrances except personal property taxes not yet due and payable,
to be dated as of the Closing Date for the relevant Store Property.
(c) Estoppel certificates, substantially in the form attached hereto
as Exhibit I, from the landlords under the Store Leases, if available, dated
within a reasonable period prior to the Initial Closing Date. If the landlord
fails to provide such a document, it will be provided by the Seller, dated
within a reasonable period prior to the Initial Closing Date.
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(d) Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit J assigning to Buyer all of the Sellers' right, title
and interest in and to the Store Leases and any sublease of all or any portion
thereof (the "Assignment"), to be dated as of the relevant Closing Date.
(e) Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit K assigning to Buyer all of the Sellers' right, title
and interest in the Contracts, to be dated as of the relevant Closing Date.
(f) Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit L assigning to Buyer all of the Sellers' right, title
and interest in the Labor Agreements and other Assumed Liabilities and pursuant
to which Buyer shall assume all of the Sellers' obligations thereunder, to be
dated as of the relevant Closing Date.
(g) Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit M assigning to Buyer all of the Sellers' right, title
and interest in the Guarantees, to be dated as of the relevant Closing Date.
(h) Assignment and Assumption Agreement substantially in the form
attached hereto as Exhibit N assigning to Buyer all of the Sellers' right, title
and interest in the Prepaid Expenses, to be dated as of the relevant Closing
Date.
(i) FIRPTA Affidavit in accordance with Section 22.2.7, below.
(j) Original Store Leases or copies if the originals are not
available.
(k) The Files and Records.
(l) Title Policies (as hereinafter defined), to be dated as of
the Initial Closing Date.
(m) All other instruments, opinions and certificates required by
this Agreement.
All documents to be delivered at or with respect to the Initial Closing or
any Subsequent Closing shall be effective as of the date specified therein. The
relevant documents shall be released by the Escrow Holder to Buyer or Seller (as
the case may be) at the Closing for each respective Store Property. Buyer and
Seller both severally irrevocably constitute and appoint the Escrow Holder and
any officer or agent thereof, with full power of substitution, as their
respective lawful attorney-in-fact with full power and authority in the place
and stead of each of Buyer and Seller respectively, for the purpose of carrying
out the terms of this Agreement, to date each of the relevant documents
described above the date of the relevant Closing for each respective Store
Property.
6.3 Payment of Prorations.
Subject to Section 9 hereof, at the same time and manner as the
payments are made as provided in Section 6.1 hereof, the Parties shall, to the
extent the figures are available as
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of the Closing for each respective Store Property, calculate all prorations of
all matters to be prorated hereunder and the net difference shall be paid to the
applicable Party at such Closing. Subject to Section 9, with respect to
prorations which are not able to be made as of such date, the calculations
thereof shall be estimated and payment therefor shall be made at the Closing for
each respective Store Property based upon such estimate, and any necessary
adjustments of such prorations shall be made as soon as reasonably practicable
thereafter.
7. Licenses and Permits.
As soon as reasonably possible following the date of this Agreement, Seller
hereby agrees to use its best efforts, but at Buyer's cost and expense, to
assist Buyer to obtain all permits and licenses (the "Permits") required for
Buyer's operation of the Store Properties following the date of this Agreement.
The liquor and all other licenses held for use primarily or exclusively in
relation to the Store Properties and owned by Seller shall, if requested by
Buyer and provided Buyer has made application in Buyer's name and in substantial
compliance with all applicable rules and regulations therefor, be transferred to
Buyer to the extent (but only to the extent) (i) such licenses are transferable
in accordance with law by Seller and at no material cost or expense to Seller,
and (ii) such licenses relate exclusively to the Store Properties. With respect
to any liquor license or liquor inventory conveyed hereunder, the Parties shall
comply with the applicable laws and regulations (including those of the State of
California or any other State if applicable), including the creation of any
necessary escrow and the disbursement or release of any funds held in such
escrow, with the related escrow fees being paid by the Buyer. The Parties shall
cooperate in executing and delivering any documentation necessary to effect the
foregoing and to determine the amount of the Purchase Price allocable to such
liquor license or liquor inventory. The closing of this transaction is not
conditioned on obtaining the necessary liquor license; provided, however, if
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the state liquor control authority refuses to consent to the transfer or
issuance of a liquor license to Buyer, the liquor inventory shall be deemed an
Excluded Asset and Seller shall have the right to access the Store Properties to
remove the liquor inventory for its own use. The Parties will cooperate to meet,
to the extent possible, governmental regulations so that Buyer may operate in
the ordinary course of business until all of the Permits requested by Buyer can
be transferred; provided, in no event shall Buyer operate under any Permit of
Seller for a period beyond the earlier of (i) the period permitted by law, and
(ii) ninety (90) days following the Closing for the respective Store Property.
Buyer agrees to and does hereby indemnify and hold Seller harmless from any and
all liabilities it may incur during the period that Buyer operates the Store
Properties using one or more of the Seller's Permits. Subject to Section 18, the
Parties shall use their best efforts to transfer or arrange for the issuance of
the Permits as expeditiously as possible and each Party shall assist the other
in connection therewith.
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8. Inventory In Transit.
Inventory ordered in the ordinary course of business of the Store
Properties, delivery of which is not received on or prior to the respective
Closing Date for each Store Property, shall remain the property of Seller and
shall not be deemed part of the Inventory transferred hereunder.
9. Prorations.
9.1 Personal Property Taxes.
Subject to Section 9.4, personal property taxes associated with the
Assets including, without limitation, sales, use, and other similar taxes (the
"Personal Property Taxes") that are imposed on a periodic basis and are payable
for a tax period that includes (but does not end on) the respective Closing Date
for each Store Property shall be prorated as of such Closing Date, and Seller
shall bear the proportion of, and shall have the sole responsibility for, such
taxes equal to a fraction, the numerator of which is equal to the number of days
which shall have elapsed from the beginning of the applicable tax period to such
Closing Date and the denominator of which is the number of days in the entire
applicable tax period, and Buyer shall be responsible for the remainder. If the
tax statement or appropriate information for the applicable tax year is
initially sent to Seller, then Seller shall promptly forward such statement to
Buyer. If the tax statement or appropriate information for the applicable tax
year is not in the possession of the Parties on such Closing Date, the Personal
Property Tax proration payment shall be estimated and paid on such Closing Date
based upon such estimate, and any necessary adjustment shall be made as soon
thereafter as the tax statement or appropriate information is received. Seller
shall be responsible for any penalties and interest payable for rent or other
items under each Store Lease where the same are due as a result of an
underpayment or late payment by Seller prior to such Closing Date; Buyer shall
be responsible for such amounts in respect of periods on or following such
Closing Date.
Personal Property Taxes which are based on or related to receipts,
income or disbursements shall be prorated at the end of the current tax period,
and such Personal Property Taxes payable, if any, shall be paid by Buyer when
due and Seller shall promptly reimburse to Buyer a portion of the net Personal
Property Taxes in proportion to a fraction the numerator of which shall be the
receipts, income and disbursements accrued prior to the respective Closing Date
for each Store Property and the denominator of which shall be the receipts,
income and disbursements accrued during the current tax period (both before and
after such Closing Date), and Buyer shall be responsible for the remainder.
Refunds or credits of any Personal Property Tax contemplated by this
Agreement shall be apportioned between the Parties in accordance with
apportionment of the Personal Property Tax pursuant to this Agreement. From and
after the respective Closing Date, Buyer agrees to take all actions reasonably
necessary to notify all applicable federal, state and local
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governmental authorities of the change of ownership and address to which all
such tax statements and related information should be mailed to insure Buyer's
receipt thereof.
9.2 Real Property Taxes.
The real property taxes and assessments including, without limitation,
commercial rent taxes, ad valorem, sewer rents, business improvement district,
license, intangibles and other similar Taxes (the "Real Property Taxes")
required to be paid by Seller pursuant to the Store Leases or in connection with
the Real Property shall be prorated as of respective Closing Date for each Store
Property between Buyer and Seller in the same manner as described in Section 9.1
for Personal Property Taxes. Taxes relating to utilities shall be apportioned in
accordance with the apportionment of the relevant utility charge or fee
contained in Section 9.7, below.
9.3 Payment of Prorated Taxes and Tax Responsibility.
Where Taxes to be prorated pursuant to Sections 9.1 and 9.2 are
required to be included in tax returns filed by Buyer, and the applicable tax
statement or appropriate information is not available at the respective Closing
Date for the Store Property, Seller shall make payments of its prorated tax
liability to Buyer within thirty (30) days after written request by Buyer for
such amounts, which request shall be accompanied by a written statement
describing the basis of the calculation of Seller's liability; provided,
--------
however, that Seller shall not be liable for any interests or penalties
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attributable to Buyer's failure to timely file any required tax returns or pay
any Taxes relating thereto. Unless otherwise provided to the contrary herein,
Buyer shall be solely responsible for Taxes relating to the Assets applicable to
or arising from the period from and after the respective Closing Date for each
Store Property, and Seller shall be solely responsible for Taxes relating to the
Assets applicable to or arising prior to such Closing Date. Subject to Sections
9.1, 9.2 and 9.4, Seller shall indemnify and hold Buyer harmless from any
liability for Taxes relating to the Assets accruing prior to such Closing Date,
and Buyer shall indemnify and hold Seller harmless from any liability for Taxes
relating to the Assets accruing from and after such Closing Date. As used in
this Agreement, the term "Taxes" shall mean and refer to any and all taxes,
including, without limitation, any debts, liabilities, obligations or
commitments for any income, excise, sales, use, gross receipts, franchise,
employment, payroll related or property tax of any sort, and any deficiencies,
assessments, charges, interest and penalties associated therewith, imposed by
the United States, any taxing or other governmental authority outside the United
States, or any state or local instrumentality or authority within the United
States. It is acknowledged that, except as otherwise provided to the contrary in
this Agreement, each Party shall pay its own capital (including capital gains),
net worth, user, franchise and income taxes and the same shall not be the
subject of apportionment hereunder.
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9.4 Sales and Use Taxes.
All transfer, transfer gains, documentary, sales, use, stamp,
registration and other such federal, state and local taxes and fees (including
any penalties, interest, additions to tax and costs and expenses relating to
such taxes), whether for real or personal property, incurred in connection with
the consummation and performance of the transactions contemplated hereby
(collectively the "Sales Taxes") shall be borne by Buyer. If, and to the extent,
Seller is required by law to collect the Sales Taxes, Buyer shall pay to Seller
at the relevant Closing an amount equal to the Sales Taxes and Seller shall
remit such amount to the appropriate governmental authority.
9.5 Purchase Price Allocation.
Buyer and Seller have agreed upon the allocation of the Purchase Price
among the categories of Assets as set forth in Exhibit O hereto (the "Purchase
Price Allocation"), and shall, as promptly as practicable, agree upon the
allocation of Purchase Price amongst the Store Properties, to be set forth in
Exhibit O hereto. The Parties shall cooperate on the timely filing of Internal
Revenue Service Form 8594, if required in the reasonable judgment of the
Parties, which shall be prepared in conformity with the Purchase Price
Allocation. Seller and Buyer agree to act in accordance with the Purchase Price
Allocation for all purposes including income, franchise and Sales Taxes and
shall not take any position for any such purpose which is inconsistent with such
allocation.
9.6 Deposits; Prepaid Expenses.
Buyer shall reimburse Seller at the Closing of each respective Store
Property for the full amount of all Prepaid Expenses and recoverable deposits
made by Seller that are assigned to Buyer including respecting the Store Leases,
the Contracts, the Permits, the Labor Agreements, the Guarantees or the Store
Properties (except any such amounts recouped or retained by Seller pursuant to
Section 1.2(e) including, without limitation, all deposits held by any utility
company, landlord, any governmental authority or any other person in connection
with the Store Leases, the Contracts, the Permits, the Labor Agreements, the
Guarantees or the Store Properties), and Seller shall assign such recoverable
deposits to Buyer.
9.7 Utilities.
Seller shall attempt to obtain final meter readings for utilities at
the Store Properties as of the respective Closing Date for each Store Property
and shall pay for all utilities to such date. In the event it shall not be
practicable to obtain the meter reading for any utility as of that date or there
are utilities which are not metered, then as soon as all such utility bills are
finally received, the Parties shall, on a pro rata basis, pay their respective
shares of such bills.
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9.8 Prorations Generally; Percentage Rents.
(a) Any and all other Store Lease payments or receipts, rentals,
costs, charges, fees or expenses connected with or used in the operation of any
Store Property, including all common area costs and costs under the Contracts,
the Permits, the Labor Agreements, the Guarantees or revenues from Assets such
as copy machines, vending machines, pay phones and the like, shall be prorated
between the Parties on the respective Closing Date for each Store Property or as
soon thereafter as reasonably practicable and Seller shall bear its proportion
thereof through the day prior to such Closing Date; provided, however,
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percentage rents payable under any of the Store Leases shall be prorated at the
end of the current lease year or applicable calculation period for each such
Store Lease, and the percentage rents payable, if any, shall be paid by Buyer
when due and Seller shall promptly reimburse to Buyer a portion of such
percentage rents in proportion to the gross receipts of the respective Store
Property for the fraction of the rent year for which percentage rent is payable
that precedes such Closing Date, and Buyer shall be responsible for the
remainder. Seller shall be responsible for any penalties and interest payable
for rent or other items under each Store Lease where the same are due as a
result of an underpayment or late payment by Seller prior to such Closing Date;
Buyer shall be responsible for such amounts in respect of periods on or
following such Closing Date.
(b) If any of the items described above cannot be finally apportioned
at the respective Closing for each Store Property, because of the unavailability
of the amounts which are to be apportioned or otherwise, or are incorrectly
apportioned at the Closing or subsequent thereto, such items shall be
apportioned or reapportioned, as the case may be, as soon as practicable after
such Closing or the date such error is discovered or the event giving rise to an
apportionment or reapportionment occurs, as applicable.
(c) The provisions of this Section 9 shall survive the Initial
Closing and the Subsequent Closings and shall not be deemed subject to any
limitations or restrictions placed upon the liability of the Parties with
respect to indemnification obligations pursuant to Section 17 hereof.
10. Conduct of Business.
10.1 Seller Conduct of Business
(a) Buyer acknowledges that the transaction contemplated hereby is a
sale of the specified Assets and does not include the sale of any goodwill.
Notwithstanding the foregoing, the Sellers agree from the date of this Agreement
until the respective Closing Date for each Store Property (i) to maintain
reasonably comparable hours of operation in such Store Properties except as a
result of security concerns or as required by law; (ii) to exercise good faith
in pricing merchandise between the date of this Agreement and such Closing Date,
including not to increase such prices other than in the Sellers' ordinary course
of business and consistent with
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the Sellers' normal pricing strategy; (iii) to maintain reasonably comparable
types of inventory and overall levels of Inventory located at such Store
Properties; (iv) to perform customary maintenance on such Store Properties and
Equipment in accordance with the Sellers' past practices; and (v) without the
consent of Buyer (which shall not be unreasonably withheld), not to enter into
any material amendment to any of the Store Leases.
(b) In the event the Sellers are not in compliance with the terms set
forth in this Section 10.1, Buyer shall provide Seller with written notice of
such non-compliance, whereupon Seller shall have ten (10) days from the date of
receipt of such notice to comply, and if the respective Closing Date is
scheduled to occur before the expiration of such ten (10) day period, the
respective Closing Date shall automatically be extended until the earlier of the
date the Sellers cure such non-compliance or the date such ten (10) day period
expires. If the respective Closing shall occur, Buyer shall be deemed to have
waived any and all claims it may have against Seller pursuant to this Section
10.1, irrespective of whether or not Buyer has actual knowledge of such claims
or facts giving rise to such claims, except to the extent that Buyer shall have
given Seller notice pursuant to the preceding sentence.
10.2 Maintenance.
Subject to the provisions of this Agreement, the Sellers agree to keep
and maintain the Store Properties (including all heating, ventilating, air
conditioning, refrigeration and heat reclaim equipment and accessories) in
working condition, ordinary wear and tear and damage by casualty excepted, and
to deliver same in such condition to Buyer on the respective Closing Date for
each Store Property.
10.3 Third Parties.
Buyer acknowledges that the Sellers shall not be obligated to deal
with anyone other than Buyer as the buyer of the Store Properties in connection
with the sale hereof pursuant to this Agreement including, but not limited to,
any operators, subtenants, or assignees of Buyer who might acquire an interest
in the Store Properties from Buyer. In no event shall the Sellers be liable to
such third parties in connection with any aspect of the transactions
contemplated by this Agreement, nor shall any third party be or become a
beneficiary of such rights, nor shall Buyer act or hold itself out as the
Sellers' agent (and Buyer is not the Sellers' agent for any purpose) in any
activity including, but not limited to, dealings with any such third parties.
11. Access
11.1 Access to Records and Files.
Seller shall have the right for a period of three years following the
Initial Closing Date, subject to any third party rights of confidentiality, to
have reasonable access to, and may make copies of the Files and Records and will
hold all such information confidential in accordance
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with the Confidentiality Agreement (as defined in Section 21.2, below) except as
may be required by law.
11.2 Telecommunications.
11.2.1 Access to Telecommunications Equipment.
Seller, or its agents, shall have and the Buyer shall allow
representatives of the telephone company and other appropriate persons, for a
period of sixty (60) days following the respective Closing Date, reasonable
access to the telephone equipment situated in Store #1623, Palm Springs-Indio,
(which telephone equipment services that and other stores of Seller) to remove,
relocate or alter such telephone equipment. Seller shall repair any damage
caused by such removal.
11.2.2 Telephone Numbers.
Seller shall consent to the assignment to Buyer following each
respective Closing of all telephone numbers, telephone lines, communication
lines and similar rights used exclusively in connection with the Store
Properties.
12. Bulk Transfer Laws.
Buyer waives the requirements of any laws with respect to bulk transfers,
and Seller agrees to pay and discharge when due all claims of creditors which
could be asserted against Buyer by reason of such waiver to the extent such
liability is not specifically assumed by Buyer herein. In consideration thereof,
Seller agrees to defend and shall indemnify and hold Buyer harmless from any and
all liabilities resulting from the claims of creditors of Seller arising out of
or connected with its failure to comply with the requirements of any laws
relating to bulk transfers or the failure of Seller to discharge such claims.
13. Accounts Receivable.
Buyer shall not be under any obligation to collect Accounts Receivable,
however, Buyer shall promptly forward to Seller within ten (10) days of receipt
any monies paid to Buyer on any Accounts Receivable. Buyer shall furnish
information that Seller may reasonably request from time to time with respect to
such receipts of Accounts Receivable.
14. Representations and Warranties of the Parties.
Seller and Buyer each respectively represent and warrant to one another (it
being understood that each of the entities included within the term Buyer is
jointly and severally making the representation as to itself and the others):
14.1 Good Standing.
It is duly incorporated, validly existing and in good standing under
the laws of its state of formation and possesses full corporate power to own and
operate its properties and carry on business as it is currently conducting it.
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14.2 Corporate Authority.
All requisite corporate action has been, or will be taken by it before
the Initial Closing, in order to authorize the execution and delivery of this
Agreement and, as the case may be, the assignment, transfer, conveyance and
acceptance of the Store Leases, the Contracts, the Real Property, the Labor
Agreements, the remaining Assets, the Assumed Liabilities and all other
properties as herein provided, the payment of all sums payable hereunder, and
the consummation of the transactions contemplated by this Agreement, and
compliance with the terms and provisions hereof (assuming all necessary consents
are obtained) will not conflict with or result in a breach of any terms and
provisions of, or constitute a default under, its Articles or Certificate of
Incorporation or By-Laws or of any material indenture, mortgage, contract or
other agreement to which it or any of its affiliates is a party or by which any
of such person's properties are bound, or any existing material applicable law,
rule, regulation, judgment, order or decree of any governmental instrumentality
or court.
14.3 Binding Obligation.
It has duly and validly executed and delivered this Agreement and,
upon due and valid execution and delivery by the other Party, this Agreement
constitutes its legal, valid and binding obligation (assuming this Agreement is
a valid and binding obligation of the other Party), enforceable against it in
accordance with its terms, subject, however, to all bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditor's rights, to general principles of equity, and to judicial
limits on the rights of specific performance.
15. Representations and Warranties of Seller.
In this Agreement, any reference to a party's "knowledge" means, in the
case of Seller, the actual knowledge of the Chief Executive Officer, the Chief
Financial Officer or the General Counsel of Seller, as such knowledge may exist
without inquiry into the matter and, in the case of Buyer, the actual knowledge
of the Chief Executive Officer, the Chief Financial Officer or the General
Counsel of Buyer, as such knowledge may exist without inquiry into the matter.
Seller represents and warrants to Buyer the following:
15.1 "As Is" Condition.
Except as otherwise specifically set forth in this Agreement, all of
the Assets are being purchased by Buyer and sold by the Sellers, and the Store
Properties (including the Real Property, if applicable) which are the subject
matter of this Agreement are being delivered, in an "AS IS, WHERE IS" CONDITION
ON THE RESPECTIVE CLOSING DATE, AND IN THEIR THEN PRESENT CONDITION, "WITH ALL
FAULTS", INCLUDING, BUT NOT LIMITED TO, BOTH LATENT AND PATENT DEFECTS, AND
BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. OTHER THAN AS SET FORTH
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EXPRESSLY IN THIS AGREEMENT, NO WARRANTIES, EXPRESS OR IMPLIED, ARE MADE BY
SELLERS CONCERNING THE ASSETS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY.
15.2 Pending Litigation.
Except as disclosed in Exhibit P hereto, there is no litigation,
proceeding or investigation by any third party or governmental authority or
agency pending or, to Seller's knowledge, threatened as of the date of this
Agreement which materially adversely affects the Sellers' ownership or title to
the Assets or consummation of the transactions contemplated in this Agreement,
which has a reasonable likelihood of resulting in an adverse material change in
the condition or value of the Assets or which could reasonably be expected to
prevent, enjoin, materially alter or delay the consummation of the transactions
contemplated by this Agreement.
15.3 Store Leases.
To Seller's knowledge, Seller has made available to Buyer correct and
complete copies of the Store Leases (including all material amendments,
modifications and supplements thereto) under which Seller uses or occupies or
has the right to use or occupy, now or in the future, the Store Leases.
15.4 Zoning.
To Seller's knowledge, except as set forth in Exhibit P hereto, there
is no action, pending or threatened, to change the zoning affecting any of the
Store Properties which would materially adversely affect the conduct of a
supermarket business at the Store Properties as it is presently conducted, or
any pending or threatened condemnation of any of the Store Properties.
15.5 Title to Personalty; Liens.
With respect to the Assets constituting personal property which are
owned by the Sellers, good and marketable title to such Assets will be
transferred to Buyer at each respective Closing free and clear of any lien,
charge, claim or other encumbrance of any nature whatsoever, except for real and
personal property taxes and assessments not yet due and payable, and the
following liens and encumbrances: (i) claims of materialmen, carriers, landlords
and others not yet, or as of the respective Closing Date to be then not due and
payable; (ii) liens securing obligations of the Sellers to creditors which shall
be released on the respective Closing Date; and (iii) claims listed on Exhibit P
hereto.
15.6 Environmental Laws.
Notwithstanding any other provision in this Agreement, this Section
15.6 contains the exclusive representations of Seller concerning environmental
matters.
Except as disclosed on Exhibit P hereto, to Seller's knowledge:
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(a) Each of the Sellers is in compliance in all material respects
with all applicable Environmental Laws with respect to the Store Properties.
(b) There have been no material releases or threatened releases of
Hazardous Materials by any of the Sellers or their affiliates at, on, or under
the Store Properties which would, individually or in the aggregate, be
reasonably likely to require remediation under applicable Environmental Laws.
(c) There exists no writ, injunction, decree, order, judgment,
lawsuit, claim, proceeding, citation, directive, or summons, pending or
threatened, against any of the Sellers under any Environmental Law with respect
to the Store Properties.
15.7 Definitions
For the purposes of this Section 15, the following terms shall have
the meanings indicated:
"Environmental Laws" means all federal, state or local laws, statutes,
ordinances, rules or regulations relating to (i) the protection of the
environment or (ii) the generation, use, storage, treatment, processing,
disposal, release or threatened release of Hazardous Materials, in each case as
in effect at the Initial Closing Date.
"Hazardous Material" means any pollutants, contaminants, toxic or
hazardous substances, materials, wastes, constituents, compounds or chemicals
(including, without limitation, petroleum or any by-products or fractions
thereof, any form of natural gas, lead, urea formaldehyde, polychlorinated
biphenyls ("PCBs") and PCB-containing equipment, radon and other radioactive
elements, ionizing radiation, electromagnetic field radiation and other non-
ionizing radiation) that are regulated by any Environmental Laws.
15.8 Buyer's Representations and Warranties.
Seller has no knowledge that any of the Buyer's representations and
warranties are untrue in any material respect.
16. Representations and Warranties of Buyer.
Buyer represents and warrants to Seller the following it being understood
that each of the entities included within the term Buyer is jointly and
severally making representation as to itself and to the other.
16.1 Pending Litigation.
Except as disclosed in Exhibit Q hereto, there is no litigation
proceeding or investigation by any governmental authority or agency pending or,
to Buyer's knowledge, threatened as of the date of this Agreement which has a
reasonable likelihood of resulting in an adverse material change in the
financial condition of Buyer, or which could reasonably be expected to prevent,
enjoin, materially alter or delay the consummation of the transactions
contemplated by this Agreement.
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16.2 "As Is" Condition.
(a) Buyer acknowledges that, pursuant to Section 21.1 and 22.2.8,
Buyer accepts the Assets in an "AS IS, WHERE IS" CONDITION ON THE RESPECTIVE
CLOSING DATE, AND IN THEIR THEN PRESENT CONDITION, "WITH ALL FAULTS", INCLUDING,
BUT NOT LIMITED TO, BOTH LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON
ITS OWN EXAMINATION THEREOF. OTHER THAN AS SET FORTH EXPRESSLY IN THIS
AGREEMENT, NO WARRANTIES, EXPRESS OR IMPLIED, ARE MADE BY SELLERS CONCERNING
SUCH ITEMS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY.
(b) Buyer hereby affirms and acknowledges that neither Seller nor any
Affiliated Seller nor any of their officers, directors, agents, employees,
accountants, advisors and/or attorneys (collectively the "Exculpated Parties")
have made nor has Buyer relied upon any representation, warranty or promise
whether oral or written, express or implied, by operation of law or otherwise,
with respect to the Assets or any other subject matter of this Agreement except
as otherwise expressly set forth in this Agreement. Without limitation, Buyer
acknowledges that, except as specifically set forth to the contrary in this
Agreement, no warranties or representations, expressed or implied, of any kind
whatsoever have been made by any of the Exculpated Parties, or will be relied
upon, and Buyer hereby releases the Exculpated Parties from any claims with
respect to the Financial Information (as defined in Section 18.3), the Files and
Records, the general plan designation, zoning, value, use, tax status or
physical condition of the Assets including, without limitation, the Store
Properties, or any part thereof, including, without limitation, the flood
elevations, drainage patterns, soil and subsoils composition and compaction
level, and other conditions at the Store Properties, or with respect to the
existence or non-existence of toxic or hazardous materials on or under such
property, or with respect to the accuracy of any boundary survey or other
survey, title report or commitment, soils report or any other plans or reports,
or with respect to the revenues and expenses generated by or associated with the
Store Properties, or otherwise in any way relating to the Store Properties or
the transactions contemplated hereby. Except as specifically provided in this
Agreement, Buyer further acknowledges that all materials which have been
provided to Buyer by any of the Exculpated Parties have been provided without
any warranty or representation, expressed or implied, as to their content,
suitability for any purpose, accuracy, truthfulness or completeness and Buyer
shall not have any recourse against Seller or any of the other Exculpated
Parties in the event of any errors therein or omissions therefrom. Buyer is
acquiring the Store Properties based solely on its own independent investigation
and inspection of the Store Properties and in no way in reliance on any
information
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provided by Seller or any of the other Exculpated Parties other than
the specified representations and warranties expressly contained herein.
(c) No representation whatsoever is given or made by Seller under
this Agreement that any distributor, supplier, contractor or service provider
who serves any of the Sellers on the date hereof will continue to serve Buyer or
any of the Store Properties after the Initial Closing or the respective
Subsequent Closing.
16.3 Financing.
Buyer either has or will have at and after the Initial Closing funds
available to it sufficient to consummate its purchase of the Assets and the
transactions contemplated by this Agreement.
16.4 Competitive Capability.
Buyer has the intent and capability of competing effectively in the
supermarket business and to use the Assets in order to do the same and believes
that it is a buyer that should be viewed as an acceptable acquiror to the
Federal Trade Commission and any relevant State Attorneys General.
16.5 Seller's Representations and Warranties.
Buyer has no knowledge that any of Seller's representations and
warranties are untrue in any material respect.
17. Indemnification.
17.1 Seller's Indemnification.
Subject to Section 17.3, Seller hereby covenants and agrees, from and
after the Initial Closing, to indemnify and to hold harmless Buyer, its
affiliates and their respective officers and directors, employees and agents
(collectively, the "Buyer Indemnified Party") from and against all claims,
losses, liabilities, damages, fines, penalties, costs and expenses, reasonable
fees and disbursements of counsel, including counsel fees incurred to enforce
its rights hereunder, (net in all cases of tax benefits and net of any benefits
paid to an Indemnified Party by an insurance carrier in respect of any loss,
liability, obligation, damage, deficiency or expense) (collectively, the
"Losses"), sustained or incurred by the Buyer Indemnified Party as follows:
(a) All Losses sustained or incurred by any Buyer Indemnified Party
in respect of Excluded Liabilities.
(b) All Losses sustained or incurred by any Buyer Indemnified Party
resulting from any breach of any representation or warranty on the part of
Seller or any Affiliated Seller under this Agreement.
(c) All Losses sustained or incurred by any Buyer Indemnified Party
resulting from any breach of any of Seller's covenants or agreements contained
herein.
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(d) Notwithstanding the provisions of this Section 17.1, Seller shall
have no obligation for any claim for indemnification pursuant to Section 17.1
unless Buyer has provided Seller with written notice of such claim (containing a
reasonable description of the facts and circumstances constituting the basis of
such claim) prior to the expiration of the Survival Period.
For the purposes of this Agreement (including Section 17.2), Losses
shall not include lost profits, consequential damages or punitive damages.
17.2 Buyer's Indemnification.
Subject to Section 17.3, Buyer hereby covenants and agrees, from and
after the Initial Closing, to indemnify and to hold harmless Seller and any
Affiliated Seller, their affiliates and their respective officers, directors,
employees and agents (collectively, the "Seller Indemnified Party") from and
against all Losses sustained or incurred by the Seller Indemnified Party as
follows:
(a) All Losses sustained or incurred by any Seller Indemnified Party
in respect of any Assumed Liabilities.
(b) All Losses sustained or incurred by any Seller Indemnified Party
resulting from any breach by Buyer of any of its representations or warranties.
(c) All Losses sustained or incurred by any Seller Indemnified Party
resulting from any breach of any of Buyer's covenants or agreements contained
herein.
(d) all Losses sustained or incurred by any Seller Indemnified Party
(excluding Deloitte & Touche and Ernst & Young) in respect of Buyer's use of the
Financial Information (as defined in Section 18.3).
(e) Notwithstanding the provisions of this Section 17.2, Buyer shall
have no obligation for any claim for indemnification pursuant to Section 17.2
unless Seller has provided Buyer with written notice of such claim (containing a
reasonable description of the facts and circumstances constituting the basis of
such claim) prior to the expiration of the Survival Period.
17.3 Procedure for Indemnification.
(a) Any party making a claim for indemnification hereunder (an
"Indemnitee") shall notify the indemnifying party (an "Indemnitor") of the claim
in writing, describing the claim, the amount thereof, and the basis therefor.
(b) In case any legal, arbitration or governmental proceeding is
brought against any Indemnitee, the Indemnitor shall be entitled to assume the
defense thereof, by written notice to the Indemnitee within thirty (30) calendar
days after receipt of notice from the Indemnitee of the claim for
indemnification, with counsel reasonably satisfactory to the Indemnitee (subject
to the requirements of any insurance carrier covering the subject matter of the
proceeding) and at the Indemnitor's own expense. However, notwithstanding the
assumption by an Indemnitor of the defense of any claim as provided in this
Section 17.3, the Indemnitee shall be permitted to join in
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such defense and to employ counsel at its own expense. The Indemnitor shall be
entitled to control the defense of any claim unless it is determined that there
is a conflict of interest between the Indemnitor and the Indemnitee, in which
case the Indemnitee shall be permitted to retain control of the conduct its own
defense. Neither Party shall be entitled to settle a claim without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed.
(c) Seller shall not be liable to Buyer and Buyer shall
not be liable to Seller for indemnification pursuant to this Section 17 unless
(i) the amount of any individual Loss or series of related Losses exceeds the
sum of $100,000 (such Losses in excess of $100,000 are each called "Permitted
Losses") and (ii) the aggregate amount of all Permitted Losses exceeds a sum
equal to 4.0% of the Purchase Price (the "Floor"), in which event the
indemnified party shall be entitled to indemnification for all amounts in excess
of the Floor; provided,however, that the Floor and limitation on Losses are not
------- -------
applicable to claims arising from the failure (i) to satisfy any payment
obligation under the Store Leases or Permitted Exceptions, or in respect of the
Assumed Liabilities or the Excluded Liabilities (ii) to pay the Purchase Price,
(iii) to satisfy any obligations arising under Section 20, and (iv) to pay or
reimburse the other Party for apportionments provided for herein.
17.4 Survival.
The Parties hereby agree, notwithstanding any contrary provision of
this Agreement, that the representations and warranties of the Parties set forth
in this Agreement shall survive the Initial Closing for a period of one (1)
year, and shall thereafter be of no further force and effect (the "Survival
Period"); provided, however, that notwithstanding the above and foregoing: (i)
Buyer agrees that Seller's representations, warranties and agreements contained
in Section 15.3 and Section 15.4 shall not survive the Initial Closing; (ii)
Seller agrees that its representations, warranties and agreements regarding
Taxes and those contained in Section 12 regarding bulk sales shall survive the
Initial Closing Date until the expiration of the relevant statute of limitations
period (including any extensions thereof); (iii) Seller agrees that its
representations, warranties and agreements regarding Environmental Laws
contained in Section 15.6 shall survive the Initial Closing Date for a period of
three (3) years; and (iv) the covenants and obligations of the Parties contained
herein (including obligations with respect to Excluded Liabilities and Assumed
Liabilities) that contemplate performance after the Initial Closing shall
survive the closing until the expiration of the relevant statute of limitations.
17.5 Indemnification as Exclusive Remedy.
After the Initial Closing, the indemnification provisions set forth in
this Section 17 constitute the sole and exclusive remedy of any Party for any
breach or default or other action brought in respect of this Agreement and the
transaction contemplated hereby, except for
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covenants to be performed following the Initial Closing, with respect to which
the Parties may seek specific performance to the extent that a remedy at law is
inadequate.
18. Consents
18.1 Consents and Approvals.
Seller will use commercially reasonable efforts to obtain any and all
consents and approvals required to authorize and permit the assignment, transfer
and conveyance to Buyer of the Assets and the Store Leases being conveyed
hereunder including, without limitation, "HSR Clearance" which shall be defined
to mean that (a) the waiting period (or extension thereof) under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"), shall have
expired or been terminated; and (b) no order, decree or injunction shall have
been entered or issued which is in effect and has the effect of making the
Merger illegal or otherwise prohibits consummation of the Merger, provided that
nothing in this Agreement shall require Seller to take any actions with respect
to the sale or divestiture or operation of any of its (or any of its
affiliates') assets in response to a request of any regulatory authority which
Seller believes to be commercially unreasonable or not in its best business
interests. Buyer shall indemnify and hold harmless Seller with respect to
Buyer's obligations under the Store Leases, the Contracts, the Labor Agreements,
the Permits and any other Assumed Liabilities after the Initial Closing in
accordance with Section 17.
18.2 Further Cooperation.
Buyer agrees to cooperate with Seller and each of the Affiliated
Sellers with respect to (A) obtaining the preliminary and final approval of the
state Attorneys General and the Federal Trade Commission to the sale of the
Assets to Buyer by (i) providing such antitrust agencies with any information
within its possession or control which such agencies duly request, (ii) taking
such actions as may be reasonably sought by such governmental agencies in
consideration of this Agreement and the Merger including responding to such
governmental agencies' requests and attending meetings with such governmental
agencies upon reasonable notice in connection with Seller's efforts to obtain
such approval, (iii) filing an HSR Notification and Report Form within ten (10)
days of receipt of notice from Seller that Seller deems it appropriate to file
an HSR Notification and Report Form in connection with the Agreement, and
thereafter promptly making any other required submissions under the HSR Act,
(iv) promptly notifying Seller of any communication concerning this Agreement or
the Merger with any governmental authority, and furnishing Seller with copies of
all correspondence, filings, and communications (and memoranda setting forth the
substance thereof) between Buyer and their representatives on the one hand, and
the FTC or a state Attorneys General or their respective staffs on the other
hand, with respect to this Agreement or the Merger, and (B) obtaining the
consent of any landlord or sublessor or other person as may be required in
connection with the
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transaction, including, without limitation, providing such persons with
information, as may be requested, relating to Buyer's financial status and
experience in operating supermarkets, and such other information as may be
reasonably requested by such landlords, sublessors or other persons.
18.3 Financial Information
Seller agrees to cooperate with Buyer with respect to providing Buyer
with financial information relating to the Store Properties to the extent
necessary for Buyer to comply with its disclosure and filing obligations under
the Securities Exchange Act of 1934 ("Financial Information"). Seller will use
its best efforts to engage Deloitte & Touche and/or Ernst & Young to assist
Seller in this process and Buyer shall promptly reimburse Seller for any
reasonable costs and expenses Seller incurs in complying with this Section,
including the fees and expenses of Deloitte & Touche and/or Ernst & Young.
Seller shall not be deemed to make and has not made any representation or
warranty to Buyer with respect to such Financial Information.
18.4 Reasonable Efforts.
On the terms and subject to the conditions set forth in this
Agreement, each of the Parties agrees to use all commercially reasonable efforts
to take or cause to be taken all actions and do, or cause to be done, and to
assist and cooperate with the other Party in doing, all things necessary or
appropriate to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated hereby.
19. Casualty.
19.1 Damage.
The risk of destruction, loss or damage by fire or other casualty to
any Asset between the date hereof and the respective Closing to the extent that
the operation of a Store Property ceases (a "Damage") shall be treated as
follows:
(A) If a Damage to Improvements at a Store Property is covered under
Seller's insurance policies, Buyer shall take possession of such Store Property
at the Closing of such Store Property and, except to the extent Seller has, or
has caused to be, repaired such Store Property prior to such Closing, Seller or
any Affiliated Seller shall (x) assign to Buyer (or to the landlord if required
by the applicable Store Lease, and subject to any right of the landlord to
terminate the Store Lease) any right it has to any unexpended insurance proceeds
relating to such Damage (with Seller responsible for any deductible payable
under the insurance policy covering such Damage and (y) to the extent that such
insurance proceeds are not sufficient, Seller shall pay any additional amount
necessary to repair, replace and restore the Improvements at such Store Property
to pre-damage condition); it being understood that no adjustment to the Purchase
Price shall occur as a result thereof.
In the event that Damage occurs prior to Closing, and subsequent to
the Closing Buyer is prevented from rebuilding or substantially restoring the
Improvements by a governmental
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authority or other third party (providing Buyer has used its best efforts to
obtain any necessary consents or approvals), Seller will refund to Buyer, if
appropriate, an equitable portion of the Purchase Price relating to such Store
Property after taking into consideration any insurance proceeds assigned, and
any other amounts paid by third parties, to Buyer or for its benefit.
If a landlord has a proper right to terminate a Store Lease which has
not been exercised at the time of the respective Closing of such Store Lease,
due to such Damage occurring prior to such Closing, the Parties shall
nonetheless proceed to such Closing. In the event that a landlord subsequently
exercises such a right to terminate a Store Lease by reason of the Damage which
occurred prior to such Closing, Seller will refund to Buyer, if appropriate, an
equitable portion of the Purchase Price relating to such Store Lease after
taking into consideration any insurance proceeds assigned, and any other amounts
paid by third parties, to Buyer or for its benefit.
If Seller has a right to terminate a Store Lease due to such Damage
occurring prior to Closing, Seller shall only exercise such right if Buyer so
directs in writing prior to Closing. In such event the Store Property shall not
be transferred at Closing and shall become an Excluded Asset and the Purchase
Price shall be reduced by an amount mutually agreed upon between Buyer and
Seller with respect to such Store Property and the related Assets located
thereat. If such Store Lease is not terminated, the Parties shall proceed to
Closing in accordance with this Section.
(B) If a Damage to Improvements at a Store Property is not covered
under Seller's insurance policies, Seller shall have the right, unless Buyer has
agreed to assume the Seller's obligations relating to such Damage by written
notice to Seller within ten days after Buyer's receipt of Seller's written
notice of termination, to either (i) terminate this Agreement as to such Store
Property or (ii) pay to Buyer an amount allowing Buyer to repair, replace and
restore the Improvements at such Store Property to pre-damage condition;
provided, however, in the event that the landlord is responsible for such
- -------- -------
repairs, loss or destruction pursuant to the terms of the relevant Store Lease,
Buyer shall take possession of such Store Property and close on such Store
Property (subject to any right of the landlord to terminate the Store Lease) at
the respective Closing without any indemnification obligation by Seller and
Seller or any Affiliated Seller shall assign to Buyer any claim it has under
such Store Lease with respect thereto.
(C) If any Equipment is damaged prior to Closing, Seller or any
Affiliated Seller shall assign to Buyer any right it has to any unexpended
insurance proceeds relating to such damaged Equipment (with Seller responsible
for any deductible payable under the insurance policy covering such damaged
Equipment and any additional amount necessary to repair, replace and restore the
Equipment to pre-damage condition); it being understood that no adjustment to
the Purchase Price shall occur as a result thereof. If such damaged Equipment is
not covered
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under the Sellers' insurance policies, then the Parties shall proceed to the
respective Closing and an appropriate adjustment shall be made to the Purchase
Price as it relates to such damaged Equipment.
19.2 Condemnation.
In the event a Store Property or any part thereof is taken in
condemnation or by the exercise of eminent domain prior to the respective
Closing Date for such Store Property, Buyer shall take possession of the Store
Property or any portion thereof and close on such Store Property (subject to any
right of the landlord to terminate the Store Lease) and Seller or any Affiliated
Seller shall assign to Buyer any right it has to any condemnation award relating
to such condemnation (it being understood that no adjustment to the Purchase
Price shall occur as a result thereof). Seller shall not settle any condemnation
proceeding relating to a Store Property without Buyer's prior consent (which
consent shall not be unreasonably withheld).
19.3 Store Encumbrances; Leases.
(a) With respect to any Owned Store subject to a mortgage, security
interest or other encumbrances (a "Monetary Encumbrance"), Seller shall use its
reasonable efforts (without being obligated to pay any prepayment premium or
penalty or other payment beyond the principal amount thereof or incur any
additional liability) to repay and obtain the release, discharge or satisfaction
of such Monetary Encumbrance or, in Seller's sole discretion, substitute or
cause to be substituted collateral under such Monetary Encumbrance so as to be
able to obtain a release and reconveyance of such Owned Store from such Monetary
Encumbrance, in each case so as to be able to convey to Buyer fee simple title
to such Owned Store, free and clear of such Monetary Encumbrance at the
respective Closing. If Seller is unable to convey any Owned Store to Buyer at
the respective Closing free and clear of the related Monetary Encumbrance, then
Seller may elect either (i) that the Store Property shall not be transferred at
the respective Closing and shall become an Excluded Asset and the Purchase Price
shall be reduced by an amount mutually agreed upon between Buyer and Seller with
respect to such Store Property and the related Assets located thereat, or (ii)
to indemnify and hold harmless Buyer from any Losses incurred by Buyer directly
as a result of such Monetary Encumbrance. In the event Seller elects to so
indemnify Buyer, the Parties shall proceed to the respective Closing and such
indemnification will be governed by the terms of Section 17 (except that such
indemnification shall be first dollar indemnification and shall not be subject
to the provisions of Section 17 regarding the Floor or Permitted Losses and
provided further that the amount of such Losses shall not be considered a
Permitted Loss and shall not be taken into account for purposes of determining
if the Floor has been satisfied with respect to other claims). In the event that
a Store Property becomes an Excluded Asset, the Escrow Holder shall release to
Seller all documents
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held regarding such Store Property and release to Buyer the agreed portion of
the Purchase Price referred to in this Section 19.3(a).
(b) If any party whose consent is required to assign the Store Leases
to Buyer refuses or fails to give its written consent to an assignment of any
Store Lease, or conditions its consent on terms unacceptable to Seller or Buyer,
then Seller may elect either: (i) that the Store Property shall not be
transferred at the respective Closing and shall become an Excluded Asset and the
Purchase Price shall be reduced by an amount mutually agreed upon between Buyer
and Seller with respect to such Store Property and the related Assets located
thereat, or (ii) to indemnify and hold harmless Buyer from any Losses incurred
by Buyer directly as a result of such failure to obtain consent. In the event
Seller elects to so indemnify Buyer, the Parties shall proceed to the respective
Closing and such indemnification will be governed by the terms of Section 17
(except that such indemnification shall be first dollar indemnification and
shall not be subject to the provisions of Section 17 regarding the Floor or
Permitted Losses and shall not be considered a Permitted Loss; and provided
further that such Losses shall not be taken into account to determine if the
Floor has been satisfied with respect to other claims). In the event that a
Store Property becomes an Excluded Asset, the Escrow Holder shall release to
Seller all documents held regarding such Store Property and release to Buyer the
agreed portion of the Purchase Price referred to in this Section 19.3(b).
20. Employee Relations.
At all times prior to each respective Closing, Seller shall be solely and
exclusively responsible for compliance with all legal or contractual obligations
including but not limited to the Labor Agreements with respect to its employees
at the Store Properties. Subsequent to each respective Closing, Buyer shall be
solely and exclusively responsible for compliance with all contractual and legal
obligations with respect to its employees at the Store Properties. Seller shall
lay off, transfer or terminate all employees at the Store Properties prior to or
at each respective Closing. At the time of termination of the Seller's
employees, Seller shall pay to such employees all vacation, sick leave, personal
time, union bonuses and other similar benefits which have accrued or to which
the employees are otherwise entitled with respect to their employment up to the
respective Closing (except for WARN responsibilities as described below).
Buyer shall have sole and exclusive responsibility for compliance with the
Worker Adjustment and Retraining Notification Act (WARN Act) and any equivalent
state statutory requirements to the extent the WARN Act and any equivalent state
statutory requirements places such responsibility on Buyer, although, if the
WARN Act is applicable to the transactions contemplated by this Agreement,
Seller agrees to provide any additional information necessary for Buyer to
provide required notice to employees on Buyer's request as Buyer's agent.
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Except for the above, neither Buyer nor Seller shall be authorized to
represent or speak for the other with respect to any employment or labor matters
and specifically with respect to communications to employees and/or unions as to
the transactions contemplated by this Agreement.
Buyer acknowledges that Seller has notified it of the Labor Agreements.
Buyer agrees to assume the Labor Agreements applicable to bargaining unit
employees at the Store Properties and to apply their terms and conditions to
operations of the Store Properties subsequent to each respective Closing.
Buyer additionally agrees to maintain seniority and a fringe benefit status
of all bargaining unit employees it hires from among the former employees of
Seller to staff its operations at the Store Properties and otherwise to comply
with all obligations imposed on a Buyer by the Labor Agreements.
As soon as possible after the date of this Agreement, Seller will arrange
for the production of an interview schedule (the "Interview Schedule") for
interviews of employees of the Sellers employed at the Store Properties.
Employees who are interested in applying for work with the Buyer will be invited
to sign up for a twenty-minute interview slot during a 2-3 day period
established by Seller and to complete any forms or applications provided by
Buyer (such forms to be provided by Buyer to Seller as soon as possible after
the date of this Agreement).
Seller will provide the Interview Schedule to Buyer. Within fifteen (15)
days of receipt of the Interview schedule, Buyer will (i) interview all
interested employees at an off-site location reserved and paid for by Seller,
and (ii) will have extended any job offers to such employees in Buyer's sole and
absolute discretion. Such job offers may remain open for acceptance by the
employee for no longer than five (5) days. Within twenty (20) days of receiving
the Interview Schedule, Buyer will notify Seller in writing of the list of
employees who have accepted employment offers with Buyer. Seller will provide
Buyer with the Employee Payroll Records promptly after the date of this
Agreement and at least ten (10) days before each respective Closing.
21. Confidentiality and Access.
21.1 Access.
Subject to any limitations arising, or consents required, under or
related to this Agreement, authorized representatives of Buyer shall, upon terms
and at times reasonably acceptable to Seller, have access during normal business
hours, at Buyer's expense, to the Store Properties and, at the Seller's offices,
to the Files and Records (which, pursuant to Section 1.1 and 1.2, does not
include any financial records relating to the Store Properties or Seller (the
sole rights in relation to the Financial Information are set forth in Section
18.3)) provided, such representatives shall not interfere with the personnel or
operations of any of the Store Properties,
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and provided further that all information so disclosed in the Files and Records
shall be subject to the terms and provisions of the Confidentiality Agreement
referred to below.
21.2 Confidentiality.
The Parties acknowledge that Buyer and Seller have previously executed
the Confidentiality Agreement dated November 11, 1998 (the "Confidentiality
Agreement"), which Confidentiality Agreement shall continue in full force and
effect in accordance with its terms except that the 18-month period referred to
in the seventh full paragraph on Page 3 of the Confidentiality Agreement shall
be deemed to commence on the date of this Agreement.
21.3 Cooperation on Tax Matters.
Buyer and Seller shall cooperate fully, as and to the extent
reasonably requested by the other Party, in connection with any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other Party's request) the timely provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.
21.4 Notice.
Buyer shall promptly notify Seller in writing of any event, condition
or circumstance occurring prior to the Initial Closing or any of the Subsequent
Closings that would constitute a breach of this Agreement, other than items
arising in the ordinary course of business which would not render any
representation or warranty of Buyer materially misleading.
22. Conditions to Closing.
22.1 Conditions to Obligations of Each Party.
The obligations of Seller and Buyer to consummate the transactions
contemplated hereby shall, for each Party at such Party's option, be subject to
satisfaction, at or prior to the Initial Closing Date, or such earlier period as
provided herein with respect to certain conditions, of the following conditions:
22.1.1 No Order or Injunction.
No temporary restraining order, preliminary injunction or
injunction shall be in effect prohibiting the transactions contemplated by this
Agreement.
22.1.2 Compliance with Law.
There shall have been obtained such Permits, approvals, and
consents of all governmental bodies or agencies including, but not limited to,
HSR Clearance (all such Permits, approvals and consents are referred to
collectively herein as the "Approvals"), which are reasonably necessary so that
consummation of the transactions contemplated by this Agreement will be in
material compliance with applicable laws; provided, however, that the Parties
agree that (i) nothing in this Section 22.1.2 shall limit, waive, release or
abate Buyer's obligations to use
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reasonable diligent efforts to obtain such Approvals pursuant to Sections 7 and
18 hereof, and (ii) Buyer shall not be permitted to refuse to close because of
Buyer's inability or failure to obtain any Approval on or before the Initial
Closing Date if, under applicable laws, rules and regulations, Buyer may operate
such Store Properties pending Buyer's receipt of such Approval, and (iii) the
closing of this transaction in respect of any Store Property is not conditioned
on Buyer obtaining any liquor license to operate the Store Properties.
22.2 Conditions to Obligations of Buyer.
The obligation of Buyer to consummate the transactions contemplated
hereby shall be, at the option of Buyer, subject to the fulfillment, at or prior
to the Initial Closing Date, of the following additional conditions:
22.2.1 Representations and Warranties True.
The representations and warranties of Seller contained in this
Agreement or in any other document of Seller delivered pursuant hereto shall be
true and correct in all material respects when made and on the Initial Closing
Date as if made on that date unless specifically made as of an earlier date, and
Seller shall have delivered a certificate to such effect to the Escrow Agent,
addressed to Buyer, executed by a duly authorized officer of Seller.
22.2.2 Seller's Performance.
Each of the obligations of Seller to be performed by it on or
before the Initial Closing Date pursuant to the terms of this Agreement shall
have been duly performed in all material respects on or before the Initial
Closing Date and at the Initial Closing Seller shall have delivered to the
Escrow Agent a certificate addressed to Buyer to such effect signed by a duly
authorized officer of Seller.
22.2.3 Opinion of Seller's Counsel.
Escrow Agent shall have been furnished at the Initial Closing
with an opinion of the General Counsel of Seller, dated the Initial Closing
Date, addressed to Buyer, to the effect that:
(a) Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware and is
qualified to do business in the States where the Store Properties are located;
(b) Seller has full corporate power to carry out the
transactions provided for in this Agreement, and this Agreement and all other
instruments to be executed by Seller in connection herewith have been duly and
validly authorized, executed and delivered by Seller and constitute valid and
binding obligations of Seller (assuming this Agreement and such other
instruments are valid and binding obligations of Buyer), enforceable against it
in accordance with its terms, subject, however, to all bankruptcy, insolvency,
reorganization, moratorium and
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other laws of general applicability relating to or affecting creditor's rights,
to general principles of equity and to judicial limits on the rights of specific
performance; and
(c) Neither the execution and delivery by Seller of this
Agreement nor the documents to be executed and delivered by Seller in connection
herewith violates or conflicts with the Articles or Certificate of Incorporation
or By-Laws of Seller or any material agreement known to such counsel which has
not theretofore been delivered to Buyer or its counsel.
22.2.4 Consents.
Except to the extent otherwise provided in this agreement
(including Section 18, Section 19, or as specified in the opinion referred to
above) there shall have been received the consents of all persons required to be
delivered at the Initial Closing pursuant to the provisions herein for the
transfer of all of the material Assets, the Store Leases and the Contracts to
Buyer.
22.2.5 Closing Documentation.
Except to the extent provided in Section 19.3 hereof, at the
respective Closing, Seller shall have transferred, or cause to be transferred,
to Buyer (i) each parcel of Real Property by the Deeds in proper form for
recording in the records of the county in which such parcel lies, and (ii)
Seller's right, title and interest in the Store Leases by the Assignment.
22.2.6 Title Insurance.
Buyer shall have received an owner's standard coverage policy of
title insurance with respect to each parcel of Real Property and leasehold
standard coverage policy of title insurance with respect to each Store Property
subject to a Store Lease (the "Title Policies"), in each case issued on the
Initial Closing Date or the respective Subsequent Closing Date by First American
Title Company (the "Title Company"). Each such Title Policy shall insure Buyer's
ownership of fee title (with respect to the Real Property) or leasehold title
(with respect to the Store Leases), in an amount to be determined pursuant to
Section 9.5, subject to the Schedule B standard preprinted exceptions to the
extent customarily and commercially utilized in the State of California and free
and clear of all other exceptions to or exclusions from coverage except those
approved in writing by Buyer; provided, however, that Buyer shall not be
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permitted to object to any of the following, all of which shall be deemed
"Permitted Exceptions," (i) liens for taxes and installments of special
assessments not yet due and payable or the validity of which is being contested
in good faith by the Sellers through appropriate proceedings (including any
interest, penalties or additions to any such taxes or assessments); (ii)
encumbrances (which shall not include any options to purchase or rights of first
refusal) consisting of zoning restrictions, easements and other restrictions on
the use of the Store Properties, provided that such items do not materially and
adversely impair the continued use of such property by Buyer for the purposes
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used by the Sellers on the date of this Agreement; (iii) any laws, rules,
regulations, statutes or ordinances affecting the Store Properties; (iv) any
utility company rights, easements and franchises for electricity, water, steam,
gas, telephone or other service or the right to use and maintain poles, lines,
wires, cables, pipes, boxes and other fixtures and facilities in, over, under
and upon the Store Properties, provided that the same do not materially
adversely affect the use of any Store Property for the material current use at
that Store Property; (v) all encroachments of stoops, areas, cellar steps, trim
and cornices, if any, upon any street or highway; (vi) all violations of laws,
rules, regulations, statutes, ordinances, orders or other legal requirements
affecting the Store Properties which do not have a material adverse effect on
the use or value of the affected Store Property; (vii) landlord liens for rental
not yet due and payable under the Store Leases; (viii) all non-monetary liens,
covenants, charges, easements, restrictions and encumbrances contained (or
otherwise disclosed or identified in sufficient detail such that Buyer is put on
notice regarding the material facts of such liens, covenants, charges,
easements, restrictions and encumbrances) in the property and lease files
furnished to Buyer by Seller prior to the date hereof, including, without
limitation, (A) all matter, conditions and states of fact so disclosed or
identified in title reports, surveys, correspondence or other documents located
in such files and (B) all leases, subleases, licenses, concessions or service
contracts, common area maintenance, reciprocal easement agreements, or other
operating, maintenance or development agreements contained (or so disclosed or
identified) in such files; (ix) with respect to any asset which consists of a
leasehold estate or possessory interest in real property, all mortgages or deeds
of trust to which the underlying fee estate in such real property is subject
provided either (i) the holder of such mortgage or deed of trust would not be
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entitled to foreclose upon or otherwise terminate such leasehold estate or
possessory interest in the event of a foreclosure upon the underlying fee
estate, (ii) an effective non-disturbance agreement exists, or (iii) Seller
agrees to indemnify Buyer against such mortgage or deed of trust; and (x) all
mechanics', carriers', workers', repairers' and similar liens (provided Seller
agrees to indemnify Buyer against such liens). The Title Policies shall contain
such endorsements as may be reasonably requested by counsel to Buyer without
expense to Seller and shall otherwise be in form reasonably satisfactory to
counsel to Buyer.
Prior to or concurrently with the execution of this Agreement Seller has
obtained a commitment for title insurance (the "Title Commitment") issued by the
Title Company for issuance of the Title Policies and has delivered a copy of
such Commitment to Buyer. Each Title Commitment lists as exceptions all
easements, covenants, restrictions, liens, encumbrances, tenancies and other
exceptions to title affecting title to the applicable item of Real Property or
Store Leases (collectively, the "Exceptions") and includes copies of all
instruments creating such Exceptions.
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Buyer has reviewed each Title Commitment, including copies of all
instruments shown as Exceptions in such Title Commitments. All Exceptions (or
portions thereof) to which Buyer has not provided Seller with a written notice
of objection within the earlier of fifteen (15) days after receipt of the Title
Commitment (and all related documents) and fifteen days after the date of this
Agreement, shall be deemed to be included within the Permitted Exceptions. With
respect to any Exception (or portions thereof) to which Buyer objects, Seller
may (but not without any obligation to do so) (i) elect to cure, remove or
otherwise satisfy such objection, and in such event Seller shall diligently,
attempt to cure, remove or otherwise satisfy such Exception, or (ii) elect to
indemnify and hold harmless Buyer (or the Title Company so as to permit deletion
of such Exception from the Title Policy) from any Losses incurred by Buyer (or
the Title Company as the case may be) directly as a result of such Exception. In
the event Seller elects to indemnify Buyer (or the Title Company) in relation to
an Exception the Parties shall proceed to the respective Closing and such
indemnification if given to Buyer will be governed by the terms of Section 17
(except that such indemnification shall be first dollar indemnification and
shall not be subject to the provisions of Section 17 regarding the Floor or
Permitted Losses and shall not be considered a Permitted Loss and shall not be
taken into account to determine if the Floor has been satisfied with respect to
other claims). In the event that Seller elects to cure any Exception, the
Parties agree that the respective Closing may, if necessary, be extended (for a
period not to exceed thirty (30) days) without the action of either Party being
required to effect such extension until the day next following the date that
Seller notifies Buyer that its objections to such Exception have been cured,
removed or otherwise satisfied. In the event Seller is unable to cure any such
Exception, or elects not to do so (and not to indemnify Buyer or the Title
Company), Seller shall notify Buyer thereof in writing and Buyer shall have the
right, upon written notice to Seller within five (5) days after receipt of
written notice of Seller's election, to (i) waive all objectionable Exceptions
to title which have not been cured in which event all uncured Exceptions shall
be deemed Permitted Exceptions, or (ii) terminate this Agreement and the
transaction contemplated hereby.
Anything in this Section 22.2.6 to the contrary notwithstanding, Buyer
shall not have the right to terminate this Agreement pursuant to clause (ii)
above for Seller's failure to cure any objectionable Exception to title within
the designated cure period if such Exception is terminated, satisfied and
released of record on or prior to the later of the Initial Closing or the
Subsequent Closing with respect to the relevant Store Property, or Seller has
agreed to indemnify Buyer or the Title Company in relation to such Exception,
and Seller has advised Buyer by written notice of its intent either at or prior
to the respective Closing to terminate, satisfy and release of record, or
indemnify Buyer (or the Title Company) in relation to the said Exception.
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The cost of the Title Commitments and Title Policies, including any
cancellation fees resulting from termination of this Agreement, shall be paid by
Seller.
22.2.7 FIRPTA Affidavit.
Buyer shall have received on or prior to the Initial Closing Date
an affidavit (a "FIRPTA Affidavit") of an officer of Seller, sworn to under
penalty of perjury, setting forth Seller's name, address and federal tax
identification number and stating that Seller is not a "foreign person" within
the meaning of Section 1445 of the Internal Revenue Code of 1986 and applicable
regulations (the "Code"). If, on or before the Initial Closing Date, Buyer shall
not have received such affidavit, Buyer may withhold from the Purchase Price
paid into the Escrow such sums as are required to be withheld therefrom under
Section 1445 of the Code.
22.2.8 Condition of Stores.
(A) Inspections. Subject to any limitations arising, or consents
-----------
required, under or related to the Merger Agreement, within fifteen (15) days
after written notice from Seller (whether before or after of the date of this
Agreement), Buyer may, if Buyer so elects, conduct an inspection of the Store
Properties at Buyer's expense, to ascertain if (x) the roof (including membrane
and structural elements) of each Store Property is watertight, (y) the
Improvements are structurally sound and (z) to inspect the Equipment at each
Store Property. Seller shall provide reasonable access to the Store Properties
for purposes of such inspections and shall otherwise provide all reasonable
cooperation and assistance in connection with same. Buyer shall give Seller
reasonable prior written notice of the date, time and place of such inspections
(or of site visits to do any of the foregoing). The Parties agree, subject to
the requirements of applicable law, to keep confidential any and all information
resulting from such inspections in accordance with the terms and provisions of
the Confidentiality Agreement.
(B) Termination and Reinstatement. In the event Buyer's
-----------------------------
indicates that the estimated cost to bring the Store Properties into compliance
with this Section 22.2.8 (so that the roof of each Store Property is watertight
and the Improvements are structurally sound) exceeds, in the aggregate, an
amount equal to 4% of the Purchase Price, then Buyer shall have the option
(subject to Seller's right of reinstatement) of terminating this Agreement by
delivering written notice of such election (the "Termination Notice") to Seller
on or before the expiration of the fifteen (15) day period referred to in
Section 22.2.8(A), above. The Termination Notice will include reasonable detail
of the following: (x) whether the inspections revealed that, in Buyer's
reasonable judgment, the roof of any Store Properties or the structural elements
of any Improvements shall not be in the condition required by this Section
22.2.8, and (y) based upon the inspections, the method reasonably satisfactory
to Buyer to satisfy or cure any such non-compliance and the estimated cost of
remedying such non-compliance. Buyer at such time shall also provide Seller with
a copy of the inspection report or draft inspection report as to
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all Store Properties. Within five (5) days of Seller's receipt the Termination
Notice, Seller may reinstate this Agreement by agreeing, at Seller's election
either:
(i) to remedy those matters which render the Store
Properties not in compliance with this Section 22.2.8, in which event Buyer
shall pay the first 4% of the Purchase Price of the cost of bringing the Store
Properties into such compliance and Seller shall pay all amounts in excess of 4%
of the Purchase Price; or
(ii) to reduce the Purchase Price payable at the
respective Closing by an amount equal to that amount by which the cost of
bringing the Store Properties into compliance with this Section 22.2.8 exceeds
4% of the Purchase Price.
If Seller elects to reinstate, Seller shall be permitted twenty
(20) days to suggest to Buyer in writing alternative forms of remediation
together with the estimated cost of such remediation. In the event Buyer and
Seller cannot agree within such twenty (20) day period as to the form and cost
of remediation, such dispute shall be submitted to an engineer mutually
agreeable to the parties (the "Engineer") the expense of which shall be borne
equally by the Parties. Within ten (10) days of the Engineer's selection, the
Engineer shall decide which form of remediation is the most cost-effective
solution based on the age and condition of the Store Properties and such
decision shall be binding upon the Parties for purposes of the calculation
described in this Section.
If Buyer elects to terminate (and Seller does not reinstate) this
Agreement pursuant to the foregoing provisions of this section, the Parties
shall have no further obligations to each other under this Agreement. Further,
in connection with the above, and subject to any limitations arising, consents
required, or obligations imposed under or related to the Merger Agreement or any
other agreement encumbering any of the Store Properties, Seller hereby grants
Buyer a license to enter in and upon the Real Property and Store Leases
(including all Improvements located thereon) at reasonable times for the purpose
of conducting the inspections required to meet the conditions set forth in this
Section 22.2.8, at Buyer's sole cost and expense, and Buyer agrees to indemnify,
defend and hold harmless Seller and all other persons required to be indemnified
from any and all liability, claims, damages, expenses (including reasonable
attorneys' fees and reasonable attorneys' fees on any appeal), judgments,
proceedings and causes of action arising out of or in any way connected with
Buyer's exercise of the license granted herein, unless caused by the willful or
negligent act or omission of Seller, its agents, tenants, subtenants,
contractors or employees.
(C) Scope Limitation. This Section 22.2.8 shall not apply to
----------------
the roof and other structural repairs which are the landlord's responsibility
under the applicable Store Lease. Seller shall not have any obligation to
remediate any condition relating thereto deemed not
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satisfactory by Buyer and Buyer shall not be entitled to terminate this
Agreement as a result thereof.
22.2.9 Warranties and Guarantees.
Seller shall have provided Buyer with copies, together with
an assignment and assumption agreement in the form attached hereto as Exhibit M,
of all warranties and guarantees, if any, held by Seller for the Assets or
Improvements.
22.2.10 Landlord Estoppels.
To the extent necessary, Buyer shall have received from each
landlord under the Store Leases estoppel certificates in substantially the form
attached hereto as Exhibit I, or, if not so received from the landlord, subject
to hereto 19.3 hereof estoppel certificates from Seller confirming that the
documents constituting the Store Leases set forth in Exhibit B hereto are
complete and that such documents have not been amended or modified in any
respect without Buyer's consent and that no termination notice has been received
with respect to such Store Lease (each estoppel certificate from Seller to
survive until the earlier of the term of the corresponding Store Lease and the
time that such estoppel certificate is provided by the landlord under such Store
Lease).
22.3 Conditions to Obligations of Seller.
The obligation of Seller to consummate the transactions
contemplated hereby shall be, at the option of Seller, subject to the
fulfillment, at or prior to the Initial Closing Date, of the following
additional conditions:
22.3.1 Merger Agreement.
All conditions to closing contained in the Merger Agreement
shall have been satisfied or waived and, concurrently with or prior to the
Initial Closing of this transaction, the Merger shall have been consummated. In
the event, whether before or after the Initial Closing or any respective
Subsequent Closings, that the FTC or a State Attorney General withdraws its
final approval of the contemplated Provisional Consent Decree or conditions or
modifies such Provisional Consent Decree in a manner considered by Seller in its
sole discretion to be adverse to Seller, or such Provisional Consent Decree does
not become a final consent decree, Seller will have the right to require that
the transactions contemplated pursuant to this Agreement be rescinded and this
Agreement be terminated.
22.3.2 Representations and Warranties.
The representations and warranties of Buyer contained in
this Agreement or in any other document of Buyer delivered pursuant hereto shall
be true and correct in all material respects when made and on the Initial
Closing Date as if made on that date (except to the extent that they are made as
of an earlier date) and Buyer shall have delivered to the Escrow
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Holder a certificate addressed to Seller to such effect to Seller executed by a
duly authorized officer of Buyer.
22.3.3 Buyer's Performance.
Each of the obligations of Buyer to be performed on or
before the Initial Closing Date pursuant to the terms of this Agreement shall
have been duly performed in all material respects on or before the Initial
Closing Date, and at the Initial Closing Buyer shall have delivered to the
Escrow Holder certificate addressed to Seller to such effect signed by a duly
authorized officer of Buyer.
22.3.4 Opinion of Buyer's Counsel.
Escrow Holder shall have been furnished with an opinion of
Varner, Saleson & Dobler LLP, counsel to Buyer, dated the Initial Closing Date,
addressed to Seller, in form and substance reasonably satisfactory to Seller, to
the effect that:
(a) Stater Bros. Markets is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
California;
(b) Stater Bros. Holdings Inc. is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware;
(c) Both Buyer corporations have full corporate power
to carry out the transactions provided for in this Agreement, and this Agreement
and all other instruments to be executed by Buyer in connection herewith have
been duly and validly authorized, executed and delivered by Buyer, and
constitute valid and binding obligations of Buyer, as the case may be (assuming
this Agreement and such other instruments are valid and binding obligations of
Seller), enforceable against it in accordance with its terms, subject, however,
to all bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditor's rights, to general
principles of equity and to judicial limits on the rights of specific
performance; and
(d) Neither the execution and delivery by Buyer
(respectively) of this Agreement nor the documents to be executed and delivered
by Buyer in connection herewith violates, or conflicts with the respective
Articles or Certificate of Incorporation or By-laws of Buyer (respectively).
22.3.5 Sales Tax Resale Exemption Certificate.
Seller shall have received from Buyer a Sales Tax Resale
Exemption Certificate from each state in which the Store Properties are located.
22.3.6 Consents.
Except as otherwise provided in this Agreement (including
Section 18 and Section 19), Seller shall have received the consents of all
persons required for the transfer of the Assets, the Contracts, the Store Leases
and the Permits to Buyer, except where such consents are
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not material when considered in connection with the transactions as a whole
contemplated by this Agreement.
23. Termination.
This Agreement may be terminated at any time prior to the Initial
Closing:
(a) by mutual written consent of the Parties at any time prior to the
Initial Closing; or
(b) by Buyer, in its sole discretion, if any one or more of the
conditions precedent to its obligations herein shall not have been waived or
fulfilled in all material respects by December 31, 1999, provided that if on
--------
such date the Merger has not been consummated because of failure to obtain all
appropriate governmental consents and approvals, or by reason of the fact that
any person or entity is challenging the Merger, then such date shall be June 30,
2000; provided further that such right to terminate this Agreement shall not be
--------
available to Buyer if Buyer is at that time in material breach of this
Agreement;
(c) by Seller, in its sole discretion, if any one or more of the
conditions precedent to its obligations herein shall not have been waived or
fulfilled in all material respects by December 31, 1999, provided that if on
--------
such date the Merger has not been consummated because of failure to obtain all
appropriate governmental consents and approvals, or by reason of the fact that
any person or entity is challenging the Merger, then such date shall be June 30,
2000; provided further that such right to terminate this Agreement shall not be
--------
available to Seller if Seller is at that time in material breach of this
Agreement; or
Termination pursuant to clause (b) or (c) of this Section shall not
relieve any Party of liability for breach of its obligations under this
Agreement.
If the Initial Closing occurs, the right to terminate under (b) or (c)
above shall be terminated.
24. Miscellaneous.
24.1 Notices.
All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed given when delivered personally to or
when received by commercial delivery service or sent by facsimile (with
confirmation of receipt) by the Parties, their successors in interest or their
assignees at the following addresses, or at such other addresses as the Parties
may designate by written notice in the manner aforesaid:
"Buyer" Stater Bros. Holdings Inc./Stater Bros. Markets
21700 Barton Road
Colton, CA 92324
Attn: Chief Financial Officer
Fax: (909) 783-5098
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With copy to:
Varner, Saleson & Dobler LLP
3750 University Avenue, Suite 610
Riverside, CA 92501
Attn: Bruce D. Varner, Esq.
Fax: (909) 274-7770
"Seller" Albertson's, Inc.
250 Parkcenter Boulevard
Boise, Idaho 83726
Attn: Legal Department
Fax: (208) 395-6225
With copy to:
Ryan, Swanson & Cleveland, PLLC
1201 Third Avenue, Suite 3400
Seattle, Washington 98101
Attn: Michael Tronquet
Fax: (206) 621-7568
24.2 Assignability and Parties in Interest.
This Agreement shall not be assignable by any of the Parties without
the prior written consent of the other Party; provided, however: (i) Seller may
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by written notice assign this Agreement in whole or in part to American Stores
Company, and (ii) Buyer or Seller may assign this Agreement to any affiliated
company, provided that in the event of an assignment, the assignor remains bound
and the assignee is able to fully discharge all of the assignor's obligations
under this Agreement. This Agreement shall inure to the benefit of and be
binding upon Buyer and Seller and their respective permitted successors and
assigns. No person other than the Parties and their assignees shall have any
rights or benefits hereunder. In the event that the whole or a portion of this
Agreement is assigned to American Stores Company, the amount of the Purchase
Price used to determine the Floor in Section 17.3 shall be the aggregate of the
purchase prices resulting from the consummation of the transactions contemplated
by both agreements and the determination of whether the Floor was exceeded shall
be made by including all Permitted Losses arising from both agreements.
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24.3 Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of California without regard to its choice
of laws rules.
24.4 Counterparts.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one and the same instrument.
24.5 Indemnification for Brokerage.
Buyer and Seller each represent and warrant to the other that no
broker or finder has acted on its behalf in connection with this Agreement or
the transactions contemplated hereby. Each Party agrees to indemnify and hold
and save harmless the other from any claim or demand for commissions or other
compensation by any broker, finder or similar agent claiming to have been
employed by or on behalf of such Party.
24.6 Publicity.
All publicity relating to this Agreement and the sale of Assets
hereunder shall be released subject to the terms of the Confidentiality
Agreement and only after prior consultation with the other Party. The Parties
agree not to disclose publicly (except as required by law, including any
applicable securities law or other legal disclosure obligations of such Party or
any consolidated group of which it is a part or except as may be required by
debt instruments and/or financing or credit agreements by which the Parties are
bound) any financial information in connection with the sale of Assets
hereunder. This provision shall survive the closing and the termination of this
Agreement without limitation.
24.7 Complete Agreement.
This Agreement, its Exhibits, and the other documents delivered or to
be delivered pursuant to this Agreement and the Confidentiality Agreement
contain or will contain the entire agreement between the Parties with respect to
the transactions contemplated herein and shall supersede all previous oral or
written agreements and all contemporaneous oral negotiations, commitments, and
understandings.
24.8 Modifications. Amendments and Waivers.
At any time prior to the Initial Closing Date or termination of this
Agreement, the Parties may, by written agreement:
(a) Extend the time for the performance of any of the obligations
or other acts of the Parties;
(b) Waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement;
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(c) Waive compliance with any of the covenants or agreements
contained in this Agreement; and
(d) Amend or supplement any of the provisions of this Agreement.
24.9 Interpretation.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. All Exhibits and Schedules attached to this Agreement are
incorporated as part of this Agreement as if fully set forth herein.
24.10 Subsidiaries.
All references in this Agreement to Buyer or Seller shall be deemed to
include reference to their respective affiliates and subsidiaries.
24.11 Expenses.
24.11.1 Transaction Expenses.
Except as provided in Section 9.4, 17, or 24.11.2 hereof, all
other fees, costs and expenses incurred by Buyer or Seller in connection with
the transactions contemplated by this Agreement shall be borne by the Party
incurring the same.
24.11.2 Litigation Expenses.
In the event of litigation between the Parties relating to this
Agreement, the party that is determined by a final non appealable order of a
court of competent jurisdiction to be the prevailing party shall be entitled to
be reimbursed by the other party for all of the reasonable legal fees and
disbursements such prevailing party has incurred in connection with such
litigation, including any appeal therefrom.
24.12 No Use of Names.
Buyer agrees that it shall not use the name or logo of Seller or any
similar name or logo, except as provided in Section 1.2(f) hereof or in
connection with the temporary use (not to exceed ninety (90) days) thereof
pending removal or replacement of such name or logo from the Assets. Seller
shall, at Seller's expense, remove its name or logo from pylons and building
signs (which shall remain Seller's property) from the Store Properties within
five (5) days after the Closing Date for each respective Store Property.
Notwithstanding anything to the contrary contained herein, Buyer shall not have
the right to use affirmatively the name or logo of Seller for advertising
purposes or otherwise for Buyer's benefit.
24.13 Time is of the Essence.
Time is of the essence of each and every provision of this Agreement.
24.14 Third Party Beneficiary Rights.
Except as may be otherwise provided herein, this Agreement is not
intended to create, nor shall it be in any way interpreted or construed to
create, any third party beneficiary rights in any person not a Party hereto.
-45-
24.15 Further Assurance.
Provided the same does not result in any expense or liability to the
requested Party in addition to that specifically provided elsewhere or
contemplated in this Agreement, each Party will from time to time after the
Initial Closing Date and the respective Subsequent Closing Dates, upon the
request of the other Party, do, execute, acknowledge and deliver such further
acts, deeds, assignments, assumptions, transfers and conveyances as may be
reasonably required to consummate the transactions contemplated herein or to
convey, transfer, assign and vest in Buyer all of Seller's right, title and
interest in and to the Assets.
24.16 1031 Exchange.
Buyer and Seller acknowledge that either party may wish to structure
this transaction as a tax deferred exchange of like-kind property within the
meaning of Section 1031 of the Code. Each party agrees to reasonably cooperate
with the other party to effect such an exchange; provided, however, that
-------- -------
(i) the cooperating party shall not be required to acquire or take title to any
exchange property, (ii) the cooperating party shall not be required to incur any
expense (excluding attorneys' fees) or liability whatsoever in connection with
the exchange, including, without limitation, any obligation for the payment of
any escrow, title, brokerage or other costs incurred with respect to the
exchange, (iii) no substitution of the effectuating party shall release said
party from any of its obligations, warranties or representations set forth in
this Agreement or from liability for any prior or subsequent default under this
Agreement by the effectuating party, its successors or assigns, which
obligations shall continue as the obligations of a principal and not of a surety
or guarantor, (iv) the effectuating party shall give the cooperating party at
least five (5) business days prior notice of the proposed changes required to
effect such exchange and the identity of any party to be substituted in the
Escrow, (v) the effectuating party shall be responsible for preparing all
additional agreements, documents and escrow instructions (collectively, the
"Exchange Documents") required by the exchange, at its sole cost and expense,
and (vi) the effectuating party shall be responsible for making all
determinations as to the legal sufficiency, tax considerations and other
considerations relating to the proposed exchange, the Exchange Documents and the
transactions contemplated thereby, and the cooperating party shall in no event
be responsible for, or in any way be deemed to warrant or represent any tax or
other consequences of the exchange transaction arising by reason of the
cooperating party's performance of the acts required hereby.
24.17 Joint and Several Liability.
The Parties acknowledge that Stater Bros. Markets, a California
corporation and Stater Bros. Holdings Inc., a Delaware corporation are jointly
and severally liable for the obligations of and performance by Buyer under this
Agreement.
-46-
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
ALBERTSON'S, INC., a Delaware
corporation
/s/ Thomas R. Soldin
By: Thomas R. Soldin
Title: Executive Vice President and
General Counsel
STATER BROS. MARKETS, a
California corporation
/s/ Jack H. Brown
By: Jack H. Brown
Title: Chairman of the Board,
President and CEO
STATER BROS. HOLDINGS INC.,
a Delaware corporation
/s/ Bruce D. Varner
By: Bruce D. Varner
Title: Secretary
-47-
EXHIBIT A
Owned Stores
Store LU #458 2535 East Avenue South Palmdale, CA
Palmdale, CA 93550
Store LU #504 25050 Hancock Avenue Murrieta- Temecula, CA
Murrieta Hot Springs, CA
92562
Store AL #607 3325 E. Chapman Avenue Orange, CA
Orange, CA 92669
Store AL #627 8640 E. Alondra Blvd. Paramount, CA
Paramount, CA 90723
Store AL #681 26900 Sierra Highway Santa Clarita, CA
Santa Clarita, CA 91355
Store AL #683 1717 Visto Chino Palm Springs, CA
Palm Springs, CA
Store AL #1627 78-630 Highway 111 La Quinta, CA
La Quinta, CA 92253
Store AL #1630 1674 Main Street Romona, CA
Ramona, CA 92065
Store AL #1631 1451 North Santa Fe Vista, CA
Vista, CA 92083
Store AL #1634 37218 47th Street East Palmdale, CA
Palmdale, CA 93552
Store AL #1648 7511 East Orangethorp Buena Park, CA
Buena Park, CA 90621
Store AL #1672 635 N. Broadway Escondido, CA
Escondido, CA 92025
Store AL #1673 22351 El Toro Road El Toro, CA
El Toro, CA 92630
Store AL #1677 26892 La Paz Road Laguna Hills, CA
Laguna Hills, CA 92653
Store AL #1687 780 Sycamore Avenue Vista, CA
Vista, CA 92083
Store AL #1692 Mission & Pepper Falbrook, CA (LAND)
Fallbrook, CA
-1-
EXHIBIT B
Store Leases
Store SS #231 3770 Mission Avenue Oceanside, CA
Oceanside, CA 92054
Store LU #298 2170 Vista Way Oceanside, CA
Oceanside, CA 92054
Store LU #425 333 N. Euclid Avenue Fullerton, CA
Fullerton, CA 92632
Store LU #442 17220 S. Lakewood Blvd. Bellflower, CA
Bellflower, CA 90706
Store LU #473 11750 E. Whittier Blvd. Whittier, CA
Whittier, CA 90601
Store LU #553 9909 Carmel Mountain Rd. San Diego, CA
San Diego, CA 92129
Store LU #561 1330 Mission Road San Marcos, CA
San Marcos, CA 92069
Store AL # 613 1048 N. El Camino Real Encinitas, CA
Encinitas, CA 92024
Store AL #619 31813 Highway 79 South Temecula, CA
Temecula, CA 92592
Store AL #620 610 South Brookhurst Anaheim, CA
Anaheim, CA 92804
Store LU #624 616 Camino De Los Mares San Clemente, CA
San Clemente, CA 92673
Store AL #629 851 North Harbor Blvd. La Habra, CA
La Habra, CA 90631
Store AL #651 11815 Artesia Boulevard Artesia, CA
Artesia, CA 90701
Store AL #666 1131 State College Blvd. Anaheim, CA
Anaheim, CA 92806
Store AL #1601 7814 E. Firestone Blvd. Downey, CA
Downey, CA 90241
Store AL #1604 1111 E. Imperial Hwy. Placentia, CA
Placentia, CA 92670
-1-
Store AL #1608 10051 Valley View Street Cypress, CA
Cypress, CA 90630
Store AL #1619 1840 East Avenue "J" Lancaster, CA
Lancaster, CA 93535
Store AL #1623 69255 Ramon Road Cathedral City, CA
Cathedral City, CA 92234
Store AL #1635 1040 E. Bastanchury Road Fullerton, CA
Fullerton, CA 92635
Store AL #1641 6501 East Spring Long Beach, CA
Long Beach, CA 90806
Store AL #1644 13589 Poway Road Poway, CA
Poway, CA 92064
Store AL #1652 12800 La Mirada Boulevard La Mirada, CA
La Mirada, CA 90638
Store AL #1656 10114 Adams Street Huntington Beach, CA
Huntington Beach, CA 92646
Store AL #1662 20677 Amar Road Walnut, CA
Walnut, CA 91789
Store AL #1668 7101 Warner Avenue Huntington Beach, CA
Huntington Beach, CA 92647
Store AL #1670 2845 West Avenue "L" Lancaster, CA
Lancaster, CA 93534
Store AL #1674 11300 Firestone Blvd. Norwalk, CA
Norwalk, CA 90650
-2-
EXHIBIT C
Collective Bargaining Agreements and Union Contracts
((S)1.1(d))
-1-
EXHIBIT C
ALBERTSON'S INC.
DIVESTITURE OFFER SUMMARY - UNION/NONUNION LIST
U-NU STORE CO. DIV LOCATION BAKERY CLERK MEAT OTHER
#
STATER BROS. (Total: 44 - Albertson's 34; Lucky 10)
==================================================================================================================================
1 U 231 SS Oceanside, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428
1428 & 1422), UFCW 135 & 1422), UFCW 135
- ----------------------------------------------------------------------------------------------------------------------------------
2 U 298 LU Oceanside, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428
1428 & 1442), UFCW 135 & 1422), UFCW 135
- -----------------------------------------------------------------------------------------------------------------------------------
3 U 425 LU Fullerton, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428
1428 & 1422), UFCW 324 & 1442), UFCW 324
- -----------------------------------------------------------------------------------------------------------------------------------
4 U 442 LU Bellflower, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167,
1428 & 1442), UFCW 324 1428 & 1442), UFCW 324
- -----------------------------------------------------------------------------------------------------------------------------------
5 U 458 LU Palmdale, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat, So. Calif Retail Food
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135, Ind. Agmt. -SEUI
L324, L770, L1036, L1167, L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 770 1428 & 1442), UFCW 1036
- -----------------------------------------------------------------------------------------------------------------------------------
6 U 473 LU Whitter, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167,
1428 & 1442), UFCW 324 1428 & 1442), UFCW 770
- ----------------------------------------------------------------------------------------------------------------------------------
7 U 504 LU Murieta NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
-Temecula, CA Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167,
1428 & 1442), UFCW 1167 1428 & 1442), UFCW 1167
- -----------------------------------------------------------------------------------------------------------------------------------
ALBERTSON'S INC.
DIVESTITURE OFFER SUMMARY - UNION/NONUNION LIST
U-NU STORE CO. DIV LOCATION BAKERY CLERK MEAT OTHER
#
STATER BROS. (Total: 44 - Albertson's 34; Lucky 10)
==================================================================================================================================
8 U 553 LU San Diego, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428,
1428 & 1442), UFCW 135 & 1442), UFCW 135
- ----------------------------------------------------------------------------------------------------------------------------------
9 U 561 LU San Marcos, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428
1428 & 1442), UFCW 135 & 1422), UFCW 135
- -----------------------------------------------------------------------------------------------------------------------------------
10 U 607 AL 50600 Chapman Avenue, Retail Handshop So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat, So. Calif.
Orange, CA Agreement, Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135, Retail Food
BC&TW 37 (BO) L324, L770, L1036, L1167, L324, L770, L1036, L1167, Ind. Agmt -
1428 & 1422), UFCW 324 1428 & 1442), UFCW 324 SEUI
Local 1877
- -----------------------------------------------------------------------------------------------------------------------------------
11 U 613 AL 50600 Leucadia & Retail Handshop So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat, So. Calif.
El Camino, Agreement, Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135, Retail Food
Encinitas, CA BC&TW 31 (BO) L324, L770, L1036, L1167, L324, L770, L1036, L1167, Ind. Agmt -
1428 & 1442), UFCW 135 1428 & 1442), UFCW 135 SEUI
Local 1877
- -----------------------------------------------------------------------------------------------------------------------------------
12 U 619 AL 50600 Hwy. 79 & Red Hawk NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat, So. Calif.
Temecula, CA Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135, Retail Food
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428 Ind. Agmt -
1428 & 1442), UFCW 1167 & 1442), UFCW 1167 SEUI
Local 1877
- -----------------------------------------------------------------------------------------------------------------------------------
13 U 620 AL 50600 Orange & Brookhurst, NA Calif. Retail Food, Meat, So. Calif. Retail Food, Meat, So. Calif.
Temecula, CA Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135, Retail Food
L324, L770, L1036, L1167, L324, L770, L1036, L1167, Ind. Agmt -
1428 & 1442), UFCW 324 1428 & 1442), UFCW 324 SEUI
Local 1877
- ----------------------------------------------------------------------------------------------------------------------------------
14 U 624 LU San Clemente, CA NA So. Calif. Retail Food, Meat, So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135, Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167, L324, L770, L1036, L1167, 1428
1428 & 1442), UFCW 324 & 1442), UFCW 324
- -----------------------------------------------------------------------------------------------------------------------------------
ALBERYDON'S, INC.
DIVERSTITURE OFFER SUMMARY - UNION/NONUNION LIST
- -------------------------------------------------------------------------------------------------------------------------
STORE
U-NU # CO. DIV LOCATION BAKERY CLERK
15 U 627 AL 50600 Paramount, CA NA So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
16 U 629 AL 50600 La Habra, CA NA So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
17 U 651 AL 50600 Pioneer & Artesia, Artesia, Retail Handshop So. Calif. Retail Food, Meat,
CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
18 U 666 AL 50600 State College, Anaheim, CA Retail Handshop So. Calif. Retail Food, Meat,
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
19 U 681 AL 50600 Sierra & Via Princessa, (BO) So. Calif. Retail Food, Meat,
Santa Clarita, CA Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167,
1428 & 1442), UFCW 770
20 U 683 AL 50600 Vista Chino & Sunrise, Palm (BO) So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167,
1428 & 1442), UFCW 1167
21 U 1601 AL 50600 Downey, CA NA So. Calif. Retail Food, Meat,
Bky, Candy & GM Agmt. (L135,
L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
- -------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
STORE
U-NU # Meat Other
15 U 627 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 324
16 U 629 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 324
17 U 651 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 324
18 U 666 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 324
19 U 681 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 770
20 U 683 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 1167
21 U 1601 So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, 1428 Local 1877
& 1442), UFCW 324
- ----------------------------------------------------------------------------------------
ALBERTSON'S, INC.
DIVESTITURE OFFER SUMMARY - UNION/NONUNION LIST
STORE
U-NU # CO DIV LOCATION BAKERY CLERK
22 U 1604 AL 50600 Placentia, CA Retail Handshop So. Calif. Retail Food, Meat,
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
23 U 1608 AL 50600 Cypress, CA Retail Handshop So. Calif. Retail Food, Meat,
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
24 U 1619 AL 50600 Ave J & 20th East, Retail Handshop So. Calif. Retail Food, Meat,
Lancaster, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 L324, L770, L1036, L1167,
1428 & 1442), UFCW 770
25 U 1623 AL 50600 Date Palm & Ramon, Retail Handshop So. Calif. Retail Food, Meat,
Cathedral City, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 L324, L770, L1036, L1167
1428 & 1442), UFCW 1167
26 U 1627 AL 50600 La Quinta, CA Retail Handshop So. Calif. Retail Food, Meat,
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 1167
27 U 1630 AL 50600 Ramona, CA Retail Handshop So. Calif. Retail Food, Meat,
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 135
28 U 1631 AL 50600 Santa Fe & Bobier, Retail Handshop So. Calif. Retail Food, Meat,
Vista, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 135
STORE
U-NU # CO DIV LOCATION MEAT OTHER
22 U 1604 AL 50600 Placentia, CA So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
23 U 1608 AL 50600 Cypress, CA So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
24 U 1619 AL 50600 Ave J & 20th East, So. Calif. Retail Food, Meat, So. Calif. Retail Food
Lancaster, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 1036
25 U 1623 AL 50600 Date Palm & Ramon, So. Calif. Retail Food, Meat, So. Calif. Retail Food
Cathedral City, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167 Local 1877
1428 & 1442), UFCW 1167
26 U 1627 AL 50600 La Quinta, CA So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 1167
27 U 1630 AL 50600 Ramona, CA So. Calif. Retail Food, Meat, So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 135
28 U 1631 AL 50600 Santa Fe & Bobier, So. Calif. Retail Food, Meat, So. Calif. Retail Food
Vista, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 135
4/29/99 9
ALBERTSON'S, INC.
DIVESTITURE OFFER SUMMARY - UNION/NONUNION LIST
STORE
U-NU # CO DIV LOCATION BAKERY CLERK
29 U 1634 AL 50600 East Palmdale, Palmdale, Retail Handshop So. Calif Retail Food, Meat
CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 770
30 U 1635 AL 50600 Bastanchury Rd., Fullerton, Retail Handshop So. Calif Retail Food, Meat
CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
31 U 1641 AL 50600 Palo Verde & Spring, Long Retail Handshop So. Calif Retail Food, Meat
Beach, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
32 U 1644 AL 50600 Community & Poway, Poway Retail Handshop So. Calif Retail Food, Meat
CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 (BO) L324, L770, L1036, L1167
1428 & 1442), UFCW 135
33 U 1648 AL 50600 Buena Park, CA Retail Handshop So. Calif Retail Food, Meat
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
34 U 1652 AL 50600 La Mirada, CA Retail Handshop So. Calif Retail Food, Meat
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
35 U 1656 AL 50600 Adams & Brookhurst, Retail Handshop So. Calif Retail Food, Meat
Huntington Beach, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
STORE
U-NU # CO DIV LOCATION MEAT OTHER
29 U 1634 AL 50600 East Palmdale, Palmdale So. Calif Retail Food, Meat So. Calif. Retail Food
CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 1036
30 U 1635 AL 50600 Bastanchury Rd., Fuller So. Calif Retail Food, Meat So. Calif. Retail Food
CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
31 U 1641 AL 50600 Palo Verde & Spring, Long So. Calif Retail Food, Meat So. Calif. Retail Food
Beach, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
32 U 1644 AL 50600 Community & Poway, Poway So. Calif Retail Food, Meat So. Calif. Retail Food
CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167 Local 1877
1428 & 1442), UFCW 135
33 U 1648 AL 50600 Buena Park, CA So. Calif Retail Food, Meat So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
34 U 1652 AL 50600 La Mirada, CA So. Calif Retail Food, Meat So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
35 U 1656 AL 50600 Adams & Brookhurst, So. Calif Retail Food, Meat So. Calif. Retail Food
Huntington Beach, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
4/29/99 11
ALBERTSON'S, INC.
DIVESTITURE OFFER SUMMARY - UNION/NONUNION LIST
STORE
U-NU # CO DIV LOCATION BAKERY CLERK
36 U 1662 AL 50600 Amar & Grand, Walnut, CA Retail Handshop So. Calif Retail Food, Meat
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 1428
37 U 1668 AL 50600 Goldenwest & Warner Retail Handshop So. Calif Retail Food, Meat
Huntington Beach, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
38 U 1670 AL 50600 Ave L & 30th West, Retail Handshop So. Calif Retail Food, Meat
Lancaster, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 770
39 U 1672 AL 50600 Escondido, CA Retail Handshop So. Calif Retail Food, Meat
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167
1428 & 1442), UFCW 135
40 U 1673 AL 50600 Trabuco Rd., El Toro, CA Retail Handshop So. Calif Retail Food, Meat
Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
41 U 1674 AL 50600 Firestone & Orr-Day, Retail Handshop So. Calif Retail Food, Meat
Norwalk, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 37 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
42 U 1677 AL 50600 Aliso Viego, Laguna Hills, Retail Handshop So. Calif Retail Food, Meat
CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 L324, L770, L1036, L1167,
1428 & 1442), UFCW 324
STORE
U-NU # CO DIV LOCATION MEAT OTHER
36 U 1662 AL 50600 Amar & Grand, Walnut, CA So. Calif Retail Food, Meat So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 1428
37 U 1668 AL 50600 Goldenwest & Warner So. Calif Retail Food, Meat So. Calif. Retail Food
Huntington Beach, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
38 U 1670 AL 50600 Ave L & 30th West, So. Calif Retail Food, Meat So. Calif. Retail Food
Lancastet, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 1036
39 U 1672 AL 50600 Escondido, CA So. Calif Retail Food, Meat So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167 Local 1877
1428 & 1442), UFCW 135
40 U 1673 AL 50600 Trabuco Rd., El Toro, CA So. Calif Retail Food, Meat So. Calif. Retail Food
Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
41 U 1674 AL 50600 Firestone & Orr-Day, So. Calif Retail Food, Meat So. Calif. Retail Food
Norwalk, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
42 U 1677 AL 50600 Aliso Viego, Laguna Hills, So. Calif Retail Food, Meat So. Calif. Retail Food
CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 324
4/29/99 11
ALBERTSON'S, INC.
DIVESTITURE OFFER SUMMARY - UNION/NONUNION LIST
STORE
U-NU # CO DIV LOCATION BAKERY CLERK
43 U 1687 AL 50600 Sycamore & Shadow Ridge, Retail Handshop So. Calif Retail Food, Meat
Vista, CA Agreement, Bky, Candy & GM Agmt. (L135,
BC&TW 31 (BO) L324, L770, L1036, L1167,
1428 & 1442), UFCW 135
44 1692 AL NO STORE - LAND ONLY
STORE
U-NU # CO DIV LOCATION MEAT OTHER
43 U 1687 AL 50600 Sycamore & Shadow Ridge, So. Calif Retail Food, Meat So. Calif Retail Food
Vista, CA Bky, Candy & GM Agmt. (L135, Ind. Agmt. - SEUI
L324, L770, L1036, L1167, Local 1877
1428 & 1442), UFCW 135
4/29/99 12
EXHIBIT D
Excluded Equipment
((S)1.2(a))
Unix In-Store Processor
Console Monitor
Console Keyboard
DigiBoard and/or StallionCard
Lexmark Pharmacy Laser Printer
-1-
EXHIBIT E
Excluded Contracts
((S)1.2(r))
There are no Excluded Contracts
-1-
EXHIBIT F
Inventory Prices
((S)5.2)
Department Sales Floor Price Back Room Price
- ---------- ----------------- ---------------
*Grocery Retail Less 24% Retail Less 24%
*General Merchandise Retail Less 28% Retail Less 28%
*Liquor Retail Less 17% Retail Less 17%
*Meat Deli Retail Less 30% Retail Less 30%
*Lobby Retail Less 25% Retail Less 25%
Produce Retail Less 33% Retail Less 33%
Service Deli Retail Less 40% Retail Less 40%
Floral Retail Less 45% Retail Less 45%
Coffee Retail Less 40% Retail Less 40%
Meat Retail Less 25% Cost
Bakery Retail Less 50% Cost
Supplies (All Departments) Cost
*Denotes departments to be counted by Inventory Service.
-1-
EXHIBIT G
Form of Special Warranty (or Grant) Deeds
((S)6.2(a))
-1-
Order No.
Escrow No.
Loan No.
WHEN RECORDED MAIL TO:
- ------------------------------------------------------------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDER'S USE
DOCUMENTARY TRANSFER TAX $..........................................
...Computed on the consideration or value of property conveyed: OR
...Computed on the consideration or value less loans or encumbrances
remaining at time of sale ___________________________________________________
Signature of Registrant or Agent determining tax
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATION GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged.
a corporation organized under the laws of the State of does hereby
GRANT to
the real property in the City of State of California, described as
County of
Dated______________________________________________________________________ _____________________________________________________
}
STATE OF CALIFORNIA }SS.
COUNTY OF ________________________}
On ______________________________________________________________before me. By __________________________________________________
__________________________________________________________________________. President
personally appeared ______________________________________________________
__________________________________________________________________________.
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within By __________________________________________________
instrument and acknowledged to me that he/she/they executed the same Secretary
in his/her/their authorized capacity(ies), and that by his/her/their signa-
ture(s) on the instrument the person(s) or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature__________________________________________________________________
MAIL TAX STATEMENTS TO:
(This area for official notarial seal)
EXHIBIT H
Form of Bill of Sale
((S)6.2(b))
THIS BILL OF SALE is executed and delivered pursuant to the terms of that
certain Asset Purchase Agreement dated ___________, 1999 ("APA"), by and between
Albertson's, Inc., a Delaware corporation ("Seller") and _______________
("Buyer")
KNOW ALL MEN BY THESE PRESENTS: that Seller, for and in consideration of
the sum of Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, does by these presents
grant, bargain, sell and deliver unto Buyer all of Seller's right, title and
interest in and to the Inventory and Equipment, excluding the Excluded Equipment
and any and all other personal property specifically excluded by any provision
of the APA or disposed of in the ordinary course of business prior to Closing.
The personal property being transferred pursuant to this Bill of Sale
("Personal Property") is being purchased by Buyer and sold by Seller and is
being delivered by Seller to Buyer in an "AS IS, WHERE IS" CONDITION ON THE
CLOSING DATE, AND IN THEIR THEN PRESENT CONDITION, "WITH ALL FAULTS", INCLUDING,
BUT NOT LIMITED TO, BOTH LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON
ITS OWN EXAMINATION THEREOF. OTHER THAN AS SET FORTH EXPRESSLY IN THIS BILL OF
SALE, NO WARRANTIES, EXPRESS OR IMPLIED ARE MADE BY SELLERS CONCERNING THE
ASSETS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTIBILITY OR FITNESS
FOR A PARTICULAR PURPOSE, OR QUALITY.
The Seller herein covenants, agrees and warrants that it is the owner of
said Personal Property and that the same is free and clear of all liens and
encumbrances, except of personal property taxes not yet due and payable, and
that Seller will defend the sale of said Personal Property against all and every
person or persons whomsoever lawfully claiming the same or any part thereof.
Unless a different meaning is specifically set forth herein, all of the
terms set forth in this Bill of Sale shall have the same meanings ascribed to
such terms in the APA. This Bill of Sale shall be effective on and after the
date of Closing established pursuant to the APA.
EXECUTED at ________________, this ____ day of ___________, 1999.
________________________________
a _____________ corporation
By: ____________________________
Its: _______________________
-1-
EXHIBIT I
Form of Estoppel Certificate
((S)6.2(c))
(Store #____________)
TO: ________________________________________________
RE: Lease dated: ___________________
Lease Amendments dated: ________________________
LANDLORD: ________________________________________________
TENANT: ________________________________________________
PREMISES: Tenant's store in the _________________________ Shopping Center
("Shopping Center"), located in ___________________________.
As Landlord under the above-described Lease (the "Lease"), the undersigned
hereby acknowledges for the benefit of _______________________________________
("Buyer"), which is about to acquire by assignment the Tenant's interest in the
Lease, the truth and accuracy, as of the date hereof, of the following
statements pertaining to the Lease:
1. Tenant has accepted and is in possession of said Premises, including
any improvements, additions and alterations thereto required to be made by
Landlord under the Lease.
2. The Lease is in full force and effect, and Tenant commenced the payment
of rent thereunder on or about ________________________.
3. To Landlord's knowledge, Tenant is not presently in default under any
of the terms, covenants, conditions or provisions of the Lease, except as
follows:
_________________________________________________________________
_________________________________________________________________
4. The fixed annual rent under the Lease is $___________ and, except to
the extent required by the Lease, no monies have been paid to Landlord more than
thirty (30) days in advance of the due date therefor set forth in the Lease,
except: ________________________________________________. The fixed rent has
been paid through ___________________, 1999.
5. The Lease is for a term of __________________ years, and the term
expires on ___________________. Tenant has the option to extend the Lease term
for ________ additional periods of _________ years each.
6. Landlord acknowledges (a) that there have been no modifications or
amendments to the Lease, except as noted above, and (b) that the Lease (together
with any and all modifications and amendments thereto) represents the entire
agreement between Landlord and Tenant with respect to the Premises, except for
the following additional agreements with respect thereto:
_______________________________________________________________________
_______________________________________________________________________
-2-
7. The statements herein contained are made to induce Buyer to acquire
Tenant's interest in the Lease and may be relied upon by Buyer and Tenant and
only with respect to such acquisition.
DATED: __________________________, 1999.
"LANDLORD" __________________________________
a ____________________________
By: ______________________________
Its: _________________________
-3-
EXHIBIT J
Form of Assignment and Assumption Agreement (Store Leases)
((S)6.2(d))
(Store #_______)
This Assignment and Assumption Agreement ("Agreement") is made this ____
day of ____________, 1999, between _________________________________, a
___________ corporation ("Seller"), and _____________________________________, a
____________ corporation ("Buyer").
WITNESSETH:
Whereas, Seller is a tenant of premises at _______________________________
pursuant to a lease (the "Lease") with _______________________________________.
The premises which are the subject of the Lease are located on a portion of the
real property more fully described on Exhibit 1 attached hereto. As used herein,
the term "Lease" shall mean and include the Lease and all amendments,
modifications and supplements thereto, all as more fully described on Exhibit 2
attached hereto; and
Whereas, this Agreement is executed and delivered pursuant to the terms of
that certain Asset Purchase Agreement dated _________________, 1999 ("APA"), by
and between Albertson's, Inc., a Delaware corporation ("Seller") and
______________________________ __________________ ("Buyer"); and
Whereas, Seller desires to assign the Lease to Buyer and Buyer desires that
the Lease be assigned to it and to assume the obligations of the tenant under
the Lease.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, effective on the
Effective Date Seller hereby assigns the Lease, and all its right, title and
interest therein, to Buyer, and Buyer hereby assumes and agrees to pay when due
all sums payable under the Lease and further agrees to be bound at all times
hereafter by all terms, conditions and provisions of the Lease and to perform
and discharge all of Seller's obligations as tenant under the Lease arising from
and after the Effective Date.
Buyer agrees to and does hereby indemnify, defend and hold harmless Seller,
its successors and assigns, from and against any and all liabilities,
obligations, damages, losses, claims, costs, expenses, actions and causes of
action (including, without limitation, attorneys' fees and the reasonable cost
of investigation) of any kind, fixed or contingent, known or unknown, incurred
by or asserted against Seller, its successors and assigns, accruing under the
Lease or arising from or pertaining to Buyer's use, non-use, operation or
occupation of the premises on or subsequent to the Effective Date. Buyer shall
not be released from any of its obligations under the Lease or this Assignment
by the subsequent assignment of the Lease or the subsequent subletting of all or
any portion of the premises.
Seller agrees to and does hereby indemnify, defend and hold harmless Buyer,
its successors and assigns, from and against any and all liabilities,
obligations, damages, losses, claims, costs, expenses, actions and causes of
action (including, without limitation, attorneys' fees
-4-
and the reasonable cost of investigation) of any kind, fixed or contingent,
known or unknown, incurred by or asserted against Buyer, its successors and
assigns, accruing under the Lease or arising from or pertaining to Seller's use,
non-use, operation or occupation of the premises prior to the Effective Date
The Lease, and the land, buildings, fixtures and other improvements which
are the subject of the Lease, are being transferred to Buyer in an "AS IS, WHERE
IS" CONDITION AND IN THEIR THEN CONDITION, "WITH ALL FAULTS", INCLUDING, BUT NOT
LIMITED TO, BOTH LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON ITS OWN
EXAMINATION THEREOF. NO WARRANTIES, EXPRESS OR IMPLIED, ARE MADE BY SELLER
CONCERNING THE LEASE OR THE LAND, BUILDING, FIXTURES OR OTHER IMPROVEMENTS
SUBJECT TO THE LEASE, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, and counterpart signature pages may be assembled to form a
single original document. Unless a different meaning is specifically set forth
herein, all of the terms set forth in this Agreement shall have the same
meanings ascribed to such terms in the APA.
As used herein, the term "Effective Date" shall mean and refer to the date
of Closing established pursuant to the APA.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
set forth above.
"SELLER" _____________________________________
a __________________ corporation
By_________________________________
Its:_____________________
"BUYER" _____________________________________
a ___________________ corporation
By_________________________________
Its:_____________________
-5-
STATE OF ______________ )
) ss.
COUNTY OF _____________ )
I certify that I know or have satisfactory evidence that ________________
signed this instrument, on oath stated that he was authorized to execute the
instrument as the ________________________________ of _______________________, a
_______________ corporation, and acknowledged it to be the free and voluntary
act and deed of said corporation, for the uses and purposes mentioned in the
instrument.
WITNESS my hand and official seal hereto affixed on _____________________,
1999.
------------------------------------------
(Signature of Notary)
------------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the
State of ________________________________
My Appointment Expires: _________________
STATE OF ______________ )
) ss.
COUNTY OF _____________ )
I certify that I know or have satisfactory evidence that ________________
signed this instrument, on oath stated that he was authorized to execute the
instrument as the ________________________________ of _______________________, a
___________________ corporation, and acknowledged it to be the free and
voluntary act and deed of said corporation, for the uses and purposes mentioned
in the instrument.
WITNESS my hand and official seal hereto affixed on _________________,
1999.
------------------------------------------
(Signature of Notary)
------------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the
State of ________________________________
My Appointment Expires: _________________
-6-
EXHIBIT 1
---------
Legal Description
-7-
EXHIBIT 2
---------
Description of Lease
-8-
EXHIBIT K
Form of Assignment and Assumption Agreement (Contracts)
(Section 6.2(e))
This Assignment and Assumption Agreement ("Agreement") is made this ____
day of ____________, 1999, between _________________________________, a
___________ corporation ("Seller"), and _____________________________________, a
____________ corporation ("Buyer").
WITNESSETH:
Whereas, this Agreement is executed and delivered pursuant to the terms of
that certain Asset Purchase Agreement dated _________________, 1999 ("APA"), by
and between Seller and Buyer; and
Whereas, Seller desires to assign to Buyer the contracts ("Contracts")
defined and described on Exhibit 1 attached hereto and Buyer desires that the
Contracts be assigned to it and to assume the obligations of Seller thereunder.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, effective on the
Effective Date (a) Seller hereby sells, assigns and transfers to Buyer all of
Seller's right, title and interest in and to the Contracts, and (b) Buyer hereby
accepts the above assignment and agrees to be bound by all of the terms,
conditions and provisions of the Contracts from and after the Effective Date.
Buyer agrees to and does hereby indemnify and hold harmless Seller, its
successors and assigns, from and against any and all liabilities, obligations,
damages, losses, claims, costs, expenses, actions and causes of action
(including, without limitation, attorneys' fees and the reasonable cost of
investigation) of any kind, fixed and contingent, known or unknown, incurred by
or asserted against Seller, its successors and assigns, accruing under the
Contracts on or subsequent to the Effective Date.
Seller agrees and does hereby indemnify and hold harmless Buyer, its
successors and assigns, from and against any and all liabilities, obligations,
damages, losses, claims, costs, expenses, actions and causes of action
(including, without limitation, attorneys' fees and the reasonable cost of
investigation) of any kind, fixed and contingent, known or unknown, incurred by
or asserted against Seller, its successors and assigns, accruing under the
Contracts prior to the Effective Date.
The Contracts being transferred pursuant to this Agreement are being
transferred to Buyer in an "AS IS, WHERE IS" CONDITION ON THE CLOSING DATE, AND
IN THEIR THEN PRESENT CONDITION, "WITH ALL FAULTS", INCLUDING, BUT NOT LIMITED
TO, BOTH LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON ITS OWN
EXAMINATION THEREOF. OTHER THAN AS SET FORTH EXPRESSLY HEREIN, NO WARRANTIES,
EXPRESS OR IMPLIED, ARE MADE BY SELLER CONCERNING THE CONTRACTS, INCLUDING, BUT
NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR QUALITY.
-9-
This Agreement may be executed in counterparts, each of which shall be
deemed an original, and counterpart signature pages may be assembled to form a
single original document. Unless a different meaning is specifically set forth
herein, all of the terms set forth in this Agreement shall have the same
meanings ascribed to such terms in the APA.
As used herein, the term "Effective Date" shall mean and refer to the date
of Closing established pursuant to the APA
DATED: ________________, 1999.
"SELLER" _________________________________________
a ______________ corporation
By: ____________________________
Its: _______________________
"BUYER" _________________________________________
a ________________ corporation
By: ____________________________
Its: _______________________
-10-
EXHIBIT 1
To Assignment and Assumption Agreement (Contracts)
List of Contracts
-11-
EXHIBIT L
Form of Assignment and Assumption Agreement (Labor Agreements)
(Section 6.2(f))
This Assignment and Assumption Agreement ("Agreement") is made this ____
day of ____________, 1999, between _________________________________, a
___________ corporation ("Seller"), and _____________________________________, a
____________ corporation ("Buyer").
WITNESSETH:
Whereas, this Agreement is executed and delivered pursuant to the terms of
that certain Asset Purchase Agreement dated _________________, 1999 ("APA"), by
and between Seller and Buyer; and
Whereas, Seller desires to assign to Buyer the collective bargaining
agreement ("CBA") defined and described on Exhibit 1 attached hereto and Buyer
desires that the CBA be assigned to it and to assume the obligations of Seller
thereunder.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, effective on the
Effective Date (a) Seller hereby sells, assigns and transfers to Buyer all of
Seller's right, title and interest in and to the CBA, and (b) Buyer hereby
accepts the above assignment and agrees to be bound by all of the terms,
conditions and provisions of the CBA from and after the Effective Date
Buyer agrees to and does hereby indemnify, defend and hold harmless Seller,
its successors and assigns, from and against any and all liabilities,
obligations, damages, losses, claims, costs, expenses, actions and causes of
action (including, without limitation, attorneys' fees and the reasonable cost
of investigation) of any kind, fixed or contingent, known or unknown, incurred
by or asserted against Seller, its successors and assigns, accruing under the
CBA, arising from or pertaining to any legal or contractual obligation with
respect to employees of Buyer on or subsequent to the Effective Date.
Seller agrees to and does hereby indemnify, defend and hold harmless Buyer,
its successors and assigns, from and against any and all liabilities,
obligations, damages, losses, claims, costs, expenses, actions and causes of
action (including, without limitation, attorneys' fees and the reasonable cost
of investigation) of any kind, fixed or contingent, known or unknown, incurred
by or asserted against Buyer, its successors and assigns, accruing under the
CBA, arising from or pertaining to any legal or contractual obligation with
respect to employees of Buyer prior to the Effective Date.
The CBA being transferred pursuant to this Agreement is being transferred
to Buyer in an "AS IS, WHERE IS" CONDITION ON THE CLOSING DATE, AND IN THEIR
THEN PRESENT CONDITION, "WITH ALL FAULTS", INCLUDING, BUT NOT LIMITED TO, BOTH
LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION
THEREOF. OTHER THAN AS SET FORTH EXPRESSLY HEREIN, NO WARRANTIES, EXPRESS OR
IMPLIED, ARE MADE BY SELLER CONCERNING THE CBA, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY.
-12-
This Agreement may be executed in counterparts, each of which shall be
deemed an original, and counterpart signature pages may be assembled to form a
single original document. Unless a different meaning is specifically set forth
herein, all of the terms set forth in this Agreement shall have the same
meanings ascribed to such terms in the APA. As used herein, the term "Effective
Date" shall mean and refer to the date of Closing established pursuant to the
APA.
DATED: ________________, 1999.
"SELLER" _________________________________________
a ______________ corporation
By: ____________________________
Its: _______________________
"BUYER" _________________________________________
a ________________ corporation
By: ____________________________
Its: _______________________
-13-
EXHIBIT 1
To Assignment and Assumption Agreement (Labor Agreements)
List of CBA
-14-
EXHIBIT M
Form of Assignment and Assumption Agreement (Guarantees)
(Section 6.2(g))
FOR VALUE RECEIVED, ___________________________________, a _____________
corporation ("Seller"), hereby sells, assigns and transfers to
________________________________, a ______________ corporation ("Buyer"), all
assignable guarantees and warranties (collectively, the "Guarantees") to the
extent that they relate specifically to the ownership or operation of the Store
Properties and not to the extent that they relate to other properties or
operations of the Seller; provided, however, that to the extent any Guarantees
-------- -------
relate to the ownership or operation of the Store Properties, and also to
properties of the Seller other than the Store Properties, such Guarantees shall
be included in this Agreement solely to the extent the portion of such
Guarantees related to the ownership or operation of the Store Properties is
separately assignable. Such Guarantees shall include, but are not limited to,
warranties and guaranties of contractors, suppliers, materialmen and
manufacturers.
The Guarantees being transferred pursuant to this Assignment are being
transferred to Buyer in an "AS IS, WHERE IS" CONDITION ON THE CLOSING DATE, AND
IN THEIR THEN PRESENT CONDITION, "WITH ALL FAULTS", INCLUDING, BUT NOT LIMITED
TO, BOTH LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON ITS OWN
EXAMINATION THEREOF. OTHER THAN AS SET FORTH EXPRESSLY HEREIN, NO WARRANTIES,
EXPRESS OR IMPLIED, ARE MADE BY ASSIGNOR CONCERNING THE GUARANTEES, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR QUALITY.
This Assignment may be executed in counterparts, each of which shall be
deemed an original, and counterpart signature pages may be assembled to form a
single original document.
This Assignment is executed and delivered pursuant to the terms of that
certain Asset Purchase Agreement dated _________________, 1999 ("APA") by and
between Seller and Buyer and, unless a different meaning is specifically set
forth herein, all of the terms set forth in this Assignment shall have the same
meanings ascribed to such terms in the APA.
This Assignment shall be effective on and after the date of Closing
established pursuant to the APA.
DATED: ____________________, 1999.
"SELLER" _________________________________________
a ______________ corporation
By: ____________________________
Its: _______________________
-15-
EXHIBIT N
Form of Assignment and Assumption Agreement (Prepaid Expenses)
(Section 6.2(h))
FOR VALUE RECEIVED, ___________________________________, a _____________
corporation ("Seller"), hereby sells, assigns and transfers to
______________________________________, a ______________ corporation ("Buyer"),
all assignable deposits, prepaid rent and prepaid expenses (the "Prepaid
Expenses") made by Seller pursuant to Seller's leases for, or otherwise in
respect of the Store Properties.
The Prepaid Expenses being transferred pursuant to this Assignment are
being transferred to Buyer in an "AS IS, WHERE IS" CONDITION ON THE CLOSING
DATE, AND IN THEIR THEN PRESENT CONDITION, "WITH ALL FAULTS", INCLUDING, BUT NOT
LIMITED TO, BOTH LATENT AND PATENT DEFECTS, AND BUYER SHALL RELY UPON IT OWN
EXAMINATION THEREOF. OTHER THAN AS SET FORTH EXPRESSLY HEREIN, NO WARRANTIES,
EXPRESS OR IMPLIED, ARE MADE BY ASSIGNOR CONCERNING THE PREPAID EXPENSES,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR QUALITY.
This Assignment may be executed in counterparts, each of which shall be
deemed an original, and counterpart signature pages may be assembled to form a
single original document.
This Assignment is executed and delivered pursuant to the terms of that
certain Asset Purchase Agreement dated _________________, 1999 ("APA") by and
between Seller and Buyer and, unless a different meaning is specifically set
forth herein, all of the terms set forth in this Assignment shall have the same
meanings ascribed to such terms in the APA.
This Assignment shall be effective on and after the date of Closing
established pursuant to the APA.
DATED: ____________________, 1999.
"SELLER" _________________________________________
a ______________ corporation
By: ____________________________
Its: _______________________
-16-
EXHIBIT O
Stater Bros. List of Stores
Store SS #231 Oceanside, CA $1,246,522
Store LU #298 Oceanside, CA $3,331,723
Store LU #425 Fullerton, CA $815,500
Store LU #442 Bellflower, CA $2,347,000
Store LU #473 Whittier, CA $286,507
Store LU #553 San Diego, CA $250,000
Store LU #561 San Marcos, CA $172,267
Store AL #613 Encinitas, CA $4,083,144
Store AL #619 Temecula, CA $4,443,583
Store AL #620 Anaheim, CA $131,503
Store LU #624 San Clemente, CA $719,160
Store AL #629 La Habra, CA $1,812,036
Store AL #651 Artesia, CA $118,344
Store AL #666 Anaheim, CA $146,326
Store AL #1601 Downey, CA $505,803
Store AL #1604 Placentia, CA $1,731,635
Store AL #1608 Cypress, CA $121,729
Store AL #1619 Lancaster, CA $1,679,945
Store AL #1623 Palm Springs- Indio, CA $1,795,955
Store AL #1635 Fullerton, CA $240,133
Store AL #1641 Long Beach, CA $2,171,042
Store AL #1644 Poway, CA $465,126
Store AL #1652 La Mirada, CA $95,852
Store AL #1656 Huntington Beach, CA $347,274
Store AL #1662 Walnut, CA $521,874
Store AL #1668 Huntington Beach, CA $788,286
Store AL #1670 Lancaster, CA $513,706
Store AL #1674 Norwalk, CA $2,009,071
Store LU #458 Palmdale, CA $3,879,435
Store LU #504 Murrieta- Temecula, CA $4,894,015
Store AL #607 Orange, CA $4,580,070
Store AL #627 Paramount, CA $5,322,337
Store AL #681 Santa Clarita, CA $4,803,843
Store AL #683 Palm Springs, CA $7,003,493
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Store AL #1627 La Quinta, CA $3,539,058
Store AL #1630 Romona, CA $5,316,204
Store AL #1631 Vista, CA $4,814,196
Store AL #1634 Palmdale, CA $3,591,687
Store AL #1648 Buena Park, CA $1,071,073
Store AL #1672 Escondido, CA $2,947,439
Store AL #1673 El Toro, CA $2,713,708
Store AL #1677 Laguna Hills, CA $2,359,737
Store AL #1687 Vista, CA $2,544,203
Store AL #1692 Falbrook, CA $2,641,694
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EXHIBIT P
Seller Disclosure Schedule
(Section 15)
Litigation
- ----------
Store AL Store No. 1634 Albertson v. City of Palmdale
Disputes
- --------
Store LU Store No. 472 Mistaken Term Sheet. Letter Agreement sent
March 9, 1999
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EXHIBIT Q
Buyer Disclosure Schedule
(Section 16)
-1-
EXHIBIT R
Permitted Exceptions/Title Policies
(Section 22.2.6)
-1-